Document:

FRANCHISEE STOCK PURCHASE AGREEMENT

 

This Agreement is made as
of March 30, 2011, by and among ITEX Corporation, a Nevada corporation (the “Company”), and __________ (the “Purchaser”).

 

		1.0	PURCHASE OF SHARES. 

 

1.1           Purchase.
The Purchaser hereby purchases, and the Company hereby sells to the Purchaser, __________ thousand (xxx,000) shares of the
Company’s common stock (the “Purchased Shares”) at a purchase price of $4.00 per share, for a total of $_______
(the “Purchase Price”).

 

1.2           Payment.
Concurrently with the execution of this Agreement, the Purchaser shall pay the Purchase Price for the Purchased Shares by delivering
to the Company a Secured Promissory Note (the “Note”) payable to the order of the Company in the form attached hereto
as Annex A. Purchaser shall also deliver to the Secretary of the Company a duly executed Stock Pledge Agreement in the form
attached hereto as Annex B (the “Pledge Agreement”), a duly executed blank Assignment Separate from Certificate
(in the form attached hereto as Exhibit A) and whatever additional documents may be required by the Company as a condition for
the purchase.

 

1.3           Delivery
of Certificates. The certificates representing the Purchased Shares purchased hereunder shall be held in escrow by the
Secretary of the Company as provided in Section 6 hereof.

 

		2.0	SECURITIES LAW COMPLIANCE. 

 

2.1           No
Registration. The Purchased Shares have not been registered under Securities Act of 1933, as amended (the “Securities
Act”), and are being issued to Purchaser in reliance upon the exemption from registration provided by Rule 506 of Regulation
D or Section 4(2) of the Securities Act for transactions by an issuer not involving any public
offering.

 

2.2           Purchaser
Warranties and Representations. Purchaser warrants and represents the following:

 

		(a)	Sophistication. Purchaser has such knowledge and experience in financial and business matters
as to make Purchaser capable of evaluating the merits and risks of this investment and of making an informed investment decision
with respect to the investment. Purchaser is in a financial position to be able to bear the economic risk of the investment and
to hold the Purchased Shares for an indefinite period of time.

 

		(b)	Information. Prior to Purchaser’s acquisition of the Purchased Shares, Purchaser acquired
sufficient information about the Company to reach an informed knowledgeable decision to acquire the Purchased Shares. Purchaser
has been furnished with the current public information of the Company (including its most recent proxy statement and annual report
on Form 10-K, and all subsequent information filed with the Securities and Exchange Commission). Purchaser has had the opportunity
to ask questions and receive answers concerning the information he has received about the Purchased Shares.

 

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		(c)	Investment for Own Account. The Purchased Shares are being
acquired by Purchaser for investment for his account, not as a nominee or agent, and not with a view to the distribution of any
part thereof. Purchaser has no present intention of selling, granting any participation in or otherwise distributing any of the
Purchased Shares in a manner contrary to federal or state securities laws, nor does the Purchaser
have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant a participation to
such person or entity with respect to any of the Purchased Shares.

 

		(d)	Residency. For purposes of the application of state securities laws, Purchaser is a resident
of the state set forth beside his name in the signature block below.

 

2.3           Restricted
Securities. Purchaser hereby confirms that Purchaser has been informed that the Purchased Shares are restricted securities
under the Securities Act and may not be resold or transferred unless the Purchased Shares are first registered under the federal
securities laws or unless an exemption from such registration is available. Accordingly, Purchaser hereby acknowledges that Purchaser
is prepared to hold the Purchased Shares for an indefinite period or until they can be sold under the exemption from registration
under the Securities Act provided by Rule 144 thereunder, if available, and in compliance with any applicable state securities
laws.

 

2.4           Restrictive
Legends. In order to reflect the restrictions on disposition of the Purchased Shares, the stock certificates for the Purchased
Shares will be endorsed with a restrictive legend substantially in the following form:

 

The securities represented by this
certificate have not been registered under the Securities Act of 1933, as amended (the “Act”) and are “restricted
securities” as that term is defined in Rule 144 as promulgated under the Act. The securities may not be sold or transferred
for value without an effective registration statement under the Act, pursuant to the provisions of Rule 144 under the Act, or pursuant
to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company.         

 

		3.0	SPECIAL PROVISIONS. 

 

3.1           Stockholder
Rights. Purchaser (or any successor in interest) shall have all the rights of a stockholder (including voting and dividend
rights) with respect to the Purchased Shares, including the Purchased Shares held in escrow under Section 6, subject, however,
to the transfer restrictions of Section 4, the provisions of the Pledge Agreement, and the provisions of the Voting Agreement attached
hereto as Annex C.

 

3.2           Security
Interest. The Purchased Shares shall be collateral for the Note, and the Purchaser hereby pledges to the Company the Collateral
(as defined in the Pledge Agreement) and grants to and creates in favor of the Company a lien upon and security interest in the
Collateral, as further provided in the Pledge Agreement.

 

		4.0	TRANSFER RESTRICTIONS.

 

4.1           Disposition
of Shares. Purchaser hereby agrees that Purchaser shall make no disposition of the Purchased Shares (other than a permitted
transfer under Section 4.2) unless and until each of the following occur: (i) the Shares to be transferred have been held until
the Initial Termination Date (defined in the Voting Agreement), (ii) all principal and interest under the Note has been made in
full by Purchaser with respect to the Shares to be transferred, and (iii) Purchaser has complied with the provisions of Section
6 (Right of First Refusal). The Company shall not be required (i) to transfer on its books any Purchased Shares that have
been sold or transferred in violation of the provisions of this Section or (ii) to treat as the owner of the Purchased Shares,
or otherwise to accord voting or dividend rights to, any transferee to whom the Purchased Shares have been transferred in contravention
of this Agreement.

 

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4.2           Permitted
Transfers. These restrictions on transfer, however, shall not be applicable provided the Purchaser receives prior written consent
from the Company to (i) a gratuitous transfer of the Purchased Shares made to the Purchaser’s spouse or issue, including
adopted children, or to a trust for the exclusive benefit of the Purchaser or the Purchaser’s spouse or issue, (ii) a transfer
of title to the Purchased Shares effected pursuant to the Purchaser’s will or the laws of intestate succession or (iii) a
transfer to the Company in pledge as security for any purchase-money indebtedness incurred by the Purchaser in connection with
the acquisition of the Purchased Shares.

 

4.3           Transferee
Obligations. Each person (other than the Company) to whom the Purchased Shares are transferred by means of one of the permitted
transfers specified in Section 4.2 must, as a condition precedent to the validity of such transfer, acknowledge in writing to the
Company that such person is bound by the provisions of this Agreement and that the transferred shares are subject to the Company’s
First Refusal Right granted hereunder, as well as the provisions of the Pledge Agreement and the Voting Agreement, to the same
extent such shares would be so subject if retained by the Purchaser.

 

4.4           Definition
of Owner. For purposes of Sections 5 and 6 of this Agreement, the term “Owner” shall include the Purchaser and
all subsequent holders of the Purchased Shares who derive their chain of ownership through a permitted transfer from the Purchaser
in accordance with Section 4.2.

 

		5.0	RIGHT OF FIRST REFUSAL.

 

5.1           Grant.
The Company is hereby granted the right of first refusal (the “First Refusal Right”), exercisable in connection
with any proposed sale or other transfer of the Shares. For purposes of this Section 5, the term “transfer” shall include
any assignment, pledge, encumbrance or other disposition for value of the Purchased Shares intended to be made by the Owner, but
shall not include any of the permitted transfers under Section 4.2.

 

5.2           Notice
of Intended Disposition. In the event the Owner desires to sell the Shares in the public market or accept a bona fide
third-party offer for any or all of the Purchased Shares (the shares subject to such proposed sale or offer to be hereinafter called,
solely for the purposes of this Section, the “Target Shares”), Owner shall promptly (i) deliver to the Secretary of
the Company written notice (the “Disposition Notice”) of the proposed sale or offer and the basic terms and conditions
thereof, including the proposed purchase price, and (ii) provide satisfactory proof that the disposition of the Target Shares would
not be in contravention of the provisions set forth in Sections 2, 3 and 4.1 of this Agreement.

 

5.3           Exercise
of Right. The Company (or its assignees) shall, for a period of five (5) days following receipt of the Disposition Notice,
have the right to repurchase any or all of the Target Shares specified in the Disposition Notice upon substantially the same terms
and conditions specified therein. Such right shall be exercisable by written notice (the “Exercise Notice”) delivered
to Owner prior to the expiration of the five (5) day exercise period. If such right is exercised with respect to all the Target
Shares specified in the Disposition Notice, then the Company (or its assignees) shall effect the repurchase of the Target Shares,
including payment of the purchase price, not more than five (5) business days after delivery of the Exercise Notice; and at such
time Owner shall deliver to the Company the certificates representing the Target Shares to be repurchased, each certificate to
be properly endorsed for transfer. To the extent any of the Target Shares are at the time held in escrow under Section 6, the certificates
for such shares shall automatically be released from escrow and surrendered to the Company for cancellation. The Target Shares
so purchased shall thereupon be canceled and cease to be issued and outstanding shares of the Company’s common stock.

 

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5.4           Non-Exercise
of Right. In the event the Exercise Notice is not given to Owner within five (5) days following the date of the Company’s
receipt of the Disposition Notice, Owner shall have the right to sell or otherwise dispose of the Target Shares upon terms and
conditions (including the purchase price) no more favorable to the third-party purchaser than those specified in the Disposition
Notice; provided however, that any such sale or disposition must not be effected in contravention of the provisions of Sections
2 and 4.1 of this Agreement. To the extent any of the Target Shares are at the time held in escrow under Section 6, the certificates
for such shares shall automatically be released from escrow and surrendered to the Owner. The third-party purchaser shall acquire
the Target Shares free and clear of all the terms and provisions of this Agreement (including the Company’s First Refusal
Right hereunder).

 

5.5           Re-capitalization.
In the event of any stock dividend, stock split, re-capitalization or other transaction affecting the Company’s outstanding
common stock as a class effected without receipt of consideration, then any new, substituted or additional securities or other
property which is by reason of such transaction distributed with respect to the Purchased Shares shall be immediately subject to
the Company’s First Refusal Right hereunder, but only to the extent the Purchased Shares are at that time covered by such
right.

