UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
(Amendment No. )
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
| ☒ | Preliminary
Proxy Statement |
| ☐ | Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ | Definitive
Proxy Statement |
| ☐ | Definitive
Additional Materials |
| ☐ | Soliciting
Material under §240.14a-12 |
1847
HOLDINGS LLC
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
| ☐ | Fee
paid previously with preliminary materials. |
| ☐ | Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and
0-11 |
PRELIMINARY
PROXY STATEMENT SUBJECT TO COMPLETION – DATED DECEMBER 31, 2024
1847
HOLDINGS LLC
260
Madison Avenue, 8th Floor
New
York, NY 10016
,
2025
Dear Fellow
Shareholders:
You
are cordially invited to attend a Special Meeting of Shareholders (the “Special Meeting”) of 1847 Holdings LLC (“we,”
“us,” “our” or the “Company”) that will be held on ,
2025 at 2:00 p.m. Eastern Time, and any postponement, adjournment or continuation thereof. We will hold the Special Meeting in a virtual
format via live webcast at https://agm.issuerdirect.com/efsh.
Details
of the business to be conducted at the Special Meeting are given in the accompanying Notice of Special Meeting of Shareholders and the
Proxy Statement. The Proxy Statement was first sent or given to our shareholders on or about ,
2025. You should also have received a proxy card or voting instruction form and postage-paid return envelope, which are being solicited
on behalf of our Board of Directors.
After
reading the Notice of Special Meeting of Shareholders and the Proxy Statement, please mark your votes on the accompanying proxy card
or voting instruction form, sign it and promptly return it in the accompanying postage-paid envelope. You may also vote by Internet or
telephone as instructed in the Proxy Statement or on the proxy card or voting instruction form. Please vote by whichever method is most
convenient for you to ensure that your shares are represented at the Special Meeting.
It
is important that your shares be represented and voted at the Special Meeting. Whether or not you plan to attend the Special Meeting,
please vote as soon as possible. Returning the proxy card or voting instruction form or voting by Internet or telephone does not deprive
you of your right to attend the Special Meeting virtually and to vote your shares at the Special Meeting. Voting now will not limit your
right to change your vote or to attend the Special Meeting.
Thank
you for your ongoing support.
|
Sincerely
yours, |
|
| |
|
| |
|
| Ellery W. Roberts |
|
| Chairman and CEO |
|
| 1847 Holdings LLC | | Proxy Statement |
1847
HOLDINGS LLC
260
Madison Avenue, 8th Floor
New
York, NY 10016
NOTICE
OF SPECIAL MEETING OF SHAREHOLDERS
TO
BE HELD ON , 2025
To the Shareholders
of 1847 Holdings LLC:
NOTICE
IS HEREBY GIVEN that a Special Meeting of Shareholders (the “Special Meeting”) of 1847 Holdings LLC (“we,”
“us,” “our” or the “Company”) will be held on ,
2025 at 2:00 PM Eastern Time. The Special Meeting will be a virtual shareholder meeting conducted via live webcast at https://agm.issuerdirect.com/efsh.
The purpose of the Special Meeting will be the following:
| 1. | To
approve the issuance of all common shares that may be issued upon the exercise of pre-funded
warrants to purchase common shares, series A warrants to purchase common shares (the “December
Series A Warrants”) and series B warrants to purchase common shares (the “December
Series B Warrants”) that were issued to certain purchasers on December 16, 2024, which,
for the avoidance of doubt, includes all common shares that may be issued as a result of
any (i) voluntary adjustment by the Company, from time to time, of the exercise price of
any and all outstanding December Series A Warrants and December Series B Warrants pursuant
to the terms of the December Series A Warrants and the December Series B Warrants, respectively,
(ii) adjustment to the exercise price and number of common shares underlying the December
Series A Warrants and the December Series B Warrants in the event of a Share Combination
Event (as defined in the December Series A Warrants and the December Series B Warrants),
(iii) adjustment to the exercise price and number of common shares underlying the December
Series A Warrants and the December Series B Warrants following the Reset Date (as defined
in the December Series A Warrants and the December Series B Warrants), (iv) adjustment to
the exercise price and number of common shares underlying the December Series A Warrants
and the December Series B Warrants following a Dilutive Issuance (as defined in the December
Series A Warrants and the December Series B Warrants), or (iv) alternative cashless exercise
pursuant to Section 2.3 of the December Series A Warrants, as well as to fully implement
the adjustments contemplated by the definition of the “Floor Price” contained
in the December Series A Warrants and the December Series B Warrants. |
| 2. | To
approve certain adjustments to the series A warrants to purchase common shares (the “October
Series A Warrants”) and the series B warrants to purchase common shares (the “October
Series B Warrants”) that were issued to certain purchasers on October 30, 2024, which
includes (i) an adjustment to the exercise price and the Floor Price (as defined in the October
Series A Warrants) of the outstanding October Series A Warrants to $0.81 (subject to adjustments
for stock splits, stock combinations, recapitalizations and similar transactions), and a
corresponding increase to the number of common shares underlying the October Series A Warrants
so that the aggregate exercise value shall remain unchanged, and (ii) an adjustment to the
exercise price and the Floor Price (as defined in the October Series B Warrants) of the outstanding
October Series B Warrants to $0.54 (subject to adjustments for stock splits, stock combinations,
recapitalizations and similar transactions), and a corresponding increase to the number of
common shares underlying the October Series B Warrants so that the aggregate exercise value
shall remain unchanged. |
| 3. | To
approve Amendment No. 4 to the Second Amended and Restated Operating Agreement of the Company
to increase the number of authorized common shares to 2,000,000,000 shares. |
| 4. | To
approve Amendment No. 3 to the 1847 Holdings LLC 2023 Equity Incentive Plan to increase the
share reserve to 5,000,000 common shares. |
| 5. | To
approve the adjournment of the Special Meeting to a later date if necessary to solicit additional
proxies if there are not sufficient votes to approve any of the foregoing proposals at the
time of the Special Meeting, or any adjournment or postponement thereof. |
| 1847 Holdings LLC | | Proxy Statement |
The
foregoing items of business are more fully described in the proxy statement accompanying this notice. The proxy statement provides a
detailed description of the business to be conducted at the Special Meeting and we urge you to read the proxy statement, including the
appendices, carefully and in their entirety.
Our
Board of Directors has unanimously recommended that you vote “FOR” each of the foregoing Proposals.
Only
shareholders of the Company as of the close of business on ,
2025 (the “Record Date”) and their proxies are entitled to notice of, to attend and/or to vote at the Special Meeting and
any postponements, adjournments or continuations thereof. All shareholders as of the Record Date are cordially invited to attend the
Special Meeting.
Whether
or not you expect to attend the Special Meeting, we encourage you to submit your proxy as soon as possible, even if you sold your shares
after the Record Date. You may vote over the Internet, as well as by telephone, or by mailing a proxy card or voting instruction form.
Further instructions regarding voting rights and the matters to be voted upon are presented in the accompanying proxy statement.
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING, REGARDLESS OF WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.
ACCORDINGLY, AFTER READING THE ACCOMPANYING PROXY STATEMENT, PLEASE PROMPTLY SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS BY FOLLOWING THE
INSTRUCTIONS PROVIDED. PLEASE NOTE THAT EVEN IF YOU PLAN TO ATTEND THE SPECIAL MEETING, WE RECOMMEND THAT YOU VOTE PRIOR TO THE SPECIAL
MEETING TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED.
Regardless
of the number of shares of the Company that you own, your vote will be important. Thank you for your continued support, interest and
investment in the Company.
| |
By
Order of the Board of Directors, |
| |
|
| |
|
| New York, NY |
Ellery W.
Roberts |
|
, 2025 |
Chairman
and CEO |
| 1847 Holdings LLC | | Proxy Statement |
1847
HOLDINGS LLC
260
Madison Avenue, 8th Floor
New
York, NY 10016
The
board of directors of 1847 Holdings LLC (“we,” “us,” “our” or the “Company”) is soliciting
proxies to be used at our Special Meeting of Shareholders to be held solely via live webcast at https://agm.issuerdirect.com/efsh on
, 2025 at 2:00 p.m. Eastern Time and for any postponement, adjournment or continuation thereof (the “Special Meeting”).
This
proxy statement summarizes information about the proposals to be considered at the Special Meeting and other information you may find
useful in determining how to vote.
We
are mailing this proxy statement to our shareholders of record as of ,
2025 (the “Record Date”) on or about ,
2025. In addition, we have provided brokers, dealers, banks, voting trustees and their nominees, at our expense, with additional copies
of our proxy materials so that our record holders can supply these materials to the beneficial owners of our shares as of the Record
Date.
| 1847 Holdings LLC | | Proxy Statement |
TABLE
OF CONTENTS
ANNEX A –
SECURITIES PURCHASE AGREEMENT (INCLUDING EXHIBITS THERETO)
ANNEX B –
FORMS OF OCTOBER WARRANTS
ANNEX C –
AMENDMENT NO. 4 TO SECOND AMENDED AND RESTATED OPERATING AGREEMENT
ANNEX D –
AMENDMENT NO. 3 TO 1847 HOLDINGS LLC 2023 EQUITY INCENTIVE PLAN
| | i | |
| 1847 Holdings LLC | | Proxy Statement |
INFORMATION
ABOUT THE PROXY PROCESS AND VOTING
Why am
I receiving these materials?
We
are providing this proxy statement in connection with the solicitation by our board of directors of proxies to be voted at the Special
Meeting. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before
the Special Meeting. You are invited to attend the Special Meeting to vote on the proposals described in this proxy statement. However,
you do not need to attend the Special Meeting to vote your shares. Instead, you may vote your shares using one of the other voting methods
described below. Whether or not you expect to attend the Special Meeting, please vote your shares as soon as possible in order to ensure
your representation at the Special Meeting.
Your
vote is very important. Please submit your vote via the Internet, telephone or mail as soon as possible by following the voting instructions
on the proxy card, even if you plan to attend the Special Meeting. If you hold your shares in an account at a bank, broker, dealer or
other nominee, follow the instructions provided by your nominee on your voting instruction form or otherwise to vote your shares. Voting
your shares by proxy ensures that if you are unable to attend the Special Meeting, your shares will be voted at the Special Meeting.
Voting now will not limit your right to change your vote or to attend the Special Meeting.
What proposals
will be voted on at the Special Meeting?
Five
proposals are scheduled to be voted on at the Special Meeting:
| ● | Proposal
No. 1 — to approve the issuance of all common shares that may be issued upon the
exercise of pre-funded warrants to purchase common shares (the “Pre-Funded Warrants”),
series A warrants to purchase common shares (the “December Series A Warrants”)
and series B warrants to purchase common shares (the “December Series B Warrants”)
that were issued to certain purchasers on December 16, 2024, which, for the avoidance of
doubt, includes all common shares that may be issued as a result of any (i) voluntary adjustment
by the Company, from time to time, of the exercise price of any and all outstanding December
Series A Warrants and December Series B Warrants pursuant to the terms of the December Series
A Warrants and the December Series B Warrants, respectively, (ii) adjustment to the exercise
price and number of common shares underlying the December Series A Warrants and the December
Series B Warrants in the event of a Share Combination Event (as defined in the December Series
A Warrants and the December Series B Warrants), (iii) adjustment to the exercise price and
number of common shares underlying the December Series A Warrants and the December Series
B Warrants following the Reset Date (as defined in the December Series A Warrants and the
December Series B Warrants), (iv) adjustment to the exercise price and number of common shares
underlying the December Series A Warrants and the December Series B Warrants following a
Dilutive Issuance (as defined in the December Series A Warrants and the December Series B
Warrants), or (iv) alternative cashless exercise pursuant to Section 2.3 of the December
Series A Warrants, as well as to fully implement the adjustments contemplated by the definition
of the “Floor Price” contained in the December Series A Warrants and the December
Series B Warrants. |
| ● | Proposal
No. 2 — to approve certain adjustments to the series A warrants to purchase common
shares (the “October Series A Warrants”) and the series B warrants to purchase
common shares (the “October Series B Warrants”) that were issued to certain purchasers
on October 30, 2024, which includes (i) an adjustment to the exercise price and the Floor
Price (as defined in the October Series A Warrants) of the outstanding October Series A Warrants
to $0.81 (subject to adjustments for stock splits, stock combinations, recapitalizations
and similar transactions), and a corresponding increase to the number of common shares underlying
the October Series A Warrants so that the aggregate exercise value shall remain unchanged,
and (ii) an adjustment to the exercise price and the Floor Price (as defined in the October
Series B Warrants) of the outstanding October Series B Warrants to $0.54 (subject to adjustments
for stock splits, stock combinations, recapitalizations and similar transactions), and a
corresponding increase to the number of common shares underlying the October Series B Warrants
so that the aggregate exercise value shall remain unchanged. |
| ● | Proposal
No. 3 — to approve Amendment No. 4 to the Second Amended and Restated Operating
Agreement of the Company to increase the number of authorized common shares to 2,000,000,000
shares. |
| | 1 | |
| 1847 Holdings LLC | | Proxy Statement |
| ● | Proposal
No. 4 — to approve Amendment No. 3 to the 1847 Holdings LLC 2023 Equity Incentive
Plan to increase the share reserve to 5,000,000 common shares. |
| ● | Proposal
No. 5 — to approve the adjournment of the Special Meeting to a later date if necessary
to solicit additional proxies if there are not sufficient votes to approve any of the foregoing
proposals at the time of the Special Meeting, or any adjournment or postponement thereof. |
In
addition, you are entitled to vote on any other matters that are properly
brought before the Special Meeting.
What are
the Board’s recommendations?
Our
board of directors unanimously recommends that you vote “FOR” each proposal. We describe each proposal and the board’s
reason for its recommendation below.
How do
I attend the Special Meeting?
You
will be able to attend the Special Meeting online by visiting https://agm.issuerdirect.com/efsh.To participate in the Special Meeting,
you will need the control number included on your proxy card or voting instruction form. The Special Meeting webcast will begin promptly
at 2:00 p.m. Eastern Time on ,
2025. We encourage you to access the meeting prior to the start time.
Your
vote is very important. Please submit your proxy card or voting instructions even if you plan to attend the Special Meeting.
Who is
entitled to vote?
Shareholders
holding our common shares at the close of business on the Record Date may vote at the Special Meeting. As a result of the dividend of
our series E preferred shares distributed on , 2025 (the
“Dividend Date”), each holder of our common shares also holds a number of series E preferred shares equal to the whole number
of common shares held by such holder as of the Dividend Date. The series E preferred shares shall be voted together with the series E
preferred shares as a single class with respect to each of the proposals; provided, however, that the holders of our outstanding series
E preferred shares will only be entitled to vote such shares on the proposals set forth herein and only by proxy prior to the opening
of the Special Meeting. Pursuant to the terms of the series E preferred shares, all shares that are not voted prior to the opening of
the Special Meeting will be automatically redeemed immediately prior to the opening of the Special Meeting and the shares that are voted
prior to the opening of the Special Meeting will be automatically redeemed once all proposals set forth in this proxy statement are approved
by shareholders.
On
the Record Date, there were
common shares and
series E preferred shares outstanding and entitled to vote at the Special Meeting. Our common shares and series E preferred shares are
our only classes of voting stock. Each common share is entitled to one (1) vote and each series E preferred shares is entitled to one
million (1,000,000) votes. You may vote all shares owned by you as of the Record Date, including (i) shares held directly in your name
as the shareholder of record and (ii) shares held for you as the beneficial owner in street name through a broker, bank or other nominee.
Shareholder
of Record. If, on the Record Date, your shares were registered directly in your name with the transfer agent for our common shares
and series E preferred shares, VStock Transfer, LLC, you are considered, with respect to those shares, the “shareholder of record.”
Beneficial
Owner. If, on the Record Date, your shares were held in a stock brokerage account or by a bank or other nominee, you are considered
the “beneficial owner” of shares held in “street name.” Your broker, bank or nominee is considered with respect
to those shares the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank or nominee how to
vote your shares.
| | 2 | |
| 1847 Holdings LLC | | Proxy Statement |
What is
the quorum requirement?
A
quorum of shareholders is necessary to hold a valid Special Meeting. A quorum will be present if shareholders
holding an aggregate of one-third of the common shares and series E preferred shares entitled to vote are present at the Special Meeting
or represented by proxy. If there is no quorum, either the Chairman or a majority of the shares present or represented by proxy at the
Special Meeting may adjourn the Special Meeting to another time or place.
How
do I vote my shares?
Shareholders
may vote on matters that are properly presented at the Special Meeting in four ways:
| ● | By
submitting your vote telephonically; |
| ● | By
submitting your vote electronically via the Internet; |
| ● | By
completing the proxy card or voting instruction form and returning it at the address noted;
or |
| ● | By
attending and voting your shares at the Special Meeting. |
We
are offering registered shareholders the opportunity to vote their shares by telephone or electronically through the Internet. Shareholders
may vote by telephone or via the Internet by following the procedures described on the proxy card. To vote via telephone or the Internet,
please have the proxy card in hand and call the number or go to the website
listed on the proxy card and follow the instructions. The telephone and Internet voting procedures are designed to authenticate shareholders’
identities, to allow shareholders to give their voting instructions, and to confirm that shareholders’ instructions have been recorded
properly.
If
your shares are held in a stock brokerage account or by a bank or other nominee, follow the instructions provided by your broker, bank
or other nominee for voting your shares prior to the Special Meeting.
The
instructions by which you may vote your shares at the Special Meeting differ based on whether you hold shares in your name as the shareholder
of record or beneficially in street name. Shares held beneficially in street name may be voted at the Special Meeting only if you first
obtain a legal proxy from the broker, bank or other nominee that holds your shares as of the Record Date. We are not involved in the
provision of legal proxies from brokers to beneficial shareholders. If you either do not request a legal proxy prior to the Special Meeting
or your broker fails to provide you a legal proxy, then you will not be able to vote at the Special Meeting.
Even
if you plan to attend the virtual Special Meeting, we recommend that you also submit your proxy or voting instructions by Internet, telephone,
or mail so that your vote will be counted if you later decide not to attend the Special Meeting.
Can I
change my vote after submitting my proxy?
If
you are a shareholder of record, you may revoke your proxy at any time prior to the vote at the Special Meeting. If you submitted your
proxy by telephone or the Internet, you may revoke your proxy with a later telephone or Internet proxy, as the case may be. If you submitted
your proxy by mail, you must file with our Secretary a written notice of revocation or deliver, prior to the vote at the Special Meeting,
a valid, later-dated proxy. Attendance at the Special Meeting will not have the effect of revoking a proxy unless you give written notice
of revocation to the Secretary before the proxy is exercised or you vote by ballot at the Special Meeting. If you are a beneficial owner,
you may vote by submitting new voting instructions to your broker, bank or nominee, or, by obtaining a legal proxy prior to the Special
Meeting and attending the meeting and voting.
How are
votes counted?
For
each proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions are included in the determination
of the number of shares present at the Special Meeting for determining a quorum.
What vote
is required to approve each item?
Each
of the proposals requires the affirmative “FOR” vote of a majority of the shares present or represented by proxy and entitled
to vote at the Special Meeting. An abstention is not an “affirmative vote”, but an abstaining shareholder is considered “entitled
to vote” at the Special Meeting. Accordingly, an abstention will have the same effect as a vote “AGAINST” each of the
proposals.
| | 3 | |
| 1847 Holdings LLC | | Proxy Statement |
For
a discussion of the impact of broker non-votes on the proposals, see “What are broker non-votes and what effect do they have
on the proposals?” below.
What are
broker non-votes and what effect do they have on the proposals?
If
you hold your shares beneficially in street name and do not provide your broker, bank or nominee with voting instructions, your shares
may constitute “broker non-votes.” Generally, broker non-votes occur when a broker (i) has not received voting instructions
from the beneficial owner with respect to a particular proposal and (ii) lacks discretionary voting power to vote those shares with respect
to that particular proposal.
A
broker is entitled to vote shares held for a beneficial owner on “routine” matters, such as Proposals 3 and 5, without instructions
from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker
is not entitled to vote shares held for a beneficial owner on “non-routine” matters, such as Proposals 1, 2 and 4.
Broker
non-votes are counted for purposes of determining whether a quorum exists for the transaction of business at the Special Meeting. Delaware
law provides that if broker non-votes occur in connection with the vote on a matter, the shares for which the broker non-votes occur
are not deemed present and entitled to vote on such matter. Accordingly, broker non-votes, if any, will have no effect on any of the
proposals since all of the proposals require the affirmative vote of a majority of the shares present or represented by proxy and entitled
to vote at the Special Meeting.
What does
it mean if I receive more than one set of proxy materials from the Company?
If
you receive more than one set of proxy materials from the Company, your shares are registered in more than one name or are registered
in different accounts. In order to vote all the shares you own, you must vote pursuant to the instructions on each proxy card or voting
instruction form.
Why are
you holding a virtual meeting instead of a physical meeting?
We
believe a virtual meeting format helps to facilitate shareholder attendance and participation by enabling shareholders to participate
fully, and equally, from any location around the world.
I
share an address with another shareholder, and we received only one printed copy of the proxy materials. How may I obtain an additional
copy of the proxy materials?
We
have adopted a procedure called “householding,” which the Securities and Exchange Commission (the “SEC”) has
approved. Under this procedure, we deliver a single copy of the proxy materials to multiple shareholders who share the same address unless
we received contrary instructions from one or more of the shareholders. This procedure reduces our printing costs, mailing costs and
fees. Shareholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written
or oral request, we will deliver promptly a separate copy of the proxy materials to any shareholder at a shared address to which we delivered
a single copy of any of these documents. To receive a separate copy, or, if a shareholder is receiving multiple copies, to request that
we only send a single copy of these proxy materials, shareholders may contact us at the following address and telephone number:
1847
Holdings LLC
260
Madison Avenue, 8th Floor
New
York, NY 10016
Tel:
(212) 417-9800
Email: info@1847holdings.com
Shareholders
who hold shares in street name (as described above) may contact their brokerage firm, bank, broker-dealer or other similar organization
to request information about householding.
| | 4 | |
| 1847 Holdings LLC | | Proxy Statement |
Who pays
the cost of proxy solicitation?
