Document:

FUNDING WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

 

Warrant Certificate No.: [NUMBER]

Original Issue Date: [DATE]1

 

FOR VALUE RECEIVED, CynergisTek, Inc., a Delaware corporation (the “Company”), hereby certifies that Horton Capital Management, LLC, a Delaware limited liability company, or its designees (as defined in the Purchase Agreement) (collectively, the “Holder”) is entitled to purchase from the Company [______] duly authorized, validly issued, fully paid and nonassessable shares of Common Stock at a purchase price per share equal to the Exercise Price, subject to the terms, conditions and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof. Other capitalized terms used in this Warrant which are not defined herein shall have the meanings ascribed to them in the Purchase Agreement. 

This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of [April __, 2020] (the “Purchase Agreement”), between the Company and the Holder.

1.Certain Definitions. As used in this Warrant, the following terms have the respective meanings set forth below: 

“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.

“Base Price” is a per-share amount equal to the Purchase Price (as defined in the Purchase Agreement).

“Board” means the board of directors of the Company.

“Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in New York City are authorized or obligated by law or executive order to close.

“Common Stock” means the common stock of the Company, par value $0.001 per share.

1 NTD: to be the Funding Date.

4820-9034-3863

“Common Stock Deemed Outstanding” means, at any given time, the sum of (a) the number of shares of Common Stock issued and actually outstanding at such time, plus (b) the number of shares of Common Stock reserved for issuance at such time under any stock option or other equity incentive plans approved by the Board, regardless of whether the shares of Common Stock are actually subject to outstanding Options at such time or whether any outstanding Options are actually exercisable at such time, plus (c) the number of shares of Common Stock issuable upon exercise of any other Options (other than Options described in clause (b) above) actually outstanding at such time, plus (d) the number of shares of Common Stock issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless of whether the Options or Convertible Securities are actually exercisable at such time.

“Company” has the meaning set forth in the preamble. 

“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 4(d)) by the Company after the Original Issue Date of: (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock (as such number of shares is equitably adjusted for subsequent stock splits, stock combinations, stock dividends and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company in connection with their service as directors of the Company, their employment by the Company or their retention as consultants by the Company, in each case authorized by the Board and issued pursuant to any stock option or other equity incentive plans approved by the Board (including all such shares of Common Stock and Options (including restricted stock units) outstanding prior to the Original Issue Date); (c) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date, provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise, settlement or conversion price thereof;   or (d) shares of Common Stock in connection with the Purchase Agreement.

“Exercise Agreement” has the meaning set forth in Section 3(a)(i).

“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Austin, Texas time, on a Business Day, including, without limitation, the receipt by the Company of the Warrant and the Aggregate Exercise Price. 

“Exercise Period” has the meaning set forth in Section 2.

“Exercise Price” means 125% of the Base Price. 

“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock averaged over twenty (20) consecutive Business Days prior to such particular date on all domestic securities exchanges on which the Common Stock may at the time be listed; or (b) if the Common Stock is not listed on a domestic securities exchange or if there have been no sales of the Common Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Common Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days 

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ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined by the Board in good faith.

“Holder” has the meaning set forth in the preamble.

“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities, including, specifically, restricted stock units (RSUs).

“Original Issue Date” means the date on which the Warrant was issued by the Company as first set forth above.

“OTC Bulletin Board” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof. 

“Pink OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

“Purchase Agreement” has the meaning set forth in the preamble.

“Registration Rights Agreement” means that certain Registration Rights Agreement dated [April ___, 2020], by and between the Company and the Holder.

“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

2.Term of Warrant. Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., Austin, Texas time, on the tenth (10th) anniversary of the date hereof or, if such day is not a Business Day, on the next Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein). 

3.Exercise of Warrant.  

(a)Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon: 

(i)surrender of this Warrant to the Company at its then principal executive offices (or such other office or agency of the Company as it may designate by notice in  

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writing to the Holder) (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii)payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b). 