 

5.6           Corporate
Transaction.

 

		(a)	In the event of any of the following transactions or a related series of transactions in which one
of the following occurs (a “Corporate Transaction”):

 

		(i)	a merger or acquisition in which the Company is not the surviving entity, except for a transaction
the principal purpose of which is to change the State in which the Company is incorporated;

 

		(ii)	the sale, transfer or other disposition of fifty percent (50%) or more of the assets of the Company;

 

		(iii)	any merger, consolidation or other business combination in which the Company is the surviving entity
but in which fifty percent (50%) or more of the Company’s outstanding voting stock is transferred to holders different from
those who held the stock immediately prior to such merger;

 

		(iv)	the issuance of securities equal to 50% or more of the Company’s issued and outstanding voting
securities, determined as a single class, to any individual, firm, partnership or other entity, including a “group”
within the meaning of section 13(d)(3) of the Securities Exchange Act of 1934; or

 

		(v)	there is a change in the majority of the members of the Board
of Directors as a result of one or more contested elections for board membership.

 

then the Company’s First Refusal
Right hereunder shall automatically lapse in its entirety upon the consummation of such Corporate Transaction.

 

5.7          Termination
of the First Refusal Right. The First Refusal Right shall terminate, and cease to be exercisable, with respect to any
and all Purchased Shares for which payment of principal and interest under the Note has been made in full by Purchaser (such shares
to be hereinafter called the “Fully-Paid Shares”), provided however, the First Refusal Right shall continue
in effect and shall not be terminated prior to the Initial Termination Date (defined in the Voting Agreement).

 

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5.8           Legend.
All certificates representing Purchased Shares subject to the Right of First Refusal shall be endorsed with a legend substantially
in the following form:

 

The shares represented by this certificate
are subject to certain restrictions contained in a Franchisee Stock Purchase Agreement, a Stock Pledge Agreement and a Voting Agreement
each dated as of March 30, 2011, copies of which are on file at the principal office of the Company. Any transfer of shares in
violation of the provisions of these Agreements will be void and without legal effect.

 

		6.0	ESCROW

 

6.1           Deposit.
Upon issuance, the certificates for the Purchased Shares shall be deposited in escrow with the Secretary of the Company to
be held in accordance with the provisions of the Pledge Agreement and this Section 6. Each deposited certificate shall be accompanied
by a duly executed Assignment Separate from Certificate in the form of Exhibit A. The deposited certificates, together with any
other assets or securities from time to time deposited with the Company pursuant to the requirements of this Agreement, shall remain
in escrow until such time or times as the certificates (or other assets and securities) are to be released or otherwise surrendered
for cancellation in accordance with this Section.

 

6.2           Re-capitalization.
All regular and special cash dividends on the Purchased Shares (or other securities at the time held in escrow) shall be paid
directly to the Owner and shall not be held in escrow. However, in the event of any stock dividend, stock split, re-capitalization
or other change affecting the Company’s outstanding common stock as a class effected without receipt of consideration or
in the event of a Corporate Transaction, any new, substituted or additional securities or other property which is by reason of
such transaction distributed with respect to the Purchased Shares shall be immediately delivered to the Secretary of the Company
to be held in escrow under this Section 6, but only to the extent the Purchased Shares are at the time subject to the escrow requirements.

 

6.3           Release,
Surrender. The Purchased Shares, together with any other assets or securities held in escrow hereunder, shall be subject
to the terms and conditions of the Pledge Agreement in addition to the following terms and conditions relating to their release
from escrow or their surrender to the Company for repurchase and cancellation:

 

		(a)	Should the Company elect to exercise its First Refusal Right under Section 5 with respect to any Target
Shares held at the time in escrow hereunder, then the escrowed certificates for such Target Shares (together with any other assets
or securities issued with respect thereto) shall, concurrently with the payment of the purchase price for such Target Shares to
the Owner, be surrendered to the Company for cancellation, and the Owner shall cease to have any further rights or claims with
respect to such Target Shares (or other assets or securities).

 

		(b)	Should the Company elect not to exercise its First Refusal Right under Section 5 with respect
to any Target Shares held at the time in escrow hereunder, then the escrowed certificates for such Target Shares (together with
any other assets or securities issued with respect thereto) shall be surrendered to the Owner for disposition according to the
provisions of Section 5.4.

 

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		(c)	So long as no Event of Default (as such term is defined in the Note) exists under the Note, as the
interest of the Purchaser in the Purchased Shares (or any other assets or securities issued with respect thereto) increases in
proportion to the portion of the Fully-Paid Shares, the certificates for such Fully-Paid Shares (as well as all other assets and
securities associated therewith) shall be released from escrow upon request of the Owner and delivered to the Owner in accordance
with the following schedule:

 

		(i)	the initial release of Fully-Paid Shares (or other fully-paid assets and securities) from escrow shall
be effected within thirty (30) days following the Initial Termination Date (as defined in the Voting Agreement).

 

		(ii)	Subsequent releases of Fully-Paid Shares (or other fully-paid assets and securities) from escrow shall
be effected at annual intervals thereafter, with the first such annual release to occur twelve (12) months after the Initial Termination
Date.

 

		(d)	All Purchased Shares (or other assets or securities) released from escrow in accordance with the provisions
of subparagraph (c) above shall nevertheless remain subject to the Company’s First Refusal Right under Section 5 until such
right lapses pursuant to Section 5.7, together with the provisions of the Voting Agreement.

 

		7.0	GENERAL PROVISIONS.

 

7.1           Assignment.
Shareholder may not assign any of his, her or its rights under this Agreement without the prior written consent of the Company.
 The Company may assign its First Refusal Right under Section 5, without the consent of Purchaser, to any person or entity
selected by the Company’s Board of Directors, including (without limitation) one or more stockholders of the Company.

 

7.2           No
Employment or Service Contract. Nothing in this Agreement shall confer upon the Purchaser any right to continue in the
service of the Company or be a Service Provider to the Company (or any parent or subsidiary corporation of the Company contracting
with, employing or retaining Purchaser) for any period of time or interfere with or restrict in any way the rights of the Company
(or any parent or subsidiary corporation of the Company contracting with, employing or retaining Purchaser) or the Purchaser, which
rights are hereby expressly reserved by each, to terminate the Service Provider status of Purchaser at any time for any reason
whatsoever, with or without cause. For purposes of this Agreement, Purchaser shall be deemed to be a “Service Provider”
to the Company for so long as the Purchaser owns, operates or manages an ITEX franchise.

 

7.3           Notices.
Any notice required in connection with (i) the Repurchase Right, the First Refusal Right or the Voting Agreement, or (ii) the
disposition of any Purchased Shares covered thereby shall be given in writing and delivered in person, transmitted by facsimile,
delivered via overnight courier or sent by registered or certified mail, postage prepaid and return receipt requested, to the parties
at their respective addresses and facsimile numbers, or to such other address/number as a party may subsequently specify in writing.
Notice shall be deemed effective upon the earlier of actual receipt, which if by facsimile shall be deemed conclusively determined
by electronic confirmation of delivery, the next day following deposit with a national commercial delivery service if sent by overnight
courier, or the third business day after the date on which said notice was sent by any other method described above.

 

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7.4           No
Waiver. The failure of the Company (or its assignees) in any instance to exercise the Repurchase Rights granted under
Section 5, or the failure of the Company (or its assignees) in any instance to exercise the First Refusal Right granted under Section
5, shall not constitute a waiver of any other repurchase rights and/or rights of first refusal that may subsequently arise under
the provisions of this Agreement or any other agreement between the Company and the Purchaser. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

 

		8.0	MISCELLANEOUS PROVISIONS.

 

8.1           Purchaser
Undertaking. Purchaser hereby agrees to take whatever additional action and execute whatever additional documents the
Company may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions
imposed on either the Purchaser or the Purchased Shares pursuant to the express provisions of this Agreement.

 

8.2           Agreement
Is Entire Contract. This Agreement, including all exhibits and annexes thereto, constitutes the entire contract between
the parties hereto with regard to the subject matter hereof.

This Agreement supersedes all prior or contemporaneous
negotiations, discussions or agreements, whether oral or written, between the parties with respect to the subject matter of this
Agreement. No amendment to or modification of this Agreement will be binding unless in writing and signed by an authorized representative
of each party.

 

8.3           Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Washington, as
such laws are applied to contracts entered into and performed in such State.

 

8.4           Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.

 

8.5           Successors
and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its
successors and assigns and the Purchaser and the Purchaser’s legal representatives, heirs, legatees, distributees, assigns
and transferees by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed
in writing to join herein and be bound by the terms and conditions hereof.

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement on the day and year first indicated above.

 

	ITEX CORPORATION	 	 	PURCHASER
	 	 	 	 
	By:	 	 	 	 
	 	Steven White, CEO	 	 	 
	 	 	 	Address:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

  

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EXHIBIT A

 

Assignment Separate from Certificate

 

FOR VALUE RECEIVED, and pursuant
to that certain Franchisee Stock Purchase Agreement (the “Agreement”), together with the Stock Pledge Agreement attached
thereto as Annex B (the “Pledge Agreement”), each dated as of March 30, 2011, the undersigned does hereby sell, assign
and transfer to ITEX CORPORATION, a Nevada corporation (the “Company”), _____________ ( _____________) shares of the
common stock of the Company, represented by Certificate No. ____ standing in the name of the undersigned on the books of said Company.

 

The undersigned does hereby
irrevocably constitute and appoint the Secretary of the Company and/or its transfer agent, OTR, Inc., as attorney-in-fact to transfer
the said stock on the books of the Company with full power of substitution in the premises. This Assignment may be used only in
accordance with and subject to the terms and conditions of the Agreement and the Pledge Agreement, in connection with the forfeiture
or repurchase of shares of common stock of the Company issued to the undersigned pursuant to the Agreement.

 

Dated: ________________________

 

	 	Signature	 	 	 
	 	 	 	, Owner	 
	 	 	 	 	 
	 	Signature	 	 	 
	 	 	 	, Joint Owner	 

 

IMPORTANT – read carefully

The signature(s) provided on this assignment must
correspond with the name(s) as written on the face of the certificate(s) in every way.

 

    	 

    	 

    

 

	Annex A

 

SECURED PROMISSORY NOTE

 

	$___________	March 30, 2011

 

FOR VALUE RECEIVED, __________________,
a resident of ___, ___ (the “Purchaser”), hereby unconditionally promises to pay to ITEX Corporation, a Nevada corporation,
or its registered assigns (the “Company”) in lawful money of the United States of America and in immediately available
funds at Bellevue, WA or such other place it designates, the principal amount of __________ Thousand Dollars ($xx,xxx) together
with interest at the rate of 2.44% per annum (the “applicable federal rate” in effect on the date hereof for loans
of such maturity) from the date of this Note on the outstanding principal amount hereof accruing until all principal and interest
has been paid, payable as follows: ___________ Dollars ($______) will be withheld twice each four-week billing Cycle from payments
the Company is required to make to the Purchaser under its Franchise Agreement, for a payment of $_____.00 every two weeks and
a total payment of $_____.00 each Cycle (“Cycle Payment”), except as provided below.