The
costs and expenses of soliciting the proxy accompanying this proxy statement from shareholders will be borne by us. Our employees, officers,
directors and director nominees may solicit proxies in person, by telephone or by electronic communication. None of these individuals
will receive any additional or special compensation for doing this, but they may be reimbursed for reasonable out-of-pocket expenses.
We may engage the services of proxy solicitors to assist us in the distribution of proxy materials and the solicitation of votes, for
which we will pay customary fees plus reasonable out-of-pocket expenses. In addition, we may reimburse brokerage houses and other custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation material to the beneficial
owners of our shares.
Who will
tabulate the votes?
Our
officers are authorized to designate an inspector of elections for the meeting. All votes will be tabulated as required by Delaware law,
the state of our formation, by an appropriate inspector of election appointed for the Special Meeting.
How can
I find out the results of the voting at the Special Meeting?
Voting
results will be announced by the filing of a Current Report on Form 8-K with the SEC within four business days after the Special
Meeting. If final voting results are unavailable at that time, we will file an amended Current Report on Form 8-K within four business
days of the day the final results are available.
| | 5 | |
| 1847 Holdings LLC | | Proxy Statement |
PROPOSAL
NO. 1 – SHARE ISSUANCE
Overview
Background
Information
On
December 13, 2024, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain purchasers (the
“Purchasers”), pursuant to which on December 16, 2024, we issued and sold to the Purchasers an aggregate of 42,311,118 units,
at a purchase price of $0.27 per unit, for total gross proceeds of approximately $11.42 million (the “Private Placement”).
The units are comprised of (i) 3,437,210 common shares (the “Shares”) and Pre-Funded Warrants for the purchase of 38,873,908
common shares, (ii) December Series A Warrants to purchase 42,311,118 common shares and (iii) December Series B Warrants to purchase
42,311,118 common shares.
In
connection with the Private Placement, we also entered into a registration rights agreement with the Purchasers (the “Registration
Rights Agreement”), pursuant to which we agreed to file a registration statement on Form S-1 (the “Registration Statement”)
with the SEC within 45 trading days of closing (the “Filing Date”) in order to register (i) the Shares, (ii) all common shares
that may be issued upon exercise of the Pre-Funded Warrants, the December Series A Warrants and the December Series B Warrants (together,
the “December Warrants”) (without regard to any exercise limitations therein), and (iii) any securities issued or then issuable
upon any share split, dividend or other distribution, recapitalization or similar event with respect to the foregoing (the “Registrable
Securities”) and use our best efforts to cause the Registration Statement to be declared effective under the Securities Act of
1933, as amended (the “Securities Act”), as promptly as possible after the filing thereof, but in any event no later than
forty-five (45) calendar days following the Filing Date or, in the event of a full review by SEC, ninety (90) calendar days following
the Filing Date (the “Effectiveness Date”). If (i) the Registration Statement is not filed on or prior to the Filing Date,
(ii) we fail to file with the SEC a request for acceleration of the Registration Statement in accordance with Rule 461 promulgated by
the SEC pursuant to the Securities Act within five (5) trading days of the date that we are notified by the SEC that the Registration
Statement will not be “reviewed” or will not be subject to further review, (iii) prior to the effective date of the Registration
Statement, we fail to file a pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of the Registration
Statement within ten (10) calendar days after the receipt of comments by or notice from the SEC that such amendment is required in order
for the Registration Statement to be declared effective, (iv) the Registration Statement registering for resale all of the Registrable
Securities is not declared effective by the SEC by the Effectiveness Date, or (v) after the effective date of the Registration Statement,
it ceases for any reason to remain continuously effective as to all Registrable Securities included in the Registration Statement, or
the Purchasers are otherwise not permitted to utilize the prospectus therein to resell such Registrable Securities for more than ten
(10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days)
during any 12-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and
(iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) trading day period is exceeded,
and for purpose of clause (iii) the date which such twenty (20) calendar day period is exceeded, and for purpose of clause (v) the date
on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event Date”),
then, in addition to any other rights the Purchasers may have under the Registration Rights Agreement or under applicable law, on each
such Event Date and on each day thereafter until the applicable Event is cured, we shall pay and distribute to each Purchaser an amount
in cash or common shares (as preferred by the Purchasers, and determined thereupon), on a pro rata basis as partial liquidated damages
and not as a penalty, on a daily basis, a sum equal to 0.5% of the aggregate subscription amount paid by the Purchasers pursuant to the
Purchase Agreement until fifteen (15) calendar days of each such Event, which amount shall increase to 1.00% of the aggregate subscription
amount between sixteenth (16) calendar days and until cure of the Event, as calculated on a daily basis. If we fail to pay any such partial
liquidated damages in full within seven (7) days after the date payable, we will pay interest thereon at a rate of 12% per annum (or
such lesser maximum amount that is permitted to be paid by applicable law) to the Purchasers, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.
| | 6 | |
| 1847 Holdings LLC | | Proxy Statement |
Pursuant
to the Purchase Agreement, we agreed to hold a special meeting of shareholders at the earliest practicable date, but in no event later
than ninety (90) days after the closing date, for the purpose of obtaining the requisite approval from our shareholders for (i) the issuance
of all common shares issuable upon exercise of the December Warrants, including without limitation, with respect to any and all additional
shares that may be issued as a result of the adjustments set forth in the December Warrants, (ii) a reset of the exercise price and approval
of a corresponding increase in the total number of common shares issuable upon exercise of the October Series A Warrants that remain
outstanding to an exercise price equal to the initial exercise price of the December Series A Warrants, and any additional share issuance(s)
as may be warranted due to such adjustment(s), and (iii) a reset of the exercise price and approval of a corresponding increase in the
total number of common shares issuable upon exercise of the October Series B Warrants that remain outstanding to an exercise price equal
to the initial exercise price of the December Series B Warrants, and any additional share issuance(s) as may be warranted due to such
adjustment(s), in accordance with NYSE American’s rules (the “Shareholder Approval”), with the recommendation
of our board of directors that such proposal be approved, and we agreed to solicit proxies from our shareholders in connection therewith
in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders agreed to vote
their proxies in favor of such proposal. We agreed to file a preliminary proxy statement with the SEC within ten (10) business days following
the closing date for the purpose of obtaining the Shareholder Approval and to use our best efforts to obtain such Shareholder Approval.
In the event that Shareholder Approval does not occur at the first shareholder meeting, we agreed to hold additional meetings at least
one time every seventy-five (75) days until the earlier of the date Shareholder Approval is obtained or the Warrants are no longer outstanding.
Until we receive Shareholder Approval at the Special Meeting, the holders may not exercise any portion of the December Warrants, as described
below.
Attached
hereto as Annex A is a copy of the Purchase Agreement with the forms of the Pre-Funded Warrants, the December Series A Warrants,
the December Series B Warrants and the Registration Rights Agreement attached as exhibits thereto.
The
Pre-Funded Warrants
The
Pre-Funded Warrants are exercisable at any time following Shareholder Approval until they are exercised in full at an exercise price
of $0.01 per share, which has been pre-paid by the Purchasers in full. The exercise price and number of common shares issuable upon exercise
will adjust in the event of certain share dividends and distributions, share splits, share combinations, reclassifications or similar
events affecting the common shares. Notwithstanding the foregoing, a holder will not have the right to exercise any portion of a Pre-Funded
Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99% (at the Purchaser’s option)
of the number of common shares outstanding immediately after giving effect to the exercise, which such percentage may be increased or
decreased by the holder, but not in excess of 9.99%, upon at least 61 days’ prior notice to us.
The
December Series A and December Series B Warrants
The
December Series A Warrants are exercisable at any time following Shareholder Approval at an exercise price of $0.81 per share (subject
to adjustment) and will expire five (5) years from the later of (a) the date that we obtain Shareholder Approval and (b) the earlier
of the date that (i) the initial Registration Statement registering for resale the Registerable Securities has been declared effective
by the SEC or (ii) the date that the Registerable Securities can be sold, assigned or transferred without restriction or limitation pursuant
to Rule 144 or Rule 144A promulgated under the Securities Act.
The
December Series B Warrants are exercisable at any time following Shareholder Approval at an exercise price of $0.54 per share (subject
to adjustment) and will expire five (5) years from the later of (a) the date that we obtain Shareholder Approval and (b) the earlier
of the date that (i) the initial Registration Statement registering for resale the Registerable Securities has been declared effective
by the SEC or (ii) the date that the Registerable Securities can be sold, assigned or transferred without restriction or limitation pursuant
to Rule 144 or Rule 144A promulgated under the Securities Act.
The
December Series A Warrants and the December Series B Warrants may be exercised on a cashless basis if there is no effective registration
statement with respect to the underlying common shares. In addition, under an alternate cashless exercise option contained in the December
Series A Warrants, the holders of the December Series A Warrants will have the right to receive an aggregate number of shares equal to
the product of (i) the aggregate number of common shares that would be issuable upon a cash exercise of the December Series A Warrants
and (ii) 1.25.
| | 7 | |
| 1847 Holdings LLC | | Proxy Statement |
The
exercise prices of the December Series A Warrants and the December Series B Warrants contain standard adjustments for forward and reverse
share splits, share dividends, reclassifications and similar transactions. In addition, the December Series
A Warrants and the December Series B Warrants also contain the following resets of the exercise prices and number of shares underlying
the December Series A Warrants and the December Series B Warrants:
| ● | Share
Combination Event: Subject to Shareholder Approval, if at any time and from time to time
on or after the issue date there occurs any share split, share dividend, share combination
or reverse share split, recapitalization, or other similar transaction involving the common
shares (each, a “Share Combination Event,” and such date thereof, the “Share
Combination Event Date”) and the lowest volume weighted average price of our common
shares on its principal trading market (the “VWAP”) during the period commencing
five (5) consecutive trading days immediately preceding and the five (5) consecutive trading
days commencing on the Share Combination Event Date (the “Event Market Price”)
(provided if the Share Combination Event is effective after the close of trading, then commencing
on the next trading day, which period shall be the “Share Combination Adjustment Period”)
is less than the exercise price then in effect, then at the close of trading on the last
day of the Share Combination Adjustment Period, the exercise price then in effect on such
fifth (5th) trading day shall be reduced (but in no event increased) to the Event Market
Price, subject to the December Warrant Floor Price (as defined below), and the number of
common shares issuable upon exercise shall be increased such that the aggregate exercise
price shall remain unchanged. |
| ● | Registration
Reset: On the Reset Date (as defined below), the exercise price shall be adjusted to
equal the lower of (i) the exercise price then in effect and (ii) a price equal to the greater
of (a) the lowest single day VWAP during the period commencing on the twentieth (20th)
trading day immediately preceding the Reset Date and ending on the Reset Date and (b) the
December Warrant Floor Price. Upon such reset of the exercise price, the number of common
shares issuable upon exercise shall be increased such that the aggregate exercise price shall
remain unchanged. As used herein, “Reset Date” means the date following Shareholder
Approval that is the earliest of the following dates, (i) the date on which for twenty (20)
consecutive trading days all Registrable Securities have become and remained registered pursuant
to an effective Registration Statement that is available for the resale of all Registrable
Securities, provided, however, that if less than all Registrable Securities have become registered
for resale on the date that a Registration Statement is declared effective, the holder with
respect to itself only, shall have the right in its sole and absolute discretion to deem
such condition satisfied, including with regard only to the Registrable Securities that have
been so registered, (ii) the date on which the holder, for twenty (20) consecutive trading
days, can sell all Registrable Securities pursuant to Rule 144 without restriction or limitation
and the Company has not had a Public Information Failure (as defined in the Purchase Agreement)
or (iii) twelve (12) months and twenty (20) trading days immediately following the issuance
date of the December Series A Warrants and the December Series B Warrants. |
| ● | Subsequent
Equity Sales: Subject to Shareholder Approval, if at any time we issue, sell, enter into
an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to
sell, or grants any right to reprice, or otherwise dispose of or issue (or announce any offer,
sale, grant, or any option to purchase or other disposition), or is deemed to have issued
or sold, any common shares or any securities of the Company or its subsidiaries which would
entitle the holder thereof to acquire at any time common shares, including, without limitation,
any debt, preferred shares, 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 shares, for a consideration per share (the “New Issuance Price”)
less than a price equal to the exercise price in effect immediately prior to such issuance
or sale or deemed issuance or sale (each, a Dilutive Issuance”), then simultaneously
with the consummation (or, if earlier, the announcement) of the Dilutive Issuance, the exercise
price then in effect shall be reduced to an amount equal to the lower of (i) the New Issuance
Price and (ii) the lowest VWAP during the five (5) consecutive trading days immediately following
the issuance, subject to the December Warrant Floor Price, and the number of common shares
issuable upon exercise shall be increased such that the aggregate exercise price shall remain
unchanged. |
Notwithstanding
the foregoing exercise price resets, in no event shall the exercises prices of the December Series A Warrants and the December Series
B Warrants be reduced to a price that is less than the December Warrant Floor Price. As used herein, “December Warrant Floor Price”
means (i) prior to Shareholder Approval, a price equal to thirty-five percent (35%) of $0.27 (which price shall be appropriately adjusted
for any share dividend, share split, share combination, reclassification or similar transactions) (as may be so adjusted, the “Minimum
Price”), or (ii) following Shareholder Approval, a price equal to twenty percent (20%) of the Minimum Price; provided, however,
that upon every Share Combination Event, the December Warrant Floor Price shall be equal to 50% of the prior December Warrant Floor Price,
and shall subsequently continue to be so adjusted for every additional Share Combination Event.
Reasons
for Shareholder Approval
At
the time that we entered into the Private Placement, our common shares were traded on NYSE American, so we were subject to the NYSE American
LLC Company Guide (the “Company Guide”). The issuance of securities in the Private Placement implicated Section 713 of the
Company Guide, which requires shareholder approval prior to the issuance of securities in connection with a transaction other than a
public offering involving: (1) the sale, issuance, or potential issuance by the issuer of common stock (or securities convertible into
common stock) at a price less than the greater of book or market value which together with sales by officers, directors or principal
shareholders of the issuer equals 20% or more of presently outstanding common stock; or (2) the sale, issuance, or potential issuance
by the issuer of common stock (or securities convertible into common stock) equal to 20% or more of presently outstanding common stock
for less than the greater of book or market value of the stock.
| | 8 | |
| 1847 Holdings LLC | | Proxy Statement |
As
noted above, none of the December Warrants may be exercised until we receive Shareholder Approval. At the Special Meeting, we are asking
shareholders to approve the issuance of all common shares that may be issued upon the exercise of the December Warrants, which, for the
avoidance of doubt, includes all common shares that may be issued as a result of any (i) voluntary adjustment by the Company, from time
to time, of the exercise price of any and all outstanding December Series A Warrants and December Series B Warrants pursuant to the terms
of the December Series A Warrants and the December Series B Warrants, respectively, (ii) adjustment to the exercise price and number
of common shares underlying the December Series A Warrants and the December Series B Warrants in the event of a Share Combination Event,
(iii) adjustment to the exercise price and number of common shares underlying the December Series A Warrants and the December Series
B Warrants following the Reset Date, (iv) adjustment to the exercise price and number of common shares underlying the December Series
A Warrants and the December Series B Warrants following a Dilutive Issuance, or (iv) alternative cashless exercise pursuant to Section
2.3 of the December Series A Warrants, as well as to fully implement the adjustments contemplated by the definition of “December
Warrant Floor Price” as described above.
No
Dissenters’ Rights
Under
Delaware law, holders of our shares are not entitled to dissenter’s rights of appraisal with respect to the approval of this Proposal
No. 1.
Vote
Required
In
order for Proposal No. 1 to be approved, holders of a majority of the common shares and series E preferred shares present or represented
by proxy at the Special Meeting and entitled to vote must vote “FOR” Proposal No. 1. You may vote “FOR”,
“AGAINST” or “ABSTAIN” on Proposal No. 1.
THE
BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 1
| | 9 | |
| 1847 Holdings LLC | | Proxy Statement |
PROPOSAL
NO. 2 – WARRANT ADJUSTMENT AND SHARE ISSUANCE
Overview
On
October 30, 2024, we issued October Series A Warrants to purchase 8,809,512 common shares and October Series B Warrants to purchase 8,809,512
common shares. As of the date of this proxy statement, October
Series A Warrants and October Series Warrants remain outstanding.
The
October Series A Warrants and the October Series B Warrants (together, the “October Warrants”) are currently exercisable
at an exercise price of $1.50 per share (the “Current Exercise Price”) and expire five years from the date of issuance. Under
an alternate cashless exercise option contained in the October Series A Warrants, the holders of the October Series A Warrants have the
right to receive an aggregate number of shares equal to the product of (i) the aggregate number of common shares that would be issuable
upon a cash exercise of the October Series A Warrants and (ii) 2.0. In addition, the October Warrants contain a reset of the exercise
price to a price equal to the lesser of (i) the then exercise price and (ii) lowest VWAP for the five trading days immediately preceding
and immediately following the date we effect a reverse share split in the future with a proportionate adjustment to the number of shares
underlying the October Warrants, subject to a floor price of $1.50. Finally, with certain exceptions, the October Series B Warrants provide
for an adjustment to the exercise price and number of shares underlying the October Series B Warrants upon our issuance of common shares
or common share equivalents at a price per share that is less than the exercise price of the October Series B Warrants, subject to a
floor price of $1.50.
As
noted above, pursuant to the Purchase Agreement, we agreed to seek Shareholder Approval for (i) a reset of the Current Exercise Price
of the October Series A Warrants to an exercise price equal to the initial exercise price of the December Series A Warrants, or $0.81
per share (subject to adjustments for stock splits, stock combinations, recapitalizations and similar transactions), and a corresponding
increase to the number of common shares underlying the October Series A Warrants so that the aggregate exercise value shall remain unchanged,
and (ii) a reset of the Current Exercise Price of the October Series B Warrants to an exercise price equal to the initial exercise price
of the December Series B Warrants, or $0.54 per share (subject to adjustments for stock splits, stock combinations, recapitalizations
and similar transactions), and a corresponding increase to the number of common shares underlying the October Series B Warrants so that
the aggregate exercise value shall remain unchanged. For the avoidance of doubt, the floor price of $1.50 contained in the October Series
A Warrants and the October Series B Warrants will also be adjusted to $0.81 and $0.54, respectively.
Attached
hereto as Annex B is a copy of the forms of the October Warrants prior to the resets described above.
Reasons
for Shareholder Approval
The
reset of the Current Exercise Price of the October Warrants and corresponding increase in the number of common shares underlying the
October Warrants implicate Section 713 of the Company Guide, which requires shareholder approval prior to the issuance of securities
in connection with a transaction other than a public offering involving: (1) the sale, issuance, or potential issuance by the issuer
of common stock (or securities convertible into common stock) at a price less than the greater of book or market value which together
with sales by officers, directors or principal shareholders of the issuer equals 20% or more of presently outstanding common stock; or
(2) the sale, issuance, or potential issuance by the issuer of common stock (or securities convertible into common stock) equal to 20%
or more of presently outstanding common stock for less than the greater of book or market value of the stock.
At
the Special Meeting, we are asking shareholders to approve the adjustments described above, which includes (i) an adjustment to the Current
Exercise Price and the Floor Price (as defined in the October Series A Warrants) of the outstanding October Series A Warrants to $0.81
(subject to adjustments for stock splits, stock combinations, recapitalizations and similar transactions), and a corresponding increase
to the number of common shares underlying the October Series A Warrants so that the aggregate exercise value shall remain unchanged,
and (ii) an adjustment to the Current Exercise Price and the Floor Price (as defined in the October Series B Warrants) of the outstanding
October Series B Warrants to $0.54 (subject to adjustments for stock splits, stock combinations, recapitalizations and similar transactions),
and a corresponding increase to the number of common shares underlying the October Series B Warrants so that the aggregate exercise value
shall remain unchanged.
No
Dissenters’ Rights
Under
Delaware law, holders of our shares are not entitled to dissenter’s rights of appraisal with respect to the approval of this Proposal
No. 2.
Vote
Required
In
order for Proposal No. 2 to be approved, holders of a majority of the common shares and series E preferred shares present or represented
by proxy at the Special Meeting and entitled to vote must vote “FOR” Proposal No. 2. You may vote “FOR”,
“AGAINST” or “ABSTAIN” on Proposal No. 2.
THE
BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 2
| | 10 | |
| 1847 Holdings LLC | | Proxy Statement |
PROPOSAL
NO. 3 – AUTHORIZED SHARE INCREASE
Overview
Pursuant
to our Second Amended and Restated Operating Agreement, dated January 19, 2018, as amended (the “Operating Agreement”), we
are authorized to issue up to 500,000,000 common shares, no par value. As the Special Meeting, we are asking shareholders to approve
an amendment to the Operating Agreement to increase the number of common shares that we are authorized to issue to 2,000,000,000 shares.
A copy of the proposed amendment to the Operating Agreement is attached to this proxy statement as Annex C.
Reasons
for the Share Increase
The
primary purpose of the authorized share increase is to accommodate potential future issuances upon the exercise of the October Warrants
and the December Warrants (collectively, the “Warrants”) and to replenish the pool of available shares for our future issuance.
As of the Record Date, we had common
shares issued and outstanding and approximately common shares
outstanding on a fully diluted basis, excluding potential adjustments to the number of common shares underlying the Warrants due to the
antidilution provisions set forth in the Warrants described above. We estimate that we could be required to issue up to approximately common
shares due to such antidilution provisions, based on the lowest floor exercise prices contained in the Warrants. Accordingly, we do not
have enough common shares available for all future potential exercises of the Warrants.