(b)Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made (i) by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price or (ii) by means of a “cashless exercise” in which the Holder may request the Company to issue Warrant Shares then issuable upon exercise of all or any part of this Warrant on a net basis such that, without payment of any cash consideration or other immediately available funds, the Holder shall surrender all or a portion of this Warrant at the principal executive offices (or such other office or agency of the Company as it may designate by notice in writing to the Holder) of the Company and shall be entitled to receive a number of shares of Common Stock calculated using the following formula: 

X = Y(A – B) ÷ A

Where:

X = the number of Warrant Shares to be issued to the Holder. 

Y = the total number of Warrant Shares for which Holder has elected to exercise this Warrant on the Exercise Date pursuant to Section 3(a). 

A = the Fair Market Value of one Warrant Share as of the applicable Exercise Date. 

B = the Exercise Price in effect under this Warrant as of the applicable Exercise Date. 

(c)Delivery of Stock Certificates; Book Entry. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within ten (10) Business Days thereafter (the “Warrant Share Delivery Date”), execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder the Warrant Shares (registered in the name of Holder (or its designee) by book entry or certificate or otherwise as may be agreed to by the Company and Holder) issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(d) hereof. If the Company fails for any reason, other than a force majeure, to deliver to the Holder the Warrant Shares by the Warrant Share Delivery Date, the Company agrees to pay to the Holder, in cash, as liquidated damages and not as a penalty, $1000 per Business Day for each Business Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. A stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement. This Warrant shall be deemed to have been exercised and such book entry, certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date. 

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(d)Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date. 

(e)Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of book entry or delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.  

(f)Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees: 

(i)This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued. 

(ii)All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take commercially reasonable actions as may be reasonably necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued free and clear of all taxes, liens and charges. 

(iii)The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid. 

(g)Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Base Price. 

(h)Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to this Section 3 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Agreement, the Holder (together with the Holder’s affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable  

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upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3(h), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 3(h) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise Agreement shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3(h), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Business Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(h) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. The Holder, upon not less than sixty-one (61) days’ prior notice to the Company, may increase, decrease or eliminate the Beneficial Ownership Limitation provisions of this Section 3(h). Any such increase, decrease or elimination will not be effective until the 61st day after such notice is delivered to the Company.

4.Adjustment to Base Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Base Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4). 

(a)Adjustment to Base Price Upon Issuance of Common Stock. Except as provided in Section 4(c) and except in the case of an event described in either Section 4(e) or Section 4(f),  

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if the Company shall, at any time or from time to time after the Original Issue Date, issue or sell or, in accordance with Section 4(d), is deemed to have issued or sold, any shares of Common Stock without consideration or for consideration per share less than the Base Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), the Base Price shall be reduced (and in no event increased) to a Base Price as is computed using the following formula:

X = ((A x B) + C) ÷ (A + D)

Where:

X = the reduced Base Price.

A = the Common Stock Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale).

B = the Base Price then in effect immediately prior to such issuance or sale (or deemed issuance or sale).

C = the aggregate consideration, if any, received by the Company upon such issuance or sale (or deemed issuance or sale).

D = the aggregate number of shares of Common Stock issued or sold (or deemed issued or sold) by the Company in such issuance or sale (or deemed issuance or sale).

(b)Adjustment to Number of Warrant Shares Upon Adjustment to Base Price. Upon any and each adjustment of the Base Price as provided in Section 4(a), the number of Warrant Shares issuable upon the exercise of this Warrant immediately prior to any such adjustment shall be increased to a number of Warrant Shares as is computed using the following formula: 

X1 = X(Y ÷ Y1)

Where: 

X1 = the adjusted total number of Warrant Shares issuable upon exercise of the Warrant immediately following the adjustment of the Base Price.

X = the total number of Warrant Shares previously issuable upon exercise of the Warrant immediately prior to the adjustment of the Base Price.

Y = the Base Price immediately prior to the adjustment.

Y1 = the adjusted Base Price pursuant to Section 4(a).

