Document:

ex_102278.htm

Exhibit 10.4

 

EXECUTION VERSION

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”) is dated as of December 13, 2017, by and between SUTTONPARK SERVICING LLC, a Delaware limited liability company (“SP Servicing”) and ASTA FUNDING, INC., a Delaware corporation (“Secured Party”). 

 

BACKGROUND

 

Pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”), dated as of December 13, 2017, by and between CBC Holdings LLC (“CBC Holdings”) and the Secured Party, CBC Holdings purchased from Secured Party, and Secured Party sold to CBC Holdings, all of the issued and outstanding equity capital (the “Interest”) of CBC Settlement Funding, LLC (the “Company”).

 

Pursuant to the Purchase Agreement, (a) CBC Holdings executed a Promissory Note (the “Promissory Note”), in the principal amount of $5,750,000.00 in favor of Secured Party in partial payment of the Purchase Price (as defined in the Purchase Agreement) for the Interest, and (b) CBC Holdings agreed to secure, or cause to be secured, the obligations of CBC Holdings under the Promissory Note by the granting of a security interest by SP Servicing in the Collateral (as defined below) to Secured Party as of the Collateral Date (as defined below).

 

Capitalized terms shall have the meanings ascribed to them in Section 1 of this Agreement or in the relevant Section of this Agreement or in revised Article 9 of the Uniform Commercial Code as enacted in the State of New York and in effect on the date hereof (the “Uniform Commercial Code” or “UCC”), as applicable, unless the context requires otherwise.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.          Definitions.

 

“Action” – means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, prosecution, assessment or reassessment, litigation, citation, summons or subpoena of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity, including any appeal or application for review.

 

“Affiliate” – means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

 

 

 

“Business Day” – means a day other than a Saturday, Sunday or other day on which commercial banks located in New York City, New York or the State of Delaware are authorized or required by Law to close for business.

 

“Collateral” – is defined in Section 2 hereof.

 

“Collateral Date” – the date upon which the security interest in the Collateral previously granted by SP Servicing shall have terminated, which shall be no later than January 15, 2018.

 

“Governmental Entity” – means any United States federal, state, local or any foreign, supranational, quasi-national or non-U.S. government political subdivision, governmental, regulatory or administrative authority, instrumentality, agency body or commission, including the U.S. Securities and Exchange Commission, self-regulatory organization, state attorney general or state agency, any foreign jurisdiction authority or any arbitrator, court, tribunal or judicial or arbitral body of competent jurisdiction.

 

“Governmental Order” – means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity.

 

“Knowledge” – or any other similar knowledge qualification of a Person, means actual or constructive knowledge, after reasonable inquiry and investigation, of such Person (or if such Person is not an individual, the actual knowledge of any manager, director or officer of such Person).

 

“Law” – means any statute, law, ordinance, rule, regulation code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Entity.

 

“Person” – means an individual, a corporation, a partnership, a joint venture, a limited liability company, an unincorporated organization, trust, association, a Governmental Entity, or any other entity or body.

 

“Secured Obligations” – is defined in Section 3 hereof.

 

“Servicing Agreement” – is defined in Section 2 hereof.

 

“Servicing Fees” – is defined in Section 2 hereof.

 

2.     Security Interest. As security for the Secured Obligations (as defined in Section 3 hereof), SP Servicing hereby grants to Secured Party, effective as of the Collateral Date, a first priority security interest in and lien on all of SP Servicing’s rights to, and to receive, under the Sale and Servicing Agreement (as amended, the “Servicing Agreement”), dated as of February 16, 2017, among SuttonPark Structured Settlements 2017-1 LLC, SP Servicing, SuttonPark Capital LLC, Portfolio Financial Servicing Company, and Wells Fargo Bank, National Association, all Servicing Fees (as defined in the Servicing Agreement) and all proceeds thereof (hereafter, the “Collateral”). A true and correct copy of a schedule of the pledged Servicing Fees is attached hereto as Exhibit A.

 

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3.     Secured Obligations. The security interest granted herein shall secure the obligations of CBC Holdings under the Promissory Note (collectively, the “Secured Obligations”).

