Document:

Exhibit 10.6

 

OFFICE BUILDING LEASE

 

Summary of Basic Lease
Terms

 

This
Summary of Basic Lease Terms forms a part of the Office Building Lease between Landlord and Tenant covering the Premises in the
Building as defined herein and these terms are incorporated in the Office Building Lease attached hereto.

 

		A.	DATE: January 31, 2017

 

		B.	LANDLORD: Havana Gold, LLC

 

		C.	TENANT: Medicine Man Technologies, LLC.

 

		D.	BUILDING: 4880 Havana, on the real property described
in Exhibit A.

 

		E.	PREMISES: Suite 200 as shown in YELLOW on Exhibit
B attached.

 

		F.	RENTABLE AREA shall mean 76,624 rentable square
feet which is all rentable space available for lease in the Building as calculated by Landlord. If there is a significant change
in the aggregate Rentable Area as a result of an addition thereto, partial destruction thereof, modification to building design,
Building re-measurement or similar cause, which causes a reduction or increase in Rentable Area on a permanent basis, Landlord
shall make such adjustments in the computation as shall be necessary to provide for any such changes.

		G.	TENANT'S RENTABLE AREA: 12,097 square feet.

 

		H.	TENANT'S PRO RATA SHARE shall initially mean 15.79%. If,
thereafter, any changes are made to the Rentable Area of the Premises, Tenant's Pro Rata Share shall be recomputed by dividing
the Tenant's Rentable Area by the Rentable Area and the resulting figure shall become Tenant's Pro Rata Share.

 

		I.	PRIMARY LEASE TERM:         
36 Months

 

		J.	COMMENCEMENT DATE:       
March 1, 2017

 

		K.	TERMINATION DATE:             
February 29, 2020

 

		L.	ANNUAL BASE RENT:

 

	 	Year 1:	March 1, 2017 through July 31, 2017	$6,479.60	$5.98 per square foot
	 	Year 1:	August 1, 2017 through February 28, 2018	$12,086.92	$11.99 per square foot 
	 	Year 2:	March 1,
2018 through February 28, 2019	$13,000.00 	$12.90 per square foot 
	 	Year 3:	March 1, 2019 through February 29, 2020	$14,500.00	$14.38 per square foot 

 

		M.	BASE OPERATING EXPENSES: The actual Building Operating
Expenses for the Base Year. The Base Year shall be the current calendar year based on the commencement date of the Lease.

 

		N.	BASE YEAR: 2017

 

 

 

 

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		O.	SECURITY DEPOSIT AMOUNT: $14,500.00

 

		P.	PARKING: Landlord grants Tenant eight (8) underground parking
spaces which will be assigned. Underground parking will be accessed via access card. Any additional parking requirements will
be met by utilizing the North Lot. Visitor Parking in the front of the building is available on a first-come-first-serve basis
and is in one hour increments which will be strictly enforced. There is no designated and/or reserved restaurant parking.

 

		P.	ADDRESSES FOR NOTICES:

 

	 	TO LANDLORD:	TO TENANT:
	 	Havana Gold, LLC	Medicine Man Technologies
	 	3535 Larimer St	4880 Havana Street, Suite 200
	 	Denver, CO, 80205	Denver, CO 80239
	 	303-297-8151	Mr. Brett Roper
	 	 	303-345-1262
	 	 	licensing@medicinemandenver.com

 

		Q.	LANDLORD'S AGENT:
	 	 	Andrew Feinstein
	 	 	3535 Larimer St
	 	 	Denver, CO, 80205
	 	 	303-297-8151

 

		R.	ORDINARY BUSINESS HOURS FOR PROPERTY:
	 	 	8:00 am. to 5:00 p.m., Monday through Friday, except
legal holidays

 

 

 

 

 

 

 

 

 

 

 

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THIS OFFICE BUILDING LEASE
("Lease"), made on the 31st day of January 2017, by and between Havana Gold, LLC ("Landlord") and Medicine
Man Technologies, Inc., an Indiana corporation ("Tenant").

 

WITNESSETH:

 

That
in consideration of the payment of rent and the keeping and performance of the covenants and agreements by Tenant, as hereinafter
set forth, Landlord hereby leases and demises unto Tenant and Tenant leases from Landlord the Premises being a part of the Building,
together with a nonexclusive right, subject to the provisions hereof, to use all appurtenances thereto, including, but not limited
to, any plazas, or other areas designated by Landlord for the use of the tenants of the Building.

 

TO HAVE AND TO HOLD
the same during the Primary Lease Term, with all appurtenances, unto Tenant from 12 o'clock noon on the Commencement Date, for,
during and until 12 o'clock noon on the Termination Date. Tenant shall pay Landlord the Minimum Monthly Rent, commencing on the
Commencement Date, and on the first day of each month thereafter during the term hereof, which sum is subject to possible adjustment
as provided in Section 5 herein. All rents shall be paid in advance, without notice, setoff, abatement or diminution, at the office
of Landlord's Agent.

 

1.                  
SECURITY DEPOSIT. It is agreed that Tenant, concurrently with the execution of this Lease, has deposited with Landlord,
and will keep on deposit at all times during the Primary Lease Term and any extension thereof, the Security Deposit Amount, the
receipt of which is hereby acknowledged, as security for the payment by Tenant of all Minimum Monthly Rent and all Additional
Rent herein agreed to be paid and for the faithful performance of all the terms, conditions and covenants of this Lease. If, at
any time during the Primary Lease Term and any extension thereof, Tenant shall be in default in the performance of any provision
of this Lease, Landlord shall have the right to use said Security Deposit Amount, or so much thereof as is necessary, in payment
of any Minimum Monthly Rent and all Additional Rent in default, reimbursement of any expense and payment of any damages incurred
by Landlord by reason of Tenant's default. In such event, Tenant shall immediately pay Landlord a sufficient amount in cash to
restore said Security Deposit Amount to its original amount. If said Security Deposit Amount has not been utilized as aforesaid,
said Security Deposit Amount, or as much thereof as has not been utilized, shall be refunded to Tenant, without interest, upon
full performance of this Lease by Tenant within sixty (60) days after the Termination Date. Landlord shall have the right to commingle
said Security Deposit Amount with other funds of Landlord, and Landlord may use such funds for payment of normal Building Operating
Expenses. Landlord may deliver the funds deposited herein by Tenant to the purchaser of Landlord's interest in the Premises if
such interest be sold, and thereupon, Landlord shall be discharged from further liability with respect to such Security Deposit
Amount. If claims of Landlord exceed said Security Deposit Amount, Tenant shall remain liable to Landlord for the balance of such
claims. Said Security Deposit Amount shall not bear interest in favor of the Tenant.

 

2.                  
PAYMENT OF RENT. Tenant covenants and agrees to pay all rents and sums provided to be paid to Landlord hereunder at the
times and in the manner herein provided, including, but not limited to, the Minimum Monthly Rent plus any rent adjustment pursuant
to Section 5. All amounts required to be paid hereunder exclusive of Minimum Monthly Rent are herein referred to as "Additional
Rent".

 

3.                  
ACCEPTANCE OF PREMISES BY TENANT. Taking possession of the Premises by Tenant shall be conclusive evidence as against Tenant
that the Premises were in the condition agreed upon between Landlord and Tenant, and acknowledgment of satisfactory completion
of any fix-up or remodeling, as the case may be, which Landlord has agreed in writing to perform, except that, if the Landlord
has failed to complete any punch list items by the time Tenant takes possession of the Premises, Landlord shall make reasonable
and timely efforts to complete the same.

 

4.                  
TENANT IMPROVEMENTS. Except as set forth in Exhibit B attached hereto, Tenant accepts the Premises in their present "as
is" condition. All alterations and improvements to the Premises shall be subject to Landlord's prior written consent pursuant
to the terms and provisions of the Lease and, except as set forth in Exhibit B hereto, shall be at Tenant's sole cost and expense.
All changes and alterations to designation signs for the Premises and in the building directory located in the lobby of the Building,
any changes in locks required and any changes required in the electrical or telephone systems, as a result of Tenant's use of
the Premises, except at related to the initial occupancy, shall likewise be at Tenant's sole cost and expense and shall require
the prior written approval of Landlord. Tenant shall have the right, at its expense, to place signage for itself and any affiliated
person or entity on the sidelights of the front door of the Premises. Landlord will place Tenant’s name or any affiliated
person or entity on the directory serving the Building. Landlord will pay for the first set of entries on the directory. Any subsequent
changes to the directory will be accomplished by Landlord but billed and paid for by Tenant without mark- up by Landlord. Tenant
will be allocated space on the Building Monument sign serving the building, at Landlord’s expense. To the best of Landlord’s
knowledge, Landlord warrants to Tenant that as of the date hereof the Building Complex is in compliance with all federal, state,
and local laws and regulations, and that the Building Complex contains sufficient parking spaces to meet or exceed all governmental
requirements.