 

For purposes of this Secured
Promissory Note (the “Note”), “Cycle” means the four-week business cycle of ITEX Corporation. Each ITEX
fiscal year is divided into 13 Cycles.

 

Payments to the Company will
commence on May 12, 2011. In the event that a payment during any Cycle is insufficient to pay the installment then due, the Purchaser
will make up any difference by making payment in the form of a check or wire transfer to the Company.

 

This Note is being executed
and delivered for payment for the Purchased Shares pursuant to and in accordance with the terms and conditions of the Franchisee
Stock Purchase Agreement (the “Purchase Agreement”), dated as of March 30, 2011 between Purchaser and the Company,
and is subject to the terms and conditions of the Agreement, which is, by this reference, incorporated herein and made a part hereof.
Capitalized terms used but not otherwise defined in this Note have the respective meanings given to such terms in the Purchase
Agreement.

 

1.          Principal.
The entire unpaid principal amount of this Note shall be paid on or before March 30, 2017 (the “Maturity Date”). Promptly
following the payment in full of this Note, the Company shall surrender this Note to the Purchaser for cancellation.

 

2.          Payments.
All payments of principal and interest to be made by the Purchaser in respect of this Note shall be either: (a) withheld from payments
the Company is required to make to the Purchaser under its Franchise Agreement; or (b) made in U.S. dollars by wire transfer to
an account designated by the Company by written notice to the Purchaser or (c) made by certified or official bank check payable
to the order of the Company and delivered to the principal office of the Company or such other address that the Company provides
to the Purchaser, not later than 12:00 p.m. Pacific Standard Time on the due date. If the due date of any payment in respect
of this Note would otherwise fall on a day that is not a Business Day (as defined below), such due date shall be extended to the
next succeeding Business Day. All amounts payable under this Note shall be paid free and clear of, and without reduction by reason
of, any deduction, set-off or counterclaim. The Purchaser may prepay this Note in whole or in part prior to the Maturity Date.
On the Maturity Date the remaining principal balance will be paid, together with any unpaid interest.

 

3.          Collateral.
Collateral has been given for the payment of this Note as described in the Stock Pledge Agreement (the “Pledge Agreement”)
of even date between the Company and the Purchaser. The term “Collateral” as used herein, has the meaning given to
it in the Pledge Agreement. The term “Liabilities” as used herein, shall mean all obligations of the Purchaser under
this Note. To secure the payment of this Note and all other Liabilities, the Purchaser has pledged and assigned to the Company
the Collateral and granted to and created in favor of the Company a lien upon and security interest in the Collateral.

 

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4.          Events
of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reasons
for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

4.1.          in
the event that payment is not made by the Purchaser within 10 days of the due date of any payment due pursuant to this Note or
upon any default by the Purchaser on any payment any of the other Notes (as defined below);

4.2.          any
material breach by the Purchaser of any term, condition, obligation, covenant, representation or warranty contained in this Note,
the Purchase Agreement, Franchise Agreement, or Purchaser’s Independent Licensed Broker Agreement;

 

4.3.          the
Purchaser (or the Purchaser’s ITEX franchise) pursuant to or within the meaning of Bankruptcy Law (as defined below): (i) commences
a voluntary case for relief from its creditors; (ii) consents to the entry of an order for relief against it in an involuntary
case for relief from its creditors; (iii) consents to the appointment of a custodian of the Purchaser or for any, all or substantially
all of the property of the Purchaser; (iv) makes a general assignment for the benefit of its creditors; or (v) admits
in writing its inability generally to pay its debts as they become due;

 

4.4.          a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Purchaser
(or the Purchaser’s ITEX franchise) in an involuntary case; (ii) appoints a custodian of the Purchaser (or the Purchaser’s
ITEX franchise) or for any, all or substantially all of the property of the Purchaser (or the Purchaser’s ITEX franchise);
or (iii) orders the liquidation of the Purchaser (or the Purchaser’s ITEX franchise);

 

4.5.          the
commencement of any proceeding or the filing of a petition by or against the Purchaser (or the Purchaser’s ITEX franchise)
under any Bankruptcy Law for liquidation, reorganization or adjustment of debts or for the modification
or adjustment of the rights of creditors;

 

4.6           any
material levy, seizure or attachment of any property of the Purchaser (or the Purchaser’s ITEX franchise);

 

4.7.          the
Purchaser (or the Purchaser’s ITEX franchise) is generally not paying its debts as they
become due;

 

4.8.          the
dissolution, consolidation, merger or transfer of a substantial part of the property of the Purchaser (or the Purchaser’s
ITEX franchise);

 

4.9.          the
Purchaser (or the Purchaser’s ITEX franchise) ceases or threatens to cease to carry on all or a substantial part of its business;

 

4.10.        the
Purchaser (or the Purchaser’s ITEX franchise) is in breach of any material term, condition, obligation, covenant, representation
or warranty under any other material agreement to which the Purchaser (or the Purchaser’s ITEX franchise) is a party;

 

4.11.        the
Purchaser (or the Purchaser’s ITEX franchise) is in default of, or materially breached the terms of, any of its indebtedness;

 

4.12.        the
Purchaser (or the Purchaser’s ITEX franchise) is sued by any of its existing or previous shareholders, directors or officers;
or

 

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4.13.       the
Purchaser (or the Purchaser’s ITEX franchise) sues the Company or is sued by the Company for any reason.

 

5.          Acceleration
of Note. If an Event of Default occurs and is continuing, then and in every such case the Company may declare the outstanding
principal amount and accrued interest of this Note to be due and payable immediately, by a notice in writing to the Purchaser,
and upon any such declaration such principal shall become immediately due and payable. Notwithstanding the foregoing, if an Event
of Default referenced in Section 4.3 or 4.4 occurs, the outstanding principal amount and accrued interest of this Note shall automatically
become due and payable immediately without any declaration or other action on the part of the Company all of which are hereby expressly
waived by the Purchaser. At any time after the outstanding principal amount and accrued interest of this Note shall become immediately
due and payable and before a judgment or decree for payment of the money due has been obtained, the Company, by written notice
to the Purchaser, may rescind and annul any acceleration and its consequences.

 

6.           Transfer
and Sale of Collateral. As set forth in the Pledge Agreement, upon
an Event of Default, the Company may realize upon the Collateral
or any part thereof, and may sell or otherwise dispose of and deliver the Collateral or any part thereof or interest therein, or
transfer to its ownership as much of the Collateral as has a fair market value equal to the amount owed by Purchaser under the
Note.

 

7.          All
Notes Equal. This Note may be one of a series of duly authorized Secured Promissory Notes of the Purchaser or an Affiliate
of the Purchaser, of like tenor and effect issued pursuant to the Purchase Agreement or another agreement for purchase of common
stock of ITEX Corporation, except for variations necessary to express the name of the maker, the principal amount of each Note,
and the date of issue (the “Notes”). All such Notes shall rank equally, without preference or priority of any kind
over one another, and all payments on account of principal and interest with respect to any and all of the Notes shall be applied
ratably and proportionately to all outstanding Notes on the basis of the principal amount of outstanding indebtedness represented
thereby.

 

8.          Priority.
This Note shall not be subordinate or junior to any of the Purchaser’s obligations incurred prior to or after the date of
this Note, except as required or permitted by law or as otherwise agreed to by the Company.

 

9.          Definitions.
The following terms shall have the meanings set forth below:

 

“Bankruptcy Law”
means Title 11, U.S. Code or any similar federal or state law or the law of any other jurisdiction for the relief of debtors.

 

“Business Day”
means a day other than Saturday, Sunday or any day on which banks located in the State of Washington are authorized or obligated
to close.

 

10.         Successors.
All agreements of the Purchaser in this Note shall bind its successors and permitted assigns. This Note shall inure to the benefit
of the Company and its successors and permitted assigns. This Note may be transferred by the Company at any time without the consent
of the Purchaser, subject to compliance with applicable federal and state securities laws. The Company shall give prior written
notice to the Purchaser of any transfer of this Note.

 

11.        Delegation.
The Purchaser shall not delegate or assign any of its obligations hereunder without the prior written consent of Company.

 

12.        Waivers.
The Purchaser waives demand, presentment for payment, notice of dishonor, protest, notice of protest and notice of non-payment
of this Note. The Company shall not be deemed by any act of omission or commission to have waived any of its rights or remedies
hereunder unless such waiver is in writing and expressly stated as such and signed by the Company and then only to the extent specifically
set forth in the writing. A waiver of one event shall not be construed as continuing or a bar to or wavier of any right or remedy
to a subsequent event.

 

    	A - 3

    	 

    

 

13.         Notices.
All notices and other communications in respect of this Note (including, without limitation, any modifications of, or requests,
waivers or consents under, this Note) shall be given or made in writing (including, without limitation, by facsimile) at the Section
entitled “Notices” specified in the Purchase Agreement; or, as to either the Purchaser or the Company, at such other
address as shall be designated by such party in a notice to the other party, and shall be deemed effective in accordance with the
provisions of the Purchase Agreement.

 

14.         Amendments,
Waivers or Termination. Any term of this Note may be amended or waived only with the written consent of the Purchaser and the
Company. Any amendment or waiver effected in accordance with this Section shall be binding upon the Company and each transferee
of this Note and the Purchaser.

 

15.         Governing
Law. This Note and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance
with the laws of the State of Washington, without giving effect to principles of conflicts of law.

 

IN WITNESS WHEREOF, the Purchaser
has caused this Note to be signed by its duly authorized officer as of the date set forth above.

 

	THE PURCHASER:	 
	 	 
	 	 

 

    	A - 4

    	 

    
 

	Annex B

 

STOCK PLEDGE AGREEMENT

 

This Stock Pledge Agreement
is made as of March 30, 2011, by and among ITEX Corporation, a Nevada corporation (the “Company”), and __________ (the
“Purchaser”).

 

RECITALS

 

A.           The
Company is making a loan to Purchaser pursuant to that certain Franchisee Stock Purchase Agreement (the “Purchase Agreement”)
and Secured Promissory Note (the “Note”) of even date, between the Purchaser, as borrower, and the Company, as lender.
Capitalized terms used but not otherwise defined in this Stock Pledge Agreement have the respective meanings given to such terms
in the Purchase Agreement.

 

B.           The
Purchaser, pursuant to the Purchase Agreement, desires to grant to the Company a perfected security interest in the Collateral
(as defined below) to secure payment of the Note. If amounts owed under the Note are not repaid, Purchaser has agreed that the
Company can take the Collateral and sell it as described below.