We
also believe that the share increase will provide us with increased flexibility in meeting future needs and requirements by providing
additional authorized shares, which will be available for issuance from time to time as determined by our board of directors for any
proper corporate purpose, without the expense and delay associated with a special shareholders’ meeting, except where required
by applicable rules, regulations and laws. However, there are no present plans, understandings or agreements, and we are not engaged
in any negotiations that will involve, the issuance of common shares, except in connection with future grants under our 2023 Equity Incentive
Plan, if shareholders approve Proposal No. 4 at the Special Meeting, or in connection with potential issuances of shares upon exercise
of currently outstanding options, warrants and other convertible securities, including those described above.
Anti-Takeover
Implications of the Proposed Share Increase
The
proposed increase in the authorized number of common shares could have an anti-takeover effect, in that additional shares could be issued
(within the limits imposed by applicable law) in one or more transactions that could make a change in control or takeover of us more
difficult. For example, additional shares could be issued by us so as to dilute the share ownership or voting rights of persons seeking
to obtain control of us, even if the persons seeking to obtain control offers an above-market premium that is favored by a majority of
the independent shareholders. Similarly, the issuance of additional shares to certain persons allied with our management could have the
effect of making it more difficult to remove our current management by diluting the share ownership or voting rights of persons seeking
to cause such removal. We have no plans or proposals to adopt other provisions or enter into other arrangements that may have material
anti-takeover consequences. This Proposal No. 3 is not being presented with the intent that it be utilized as a type of anti-takeover
device.
Our
shareholders should recognize that, as a result of this Proposal No. 3, they will own a fewer percentage of shares with respect to our
total authorized shares than they presently own and will be diluted as a result of any issuance of shares by us in the future.
Notwithstanding
the foregoing, there are no present plans, understandings or agreements, and we are not engaged in any negotiations that will involve,
the issuance of common shares, except in connection with future grants under our 2023 Equity Incentive Plan, if shareholders approve
Proposal No. 4 at the Special Meeting, or in connection with potential issuances of shares upon exercise of currently outstanding options,
warrants and other convertible securities, including those described above.
No
Dissenters’ Rights
Under
Delaware law, holders of our shares are not entitled to dissenter’s rights of appraisal with respect to the approval of this Proposal
No. 3.
Vote
Required
In
order for Proposal No. 3 to be approved, holders of a majority of the common shares and series E preferred shares present or represented
by proxy at the Special Meeting and entitled to vote must vote “FOR” Proposal No. 3. You may vote “FOR”,
“AGAINST” or “ABSTAIN” on Proposal No. 3.
THE
BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 3
| | 11 | |
| 1847 Holdings LLC | | Proxy Statement |
PROPOSAL
NO. 4 – PLAN AMENDMENT
Overview
We
are asking our shareholders to approve Amendment No. 3 to the 1847 Holdings LLC 2023 Equity Incentive Plan (the “Plan”).
The purpose of the Plan is to grant restricted shares, share options and other forms of incentive compensation to our officers, employees,
directors and consultants.
The
Plan was first adopted by our board of directors on March 28, 2023 and approved by our shareholders on May 9, 2023. On April 15, 2024,
our board of directors adopted two amendments to the Plan, which were approved by our shareholders on July 25, 2024.
On ,
2025, our board of directors adopted Amendment No. 3 to the Plan (the “Plan Amendment”) to increase the number of common
shares authorized for issuance under the Plan to 5,000,000 shares. A copy of the proposed Plan Amendment is attached to this proxy statement
as Annex D.
Background
for Proposed Increase in Share Reserve
We
are seeking shareholder approval of the Plan Amendment to increase the number of common shares authorized for issuance under the Plan
to 5,000,000 shares.
As
of the Record Date, we have issued shares and have
shares available under the Plan. We view the use of equity compensation as essential to attract, retain, motivate and reward key employees,
directors and consultants, as well as to align their interests with those of our shareholders, and we plan to issue additional awards
under the Plan shortly following the approval of the Plan Amendment at the Special Meeting.
We
believe that the Plan helps to strengthen the incentive for participants to achieve the objectives of the Company and its shareholders
and contribute to our growth and success. We have a standing practice of linking employee compensation to corporate performance because
we believe this increases employee motivation to improve profitability and shareholder value. In addition, the grant of equity awards
as a form of compensation helps to allow us to manage cash resources. We believe the additional shares are necessary to further our goals
and to begin providing equity compensation as an integral component of our compensation philosophy.
We
believe that the use of equity compensation will be a critical and powerful tool to compete for and attract, retain and motivate talented
employees. If the Plan Amendment is not approved by our shareholders, the existing Plan will continue in effect, but we will be limited
in the grants that we will be able to make, which could place us in a disadvantageous position as compared with our competitors.
Significant
Features of the Plan
The
following is a summary of the Plan with the Plan Amendment submitted for shareholder approval. The summary describes the principal features
of the Plan, but it is qualified in its entirety by reference to the full text of the Plan.
Purposes: The
purpose of this Plan is to provide a means whereby employees, directors and consultants of the Company, its subsidiaries and affiliates
develop a sense of proprietorship and personal involvement in the development and financial success of the Company, and to encourage
them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders.
A further purpose of this Plan is to provide a means through which the Company may attract able individuals to provide services to or
for the benefit of the Company and to provide a means for such individuals to acquire and maintain share ownership in the Company, thereby
strengthening their concern for the welfare of the Company.
Types
of Awards: Awards that may be granted include incentive share options, non-qualified share options, share appreciation rights
and restricted awards. These awards offer our officers, employees, consultants and directors the possibility of future value, depending
on the long-term price appreciation of our common shares and the award holder’s continuing service with the Company.
| | 12 | |
| 1847 Holdings LLC | | Proxy Statement |
Eligible
Recipients: Persons eligible to receive awards under the Plan will be those officers, employees, directors and consultants
of the Company and its subsidiaries who are selected by the administrator.
Administration: The
Plan is administered by our compensation committee. Among other things, the administrator has the authority to select persons who will
receive awards, determine the types of awards and the number of shares to be covered by awards, and to establish the terms, conditions,
performance criteria, restrictions and other provisions of awards. The administrator has authority to establish, amend and rescind rules
and regulations relating to the Plan.
Shares
Available: If the Plan Amendment is approved at the Special Meeting, the maximum number of common shares that may be delivered
to participants under the Plan will be 5,000,000, subject to adjustment for certain corporate changes affecting the shares, such as share
splits. In addition, the number of shares available for issuance under the Plan will also automatically increase on January 1 of each
calendar year during the term of the Plan by an amount equal to five percent (5%) of the total number of common shares issued and outstanding
on December 31 of the immediately preceding calendar year. Shares subject to an award under the Plan for which the award is canceled,
forfeited or expires again become available for grants under the Plan. Shares subject to an award that is settled in cash will not again
be made available for grants under the Plan. Notwithstanding the foregoing, the maximum aggregate number of shares that may be issued
as incentive share options is equal to the maximum number of shares available for issuance under the Plan without taking into account
any automatic increases in the share reserve.
Share
Options:
General. Share
options give the option holder the right to acquire from us a designated number of common shares at a purchase price that is fixed upon
the grant of the option. Share options granted may be either tax-qualified share options (so-called “incentive share options”)
or non-qualified share options. Subject to the provisions of the Plan, the administrator has the authority to determine all grants of
share options. That determination will include: (i) the number of shares subject to any option; (ii) the exercise price per share; (iii)
the expiration date of the option; (iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option
or the shares underlying the option; and (vi) any other terms and conditions as the administrator may determine.
Option
Price. The exercise price for share options will be determined at the time of grant. Normally, the exercise price will not be less
than the fair market value on the date of grant. As a matter of tax law, the exercise price for any incentive share option awarded may
not be less than the fair market value of the shares on the date of grant. However, incentive share option grants to any person owning
more than 10% of our voting power must have an exercise price of not less than 110% of the fair market value on the grant date.
Exercise
of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established
by the administrator at the time of the grant. The option must be exercised by notice to us, accompanied by payment of the exercise price.
Payments may be made either: (i) in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired
shares having an aggregate fair market value at the time of exercise equal to the exercise price; (iii) a cashless exercise (broker-assisted
exercise) through a “same day sale” commitment; (iv) by a combination of (i), (ii), and (iii); or (v) any other method approved
or accepted by the administrator in its sole discretion.
Expiration
or Termination. Options, if not previously exercised, will expire on the expiration date established by the administrator at
the time of grant. In the case of incentive stock options, such term cannot exceed ten years provided that in the case of holders of
more than 10% of our voting power, such term cannot exceed five years. Options will terminate before their expiration date if the holder’s
service with the Company or a subsidiary terminates before the expiration date. The option may remain exercisable for specified periods
after certain terminations of employment, including terminations as a result of death, disability or retirement, with the precise period
during which the option may be exercised to be established by the administrator and reflected in the grant evidencing the award.
Incentive
and Non-Qualified Options. As described elsewhere in this summary, an incentive share option is an option that is intended to
qualify under certain provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), for more favorable tax
treatment than applies to non-qualified share options. Any option that does not qualify as an incentive share option will be a non-qualified
share option. Under the Code, certain restrictions apply to incentive share options. For example, the exercise price for incentive share
options may not be less than the fair market value of the shares on the grant date and the term of the option may not exceed ten years.
In addition, an incentive share option may not be transferred, other than by will or the laws of descent and distribution, and is exercisable
during the holder’s lifetime only by the holder. In addition, no incentive share options may be granted to a holder that is first
exercisable in a single year if that option, together with all incentive share options previously granted to the holder that also first
become exercisable in that year, relate to shares having an aggregate fair market value in excess of $100,000, measured at the grant
date.
| | 13 | |
| 1847 Holdings LLC | | Proxy Statement |
Share
Appreciation Rights: Share appreciation rights (“SARs”), which may be granted alone or in tandem with
options, have an economic value similar to that of options. When an SAR for a particular number of shares is exercised, the holder receives
a payment equal to the difference between the market price of the shares on the date of exercise and the exercise price of the shares
under the SAR. Again, the exercise price for SARs normally is the market price of the shares on the date the SAR is granted. Under the
Plan, holders of SARs may receive this payment - the appreciation value - either in cash or shares valued at the fair market value on
the date of exercise. The form of payment will be determined by us.
Restricted
Awards: Restricted awards are shares awarded to participants at no cost. Restricted awards can take the form of awards of
restricted shares, which represent issued and outstanding shares subject to vesting criteria, or restricted share units, which represent
the right to receive shares subject to satisfaction of the vesting criteria. Restricted share awards are forfeitable and non-transferable
until the shares vest. The vesting date or dates and other conditions for vesting are established when the shares are awarded. These
awards will be subject to such conditions, restrictions and contingencies as the administrator shall determine at the date of grant.
Those may include requirements for continuous service and/or the achievement of specified performance goals.
Performance
Criteria: Under the Plan, one or more performance criteria will be used by the administrator in establishing performance
goals. Any one or more of the performance criteria may be used on an absolute or relative basis to measure the performance of the Company,
as the administrator may deem appropriate, or as compared to the performance of a group of comparable companies, or published or special
index that the administrator deems appropriate.
Other
Material Provisions: Awards will be evidenced by a written agreement, in such form as may be approved by the administrator.
In the event of various changes to the capitalization of the Company, such as share splits, share dividends and similar re-capitalizations,
an appropriate adjustment will be made by the administrator to the number of shares covered by outstanding awards or to the exercise
price of such awards. The administrator is also permitted to include in the written agreement provisions that provide for certain changes
in the award in the event of a change of control of the Company, including acceleration of vesting. Except as otherwise determined by
the administrator at the date of grant, awards will not be transferable, other than by will or the laws of descent and distribution.
Prior to any award distribution, we are permitted to deduct or withhold amounts sufficient to satisfy any employee withholding tax requirements.
Our board of directors also has the authority, at any time, to discontinue the granting of awards. The board also has the authority to
alter or amend the Plan or any outstanding award or may terminate the Plan as to further grants, provided that no amendment will, without
the approval of our shareholders, to the extent that such approval is required by law or the rules of an applicable national securities
exchange, increase the number of shares available under the Plan, change the persons eligible for awards under the Plan, extend the time
within which awards may be made, or amend the provisions of the Plan related to amendments. No amendment that would adversely affect
any outstanding award made under the Plan can be made without the consent of the holder of such award.
New
Plan Benefits
Future
awards, if any, that will be made to eligible persons under the Plan are subject to the discretion of the administrator and, therefore,
we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to our officers, employees,
directors and consultants under the Plan.
No
Dissenters’ Rights
Under
Delaware law, holders of our common shares are not entitled to dissenter’s rights of appraisal with respect to the approval of
this Proposal No. 4.
Vote
Required
In
order for Proposal No. 4 to be approved, holders of a majority of the common shares and series E preferred shares present or represented
by proxy at the Special Meeting and entitled to vote must vote “FOR” Proposal No. 4. You may vote “FOR”,
“AGAINST” or “ABSTAIN” on Proposal No. 4.
THE
BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 4
| | 14 | |
| 1847 Holdings LLC | | Proxy Statement |
PROPOSAL
NO. 5 – ADJOURNMENT PROPOSAL
Shareholders
are being asked to grant authority to proxy holders to vote in favor of one or more adjournments of the Special Meeting, if necessary
or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt any of the
proposals. If this Proposal No. 5 is approved, the Special Meeting could be successively adjourned to any date. In accordance with the
Operating Agreement, a vote on adjournments of the Special Meeting, if necessary or appropriate, may be taken in the absence of a quorum.
If the Special Meeting is adjourned to solicit additional proxies, shareholders who have already submitted their proxies will be able
to revoke them at any time prior to their use.
In
order for Proposal No. 5 to be approved, holders of a majority of the common shares and series E preferred shares present or represented
by proxy at the Special Meeting and entitled to vote must vote “FOR” Proposal No. 5. You may vote “FOR”,
“AGAINST” or “ABSTAIN” on Proposal No. 5.
THE
BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 5
| | 15 | |
| 1847 Holdings LLC | | Proxy Statement |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information with respect to the beneficial ownership of our common shares as of the Record Date for
(i) each of our executive officers and directors; (ii) all of our executive officers and directors as a group; and (iii) each other shareholder
known by us to be the beneficial owner of more than 5% of our outstanding common shares. As noted above, each holder of common shares
also holds a number of series E preferred shares equal to the number of common shares owned, which are entitled to 1,000,000 votes per
share and may only be voted on the matters described in this proxy statement.
Unless
otherwise indicated, the address of each beneficial owner listed in the table below is c/o the Company, 260 Madison Avenue, 8th Floor,
New York, NY 10016.
| Name
and Address of Beneficial Owner | |
Title
of Class | |
Amount
and Nature of Beneficial Ownership(1) | | |
Percent
of Class(2) | |
| Ellery W. Roberts, Chairman and
Chief Executive Officer | |
Common Shares | |
| 16,328 | | |
| * | |
| Vernice L. Howard, Chief Financial Officer | |
Common Shares | |
| 1 | | |
| * | |
| Eric VanDam, Chief Operating Officer | |
Common Shares | |
| 0 | | |
| * | |
| Glyn C. Milburn, Vice President of Operations | |
Common Shares | |
| 0 | | |
| * | |
| Robert D. Barry, Director | |
Common Shares | |
| 4 | | |
| * | |
| Michele A. Chow-Tai, Director | |
Common Shares | |
| 0 | | |
| * | |
| Clark R. Crosnoe, Director | |
Common Shares | |
| 0 | | |
| * | |
| Paul A. Froning, Director | |
Common Shares | |
| 29 | | |
| * | |
| Lawrence X. Taylor, Director | |
Common Shares | |
| 0 | | |
| * | |
| All executive officers and directors (9 persons
named above) | |
Common Shares | |
| 16,362 | | |
| * | |
| (1) | Beneficial
ownership is determined in accordance with SEC rules and generally includes voting or investment
power with respect to securities. For purposes of this table, a person or group of persons
is deemed to have “beneficial ownership” of any shares that such person or any
member of such group has the right to acquire within sixty (60) days. For purposes of computing
the percentage of outstanding common shares held by each person or group of persons named
above, any shares that such person or persons has the right to acquire within sixty (60)
days of the Record Date are deemed to be outstanding for such person, but not deemed to be
outstanding for the purpose of computing the percentage ownership of any other person. The
inclusion herein of any shares listed as beneficially owned does not constitute an admission
of beneficial ownership by any person. |
| (2) | Based
on common shares
issued and outstanding as of the Record Date. |
We
do not currently have any arrangements which if consummated may result in a change of control of the Company.
| | 16 | |
| 1847 Holdings LLC | | Proxy Statement |
ADDITIONAL
INFORMATION
Other
Matters
As
of the date of this proxy statement, the board of directors does not intend to present any matters other than those described herein
at the Special Meeting and is unaware of any matters to be presented by other parties. If other matters are properly brought before the
meeting for action by the shareholders, proxies will be voted in accordance with the recommendation of the board of directors or, in
the absence of such a recommendation, in accordance with the judgment of the proxy holder, to the extent permitted by Rule 14a-4(c)(3).
Shareholder
Proposals for 2025 Annual Meeting
A
shareholder who is entitled to vote for the election of directors and who desires to nominate a candidate for election to be voted on
at an annual meeting of shareholders may do so only in accordance with Section 9.8 of the Operating Agreement, which provides that a
shareholder may nominate a director candidate by written notice to the Secretary of the Company not less than 120 days nor more than
150 days prior to the first anniversary of the preceding year’s annual meeting. To be considered timely for our 2025 annual meeting
of shareholders, a shareholder nomination, and all supporting information, must be submitted no earlier than January 26, 2025 and no
later than February 25, 2025.
A
shareholder who desires to present a proposal pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, to be included
in the proxy statement for, and voted on by the shareholders at, our 2025 annual meeting of shareholders must submit such proposal in
writing, including all supporting materials, to the Company at its principal office no later than January 6, 2025, 120 days before the
date of mailing based on last year’s proxy statement date, and meet all other requirements for inclusion in the proxy statement.
Additionally, pursuant to Rule 14a-4(c)(1) under the Securities Exchange Act of 1934, as amended, if a shareholder intends to present
a proposal for business to be considered at our 2025 annual meeting of shareholders but does not seek inclusion of the proposal in our
proxy statement for such meeting, then we must receive the proposal by March 22, 2025, 45 days before the date of mailing based on last
year’s proxy statement date, for it to be considered timely received. If notice of a shareholder proposal is not timely received,
then the proxies will be authorized to exercise discretionary authority with respect to the proposal.
Any
proposals should be sent to us at 1847 Holdings LLC, 260 Madison Avenue, 8th Floor, New York, NY 10016, Attention Secretary.
| |
By
Order of the Board of Directors, |
| |
|
| |
|
| New York, NY |
Ellery W.
Roberts |
|
, 2025 |
Chairman
and CEO |
| | 17 | |
| 1847 Holdings LLC | | Proxy Statement |
ANNEX
A
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of December 13, 2024, between 1847 Holdings LLC, a limited liability company formed
under the laws of the State of Delaware (the “Company”), and each purchaser identified on the signature pages hereto
(each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below) and Rule 506 promulgated
thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agree as follows:
Article
I
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“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.
“Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which Common Shares and standard options to purchase Common Shares may be issued to any employee, officer, director or consultant
for services provided to the Company or its subsidiaries in their capacity as such.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd)
Trading Day following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common Shares”
means the common shares of the Company, no par value per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Share Equivalents”
means any securities of the Company or the Subsidiaries, as applicable, which would entitle the holder thereof to acquire at any time
Common Shares, including, without limitation, any debt, preferred shares, 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 Shares.
“Company Counsel”
means Bevilacqua PLLC, with offices located at 1050 Connecticut Avenue, NW, Suite 500, Washington, DC 20036.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agent.
“Escrow Agent”
means Placement Agent Counsel, or as designated therein.
“Escrow Agreement”
means the Escrow Agreement, dated as of the date hereof, by and among the Company, the Placement Agent and the Escrow Agent.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means: (i) the Securities to be sold hereunder, (ii) the issuance by the Company of Common Shares upon the exercise of an outstanding
share option or warrant or the conversion of a security outstanding on the date hereof, of which the Placement Agent has been advised,
provided that such share option, warrant or other convertible security has not been amended after the date hereof to decrease the exercise
or conversion price, increase the number of common shares issuable upon exercise or conversion, or extend the duration thereof, (iii)
any issuance of securities disclosed in the Registration Statement, the Time of Sale Prospectus or the Prospectus, (iv) Common Shares
paid as dividends on the Company’s series A senior convertible preferred shares, (v) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company or securities issued in financing transactions,
the primary purpose of which is to finance acquisitions or strategic transactions approved by a majority of the disinterested directors
of the Company, (vi) Common Shares, options or convertible securities issued to banks, equipment lessors or other financial institutions
or other lenders, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction, approved
by a majority of the disinterested directors of the Company, but shall not include a transaction in which the Company is primarily issuing
such securities primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities,
(vii) Common Shares, options or convertible securities issued to in connection with the provision of goods or services pursuant to transactions
approved by a majority of the disinterested directors of the Company, but shall not include a transaction in which the Company is primarily
issuing such securities primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in
securities, (viii) Common Shares, options or convertible securities issued in connection with sponsored research, collaboration, technology
license, development, investor or public relations, marketing or other similar agreements or strategic partnerships approved a majority
of the disinterested directors of the Company, but shall not include a transaction in which the Company is primarily issuing such securities
primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities, (ix) the issuance
by the Company of any Common Shares or standard options to purchase Common Shares to directors, officers, employees or consultants of
the Company or its subsidiaries in their capacity as such pursuant to an Approved Stock Plan, (x) the issuance by the Company of any Common
Shares or standard options to purchase Common Shares to directors and officers of the Company or its subsidiaries as payment for deferred
compensation, subject to Shareholder Approval (as defined below), or (xi) the creation and issuance of preferred shares with super voting
rights, which may be created and issued for the sole purpose of obtaining the Shareholder Approval (as defined below), after which time
such shares will be automatically redeemed by the Company.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Intellectual Property
Counsel” means Nolte Lackenbach Siegel, with offices located at 111 Brook St Suite 101, Scarsdale, NY 10583, United States.