 

 

 

 

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5.                  
RENT ADJUSTMENT. In addition to terms herein above defined, the following terms shall have the following meanings with
respect to the provisions of this Lease:

 

(a)                
"Lease Year" shall mean each twelve (12) month period beginning with the Commencement Date, or any anniversary
thereof, and ending on the same date one (1) year later. If the Lease Year is not concurrent with the calendar year, Landlord
will make all adjustments provided herein on a calendar year basis with an appropriate proration for the first and last partial
calendar years during the Primary Lease Term or any extension thereof.

 

(b)                
"Building Complex" as used herein shall mean the Building of which the Premises are a part, the real property
on which the same is located, all plazas, common areas, parking lots, open space and any other areas located on said real property
and designated by Landlord for use by all tenants in the Building.

 

(c)                  
"Landlord's Accountants" shall mean the individual or firm qualified as a Certified Public Accountant and employed
by Landlord from time to time to keep the books and records for the Building Complex.

 

(d)                 
"Operating Expenses" shall mean all operating expenses of any kind or nature which are necessary, ordinary or
customarily incurred in connection with the operation, maintenance or repair of the Building Complex as determined by Landlord
in accordance with generally accepted accounting practices. Operating Expenses shall include, but not be limited to:

 

(i)     
all real property taxes and assessments, including interest and penalties, levied against the Building Complex by any governmental
or quasi-govemmental authority. The foregoing shall include any taxes, assessments, surcharges or service or other fees of a nature
not presently in effect which shall hereafter be levied on the Building Complex as a result of the use, ownership or operation
of the Building Complex or any other reason, whether in lieu of, or in addition to, any current real estate taxes and assessments;
provided, however, any taxes which shall be levied on the rentals of the Building Complex shall be determined as if the Building
Complex were Landlord's only property, and provided further that in no event shall the term "taxes or assessments," as
used herein, include any net federal or state income taxes levied or assessed on Landlord, unless such taxes are a specific substitute
for real property taxes. Such term shall, however, include gross taxes on rentals. Expenses incurred by Landlord for tax consultants
and in contesting the amount or validity of any such taxes or assessments shall be included in such computations (all of the foregoing
area collectively referred to herein as the "Taxes"). "Assessments" shall include so-called special assessments,
license tax, business license fee, business license tax, levy, charge, penalty or tax imposed by any authority having the direct
power to tax, including any city, county, state or federal government, or any school, utility, or other improvement or special
district thereof, against the Premises, the Building or Building Complex or any legal or equitable interest of Landlord therein.
For the purposes of this Lease, any special assessments shall be deemed payable in such number of installments with interest thereon
as is permitted by law, whether or not actually so paid;

 

(ii)      
costs of supplies, including, but not limited to, janitorial supplies, and the cost of relamping all Building and Premises
lighting as the same may be required from time to time;

 

(iii)       
costs incurred in connection with obtaining and providing energy for the Building Complex, including, but not limited to,
costs of natural gas, steam, electricity, solar energy or any other sources;

 

(iv)
costs of water and sanitary and storm drainage service;

 

 

 

 

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(v)
costs of janitorial and security services;

 

(vi)     
costs of general maintenance and repairs, including, but not limited to, costs under HVAC and other mechanical maintenance
contracts and maintenance, repairs and replacement of equipment and tools used in connection with operating the Building Complex;

 

(vii)
costs of maintenance and replacement of landscaping;

 

(viii)       
insurance premiums, including fire, flood and all-risk coverage, together with loss of rent endorsements, the part of any
claim required to be paid under the deductible portion of any insurance policies carried by Landlord in connection with the Building
Complex (where Landlord is unable to obtain insurance without such deductible from a major insurance carrier at reasonable rates),
public liability insurance and any other insurance carried by Landlord on the Building Complex or any component parts thereof
(all such insurance shall be in such amounts as Landlord may reasonably determine);

 

(ix)     
Landlord’s labor costs, including wages, benefits and other payments, costs to Landlord of workers' compensation
and disability insurance, payroll taxes, welfare fringe benefits and all legal fees and other costs or expenses incurred in resolving
any labor dispute;

 

(x)     
professional building management fees including costs of storage space, administrative costs and office space required
by management in the Building;

 

(xi)     
legal, accounting, inspection and other consultation fees (including, without limitation, fees charged by consultants retained
by Landlord for services that are designed to produce a reduction in Operating Expenses or to reasonably improve the operation,
maintenance or state of repair of the Building Complex) incurred in the ordinary course of operating the Building Complex or in
connection with making the computations required hereunder or in any audit of operations or the Building;

 

(xii)      
the costs of capital improvements or structural repairs or replacements made in or to the Building Complex in order to
conform to changes subsequent to the date of this Lease in any applicable laws, ordinances, rules, regulations or orders of any
governmental or quasi-governmental authority having jurisdiction over the Building Complex including changes required by the Americans
with Disabilities Act and any amendments thereto (herein "Required Capital Improvements") plus a reasonable reserve
for all other capital improvements and structural repairs and replacements reasonably necessary to permit Landlord to maintain
the Building as a first class office building. The expenditures for Required Capital Improvements shall be amortized over the
useful life of such capital improvements or structural repair or replacement (as determined by Landlord's Accountants). All costs
so amortized shall bear interest on the amortized balance at the rate of twelve percent (12%) per annum or such higher rate as
may have been paid by Landlord on funds borrowed for the purpose of constructing these capital improvements.

 

Notwithstanding anything contained herein
to the contrary, if any lease entered into by Landlord with any tenant in the Building is on a so-called "net" basis,
or provides for a separate basis of computation for any Operating Expenses with respect to its Premises, then, to the extent that
Landlord's Accountants determine that an adjustment should be made in the computation herein provided for, Landlord's Accountants
shall be permitted to modify the computation of Base Operating Expenses, Rentable Area, and Operating Expenses for a particular
year in order to eliminate or otherwise modify any such expenses which are paid for in whole or in part by such tenant. Furthermore,
in making any computations contemplated hereby, Landlord's Accountants shall also be permitted to make such adjustments and modifications
to the provisions of this Subsection 5(d) as shall be reasonably necessary to achieve the intention of the parties hereto.

 

 

 

    	 	5	 

     

    

 

(e)                
If Operating Expenses during any Lease Year during the Primary Lease Term, or any extension thereof, including the first
Lease Year, exceed the Base Operating Expenses, Tenant shall pay to Landlord Tenant's Pro Rata Share of the amount of such excess
("Operating Expense Escalation") within thirty (30) days following billing therefore by Landlord. In addition to the
foregoing, it is agreed that during each Lease Year beginning with the first month of the Lease Year alter the Base Year and each
month thereafter during the Primary Lease Term, or any extension thereof, Tenant shall pay to Landlord, at the same time as the
Minimum Monthly Rent is paid, an amount equal to one-twelfth (1/12) of Landlord’s estimate (as determined by Landlord's
Accountants) of Tenant's Pro Rata Share of any projected excess of the Operating Expenses for that particular Lease Year in excess
of the Base Operating Expenses ("Estimated Escalation Increase"), with a final adjustment ("Escalation Reconciliation")
to be made between the parties within ninety (90) days after the end of each Lease Year. If during any Lease Year the Estimated
Escalation Increase is less than the Estimated Escalation Increase for the previous Lease Year on which Tenant's monthly rental
payments were based for said year, the rental payments, attributable to Estimated Escalation Increase, to be paid by Tenant for
the new Lease Year shall be decreased accordingly; provided, however, in no event will the rental to be paid by Tenant hereunder
ever be less than the Minimum Monthly Rent plus all amounts of Additional Rent.

 

(f)                  
As soon as practical following the end of each Calendar Year during the Primary Lease Term, or any extensions hereof, including
the first Lease Year, Landlord shall submit to Tenant a statement prepared by Landlord's Accountants setting forth the Operating
Expense Escalation, if any. Beginning with said statement for the second Lease Year, it shall also set forth the Escalation Reconciliation
for the Lease Year just completed. To the extent that the Operating Expense Escalation is different from the Estimated Escalation
Increase upon which Tenant paid rent during the Lease Year just completed, Tenant shall pay Landlord the difference in cash within
thirty (30) days following receipt by Tenant of such statement from Landlord, or receive a credit on future rental owing hereunder
as the case may be. Until Tenant receives such statement, Tenant's monthly rent for the new Lease Year shall continue to be paid
at the rate being paid for the particular Lease Year just completed, but Tenant shall commence payment to Landlord of the monthly
installments of rent on the basis of said statement beginning on the first day of the month following the month in which Tenant
receives such statement. Moreover, Tenant shall pay to Landlord, or deduct from the rent, as the case may be, on the date required
for the first payment of rent adjusted, the difference, if any, between the monthly installments of rent actually paid during
the new Lease Year to date. In addition to the above, if, during any particular Lease Year, there is a change in the information
on which Landlord's Accountants based the estimate upon which Tenant is then making its estimated rental payment so that such
estimate furnished to Tenant is no longer accurate, Landlord shall be permitted to revise such estimate by notifying Tenant, and
there shall be such adjustments made in the monthly rental on the first day of the month following the serving of such statement
on Tenant as shall be necessary by either increasing or decreasing, as the case may be, the amount of monthly rent then being
paid by Tenant for the balance of the Lease Year (but in no event shall any such decrease result in a reduction of the rent below
the Minimum Monthly Rent and all amounts of Additional Rent), as well as a payment by Tenant or credit to the Tenant as appropriate
based upon the amount theretofore paid by Tenant during such particular Lease Year pursuant to the prior estimate.