 

NOW, THEREFORE, in consideration
of the mutual promises, covenants, representations and warranties hereinafter set forth and for other good and valuable consideration,
the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

 

1.0        Grant
of Security Interest; Pledge of Collateral. To secure the payment of the Note and the Liabilities, the Purchaser hereby
pledges and assigns to the Company the Collateral and grants to and creates in favor of the Company a lien upon and a continuing
security interest in the Collateral. The term “Collateral,” as used herein, shall mean: (i) certificates representing
the __________ thousand (xxx,000) Purchased Shares which are deposited in escrow pursuant to the Purchase Agreement, together with
the Assignment Separate from Certificate duly executed in blank (in the form of Exhibit A to the Purchase Agreement), and (ii)
any and all dividends, distributions and other rights on or with respect to, and substitutions for and proceeds of, any of the
foregoing. Any proceeds from the sale of Collateral are also part of the Collateral. Purchaser hereby agrees to execute all documents
and take any other actions reasonably requested by the Company in order to perfect the security interest contemplated hereby.

 

2.0        Voting
Rights; Dividends. During the term of this Stock Pledge Agreement and as long as no Event of Default (as such term is defined
in the Note) under the Note shall have occurred and be continuing:

 

(a)          Purchaser
(or any successor in interest) shall have all the rights of a stockholder (including voting and dividend rights) with respect to
the Purchased Shares, subject to the terms of this Stock Pledge Agreement, the Purchase Agreement, the Note, and the Voting Agreement
(collectively, the “Transaction Documents”)

 

(b)          Purchaser
(or any successor in interest) shall be entitled to receive and retain any cash dividends on the Purchased Shares. However, in
the event of any stock dividend, stock split, re-capitalization or other change affecting the Company’s outstanding common
stock as a class effected without receipt of consideration or in the event of a Corporate Transaction, any new, substituted or
additional securities or other property which is by reason of such transaction distributed with respect to the Purchased Shares
shall be immediately delivered to the Secretary of the Company to be held in escrow under Section 6 of the Purchase Agreement as
Collateral, and shall be, if received by Purchaser, received in trust for the benefit of the Company, segregated from the other
property or funds of Purchaser, and forthwith delivered to the Company as Collateral in the same form as so received (with any
necessary endorsement);

 

    	B - 1

    	 

    

 

(c)          Purchaser
shall execute and deliver (or cause to be executed and delivered) to the Company all such proxies and other instruments as the
company may reasonably request for the purpose of enabling the Company to exercise those voting and other rights which it is entitled
to exercise pursuant to the Voting Agreement; and

 

(d)          If
an Event of Default shall have occurred and be continuing and any amounts shall be due and payable (whether by acceleration, maturity
or otherwise) under any of the Liabilities, all rights of Purchaser to exercise the voting and other consensual rights with respect
to the Collateral which it would otherwise be entitled to exercise pursuant to the Purchase Agreement or this Section 2 shall,
at the Company’s option, cease, and all such rights shall, at the Company’s option, thereupon become vested in the
Company so long as an Event of Default shall continue, and the Company shall, at its option, thereupon have the sole right, but
no obligation, to exercise such voting and other consensual rights and to receive and hold as Collateral such dividends, interest
payments and any new, substituted or additional securities or other property which is distributed with respect to the Collateral.

 

3.0           Representations
and Warranties. Purchaser warrants and represents that:

 

(a)          Other
than as set forth in the Transaction Documents, there are no restrictions upon the transfer of any of the Collateral and Purchaser
has the right to pledge and grant a security interest in or otherwise transfer such Collateral free of any encumbrances or rights
of third parties;

 

(b)          Other
than as set forth in the Transaction Documents, all of the Collateral is and shall remain free from all liens, claims, encumbrances
and purchase money or other security interests. Purchaser shall not, without the Company’s prior written consent, sell or
otherwise dispose of any or all of the Collateral until all amounts owed to the Company under the Note are paid;

 

(c)          This
Stock Pledge Agreement, and the delivery to the Company of the Collateral, creates a valid, perfected and first priority security
interest in the Collateral in favor of the Company, and all actions necessary or desirable to such perfection have been duly taken.
Purchaser is using the money loaned by the Company to purchase the Collateral, so that the Company has a “purchase money
security interest” in the Collateral;

 

(d)          No
authorization or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for
the: (i) grant by Purchaser of the security interest granted hereby or for the execution, delivery or performance of this Stock
Pledge Agreement by Purchaser; (ii) perfection of, or exercise by, the Company of its rights and remedies hereunder (except as
may have been taken by or at the direction of Purchaser or as may be required in connection with a disposition of the Collateral
by laws affecting the offering and sale of securities generally); or (iii) exercise by the Company of the voting or other rights
provided for in this Stock Pledge Agreement or the remedies in respect of the Collateral pursuant to this Stock Pledge Agreement
(except as may be required in connection with a disposition of the Collateral by laws affecting the offering and sale of securities
generally);

 

(e)          Other
than as set forth in the Transaction Documents, there are no existing agreements with respect to the Collateral between Purchaser
and any other person or entity.

 

    	B - 2

    	 

    

 

4.0          Charges
against Collateral. Purchaser will pay as they become due all taxes or other liens or claims which may become a charge
against the Collateral. Subject to Section 9-207 (RCW 62A.9A-207) of the Washington Uniform Commercial Code (the “UCC”),
the Company shall have no duty with respect to the Collateral. Without limiting the generality of the foregoing, the Company shall
be under no obligation to take any steps necessary to preserve rights in the Collateral against any other parties or to exercise
any rights represented thereby; provided, however, that the Company may, at its option, do so, and any and all expenses incurred
in connection therewith shall be for the sole account of Purchaser.

 

5.0           Remedies
Upon Default.

 

5.1           Upon
the occurrence of an Event of Default, the Company shall give Purchaser five (5) Business Days written notice of its intent to
sell or purchase the Collateral. If the default has not been cured within the 5-day notice period, the Company may, without demand
of performance or other demand, and without notice, advertisement, hearing or process of law of any kind, realize upon the Collateral
or any part thereof, and may sell or otherwise dispose of and deliver the Collateral or any part thereof or interest therein, in
one or more parcels at public or private sale or sales at such price and upon such terms as it may deem best, for cash or credit.
Any purchaser shall take the Collateral free of any right or claims in Purchaser, which rights or claims are hereby expressly waived
and released.

 

5.2           The
right is expressly granted to the Company at and after an Event of Default to transfer into the Company’s name, or in the
name of a designee or nominee, any Collateral in the form of securities pledged hereunder and to exercise, at its option, all of
the rights of a registered owner with respect thereto, including voting rights, if any, and to require any cash dividends on the
Collateral to be delivered to the Company as additional security or applied toward the satisfaction of the Purchaser’s obligation.
The parties agree that the Company shall first proceed against the Collateral upon any Event of Default. The sale price of the
Collateral shall be the fair market value if the Company chooses to purchase the Collateral for its own account and apply the proceeds
of the sale to the satisfaction of the Purchaser’s obligation.

 

5.3           The
Purchaser hereby irrevocably constitutes and appoints the Company and any officer or agent thereof, with full power of substitution,
as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of the Purchaser or in
the Company’s own name, for the purpose of carrying out the provisions of this Section 5, to take any and all appropriate
action and to execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this
section. The Purchaser hereby acknowledges that any requirement of reasonable notice shall be met if such notice is mailed to Purchaser
at the address set forth in the Purchase Agreement at least five (5) Business Days before the time of the sale or disposition.
In addition, to the extent permitted by law, Purchaser waives any and all rights that it may have to a judicial hearing in advance
of the enforcement of any of the Company’s rights and remedies hereunder, including, without limitation, its right following
an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

 

5.4           In
view of the fact that federal and state securities laws may impose certain restrictions on the method by which a sale of the Collateral
may be effected after an Event of Default, Purchaser agrees that upon the occurrence of an Event of Default, the Company may from
time to time attempt to sell all or any part of the Stock Collateral by a private placement, restricting the bidders and prospective
purchasers to those who will represent and agree that they are “accredited investors” within the meaning of Regulation
D promulgated pursuant to the Securities Act of 1933, as amended, and are purchasing for investment only and not for distribution.
In so doing, the Company may solicit offers to buy the Collateral, or any part of it for cash, from a limited number of investors
deemed by the Company, in its sole discretion, to be responsible parties who might be interested in purchasing the Collateral.
If the Company shall solicit such offers from not less than ten (10) such investors, then the acceptance by the Company of the
highest offer obtained therefrom shall be deemed to be a commercially reasonable method of disposition of such Collateral.

 

    	B - 3

    	 

    

 

5.5        Upon
the occurrence of an Event of Default, the Company shall have, in addition to any other rights given by law and the rights against
Purchaser hereunder, in the Purchase Agreement, in the other Transaction Documents and in any other documents executed by Purchaser
and the Company, all of the rights and remedies with respect to the Collateral of a secured party under the UCC. Any proceeds of
any of the Collateral may be applied by the Company to the payment of expenses in connection with the Collateral, free of all rights
and claims of the Purchaser therein and thereto, including reasonable attorneys’ fees and legal expenses, and any balance
of such proceeds may be applied by the Company toward the payment of the Liabilities. Payment may be enforced and recovered in
whole or in part at any time by one or more of the remedies provided to Company in the Stock Pledge Agreement, the Note or the
Transaction Documents. The remedies of Company shall be cumulative and concurrent and may be pursued singularly, successively or
together, at the sole discretion of Company, and may be exercised as often as occasion therefore shall occur; and the failure to
exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

6.0           Adjustments.
Purchaser hereby consents and agrees that, from time-to-time, before or after the occurrence or existence of any Event of Default,
with or without notice to or assent from Purchaser, any other security at any time held by or available to the Company of Purchaser
for any of the Liabilities, or any other security at any time held by or available to the Company of any other person, firm or
corporation secondarily or otherwise liable for any of the Liabilities, may be exchanged, surrendered or released, any of the Liabilities
may be changed, altered, renewed, extended, continued, surrendered, compromised, waived or released, in whole or in part, and the
Company may fail to take any action with respect to any of such security or may extend further credit to Purchaser, all of the
same as the Company may see fit, and Purchaser shall remain bound under this Stock Pledge Agreement notwithstanding any such exchange,
surrender, release, change, alteration, renewal, extension, continuance, compromise, waiver, release, inaction or extension of
further credit.

 

		7.0	GENERAL PROVISIONS.

 

7.1           Notices.
All notices or demands by any party hereto to the other party and relating to this Stock Pledge Agreement shall be made in
the manner and to the addresses set forth in the Purchase Agreement.

 

7.2           Severability.
If any provision of this Stock Pledge Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then
such provision shall be enforced to the maximum extent permissible and the remainder of this Stock Pledge Agreement shall continue
in full force and effect.