(c)Exceptions To Adjustment Upon Issuance of Common Stock. Anything herein to the contrary notwithstanding, there shall be no adjustment to the Base Price or the number of Warrant Shares issuable upon exercise of this Warrant with respect to any Excluded Issuance. 

(d)Effect of Certain Events on Adjustment to Base Price. For purposes of determining the adjusted Base Price under Section 4(a) hereof, the following shall be applicable: 

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(i)Issuance of Options. If the Company shall, at any time or from time to time after the Original Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible Securities issuable upon the exercise of such Options are immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(d)(v)) for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon the exercise of such Options is less than the Base Price in effect immediately prior to the time of the granting or sale of such Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter shall be deemed to be outstanding for purposes of adjusting the Base Price under Section 4(a)), at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of all such Options, plus (y) the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the issuance or sale of all such Convertible Securities and the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of shares of Common Stock issuable upon the exercise of all such Options or upon the conversion or exchange of all Convertible Securities issuable upon the exercise of all such Options. Except as otherwise provided in Section 4(d)(iii), no further adjustment of the Base Price shall be made upon the actual issuance of Common Stock or of Convertible Securities upon exercise of such Options or upon the actual issuance of Common Stock upon conversion or exchange of Convertible Securities issuable upon exercise of such Options. 

(ii)Issuance of Convertible Securities. If the Company shall, at any time or from time to time after the Original Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible Securities is immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(d)(v) ) for which Common Stock is issuable upon the conversion or exchange of such Convertible Securities is less than the Base Price in effect immediately prior to the time of the granting or sale of such Convertible Securities, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for purposes of adjusting the Base Price pursuant to Section 4(a)), at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of such Convertible Securities, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. Except as otherwise provided in Section 4(d)(iii), no further adjustment of the Base Price shall be made upon the actual issuance of Common Stock  

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upon conversion or exchange of such Convertible Securities or the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Base Price have been made pursuant to the other provisions of this Section 4(d).

(iii)Change in Terms of Options or Convertible Securities. Upon any change in any of (A) the total amount received or receivable by the Company as consideration for the granting or sale of any Options or Convertible Securities referred to in Section 4(d)(i)or Section 4(d)(ii) hereof, (B) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of any Options or upon the issuance, conversion or exchange of any Convertible Securities referred to in Section 4(d)(i) or Section 4(d)(ii) hereof, (C) the rate at which Convertible Securities referred to in Section 4(d)(i) or Section 4(d)(ii) hereof are convertible into or exchangeable for Common Stock, or (D) the maximum number of shares of Common Stock issuable in connection with any Options referred to in Section 4(d)(i) hereof or any Convertible Securities referred to in Section 4(d)(ii) hereof (in each case, other than in connection with an Excluded Issuance), then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment to the Base Price pursuant to this Section 4) the Base Price in effect at the time of such change shall be adjusted or readjusted, as applicable, to the Base Price which would have been in effect at such time pursuant to the provisions of this Section 4 had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion rate or maximum number of shares, as the case may be, at the time initially granted, issued or sold, but only if as a result of such adjustment or readjustment the Base Price then in effect is reduced, and the number of Warrant Shares issuable upon the exercise of this Warrant immediately prior to any such adjustment or readjustment shall be correspondingly adjusted or readjusted pursuant to the provisions of Section 4(b).  

(iv)Treatment of Expired or Terminated Options or Convertible Securities. Upon the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security (or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant to this Section 4 (including without limitation upon the redemption or purchase for consideration of all or any portion of such Option or Convertible Security by the Company), the Base Price then in effect hereunder shall forthwith be changed pursuant to the provisions of this Section 4 to the Base Price which would have been in effect at the time of such expiration or termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion thereof), to the extent outstanding immediately prior to such expiration or termination, never been issued. 