“Knowledge”
means with respect to the Company, the actual knowledge of each of the executive officers of the Company set forth in the section entitled
“Management” in the Registration Statement, after reasonable inquiry.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreements”
means the Lock-Up Agreements, dated as of the date hereof, by the directors, officers and 5% shareholders of the Company, in the form
agreed by the Company and the Placement Agent.
“Per Share Purchase
Price” equals $0.27, subject to adjustment for reverse and forward share splits, share dividends, share combinations and other
similar transactions of the Common Shares that occur after the date of this Agreement, provided that the purchase price per Pre-Funded
Warrant shall be the Per Share Purchase Price minus $0.01.
“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.
“Placement Agent”
means Spartan Capital Securities LLC.
“Placement Agent
Agreement” means the placement agent agreement, dated on or about the date hereof, between the Company and the Placement Agent.
“Placement Agent
Counsel” means Sichenzia Ross Ference Carmel LLP, with offices located at 1185 Avenue
of the Americas, 31st Floor, New York, New York 10036.
“Pre-Funded Warrants”
means, collectively, the Pre-Funded Common Share Purchase Warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(b)(ii) hereof, which Pre-Funded Warrants shall be in the form of Exhibit A attached hereto.
“Pre-Funded Warrant
Shares” means the Common Shares underlying the Pre-Funded Warrants.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the date hereof, by and among the Company and the Purchasers,
in the form of form of Exhibit D attached hereto.
“Release Date”
means the later of (x) the earlier of the date that (i) the initial Resale Registration Statement registering for resale all Securities
has been declared effective by the Commission or (ii) the Securities can be sold, assigned or transferred without restriction or limitation
pursuant to Rule 144 or Rule 144A promulgated under the Securities Act and (y) the date that the Company obtains the Shareholder Approval.
“Resale Effective
Date” means the earliest of the date that (a) the initial Resale Registration Statement registering for resale all Securities
has been declared effective by the Commission, (b) all of the Securities have been sold pursuant to Rule 144 or may be sold pursuant to
Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without
volume or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date, provided that a holder of Securities
is not an Affiliate of the Company, or (d) all of the Securities may be sold pursuant to an exemption from registration under Section
4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing
written unqualified opinion that resales may then be made by such holders of the Securities pursuant to such exemption which opinion shall
be in form and substance reasonably acceptable to such holders.
“Resale Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale by the Purchasers of the Securities.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities”
means the Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series A Warrants”
means Common Share purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, in the form
of Exhibit B attached hereto.
“Series B Warrants”
means Common Share purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, in the form
of Exhibit C attached hereto.
“Shares”
means the Common Shares issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing Common Shares).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for the Shares purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds (minus, if applicable, a Purchaser’s aggregate exercise price of the Pre-Funded Warrants, which amounts
shall be paid as and when such Pre-Funded Warrants are exercised).
“Subsidiary”
means any subsidiary of the Company as set forth in the Disclosure Schedules, and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the date hereof.
“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 Share is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the
Pink Open Market, OTCQB or the OTCQX (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Pre-Funded Warrants, the Registration Rights Agreement, the Placement Agent Agreement, the Warrants, the Lock-Up
Agreements, the Escrow Agreement, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
“Transfer Agent”
means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Pl, Woodmere, NY 11598,
and any successor transfer agent of the Company.
“Warrants”
means collectively, the Series A Warrants and the Series B Warrants.
“Warrant Shares”
means the shares of Common Shares issuable upon exercise of the Warrants.
Article
II
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
up to an aggregate of approximately $11.424 million of Shares and Warrants; provided, however, that in accordance with NYSE American rules,
the maximum number of Shares that may be purchased hereunder is 3,453,980 (the “Exchange Cap”) and that all Shares
in excess of the Exchange Cap shall be issued as Pre-Funded Warrants in lieu of Shares in such manner to result in the same aggregate
purchase price being paid by the Purchasers, less $0.01 per Pre-Funded Warrant; and provided further that if NYSE American determines
that the transactions contemplated by this Agreement shall be aggregated with any prior offering of securities by the Company, then the
Exchange Cap may be reduced to zero, in which case no Shares shall be issued and Pre-Funded Warrants will be issued in lieu of Shares.
Each Purchaser shall deliver to the Escrow Agent, via wire transfer, immediately available funds equal to such Purchaser’s Subscription
Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective
Shares and/or Pre-Funded Warrants and Warrants, as determined pursuant to Section 2.2(a) and Section 2.2(b), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2(c) and Section 2.2(d) deliverable at the Closing. Upon satisfaction of
the covenants and conditions set forth in Sections 2.3(a) and 2.3(b), the Closing shall take place remotely by electronic means. Unless
otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (i.e., on the
Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer
Agent directly to the account(s) at the Placement Agent identified by each Purchaser; and upon receipt of such Shares, the Placement Agent
shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent
(or its clearing firm) by wire transfer to the Company).
2.2 Deliveries.
(a) The
Company shall deliver or cause to be delivered to each Purchaser the following on the date hereof:
(i) this
Agreement duly executed by the Company;
(ii) the
Lock-Up Agreements;
(iii) the
Registration Rights Agreement duly executed by the Company;
(iv) the
Escrow Agreement duly executed by the Company; and
(v) the
Placement Agent Agreement duly executed by the Company.
(b) The
Company shall deliver or cause to be delivered to each Purchaser the following on or on or prior to the Closing Date:
(i) a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver the Shares to the Placement Agent
in accordance with Section 2.1;
(ii) for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of Common Shares set forth on the signature page hereto;
(iii) for
each Purchaser of Shares and/or Pre-Funded Warrants, one Series A Warrant and one Series B Warrant for each Share and/or Pre-Funded Warrant
purchased registered in the name of such Purchaser.
(iv) the
Company shall have provided a flow of funds, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;
(v) a
duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and its counsel;
(vi) a
legal opinion of Company Counsel, addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable to
the Placement Agent and the Purchasers;
(vii) a
legal opinion of Intellectual Property Counsel, substantially in the form and substance reasonably acceptable to the Placement Agent and
each Purchaser; and
(viii) a
duly executed joint written instruction to the Escrow Agent.
(c) Each
Purchaser, and the Placement Agent, as applicable, shall deliver or cause to be delivered to the Company or the Escrow Agent, on the date
hereof:
(i) this
Agreement duly executed by such Purchaser;
(ii) the
Registration Rights Agreement duly executed by such Purchaser;
(iii) the
Escrow Agreement duly executed by the Placement Agent; and
(iv) Placement
Agent Agreement duly executed by the Placement Agent.
(d) Each
Purchaser shall deliver or cause to be delivered to the Escrow Agent, on or prior to the Closing Date, such Purchaser’s Subscription
Amount by wire transfer to the account specified in writing by the Company.
(e) On
the Closing Date, the Placement Agent shall deliver a duly executed joint written instruction to the Escrow Agent.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) on the
Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case
they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality, in all
respects) as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Sections 2.2(c) and 2.2(d) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect
(as defined below), in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate in all material respects or, to the extent representations
or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Sections 2.2(a) and 2.2(b) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company; and
(v) from
the date hereof to the Closing Date, trading in the Common Shares shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
Article
III
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the Subsidiaries of the Company and their respective jurisdictions of incorporation or organization are set forth on Schedule
3.1(a). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any Liens, and all of the issued and outstanding shares of capital stock or other equity interests of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization
and Qualification. The Company and each of the Subsidiaries, as applicable, is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary, as applicable, is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries, as applicable, is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case
may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, as applicable, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do
not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s, as applicable, certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, as applicable, or give to others any rights of termination, amendment, anti-dilution or similar
adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary, as applicable, debt or otherwise) or other understanding to which the Company or
any Subsidiary, as applicable, is a party or by which any property or asset of the Company or any Subsidiary, as applicable, is bound
or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary, as applicable, is
subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary,
as applicable, is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Resale Registration Statement pursuant to the Registration
Rights Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities
and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) the Shareholder
Approval and such other filings as are required to be made under applicable state securities laws (the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable (which means that no further sums are required to be paid by
the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Warrant Shares, when issued in accordance with the terms
of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means that no further sums are required to be
paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Company has reserved from its duly authorized capital stock
the maximum number of Common Shares issuable pursuant to this Agreement and the Warrants.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include the number of Common Shares owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Except
as set forth on Schedule 3.1(g), the Company has not issued any shares since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee share options or vesting of restricted shares under the Company’s
equity incentive plans, the issuance of Common Shares to employees pursuant to the Company’s employee stock purchase plans and pursuant
to the conversion and/or exercise of Common Share Equivalents outstanding as of the date of the most recently filed periodic report under
the Exchange Act. Other than the Placement Agent to act in said capacity, no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set
forth in Schedule 3.1(g), or pursuant to this Agreement, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or the capital stock of any Subsidiary,
as applicable, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary, as applicable, is or
may become bound to issue additional Common Shares or Common Share Equivalents or capital stock of any Subsidiary, as applicable. The
issuance and sale of the Securities will not obligate the Company or any Subsidiary, as applicable, to issue Common Shares or other securities
to any Person (other than the Purchasers). Except as set forth in the Schedule 3.1(g), there are no outstanding securities or instruments
of the Company or any Subsidiary, as applicable, with any provision that adjusts the exercise, conversion, exchange or reset price of
such security or instrument upon an issuance of securities by the Company or any Subsidiary, as applicable. Except as set forth in the
Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary, as applicable, that contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary, as applicable, is or may become bound to redeem a security of the Company or such Subsidiary, as applicable. The Company
does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of
the outstanding shares of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or authorization of any shareholder, the Board of Directors or others
is required for the issuance and sale of the Securities. There are no shareholders agreements, voting agreements or other similar agreements
with respect to the Company’s shares to which the Company is a party or, to the knowledge of the Company, between or among any of
the Company’s shareholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries, as applicable, as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Audited
Financial Information. The consolidated balance sheets of the Company as of December 31, 2023 and December 31, 2022, and the related
audited income statements, changes in shareholder or member equity and statements of cash flows for the fiscal years then ended, each
audited by a PCAOB qualified auditor in accordance with GAAP and PCAOB standards (the “Audited Company Financials”),
fairly present in all material respects the financial position of the Company at the respective dates thereof, subject to adjustments
which are not expected to have a Material Adverse Effect. The forecasts and projections, if any, contained in the Audited Company Financials
will have been prepared in good faith and on the basis of assumptions that are fair and reasonable in light of current and reasonably
foreseeable circumstances.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as set forth in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares and (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive
plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement or as set forth in the SEC Reports, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries, as
applicable, or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to
be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been
publicly disclosed at least 1 Trading Day prior to the date that this representation is made. No event, liability, development or circumstance
has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, or any of its businesses, properties,
liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i) could have a material adverse
effect on any Purchaser’s investment hereunder or (ii) could have a Material Adverse Effect. The reserves, if any, established by
the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date
hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of
the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise.
(k) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary, as applicable, or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”),
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, as applicable, nor, to the knowledge of the Company, any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary, as applicable, under the Exchange
Act or the Securities Act.
(l) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’, as
applicable, employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, as
applicable, and neither the Company nor any of its Subsidiaries, as applicable, is a party to a collective bargaining agreement, and the
Company and its Subsidiaries, as applicable, believe that their relationships with their employees are good. To the knowledge of the Company,
no executive officer of the Company or any Subsidiary, as applicable, is, or is now expected to be, in violation of any material term
of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer
does not subject the Company or any of its Subsidiaries, as applicable, to any liability with respect to any of the foregoing matters.
The Company and its Subsidiaries, as applicable, are in compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be
in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(m) Compliance.
Neither the Company nor any Subsidiary, as applicable: (i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary, as applicable,
under), nor has the Company or any Subsidiary, as applicable, received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or
regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could
not have or reasonably be expected to result in a Material Adverse Effect.
(n) Environmental
Laws. To the knowledge of the Company, as of the date hereof, the Company and its Subsidiaries, as applicable, (i) are in compliance
with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in
each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect.
(o) Regulatory
Permits. The Company and the Subsidiaries, as applicable, possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary, as applicable, has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(p) Title
to Assets. The Company and the Subsidiaries, as applicable, have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
as applicable, in each case, except as set forth in the SEC Reports, free and clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries, as applicable, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company and the Subsidiaries, as applicable, are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries, as applicable, are in compliance.
(q) Intellectual
Property. The Company and the Subsidiaries, as applicable, have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary, as applicable, has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years
from the date of this Agreement. Neither the Company nor any Subsidiary, as applicable, has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries, as applicable, have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge that it
lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.
(r) Insurance.
The Company and the Subsidiaries, as applicable, are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries, as applicable, are
engaged, including, but not limited to, directors and officers insurance coverage at least equal to $2,500,000. Neither the Company nor
any Subsidiary, as applicable, has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.
(s) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary,
as applicable, and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary, as applicable, is presently
a party to any transaction with the Company or any Subsidiary, as applicable, (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000
other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including share option or restricted share grant agreements under any equity incentive plan
of the Company.
(t) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries, as applicable, are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002, as amended that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries,
as applicable, maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the
Subsidiaries, as applicable, have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and the Subsidiaries, as applicable, and designed such disclosure controls and procedures to ensure that information required
to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms. The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). Since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries, as applicable, that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries, as applicable.
Notwithstanding anything contained above to the contrary, the SEC Reports disclose certain historical weaknesses in internal controls
and the Company’s plan of remediation of these weaknesses.
(u) Certain
Fees. Except for fees payable by the Company to the Placement Agent, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary, as applicable, to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(v) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(w) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(x) Registration
Rights. Except as disclosed on Schedule 3.1(x) and other than to each of the Purchasers pursuant to the Registration Rights
Agreement, no Person has any right to cause the Company or any Subsidiary, as applicable, to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary, as applicable.
(y) Listing
and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are
or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(z) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of formation (or similar charter documents) or the laws of its state of
formation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
(aa) Disclosure. Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or
on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, as applicable, their respective businesses and
the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as
a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading. The
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(bb) No Integrated Offering.
Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.
(cc) Solvency. Based
on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from
the Closing Date. Schedule 3.1(cc) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company
or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the
present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
(dd) Tax Status. Except
for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the
Company and its Subsidiaries, each (i) has made or filed all United States federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations
and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary, as applicable, know of no basis for any such
claim.
(ee) Foreign Corrupt Practices.
Neither the Company nor any Subsidiary, as applicable, nor to the knowledge of the Company or any Subsidiary, as applicable, any agent
or other person acting on behalf of the Company or any Subsidiary, as applicable, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary, as applicable, (or made by any person acting
on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the
FCPA.
(ff) Accountants.
The Company’s independent registered public accounting firm is Sadler, Gibb & Associates, LLC. To the knowledge and belief of
the Company, such accounting firm (i) is registered public accounting firm as required by the Exchange Act and (ii) shall express its
opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December
31, 2023.
(gg) No Disagreements
with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is
current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of
its obligations under any of the Transaction Documents.
(hh) Acknowledgment Regarding
Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision
to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ii) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(f) hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company
to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market
or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser
is a party, directly or indirectly, presently may have a “short” position in the Common Shares, and (iv) each Purchaser shall
not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during
the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Pre-Funded Warrant
Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of
the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(jj) Regulation M Compliance.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii)
paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than,
in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
(kk) Officers’ Certificate.
Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed a representation
and warranty by the Company to the Purchasers as to the matters covered thereby.
(ll) D&O Questionnaires.
To the Company’s knowledge, all information contained in the questionnaires most recently completed by each of the Company’s
directors and officers and beneficial owner of 5% or more of the Common Shares or Common Share Equivalents is true and correct in all
respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become
inaccurate and incorrect.
(mm) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of
the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating
in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company
in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures
provided thereunder.
(nn) Other Covered Persons.
Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(oo) Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date of
(i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a
Disqualification Event relating to any Issuer Covered Person.
(pp) Cybersecurity.
There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”)
and the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be
expected to result in, any security breach or other compromise to its IT Systems and Data. The Company and the Subsidiaries are presently
in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental
or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and
to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually
or in the aggregate, have a Material Adverse Effect. The Company and the Subsidiaries have implemented and maintained commercially reasonable
safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security
of all IT Systems and Data. The Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with
industry standards and practices.
(qq) Share Option Plans.
Each share option granted by the Company under the Company’s equity incentive plan was granted (i) in accordance with the terms
of the Company’s equity incentive plan and (ii) with an exercise price at least equal to the fair market value of the Common Shares
on the date such option would be considered granted under GAAP and applicable law. No share option granted under the Company’s equity
incentive plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to
knowingly grant, share options prior to, or otherwise knowingly coordinate the grant of share options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries, as applicable, or their financial results or prospects.
(rr) Office of Foreign
Assets Control. Neither the Company nor any Subsidiary, as applicable, nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary, as applicable, is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(ss) U.S. Real Property
Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(tt) Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries, as applicable, or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries, as applicable, or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries,
as applicable, or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve.
(uu) Money Laundering.
The operations of the Company and its Subsidiaries, as applicable, are and have been conducted at all times in material compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary, as applicable, with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary,
as applicable, threatened.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with
applicable federal and state securities laws). Such Purchaser understands that the Securities are “restricted securities”
as defined in Rule 144 and have not been registered under the Securities Act or any applicable state securities law and is acquiring the
Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof
in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities
in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable
state securities law (this representation and warranty shall not limit such Purchaser’s right to sell the Securities pursuant to
a registration statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Pre-Funded Warrants, if any, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act, or (ii) a “qualified institutional buyer” as defined
in Rule 144A(a)(1) under the Securities Act. Such Purchaser hereby represents that neither such Purchaser nor any of its Rule 506(d) Related
Parties (as defined below) is a “bad actor” within the meaning of Rule 506(d) promulgated under the Securities Act. For purposes
of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor disqualification”
provision of Rule 506(d) of the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information
with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities
to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received
a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
(g) Independent
Advice. Each Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company
to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement, or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or
similar transactions in the future.
Article
IV
OTHER AGREEMENTS OF THE PARTIES
4.1 The
Securities.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(a), the Company may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration
Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in substantially
the following form:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO
WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company acknowledges and
agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant
a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined
in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall
be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including,
if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately
amend the list of Selling Shareholders (as defined in the Registration Rights Agreement) thereunder.
(c) Certificates
evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while
a registration statement (including the Resale Registration Statement) covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144 and the Company is then in compliance with the current
public information required under Rule 144 (assuming cashless exercise of the Warrants), (iii) if such Shares or Warrant Shares are eligible
for sale or may be sold under Rule 144 (assuming cashless exercise of the Warrants), without volume or manner-of-sale restrictions, or
(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser
if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively. If all
or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant
Shares, if the Shares or Warrant Shares may be sold under Rule 144 and the Company is then in compliance with the current public information
required under Rule 144 (assuming cashless exercise of the Warrants), or if the Shares or Warrant Shares may be sold under Rule 144 without
the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares or Warrant
Shares or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission), then such Shares or Warrant Shares shall be issued free of all legends. The
Company agrees that following the Resale Effective Date or at such time as such legend is no longer required under this Section 4.1(c),
it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares
or Warrant Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such Shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section 4.1. Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by
such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number
of Trading Days, on the Company’s primary Trading Market with respect to the Common Share as in effect on the date of delivery of
a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend. In addition to such Purchaser’s
other available remedies, the Company shall pay to the Purchaser, in cash, as partial liquidated damages and not as a penalty, 2% of the
total of the value of the Shares or Warrant Shares for which the removal of the legend is sought (based on the VWAP of the Common Share
on the date such Shares or Warrant Shares are submitted to the Transfer Agent) for each full month that said opinion is not delivered
after the Legend Removal Date until such certificate is delivered without a legend.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the VWAP of the Common Shares on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after the Legend Removal Date) for each Trading Day after the Legend Removal
Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered)
to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such Purchaser that
is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction
or otherwise) Common Shares to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of Common Shares,
or a sale of a number of Common Shares equal to all or any portion of the number of Common Shares that such Purchaser anticipated receiving
from the Company without any restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the Common Shares so purchased (including brokerage commissions and
other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Shares or Warrant
Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale
price of the Common Shares on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company
of the applicable Shares or Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this clause
(ii).
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Resale Registration Statement, they will be sold in compliance with the plan
of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2 Furnishing
of Information; Public Information. Until the time that no Purchaser owns Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. At any
time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities
(assuming cashless exercise for the Warrants) may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer
in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal
to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure
and on every thirtieth (30th) day (prorated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such
Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer
the Shares and Warrant Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2 are
referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the
earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third
(3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company
fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to
it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. If required by the Exchange Act, the Company shall (a) by the Disclosure Time, issue a press release disclosing
the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release,
the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of
the Purchasers by the Company or any of its Subsidiaries, as applicable, or any of their respective officers, directors, employees, Affiliates
or agents, including, without limitation, the Placement Agent, in connection with the transactions contemplated by the Transaction Documents.
In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or
similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries, as applicable, or any
of their respective officers, directors, agents, employees, Affiliates or agents, including, without limitation, the Placement Agent,
on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate and be of no further force or
effect. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make
any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the
prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (a) to the extent required by federal securities law in connection with (i) any Resale
Registration Statement contemplated by this Agreement or the Registration Rights Agreement and (ii) the filing of final Transaction Documents
with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which such cases the Company
shall (x) obtain prior advice of competent counsel that such disclosure is required, (y) provide the Purchasers with prior notice of such
disclosure permitted under this Section 4.4 and (z) reasonably cooperate with such Purchaser regarding such disclosure.