 

7.3           No
Waiver. No waiver by the Company (or its assignees) of any breach of this Stock Pledge Agreement shall be a waiver of any preceding
or succeeding breach. Any forbearance or failure or delay by the Company in exercising any right, power or remedy hereunder shall
not be deemed to be a waiver of such right, power or remedy, and any single or partial exercise of any right, power or remedy hereunder
shall not preclude the further exercise thereof; and every right, power and remedy of the Company shall continue in full force
and effect until such right, power or remedy is specifically waived by an instrument in writing executed by the Company.

 

    	B - 4

    	 

    

 

7.4           Further
Assurances. Purchaser hereby agrees to take whatever additional action and execute and deliver, or cause to be executed
and delivered, all such other stock powers, proxies, instruments and documents and to take all such other action as the Company
may reasonably request from time to time in order to carry out the provisions and purposes of this Stock Pledge Agreement.

 

7.5           Governing
Law; Consent to Personal Jurisdiction. This Stock Pledge Agreement will be governed by and construed according to the laws
of the State of Washington; as such laws are applied to agreements entered into and to be performed entirely within Washington
between Washington residents. Purchaser hereby expressly consents to the personal jurisdiction of the state and federal courts
located in King County, Washington in connection with any dispute or claim involving this Agreement. Purchaser waives any right
it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance
with this section.

 

7.6           Counterparts.
This Stock Pledge Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

7.7           Successors
and Assigns. The provisions of this Stock Pledge Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns and the Purchaser and the Purchaser’s legal representatives, heirs, legatees, distributees,
assigns and transferees by operation of law, whether or not any such person shall have become a party to this Stock Pledge Agreement
and have agreed in writing to join herein and be bound by the terms and conditions hereof, provided however, that Purchaser
may not assign this Stock Pledge Agreement or any rights hereunder without the Company’s prior written consent and any prohibited
assignment shall be absolutely void. No consent to an assignment by the Company shall release Purchaser from its obligations to
the Company hereunder.

 

7.8           Attorneys’
Fees and Costs. Purchaser hereby agrees to pay all reasonable attorney’s fees, costs and expenses which may be incurred
by the Company in the enforcement of this Stock Pledge Agreement, whether or not suit is brought, including all reasonable attorney’s
fees to be fixed by any arbitrator, trial court, and/or appellate court, in the action and on appeal.

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement on the day and year first indicated above.

 

	ITEX CORPORATION	 	 	PURCHASER
	 	 	 	 
	By:	 	 	 	 
	 	Steven White, CEO	 	 	 
	 	 	 	Address:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    	B - 5

    	 

    

 

ANNEX C

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT (this
“Agreement”), dated as of March 30, 2011, is by and between ITEX Corporation, a Nevada corporation (the “Company”),
and _______________ as a shareholder (or potential shareholder) of the Company (the “Shareholder”).

 

RECITALS

 

A.           The
Company and Shareholder have entered into a Franchisee Stock Purchase Agreement of even date (the “Purchase Agreement”),
pursuant to which the Shareholder will purchase from the Company shares of common stock. Capitalized terms used but not otherwise
defined in this Agreement have the respective meanings given to such terms in the Purchase Agreement.

 

B.           Concurrently
with the execution of the Purchase Agreement, the Company and the Shareholder desire to enter into this Agreement for the purpose
of providing certain voting rights with respect to the Purchased Shares.

 

THEREFORE, THE PARTIES
HEREBY AGREE AS FOLLOWS:

 

1.          VOTING.
During the Term of this Agreement, Stockholder agrees to vote all of the Purchased Shares, whether now owned or hereafter acquired
or which Stockholder may be empowered to vote (together the “Shares”), from time to time and at all times, in whatever
manner shall be necessary at each annual or special meeting of stockholders in which Stockholder is entitled to vote, or pursuant
to any written consent of the stockholders, “FOR” and in favor of the following:

 

		(a)	Board Composition. To elect each of those nominees designated by the Board of Directors of
the Company to constitute its Board of Directors; and
	 	 	 

		(b)	Other Matters. For such other proposals as may be recommended by the Board of Directors
from time to time.

 

The Company and Shareholder
agree to not take any action inconsistent with the purposes and provisions of this Agreement.

 

2.          TERM.
This Agreement shall be effective as of the date hereof and shall continue in effect until and shall terminate (1) with respect
to any portion of the Purchased Shares for which payment has been made (the “Fully-Paid Shares”), the date upon which
all payments of principal and interest under the Note have been made by Purchaser for that portion of the Purchased Shares; or
(2) with respect to any or all of the Purchased Shares, upon the earlier to occur of (a) the date of any termination of the Note
made by amendment or waiver by written consent of both parties; or (b) the occurrence of a Corporate Transaction (as defined in
Section 5.7 of the Purchase Agreement). Notwithstanding subsection 2(1) above, or any payment for the Purchased Shares or prepayment
of the Note, this Voting Agreement shall continue in effect and shall not be terminated prior to March 31, 2014 (the “Initial
Termination Date”).

 

3.          IRREVOCABLE
PROXY. Shareholder shall enter into an Irrevocable Proxy in the form attached hereto as Exhibit A (the “Irrevocable
Proxy”) which shall be effective immediately and shall continue in full force and effect through the Initial Termination
Date; and shall be effective thereafter from time to time beginning the first date on which an Event of Default occurs or is continuing.
“Event of Default” shall have the meaning given to such term in the Note.

 

    	C - 1

    	 

    

 

4.           MISCELLANEOUS.

 

4.1           Representations
of Shareholder. Shareholder hereby represents and warrants to the Company that Shareholder has full power to enter into this
Agreement and has not, prior to the date of this Agreement, executed or delivered any proxy or entered into any other voting agreement
or similar arrangement that would conflict with the purposes or provisions of this Agreement.

 

4.2           Legend.
In addition to any other legend required by law or agreement, each certificate evidencing shares of the Company’s common
stock owned by any party to this Agreement shall be endorsed with a legend substantially in the form set forth in Section 5.8 of
the Purchase Agreement.

4.3           Effect
on Transferees. Each and every transferee or assignee of the Purchased Shares (other than through public market resales) from
Shareholder shall be bound by and subject to the terms and conditions of this Agreement that are applicable to such transferee’s
transferor or assignor, and the Company shall require, as a condition precedent to the transfer of any the Purchased Shares, that
the transferee agrees in writing to be bound by, and subject to, all the terms and conditions of this Agreement.

 

4.4           Specific
Performance. Shareholder recognizes that the obligations imposed on Shareholder in this Agreement are special, unique and of
extraordinary character, and that in the event of breach by Shareholder, damages will be an insufficient remedy; consequently,
it is agreed that the Company will be entitled to an injunction to prevent breaches of this Agreement and/or specific performance
(in addition to any other remedies in equity or at law) as a remedy for the enforcement hereof, without posting a bond or other
security and without proving damages.

 

4.5           Binding
Agreement; Amendment. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, legal representatives, successors or assigns. This Agreement may not be amended or modified
in whole or in part at any time except upon the written consent of both Shareholder and the Company.

 

4.6           Notices.
Any notice provided under this Agreement shall be given in writing in the manner provided by the Purchase Agreement.

 

4.7           Severability;
Counterparts. The invalidity of any provision or provisions of the Agreement shall not invalidate or otherwise affect any other
provisions of this Agreement, which shall remain in full force and effect. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

4.8           Choice
of Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington,
as such laws are applied to contracts entered into and performed in such State. Each of the parties to this Agreement hereby consents
to personal jurisdiction of the state and federal courts located in King County, Washington having subject matter jurisdiction.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Voting Agreement as of the date and year first above written.

 

	ITEX CORPORATION	 	 	SHAREHOLDER
	 	 	 	 
	By:	 	 	 	 
	 	Steven White, CEO	 	 	 
	 	 	 	Address: 	 
	 	 	 	 	 
	 	 	 	 	 

 

    	C - 2

    	 

    

 

EXHIBIT A

 

IRREVOCABLE PROXY

 

By signing below, for value
received, ___________________ (the “Shareholder”) does hereby irrevocably appoint John Wade, Secretary (the “Proxy”)
proxy and attorney-in-fact, with full power of substitution, on Shareholder’s behalf and in Shareholder’s name, to
represent Shareholder as of and after the Effective Date (as defined below), at all annual and special shareholders meetings (the
“Meetings”) of ITEX Corporation, a Nevada corporation (the “Company”), and at any adjournment(s) or postponement(s)
thereof, or pursuant to any written consent of the stockholders, and to vote all of the Purchased Shares, whether now owned or
hereafter acquired or which Stockholder may be empowered to vote, on all matters that the Shareholder would be entitled to vote
if personally present. This proxy will be voted for the Board of Director nominees and recommended proposals in the manner provided
by Section 1 of the Voting Agreement (to which this proxy is attached as Exhibit A), and will be voted in the discretion of the
Proxy on such other matters as may properly come before the meeting or any adjournment or postponement thereof. This appointment,
being coupled with the interest set forth in the Purchase Agreement, Pledge Agreement and Note, is irrevocable and shall continue
in full force and effect through the “Initial Termination Date” (defined in the Voting Agreement); and thereafter in
accordance with the provisions of the Voting Agreement.

 

The “Effective Date”
of this irrevocable proxy shall be the date of the Voting Agreement.

 

During the effective term
of this irrevocable proxy, the Proxy is hereby granted the right to vote the Purchased Shares electronically or by Internet or
telephone, and the Proxy is authorized to receive (and the Company’s transfer agent and/or proxy agent are authorized and
instructed to deliver to the Proxy) any Shareholder electronic voting instructions, control numbers, sequence numbers and account
validation numbers to enable Internet voting or telephone voting of the Purchased Shares.

 

This Irrevocable Proxy shall
terminate in accordance with the provisions of the Voting Agreement. The Proxy may, at any time or from time to time, terminate
this Irrevocable Proxy or waive its right to act on behalf of the Shareholder pursuant to this Irrevocable Proxy for a definite
or indefinite period of time, all in the sole and absolute discretion of the Proxy.

 

Shareholder may not assign
any of his, her or its rights or delegate duties under this Irrevocable Proxy without the prior written consent of the Proxy. The
Proxy and any assignee of the Proxy hereunder may assign its rights hereunder, without the consent of the Shareholder.

 

If one or more provisions
of this Irrevocable Proxy are held to be unenforceable under applicable law, such provision shall be excluded from this Irrevocable
Proxy and the balance of this Irrevocable Proxy shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms. This Irrevocable Proxy shall be construed and enforced in accordance with the federal laws of the
United States and the laws of the State of Nevada, without regard to the conflicts of law rules of such state.

 

IN WITNESS WHEREOF, the Shareholder
has executed this Irrevocable Proxy intending to be bound thereby as of March 31, 2011.