(v)Calculation of Consideration Received. If the Company shall, at any time or from time to time after the Original Issue Date, issue or sell, or is deemed to have issued or sold in accordance with Section 4(d), any shares of Common Stock, Options or Convertible Securities: (A) for cash, the consideration received therefor shall be deemed to be the net amount received by the Company therefor; (B) for consideration other than cash, the amount of the consideration other than cash received by the Company shall be the fair value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration received by the Company shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system covering such security) for such securities as of the end of business on the date of receipt of such securities; (C) for no specifically  

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allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration received by the Company in such transaction as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be, issued in such transaction; or (D) to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be, issued to such owners. The net amount of any cash consideration and the fair value of any consideration other than cash or marketable securities shall be determined by the Board in good faith.

(vi)Record Date. For purposes of any adjustment to the Base Price or the number of Warrant Shares in accordance with this Section 4, in case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be; provided, that if before the distribution to its holders of Common Stock the Company legally abandons its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. 

(vii)Treasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale of Common Stock for the purpose of this Section 4.  

(e)Adjustment to Base Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Base Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Base Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(e) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.  

(f)Adjustment to Base Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization of the  

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Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(e)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to ensure that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Base Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Base Price in effect immediately prior to such consolidation, merger, sale or similar transaction). The provisions of this Section 4(f) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions.

5.Purchase Rights. In addition to any adjustments pursuant to Section 4 above, if at any time the Company grants, issues or sells any shares of Common Stock, Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance. 

6.Transfer of Warrant. Subject to Section 9 and the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder upon providing the Company with (a) written notice thereof, including notice of the portion of the Warrant being transferred and the name, address and taxpayer identification number of the transferee, and (b) the surrender of this Warrant to the Company at its then principal executive offices (or such other office or agency of the Company as it may designate by notice in writing to the Holder), together with funds sufficient to pay any transfer taxes described in Section 3(f)(iii) in connection with the making of such transfer; provided, however, that any transferee shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant. Upon such compliance, surrender and delivery and, if  

11

required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

7.Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 

8.Replacement on Loss; Division and Combination. 

(a)Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation. 

(b)Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant and the Purchase Agreement as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices (or such other office or agency of the Company as it may designate by notice in writing to the Holder), together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant and the Purchase Agreement as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.  

9.Compliance with the Securities Act. 

(a)Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 9 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be  

12

issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”

(b)Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows: 

(i)The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.  

(ii)The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 

(iii)The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company. 

10.Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any  

13

assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

11.Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11).   

	If to the Company:

	 

CynergisTek, Inc.

11940 Jollyville Road, Suite 300-N

Austin, Texas  78759

Attention:  Paul Anthony

E-mail:  Paul.Anthony@cynergistek.com

	with a copy to:

	Kirton McConkie

50 E. South Temple, Ste. 400

Salt Lake City, UT 84111

Attn: Alexander N. Pearson 

E-mail: apearson@kmclaw.com 

	If to the Holder:

	Horton Capital Management

1717 Arch Street, Suite 3920

Philadelphia, PA 19103

Attention: Joseph M Manko, Jr. 

E-mail: [E-MAIL ADDRESS]

12.Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.  

13.Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction. 

14.Entire Agreement. This Warrant, together with the Registration Rights Agreement and the Purchase Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of  

14

any inconsistency between the statements in the body of this Warrant, the Registration Rights Agreement and the Purchase Agreement, the statements in the body of the Purchase Agreement shall control.

15.Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.  

16.No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant. 

17.Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant. 

18.Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  

19.Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.  

20.Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.  

21.Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Delaware in each case located in Kent County, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 

22.Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such  

15

party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

23.Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant. 

24.No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.  