 

(g)                
Landlord's and Tenant's responsibilities with respect to the Operating Expense adjustment described herein shall survive
the expiration or other termination of this Lease.

 

(h)                 If
the Rentable Area is not fully occupied during any particular Lease Year, Landlord's Accountants in determining Tenant's Operating
Expense Escalation, shall adjust those Operating Expenses which are affected by Building occupancy for the particular Lease Year,
or portion thereof, as the case may be, to the amount of expense which would have been incurred if the occupancy of the Building
was not less than ninety-five percent (95%) of all Rentable Area.

 

 

 

 

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(i)                 
If Tenant disputes the amount of an adjustment or the proposed estimated increase or decrease related to the Operating Expense
Escalation, the Estimated Escalation Increase or the Escalation Reconciliation submitted by Landlord's Accountants, on the basis
of which Tenant's rent is to be adjusted as provided in Subsections 5(e) and 5(f) above, Tenant shall give Landlord written notice
of such dispute within thirty (30) days after Landlord's Accountants advise Tenant of such adjustment or proposed increase or
decrease. Tenant's failure to give such notice shall waive its right to dispute the amounts so determined. If Tenant timely objects,
Tenant shall have the right to engage its own certified public accountants ("Tenant's Accountants") for the purpose
of verifying the accuracy of the statement complained of, or the reasonableness of the adjustment or estimated increase or decrease.
If Tenant's Accountants determine that they believe an error has been made, Landlord's Accountants and Tenant's Accountants shall
endeavor to agree upon the matter, failing which Landlord's Accountants and Tenant's Accountants shall jointly select a third
certified public accounting firm ("Third Accountant") which firm shall conclusively determine whether the adjustment
or estimated increase or decrease is reasonable, and if not, what amount is reasonable. Both parties shall be bound by such determination.
If Tenant's Accountants do not participate in choosing the Third Accountant with twenty (20) days notice by Landlord, then Landlord's
determination of the adjustment or estimated increase or decrease shall be conclusively determined to be reasonable and Tenant
shall be bound thereby. All costs incurred by Tenant in obtaining Tenant's Accountants and the cost of the Third Accountant shall
be paid by Tenant unless Tenant's Accountants disclose an error, acknowledged by Landlord's Accountants (or found to have occurred
by the Third Accountant), of more than ten percent (10%) in the computation of the total amount of Operating Expenses as set forth
in the statement submitted by Landlord's Accountant with respect to the matter complained of, in which event Landlord shall pay
the reasonable costs incurred by the Third Accountant related to review of expenses. Tenant shall continue to timely pay Landlord
the amount of the prior year adjustment and adjusted monthly installments of rent determined by Landlord's Accountants until the
adjustment has been determined to be correct or incorrect as aforesaid.

 

(j)                  
Landlord's or Landlord's Accountants' delay in submitting any statement contemplated herein for any Lease Year shall not
affect the provisions of this Section 5, nor constitute a waiver of Landlord's rights as set forth herein for said Lease Year
or any subsequent Lease Years during the Primary Lease Term or any extensions thereof.

 

(k)                  
Notwithstanding anything to the contrary contained herein, there shall be a cap of four percent (4.0%) per year on a cumulative
basis beginning with the first year that Tenant is charged an Operating Expense Escalation on Tenant’s Pro Rata Share of
increased controllable Operating Costs; “controllable Operating Costs” means all Operating Costs except for utilities,
Taxes, snow removal and property insurance which shall have no such caps.

 

6.                  
SERVICES. Landlord, without charge except as provided herein, and in accordance with standards from time to time prevailing
for comparable office buildings, agrees to furnish during Ordinary Business Hours, such heated or cooled air to the Premises,
as may, in the judgment of Landlord, be reasonably required for comfortable use and occupancy, in accordance with building standards
established at the time the Building was constructed, and provided that Tenant complies with the recommendations of Landlord's
engineer and maintenance personnel regarding occupancy and use of the Premises; to provide, during such Ordinary Business Hours,
the use of passenger elevators for access to and from the Premises; during Ordinary Business Hours, to cause electric current
to be supplied for lighting the Premises and public halls; and to provide janitorial services for the Premises (including such
window washing as may in the judgment of the Landlord be reasonably required). Such janitorial services will be provided only
on Monday through Friday not including legal holidays. It is understood that Tenant shall use such electric current only for Building
standard lighting, typewriters, adding machines, calculators, personal computers, peripherals, and copy machines. Landlord does
not guaranty that the quality of the power provided will be sufficient to run computers without power surges or intermittent unavoidable
cut-offs. Tenant is encouraged to provide its own power surge protection and uninterruptable power source. To the extent that
electric current is used for any other purpose, Tenant's rent may be increased from time to time by Landlord in such amounts as
Landlord reasonably determines to cover the costs of such increased use. Such increases shall also be paid monthly. Prior to installation
or use by Tenant of any equipment other than as set forth above, Tenant shall notify Landlord of such intended installation or
use and Landlord may, at its option, require Tenant at Tenant's sole cost and expense to install a check meter to assist in determining
the fair amount by which Tenant's rent should be increased. If Tenant desires electric current, heating or cooled air to the Premises
during periods other than during Ordinary Business Hours, Landlord will use reasonable efforts to supply the same, but at the
expense of Tenant, as determined from time to time by Landlord. Not less than forty-eight (48) hours' prior notice shall be given
by Tenant to Landlord of Tenant's desire for such services. If Tenant requires janitorial services other than those required to
be provided to other tenants of the Building generally, Tenant shall separately contract for such services with the same company
furnishing janitorial services to Landlord.

 

 

 

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7.                  
INTERRUPTION OR DISCONTINUANCE OF LANDLORD'S SERVICES. Tenant agrees that Landlord shall not be liable for failure to supply
any such heating, air conditioning, elevator, electrical, janitorial, lighting or other services during any period when Landlord
uses reasonable diligence to supply such services, or during any period Landlord is required to reduce or curtail such services
pursuant to any applicable laws, rules or regulations, now or hereafter in force or effect, it being understood that Landlord
may discontinue, reduce or curtail such service, or any of them (either temporarily or permanently), at such times as it may be
necessary by reason of accident, unavailability of employees, repairs, alterations, improvements, strikes, lockouts, riots, acts
of God, application of applicable laws, statutes, rules and regulations, or due to any other happening beyond the control of Landlord.
In the event of any such interruptions, reduction or discontinuance of Landlord's services (either temporary or permanent), Landlord
shall not be liable for damages to person or property as a result thereof, nor shall the occurrence of any such event in any way
be construed as an eviction of Tenant, or cause or permit an abatement, reduction or setoff of rent, or operate to release Tenant
from any of Tenant's obligations hereunder. Tenant further agrees that if any installment of rent shall remain unpaid for more
than fifteen (15) days after it shall become due, Landlord may, without notice to Tenant, discontinue furnishing heat, air conditioning,
electricity, janitorial or lighting services, or any of them, until all arrears of rent have been paid in full.

 

8.                  
QUIET ENJOYMENT. Landlord agrees to warrant and defend Tenant in the quiet enjoyment and possession of the Premises during
the term of this Lease so long as an Event of Default has not occurred hereunder.

 

9.                   CHARACTER
OF OCCUPANCY. Tenant covenants and agrees to occupy the Premises as general business offices and for no other purpose, and to
use them in a careful, safe and proper manner; to pay on demand for any damage to the Premises, Building or Building Complex
caused by the negligence of Tenant, its agents, licensees, contractors, employees, or invitees, or the misuse or abuse of the
Premises by Tenant, its agents, employees or invitees; not to use or permit the Premises to be used for any purpose
prohibited by the laws, codes, rules and regulations of the United States or the state, city and county where the Building is
located. If tenant’s occupancy of the premises is deemed to be in conflict with Landlord’s lender’s loan
covenants, conditions, or business relationship requirements, then Landlord shall provide Tenant with no less than ninety
(90) days notice of it’s intent to terminate this lease agreement. Such termination shall relieve Tenant of any further
lease obligations, and there shall be no recourse against Landlord. Landlord, upon surrender of the premises, shall return
Tenant’s Security Deposit, any unused rents, and a reimbursement fee of Twenty-Five Thousand Dollars and No cents
($25,000) for Tenants initial IT start-up expenses.

 

Tenant shall not commit
waste or suffer or permit waste to be committed or permit any nuisance on or in the Premises, Building or Building Complex. Further,
Tenant will not use or allow the presence or use of any toxic or hazardous substances on or in the Building or Premises, except
such substances as are normally and generally used in Tenant’s business and are handled in accordance with state and federal
laws, rules, codes and regulations.