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such information
and agreed in writing with the Company to keep such information confidential. The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any
of its Subsidiaries, as applicable, or any of their respective officers, directors, agents, employees or Affiliates delivers any material,
non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser
shall not have any duty of confidentiality to the Company, any of its Subsidiaries, as applicable, or any of their respective officers,
directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, or a duty to the Company, any of its Subsidiaries,
as applicable, or any of their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement
Agent, not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, as applicable, the Company shall promptly after the delivery of such notice file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.
4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder as set forth in the Schedule 4.7
and shall not, unless otherwise provided in the Schedule 4.7, use such proceeds: (a) for the redemption of any Common Shares or
Common Share Equivalents, (b) for the settlement of any outstanding litigation or (c) in violation of FCPA or OFAC regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such
shareholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
is finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the
Company in writing, and, the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to
any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the representations in the Agreement, or in any of the other
Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.
4.9 Reservation
of Common Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at
all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the Company to issue Shares pursuant
to this Agreement and Pre-Funded Warrant Shares and Warrant Shares pursuant to any exercise of the Pre-Funded Warrants and Warrants, respectively.
4.10 Listing
of Common Shares. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Shares on the Trading
Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares,
Pre-Funded Warrant Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares, Pre-Funded Warrant
Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded
on any other Trading Market, it will then include in such application all of the Shares, Pre-Funded Warrant Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares, Pre-Funded Warrant Shares and Warrant Shares to be listed
or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue
the listing and trading of its Common Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Shares
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.
4.11 Equal
Treatment of Purchasers. No consideration (including any modification of this Agreement) shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of
the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not
in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities
or otherwise.
4.12 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules
(other than as disclosed to its legal and other representatives). Notwithstanding the foregoing and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to
the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade
in the securities of the Company to the Company, any of its Subsidiaries, as applicable, or any of their respective officers, directors,
employees, Affiliates, or agent, including, without limitation, the Placement Agent, after the issuance of the initial press release as
described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set
forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement.
4.13 Exercise
Procedures. The form of Notice of Exercise included in each of the Pre-Funded Warrants and Warrants set forth the totality of the
procedures required of the Purchasers in order to exercise the Pre-Funded Warrants and Warrants, as the case may be. No additional legal
opinion, other information or instructions shall be required of the Purchasers to exercise their Pre-Funded Warrants or Warrants. Without
limiting the preceding sentences, 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 form be required in order to exercise the Pre-Funded Warrants or Warrants. The
Company shall honor exercises of the Pre-Funded Warrants and Warrants and shall deliver Pre-Funded Warrant Shares and Warrant Shares,
as the case may be, in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.14 Lock-Up
Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements without the prior
written consent of the Placement Agent, except to extend the term of the lock-up period, and shall enforce the provisions of each Lock-Up
Agreement in accordance with its terms. If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company
shall promptly use its best efforts to seek specific performance of the terms of such Lock-Up Agreement.
4.15 Shareholder
Approval. The Company shall hold a special meeting of shareholders (which may also be at the annual meeting of shareholders)
at the earliest practicable date after the date hereof, but in no event later than ninety (90) days after the Closing Date for the purpose
of obtaining the requisite approval from its shareholders for (i) the issuance of all Warrant Shares and Pre-Funded Warrant Shares, including
without limitation, with respect to any and all additional Warrant Shares that may be issued as a result of the adjustments set forth
in the Warrants, (ii) a reset of the floor exercise price and approval of a corresponding increase in the total number of warrant shares
of the series A warrants issued by the Company to the investors of the October 30, 2024 public offering that remain outstanding to an
exercise price equal to the initial exercise price of the Series A Warrants, and any additional share issuance(s) as may be warranted
due to such adjustment(s), and (iii) a reset of the floor exercise price and approval of a corresponding increase in the total number
of warrant shares of the series B warrants issued by the Company to the investors of the October 30, 2024 public offering to an exercise
price equal to the initial exercise price of the Series B Warrants, and any additional share issuance(s) as may be warranted due to such
adjustment(s), in accordance with NYSE American’s rules (the “Shareholder Approval”), with the recommendation
of the Company’s Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders
in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposal. Within ten (10) Business Days following the Closing Date, the Company shall file with
the Commission a preliminary proxy statement to request for the purpose of obtaining Shareholder Approval, and the Company shall use its
best efforts to obtain such Shareholder Approval. In the event Shareholder Approval (or board approval in lieu thereof following six months
after the Closing Date) does not occur, the Company will be required to hold additional meetings at least one time every seventy-five
(75) days until the earlier of the date Shareholder Approval is obtained or the Warrants are no longer outstanding, with printed and mailed
proxy statements sent to shareholders for such meetings. The Company shall additionally designate and enact a series of super-voting preferred
shares to enable the Shareholder Approval, within twenty (20) days.
4.16 Subsequent
Equity Sales.
(a) From
the date hereof until forty-five days after the Resale Effective Date, neither the Company nor any Subsidiary shall (i) issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents or (ii) file any
registration statement or amendment or supplement thereto, other than the Resale Registration Statement or filing a registration statement
on Form S-8 in connection with any employee benefit plan and the filing of a registration statement for a public offering that names the
Placement Agent as underwriter or placement agent for the offering covered thereby.
(b) From
the date hereof until the one (1) year anniversary of the Resale Effective Date, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company of Common Shares or Common Share Equivalents (or a combination thereof) involving
a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells
any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Common
Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading
prices of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the
market for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity
line of credit, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages, provided
however, that at-the-market (ATM) equity offerings shall not be included in the definition of Variable Rate Transactions.
(c) Notwithstanding
the foregoing, this Section 4.16 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
4.17 Reverse
Stock Split. The Company has agreed that within twenty (20) days of that date which is the earlier of that date on which (i) the Company
receives notification from NYSE American that its Common Shares are no longer suitable for listing pursuant to Section 1003(f)(v) of the
NYSE American Company Guide due to the low selling price of the Common Shares or (ii) the trailing 30-trading day average of the Common
Shares as quoted on NYSE American is less than $0.50 per share, it shall implement a reverse share split in such a ratio that, in the
reasonable opinion of its counsel, is sufficient to maintain the listing of the Common Shares on NYSE American. Additionally, the Company
shall further effect a reverse share split within twenty (20) days, if between the Closing Date and the Resale Effective Date, the trailing
10-trading day average of the Common Shares as quoted on NYSE American is less than $0.50 per share.
4.18 Registration
Rights Agreement. On the date hereof, the Company shall enter into the Registration Rights Agreement and shall not amend, modify,
waive or terminate any provision of the Registration Rights Agreement, except pursuant to the terms of the Registration Rights Agreement.
4.19 Waiver.
By agreeing to purchase Securities hereunder, each Purchaser consents to the terms of the transactions contemplated hereby and waives
any claims such Purchaser may have against the Company as a result of the consummation of the transactions contemplated hereby.
4.20 Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
Article
V
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated
on or before the fifth (5th) Trading Day following the date hereof; provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered
by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment
at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares and Pre-Funded Warrants
based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected
Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and
the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents 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 Agreement and any other Transaction Documents (whether brought against a party hereto or its 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 (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such 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 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 any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section
4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for a period of 12 months.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise
of a Pre-Funded Warrant, the applicable Purchaser shall be required to return any Common Shares subject to any such rescinded exercise
notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration
of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Pre-Funded Warrant (including, issuance of a
replacement warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
the Placement Agent Counsel. The Placement Agent Counsel does not represent any of the Purchasers and only represents the Placement Agent.
The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision
contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the
Company and the Purchasers collectively and not between and among the Purchasers.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19 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.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and Common Shares in any Transaction Document shall be subject to adjustment for reverse and forward share splits, share
dividends, share combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
| 1847 HOLDINGS LLC |
|
| |
|
| By: |
|
|
| Name: |
Ellery W. Roberts |
|
| Title: |
Chief Executive Officer |
|
Address for Notice:
590 Madison Avenue, 21st Floor New York, NY 10022
Attn: Chief Executive Officer
E-Mail:
With a copy to (which shall not constitute
notice):
Bevilacqua PLLC
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Attn: Louis A. Bevilacqua, Esq.
E-Mail:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
| Signature of Authorized Signatory of Purchaser: |
|
|
| Name of Authorized Signatory: |
|
|
| Title of Authorized Signatory: |
|
|
| Email Address of Authorized Signatory: |
|
|
Address for Notice to Purchaser: ___________________________________________________________
Address for Delivery of Securities to Purchaser (if
not same as address for notice): _________________________________________________________________________________
| Pre-Funded Warrant Shares: |
|
Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99% |
Series A Warrants:_________
Series B Warrants:_________
EIN Number:_________
| ☐ | Notwithstanding anything contained in this Agreement to the
contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased
from the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional
and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the second (2nd)
Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to being
disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate
or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an unconditional obligation of the
Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable)
to such other party on the Closing Date. |
[SIGNATURE PAGES CONTINUE]
Exhibit
A
Form
of Pre-Funded Warrant
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
PRE-FUNDED
WARRANT TO PURCHASE COMMON SHARES
1847
HOLDINGS LLC
Issue
Date: December 16, 2024
THIS
PRE-FUNDED WARRANT TO PURCHASE COMMON SHARES (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 following Shareholder Approval (as defined below) and until this Warrant is exercised in
full (the “Termination Date”) but not thereafter, to subscribe for and purchase from 1847 Holdings LLC, a limited
liability company formed under the laws of the State of Delaware (the “Company”), up to ______ Common Shares
(as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one (1) share of Common Share
under this Warrant shall be equal to the Exercise Price, as defined in Section 2.2.
1.
Definitions. In addition to the terms defined elsewhere in this Warrant or in the Securities Purchase Agreement, dated
December 13, 2024 (the “Securities Purchase Agreement”), the following terms have the meanings indicated in this Section
1:
1.1
“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.
1.2
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Shares are 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 Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported
on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
1.3
“Board of Directors” means the board of directors of the Company.
1.4
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.5
“Commission” means the United States Securities and Exchange Commission.
1.6
“Common Shares” means the common shares of the Company, no par value per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.
1.7
“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred shares, 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 Shares.
1.8
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.9
“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.
1.10
“Placement Agency Agreement” means the placement agency agreement, dated as of December 13, 2024, between the
Company and Spartan Capital Securities, LLC as amended, modified or supplemented from time to time in accordance with its terms.
1.11
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.12
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of NYSE
American (or any successor entity) from the shareholders of the Company, or board of directors in lieu thereof, with respect to issuance
of all of the Warrant Shares upon the exercise thereof.
1.13
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
1.14
“Trading Day” means a day on which the Common Shares are traded on a Trading Market.
1.15
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted
for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.16
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address
of 18 Lafayette Pl, Woodmere, NY 11598, and any successor transfer agent of the Company.
1.17
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such
date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares
are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
1.18
“Warrants” means this Warrant and other Common Share purchase warrants issued by the Company pursuant to the
Securities Purchase Agreement.
2.
Exercise.
2.1
Exercise of Warrant. 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 Shareholder Approval and on or before the Termination Date by delivery to the Company of a duly executed
PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit 2.1 (the
“Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Warrant 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 2.3 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 on which 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) Trading 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.
2.2
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.01 per Warrant
Share, was pre-funded to the Company on or prior to the Issue Date and, consequently, no additional consideration (other than the nominal
exercise price of $0.01 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any
circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination
Date. The remaining unpaid exercise price per Common Share under this Warrant shall be $0.01, subject to adjustment hereunder (the “Exercise
Price”).
2.3
Cashless Exercise. 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 2.1 hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b) 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 Shares 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 (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2.1 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 2.1 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, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. Without limiting any other provision in the
Transaction Documents, assuming (i) the Holder is not an Affiliate of the Company, and (ii) all of the applicable conditions of Rule
144 promulgated under the Securities Act with respect to Holder and the Warrant Shares are met in the case of such a cashless exercise,
the Company agrees that the Company will cause the removal of the legend from such Warrant Shares (including by delivering an opinion
of the Company’s counsel to the Company’s transfer agent at its own expense to ensure the foregoing), and the Company agrees
that the Holder is under no obligation to sell the Warrant Shares issuable upon the exercise of the Warrant prior to removing the legend.
The Company agrees not to take any position contrary to this Section 2.3.
2.4
Mechanics of Exercise.
2.4.1.
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 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. 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 Shares on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each
Trading Day after such Warrant Share Delivery Date 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, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery of
the Notice of Exercise.
2.4.2.
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.
2.4.3.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
2.4.4.
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 2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date, 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, Common
Shares 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 Common Shares 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 and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of this Warrant to purchase Common Shares 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 Common Shares upon exercise of the Warrant as
required pursuant to the terms hereof.
2.4.5.
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.
2.4.6.
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 as Exhibit 2.4.6 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.
2.4.7.
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
2.5
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 Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall
include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but
shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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
unconverted portion of any other securities of the Company (including, without limitation, any other Common Share 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding shares of Common Share, a Holder may rely on the
number of outstanding Common Shares 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 Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one
(1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Shares then outstanding. In any case, the
number of outstanding Common Shares 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
Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect to the issuance
of Common Shares 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 2.5, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held
by the Holder and the provisions of this Section 2.5 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 2.5 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.
3.
Certain Adjustments.
3.1
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or
otherwise makes a distribution or distributions of Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares 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 Common
Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of Common Shares 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
3.1 shall become effective immediately after the record date for the determination of shareholders 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.
3.2
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants,
issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to all (or
substantially all) of the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that,
to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder 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 Common Shares 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).
3.3
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 all (or substantially all) holders of Common Shares, 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) (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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder 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 Common Shares 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.
3.4
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 (and
all of its subsidiaries taken as a whole), directly or indirectly, effects any sale, lease, 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
Shares 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 Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common
Shares or any compulsory share exchange pursuant to which the Common Shares are 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, merger or scheme
of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common
Shares or 50% or more of the voting power of the common equity of the Company (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 2.5 on the exercise of this Warrant), the number of Common Shares 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 Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 Common Share 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 Shares 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, 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 (as defined below) of
the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however,
that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of
Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to
the holders of Common Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form
of cash, stock or any combination thereof, or whether the holders of Common Shares are given the choice to receive from among alternative
forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Shares of the Company
are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Shares will be deemed to have received
Common Share/shares of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental
Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day
of consummation of the applicable contemplated 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
contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the 100 day volatility as obtained
from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following
the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the greater of (i) 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 (ii) the highest VWAP during the period beginning on the Trading Day immediately
preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental
Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3.4 and (D) a remaining
option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and
the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately
available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s election and (ii)
the date of consummation 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 in accordance with the provisions of this Section 3.4 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 that is exercisable for a corresponding number of shares
of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares 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 Common Shares prior 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 be added to the term “Company” under this Warrant (so that from
and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant referring to the “Company”
shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor
Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto
and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant with
the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company
herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.4 regardless of
(i) whether the Company has sufficient authorized Common Shares for the issuance of Warrant Shares and/or (ii) whether a Fundamental
Transaction occurs prior to the Shareholder Approval.
3.5
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 Common Shares deemed to be issued and outstanding as of a given date
shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
3.6
Notice to Holder.
3.6.1.
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 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.
3.6.2.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Share,
(C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any
shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Share, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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.
4.
Transfer of Warrant.
4.1
Transferability. Subject to compliance with any applicable securities laws, 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 as Exhibit 2.4.6 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
on which 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.
4.2
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 4.1, 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.
4.3
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.
4.4
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions
or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that
(x) the transferor provide to the Company an opinion of counsel to the effect that such transfer does not require registration of such
transferred Warrant under the Securities Act and (y) that the transferee agree in writing to be bound by the terms of the Securities
Purchase Agreement and Registration Rights Agreement, with all the rights and obligations of a Purchaser under such agreements.
4.5
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
5.
Miscellaneous.
5.1
No Rights as Shareholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company
be required to net cash settle an exercise of this Warrant.
5.2
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.
5.3
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.
5.4
Authorized Shares.
5.4.1.
Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Shares a sufficient number of shares of Common 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 Shares 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 (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2.
Noncircumvention. 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 formation 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.
5.4.3.
Authorizations, Exemptions and Consents. Before taking any action that 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.
5.5
Governing Law. 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 Warrant 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. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6
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.
5.7
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, notwithstanding the fact
that the right to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver
by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission
thereunder. Without limiting any other provision of this Warrant, 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.
5.8
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company at 590 Madison Avenue, 21st Floor New York, NY 10022, Attention: Ellery W. Roberts, Chief Executive
Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such purposes
by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be
in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder
at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered
via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading
Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
5.8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.
5.9
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 Shares or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.10
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.
5.11
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 to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
5.12
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder, on the other hand.
5.13
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.
5.14
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.
********************
[Investor
Pre-Funded Warrant To Purchase Common Shares Signature Page Follows]
[Investor
Pre-Funded Warrant To Purchase Common Shares Signature Page]
IN
WITNESS WHEREOF, the Company has caused this Pre-Funded Warrant To Purchase Common Shares to be executed by its officer thereunto duly
authorized as of the date first above indicated.
| |
1847 HOLDINGS LLC |
| |
|
|
| |
By: |
|
| |
Name: |
Ellery W. Roberts |
| |
Title: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXERCISE
| 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.
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2.3, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2.3.
| 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
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
shares of Common Shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| Address: |
|
| Phone Number: |
|
| Email Address: |
|
| Date: |
|
| Holder’s Signature |
|
| Holder’s Address |
|
Exhibit
B
Form
of Series A Warrant
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
SERIES
A WARRANT TO PURCHASE COMMON SHAREs
1847
HOLDINGS LLC
Warrant
Shares:
Issue
Date: December 16, 2024
THIS
WARRANT TO PURCHASE COMMON SHARES (the “Warrant”) certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, __________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from 1847 Holdings LLC, a Delaware limited liability company (the “Company”), at the Exercise Price
(as defined below) then in effect, at any time or times on or after the date that Shareholder Approval (as defined below) is obtained,
but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), ______________ fully paid nonassessable Common Shares,
subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or replacement
hereof, this “Warrant”), shall have the meanings set forth in Section 1. This Warrant is one of the Series
A Warrants to purchase Common Shares issued pursuant to that certain Securities Purchase Agreement, dated as of December 13, 2024 (the
“Subscription Date”), by and among the Company and the investors (the “Purchasers”)
referred to therein (the “Purchase Agreement”). Capitalized terms used herein and not otherwise defined shall
have the definitions ascribed to such terms in the Purchase Agreement.
1.
Definitions. In addition to the terms defined elsewhere in this Warrant or in the Purchase Agreement, the following terms
have the meanings indicated in this Section 1:
1.1
“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.
1.2
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported
on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
1.3
“Board of Directors” means the board of directors of the Company.
1.4
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.5
“Commission” means the United States Securities and Exchange Commission.
1.6
“Common Shares” means the Common Shares of the Company, no par value per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.
1.7
“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Shares, 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 Shares.
1.8
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.9
“Expiration Date” means five (5) years after the later of (a) the date that the Company obtains the Shareholder
Approval and (b) the earlier of the date that (i) the initial Registration Statement registering for resale the Registerable Securities
has been declared effective by the Commission or (ii) the date that the Registerable Securities can be sold, assigned or transferred
without restriction or limitation pursuant to Rule 144 or Rule 144A promulgated under the Securities Act.
1.10
“Floor Price” means (i) prior to Shareholder Approval, a price equal to the thirty-five percent (35%) of the
Minimum Price (which price shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or
similar transactions), or (ii) following Shareholder Approval, a price equal to twenty percent (20%) of the Minimum Price (which price
shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transactions); provided,
however, that upon every Share Combination Event (as defined below), the Floor Price shall be equal to 50% of the prior Floor
Price, and shall subsequently continue to be so adjusted for every additional Share Combination Event(s).
1.11
“Minimum Price” means $0.27.
1.12
“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.
1.13
“Placement Agency Agreement” means the placement agency agreement, dated as of December 13, 2024, between the
Company and Spartan Capital Securities, LLC, as amended, modified or supplemented from time to time in accordance with its terms.
1.14
“Registrable Securities” shall have the meaning ascribed to such term in the Registration Rights Agreement.
1.15
“Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of the Subscription
Date, by and among the Company and the Purchasers.
1.16
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchasers of the Registrable Securities.
1.17
“Resale Effective Date” means the earliest of the date that (a) the initial Registration Statement registering
for resale the Registerable Securities has been declared effective by the Commission, (b) all of the Registerable Securities have been
sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current
public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary
of the Closing Date provided that a holder of Registerable Securities is not an Affiliate of the Company, or (d) all of the Registerable
Securities may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale
restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by
such holders of the Registerable Securities pursuant to such exemption which opinion shall be in form and substance reasonably acceptable
to such holders.
1.18
“Reset Date” means the date following Shareholder Approval that is the earliest of the following dates, (i)
the date on which for twenty (20) consecutive Trading Days all Registrable Securities have become and remained registered pursuant to
an effective Registration Statement that is available for the resale of all Registrable Securities, provided, however,
that if less than all Registrable Securities have become registered for resale on the date that a Registration Statement is declared
effective, the Holder with respect to itself only, shall have the right in its sole and absolute discretion to deem such condition satisfied,
including with regard only to the Registrable Securities that have been so registered, (ii) the date on which the Holder, for twenty
(20) consecutive Trading Days, can sell all Registrable Securities pursuant to Rule 144 without restriction or limitation and the Company
has not had a Public Information Failure or (iii) twelve (12) months and twenty (20) Trading Days immediately following the Issuance
Date.
1.19
“Reset Period” means the period commencing on the twentieth (20th) Trading Day immediately preceding the Reset
Date and ending on the Reset Date.
1.20
“Reset Price” means the greater of (i) the lowest single day VWAP of the Common Shares during the Reset Period
and (ii) the Floor Price.