 

SHAREHOLDER:

 

	 	 	Address:	 
	(print name)	 	 	 
	 	 	 	 
	 	 	 	 
	(signature)	 	Fax:	 
	 	 	 	 
	Consented and agreed to by spouse (if applicable):	 	SSN or EIN:	 
	 	 	 	 
	 	 	 	 
	(print name)	 	 	 
	 	 	 	 
	 	 	 	 
	(signature)Exhibit 4.1

 

THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1)
AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAWS,
OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

IN ADDITION, THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF
ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF SUCH SECURITIES
BY ANY PERSON FOR A PERIOD OF 180 DAYS IMMEDIATELY FOLLOWING THE DATE OF EFFECTIVENESS OF THE COMPANY’S REGISTRATION STATEMENT
NO.: 333-178837 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT IN ACCORDANCE WITH FINRA RULE 5110(G)(2).

 

LIQTECH INTERNATIONAL, INC.

 

PLACEMENT AGENT’S WARRANT

 

___ shares of Common Stock

 

March 8, 2012

 

This PLACEMENT AGENT’S WARRANT (this
“Warrant”) of LiqTech International, Inc., a corporation duly organized and validly existing under the laws
of the State of Nevada (the “Company”), is being issued pursuant to that certain Placement Agency Agreement,
dated as of March 8, 2012 (the “Placement Agency Agreement”), by and among the Company and Sunrise Securities
Corp. (the “Placement Agent”) relating to a public offering (the “Offering”) of up to 8,333,333
shares (the “Shares”) of Common Stock, $0.001 par value per share (the “Common Stock”) pursuant
to a Registration Statement on Form S-1 (File No. 333-178837).

 

FOR VALUE RECEIVED, the Company hereby grants to _____
and its permitted successors and assigns (collectively, the “Holder”) the right to purchase from the Company
up to _____ (____) shares of Common Stock [in the aggregate, with all other Placement Agent’s Warrants, 5% of number of Shares
sold] (such shares underlying this Warrant, the “Warrant Shares”), at a per share purchase price equal to $4.0625
(the “Exercise Price”), subject to the terms, conditions and adjustments set forth below in this Warrant.

 

1. Date of Warrant Exercise. This Warrant shall become
exercisable on the date that is 180 days from the Base Date (the “Exercise Date”). As used in this Warrant,
the term “Base Date” shall mean March 8, 2012. Except as otherwise provided for herein or as permitted by applicable
rules of the Financial Industry Regulatory Authority, Inc., this Warrant shall not be sold, transferred, assigned, pledged or hypothecated
prior to the Exercise Date.

 

2. Expiration of Warrant. This Warrant shall expire
on the five (5) year anniversary of the Base Date (the “Expiration Date”).

 

    	 

    	 

    

 

3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the terms of this Section 3.

 

3.1 Manner of Exercise.

 

(a) This Warrant may only be exercised by the Holder hereof
on or after the Exercise Date and on or prior to the Expiration Date, in accordance with the terms and conditions hereof, in whole
or in part (but not as to fractional shares) with respect to any portion of this Warrant, during the Company’s normal business
hours on any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York, New York are
authorized by law to be closed (a “Business Day”), by surrender of this Warrant to the Company at its office
maintained pursuant to Section 10.2(a) hereof, accompanied by a written exercise notice in the form attached as Exhibit A
to this Warrant (or a reasonable facsimile thereof) duly executed by the Holder, together with the payment of the aggregate Exercise
Price for the number of Warrant Shares purchased upon exercise of this Warrant. Upon surrender of this Warrant, the Company shall
cancel this Warrant document and shall, in the event of partial exercise, replace it with a new Warrant document in accordance
with Section 3.3.

 

(b) Except as provided for in Section 3.1(c) below, each
exercise of this Warrant must be accompanied by payment in full of the aggregate Exercise Price in cash by check or wire transfer
in immediately available funds for the number of Warrant Shares being purchased by the Holder upon such exercise.

 

(c) The aggregate Exercise Price for the number of Warrant
Shares being purchased may also, in the sole discretion of the Holder, be paid in full or in part on a “cashless basis”
at the election of the Holder:

 

(i) in the form of Common Stock owned by the Holder (based
on the Fair Market Value (as defined below) of such Common Stock on the date on which the exercise is deemed to have been effected);

 

(ii) in the form of Warrant Shares withheld by the Company
from the Warrant Shares otherwise to be received upon exercise of this Warrant having an aggregate Fair Market Value on the date
on which the exercise is deemed to have been effected equal to the aggregate Exercise Price of the Warrant Shares being purchased
by the Holder; or

 

(iii) by a combination of the foregoing, provided that the
combined value of all cash and the Fair Market Value of any shares surrendered to the Company is at least equal to the aggregate
Exercise Price for the number of Warrant Shares being purchased by the Holder.

 

For purposes of this Warrant, the term “Fair Market
Value” means with respect to a particular date, (i) if the Common Stock is then listed or quoted on the New York Stock
Exchange, the NYSE AMEX, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market or any other national
securities exchange, the closing price per share of the Common Stock for such date (or the nearest preceding date) on the primary
eligible market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted
on the OTC Bulletin Board, the closing bid price per share of the Common Stock for such date (or the nearest preceding date) so
quoted; or (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent closing
bid price per share of the Common Stock so reported. If the Common Stock is not publicly traded as set forth above, the “fair
value” per share of Common Stock shall be reasonably and in good faith determined by the Board of Directors of the Company
as of the date which the exercise is deemed to have been effected.

 

    	2

    	 

    

 

For purposes of illustration of a cashless exercise of this
Warrant under Section 3.1(c)(ii) (or for a portion thereof for which cashless exercise treatment is requested as contemplated by
Section 3.1(c)(iii) hereof), the calculation of such exercise shall be as follows:

 

X = Y (A-B)/A

 

where:

  

X = the number of Warrant Shares to be issued to the Holder
(rounded to the nearest whole share).

 

Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.

 

A = the Fair Market Value of the Common Stock.

 

B = the Exercise Price.

 

(d) For purposes of Rule 144 and sub-section (d)(3)(ii) thereof,
it is intended, understood, and acknowledged that the Common Stock issuable upon exercise of this Warrant in a cashless exercise
transaction as described in Section 3.1(c) above shall be deemed to have been acquired at the time this Warrant was issued. Moreover,
it is intended, understood, and acknowledged that the holding period for the Common Stock issuable upon exercise of this Warrant
in a cashless exercise transaction as described in Section 3.1(c) above shall be deemed to have commenced on the date this Warrant
was issued.

 

3.2 When Exercise Effective. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the close of business on the Business Day on which this Warrant
shall have been duly surrendered to the Company as provided in Sections 3.1 and 3.12 hereof, and, at such time, the Holder in whose
name any certificate or certificates for Warrant Shares shall be issuable upon exercise as provided in Section 3.3 hereof shall
be deemed to have become the holder or holders of record thereof of the number of Warrant Shares purchased upon exercise of this
Warrant.

 

3.3 Delivery of Common Stock Certificates and New Warrant.
As soon as reasonably practicable after each exercise of this Warrant, in whole or in part, and in any event within five (5) Business
Days thereafter, the Company, at its expense (including the payment by it of any applicable issue taxes), will cause to be issued
in the name of and delivered to the Holder hereof or, subject to Sections 9 and 10 hereof, as the Holder (upon payment by the Holder
of any applicable transfer taxes) may direct:

 

(a) a certificate or certificates (with appropriate restrictive
legends, as applicable) for the number of duly authorized, validly issued, fully paid and nonassessable Warrant Shares to which
the Holder shall be entitled upon exercise; and

 

(b) in case exercise is in part only, a new Warrant document
of like tenor, dated the date hereof, for the remaining number of Warrant Shares issuable upon exercise of this Warrant after giving
effect to the partial exercise of this Warrant (including the delivery of any Warrant Shares as payment of the Exercise Price for
such partial exercise of this Warrant).

 

    	3

    	 

    

 

4. Certain Adjustments. For so long as this Warrant
is outstanding:

 

4.1 Mergers or Consolidations. If at any time after
the date hereof there shall be a capital reorganization (other than a combination or subdivision of Common Stock otherwise provided
for herein) resulting in a reclassification to or change in the terms of securities issuable upon exercise of this Warrant (a “Reorganization”),
or a merger or consolidation of the Company with another corporation, association, partnership, organization, business, individual,
government or political subdivision thereof or a governmental agency (a “Person” or the “Persons”)
(other than a merger with another Person in which the Company is a continuing corporation and which does not result in any reclassification
or change in the terms of securities issuable upon exercise of this Warrant or a merger effected exclusively for the purpose of
changing the domicile of the Company) (a “Merger”), then, as a part of such Reorganization or Merger, lawful
provision and adjustment shall be made so that the Holder shall thereafter be entitled to receive, upon exercise of this Warrant,
the number of shares of stock or any other equity or debt securities or property receivable upon such Reorganization or Merger
by a holder of the number of shares of Common Stock which might have been purchased upon exercise of this Warrant immediately prior
to such Reorganization or Merger. In any such case, appropriate adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after the Reorganization or Merger to the end that the provisions
of this Warrant (including adjustment of the Exercise Price then in effect and the number of Warrant Shares) shall be applicable
after that event, as near as reasonably may be, in relation to any shares of stock, securities, property or other assets thereafter
deliverable upon exercise of this Warrant. The provisions of this Section 4.1 shall similarly apply to successive Reorganizations
and/or Mergers.

 

4.2 Splits and Subdivisions; Dividends. In the event
the Company should at any time or from time to time effectuate a split or subdivision of the outstanding shares of Common Stock
or pay a dividend in or make a distribution payable in additional shares of Common Stock or Common Stock Equivalents without payment
of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents (including the additional
shares of Common Stock issuable upon conversion or exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share Exercise Price shall be appropriately decreased and
the number of Warrant Shares shall be appropriately increased in proportion to such increase (or potential increase) of outstanding
shares; provided, however, that no adjustment shall be made in the event the split, subdivision, dividend or distribution is not
effectuated.

 

4.3 Combination of Shares. If the number of shares
of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common
Stock, the per share Exercise Price shall be appropriately increased and the number of shares of Warrant Shares shall be appropriately
decreased in proportion to such decrease in outstanding shares.

 

4.4 Adjustments for Other Distributions. In the event
the Company shall declare a distribution payable in securities of other Persons, evidences of indebtedness issued by the Company
or other Persons, assets (excluding cash dividends or distributions to the holders of Common Stock paid out of current or retained
earnings and declared by the Company’s board of directors) or options or rights not referred to in Sections 4.1, 4.2 or 4.3,
then, in each such case for the purpose of this Section 4.4, upon exercise of this Warrant, the Holder shall be entitled to a proportionate
share of any such distribution as though the Holder was the actual record holder of the number of Warrant Shares as of the record
date fixed for the determination of the holders of Common Stock of the Company entitled to receive such distribution.