 

4.     Warranties and Representations of SP Servicing. SP Servicing warrants and represents to Secured Party, on the date hereof or as of the date set forth below, as applicable, as follows (which representations and warranties shall survive such date and shall be continuing warranties and representations commencing with such date and continuing for as long as any Secured Obligations remain outstanding):

 

(a)     SP Servicing is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Delaware. SP Servicing has full limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by SP Servicing of this Agreement, the performance by SP Servicing of its obligations hereunder and the consummation by SP Servicing of the transactions contemplated hereby have been duly authorized by all requisite limited liability company action on the part of SP Servicing. This Agreement has been duly executed and delivered by SP Servicing, and (assuming due authorization, execution and delivery by the Secured Party) this Agreement constitutes legal, valid and binding obligations of SP Servicing enforceable against SP Servicing in accordance with its terms. SP Servicing is the sole Servicer authorized to receive the pledged Servicing Fees and SP Servicer agrees that, other than as contemplated by this Agreement, it shall not pledge, assign, transfer or hypothecate the pledged Servicing Fees, or any portion thereof, either directly or indirectly, without Secured Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(b)     The execution, delivery and performance by SP Servicing of this Agreement, and the consummation of the transactions contemplated hereby, including without limitation the grant by SP Servicing of the security interests granted hereby, except for the filing of financing statements, do not and will not: (A) conflict with or result in a violation or breach of, or default under, any provision of the certificate of formation or operating agreement of SP Servicing; (B) conflict with or result in a material violation or breach of any provision of any Law or Governmental Order applicable to SP Servicing; or (C) require the consent, notice or other action by any Person under, conflict with, result in a material violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any material contract to which SP Servicing is a party or by which SP Servicing is bound (other than any actions taken to release the existing lien on the Collateral, which actions will be taken on or prior to the Collateral Date).

 

(c)     There are no Actions pending or, to SP Servicing’s Knowledge, threatened against SP Servicing or any Affiliate of SP Servicing, which, if adversely determined, would reasonably be expected to have an adverse effect on the ability of SP Servicing to consummate the transactions contemplated by this Agreement.

 

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(d)     SP Servicing is not subject to any Governmental Order, which has had, or which would reasonably be expected to have, a material adverse effect on SP Servicing’s ability to consummate the transactions contemplated by this Agreement.

 

(e)     The Collateral is lawfully owned by SP Servicing, and as of the Collateral Date will be free and clear of any and all liens, encumbrances and security interests (other than those arising hereunder), and SP Servicing will warrant and defend title to the same against the claims and demands of all persons.

 

(f)     As of the Collateral Date, this Security Agreement creates a valid and continuing security interest (as defined in UCC Section 1-201) in favor of the Secured Party in the Collateral, which security interest is prior to all other liens or encumbrances, and is enforceable as such as against creditors of SP Servicing. Upon the filing of the UCC financing statements described in Section 5(h) below, the Secured Party shall have a first priority perfected security interest in the Collateral and, with respect to any such proceeds, as limited to the extent set forth in Section 9-315 of the UCC as in effect in the applicable jurisdiction. As of the Collateral Date, other than the security interest granted to the Secured Party pursuant to this Security Agreement, SP Servicing has not pledged, assigned, sold or granted a security interest in, or otherwise conveyed any of the Collateral.

 

5.     Affirmative Covenants of SP Servicing.

 

(a)     SP Servicing shall promptly notify and provide Secured Party with a complete description of the conduct of business under any names other than those set forth herein, which would affect the financing statements filed by Secured Party. 

 

(b)     Commencing with the Collateral Date, SP Servicing shall continuously take all steps that are reasonably necessary or prudent to protect the security interests of Secured Party in or perfect the liens of Secured Party on the Collateral.

 

(c)     SP Servicing shall defend the Collateral against the claims and demands of all persons arising through SP Servicing.

 

(d)     Commencing with the Collateral Date, if reasonably requested by Secured Party from time to time, SP Servicing shall deliver and pledge to Secured Party, endorsed or accompanied by instruments of assignment or transfer satisfactory to Secured Party, any instruments, documents and chattel paper which Secured Party may specify, as and when reasonably requested by Secured Party, with respect to the Collateral.