1.21
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.22
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of NYSE
American (or any successor entity) from the shareholders of the Company, or board of directors in lieu thereof, with respect to issuance
of all of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.22.1.
to give full effect to alternative cashless exercises pursuant to Section 2.3 hereof.
1.22.2.
to consent to any adjustment to the exercise price or number of Common Shares underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.5.
1.22.3.
to consent to the voluntary adjustment, from time to time, of the exercise price of any and all currently outstanding warrants pursuant
to Section 3.8.
1.23
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
1.24
“Trading Day” means a day on which the Common Shares are traded on a Trading Market.
1.25
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted
for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.26
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address
of 18 Lafayette Pl, Woodmere, NY 11598, and any successor transfer agent of the Company.
1.27
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional Common Shares either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price.
1.28
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such
date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares
are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
1.29
“Warrants” means this Warrant and other Common Shares purchase warrants issued by the Company pursuant to the
Purchase Agreement.
2.
Exercise.
2.1
Exercise of Warrant. Subject to the provisions of Section 2.5 herein, 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 Shareholder Approval and on or before the Expiration Date
by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially
in the form attached hereto as Exhibit 2.1 (the “Notice of Exercise”). Within the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2.4.1
herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant 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 2.3 below is specified in the applicable Notice of Exercise. For the avoidance of doubt, any reference
to cashless exercise herein shall include a reference to alternative cashless 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 on which 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) Trading
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.
2.2
Exercise Price. The exercise price per Warrant Share shall be $0.81, subject to adjustment hereunder (the “Exercise
Price”).
2.3
Cashless Exercise. If at any time following the Shareholder Approval, if 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 or the resale of the Warrant
Shares by 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 2.1 hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b) 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 Shares 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 (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2.1 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 2.1 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, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. Assuming (i) the Holder is not an Affiliate
of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities Act with respect to Holder and
the Warrant Shares are met in the case of such a cashless exercise, the Company agrees that the Company will cause the removal of the
legend from such Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent
at its own expense to ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares
issuable upon the exercise of the Warrant prior to removing the legend. The Company agrees not to take any position contrary to this
Section 2.3.
The
Holder may also effect an “alternative cashless exercise” following Shareholder Approval. In such event, the aggregate number
of Warrant Shares issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative
cashless exercise shall equal the product of (i) the aggregate 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,
multiplied by (ii) 1.25. Notwithstanding anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically
exercised via cashless exercise pursuant to this Section 2.3 (including an alternative cashless exercise pursuant to this paragraph).
Notwithstanding anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2.3.
2.4
Mechanics of Exercise.
2.4.1.
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 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver the aggregate Exercise
Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 Shares on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date 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, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date
of delivery of the Notice of Exercise.
2.4.2.
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.
2.4.3.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however,
that the Holder shall be required to return any Warrant Shares subject to any such rescinded exercise notice concurrently with the return
to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to
acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
2.4.4.
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 2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder
to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means 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, Common Shares 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 Common Shares 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares 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 Common Shares upon exercise of the
Warrant as required pursuant to the terms hereof.
2.4.5.
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.
2.4.6.
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 as Exhibit 2.4.6 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.
2.4.7.
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
2.5
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 Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall
include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but
shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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
unconverted portion of any other securities of the Company (including, without limitation, any other Common Share 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding Common Shares, a Holder may rely
on the number of outstanding Common Shares 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 Common Shares outstanding. Upon the written or oral request of a Holder, the Company
shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case,
the number of outstanding Common Shares 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
Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect to the issuance
of Common Shares 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 2.5, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held
by the Holder and the provisions of this Section 2.5 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 2.5 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.
3.
Certain Adjustments.
3.1
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or
otherwise makes a distribution or distributions of Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares any shares 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 Common Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares
outstanding immediately after such event, and the number of Common 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 3.1
shall become effective immediately after the record date for the determination of shareholders 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.
3.2
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company
grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to
all (or substantially all) of the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that,
to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder 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 Common Shares 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).
If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Shares or Common Share Equivalents
at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised.
3.3
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 all (or substantially all) holders of Common Shares, 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) (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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder 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 Common Shares 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.
3.4
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 or
any Subsidiary, directly or indirectly, effects any sale, lease, 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 Shares 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 Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory
share exchange pursuant to which the Common Shares are 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, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or
more of the voting power of the common equity of the Company (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 2.5 on the exercise of this Warrant), the number of Common Shares 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 Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 Common Share 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 Shares 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, 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 (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of
this Warrant, that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Shares are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Shares will be deemed to have received Common Shares /shares of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this
Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated 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 contemplated Fundamental Transaction and the Expiration Date, (B) an expected volatility equal to the 100 day volatility
as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the greater of (i) 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 (ii) the highest VWAP during the period beginning on the Trading
Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the
applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section
3.4 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Expiration Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s
election and (ii) the date of consummation 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 in accordance with the provisions of this Section 3.4 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 that is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares 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 Common Shares prior 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 be added to the term “Company” under this Warrant
(so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant referring
to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally),
and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company
prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this
Warrant with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named
as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.4
regardless of (i) whether the Company has sufficient authorized Common Shares for the issuance of Warrant Shares and/or (ii) whether
a Fundamental Transaction occurs prior to the Initial Exercise Date.
3.5
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, subject to Shareholder
Approval, if at any time and from time to time on or after the Issue Date there occurs any share split, share dividend, share combination
or reverse share split, recapitalization, or other similar transaction involving the Common Shares (each, a “Share Combination
Event,” and such date thereof, the “Share Combination Event Date”) and the lowest VWAP during
the period commencing five (5) consecutive Trading Days immediately preceding and the five (5) consecutive Trading Days commencing on
the Share Combination Event Date (the “Event Market Price”) (provided if the Share Combination Event is effective
after the close of trading on the primary Trading Market, then commencing on the next Trading Day which period shall be the “Share
Combination Adjustment Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in
Section 3.1 above), then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment
Period, the Exercise Price then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market
Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on
the Issue Date for the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise
Price in this Section 3.5 shall not reduce the Exercise Price below the Floor Price (as defined below); provided further that notwithstanding
the foregoing, if one or more Share Combination Events occurred prior to obtaining Shareholder Approval (if required), then effective
upon Shareholder Approval, the Exercise Price will automatically be reduced to equal the greater of (x) the lowest Event Market Price
with respect to any Share Combination Event that occurred prior to obtaining Shareholder Approval, and (y) the Floor Price, and in any
such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant
on the Issue Date for the Warrant Shares then outstanding shall remain unchanged. For the avoidance of doubt, (i) if the adjustment in
the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made,
and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such
portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable
Exercise Date will be the lowest VWAP of the Common Shares immediately during such the Share Combination Adjustment Period prior to such
Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date and (ii) all adjustments pursuant
to this Section 3.5 shall also be subject to Section 3.1 above, including any Event Market Price. Notwithstanding anything herein
to the contrary, the “aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be
based on the aggregate Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate
Exercise Price resulting from a reduction in the Exercise Price without a proportionate increase in the number of Warrant Shares (i.e.,
pursuant to this Section 3.5 or otherwise).
3.6
Reset. On the Reset Date, the Exercise Price shall be adjusted to equal the lower of (i) the Exercise Price then in effect
and (ii) the Reset Price determined as of the date of determination. Upon such reset of the Exercise Price pursuant to this Section 3.6,
the number of Warrant Shares issuable upon exercise of this Warrant shall be increased such that the aggregate Exercise Price payable
hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price on the Issuance
Date (adjusted for any Warrants exercised or sold by the Holder prior to such Reset Date) for the Warrant Shares then outstanding (the
“Reset Share Amount”).
3.6.1.
Notwithstanding the foregoing, if a Holder requests to exercise this Warrant in whole or in part on any given date prior to the Reset
Date on which (i) all Registrable Securities have become and remained registered pursuant to an effective Registration Statement that
is available for the resale of all Registrable Securities, provided, however, if less than all Registrable Securities have
become registered for resale on the date that a Registration Statement is declared effective, the Holder with respect to itself only,
shall have the right in its sole and absolute discretion to deem such condition satisfied, including with regard only to the Registrable
Securities that have been so registered, (ii) the Holder can sell all Registrable Securities pursuant to Rule 144 without restriction
or limitation and the Company has not had a Public Information Failure or (iii) twelve (12) months immediately following the Issuance
Date (any such date, an “Exercise Date”), solely with respect to such portion of this Warrant being exercised
on such applicable Exercise Date, (a) such applicable Reset Date shall be deemed to mean the Exercise Date, (b) such applicable Reset
Period shall be deemed to have commenced on the applicable date set forth in clause (i), (ii) or (iii) hereof and ended on the twenty-first
(21st) Trading Day thereafter and (c) the applicable Reset Price and Reset Share Amount for such exercised Warrants shall be calculated
pursuant to this Section 3.6. For the avoidance of doubt, following the calculation of the Reset Price and Reset Share Amount pursuant
to this Section 3.6.1, the Company’s obligations with regard to such exercised Warrants shall be deemed satisfied and no additional
Reset Price and Reset Share Amount shall apply to such exercised Warrants.
3.6.2.
If less than all of the Registrable Securities have been registered pursuant to the clause (i) of the definition of Reset Date and a
Holder has deemed the condition satisfied as to such Registrable Securities, then the Reset Date shall apply only to such portion of
the Registrable Securities, and the Company’s obligations will continue to apply with regard to the Registrable Securities for
which the definition of Reset Date has not been not satisfied.
3.7
Subsequent Equity Sales. Subject to Shareholder Approval, if at any time while this Warrant is outstanding (such period,
the “Adjustment Period”), the Company issues, sells, enters into an agreement to sell, or grants any option
to purchase, or sells, enters into an agreement to sell, or grants any right to reprice, or otherwise disposes of or issues (or announces
any offer, sale, grant, or any option to purchase or other disposition), or, in accordance with this Section 3.7, is deemed to have issued
or sold, any Common Shares or Common Share Equivalents for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Exercise
Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then simultaneously with the consummation (or, if earlier, the announcement) of such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount (the “New Exercise Price”) equal to the lower of (A) the New Issuance Price and
(B) the lowest VWAP during the five (5) consecutive Trading Days immediately following the Dilutive Issuance (such lower price, the “Base
Share Price”) and the number of Warrant Shares issuable hereunder shall be proportionately increased such that the aggregate
Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged; provided that the
Base Share Price shall not be less than the Floor Price. Notwithstanding the foregoing, if one or more Dilutive Issuances occurred prior
to obtaining Shareholder Approval, then effective upon Shareholder Approval, the Exercise Price will automatically be reduced to equal
the greater of (x) lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to obtaining Shareholder Approval
and (B) the Floor Price, and in any such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate
Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged. If the Company enters
into a Variable Rate Transaction (as defined in the Purchase Agreement; provided, that, with respect to a Variable Rate Transaction that
is an equity line of credit or an “at-the-market offering”, this Section 3.7 shall apply to any issuances of Common Shares
or Common Share Equivalents thereunder rather than the entry into the agreement with respect thereto), the Company shall be deemed to
have issued Common Shares or Common Share Equivalents at the lowest possible price, conversion price, or exercise price at which such
securities may be issued, converted, or exercised. Notwithstanding the foregoing, no adjustments shall be made, paid, or issued under
this Section 3.7 in respect of an Exempt Issuance (as defined in the Purchase Agreement). For the avoidance of doubt, in the event the
Exercise Price has been adjusted pursuant to this Section 3.7 and the Dilutive Issuance that triggered such adjustment does not occur,
is not consummated, is unwound, or is canceled after the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted
to the Exercise Price that would have been in effect if such Dilutive Issuance had not occurred or been consummated. For all purposes
of the foregoing, the following shall be applicable:
3.7.1.
Issuance of Options. If, during the Adjustment Period, the Company in any manner grants or sells any options to purchase
Common Shares (“Options”) and the lowest price per share for which one Common Share is issuable upon the exercise
of any such Option or upon conversion, exercise, or exchange of any convertible securities (“Convertible Securities”)
issuable upon exercise of any such Option (such Common Shares issuable upon such exercise of any Option or upon conversion, exercise,
or exchange of any Convertible Securities, the “Convertible Securities Shares”) is less than the Applicable
Price, then such Common Shares shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting
or sale of such Option for such price per share. For purposes of this Section 3.7.1, the “lowest price per share for which one
Common Share is issuable upon the exercise of any such Option or upon conversion, exercise, or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received
or receivable by the Company with respect to any one Convertible Securities Share upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise, or exchange of any Convertible Security issuable upon exercise of such Option and (2) the
lowest exercise price set forth in such Option for which one Convertible Securities Share is issuable upon the exercise of any such Option
or upon conversion, exercise, or exchange of any Convertible Securities issuable upon exercise of any such Option, minus (B) the sum
of all amounts paid or payable to the holder of such Option (or any other Person), with respect to any one Convertible Securities Share,
upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise, or exchange of any Convertible
Security issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated below,
no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such Convertible Securities Share upon conversion, exercise,
or exchange of such Convertible Securities.
3.7.2.
Issuance of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise, or exchange
thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes
of this Section 3.7.2, the “lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable
by the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible Security and upon conversion,
exercise, or exchange of such Convertible Security and (2) the lowest conversion price set forth in such Convertible Security for which
one Convertible Securities Share is issuable upon conversion, exercise, or exchange thereof, minus (B) the sum of all amounts paid or
payable to the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share, upon
the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share upon conversion,
exercise, or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this Section 3.7.2,
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issue or sale.
3.7.3.
Change in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided
for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise, or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for Common Shares increases
or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event
referred to in Section 3.1, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price
which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued,
or sold. For purposes of this Section 3.7.3, if the terms of any Option or Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the Convertible Securities Share deemed issuable upon exercise, conversion, or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3.7.3 shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.
3.7.4.
Calculation of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (the “Primary Security,” and such
Option or Convertible Security, the “Secondary Securities” and together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share with respect to such Primary Security shall be
deemed to be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security,
the lowest price per share for which one Common Share is at any time issuable upon the exercise or conversion of the Primary Security
in accordance with Section 3.7.1 or 3.7.2 above and (z) the lowest VWAP of the Common Shares on any Trading Day during the five (5) consecutive
Trading Days immediately following the consummation (or, if applicable, the announcement) of such Dilutive Issuance (for the avoidance
of doubt, if such public announcement, if applicable, is released prior to the opening of the Principal Market on a Trading Day, such
Trading Day shall be the first Trading Day in such five (5) Trading Day period and if this Warrant is exercised on any given Exercise
Date during any such period, the Holder may elect to earlier end such period (including, solely with respect to such portion of this
Warrant exercised on such applicable Exercise Date)). If any Common Shares, Options, or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of cash received
by the Company therefor. If any Common Shares, Options, or Convertible Securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any Common Shares, Options, or Convertible Securities are issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Shares, Options or Convertible
Securities (as the case may be). The fair market value of any consideration other than cash or publicly traded securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair market value of such consideration will be determined
within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
3.8
Voluntary Adjustment by Company. Subject to the rules and regulations of the principal Trading Market and the consent of
the Holder, the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors.
3.9
Floor Price. Notwithstanding anything in Section 3 to the contrary, the Holder shall not be entitled to utilize an Exercise
Price that is less than the Floor Price.
3.10
Other Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Holders of a majority in interest
of the Warrants then outstanding, so as to protect the rights of the Holder; provided that no such adjustment pursuant to this
Section 3 will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section
3.
3.11
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 Common Shares deemed to be issued and outstanding as of
a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
3.12
Notice to Holder.
3.12.1.
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 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.
3.12.2.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares,
(C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any
shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer
of all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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.
3.13
Shareholder Approval. The Company shall seek Shareholder Approval in the time period and the manner provided in the Purchase
Agreement.
4.
Transfer of Warrant.
4.1
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) 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
as Exhibit 2.4.6 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 on which 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.
4.2
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 4.1, 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.
4.3
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.
5.
Miscellaneous.
5.1
No Rights as Shareholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein,
in no event shall the Company be required to net cash settle an exercise of this Warrant.
5.2
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.
5.3
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.
5.4
Authorized Shares.
5.4.1.
Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Shares a sufficient number of Common 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 Shares 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 (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2.
Non circumvention. Except and to the extent as waived or consented to by the Holders of a majority in interest of the Warrants
then outstanding, the Company shall not by any action, including, without limitation, amending its certificate of formation 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.
5.4.3.
Authorizations, Exemptions and Consents. Before taking any action that 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.
5.5
Governing Law. 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 Warrant 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. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6
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.
5.7
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, notwithstanding the fact
that the right to exercise this Warrant terminates on the Expiration Date. No provision of this Warrant shall be construed as a waiver
by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission
thereunder. Without limiting any other provision of this Warrant, 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.
5.8
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 590 Madison Avenue, 21st Floor New York, NY 10022, Attention: Ellery W. Roberts, Chief
Executive Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each
Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered
via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in
this Section 5.8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.
5.9
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 Shares or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.10
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.
5.11
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 to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
5.12
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holders of a majority in interest of the Warrants then outstanding, on the other hand.
5.13
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.
5.14
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.
********************
[Investor
Series A Warrant Signature Page Follows]
[Investor
Series A Warrant Signature Page]
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.
| |
1847 HOLDINGS LLC |
| |
|
| |
By: |
|
| |
Name: |
Ellery W. Roberts |
| |
Title: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXRCISE
| To: | 1847
HOLDINGS LLC |
| | |
| 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. |
| ☐ | if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3. |
| 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
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
Common Shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| Address: |
|
| Phone Number: |
|
| Email Address: |
|
| Date: |
|
| Holder’s Signature |
|
| Holder’s Address |
|
Exhibit
C
Form
of Series B Warrant
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
SERIES
B WARRANT TO PURCHASE COMMON SHARES
1847
HOLDINGS LLC
Warrant
Shares: |
| Issue Date: December 16, 2024 |
| |
THIS
WARRANT TO PURCHASE COMMON SHARES (the “Warrant”) certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, __________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from 1847 Holdings LLC, a Delaware limited liability company (the “Company”), at the Exercise Price
(as defined below) then in effect, at any time or times on or after the date that Shareholder Approval is obtained, but not after 11:59
p.m., New York time, on the Expiration Date (as defined below), ______________ fully paid nonassessable Common Shares, subject to adjustment
as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant
to Purchase Common Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or replacement hereof, this
“Warrant”), shall have the meanings set forth in Section 1. This Warrant is one of the Series B Warrants to
purchase Common Shares issued pursuant to that certain Securities Purchase Agreement, dated as of December 13, 2024 (the “Subscription
Date”), by and among the Company and the investors (the “Purchasers”) referred to therein (the
“Purchase Agreement”). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed
to such terms in the Purchase Agreement.
1.
Definitions. In addition to the terms defined elsewhere in this Warrant or in the Purchase Agreement, the following terms
have the meanings indicated in this Section 1:
1.1
“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.
1.2
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported
on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Shares so reported, or (d) in all other cases, the fair market value of a Common Shares as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
1.3
“Board of Directors” means the board of directors of the Company.
1.4
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.5
“Commission” means the United States Securities and Exchange Commission.
1.6
“Common Shares” means the Common Shares of the Company, no par value per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.
1.7
“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Shares, 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 Shares.
1.8
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.9
“Expiration Date” means five (5) years after the later of (a) the date that the Company obtains the Shareholder
Approval and (b) the earlier of the date that (i) the initial Registration Statement registering for resale the Registerable Securities
has been declared effective by the Commission or (ii) the date that the Registerable Securities can be sold, assigned or transferred
without restriction or limitation pursuant to Rule 144 or Rule 144A promulgated under the Securities Act.
1.10
“Floor Price” means (i) prior to Shareholder Approval, a price equal to the thirty-five percent (35%) of the
Minimum Price (which price shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or
similar transactions), or (ii) following Shareholder Approval, a price equal to twenty percent (20%) of the Minimum Price (which price
shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transactions); ;
provided, however, that upon every Share Combination Event (as defined below), the Floor Price shall be equal to 50% of
the prior Floor Price, and shall subsequently continue to be so adjusted for every additional Share Combination Event(s).
1.11
“Minimum Price” means $0.27.
1.12
“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.
1.13
“Placement Agency Agreement” means the placement agency agreement, dated as of December 13, 2024, between the
Company and Spartan Capital Securities, LLC, as amended, modified or supplemented from time to time in accordance with its terms.
1.14
“Registrable Securities” shall have the meaning ascribed to such term in the Registration Rights Agreement.
1.15
“Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the Subscription
Date by and among the Company and the Purchasers.
1.16
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale by the Purchasers of the Registrable Securities).
1.17
“Resale Effective Date” means the earliest of the date that (a) the initial Registration Statement registering
for resale the Registerable Securities has been declared effective by the Commission, (b) all of the Registerable Securities have been
sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current
public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary
of the Closing Date provided that a holder of Registerable Securities is not an Affiliate of the Company, or (d) all of the Registerable
Securities may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale
restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by
such holders of the Registerable Securities pursuant to such exemption which opinion shall be in form and substance reasonably acceptable
to such holders.
1.18
“Reset Date” means the date following Shareholder Approval that is the earliest of the following dates, (i)
the date on which for twenty (20) consecutive Trading Days all Registrable Securities have become and remained registered pursuant to
an effective Registration Statement that is available for the resale of all Registrable Securities, provided, however,
that if less than all Registrable Securities have become registered for resale on the date that a Registration Statement is declared
effective, the Holder with respect to itself only, shall have the right in its sole and absolute discretion to deem such condition satisfied,
including with regard only to the Registrable Securities that have been so registered, (ii) the date on which the Holder, for twenty
(20) consecutive Trading Days can sell all Registrable Securities pursuant to Rule 144 without restriction or limitation and the Company
has not had a Public Information Failure or (iii) twelve (12) months and twenty (20) Trading Days immediately following the Issuance
Date.