 

5. No Impairment. The Company will not, by amendment
of its articles of incorporation or by-laws or through any consolidation, merger, reorganization, transfer of assets, dissolution,
issue 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, but will at all times in good faith assist in the carrying out of all of the terms and in the taking of all actions
necessary or appropriate in order to protect the rights of the Holder against impairment.

 

    	4

    	 

    

 

6. Chief Financial Officer’s Report as to Adjustments.
With respect to each adjustment pursuant to Section 4 of this Warrant, the Company, at its expense, will promptly as practicable
compute the adjustment or re-adjustment in accordance with the terms of this Warrant and cause its Chief Financial Officer to certify
the computation (other than any computation of the fair value of property of the Company, as the case may be) and prepare a report
setting forth, in reasonable detail, the event requiring the adjustment or re-adjustment and the amount of such adjustment or re-adjustment,
the method of calculation thereof and the facts upon which the adjustment or re-adjustment is based, and the Exercise Price and
the number of Warrant Shares or other securities purchasable hereunder after giving effect to such adjustment or re-adjustment,
which report shall be mailed by first class mail, postage prepaid to the Holder. The Company will also keep copies of all reports
at its office maintained pursuant to Section 10.2(a) hereof and will cause them to be available for inspection at the office during
normal business hours upon reasonable notice by the Holder or any prospective purchaser of the Warrant designated by the Holder
thereof.

 

7. Reservation of Shares. The Company shall, solely
for the purpose of effecting the exercise of this Warrant, at all times during the term of this Warrant, reserve and keep available
out of its authorized shares of Common Stock, free from all taxes, liens and charges with respect to the issue thereof and not
subject to preemptive rights or other similar rights of shareholders of the Company, such number of its shares of Common Stock
as shall from time to time be sufficient to effect in full the exercise of this Warrant. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect in full the exercise of this Warrant, in addition to such
other remedies as shall be available to Holder, the Company will promptly take such corporate action as may, in the opinion of
its counsel, be necessary to increase the number of authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including without limitation, using its Reasonable Best Efforts (as defined in Section 14
hereof) to obtain, as promptly as practicable, the requisite shareholder approval necessary to increase the number of authorized
shares of Common Stock. The Company hereby represents and warrants that all shares of Common Stock issuable upon exercise of this
Warrant shall be duly authorized and, when issued and paid for upon exercise, shall be validly issued, fully paid and nonassessable.

 

8. Registration and Listing.

 

8.1 Definition of Registrable Securities; Majority.
As used herein, the term “Registrable Securities” means any shares of Common Stock issuable upon the exercise
of this Warrant, until the date (if any) on which such shares shall have been transferred or exchanged and new certificates for
them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act or any similar state law then in force. For purposes
of this Warrant, the term “Majority”, in reference to the holders of Registrable Securities, shall mean in excess
of fifty percent (50%) of the then outstanding Warrant Shares (assuming the exercise of the all Placement Agent’s Warrants
in their entirety) that: (i) are not held by the Company, an affiliate, officer, creditor, employee or agent thereof or any of
their respective affiliates, members of their family, Persons acting as nominees or in conjunction therewith and (ii) have not
be resold to the public pursuant to a registration statement filed under the Securities Act.

 

    	5

    	 

    

 

8.2 Incidental Registration Rights.

 

(a) If the Company, at any time on or after the Base Date
through the fifth anniversary of the Base Date, proposes to register any of its securities under the Securities Act (other than
in connection with a registration on Form S-4 or S-8 or any successor forms) whether for its own account or for the account of
any holder or holders of its shares other than Registrable Securities (any shares of such holder or holders (but not those of the
Company and not Registrable Securities) with respect to any registration are referred to herein as, “Other Shares”),
the Company shall each such time give prompt (but not less than thirty (30) days prior to the anticipated effectiveness thereof)
written notice to the holders of Registrable Securities of its intention to do so. Upon the written request of any such holder
of Registrable Securities made within ten (10) days after the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), except as set forth in Section 8.2(b), the Company will use its Reasonable
Best Efforts to effect the registration under the Securities Act of all of the Registrable Securities which the Company has been
so requested to register by such holder, to the extent requisite to permit the disposition of the Registrable Securities so to
be registered, by inclusion of such Registrable Securities in the registration statement which covers the securities which the
Company proposes to register; provided, however, that if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company
shall determine for any reason in its sole discretion either to not register, to delay or to withdraw registration of such securities,
the Company may, at its election, give written notice of such determination to such holder and, thereupon: (i) in the case of a
determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in connection therewith), (ii) in the case of a determination
to delay registration, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering
such other securities (including the Other Shares), and (iii) in the case of a determination to withdraw registration, shall be
permitted to withdraw registration. The Company will pay all Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 8.2.

 

(b) If the Company, at any time on or after the Base Date
through the fifth anniversary of the Base Date proposes to register any of its securities under the Securities Act as contemplated
by this Section 8.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested
by a holder of Registrable Securities, use its Reasonable Best Efforts to arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder among the securities to be distributed by such underwriters, provided that if
the managing underwriter of such underwritten offering shall inform the Company by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be distributed by such underwriters would interfere with
the successful marketing of the securities being distributed by such underwriters (such letter to state the basis of such belief
and the approximate number of such Registrable Securities, such Other Shares and shares held by the Company proposed so to be registered
which may be distributed without such effect), then the Company may, upon written notice to such holder, the other holders of Registrable
Securities, and holders of such Other Shares, reduce pro rata in accordance with the number of shares of Common Stock desired to
be included in such registration (if and to the extent stated by such managing underwriter to be necessary to eliminate such effect)
the number of such Registrable Securities and Other Shares the registration of which shall have been requested by each holder thereof
so that the resulting aggregate number of such Registrable Securities and Other Shares so included in such registration, together
with the number of securities to be included in such registration for the account of the Company, shall be equal to the number
of shares stated in such managing underwriter’s letter.

 

8.3 Registration Procedures. Whenever the holders
of Registrable Securities have properly requested that any Registrable Securities be registered pursuant to the terms of this Warrant,
the Company shall use its Reasonable Best Efforts to effect the registration and the sale of such Registrable Securities in accordance
with the intended method of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:

 

(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its Reasonable Best Efforts to cause such registration statement to become
effective;

 

    	6

    	 

    

 

(b) notify such holders of the effectiveness of each registration
statement filed hereunder and prepare and file with the SEC such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to (i) keep such registration statement effective and the prospectus
included therein usable for a period commencing on the date that such registration statement is initially declared effective by
the SEC and ending on the date when all Registrable Securities covered by such registration statement have been sold pursuant to
the registration statement or cease to be Registrable Securities, and (ii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration statement;

 

(c) furnish to such holders such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such holders;

 

(d) use its Reasonable Best Efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such jurisdictions as such holders reasonably request
and do any and all other acts and things which may be reasonably necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such holders; provided, however, that the Company
shall not be required to: (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph; (ii) subject itself to taxation in any such jurisdiction; or (iii) consent to general service
of process in any such jurisdiction;

 

(e) notify such holders, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a material fact or omits any material fact necessary to
make the statements therein, in light of the circumstances in which they are made, not materially misleading, and, at the reasonable
request of such holders, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of the circumstances in which they are made, not
materially misleading;

 

(f) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;

 

(g) make available for inspection by any underwriter participating
in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such underwriter,
all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers,
directors, managers, employees and independent accountants to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration statement;

 

(h) otherwise use its Reasonable Best Efforts to comply with
all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable,
an earnings statement of the Company, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities
Act and, at the option of the Company, Rule 158 thereunder;

 

(i) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending
the qualification of any Registrable Securities included in such registration statement for sale in any jurisdiction, the Company
shall use its Reasonable Best Efforts promptly to obtain the withdrawal of such order;

 

(j) use its Reasonable Best Efforts to cause any Registrable
Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities; and

 

    	7

    	 

    

 

(k) if the offering is underwritten, use its Reasonable Best
Efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration,
an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters
covering such issues as are reasonably required by such underwriters.

 

8.4 Listing. The Company shall secure the listing
of the Common Stock underlying this Warrant upon each national securities exchange or automated quotation system upon which shares
of Common Stock are then listed or quoted (subject to official notice of issuance) and shall maintain such listing of shares of
Common Stock. The Company shall at all times comply in all material respects with the Company’s reporting, filing and other
obligations under the by-laws or rules of any national securities exchange or market on which the Common Stock may then be listed,
as applicable.

 

8.6 Expenses. The Company shall pay all Registration
Expenses relating to the registration and listing obligations set forth in this Section 8. For purposes of this Warrant, the term
“Registration Expenses” means: (a) all registration, filing and FINRA (as defined below) fees, (b) all reasonable
fees and expenses of complying with securities or blue sky laws, (c) all word processing, duplicating and printing expenses, (d)
the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any
special audits or “cold comfort” letters required by or incident to such performance and compliance, and (e) premiums
and other costs of policies of insurance (if any) against liabilities arising out of the public offering of the Registrable Securities
being registered if the Company desires such insurance, if any; provided however, that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include (and such expenses shall be borne by the Company): (i) salaries
of Company personnel or general overhead expenses of the Company, (ii) auditing fees, (iii) premiums or other expenses relating
to liability insurance required by underwriters of the Company, or (iv) other expenses for the preparation of financial statements
or other data, to the extent that any of the foregoing either is normally prepared by the Company in the ordinary course of its
business or would have been incurred by the Company had no public offering taken place. Registration Expenses shall not include
any underwriting discounts and commissions which may be incurred in the sale of any Registrable Securities and transfer taxes of
the selling holders of Registrable Securities.

 

8.7 Information Provided by Holders. Any holder of
Registrable Securities included in any registration shall furnish to the Company such information as the Company may reasonably
request in writing to enable the Company to comply with the provisions hereof in connection with any registration referred to in
this Warrant.

 

8.8 FINRA Cobradesk Filings. In the event that a registration
statement covering the Registrable Securities is filed, within one (1) Business Day of the filing of such registration statement,
the Company will prepare and file the selling stockholder resale offering described in such registration statement for review by
the Financial Industry Regulatory Authority (“FINRA”) via the FINRA’s CobraDesk filing system (“CobraDesk
Filing”) for the purpose of having the prospectus contained within such registration statement treated as a “base
prospectus” in connection with such resale offering. The Company will use its Reasonable Best Efforts to have the CobraDesk
Filing approved by FINRA within thirty (30) days of such filing date. The Company shall bear all expenses of the CobraDesk Filing,
including fees and expenses of counsel or other advisors to the Holder. In all circumstances, the Company shall pay for all FINRA
filing fees associated with the CobraDesk Filing.