 

10.               
ALTERATIONS AND REENTRY BY LANDLORD. Tenant covenants and agrees to permit Landlord at any reasonable time to enter the
Premises for any of the following purposes: (a) to examine and inspect the same, or, if Landlord so elects, (b) to perform any
obligations of Tenant hereunder which Tenant failed to perform, (c) to perform such cleaning, maintenance, janitorial services,
repairs, additions or alterations as Landlord may deem necessary for the safety, improvement or preservation of the Premises,
or of other portions of the Building, or as may be required by governmental authorities through any code, rule, regulation, ordinance
and/or law, (d) to post "for rent" signs during the last three months of the Primary Lease Term or any extension thereof
and (e) to show the Premises to prospective brokers, agents, buyers or tenants. Any such reentry shall not constitute an eviction
nor entitle Tenant to abatement of rent. Furthermore, Landlord shall at all times have the right at its election to make such
alterations or changes in other portions of the Building as it may from time to time deem necessary and desirable as long as such
alterations and changes do not unreasonably interfere with Tenant's access to, or use of, the Premises.

 

 

 

 

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11.                
ALTERATIONS BY TENANT. Tenant covenants and agrees not to make any alterations in or additions to the Premises without
first obtaining the written consent of Landlord. All alterations and additions to the Premises, including by way of illustration
and not by limitation, all partitions, paneling, carpeting, drapes or other window coverings and light fixtures (but not including
movable office furniture or removable electronics such as Display Televisions, etc., not attached to the Building) shall be deemed
a part of the real estate and the property of Landlord and shall remain upon and be surrendered with the Premises as a part thereof
without molestation, disturbance or injury at the end of the term, whether by lapse of time or otherwise, unless Landlord by notice
given to Tenant no later than fifteen (15) days prior to the end of the term shall elect to have Tenant remove all or any of such
alterations or additions, and in such event, Tenant shall promptly remove, at its expense, such alterations and additions and
restore the Premises to its condition prior to making the alterations or additions, reasonable wear and tear excepted.

 

12.                
REPAIRS. Tenant shall keep the Premises in as good order, condition and repair and in an orderly state, as ‘when
they were entered upon, loss by fire or other casualty (unless caused by the negligence of Tenant, its agents, employees or invitees)
or ordinary wear excepted. All such repair and maintenance work and any alterations or additions by Tenant permitted by Landlord
under Section 11 above shall be done at Tenant's expense by Landlord's employees or, with Landlord's consent, by persons requested
by Tenant and authorized in writing by Landlord. If Landlord authorizes persons requested by Tenant to perform such work, prior
to the commencement of any such work, Tenant shall deliver to Landlord certificates issued by insurance companies qualified to
do business in the State of Colorado, evidencing that worker's compensation, public liability insurance and property damage insurance,
all in the amounts, with companies and on forms satisfactory to Landlord, are in force and effect and maintained by all contractors
and subcontractors engaged by Tenant to perform such work. All such policies shall name Landlord and Landlord's Agent as additional
insured. Each such certificate shall provide that the same may not be canceled or modified without thirty (30) days' prior written
notice to Landlord. All such work performed by such Contractors and Subcontractors and the Contractors and Subcontractors themselves
will be subject to Landlord's construction supervision and rules and will be required to provide lien releases at the completion
of the work and as otherwise requested by Landlord.

 

13.                
MECHANIC'S LIENS. Tenant shall pay or cause to be paid all costs for work done by Tenant on the Premises of a character
which will or may result in liens on Landlord's interest therein, and Tenant will keep the Premises free and clear of any mechanic's
liens and other liens on account of work done for Tenant or persons claiming under it. Tenant hereby agrees to post the Premises
with a notice of non-liability by Landlord and to indemnify, defend and save Landlord harmless of and from all liability, loss,
damage, costs or expenses, including attorneys' fees, on account of any claims of any nature whatsoever including claims or liens
of laborers, materialmen or others for work performed for or materials or supplies furnished to Tenant or persons claiming under
Tenant. Should any liens be filed or recorded against the Premises or any action affecting the title thereto be commenced, Tenant
shall cause such liens to be removed of record or bonded over to Landlord's satisfaction within ten (10) days after Tenant becomes
aware of their existence or notice from Landlord whichever first occurs. If Tenant shall be in default in paying any charge for
which a mechanic's lien or suit to foreclose the lien has been recorded or filed and shall not have bonded said lien off to Landlord's
satisfaction as aforesaid, Landlord may (but without being required to do so) pay such lien or claim and any costs thereon and
the amount so paid, together with reasonable attorneys' fees incurred in connection therewith, shall be immediately due from Tenant
to Landlord.

 

14.                SUBLETTING
AND ASSIGNMENT.

 

(a)                Tenant
shall not, directly or indirectly, sell, transfer, assign, encumber, pledge or hypothecate all or any portion of its interest
in the Premises, nor permit all or any portion of the Premises to be occupied by anyone other than Tenant, nor sublet all or any
portion of the Premises without the written consent of Landlord first being obtained except Tenant shall be allowed, without
having to obtain Landlord’s consent, to have professional licensed sub- tenants who pay Tenant consideration for their participation
in Tenant’s business and occupy portions of the Premises to perform their services. If Sub-Tenant is a corporation, partnership
or other entity a transfer in the aggregate of more than 50% of the equity interest of Tenant at any time or at more than one
time during the Primary Lease Term or any extension thereof shall be construed as transfer of the Lease and subject to Landlord's
written consent. Notwithstanding the consent of Landlord, any such subletting or assignment shall not relieve Tenant from its
primary obligations hereunder to Landlord. If this Lease is assigned or if the Premises or any part thereof is sublet or occupied
by anybody other than Tenant, Landlord may, after default by Tenant, collect the rent from the assignee, subtenant or occupant
and apply the net amount collected to the rent herein reserved, but no such assignment, subletting, occupancy or collection shall
be deemed an acceptance of the assignee, subtenant or occupant as the Tenant hereunder or a release of Tenant from further performance
by Tenant of covenants on the part of Tenant herein contained.

 

 

 

    	 	9	 

     

    

 

(b)                If
Tenant desires to enter into an assignment or sublease it shall first give written notice of its intention to Landlord which notice
shall include the name of the proposed assignee or subtenant ("Subtenant"); the nature of Subtenant's business to be
carried on in the Premises; the terms of the proposed assignment or sublease and Subtenant's most recent financial statement.
Notwithstanding anything contained hereinabove in this Section 14 to the contrary, at any time within thirty (30) days after Landlord's
receipt of Tenant's notice herein, Landlord may elect any of the following options in its absolute and sole discretion: (i) consent
to such subletting or assignment or (ii) refuse to grant such consent or (iii) refuse to grant such consent and terminate this
Lease as to the portion of the Premises with respect to which such consent was requested, provided, however, if Landlord refuses
to grant such consent and elects to terminate the Lease as to such portion of the Premises, Tenant shall have the right to withdraw
its request for such consent and remain in possession of the Premises under the terms and conditions hereof. If the Lease is terminated
as set forth herein, such termination shall be effective as of the date set forth in a written notice from Landlord to Tenant,
which date shall not be less than thirty (30) days nor more than sixty (60) days following such notice. Landlord's consent to
any requested subletting or assignment shall not relieve Tenant from obtaining Landlord's express consent to any further assignment
or sublease nor waive Landlord's right to refuse to consent to any other such request, or to terminate this Lease if such request
is made, all as provided above.

 

15.                
INJURY TO PERSON OR PROPERTY. Tenant shall neither hold, nor attempt to hold, Landlord liable for any injury or damage,
either proximate or remote, occurring through or caused by fire, water, steam or any repairs, alteration, injury or accident or
any other cause, to the Premises, to any furniture, fixtures, tenant improvements or other personal property of Tenant kept or
stored in the Premises, to adjacent premises, or to other parts of the Building not herein demised, whether by reason of the negligence
or default of the owners or occupants thereof, or any other person or otherwise. All property of Tenant kept or stored in the
Building Complex shall be at the sole risk of Tenant. If Tenant shall obtain risk insurance on any of its property, such insurance
shall permit Tenant to waive any rights of subrogation and Tenant hereby waives such rights.