 

(e)     SP Servicing shall comply, in all material respects, with all governmental regulations applicable to the Collateral or any part thereof or to the operation of SP Servicing’s business; provided, however, that SP Servicing may contest any governmental regulation in any reasonable manner which shall not, in the reasonable opinion of the SP Servicing, materially adversely affect Secured Party’s rights or the priority of its security interest in the Collateral.

 

(f)     SP Servicing shall pay promptly, when due, all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of its income or profits therefrom, except that no such charge need be paid if (i) the validity thereof is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve any danger of the forfeiture or loss of any of the Collateral or any interest therein; and (iii) such charge is adequately reserved against in accordance with U.S. generally accepted accounting principles.

 

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(g)     Commencing with the Collateral Date, SP Servicing shall advise Secured Party promptly after acquiring Knowledge thereof, in reasonable detail, (i) of any lien, security interest, encumbrance or claim made or asserted against any of the Collateral (other than the lien and security interest of Secured Party created hereunder), (ii) of any material change or substantial loss in the composition of the Collateral other than in the ordinary course of business, and (iii) of the occurrence of any other material adverse effect on the value, enforceability or collectability of the Collateral or on the security interests created hereunder.

 

(h)     Commencing with the Collateral Date, SP Servicing shall give, execute, deliver and file or record in the proper governmental offices, any instrument, paper or document including, but not limited to, one or more financing statements under the Uniform Commercial Code, satisfactory to Secured Party, or take any action which Secured Party may deem reasonably necessary or desirable in order to create, preserve, perfect, extend, continue, modify, terminate or otherwise effect any security interest or lien granted pursuant hereto, or to enable or facilitate Secured Party’s exercise or enforcement of any of its rights hereunder.

 

(i)     Following the occurrence and during the continuance of an Event of Default, SP Servicing shall pay, or reimburse Secured Party, in the amount of all reasonable expenses (including reasonable fees and expenses of attorneys, experts and agents) incurred in connection with the enforcement of any of its rights or interests hereunder, the enforcement of any provisions hereof or the preservation, collection, disposition or enforcement of any of the Collateral (all such expenses shall be treated as Secured Obligations hereunder).

 

(j)     SP Servicing covenants with Secured Party as follows: (i) without providing at least thirty (30) days prior written notice to Secured Party, SP Servicing will not change its name, its principal place of business or, if more than one, its chief executive office, and (ii) SP Servicing will not change its type of organization or jurisdiction of organization or the State where it is located without providing at least thirty (30) days prior written notice to Secured Party.

 

(k)     SP Servicing shall advise Secured Party promptly, but in any event within five (5) Business Days, after SP Servicing has knowledge of any event or condition that constitutes an Event of Default hereunder, together with a statement of the curative action that SP Servicing proposes to take with respect thereto.

 

(l)     SP Servicing shall advise Secured Party promptly, but in any event within five (5) Business Days, after SP Servicing has knowledge of any event or condition that constitutes a servicer termination event or other event under the Servicing Agreement that would permit any party to such agreement to replace SP Servicing as servicer thereunder, together with a statement of the curative action that SP Servicing proposes to take with respect thereto.

 

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(m)     SP Servicing shall preserve its existence and its rights to receive the pledged Servicing Fees in all respects.

 

(n)     Servicer shall not merge, consolidate or transfer a material portion of its ownership interests or assets, without Secured Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

 

6.     Negative Covenants of SP Servicing. Without the prior written consent of Secured Party, commencing with the Collateral Date, SP Servicing shall not:

 

(a)     Allow or permit any other security interest or lien to attach to any of the Collateral.

 

(b)     File, or authorize or permit to be filed, in any jurisdiction any financing statement relating to any of the Collateral unless Secured Party is named as sole secured party.

 

(c)     Permit any of the Collateral to be levied upon under any legal process.

 

(d)     Permit anything to be done that may materially impair the security interest in the Collateral intended to be afforded hereby.

 

(e)     Make any sales or assignments of any of the Collateral, or grant any other security interest in any of the Collateral.

 

7.     Events of Default. SP Servicing shall be in default under this Agreement upon the occurrence of an Event of Default. “Event of Default” shall mean:

 

(a)     default in payment or performance under any of the Secured Obligations, and such default shall continue for five (5) Business Days; 

 

(b)     an Event of Default (as defined in the Promissory Note) that has occurred and is continuing; and

 

(c)     default in the due performance or observance of any material covenant or provision of this Agreement and such default shall continue for a period of 30 days after knowledge thereof by SP Servicing or after the date on which written notice of such default, requiring the same to be remedied, shall have been given to SP Servicing by Secured Party.