 

8.9 Effectiveness Period. The Company shall use its
Reasonable Best Efforts to keep each registration statement contemplated hereunder continuously effective under the Securities
Act until the date which is the earlier date of when (i) all Registrable Securities covered by such Registration Statement have
been sold or (ii) all Registrable Securities (assuming that the Warrants and such securities were not held by any affiliate of
the Company and all Warrants are exercised on a cashless basis pursuant to Section 3.1(c)) may be sold immediately without registration
under the Securities Act and without volume restrictions pursuant to Rule 144 under the Securities Act, as determined by the counsel
to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s
transfer agent and the affected holders of Registrable Securities.

 

    	8

    	 

    

 

8.10 Net Cash Settlement. Notwithstanding anything
herein to the contrary, in no event will the Holder hereof be entitled to receive a net-cash settlement as liquidated damages in
lieu of physical settlement in shares of Common Stock, regardless of whether the Common Stock underlying this Warrant is registered
pursuant to an effective registration statement; provided, however, that the foregoing will not preclude the Holder from seeking
other remedies at law or equity for breaches by the Company of its registration obligations hereunder.

 

9. Restrictions on Transfer.

 

9.1 Restrictive Legends. This Warrant and each Warrant
issued upon transfer or in substitution for this Warrant pursuant to Section 10 hereof, each certificate for Common Stock issued
upon the exercise of the Warrant and each certificate issued upon the transfer of any such Common Stock shall be transferable only
upon satisfaction of the conditions specified in this Section 9. Each of the foregoing securities shall be stamped or otherwise
imprinted with a legend reflecting the restrictions on transfer set forth herein and any restrictions required under the Securities
Act or other applicable securities laws.

 

9.2 Notice of Proposed Transfer. Prior to any transfer
of any securities which are not registered under an effective registration statement under the Securities Act (“Restricted
Securities”), which transfer may only occur if there is an exemption from the registration provisions of the Securities
Act and all other applicable securities laws, the Holder will give written notice to the Company of the Holder’s intention
to effect a transfer (and shall describe the manner and circumstances of the proposed transfer). The following provisions shall
apply to any proposed transfer of Restricted Securities:

 

(i) If in the opinion of counsel for the Holder reasonably
satisfactory to the Company the proposed transfer may be effected without registration of the Restricted Securities under the Securities
Act (which opinion shall state in detail the basis of the legal conclusions reached therein), the Holder shall thereupon be entitled
to transfer the Restricted Securities in accordance with the terms of the notice delivered by the Holder to the Company. Each certificate
representing the Restricted Securities issued upon or in connection with any transfer shall bear the restrictive legends required
by Section 9.1 hereof.

 

(ii) If the opinion called for in (i) above is not delivered,
the Holder shall not be entitled to transfer the Restricted Securities until either: (x) receipt by the Company of a further notice
from such Holder pursuant to the foregoing provisions of this Section 9.2 and fulfillment of the provisions of clause (i) above,
or (y) such Restricted Securities have been effectively registered under the Securities Act.

 

9.3 Certain Other Transfer Restrictions. Notwithstanding
any other provision of this Section 9: (i) prior to the Exercise Date, this Warrant or the Restricted Securities thereunder may
only be transferred or assigned to the persons permitted under FINRA Rule 5110(g), and (ii) no opinion of counsel shall be necessary
for a transfer of Restricted Securities by the holder thereof to any Person employed by the Placement Agent, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if the transferee were the original purchaser hereof
and such transfer is permitted under applicable securities laws.

 

9.4 Termination of Restrictions. Except as set forth
in Section 9.3 hereof, the restrictions imposed by this Section 9 upon the transferability of Restricted Securities shall cease
and terminate as to any particular Restricted Securities: (a) which shall have been effectively registered under the Securities
Act, or (b) when, in the opinions of both counsel for the holder thereof and counsel for the Company, such restrictions are no
longer required in order to insure compliance with the Securities Act or Section 10 hereof. Whenever such restrictions shall cease
and terminate as to any Restricted Securities, the Holder thereof shall be entitled to receive from the Company, without expense
(other than applicable transfer taxes, if any), new securities of like tenor not bearing the applicable legends required by Section
9.1 hereof.

 

    	9

    	 

    

 

10. Ownership, Transfer, Sale and Substitution of Warrant.

 

10.1 Ownership of Warrant. The Company may treat any
Person in whose name this Warrant is registered in the Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner
and holder thereof for all purposes, notwithstanding any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned,
may be exercised by a new holder without a new Warrant first having been issued.

 

10.2 Office; Exchange of Warrant.

 

(a) The Company will maintain its principal office at the
location identified in the prospectus relating to the Offering or at such other offices as set forth in the Company’s most
current filing (as of the date notice is to be given) under the Exchange Act or as the Company otherwise notifies the Holder.

 

(b) The Company shall cause to be kept at its office maintained
pursuant to Section 10.2(a) hereof a Warrant Register for the registration and transfer of the Warrant. The name and address of
the holder of the Warrant, the transfers thereof and the name and address of the transferee of the Warrant shall be registered
in such Warrant Register. The Person in whose name the Warrant shall be so registered shall be deemed and treated as the owner
and holder thereof for all purposes of this Warrant, and the Company shall not be affected by any notice or knowledge to the contrary.

 

(c) Upon the surrender of this Warrant, properly endorsed,
for registration of transfer or for exchange at the office of the Company maintained pursuant to Section 10.2(a) hereof, the Company
at its expense will (subject to compliance with Section 9 hereof, if applicable) execute and deliver to or upon the order of the
Holder thereof a new Warrant of like tenor, in the name of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face thereof for the number of shares of Common Stock called for on
the face of the Warrant so surrendered (after giving effect to any previous adjustment(s) to the number of Warrant Shares).

 

10.3 Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, upon delivery of indemnity reasonably satisfactory to the Company in form and amount
or, in the case of any mutilation, upon surrender of this Warrant for cancellation at the office of the Company maintained pursuant
to Section 10.2(a) hereof, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor
and dated the date hereof.

 

10.4 Opinions. In connection with the sale of the
Warrant Shares by Holder, the Company agrees to cooperate with the Holder, and at the Company’s expense, have its counsel
provide any legal opinions required to remove the restrictive legends from the Warrant Shares in connection with a sale, transfer
or legend removal request of Holder.

 

    	10

    	 

    

 

11. No Rights or Liabilities as Stockholder. No Holder
shall be entitled to vote or receive dividends or be deemed the holder of any shares of Common Stock or any other securities of
the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed
to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate
action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable,
as provided herein. The Holder will not be entitled to share in the assets of the Company in the event of a liquidation, dissolution
or the winding up of the Company.

 

12. Notices. Any notice or other communication in
connection with this Warrant shall be given in writing and directed to the parties hereto as follows: (a) if to the Holder, c/o
________________[—name and fax and/or email address] or (b) if to the Company, to the attention of its Chief Executive Officer
at its office maintained pursuant to Section 10.2(a) hereof; provided, that the exercise of the Warrant shall also be effected
in the manner provided in Section 3 hereof. Notices shall be deemed properly delivered and received when delivered to the notice
party (i) if personally delivered, upon receipt or refusal to accept delivery, (ii) if sent via facsimile, upon mechanical confirmation
of successful transmission thereof generated by the sending telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next Business Day, on the first Business Day after deposit with such courier service, or (iv) if sent by registered
or certified mail, five (5) Business Days after deposit thereof in the U.S. mail.

 

13. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the issuance of shares of Common Stock underlying this Warrant upon exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in
the transfer or registration of this Warrant or any certificate for shares of Common Stock underlying this Warrant in a name other
that of the Holder. The Holder is responsible for all other tax liability that may arise as a result of holding or transferring
this Warrant or receiving shares of Common Stock underlying this Warrant upon exercise hereof.

 

14. Miscellaneous. This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The section headings in this Warrant are for purposes of convenience only and shall
not constitute a part hereof. When used herein, the term “Reasonable Best Efforts” means, with respect to the
applicable obligation of the Company, reasonable best efforts for similarly situated, publicly-traded companies.

 

    	11

    	 

    

 

IN WITNESS WHEREOF, the Company has caused this Placement
Agent’s Warrant to be duly executed as of the date first above written.

 

	 	LIQTECH INTERNATIONAL, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT A

FORM OF EXERCISE NOTICE

[To be executed only upon exercise of
Warrant]

 

To LIQTECH INTERNATIONAL, INC.:

 

The undersigned registered holder of the within Warrant hereby
irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with respect to ________________________ Warrant Shares,
at an exercise price per share of $[ ], and requests that the certificates for such Warrant Shares be issued, subject to Sections
9 and 10, in the name of, and delivered to:

	 
	 
	 
	 
	 

 

The undersigned is hereby making payment for the Warrant
Shares in the following manner: [check one]

 

		•	by cash in accordance with Section 3.1(b) of the Warrant

 

		•	via cashless exercise in accordance with Section 3.1(c) of the Warrant in the following manner:

	 
	 
	 

 

The undersigned hereby represents and warrants that it is,
and has been since its acquisition of the Warrant, the record and beneficial owner of the Warrant.

 

Unless and until there is an effective registration statement
covering the Warrant Shares at the time of exercise, the undersigned hereby represents and warrants that it is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

	Dated:	 	 
	 	 	 
	 	 
	Print or Type Name	 
	 	 	 
	 	 
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	 	 	 
	 	 
	(Street Address)	 
	 	 	 
	 	 
	(City) (State) (Zip Code)	 

 

    	 

    	 

    

 

 

EXHIBIT B

FORM OF ASSIGNMENT

[To be executed only upon transfer of
Warrant]

 

For value received, the undersigned registered holder of
the within Warrant hereby sells, assigns and transfers unto _____________________ [include name and addresses] the rights represented
by the Warrant to purchase __________ shares of Common Stock of LIQTECH INTERNATIONAL, INC. to which the Warrant relates, and appoints
___________________ Attorney to make such transfer on the books of LIQTECH INTERNATIONAL, INC. maintained for the purpose, with
full power of substitution in the premises.

 

	 	Dated:	 
	 	 	 	(Signature must conform in all respects to name of holder as specified on the face of Warrant) 
	 	 	 	 
	 	 	 	 
	 	 	 	(Street Address)
	 	 	 	 
	 	 	 	 
	 	 	 	(City) (State) (Zip Code)
	 	 	 	 
	 	
        Signed in the

        presence of:
	 	 
	 	 	 	 
	 	 	 	(Signature of Transferee)
	 	 	 	 
	 	 	 	 
	 	 	 	(Street Address)
	 	 	 	 
	 	 	 	 
	 	 	 	(City) (State) (Zip Code)
	 	 	 	 
	 	
        Signed in the

        presence of:

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