 

16.               INDEMNIFICATION.

 

(a)                
Tenant, as a material part of the consideration to be rendered to Landlord under this Lease, hereby waives all claims of
liability that Tenant or Tenant's legal representatives, successors and assigns may have against Landlord, and Tenant hereby indemnifies
and agrees to hold Landlord harmless from any and all loss (including loss of use of the Premises or loss of profits) and against
all claims, actions, damages, liability, and expenses in connection with loss of life and any injury or damage to any person or
property whatsoever: (1) occurring in, on or about the Premises or any part thereof; or (2) occurring in, on or about the Building
Complex, when such loss of life, injury or damage is caused in part or in whole by the negligence, fraud or willful misconduct
of Tenant, its agents, contractors, employees, licensees or invitees. Tenant further agrees to indemnify and to hold Landlord
harmless from and against any and all claims arising from any breach or default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease or arising from any negligence, fraud or willful misconduct of Tenant, or any
of its agents, contractors, employees, licensees or invitees. Similarly Landlord further agrees to indemnify and to hold Tenant
harmless from and against any and all claims arising from any breach or default in the performance of any obligation on Landlord's
part to be performed under the terms of this Lease or arising from any negligence, fraud or willful misconduct of Landlord, or
any of its agents, contractors, employees, licensees or invitees. Such indemnities shall include by way of example, but not limitation,
all costs, reasonable attorneys' fees, expenses and liabilities incurred in or about any such claim, action or proceeding.

 

(b)                
Landlord shall not be liable to Tenant for any damage by or from any act or negligence of any co-tenant or other occupant
of the Building Complex or by any owner or occupants of adjoining or contiguous property. Landlord shall not be liable for any
injury or damage to persons or property resulting in whole or in part from the criminal activities of others. Tenant agrees to
pay for all damage to the Building Complex, as well as all damage to persons or property of other tenants or occupants thereof,
caused by the negligence, fraud or willful misconduct of Tenant or any of its agents, contractors, employees, licensees or invitees.
Nothing contained herein shall be construed to relieve Landlord from liability for any personal injury resulting from its negligence,
fraud or willful misconduct.

 

 

 

 

    	 	10	 

     

    

 

(c)                  
Tenant shall obtain and maintain at its expense throughout the Primary Lease Term and any extension thereof a commercial
general liability policy covering losses, on an occurrence basis, including protection against personal injury and property damage,
with limits of not less than One Million Dollars ($1,000,000.00) with respect to injuries or death of one or more persons, and
not less than Two Hundred Thousand Dollars ($200,000.00) with respect to property damage. Tenant shall maintain workers’
compensation insurance in at least the amount required by law. Tenant shall insure its personal property and the Tenant improvements
in the Premises with a special form or all risks policy for the full amount of the replacement cost thereof and shall obtain rental
coverage insurance and insure against loss of profits. All such policies shall name Landlord and Landlord's Agent as additional
insured. Each such policy shall provide that the same may not be canceled or modified without at least thirty (30) days' prior
written notice to Landlord. Tenant shall, at the request of Landlord, deliver from time to time (but no less frequently than annually)
evidence of insurance on forms acceptable to Landlord. Said policies shall be with companies qualified to do business in Colorado.
Tenant shall obtain from the insurer a waiver of its right of subrogation against Landlord and Landlord’s Agent in all such
policies. The limits of said insurance shall not, however, limit the liability of the Tenant hereunder.

 

17.               
SURRENDER AND NOTICE. Upon the expiration or other termination of the Primary Lease Term or any extension thereof, Tenant
shall promptly quit and surrender to Landlord the Premises broom clean, in good order and condition, ordinary wear and tear and
loss by fire or other casualty (unless caused by the Tenant, its agents, servants, employees or invitees) excepted, and Tenant
shall remove all of its movable furniture and other effects and such alterations, additions and improvements as Landlord shall
require Tenant to remove pursuant to Section 11. If Tenant fails to vacate the Premises on a timely basis as required, Tenant
shall be responsible to Landlord for all costs incurred by Landlord as a result of such failure, including, but not limited to,
any amounts required to be paid to third parties who were to have occupied the Premises.

 

18.                FIRE,
RESTORATION OF PREMISES.

 

(a)                  
If the Premises, or said Building, shall be so damaged by fire or other casualty as to render the Premises wholly untenantable,
and if such damage is so great that Landlord determines the Premises, with the exercise of reasonable diligence, cannot be made
fit for occupancy within one hundred fifty (150) working days from the happening thereof, or if Landlord determines not to repair
said damage, then this Lease shall cease and terminate from the date of the occurrence of such damage; and Tenant thereupon shall
surrender to Landlord the Premises and remove Tenant's property therefrom. Tenant shall pay rent, duly apportioned, up to the
time of such termination of this Lease.

 

(b)                
If, however, the damage shall be such that Landlord determines that the Premises can be made tenantable within said one
hundred fifty (150) day period from the happening of such damage or other casualty and Landlord determines to repair said damage,
then, except as hereinafter provided, Landlord shall repair the damage so done with reasonable speed. Tenant shall continue to
pay rent during the period of repair.

 

(c)                  
If the Premises without the fault of Tenant or any of its agents, contractors, employees, licensees or invitees, shall
be slightly damaged by fire or other casualty, but not so as to render the same untenable, Landlord, after receiving notice in
writing of the occurrence of the injury, shall cause the same to be repaired with reasonable promptness. Tenant shall continue
to pay rent during the period of repair.

 

(d)                
If the fire or other casualty causing injury to the Premises or other parts of the Building shall have been caused by the
negligence or misconduct of Tenant, its agents, contractors, employees, licensees or invitees, such injury shall be repaired by
Landlord at the expense of Tenant. Tenant shall continue to pay rent during the period of repair.

 

 

 

 

    	 	11	 

     

    

 

(e)                  
In case the Building throughout shall be so injured or damaged, whether by fire or otherwise (though the Premises may not
be affected, or if affected, can be repaired within said one hundred fifty (150) days) that Landlord within sixty (60) days after
the happening of such injury shall decide not to reconstruct or rebuild the Building, then, notwithstanding anything contained
herein to the contrary, upon notice in writing to that effect given by Landlord to Tenant within said sixty (60) days, Tenant
shall pay the rent properly apportioned up to said date, this Lease shall terminate from the date of delivery of said written
notice and both parties hereto shall be freed and discharged of all further obligations hereunder.

 

19.                 
CONDEMNATION. If any portion of the Premises or any portion of the Building which shall render the Premises untenable shall
be taken by right of eminent domain or by condemnation or shall be conveyed in lieu of any such taking, then this Lease, at the
option of either Landlord or Tenant, exercised by either party giving notice to the other of such termination within thirty (30)
days after such taking or conveyance, shall forthwith cease and terminate, and the rent shall be duly apportioned as of the date
of such taking or conveyance. Tenant thereupon shall surrender to Landlord the Premises and all interest therein under this Lease,
and Landlord may reenter and take possession of the Premises or remove Tenant therefrom. If such taking or conveyance occurs,
Landlord shall receive the entire award or consideration for the lands and improvements so taken, including the value, if any,
which is given to this Lease. Nothing herein contained shall be construed as depriving the Tenant of the right to retain as its
sole property any compensation paid for any tangible personal property owned by the Tenant which is taken in any such condemnation
proceeding or awarded to Tenant for moving or relocation expenses.

 

20.                 
DEFAULT BY TENANT. The occurrence of any of the following shall constitute an "Event of Default" by Tenant:

 

(a)  
Failure to pay rent or any other amounts payable hereunder when due, and such default shall continue for ten (10) days
after receipt of written notice from Landlord; provided, however, Tenant shall not be entitled to more than two (2) notices of
a delinquency for a monetary default during any Lease Year. If thereafter any rent or other amounts owing hereunder are not paid
when due, a default shall be considered to have occurred even though no notice thereof is given;

 

(b)  
Tenant shall abandon or permanently vacate the Premises for thirty (30) consecutive days;

 

(c)  
If this Lease or the estate of Tenant hereunder shall be transferred to or shall pass to or devolve upon any other person
or party except in the manner herein provided;

 

(d)  
This Lease or the Premises or any part thereof shall be taken upon execution or by other process of law directed against
Tenant, or shall be taken upon or subject to any attachment at the instance of any creditor or claimant against Tenant, and said
attachment shall not be discharged or disposed of within fifteen (15) days alter the levy thereof;

 

(e)  
Tenant shall file a petition in bankruptcy or insolvency or for reorganization of arrangement under the bankruptcy laws
of the United States or under any insolvency, act of any state, or shall voluntarily take advantage of any such law or act by
answer or otherwise, or shall be dissolved or shall make an assignment for the benefit of creditors;

 

(f)  
Involuntary proceedings under any such bankruptcy law or insolvency act or for the dissolution of Tenant shall be instituted
against Tenant, or a receiver or trustee shall be appointed for all or substantially all of the property of Tenant, and such proceedings
shall not be dismissed or such receivership or trusteeship vacated within sixty (60) days after such institution or appointment;

 

 

 

 

    	 	12	 

     

    

 

(g)  
Tenant shall, for reasons other than those specifically permitted in this Lease, cease to conduct continually its normal
business operations in the Premises, or fail to from the Commencement Date throughout the term of this Lease and any renewals
hereof, do any of the following:

 

		(i)	keep the phone lines in the Premises hooked up with adequate
personnel to operate same; or

 

		(ii)	operate its normal business activities as an active and
ongoing entity consistent with generally accepted standards in the industry;

 

(h)
Tenant shall fail to obtain a release of any mechanic's lien, as required herein;

 

(i)  
A guarantor of this Lease, if any, or a general partner of Tenant (if Tenant is a general or limited partnership), becomes
a debtor under any state or federal bankruptcy proceedings, or becomes subject to receivership or trusteeship proceedings, whether
voluntary or involuntary; except in the case of a guarantor, Tenant shall not be in default if a substitute guarantor, with acceptable
credit worthiness and financial abilities in light of the responsibilities of Tenant hereunder, and other acceptable to Landlord,
is provided to Landlord within fifteen (15) days after notice by Landlord to Tenant;

 

(j)  
All or any part of the personal property of Tenant is seized, subject to levy or attachment, or similarly repossessed or
removed from the Premises;

 

(k)  
Tenant's representations regarding its financial condition and creditworthiness are false;

 

(l)  
Tenant shall fail to perform any of the other agreements, terms, covenants or conditions hereof on Tenant's part to be
performed, and such nonperformance shall continue for a period of fifteen (15) days after notice thereof by Landlord to Tenant,
or if such performance cannot be reasonably had within such fifteen (15) day period, Tenant shall not in good faith have commenced
such performance within such fifteen (15) day period and shall not diligently proceed therewith to completion.