 

8.     Rights of Secured Party on Default. Upon the occurrence of any Event of Default, Secured Party may declare all of the Secured Obligations to be immediately due and payable and shall then have the remedies of a secured party under the Uniform Commercial Code or under any other applicable law, including, without limitation, the right to take assignment or possession of the Collateral. SP Servicing shall, at the request and option of Secured Party, notify account debtors and other persons or payors obligated on any of the Collateral of the security interest of Secured Party in any account, chattel paper, general intangible, payment intangible, instrument or other Collateral and that payment thereof is to be made directly to Secured Party or to any financial institution designated by Secured Party as Secured Party’s agent therefor, and Secured Party may itself without notice to or demand upon SP Servicing, so notify account debtors and other persons and payors obligated on the Collateral. After the making of such a request or the giving of any such notification, SP Servicing shall hold any proceeds of collection of accounts, chattel paper, general intangibles, payment intangibles, instruments and other Collateral received by SP Servicing as trustee for Secured Party and shall turn the same over to Secured Party in the identical form received, together with any necessary endorsements or assignments. After deducting all costs and expenses (including reasonable legal costs and attorneys’ fees), Secured Party shall apply the proceeds of collection of accounts, chattel paper, general intangibles, payment intangibles, instruments and other Collateral received by Secured Party to the Secured Obligations in such order of priority as is provided for in the Promissory Note, such proceeds to be immediately credited after final payment in cash or other immediately available and irrevocable funds of the items giving rise to them. In the event the proceeds of any assignment, collection and/or other disposition of the Collateral hereunder are insufficient to pay all of the Secured Obligations in full, SP Servicing will be liable for the deficiency.

 

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9.     Rights of Secured Party to Sell Collateral. SP Servicing agrees that notice received at least ten (10) calendar days before the time of any intended public sale, or the time after which any private sale or other disposition of Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. At any sale or disposition of Collateral, Secured Party may (to the extent permitted by applicable law) purchase all or any part thereof free from any right of redemption by SP Servicing which right is hereby waived and released.

 

10.     Power of Attorney.

 

(a)     As of the Collateral Date, SP Servicing hereby appoints Secured Party as its lawful attorney-in-fact to do, after the occurrence and during the continuance of an Event of Default, at Secured Party’s option, and at SP Servicing’s expense and liability, all acts and things which Secured Party may deem necessary or desirable to effectuate its rights under this Security Agreement, including without limitation: (i) file financing statements and otherwise perfect any security interest granted hereby, and (ii) in SP Servicing’s or Secured Party’s name, to demand, collect, receive, and receipt for, compound, compromise, settle and give acquittance for, and prosecute and discontinue or dismiss, with or without prejudice, any suit or proceeding respecting any of the Collateral.

 

(b)     To the extent permitted by law, SP Servicing hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and is irrevocable and shall be terminated upon termination of this Agreement.

 

(c)     SP Servicing agrees that in the event of a default, it will immediately grant Secured Party complete access to and full control over all bank accounts into which the Servicing Fees are deposited.

 

(d)     The powers conferred on Secured Party hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible to SP Servicing for any act or failure to act, except for Secured Party’s own gross negligence or willful misconduct.

 

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11.     Authorization to File Financing Statements. As of the Collateral Date, SP Servicing hereby irrevocably authorizes Secured Party at any time and from time to time to file in any UCC jurisdiction any initial financing statements and amendments thereto that (a) accurately describe the Collateral, and (b) contain any other information required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether SP Servicing is an organization, the type of organization and any organization identification number issued to SP Servicing. SP Servicing agrees to furnish any such information to Secured Party promptly upon request. SP Servicing also ratifies authorization for Secured Party to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.