1.19
“Reset Period” means the period commencing on the twentieth (20th) Trading Day immediately preceding the Reset
Date and ending on the Reset Date
1.20
“Reset Price” means the greater of (i) the lowest single day VWAP of the Common Shares during the Reset Period
and (ii) the Floor Price.
1.21
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.22
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of NYSE
American (or any successor entity) from the shareholders of the Company, or board of directors in lieu thereof, with respect to issuance
of all of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.22.1.
to give full effect to the adjustment in the exercise price and number of Warrant Shares following a Dilutive Issuance pursuant to Section
3.6.
1.22.2.
to consent to any adjustment to the exercise price or number of Common Shares underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.5.
1.22.3.
to consent to the voluntary adjustment, from time to time, of the exercise price of any and all currently outstanding warrants pursuant
to Section 3.8.
1.23
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
1.24
“Trading Day” means a day on which the Common Shares are traded on a Trading Market.
1.25
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted
for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.26
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address
of 18 Lafayette Pl, Woodmere, NY 11598, and any successor transfer agent of the Company.
1.27
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional Common Shares either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price.
1.28
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such
date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares
are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
1.29
“Warrants” means this Warrant and other Common Shares purchase warrants issued by the Company pursuant to the
Purchase Agreement.
2.
Exercise.
2.1
Exercise of Warrant. Subject to the provisions of Section 2.5 herein, 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 Shareholder Approval and on or before the Expiration Date
by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially
in the form attached hereto as Exhibit 2.1 (the “Notice of Exercise”). Within the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2.4.1
herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant 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 2.3 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 on which 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) Trading
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.
2.2
Exercise Price. The exercise price per Warrant Share shall be $0.54, subject to adjustment hereunder (the “Exercise
Price”).
2.3
Cashless Exercise. If at any time following the Shareholder Approval, if 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 or the resale of the Warrant
Shares by 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 2.1 hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b) 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 Shares 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 (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2.1 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 2.1 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, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. Assuming (i) the Holder is not an Affiliate
of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities Act with respect to Holder and
the Warrant Shares are met in the case of such a cashless exercise, the Company agrees that the Company will cause the removal of the
legend from such Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent
at its own expense to ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares
issuable upon the exercise of the Warrant prior to removing the legend. The Company agrees not to take any position contrary to this
Section 2.3.
Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2.3.
2.4
Mechanics of Exercise.
2.4.1.
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 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver the aggregate Exercise
Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 Shares on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date 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, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date
of delivery of the Notice of Exercise.
2.4.2.
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.
2.4.3.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however,
that the Holder shall be required to return any Warrant Shares subject to any such rescinded exercise notice concurrently with the return
to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to
acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
2.4.4.
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 2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder
to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means 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, Common Shares 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 Common Shares 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares 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 Common Shares upon exercise of the
Warrant as required pursuant to the terms hereof.
2.4.5.
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.
2.4.6.
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 as Exhibit 2.4.6 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.
2.4.7.
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
2.5
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 Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall
include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but
shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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
unconverted portion of any other securities of the Company (including, without limitation, any other Common Share 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding shares of Common Share,
a Holder may rely on the number of outstanding Common Shares 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 Common Shares outstanding. Upon the written or oral request of a Holder,
the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding.
In any case, the number of outstanding Common Shares 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 Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election
by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect
to the issuance of Common Shares 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 2.5, provided that the Beneficial Ownership Limitation in no
event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon
exercise of this Warrant held by the Holder and the provisions of this Section 2.5 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 2.5 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.
3.
Certain Adjustments.
3.1
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or
otherwise makes a distribution or distributions of Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares 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 Common
Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of Common Shares 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 3.1
shall become effective immediately after the record date for the determination of shareholders 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.
3.2
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company
grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to
all (or substantially all) of the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that,
to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder 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 Common Shares 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).
3.3
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 all (or substantially all) holders of Common Shares, 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) (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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder 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 Common Shares 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.
3.4
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 or
any Subsidiary, directly or indirectly, effects any sale, lease, 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 Shares 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 Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory
share exchange pursuant to which the Common Shares are 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, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or
more of the voting power of the common equity of the Company (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 2.5 on the exercise of this Warrant), the number of Common Shares 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 Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 s Common Share 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 Shares 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, 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 (as defined below) of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company
or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised
portion of this Warrant, that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Shares
are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such
holders of Common Shares will be deemed to have received Common Share/shares of the Successor Entity (which Entity may be the Company
following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value
of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated 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 contemplated Fundamental Transaction and the Expiration Date, (B) an expected volatility equal to the 100 day volatility
as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the greater of (i) 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 (ii) the highest VWAP during the period beginning on the Trading
Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the
applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section
3.4 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Expiration Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s
election and (ii) the date of consummation 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 in accordance with the provisions of this Section 3.4 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 that is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares 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 Common Shares prior 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 be added to the term “Company” under this Warrant
(so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant referring
to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally),
and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company
prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this
Warrant with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named
as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.4
regardless of (i) whether the Company has sufficient authorized Common Shares for the issuance of Warrant Shares and/or (ii) whether
a Fundamental Transaction occurs prior to the Initial Exercise Date.
3.5
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, subject to Shareholder
Approval, if at any time and from time to time on or after the Issue Date there occurs any share split, share dividend, share combination
or reverse share split, recapitalization, or other similar transaction involving the Common Shares (each, a “Share Combination
Event,” and such date thereof, the “Share Combination Event Date”) and the lowest VWAP during
the period commencing five (5) consecutive Trading Days immediately preceding and the five (5) consecutive Trading Days commencing on
the Share Combination Event Date (the “Event Market Price”) (provided if the Share Combination Event is effective
after the close of trading on the primary Trading Market, then commencing on the next Trading Day which period shall be the “Share
Combination Adjustment Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in
Section 3.1 above), then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment
Period, the Exercise Price then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market
Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on
the Issue Date for the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise
Price in this Section 3.5 shall not reduce the Exercise Price below the Floor Price (as defined below); provided further that notwithstanding
the foregoing, if one or more Share Combination Events occurred prior to obtaining Shareholder Approval (if required), then effective
upon Shareholder Approval, the Exercise Price will automatically be reduced to equal the greater of (x) the lowest Event Market Price
with respect to any Share Combination Event that occurred prior to obtaining Shareholder Approval, and (y) the Floor Price, and in any
such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant
on the Issue Date for the Warrant Shares then outstanding shall remain unchanged. For the avoidance of doubt, (i) if the adjustment in
the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made,
and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such
portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable
Exercise Date will be the lowest VWAP of the Common Shares immediately during such the Share Combination Adjustment Period prior to such
Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date, and (ii) all adjustments pursuant
to this Section 3.5 shall also be subject to Section 3.1 above, including any Event Market Price. Notwithstanding anything herein to
the contrary, the “aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be based
on the aggregate Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate Exercise
Price resulting from a reduction in the Exercise Price without a proportionate increase in the number of Warrant Shares (i.e., pursuant
to this Section 3.5 or otherwise).
3.6
Subsequent Equity Sales. Subject to Shareholder Approval, if at any time while this Warrant is outstanding (such period,
the “Adjustment Period”), the Company issues, sells, enters into an agreement to sell, or grants any option
to purchase, or sells, enters into an agreement to sell, or grants any right to reprice, or otherwise disposes of or issues (or announces
any offer, sale, grant, or any option to purchase or other disposition), or, in accordance with this Section 3.6, is deemed to have issued
or sold, any Common Shares or Common Share Equivalents for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Exercise
Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then simultaneously with the consummation (or, if earlier, the announcement) of such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount (the “New Exercise Price”) equal to the lower of (A) the New Issuance Price and
(B) the lowest VWAP during the five (5) consecutive Trading Days immediately following the Dilutive Issuance (such lower price, the “Base
Share Price”) and the number of Warrant Shares issuable hereunder shall be proportionately increased such that the aggregate
Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged; provided that the
Base Share Price shall not be less than the Floor Price. Notwithstanding the foregoing, if one or more Dilutive Issuances occurred prior
to obtaining Shareholder Approval, then effective upon Shareholder Approval, the Exercise Price will automatically be reduced to equal
the greater of (x) lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to obtaining Shareholder Approval
and (B) the Floor Price, and in any such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate
Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged. If the Company enters
into a Variable Rate Transaction (as defined in the Purchase Agreement; provided, that, with respect to a Variable Rate Transaction that
is an equity line of credit or an “at-the-market offering”, this Section 3.6 shall apply to any issuances of Common Shares
or Common Share Equivalents thereunder rather than the entry into the agreement with respect thereto), the Company shall be deemed to
have issued Common Shares or Common Share Equivalents at the lowest possible price, conversion price, or exercise price at which such
securities may be issued, converted, or exercised. Notwithstanding the foregoing, no adjustments shall be made, paid, or issued under
this Section 3.6 in respect of an Exempt Issuance (as defined in the Purchase Agreement). For the avoidance of doubt, in the event the
Exercise Price has been adjusted pursuant to this Section 3.6 and the Dilutive Issuance that triggered such adjustment does not occur,
is not consummated, is unwound, or is canceled after the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted
to the Exercise Price that would have been in effect if such Dilutive Issuance had not occurred or been consummated. For all purposes
of the foregoing, the following shall be applicable:
3.6.1.
Issuance of Options. If, during the Adjustment Period, the Company in any manner grants or sells any options to purchase
Common Shares (“Options”) and the lowest price per share for which one Common Share is issuable upon the exercise
of any such Option or upon conversion, exercise, or exchange of any convertible securities (“Convertible Securities”)
issuable upon exercise of any such Option (such Common Shares issuable upon such exercise of any Option or upon conversion, exercise,
or exchange of any Convertible Securities, the “Convertible Securities Shares”) is less than the Applicable
Price, then such Common Shares shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting
or sale of such Option for such price per share. For purposes of this Section 3.6.1, the “lowest price per share for which one
Common Share is issuable upon the exercise of any such Option or upon conversion, exercise, or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received
or receivable by the Company with respect to any one Convertible Securities Share upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise, or exchange of any Convertible Security issuable upon exercise of such Option and (2) the
lowest exercise price set forth in such Option for which one Convertible Securities Share is issuable upon the exercise of any such Option
or upon conversion, exercise, or exchange of any Convertible Securities issuable upon exercise of any such Option, minus (B) the sum
of all amounts paid or payable to the holder of such Option (or any other Person), with respect to any one Convertible Securities Share,
upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise, or exchange of any Convertible
Security issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated below,
no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such Convertible Securities Share upon conversion, exercise,
or exchange of such Convertible Securities.
3.6.2.
Issuance of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise, or exchange
thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes
of this Section 3.6.2, the “lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable
by the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible Security and upon conversion,
exercise, or exchange of such Convertible Security and (2) the lowest conversion price set forth in such Convertible Security for which
one Convertible Securities Share is issuable upon conversion, exercise, or exchange thereof, minus (B) the sum of all amounts paid or
payable to the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share, upon
the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share upon conversion,
exercise, or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this Section 3.6.2,
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issue or sale.
3.6.3.
Change in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided
for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise, or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for Common Shares increases
or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event
referred to in Section 3.1, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price
which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued,
or sold. For purposes of this Section 3.6.3, if the terms of any Option or Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the Convertible Securities Share deemed issuable upon exercise, conversion, or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3.6.3 shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.
3.6.4.
Calculation of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (the “Primary Security,” and such
Option or Convertible Security, the “Secondary Securities” and together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share with respect to such Primary Security shall be
deemed to be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security,
the lowest price per share for which one Common Share is at any time issuable upon the exercise or conversion of the Primary Security
in accordance with Section 3.6.1 or 3.6.2 above and (z) the lowest VWAP of the Common Shares on any Trading Day during the five (5) consecutive
Trading Days immediately following the consummation (or, if applicable, the announcement) of such Dilutive Issuance (for the avoidance
of doubt, if such public announcement, if applicable, is released prior to the opening of the Principal Market on a Trading Day, such
Trading Day shall be the first Trading Day in such five (5) Trading Day period and if this Warrant is exercised on any given Exercise
Date during any such period, the Holder may elect to earlier end such period (including, solely with respect to such portion of this
Warrant exercised on such applicable Exercise Date)). If any Common Shares, Options, or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of cash received
by the Company therefor. If any Common Shares, Options, or Convertible Securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any Common Shares, Options, or Convertible Securities are issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Shares, Options or Convertible
Securities (as the case may be). The fair market value of any consideration other than cash or publicly traded securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair market value of such consideration will be determined
within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
3.7
Reset. On the Reset Date, the Exercise Price shall be adjusted to equal the lower of (i) the Exercise Price then in effect
and (ii) the Reset Price determined as of the date of determination. Upon such reset of the Exercise Price pursuant to this Section 3.7,
the number of Warrant Shares issuable upon exercise of this Warrant shall be increased such that the aggregate Exercise Price payable
hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price on the Issuance
Date (adjusted for any Warrants exercised or sold by the Holder prior to such Reset Date) for the Warrant Shares then outstanding (the
“Reset Share Amount”).
3.7.1.
Notwithstanding the foregoing, if a Holder requests to exercise this Warrant in whole or in part on any given date prior to the Reset
Date on which (i) all Registrable Securities have become and remained registered pursuant to an effective Registration Statement that
is available for the resale of all Registrable Securities, provided, however, if less than all Registrable Securities have
become registered for resale on the date that a Registration Statement is declared effective, the Holder with respect to itself only,
shall have the right in its sole and absolute discretion to deem such condition satisfied, including with regard only to the Registrable
Securities that have been so registered, (ii) the Holder can sell all Registrable Securities pursuant to Rule 144 without restriction
or limitation and the Company has not had a Public Information Failure or (iii) twelve (12) months immediately following the Issuance
Date (any such date, an “Exercise Date”), solely with respect to such portion of this Warrant being exercised
on such applicable Exercise Date, (a) such applicable Reset Date shall be deemed to mean the Exercise Date, (b) such applicable Reset
Period shall be deemed to have commenced on the applicable date set forth in clause (i), (ii) or (iii) hereof and ended on the twenty-first
(21st) Trading Day thereafter and (c) the applicable Reset Price and Reset Share Amount for such exercised Warrants shall be calculated
pursuant to this Section 3.7. For the avoidance of doubt, following the calculation of the Reset Price and Reset Share Amount pursuant
to this Section 3.7.1, the Company’s obligations with regard to such exercised Warrants shall be deemed satisfied and no additional
Reset Price and Reset Share Amount shall apply to such exercised Warrants.
3.7.2.
If less than all of the Registrable Securities have been registered pursuant to the clause (i) of the definition of Reset Date and a
Holder has deemed the condition satisfied as to such Registrable Securities, then the Reset Date shall apply only to such portion of
the Registrable Securities, and the Company’s obligations will continue to apply with regard to the Registrable Securities for
which the definition of Reset Date has not been not satisfied.
3.8
Voluntary Adjustment by Company. Subject to the rules and regulations of the principal Trading Market and the consent of
the Holder, the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors.
3.9
Floor Price. Notwithstanding anything in Section 3 to the contrary, the Holder shall not be entitled to utilize an Exercise
Price of less than the Floor Price.
3.10
Other Events. If any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Holders of a majority in interest
of the Warrants then outstanding, so as to protect the rights of the Holder; provided that no such adjustment pursuant to this
Section 3 will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section
3.
3.11
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 Common Shares deemed to be issued and outstanding as of
a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
3.12
Notice to Holder.
3.12.1.
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 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.
3.12.2.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares,
(C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any
shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Share, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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.
3.13
Shareholder Approval. The Company shall seek Shareholder Approval in the time period and the manner provided in the Purchase
Agreement.
4.
Transfer of Warrant.
4.1
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) 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
as Exhibit 2.4.6 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 on which 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.
4.2
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 4.1, 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.
4.3
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.
5.
Miscellaneous.
5.1
No Rights as Shareholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein,
in no event shall the Company be required to net cash settle an exercise of this Warrant.
5.2
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.
5.3
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.
5.4
Authorized Shares.
5.4.1.
Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Shares a sufficient number of Common 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 Shares 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 (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2.
Non circumvention. Except and to the extent as waived or consented to by the Holders of a majority in interest of the Warrants
then outstanding, the Company shall not by any action, including, without limitation, amending its certificate of formation 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.
5.4.3.
Authorizations, Exemptions and Consents. Before taking any action that 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.
5.5
Governing Law. 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 Warrant 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. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6
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.
5.7
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, notwithstanding the fact
that the right to exercise this Warrant terminates on the Expiration Date. No provision of this Warrant shall be construed as a waiver
by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission
thereunder. Without limiting any other provision of this Warrant, 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.
5.8
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 590 Madison Avenue, 21st Floor New York, NY 10022, Attention: Ellery W. Roberts, Chief
Executive Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each
Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered
via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in
this Section 5.8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.
5.9
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 Shares or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.10
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.
5.11
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 to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
5.12
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holders of a majority in interest of the Warrants then outstanding, on the other hand.
5.13
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.
5.14
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.
********************
[Investor
Series B Warrant Signature Page Follows]
[Investor
Series B Warrant Signature Page]
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.
| |
1847 HOLDINGS LLC |
| |
|
| |
By: |
|
| |
Name: |
Ellery W. Roberts |
| |
Title: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXRCISE
| 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. |
| ☐ | if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3. |
| 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
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
Common Shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| Address: |
|
| Phone Number: |
|
| Email Address: |
|
| Date: |
|
| Holder’s Signature |
|
| Holder’s Address |
|
Exhibit
D
Form
of Registration Rights Agreement
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of December 13, 2024, between
1847 Holdings LLC, a Delaware limited liability company (the “Company”), and each of the several purchasers
signatory hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
1.1. “Advice”
shall have the meaning set forth in Section 6.3.
1.2. “Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, forty-five (45) calendar
days following the Filing Date (or, in the event of a full review by the Commission, ninety (90) calendar days following the Filing Date)
and with respect to any additional Registration Statements which may be required pursuant to Section 2.3 or Section 3.3, forty-five (45)
calendar days following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of
a full review by the Commission, ninety (90) calendar days following the date such additional Registration Statement is required to be
filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the
above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as
to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date
precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day,
then the Effectiveness Date shall be the next succeeding Trading Day.
1.3. “Effectiveness
Period” shall have the meaning set forth in Section 2.1.
1.4. “Event”
shall have the meaning set forth in Section 2.4.
1.5. “Event
Date” shall have the meaning set forth in Section 2.4.
1.6. “Filing
Date” means, with respect to the Initial Registration Statement required hereunder forty-five (45) Trading Days after the
Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2.3 or Section 3.3,
the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related
to the Registrable Securities.
1.7. “Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
1.8. “Indemnified
Party” shall have the meaning set forth in Section 5.3.
1.9. “Indemnifying
Party” shall have the meaning set forth in Section 5.3.
1.10. “Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
1.11. “Losses”
shall have the meaning set forth in Section 5.1.
1.12. “Plan
of Distribution” shall have the meaning set forth in Section 2.1.
1.13. “Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
1.14. “Registrable
Securities” means, as of any date of determination, (a) all Common Shares, (b) all Warrant Shares then issued and issuable
upon exercise of the Warrants and Pre-Funded Warrants (assuming on such date the Warrants and Pre-Funded Warrants are exercised in full
without regard to any exercise limitations therein), and (c) any securities issued or then issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable
Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file
another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale
of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have
been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously
sold in accordance with Rule 144, or (c) such securities become eligible for resale and without the requirement for the Company to be
in compliance with the current public information requirement under Rule 144 (if such requirement is applicable) as set forth in a written
opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such
securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were
issued or are issuable, were at no time held by any Affiliate of the Company, as reasonably determined by the Company, upon the advice
of counsel to the Company.
1.15. “Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2.1 and any additional registration
statements contemplated by Section 2.3 or Section 3.3, including (in each case) the Prospectus, amendments and supplements to any such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration statement.
1.16. “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.17. “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.18. “Selling
Shareholder Questionnaire” shall have the meaning set forth in Section 3.1.
1.19. “SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.
2. Registration
Statement.
2.1. On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of
all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-1 (or Form S-3 to the extent the
Company is eligible to use such registration statement form, subject to the provisions of Section 2.5) and shall contain (unless otherwise
directed by at least 85% in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex
2.1.1 and substantially the “Selling Shareholders” section attached hereto as Annex 2.1.2; provided,
however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior
written consent. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed
under this Agreement (including, without limitation, under Section 3.3) to be declared effective under the Securities Act as promptly
as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts
to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered
by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale
restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144 (to the extent applicable), as determined by the counsel to the Company pursuant to a written opinion letter
to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”).
The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading
Day. The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for
effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective
date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder
within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an
Event under Section 2.4.
2.2. Notwithstanding
the registration obligations set forth in Section 2.1, if the Commission informs the Company that all of the Registrable Securities cannot,
as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the
Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial
Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered
by the Commission, on Form S-1 or such other form available to register for resale the Registrable Securities as a secondary offering,
subject to the provisions of Section 2.5; with respect to filing on Form S-1 or other appropriate form, and subject to the provisions
of Section 2.4 with respect to the payment of liquidated damages; provided, however, that prior to filing such amendment,
the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.
2.3. Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2.4, if the Commission or
any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable
Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:
2.3.1. First,
the Company shall reduce or eliminate any securities to be included other than Registrable Securities;
2.3.2. Second,
the Company shall reduce Registrable Securities represented by the Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders); and
2.3.3. Third,
the Company shall reduce Registrable Securities represented by Common Shares (applied, in the case that some Common Shares may be registered,
to the Holders on a pro rata basis based on the total number of unregistered Common Share held by such Holders).
In
the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the
calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with
the foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-1 or such other form
available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement,
as amended.