[signature page follows]

16

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

 

	 

	CYNERGISTEK, INC., a Delaware corporation

 

	 

	By: ____________________________

Name:

Title:

 

	Accepted and agreed,

 

	HORTON CAPITAL MANAGEMENT, LLC, a Delaware limited liability company

 

	 

	By: ____________________________

Name:

Title:

	 

4820-9034-3863

EXERCISE AGREEMENT

 

1.The undersigned Holder hereby exercises its right purchase  shares of the Common Stock of CynergisTek, Inc., a Delaware corporation (the “Company”) in accordance with the attached Warrant, and tenders payment of the aggregate Warrant Price for such shares as follows: 

[    ] Check in the amount of $ payable to order of the Company enclosed herewith  

[    ] Wire transfer of immediately available funds to the Company’s account

[    ] Net “cashless” exercise pursuant to the provisions of Section 3(b) of the Warrant

[    ]  Other [Describe]   

2.Please issue a certificate or certificates representing the Shares in the name specified below: 

 

_____________________________________________

Holder’s Name

 

_____________________________________________

_____________________________________________

Holder’s Address

3.By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 9(b) of the Warrant as of the date hereof. 

 

HOLDER:

	 

	HORTON CAPITAL MANAGEMENT, LLC, 

	 

	a Delaware limited liability company

	 

	 

	By: 

	 

	Name: 

	 

	Title:Exhibit 4.1

 

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

[FORM OF PRE-FUNDED
WARRANT]

 

IDERA PHARMACEUTICALS,
INC.

 

PRE-FUNDED WARRANT
TO PURCHASE COMMON STOCK

 

Warrant No.: [__]

Number of Shares of Common Stock: [                    ]

Date of Issuance: [__], 2020 (“Issuance
Date”)

 

Idera Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, , the registered holder hereof or its permitted assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, at any time or times on or after the next business day after the Issuance Date until this Pre-Funded Warrant to Purchase
Common Stock (including any Pre-Funded Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this
 “Warrant”) is exercised in full, the Warrant Shares (as defined below). Except as otherwise defined herein,
capitalized terms in this, shall have the meanings set forth in Section 14. This Warrant is one of the Pre-Funded Warrants to Purchase
Common Stock (the “Warrants”) issued in connection with the transactions contemplated by that certain Securities
Purchase Agreement, dated as of [__], 2020 (the “Subscription Date”) by and between the Company, the holder
and the other purchasers set forth on the schedule of purchasers thereto (the “Securities Purchase Agreement”).

 

     

     

    

 

1.           EXERCISE
OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(e)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise
this Warrant. Within one (1) Trading Day following the delivery of the Exercise Notice, the Holder shall make payment to
the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash by
wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable, by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder (until the Holder has
purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full), nor shall
any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any
Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right
to purchase the remaining number of Warrant Shares and the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. On or before the first
(1st) Trading Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company
shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the
form attached to the Exercise Notice, to the Holder and the Company’s transfer agent (the “Transfer
Agent”). So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise, if
applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been
delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day and
(ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the
Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice
of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the
Exercise Notice has been delivered to the Company, then on or prior to the first (1st) Trading Day following the
date on which the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) is delivered (such earlier date,
or if later, the earliest day on which the Company is required to deliver Warrant Shares pursuant to this Section 1(a),
the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating
in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program (“FAST”), issue and
dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the name of
the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The
Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the
issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Upon delivery of the
Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial
owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise pursuant
to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event
later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 6(d)) representing the right to purchase the number of Warrant
Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but
rather the number of shares of Common Stock to be issued shall be rounded down to the nearest whole number. The Company shall
pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and
expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination; provided, however, that the Company shall not be required to deliver Warrant Shares with
respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice of a Cashless
Exercise, if applicable) with respect to such exercise.

 

     

     

    

 

(b)          Company’s
Failure to Timely Deliver Securities. In addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 1(a)
above pursuant to an exercise on or before the Share Delivery Date (other than a failure caused by incorrect or incomplete
information provided by the Holder to the Company), and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such
exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice within three (3) Trading Days after the occurrence of a Buy-In, indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.

 

     

     

    

 

(c)          Cashless
Exercise. The Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula
(a “Cashless Exercise”):

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

 

For purposes of the foregoing
formula:

 

	 	 	 	 
	 	A=	 	the total number of shares of Common Stock with respect to which this Warrant is then being exercised.
	 	 	 