 

12.     Waiver, etc. SP Servicing hereby waives presentment, demand, notice, protest and, except as is otherwise provided herein, all other demands and notices in connection with this Agreement or the enforcement of Secured Party’s rights hereunder or in connection with any Secured Obligations or any Collateral; consent to and waive notice of the granting of renewals, extensions of time for payment or other indulgences to SP Servicing, or substitution, release or surrender of any Collateral, the addition or release of persons primarily or secondarily liable on any Secured Obligation or on any Collateral, the acceptance of partial payments on any Secured Obligation or on any Collateral and/or the settlement or compromise thereof. No delay or omission on the part of Secured Party in exercising any right hereunder shall operate as a waiver of such right or of any other right hereunder. Any waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any such future occasion.

 

13.     Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

14.     Termination; etc. This Agreement and the security interest in the Collateral created hereby shall be terminated when all of the Secured Obligations have been fully and finally paid and performed.

 

15.     Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given: (a) on the date established by the sender as having been delivered personally, (b) on the date delivered by a private courier as established by the sender by evidence obtained from the courier, (c) on the date sent by facsimile or email, with confirmation of receipt (electronic or otherwise), if sent prior to 5:00 p.m. Eastern Standard Time, or if sent later, then on the next Business Day, or (d) on the fifth Business Day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must be addressed as follows:

 

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If to SP Servicing, to:

 

SuttonPark Servicing LLC

600 Brickell Avenue, 19th Floor

Miami, Florida 33131

Attn:          Steven W. Pasko

Email:        [     ]

Facsimile:  [     ]

 

With copies to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention:     Peter Halasz

E-mail:         peter.halasz@srz.com

Facsimile:    (212) 593-5955 

 

If to Secured Party, to:

 

CBC Settlement Funding, LLC

c/o Asta Funding, Inc.

210 Sylvan Avenue

Englewood Cliff, New Jersey 07632

Attn:         Gary Stern

Email:       [    ]

Facsimile: [    ]

 

With a required copy (which shall not constitute notice) to:

 

Edward Stone Law, P.C.

175 West Putnam Avenue, 2nd Floor

Greenwich, Connecticut 06830

Attn:           Eddie Stone

Email:        eddie@edwardstonelaw.com

Facsimile: (203) 348-8477

 

16.     Miscellaneous.

 

(a)     Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party hereto in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

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(b)     Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(c)     All of the terms and provisions of this Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns.

 

(d)     This Agreement and all matters arising out of or in any way related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York (including Section 5-1401 of the General Obligations Law but otherwise without regard to conflict of law provisions).

 

(e)     ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA IN THE SOUTHERN DISTRICT OF NEW YORK, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, SP Servicing and Secured Party have executed this Agreement by their duly authorized as of the date first above written.

 

	 	
			SUTTONPARK SERVICING LLC

			
	 	 
	 	 
	 	
			By: SuttonPark Capital LLC, its Sole Member

			
	 	 
	 	 
	 	
			By:

				
			/s/ Steven W. Pasko

			
	 	
			Name:

				
			Steven W. Pasko

			
	 	
			Title:

				
			Chief Executive Officer of the Sole Member

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ Paul Kosinski

			
	 	
			Name:

				
			Paul Kosinski

			
	 	
			Title:

				
			Chief Financial Officer and Chief Operating Officer of the Sole Member

			
	 	 	 
	 	
			ASTA FUNDING, INC.

			
	 	 
	 	 
	 	
			By:

				
			/s/ Gary Stern

			
	 	
			Name:

				
			Gary Stern

			
	 	
			Title:

				
			Chief Executive Officer

			

 

 

[Signature Page to Security Agreement]Exhibit 4.2

 

[FORM OF PREPAID
WARRANT]

 

THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 1(a) OF THIS WARRANT.

My Size, Inc.

Warrant To Purchase Common
Stock

Warrant No.:

Date of Issuance: [                 ], 2017 (“Issuance
Date”)

My Size, Inc., a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [BUYER], the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined
below), _________________1 (subject
to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”, and such number of Warrant Shares, the “Warrant Number”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section 17. This Warrant is one of the Warrants to
Purchase Common Stock (the “Registered Warrants”) issued pursuant to (i) Section 1 of that certain Securities
Purchase Agreement, dated as of December __, 2017 (the “Subscription Date”), by and among the Company and the
investors (the “Buyers”) referred to therein, as amended from time to time (the “Securities Purchase
Agreement”) and (ii) the Company’s Registration Statement on Form S-3 (File number 333-         ) (the “Registration
Statement”).