 

21.               
REMEDIES. Upon the occurrence of an Event of Default, Landlord shall have the right at its election, provided that Landlord
complies with Colorado law, then or at any time thereafter:

 

(a)                
To give Tenant written notice of intention to terminate this Lease on the date of such given notice or any later date specified
therein, and on the date specified in such notice, Tenant's right to possession of the Premises shall cease and this Lease shall
thereupon be terminated, except as to Tenant's liability; or

 

(b)                
Without demand or notice, to reenter and take possession of the Premises or any part thereof, and repossess same as of
Landlord's former estate and expel Tenant and those claiming through or under Tenant, and remove the effects of both or either,
using such force for such purposes as may be necessary, without being liable for prosecution thereof, without being deemed guilty
of any manner of trespass and without prejudice to any remedies for arrears or future obligations of rent or preceding breach
of covenants or conditions. Should Landlord elect to reenter as provided in this Subsection (b), or should Landlord take possession
pursuant to legal proceedings or pursuant to any notice provided for by law, Landlord may, from time to time, without terminating
this Lease, relet the Premises or any part thereof, either alone or in conjunction with other portions of the Building of which
the Premises are a part, in Landlord's or Tenant's name, but for the account of Tenant. Any reletting under this Section shall
be for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of
the term of this Lease) and on such conditions and upon such other terms (which may include concessions of free rent and alteration
and repair of the Premises) as Landlord, in its uncontrolled discretion, may determine, and Landlord may collect and receive the
rents therefor. Landlord shall in no way be responsible or liable for any failure to relet the Premises, or any part thereof,
or for any failure to collect any rent due upon such reletting. No such reentry or taking possession of the premises by Landlord
shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention be given
to Tenant. No notice from Landlord hereunder or under a forcible entry and detainer statute or similar law shall constitute an
election by Landlord to terminate this Lease unless such notice specifically so states. Landlord reserves the right following
any such reentry and/or reletting to exercise its right to terminate this Lease by giving Tenant such written notice, in which
event the Lease will terminate as specified in said notice.

 

 

 

    	 	13	 

     

    

 

(c)                
If Landlord does not elect to terminate this Lease as permitted in Subsection (a) of this Section, but on the contrary,
elects to take possession as provided in Subsection (b) hereof, Tenant shall pay to Landlord (i) the rent and other sums as herein
provided, which would be payable hereunder if such repossession had not occurred, less (ii) the net proceeds, if any, of any reletting
of the Premises after deducting all Landlord's expenses in connection with such reletting, including, but without limitation,
all repossession costs, brokerage commissions, legal expenses, attomeys' fees, expenses of employees, alteration and repair costs
and expenses of preparation for such reletting. If, in connection with any reletting, the new lease term extends beyond the existing
term or the premises covered thereby include other premises not part of the Premises, a fair apportionment of the rent received
from such reletting and the expenses incurred in connection therewith as provided aforesaid will be made in determining the net
proceeds received from such reletting. In addition, in determining the net proceeds from such reletting, any rent concessions
will be apportioned over the term of the new lease. Tenant shall pay such amounts to Landlord monthly on the days on which the
rent would have been payable hereunder if possession had not been retaken and Landlord shall be entitled to receive the same from
Tenant on each such day.

 

(d)                  If
this Lease is terminated pursuant to the provisions of this Section 21:

 

(i)     
Tenant shall remain liable to Landlord for damages in an amount equal to the rent and other sums which would have been
owing by Tenant hereunder for the balance of the term had this Lease not been terminated, less the net proceeds, if any, of any
reletting of the Premises by Landlord subsequent to such termination, after deducting all Landlord's expenses in connection with
such reletting, including, but without limitation, the expenses enumerated above in Subsection (c)(ii). Landlord shall be entitled
to collect such damages from Tenant monthly on the days on which the rent and other amounts would have been payable hereunder
if this Lease had not been terminated, and Landlord shall be entitled to receive the same from Tenant on each such day.

 

(ii)      
Alternatively, at the sole discretion of the Landlord, Tenant will pay Landlord a lump sum amount equal to the present
value of the rent that would have been payable hereunder if this Lease had not been terminated less the reasonable net rental
value of the Premises. Such lump sum amount will be based upon the Minimum Monthly Rent plus Additional Rent (including without
limitation, rent attributable to Operating Expense Escalation, Estimated Escalation Increase and Escalation Reconciliation) for
the period during which the lease termination is effective at a discount rate of seven percent (7%).

 

 

(e)                
Suit or suits for the recovery of the rent and other amounts and damages set forth hereinabove may be brought by Landlord
from time to time, at Landlord's election, and nothing herein shall be deemed to require Landlord to await the date whereon the
Primary Lease Term would have expired had there been no such default by Tenant. Each right and remedy provided in this Lease shall
be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise, including but not limited to, suits for injunctive relief and specific performance.
The exercise or beginning of the exercise by Landlord or any one or more of the rights or remedies provided for in this Lease
or now or hereafter existing at law or in equity or otherwise shall not preclude the simultaneous or later exercise by Landlord
of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or otherwise.
All costs incurred by Landlord or Tenant in connection with collecting any rent or other amounts and damages owing by the other
pursuant to the provisions of this Lease or to enforce any provision of this Lease, including reasonable attorneys' fees from
the date any such matter is turned over to an attorney, whether or not one or more actions are commenced by the non-defaulting
party, shall also be recoverable by the prevailing party.

 

 

 

    	 	14	 

     

    

 

(f)                  
No failure by Landlord to insist upon the strict performance of any agreement, term, covenant or condition hereof or to
exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance
of any such breach, shall constitute a waiver of any such breach or of such agreement, term, covenant or condition. No agreement,
term, covenant or condition hereof to be performed or complied with by Tenant, and no breach thereof, shall be waived, altered
or modified except by written instrument executed by Landlord. No waiver of any breach shall affect or alter this Lease, but each
and every agreement, term, covenant and condition hereof shall continue in full force and effect with respect to any other then
existing or subsequent breach thereof. Notwithstanding any termination of this Lease, (i) the same shall continue in full force
and effect as to any provisions which require observance or performance by Landlord or Tenant subsequent to such termination,
and (ii) in the event of a Tenant default, Landlord must mitigate its damages as required by Colorado law.

 

(g)                
Nothing in this Section shall limit or prejudice the right of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution proceeding, an amount equal to the maximum allowed by any
statute or rule of law governing such a proceeding and in effect at the time when such damages are to be proved, whether or not
such amount be greater, equal to or less than the amounts recoverable, either as damages or rent, referred to in any of the proceeding
provisions of this Section.

 

(h)                
Notwithstanding anything contained hereinabove in this Section to the contrary, any such proceeding or action involving
bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors or appointment of a receiver or trustee
set forth above, shall be considered to be an Event of Default only when such proceeding, action or remedy shall be taken or brought
by or against the then holder of the leasehold estate under this Lease or any partner or guarantor thereof.

 

(i)                  
Any rents or amounts owing hereunder (including amounts that are the subject of this Section) which are not paid within
ten (10) days after the date they are due, shall thereafter bear interest at the rate of ten percent (10%) per annum, or the highest
rate permitted by applicable law, whichever is lower, until paid. Further, in the event any rents or other amounts owing hereunder
are not paid within said five (5) day period, Landlord and Tenant agree that Landlord will incur additional administrative expenses,
the amount of which will be difficult if not impossible to determine. Accordingly, Tenant shall pay to Landlord an additional
late charge for any such late payment in the amount of five percent (5%) of such payment. Any amounts paid by Landlord to cure
any defaults of Tenant hereunder, which Landlord shall have the right, but not the obligation to do, shall, if not repaid by Tenant
within ten (10) days after demand by Landlord, thereafter bear interest at the rate of ten percent (10%) per annum, or the highest
rate permitted by applicable law, whichever is lower, until paid.