	 	B=	 	as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
	 	 	 	 
	 	C=	 	the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
	 	 	 

If Warrant
Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with
Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants
being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any
position contrary to this Section 1(c).

 

     

     

    

 

(d)         Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 9.

 

(e)          Beneficial
Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any
portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the
terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that immediately prior to or after giving effect to such exercise, the Holder together with the other Attribution Parties
collectively would beneficially own in excess of 19.99% (the “Maximum Percentage”) of the number of shares
of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include
the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and
(B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants, including the other Warrants)
beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 1(e). For purposes of this Section 1(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required
to be filed in accordance therewith. To the extent that the limitation contained in this Section 1(e) applies, the
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of
the Holder, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports
on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as
the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding
Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of
outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the
Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would
otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(e), to exceed the
Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such
Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and
(ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for
the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within
one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution
Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common
Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to
beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as
determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the
other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess
Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to
vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been
deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares.
Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum
Percentage to any other percentage as specified in such notice not in excess of 19.99%; provided that (i) any such
increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is
delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and not to any other
holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock
issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially
owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the
Exchange Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the
applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 1(e) to the extent necessary to correct this paragraph or any portion of this paragraph which may
be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(e) or to make
changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this
paragraph may not be waived and shall apply to a successor holder of this Warrant.

 

     

     

    

 

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

 

(g)          Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an “Authorized
Share Failure”), then the Company shall promptly take all action reasonably necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this
Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than 120 days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use
its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

     

     

    

 

2.           ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES UPON SUBDIVISION OR COMBINATION OF COMMON STOCK.

 

(a)          Subdivisions
or Combinations. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the
applicable Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of the
applicable Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the applicable Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of the applicable Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(a)
shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

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

 

     

     

    

 

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

 

(d)          Fundamental
Transactions. At any time while this Warrant remains outstanding, the Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3, including agreements to deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including,
without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price
being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for the Company (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and
the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect
as if such Successor Entity had been named as the Company herein. Notwithstanding the foregoing, and without limiting Section 1(e)
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 3 to
permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction until this Warrant
is exercised in full, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) issuable
upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription rights) (collectively, the “Corporate Event
Consideration”) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder. The provisions of this Section 3 shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events.

 

     

     

    

 

3.           NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation
or by-laws, or through any reorganization, transfer of assets, consolidation, merger, scheme, arrangement,
dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this
Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise
of this Warrant above the applicable Exercise Price then in effect, (ii) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).

 

4.           WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.

 

5.           REISSUANCE
OF WARRANTS.

 

(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 5(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 5(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 5(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 5(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to
purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender.

 

     

     

    

 

(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the
right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 5(a)
or Section 5(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

6.           NOTICES.
Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise
provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States,
by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic
mail or by facsimile or (b) from outside the United States, by International Federal Express, electronic mail or facsimile,
and (ii) will be deemed given (A) if delivered by first-class registered or certified mail domestic, three (3) Business
Days after so mailed, (B) if delivered by nationally recognized overnight carrier, one (1) Business Day after so mailed,
(C) if delivered by International Federal Express, two (2) Business Days after so mailed and (D) at the time of
transmission, if delivered by electronic mail to the email address specified in this Section 6 prior to 5:00 p.m. (New York
time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered by electronic mail to the email
address specified in this Section 7 on a day that is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading
Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and will be delivered and
addressed as follows:

 

(i) If to the Company,
to:

 

Idera Pharmaceuticals, Inc.

505 Eagleview Blvd., Suite
212

Exton, Pennsylvania 19341

Attn: Chief Financial Officer

 

with copies to:

 

Morgan, Lewis & Bockius
LLP

1701 Market Street

Philadelphia, Pennsylvania
19103-2921

Attn: Joanne R. Soslow, Esq.

Email: joanne.soslow@morganlewis.com

 

(ii) if to the Holder,
at such address or other contact information delivered by the Holder to Company or as is on the books and records of the Company.