PREPAYMENT
OF SUBSTANTIALLY ALL OF AGGREGATE EXERCISE PRICE (INCLUDING NOMINAL VALUE). Notwithstanding anything herein to the contrary,
the Company hereby acknowledges receipt of $[           ]2
of the Exercise Price per Warrant Share, including the nominal value of $0.001 per Warrant Share (the “Prepayment”),
from the initial holder of this Warrant as of the initial Issuance Date, which was pre-funded to the Company on or prior to the
initial Issuance Date, and further acknowledges that only $0.001 per Warrant Share of the Exercise Price remains unpaid as of the
initial Issuance Date (as adjusted for stock splits, stock dividends, recapitalizations and similar events, the “Remaining
Per Share Amount”). Consequently, upon each exercise of this Warrant, only the applicable Remaining Per Share Amount
of the applicable Aggregate Exercise Price (as defined below) of this Warrant shall be the remaining unpaid amount that must be
satisfied by the Holder (whether in cash or by a Cashless Exercise (as defined below)) to effect an exercise of this Warrant. For
the avoidance of doubt, (a) after giving effect to the Prepayment, other than the applicable Remaining Per Share Amount, no additional
consideration shall be due and payable hereunder to effect any exercise of this Warrant and (b) the Prepayment is nonrefundable,
whether or not this Warrant is exercisable in full.

 

1 [   ]% Warrant coverage

2 Insert the difference
of (x) the price of one share of Common Stock less (y) $0.001.

 

    	 	1	 

     

    

1.             EXERCISE OF WARRANT.

(a)           Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”),
in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1)
Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal
to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant
was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds
if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as
defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an
exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares
shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance
with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received
an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of
such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer
agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process
such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date on which
the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law,
rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company
shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified
in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company
by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2)
Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to
be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar
taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case
where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant
Shares to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or
such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade
of such Warrant Shares initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt
of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”)
shall not be deemed to be a breach of this Warrant. From the Issuance Date through and including the Expiration Date, the Company
shall maintain a transfer agent that participates in the DTC’s Fast Automated Securities Transfer Program.

    	 	2	 

     

    

(b)           Exercise
Price. For purposes of this Warrant, “Exercise Price” means $[      ], subject
to adjustment as provided herein.

(c)            Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior to the Share
Delivery Date, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to
issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled
and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast
Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder’s designee with DTC for
such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may
be) or (II) if the Registration Statement (or prospectus contained therein) covering the issuance of the Warrant Shares that are
the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance of
such Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares
electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice
Failure” and together with the event described in clause (I) above, a “Delivery Failure”), then,
in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the
Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product of (A) the sum of the number of shares
of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied
by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning
on the applicable Exercise Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the
Company, may void its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect
the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Date either (I) the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver to the Holder
(or its designee) a certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer
Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance
account of the Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below
or (II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon
such exercise that the Holder is entitled to receive from the Company and has not received from the Company in connection with
such Delivery Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies
available to the Holder, the Company shall, within two (2) Business Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation,
by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s
obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of
such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled
upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to
which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B)
the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable
Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”).
Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise
of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer
agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if the Company
fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery
Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the
date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the
issuance or resale, as applicable, of such Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice
of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying
such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind
such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has
not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s
obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise,
and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.

    	 	3	 

     

    

(d)           Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below),
if at the time of exercise hereof the Registration Statement is not effective (or the prospectus contained therein is not available
for use) for the issuance of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment
of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares determined
according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C)

                                                                    D

For purposes of
the foregoing formula:

A= the total number of shares with
respect to which this Warrant is then being exercised.

B = the greater of (A) the Spot
Price and (B) the quotient of (x) the sum of the VWAP of the Common Stock of each of the twenty (20) Trading Days ending at the
close of business on the Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice,
divided by (y) twenty (20).

C = Remaining
Per Share Amount.

D = the Spot Price.

For purposes of Rule
144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in
a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.

(e)            Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 13.