 

22.  
SUBORDINATION AND ATTORNMENT. This Lease shall be subordinate to any mortgage, deed of trust (now or hereafter placed upon
the Building Complex), ground lease or declaration of covenants (now or hereafter placed upon the Building Complex) regarding
maintenance and use of any areas contained in any portion of the Building Complex, and to any and all advances made under any
mortgage or deed of trust and to all renewals, modifications, consolidations, replacements and extensions thereof. Tenant agrees
that with respect to any of the foregoing documents, no documentation, other than this Lease, shall be required to evidence such
subordination. If any holder of a mortgage or deed of trust shall elect to have this Lease superior to the lien of its mortgage
or deed of trust and shall give written notice thereof to Tenant, this Lease shall be deemed prior to such mortgage or deed of
trust whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or the date of recording thereof.
Tenant agrees to execute such documents which may be required to effectuate such subordination or to make this Lease junior to
the lien of any mortgage or deed of trust, as the case may be, and failing to do so within ten (10) days after written demand,
Tenant does hereby make, constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant's name, place
and stead, to do so. Tenant hereby attorns to all successor owners of the Building, whether or not such ownership is acquired
as a result of sale, through foreclosure of a deed of trust or mortgage, or otherwise.

 

 

 

    	 	15	 

     

    

 

23.  
REMOVAL OF TENANT'S PROPERTY. All movable furniture and personal effects of Tenant not removed from the Premises upon the
vacation or abandonment thereof or upon the termination of this Lease for any cause whatsoever shall conclusively be deemed to
have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant
or any other person and without obligation to account therefor. Tenant shall pay Landlord all expenses incurred in connection
with the disposition of such property. Tenant's property shall not be removed from the Premises without the prior written consent
of Landlord, except to the extent such property is replaced with an item of equal or greater value.

 

24.  
HOLDING OVER: TENANCY MONTH TO MONTH. If after the expiration of this Lease Tenant shall remain in possession of the Premises
and continue to pay rent, without any express written agreement as to such holding, then such holding over shall be deemed and
taken to be a holding upon a tenancy from month-to-month, subject to all the terms and conditions hereof on the part of Tenant
to be observed and performed and at a monthly rent equivalent to one hundred twenty five percent (125%) of the monthly installments
paid by Tenant immediately prior to such expiration, payable in advance on the same day of each calendar month. Such month-to-month
tenancy may be terminated by either party upon ten (10) days' written notice prior to the end of any such monthly period.

 

25.  
PAYMENTS AFTER TERMINATION. No payments of money by Tenant to Landlord after the termination of this Lease, in any manner,
or after giving of any notice (other than a demand for payment of money) by Landlord to Tenant, shall reinstate, continue or extend
the term of this Lease or affect any notice given to Tenant prior to the payment of such money, it being agreed that after the
service of notice or the commencement of a suit or other final judgment granting Landlord possession of said Premises, Landlord
may receive and collect any sums or rent due, or any other sums of money due under the terms of this Lease, or otherwise exercise
its rights and remedies hereunder. The payment of such sums of money, whether as rent or otherwise, shall not waive said notice,
or in any manner affect any pending suit or judgment theretofore obtained.

 

26.  
PREMISES NOT READY FOR OCCUPANCY. If Landlord is to remodel the Premises, and if the Premises are not ready for occupancy
on the Commencement Date, the rent under this Lease shall not commence until the Premises are ready for occupancy, whereupon this
Lease, and all of the covenants, conditions and agreements herein contained shall be in full force and effect; and the Termination
Date shall be postponed for an equivalent period of time, and the postponement of rent herein provided to be paid by Tenant for
such period prior to the delivery of the Premises to Tenant ready for occupancy shall be in full settlement for all claims which
Tenant might otherwise have by reason of said Premises not being ready for occupancy on the Commencement Date. Provided, however,
if Tenant takes possession of all or any part of the Premises prior to the date the Premises are ready for occupancy (such possession
subject to Landlord consent), all terms and provisions of this Lease shall apply except for the payment of rent. "Ready for
occupancy" as used herein shall mean the date that Landlord shall have substantially completed any remodeling work to be
performed by Landlord to the extent agreed to in the work letter. The certificate of the architect (or other representative of
Landlord) in charge of supervising the completion or remodeling of the Premises shall control conclusively the date upon which
the Premises are ready for occupancy, and the obligation to pay rent begins as aforesaid. In addition to the above, if Landlord
is delayed in delivering the Premises to Tenant due to the failure of a prior occupant to vacate the same, then, the rent and
Commencement and Termination Dates shall also be postponed as hereinabove set forth, and such postponement shall be in full settlement
of all claims which Tenant may otherwise have by reason of the delay of delivery.

 

27.  
MID-MONTH COMMENCEMENT. If, as a result of the postponement of the Commencement Date, the Primary Lease Term would begin
other than the first day of the month, the Commencement Date shall be further postponed until the first day of the following month,
but Tenant shall pay proportionate rent at the same monthly rate set forth herein (also in advance) for such partial month and
all other terms and conditions of this Lease shall be in force and effect during such partial month. As soon as the Primary Lease
Term commences, Landlord and Tenant shall execute an addendum to this Lease, which may be requested by either party, setting forth
the exact Commencement Date and Termination Date hereof.

 

 

 

 

    	 	16	 

     

    

 

28.  
TENANT ESTOPPEL STATEMENT. Tenant agrees at any time and from time to time, upon not less than ten (10) days' prior written
request by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified
and in full force and effect (or in full force and effect as modified, and stating the modifications), that there have been no
Events of Default hereunder by Landlord or Tenant (or if there have been defaults, setting forth the nature hereof), the amount
of the Minimum Monthly Rent, the Security Deposit Amount and the date to which the rent and other charges have been paid in advance,
if any. It is intended that any such statement delivered pursuant to this Section may be relied upon by a prospective purchaser
of all or any portion of Landlord's interest herein, or a holder of any mortgage or deed of trust encumbering the Building Complex.

 

Tenant's failure to
deliver such statement within such time shall be conclusive upon Tenant (i) that this Lease is in full force and effect, without
modifications except as may be represented by Landlord, (ii) that there are no uncured Events of Default in Landlord's performance,
and (iii) that not more than one (1) month's rent has been paid in advance. Further, upon request, Tenant will supply Landlord
a corporate resolution certifying that the party signing this statement on behalf of Tenant is properly authorized to do so.

 

29. MISCELLANEOUS.

 

(a)  
Notwithstanding any other language herein, the term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners of the Building
in which the premises are situated at the time in question, and in the event of any transfer or transfers of the title thereto,
Landlord herein named (and in the case of any subsequent transfers or conveyances, the then grantor) shall be automatically released
from and after the date of such transfer or conveyance of all liability as respects the performance of any covenants or obligations
on the part of Landlord contained in this Lease thereafter to be performed; provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer, in which Tenant has an interest, shall be turned over to the grantee, and any amount
then due and payable to Tenant by Landlord or the then grantor under any provision of this Lease shall be paid to Tenant.

 

(b)  
This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent,
and Tenant shall not be entitled to any setoff of the rent or other amounts owing hereunder against Landlord if Landlord fails
to perform its obligations set forth herein; provided, however, the foregoing shall in no way impair the right of Tenant to commence
a separate action against Landlord for any violation by Landlord of the provisions hereof so long as notice is first given to
Landlord and any holder of a mortgage or deed of trust covering the Building Complex or any portion thereof and an opportunity
granted to Landlord and such holder to correct such violation as provided in Subsection (f) of this Section.

 

(c)  
If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during
the Primary Lease Term, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby,
and it is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal,
invalid or unenforceable, there be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid
or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

 

(d)  
The caption of each Section is added as a matter of convenience only and shall be considered of no effect in the construction
of any provision or provisions of this Lease.

 

 

 

 

    	 	17	 

     

    

 

(e)  
Except as herein specifically set forth, all terms, conditions and covenants to be observed and performed by the parties
hereto shall be applicable to and binding upon their respective heirs, administrators, executors, successors and assigns. The
terms, conditions and covenants hereof shall also be considered to be covenants running with the land.

 

(f)  
If any alleged default on the part of Landlord hereunder occurs, Tenant shall give written notice to Landlord in the manner
herein set forth and shall afford Landlord a reasonable opportunity to cure any such default. In addition, Tenant shall send notice
of such default by certified or registered mail, postage prepaid, to the holder of any mortgages or deeds of trust covering the
Building Complex or any portion thereof of whose address Tenant has been notified in writing, and shall afford such holder a reasonable
opportunity to cure any alleged default on Landlord's behalf. In no event will Landlord be responsible for any damages incurred
by Tenant, including, but not limited to, lost profits or interruption of business as a result of any alleged default by Landlord
hereunder.

 

(g)  
Tenant and the party executing this Lease on behalf of Tenant represent to Landlord that such party is authorized to do
so by requisite action of the board of directors or partners, as the case may be, and agree upon request to deliver to Landlord
a resolution or similar document to that effect.