 

     

     

    

 

The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes
a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants,
issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of Common Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation; provided in each case that such information shall be made known to the
public prior to or in conjunction with such notice being provided to the Holder; provided, further, that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice.

 

7.           AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.

 

8.           GOVERNING
LAW; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

9.           DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic
mail within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the
case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or
electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to
the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the
accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the
results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

 

     

     

    

 

10.         REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to seek an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

11.         TRANSFER.
Subject to compliance with applicable federal and state securities laws, this Warrant and the Warrant Shares may be offered for
sale, sold, transferred, pledged or assigned without the consent of the Company.

 

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

 

13.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to
the Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such
material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company
believes that a notice contains material, nonpublic information relating to the Company or its subsidiaries, the Company so
shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the
Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its subsidiaries.

 

     

     

    

 

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

 

(a) “Affiliate”
means any person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

(b) “Attribution
Parties” means, collectively, the Holder (together with the Holder’s Affiliates, and any other persons acting as
a group together with the Holder or any of the Holder’s Affiliates. For clarity, the purpose of the foregoing is to subject
collectively the Holder and all other Attribution Parties to the Maximum Percentage.

 

(c) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported
by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of
determination, the average of the bid prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for
a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such
time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with
the procedures in Section 9. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.

 

(d) “Bloomberg”
means Bloomberg Financial Markets.

 

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

 

     

     

    

 

(f)
 “Change of Control” means any Fundamental Transaction other than (i) any reorganization,
recapitalization or reclassification of the Common Stock in which holders of the Company’s voting power immediately
prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders
of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board
of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization,
recapitalization or reclassification, (ii) pursuant to a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company or (iii) a merger in connection with a bona fide acquisition by the
Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the Company in such
acquisition is not greater than 20% of the Company’s market capitalization as calculated on the date of the
consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the board
of directors of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transactions that,
directly or indirectly, results in the Company or the Successor Entity not having Common Stock or common stock, as
applicable, registered under the Exchange Act and listed on an Eligible Market shall be deemed a Change of Control.

 

(g) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for
such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security
as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the
Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 9. All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.

 

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

 

(i) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.

 

(j) “Eligible
Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market
or The New York Stock Exchange, Inc.

 

(k) “Exercise
Price” means $0.01 per share of Common Stock, subject to adjustment as provided herein.

 

     

     

    

 

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

 

     

     

    

 

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

 

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

 

(o) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.

 

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

 

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

 

(r) “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the Company’s
primary trading market or quotation system with respect to the Common Stock that is in effect on the date of delivery of an applicable
Exercise Notice.

 

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

 

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

 

(u) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.

 

(v) “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.

 

(w) “Warrant
Shares” means [                  (                )]
shares of fully paid non-assessable shares of Common Stock (as defined above).

 

     

     

    

 

(x) “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market
on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 9 but with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

[Signature Page
Follows]

 

     

     

    

 

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

 

	 	IDERA
    PHARMACEUTICALS, INC.
	 	 
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	                            

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS 

PRE-FUNDED WARRANT
TO PURCHASE COMMON STOCK 

 

IDERA PHARMACEUTICALS,
INC.

 

The undersigned
holder hereby exercises the right to purchase                 
shares of Common Stock (“Warrant Shares”) of Idera Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
evidenced by the attached Pre-Funded Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

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

 

	 	 	 
	 	 ̈ “Cash Exercise” with respect to	Warrant Shares; and/or
	 	 	 
	 	 ̈ “Cashless Exercise” with respect to	Warrant Shares

 

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

 

Delivery of Warrant Shares.
The Company shall deliver to the holder                 
shares of Common Stock in accordance with the terms of the Warrant.

 

	 	 
	 	 
	Date:
	 
	

	Name of Registered Holder	 
	 	 
	By:	 	

	 	Name:	
	 	Title:	

 

     

     

    

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice and hereby directs [Transfer Agent] to issue the above indicated number of Warrant Shares on
or prior to the applicable Share Delivery Date.

 

	 	IDERA
    PHARMACEUTICALS, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:

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