    	 	4	 

     

    

(f)            Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any
such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the
Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes
of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion
of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes
or convertible preferred stock or warrants, including other Registered Warrants) beneficially owned by the Holder or any other
Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f).
For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For
purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant
without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written
notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number
of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder
in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the
Holder must notify the Company of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number
of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable,
the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time,
upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or
by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the
“Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have
the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has
been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares.
Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until
the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease
will apply only to the Holder and the other Attribution Parties and not to any other holder of Registered Warrants that is not
an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this
Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including
for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this
paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination
of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may
be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may
not be waived and shall apply to a successor holder of this Warrant.

    	 	5	 

     

    

(g)           Reservation of Shares.

(i)           Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved
for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Registered Warrants
then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that
at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally
in connection with any exercise or redemption of Registered Warrants or such other event covered by Section 2(a) below. The Required
Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among
the holders of the Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants
held by each holder on the Closing Date (as defined in the Securities Purchase Agreement) (without regard to any limitations on
exercise) or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder’s Registered Warrants, each transferee shall
be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Registered Warrants shall be allocated to the remaining holders of Registered Warrants,
pro rata based on the number of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such holders
(without regard to any limitations on exercise).

(ii)          Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any
time while any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Registered Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure,
the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board
of directors to recommend to the stockholders that they approve such proposal. In the event that the Company is prohibited from
issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have sufficient shares of
Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common
Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable
Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment
under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage
commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(g)(ii) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.

    	 	6	 

     

    

 

2.             ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. So long as the Warrant remains outstanding, the Exercise Price and number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

(a)           Stock
Dividends and Splits. Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at
any time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of
Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common
Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any
event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then
the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

(b)           Intentionally Omitted.

(c)           Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a),
the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be
the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).

(d)           Intentionally Omitted.

(e)           Intentionally Omitted.

(f)            Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance
or sale of Common Stock.

(g)           Intentionally
Omitted.

    	 	7	 

     

    

3.             RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation,
the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is
taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the
Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares
of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the
Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent
Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

4.             PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

(a)            Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such
Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not
be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such
excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder for a period of up to six
(6) months, until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent
as if there had been no such limitation).

    	 	8	 

     

    

(b)           Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i)  the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in
the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements
in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number
of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which
applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent
Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the
consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and
after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the
consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly
traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior
to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior
to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive
stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights)
(the “Corporate Event Consideration”) with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the
Expiration Date, in lieu of the shares of the Common Stock or Corporate Event Consideration (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such Corporate Event Consideration which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Holder.

    	 	9	 

     

    

(c)            Intentionally Omitted.

(d)           Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter
receivable upon exercise of this Warrant (or any such other warrant)).

5.             NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such
actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60)
calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other
than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such
failure, including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of
Common Stock.

6.             WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and
other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

    	 	10	 

     

    

7.             REISSUANCE
OF WARRANTS.

(a)            Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

(b)           Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing
the right to purchase the Warrant Shares then underlying this Warrant.

(c)           Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however,
no warrants for fractional shares of Common Stock shall be given.

(d)           Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of
shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant
which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

    	 	11	 

     

    

 

8.             NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with
the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii)
at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder, and
(iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries (as defined
in the Securities Purchase Agreement), the Company shall simultaneously file such notice with the SEC (as defined in the Securities
Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public
information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive
such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood
and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company. 

 

9.            AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f))
may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party.

 

10.          SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	 	12	 

     

    

 

11.          GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

12.           CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be
construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not
form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents
shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other
Transaction Documents unless otherwise consented to in writing by the Holder.

 

    	 	13	 

     

    

 

13.          DISPUTE RESOLUTION.

 

(a)           Submission to Dispute Resolution.

(i)          In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the
arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating
to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other
party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to
such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If
the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price,
such Bid Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at
any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case
may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent,
reputable investment bank to resolve such dispute.

(ii)         The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the
Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute
Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other
support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on
the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless
otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company
nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection
with such dispute (other than the Required Dispute Documentation).

(iii)        The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The
fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of
such dispute shall be final and binding upon all parties absent manifest error.

    	 	14	 

     

    

(b)           Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to
arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under §
7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply
for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) the
terms of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s
resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all
findings, determinations and the like that such investment bank determines are required to be made by such investment bank in
connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations
and the like to the terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder),
in its sole discretion, shall have the right to submit any dispute described in this Section 13 to any state or federal court
sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 13 and (iv)
nothing in this Section 13 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including,
without limitation, with respect to any matters described in this Section 13).