 

(h)  
If there is more than one entity or person which or who are the Tenant under this Lease, the obligations imposed upon Tenant
under this Lease shall be joint and several.

 

(i)  
No act or thing done by Landlord or Landlord's agents during the terms hereof, including, but not limited to, any agreement
to accept surrender of the Premises or to amend or modify this Lease, shall be deemed to be binding on Landlord unless such act
or thing shall be approved by an officer of Landlord or a party designated in writing by Landlord as so authorized to act. The
delivery of keys to Landlord, or Landlord's agents, employees or officers shall not operate as a termination of this Lease or
a surrender of the Premises. No payment by Tenant, or receipt by Landlord, of a lesser amount than the fill] amount due hereunder,
shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check
or any letter accompanying any check, or payment as rent, be deemed an accord and satisfaction. Landlord may accept such check
or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy available to Landlord.

 

(j)  
Landlord shall have the right at any time to change the name of the Building, to construct other buildings or improvements
in any plaza, or other area designated by Landlord for use by tenants or to change the location, character or make alterations
of, or additions to, any of said plaza or other areas.

 

(k)  
Notwithstanding anything to the contrary contained herein, Landlord's liability under this Lease shall be limited to its
interest in the Building.

 

(l)  
Tenant acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties by
Landlord, its agents or employees except such as are expressed herein, and that no amendment or modification of this Lease shall
be valid or binding unless expressed in writing and executed by the parties hereto in the same manner as the execution of this
Lease.

 

 

 

 

    	 	18	 

     

    

 

31.
AUTHORITIES FOR ACTION AND NOTICE.

 

(a) 
Except as herein otherwise provided, Landlord may act in any matter provided for herein by Landlord's Agent or any other
person who shall from time to time be designated in writing.

 

(b)
All notices or demands required or permitted to be given to Landlord hereunder shall be in writing and shall be deemed duly
served when delivered personally to Landlord's Agent, or when deposited in the United States mail, postage prepaid, certified
or registered, return receipt requested, addressed to Landlord at its principal office in the Building or at the most recent
address of which Landlord has notified Tenant in writing. All notices or demands required to be given to Tenant hereunder
shall be in writing and shall be deemed duly served when delivered personally to any officer of Tenant in the Building, or
when deposited in the United States mail, postage prepaid, certified or registered, return receipt requested, addressed to
Tenant at its office in the Building. Either party shall have the right to designate in writing, served as above provided, a
different address to which notice is to be mailed. The foregoing shall not prohibit notice being given as provided in Rule 4
of Colorado Rules of Civil Procedure, as the same may be amended from time to time.

 

32.

IN WITNESS WHEREOF, the parties hereto have caused
this Lease to be executed the day and year first above written.

 

Tenant:

 

/s/ Brett Roper                                  

Brett Roper (Feb 27, 2017)

Brett Roper, COO

Medicine Man Technologies, Inc.

 

Landlord:

 

/s/ Andrew Feinstein                        

Andrew Feinstein (Feb 27, 2017)

Andrew Feinstein, Manager

Havana Gold, LLC

 

 

 

 

 

    	 	19	 

     

    

 

Exhibit A

 

Second Floor

 

4880
Havana Street

 

 

 

 

 

 

 

    	 	20	 

     

    

 

Exhibit B

 

Tenant Improvements

 

Landlord will turnkey the Tenant improvements which
include:

 

		·	Replacing carpet throughout the Suite

		·	Repainting the entire Suite to the mutual agreement of Landlord and Tenant

		·	Ensuring all existing IT wiring (phone and internet) are 100% usable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	21Exhibit

Exhibit 4.9

    

COMMON STOCK PURCHASE WARRANT

APRICUS BIOSCIENCES, INC.
 
Warrant Shares: _______                            Issue Date: _______, 2017

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Initial Exercise Date and on or prior to the close of business on the five 5) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Apricus Biosciences, Inc., a Nevada corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).  
Section 1.    Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth below:
“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.  
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Initial Exercise Date” means the date that the Company publicly announces through the filing of a Current Report on Form 8-K that the Company has received Shareholder Approval and the amendment to the Company’s Articles of Incorporation has become effective.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shareholder Approval” means the approval of the Company’s shareholders as required by Nevada law to amend the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 15,000,000 to 30,000,000.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Wells Fargo Shareholder Services, the current transfer agent of the Company, with a mailing address of 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120, and any successor transfer agent of the Company.
Section 2.    Exercise.
a)Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).  Within the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.  No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.  Notwithstanding anything herein to the contrary, 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 the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares 

available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

For the avoidance of doubt, there is no circumstance that would require the Company to net cash settle the Warrants.

b)Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”).

c)Cashless Exercise. [If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

		
	(A) =
	as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(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 VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

		
	(B) = 
	the Exercise Price of this Warrant, as adjusted hereunder; and 

		
	(X) = 
	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.  The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization 

or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. 
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. 
Notwithstanding anything herein to the contrary, subject to the limitations set forth in Section 2(e), on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

d)Mechanics of Exercise. 

i.Delivery of Warrant Shares Upon Exercise.  The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner of sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register 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 to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) the earlier of (A) three (3) Trading Days after the delivery to the Company of the Notice of Exercise and (B) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).   Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) three Trading Days and (ii) the number of Trading Days 

comprising the Standard Settlement Period following delivery of the Notice of Exercise.  If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date (subject to receipt of the aggregate exercise price of the applicable exercise (other than in the case of a cashless exercise)) until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, pursuant to Rule 11320(b) of the Nasdaq Stock Market Rules, or any successor or similar rule on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.  

ii.Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii.Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date (subject to receipt of the aggregate exercise price for the applicable exercise (other than in the case of a cashless exercise)), then the Holder will have the right to rescind such exercise.

iv.Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise.  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 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (subject to receipt of the aggregate exercise price for the applicable exercise (other than in the case of a cashless exercise)), 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 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.

v.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi.Charges, Taxes and Expenses.  Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii.Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e)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 Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, 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 (such Persons, “Attribution Parties”)), 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 and Attribution Parties shall include the number 

of shares of Common Stock issuable 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 or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), 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 2(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 submission of a Notice of Exercise 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 Attribution Parties) 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 2(e), 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 Trading 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 or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% 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 Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) 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.

Section 3.    Certain Adjustments.
a)Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re‐classification.

b)Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares 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 on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 

c)Pro Rata Distributions.  During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) other than a dividend or other distribution of the type described in Section 3(a) above (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 on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of 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, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).  To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.  

d)Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, exclusive license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Notwithstanding anything to the contrary, in the event of a Fundamental Transaction (other than a Fundamental Transaction which was not approved by the Board of Directors, as to which this right shall not apply), the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time 

concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date.  The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, 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 which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) 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 number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. 

e)Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

f)Notice to Holder.  
i.Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment. 
ii.Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided 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.  To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4.    Transfer of Warrant.
a)Transferability.  This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, 

and this Warrant shall promptly be cancelled.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.  

b)New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. 
c)Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5.    Miscellaneous.
a)No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.  

b)Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c)Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d)Authorized Shares.  

The Company covenants that, subject to its receipt of Shareholder Approval, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary 

to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e)Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. 

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.

f)Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g)Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant or the Underwriting Agreement pursuant to which this Warrant was issued, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h)Notices.  Any notices, consents, waivers or other document or communications required or permitted to be given or delivered under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Trading Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. If notice is given by facsimile or email, a copy of such notice shall be dispatched no later than the next business day by first class  mail, postage prepaid. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:
Apricus Biosciences, Inc.
11975 El Camino Real, Suite 300
San Diego, CA 92130
Telephone: 858-222-8041
Attention: ____________
Email: ______________

If to a Holder, to its address, facsimile number or e-mail address set forth herein or on the books and records of the Company.
Or, in each of the above instances, to such other address, facsimile number or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile 

or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively. A copy of the e-mail transmission containing the time, date and recipient e­mail address shall be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.
i)Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time

l) to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

m)Amendment.  This Warrant may be modified or amended or the 
provisions hereof waived with the written consent of the Company and the Holder.

n)Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

o)Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 
	
	
	Apricus Biosciences, Inc.

	By:__________________________________________
     Name:
     Title:

    

    

EXHIBIT A

NOTICE OF EXERCISE

To:    Apricus Biosciences, Inc.

(1)The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2)Payment shall take the form of (check applicable box):

[  ] in lawful money of the United States; or
[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3)Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
            

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________
            
_______________________________
            
_______________________________

[SIGNATURE OF HOLDER]
    
Name of Investing Entity:
 ________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:  ________________________________________________________________________
Name of Authorized Signatory:  ________________________________________________________________________
Title of Authorized Signatory:  ________________________________________________________________________
Date:  ___________________________________________________________________

    

EXHIBIT B

ASSIGNMENT FORM

 (To assign the foregoing Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
	
		
	Name:
	 

	 
	(Please Print)

	Address:
	 

	Phone Number:
	 

	Email Address:
	 

	Dated: _______________ __, ______
	 

	Holder’s Signature:
	 

	Holder’s Address:

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