14.           REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right
of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to
all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting
a bond or other security. The Company shall provide all information and documentation to the Holder that is requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without
limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon
the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect
thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

15.           PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant
is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or
the holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b)
there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company creditors’
rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection,
enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without
limitation, attorneys’ fees and disbursements. 

    	 	15	 

     

    

 

16.           TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

 

17.           CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)           “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

(b)           “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

(c)           Intentionally Omitted.

(d)           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls,
is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.

(e)           Intentionally Omitted.

(f)            “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly
managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect
Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together
with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock
would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934
Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum
Percentage.

(g)           “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not
apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported
by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time
of determination, the average of the bid prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for
a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such
time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and
the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

    	 	16	 

     

    

(h)           Intentionally Omitted.

(i)            “Bloomberg” means Bloomberg, L.P.

(j)            “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain closed.

(k)           “Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any
of its, direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to
hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of
the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification,
or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company
or any of its Subsidiaries.

(l)            
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date,
the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported
by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid
price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively,
is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the
Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value
as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations
shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar
transactions during such period.

    	 	17	 

     

    

(m)           “Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share,
and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification
of such common stock.

(n)           “Convertible Securities” means any stock or other security (other than Options) that is at any time and
under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common Stock.

(o)           “Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market,
the Nasdaq Global Market, the OTCQX, the OTCQB (or any successors to any of the foregoing) or the Principal Market.

(p)           Intentionally Omitted.

(q)           “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

(r)            “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange
offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated
(as defined in the Note) with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule
13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by
all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to
effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares
of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary
to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment
of such instrument or transaction.

    	 	18	 

     

    

(s)            “Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined
in Rule 13d-5 thereunder.

(t)            “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock
or Convertible Securities.

(u)           “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

(v)           “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

(w)          “Principal Market” means the Nasdaq Capital Market.

(x)             “SEC” means the United States Securities and Exchange Commission or the successor thereto.

(y)           “Spot
Price” means, as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding
the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a)
hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day
prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under
the federal securities laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of the time of the Holder’s
execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on
a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price
of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such
Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours”
on such Trading Day.

    	 	19	 

     

    

(z)            “Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person,
Persons or Group.

(aa)         “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

(bb)         “Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.

(cc)         “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security
on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending
at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If
the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.

[signature page follows]

    	 	20	 

     

    

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	MY SIZE, INC.
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:    

  

    	 	21	 

     

    

 

EXHIBIT
A

 

EXERCISE
NOTICE

TO BE
EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

MY
SIZE, INC. 

The undersigned
holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of My
Size, Inc., a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

1.       Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:

		☐	a “Cash Exercise” with respect to _________________
Warrant Shares; and/or

		☐	a “Cashless Exercise” with respect to _______________
Warrant Shares.

In the event that
the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the
Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.

2.       Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum
of $___________________ to the Company in accordance with the terms of the Warrant.

3.       Variable
Price Securities. By checking the box in this Item 4, the holder elects to exercise the Warrant by substituting the Variable
Price for the Exercise Price pursuant to Section 2(d) of the Warrant, which Variable Price equals $            per share.☐ 

4.       Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common
Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:

☐         Check
here if requesting delivery as a certificate to the following name and to the following address:

 

	Issue
    to:	 
	 	 
	 	 

 

		☐	Check
                                         here if requesting delivery by Deposit/Withdrawal at Custodian as follows: 

 

	DTC Participant: 	 
	DTC
    Number:	 
	Account Number:	 
	 	 	 

	Date:
        _____________ __,           

         

                                                                    

Name of Registered Holder

        

 

	By:	                                                       

                                         Name:

                                         Title:

                                         

         

        Tax
        ID:____________________________

         

        Facsimile:__________________________

         

        E-mail
        Address:_____________________

    	 	A-1	 

     

    

 

 EXHIBIT B

 

ACKNOWLEDGMENT

The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number
of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 201_, from the Company and acknowledged
and agreed to by _______________.

 

	 	MY SIZE, INC.
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:    

 

    	 	B-1

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