2.4. If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement
without affording the Holders the opportunity to review and comment on the same as required by Section 3.1 herein or the Company subsequently
withdraws the filing of the Registration Statement, the Company shall be deemed to have not satisfied this clause (i)) as of the Filing
Date, or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with
Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or
will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement
within ten (10) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order
for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable
Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement (provided if the
Registration Statement does not allow for the resale of Registrable Securities at prevailing market prices (i.e., only allows for fixed
price sales), the Company shall have been deemed to have not satisfied this clause), or (v) after the effective date of a Registration
Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included
in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not
be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”,
and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such
five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such twenty (20) calendar day period is exceeded,
and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred
to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable
law, on each such Event Date and on each day thereafter each such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay and distribute to each Holder an amount in cash or Common Shares (as
preferred by the Holders, and determined thereupon), on a pro rata basis as partial liquidated damages and not as a penalty on a daily
basis, a sum equal to 0.5% of their aggregate Subscription Amount paid by the Holders pursuant to the Purchase Agreements until fifteen
(15) calendar days of each such Event, which amount shall increase to 1.00% of their aggregate Subscription Amount paid by the Holders
pursuant to the Purchase Agreements between sixteenth (16) calendar days, and until cure of the Event, as calculated on a daily basis.
If the Company fails to pay any partial liquidated damages pursuant to this Section 2.4 in full within seven days after the date payable,
the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable
law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of
a month prior to the cure of an Event.
2.5. If
Form S-1 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-1
as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-1 covering the Registrable Securities has been declared effective by the Commission.
2.6. Notwithstanding
anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as
any Underwriter without the prior written consent of such Holder.
3. Registration
Procedures. In connection with the Company’s registration obligations hereunder, the Company shall:
3.1. Not
less than one (1) Trading Day prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing
of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated
therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause
its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of
such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto.
Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex 3.1 (a
“Selling Shareholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing
Date or by the end of the fourth (4th) Trading Day following the date on which such Holder receives draft materials in accordance
with this Section.
3.2. (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant
to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration
Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence
from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein
which would constitute material non-public information regarding the Company), and (iv) comply in all material respects with the applicable
provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition
by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
3.3. If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Shares
then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to
the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such
Registrable Securities.
3.4. Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and,
in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to
a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings
for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding
for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company,
makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided,
however, that in no event shall any such notice contain any information which would constitute material, non-public information
regarding the Company and the Company agrees that the Holders shall not have any duty of confidentiality to the Company and shall not
have any duty to the Company not to trade on the basis of such non-material, public information.
3.5. Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
3.6. Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested
by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission, provided that any such item which is available on the EDGAR system (or
successor thereto) need not be furnished in physical form.
3.7. Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice pursuant to Section 3.4.
3.8. Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such
Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions
of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process in any such jurisdiction.
3.9. If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted
by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holder may request.
3.10. Upon
the occurrence of any event contemplated by Section 3.4, as promptly as reasonably possible under the circumstances taking into account
the Company’s good faith assessment of any adverse consequences to the Company and its shareholders of the premature disclosure
of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to
the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document
so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section
3.4 above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall
suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable. The Company shall be entitled to exercise its right under this Section 3.10 to suspend the availability of a Registration
Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2.4, for a period
not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.
3.11. Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at
any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof,
the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
3.12. The
Company shall use its best efforts to maintain eligibility for use of Form S-1/S-3 (or any successor form thereto) for the registration
of the resale of Registrable Securities.
3.13. The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of Common Share beneficially
owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the
Common Share. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request,
any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely
because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
4. Registration
Expenses. All fees and expenses incident to the performance of, or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with
the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Share is then listed for
trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance to be purchased at the sole discretion of the Company, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.
In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal
or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions
of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.
5. Indemnification.
5.1. Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Share), investment advisors and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title)
of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, members, shareholders, partners, agents and employees (and any other Persons with a functionally
equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person,
to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus
or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to
any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the
case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder,
in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such
untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution
of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement,
such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex 2.1.1 hereto for this
purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3.4(iii)-(vi), the use by such Holder of an
outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is
outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated
in Section 6.3. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any
Registrable Securities by any of the Holders in accordance with Section 6.7.
5.2. Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents
and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were
made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii)
to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Shareholder
Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex 2.1.1 hereto for this
purpose), such Prospectus or in any amendment or supplement thereto. In no event shall the liability of a selling Holder be greater in
amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this
Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission)
received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification
obligation.
5.3. Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified
Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of
any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such Proceeding. Subject to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten
Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying
Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by
a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification
hereunder.
5.4. Contribution.
If the indemnification under Section 5.1 or 5.2 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements
or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates
to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified
for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5.4 were determined by pro
rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section
5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may
have to the Indemnified Parties.
6. Miscellaneous.
6.1. Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including
recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder
agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach,
it shall not assert or shall waive the defense that a remedy at law would be adequate.
6.2. No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities
are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6.2 shall
not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.
6.3. Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3.4(iii) through (vi), such Holder will forthwith discontinue disposition
of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will
use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2.4.
6.4. Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form
S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if
within five (5) days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided,
however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 6.4 that are eligible
for resale pursuant to Rule 144 (without volume restrictions and provided the Company is in compliance with the current public information
requirement under Rule 144) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective
Registration Statement that is available for resales or other dispositions by such Holder.
6.5. Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of 50.1% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes
any Registrable Securities issuable upon exercise or conversion of any Security); provided that no such amendment, action or omission
that adversely affects, alters or changes the interests of any Holder in a manner disproportionate to the other Holders shall be effective
against such Holder without the prior written consent of such Holder. If a Registration Statement does not register all of the Registrable
Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities
to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which
of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that
does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable
Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 6.5. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the
same consideration also is offered to all of the parties to this Agreement.
6.6. Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.
6.7. Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder
without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement.
6.8. No
Inconsistent Agreements. The Company has not entered, as of the date hereof, nor shall the Company, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6.8, the Company
has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that
have not been satisfied in full.
6.9. Execution
and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
6.10. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
6.11. Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
6.12. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
6.13. Headings.
The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
6.14. Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any
other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken
by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges
that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations
or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out
of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such
purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company,
not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested
to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company
and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
[EFSH
Registration Rights Agreement Signature Pages Follow]
[EFSH
Registration Rights Agreement – Company Signature Page]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
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1847 HOLDINGS
LLC |
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By: |
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Name: |
Ellery W. Roberts |
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Title: |
Chief Executive Officer |
[EFSH
Registration Rights Agreement – Holder Signature Page]
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of Holder: |
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| Signature
of Authorized Signatory of Holder: |
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| Name of
Authorized Signatory: |
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| Title
of Authorized Signatory: |
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| Email
Address of Authorized Signatory: |
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ANNEX
B
SERIES
A WARRANT TO PURCHASE COMMON SHAREs
1847
HOLDINGS LLC
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Warrant
Shares: |
Initial Exercise
Date: October 30, 2024 |
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Issue Date: October 30, 2024 |
THIS
WARRANT TO PURCHASE COMMON SHARES (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 5:00 p.m. (New York City time) on October
30, 2029 (the “Termination Date”) but not thereafter, to subscribe for and purchase from 1847 Holdings LLC,
a limited liability company formed under the laws of the State of Delaware (the “Company”), up to ______ Common
Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price per Common Share under
this Series A Warrant (this “Warrant”) shall be equal to the Exercise Price, as defined in Section 2.2.
1.
Definitions. In addition to the terms defined elsewhere in this Warrant or in the Placement Agency Agreement, dated October
28, 2024, the following terms have the meanings indicated in this Section 1:
1.1
“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.
1.2
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported
on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
1.3
“Board of Directors” means the board of directors of the Company.
1.4
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.5
“Commission” means the United States Securities and Exchange Commission.
1.6
“Common Shares” means the Common Shares of the Company, no par value per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.
1.7
“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Shares, 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 Shares.
1.8
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.9
“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.
1.10
“Placement Agency Agreement” means the Placement Agency Agreement, dated as of October 28, 2024, between the
Company and Spartan Capital Securities, LLC, as amended, modified or supplemented from time to time in accordance with its terms.
1.11
“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333-282201).
1.12
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.13
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of NYSE
American (or any successor entity) from the shareholders of the Company, or board of directors in lieu thereof, with respect to issuance
of all of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.13.1.
to give full effect to alternative cashless exercises pursuant to Section 2.3 hereof.
1.13.2.
to consent to any adjustment to the exercise price or number of Common Shares underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.7.
1.14
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
1.15
“Trading Day” means a day on which the Common Shares are traded on a Trading Market.
1.16
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted
for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.17
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address
of 18 Lafayette Pl, Woodmere, NY 11598, and any successor transfer agent of the Company.
1.18
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such
date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares
are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
1.19
“Warrants” means this Warrant and other Common Shares purchase warrants issued by the Company pursuant to the
Registration Statement.
2.
Exercise.
2.1
Exercise of Warrant. Subject to the provisions of Section 2.5 herein, 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 of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially
in the form attached hereto as Exhibit 2.1 (the “Notice of Exercise”). Within the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2.4.1
herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant 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 2.3 below is specified in the applicable Notice of Exercise. For the avoidance of doubt, any reference
to cashless exercise herein shall include a reference to alternative cashless 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 on which 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) Trading
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.
Notwithstanding
the foregoing in this Section 2.1, a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing
this Warrant held in book-entry form through the Depository Trust Company or its nominee (“DTC”) (or another
established clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2.1 by delivering
to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures
to effect exercise that are required by DTC (or such other clearing corporation, as applicable).
2.2
Exercise Price. The exercise price per Warrant Share shall be $1.90, subject to adjustment hereunder (the “Exercise
Price”).
2.3
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 or the resale of the Warrant Shares by 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 2.1 hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b) 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 Shares 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 (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2.1 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 2.1 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, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. Assuming (i) the Holder is not an Affiliate
of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities Act with respect to Holder and
the Warrant Shares are met in the case of such a cashless exercise, the Company agrees that the Company will cause the removal of the
legend from such Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent
at its own expense to ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares
issuable upon the exercise of the Warrant prior to removing the legend. The Company agrees not to take any position contrary to this
Section 2.3.
The
Holder may also effect an “alternative cashless exercise” following Shareholder Approval (if required). In such event, the
aggregate number of Warrant Shares issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing to
effect an alternative cashless exercise shall equal the product of (i) the aggregate 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, multiplied by (ii) 2.0. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2.3 (including an alternative cashless exercise pursuant
to this paragraph). Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised
via cashless exercise pursuant to this Section 2.3.
2.4
Mechanics of Exercise.
2.4.1.
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 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver the aggregate Exercise
Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 Shares on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date 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, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date
of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior
to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the
Placement Agency Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time)
on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery
Date.
2.4.2.
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.
2.4.3.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however,
that the Holder shall be required to return any Warrant Shares subject to any such rescinded exercise notice concurrently with the return
to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to
acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
2.4.4.
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 2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder
to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means 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, Common Shares 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 Common Shares 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Shares 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 Common Shares upon exercise of the
Warrant as required pursuant to the terms hereof.
2.4.5.
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.
2.4.6.
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 as Exhibit 2.4.6 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.
2.4.7.
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
2.5
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 Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall
include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but
shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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
unconverted portion of any other securities of the Company (including, without limitation, any other Common Share 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding Common Shares, a Holder may rely
on the number of outstanding Common Shares 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 Common Shares outstanding. Upon the written or oral request of a Holder, the Company
shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case,
the number of outstanding Common Shares 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
Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect to the issuance
of Common Shares 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 2.5, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held
by the Holder and the provisions of this Section 2.5 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 2.5 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.
3.
Certain Adjustments.
3.1
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or
otherwise makes a distribution or distributions of Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares any shares 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 Common Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares
outstanding immediately after such event, and the number of Common 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 3.1
shall become effective immediately after the record date for the determination of shareholders 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.
3.2
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company
grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to
all (or substantially all) of the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that,
to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder 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 Common Shares 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).
3.3
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 all (or substantially all) holders of Common Shares, 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) (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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder 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 Common Shares 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.
3.4
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 or
any Subsidiary, directly or indirectly, effects any sale, lease, 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 Shares 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 Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory
share exchange pursuant to which the Common Shares are 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, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or
more of the voting power of the common equity of the Company (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 2.5 on the exercise of this Warrant), the number of Common Shares 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 Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 Common Share 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 Shares 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, 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 (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of
this Warrant, that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Shares are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Shares will be deemed to have received Common Shares /shares of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this
Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated 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 contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1)
100% and (2) the 100 day volatility as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) 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 (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or
the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to this Section 3.4 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable
contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow.
The
payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within
the later of (i) five (5) Business Days after the Holder’s election and (ii) the date of consummation 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 in accordance with the provisions
of this Section 3.7 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 that is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the Common Shares 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 Common Shares prior 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 be added to
the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant referring to the “Company” shall refer instead to each of the Company and the Successor
Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the
Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume
all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity
or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled
to the benefits of the provisions of this Section 3.4 regardless of (i) whether the Company has sufficient authorized Common Shares
for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
3.5
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 Common Shares deemed to be issued and outstanding as of
a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
3.6
Notice to Holder.
3.6.1.
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 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.
3.6.2.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C)
the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares
of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer
of all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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.
3.7
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, if at any time
and from time to time on or after the Issue Date there occurs any share split, share dividend, share combination or reverse share split,
recapitalization, or other similar transaction involving the Common Shares (each, a “Share Combination Event,”
and such date thereof, the “Share Combination Event Date”) and the lowest VWAP during the period commencing
five (5) consecutive Trading Days immediately preceding and the five (5) consecutive Trading Days commencing on the Share Combination
Event Date (the “Event Market Price”) (provided if the Share Combination Event is effective after the close
of trading on the primary Trading Market, then commencing on the next Trading Day which period shall be the “Share Combination
Adjustment Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in Section 3.1
above), then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise
Price then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number
of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issue Date for
the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise Price in this
Section 3.7 shall not reduce the Exercise Price below the Floor Price (as defined below); provided further that notwithstanding the foregoing,
if one or more Share Combination Events occurred prior to obtaining Shareholder Approval (if required), then effective upon Shareholder
Approval, the Exercise Price will automatically be reduced to equal the greater of (x) the lowest Event Market Price with respect to
any Share Combination Event that occurred prior to obtaining Shareholder Approval, and (y) the Floor Price, and in any such event the
number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issue Date
for the Warrant Shares then outstanding shall remain unchanged. For the avoidance of doubt, (i) if the adjustment in the immediately
preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant
is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such portion of this
Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended
on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date
will be the lowest VWAP of the Common Shares immediately during such the Share Combination Adjustment Period prior to such Exercise Date
and ending on, and including the Trading Day immediately prior to such Exercise Date and (ii) all adjustments pursuant to this Section
3.7 shall also be subject to Section 3.1 above, including any Event Market Price. Notwithstanding anything herein to the contrary,
the “aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be based on the aggregate
Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate Exercise Price resulting
from a reduction in the Exercise Price without a proportionate increase in the number of Warrant Shares (i.e., pursuant to this Section
3.7 or otherwise).
3.8
Subsequent Equity Sales. Soley in the event that the offering contemplated by the Placement Agency Agreement is not deemed
to qualify as a “public offering” under Rule 713 of the NYSE American Company Guide, then the provisions of this Section
3.8 shall apply. In such case, if at any time while this Warrant is outstanding (such period, the “Adjustment Period”),
the Company issues, sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to
sell, or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant, or any option to purchase
or other disposition), or, in accordance with this Section 3.8, is deemed to have issued or sold, any Common Shares or Common Share Equivalents
for a consideration per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect
immediately prior to such issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then simultaneously with the consummation (or,
if earlier, the announcement) of such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount (the “New
Exercise Price”) equal to the lower of (A) the New Issuance Price and (B) the lowest VWAP during the five (5) consecutive
Trading Days immediately following the Dilutive Issuance (such lower price, the “Base Share Price”) and the
number of Warrant Shares issuable hereunder shall be proportionately increased such that the aggregate Exercise Price of this Warrant
on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged; provided that the Base Share Price shall not be
less than the Floor Price. Notwithstanding the foregoing, if one or more Dilutive Issuances occurred prior to obtaining Shareholder Approval
(if required), then effective upon Shareholder Approval, the Exercise Price will automatically be reduced to equal the greater of (x)
lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to obtaining Shareholder Approval and (B) the Floor
Price, and in any such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price
of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged. If the Company enters into a Variable
Rate Transaction (as defined in the Purchase Agreement; provided, that, with respect to a Variable Rate Transaction that is an equity
line of credit or an “at-the-market offering”, this Section 3.8 shall apply to any issuances of Common Shares or Common Share
Equivalents thereunder rather than the entry into the agreement with respect thereto), the Company shall be deemed to have issued Common
Shares or Common Share Equivalents at the lowest possible price, conversion price, or exercise price at which such securities may be
issued, converted, or exercised. Notwithstanding the foregoing, no adjustments shall be made, paid, or issued under this Section 3.8
in respect of an Exempt Issuance (as defined in the Purchase Agreement). For the avoidance of doubt, in the event the Exercise Price
has been adjusted pursuant to this Section 3.8 and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated,
is unwound, or is canceled after the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise
Price that would have been in effect if such Dilutive Issuance had not occurred or been consummated. For all purposes of the foregoing,
the following shall be applicable:
3.8.1.
Issuance of Options. If, during the Adjustment Period, the Company in any manner grants or sells any options to purchase Common
Shares (“Options”) and the lowest price per share for which one Common Share is issuable upon the exercise
of any such Option or upon conversion, exercise, or exchange of any convertible securities (“Convertible Securities”)
issuable upon exercise of any such Option (such Common Shares issuable upon such exercise of any Option or upon conversion, exercise,
or exchange of any Convertible Securities, the “Convertible Securities Shares”) is less than the Applicable
Price, then such Common Shares shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting
or sale of such Option for such price per share. For purposes of this Section 3.8.1, the “lowest price per share for which one
Common Share is issuable upon the exercise of any such Option or upon conversion, exercise, or exchange of any Convertible Securities
issuable upon exercise of any such Option” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received
or receivable by the Company with respect to any one Convertible Securities Share upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise, or exchange of any Convertible Security issuable upon exercise of such Option and (2) the
lowest exercise price set forth in such Option for which one Convertible Securities Share is issuable upon the exercise of any such Option
or upon conversion, exercise, or exchange of any Convertible Securities issuable upon exercise of any such Option, minus (B) the sum
of all amounts paid or payable to the holder of such Option (or any other Person), with respect to any one Convertible Securities Share,
upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise, or exchange of any Convertible
Security issuable upon exercise of such Option plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Option (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated below,
no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such Convertible Securities Share upon conversion, exercise,
or exchange of such Convertible Securities.
3.8.2.
Issuance of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise, or exchange
thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes
of this Section 3.8.2, the “lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable
by the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible Security and upon conversion,
exercise, or exchange of such Convertible Security and (2) the lowest conversion price set forth in such Convertible Security for which
one Convertible Securities Share is issuable upon conversion, exercise, or exchange thereof, minus (B) the sum of all amounts paid or
payable to the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share, upon
the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share upon conversion,
exercise, or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this Section 3.8.2,
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issue or sale.
3.8.3.
Change in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided for
in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise, or exchange of any Convertible Securities,
or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for Common Shares increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to
in Section 3.1, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued, or sold.
For purposes of this Section 3.8.3, if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the Convertible Securities Share deemed issuable upon exercise, conversion, or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3.8.3 shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.
3.8.4.
Calculation of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or
sale or deemed issuance or sale of any other securities of the Company (the “Primary Security,” and such Option
or Convertible Security, the “Secondary Securities” and together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share with respect to such Primary Security shall be
deemed to be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security,
the lowest price per share for which one Common Share is at any time issuable upon the exercise or conversion of the Primary Security
in accordance with Section 3.8.1 or 3.8.2 above and (z) the lowest VWAP of the Common Shares on any Trading Day during the five (5) consecutive
Trading Days immediately following the consummation (or, if applicable, the announcement) of such Dilutive Issuance (for the avoidance
of doubt, if such public announcement, if applicable, is released prior to the opening of the Principal Market on a Trading Day, such
Trading Day shall be the first Trading Day in such five (5) Trading Day period and if this Warrant is exercised on any given Exercise
Date during any such period, the Holder may elect to earlier end such period (including, solely with respect to such portion of this
Warrant exercised on such applicable Exercise Date)). If any Common Shares, Options, or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of cash received
by the Company therefor. If any Common Shares, Options, or Convertible Securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any Common Shares, Options, or Convertible Securities are issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Shares, Options or Convertible
Securities (as the case may be). The fair market value of any consideration other than cash or publicly traded securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair market value of such consideration will be determined
within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
3.9
Shareholder Approval. If required, the Company shall seek Shareholder Approval in the time period and the manner provided
in the Purchase Agreement.
3.10
Floor Price. Notwithstanding anything in Section 3 to the contrary, the Holder shall not be entitled to utilize an Exercise
Price of less than $0.10 per Warrant Share (the “Floor Price”).
4.
Transfer of Warrant.
4.1
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) 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
as Exhibit 2.4.6 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 on which 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.
4.2
New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), 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 4.1, 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.
4.3
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.
5.
Miscellaneous.
5.1
No Rights as Shareholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein,
in no event shall the Company be required to net cash settle an exercise of this Warrant.
5.2
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.
5.3
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.
5.4
Authorized Shares.
5.4.1.
Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Shares a sufficient number of Common 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 Shares 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 (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2.
Non circumvention. Except and to the extent as waived or consented to by the Holders of a majority in interest of the Warrants
then outstanding, the Company shall not by any action, including, without limitation, amending its certificate of formation 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.
5.4.3.
Authorizations, Exemptions and Consents. Before taking any action that 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.
5.5
Governing Law. 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 Warrant 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. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6
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.
5.7
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, notwithstanding the fact
that the right to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver
by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission
thereunder. Without limiting any other provision of this Warrant, 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.
5.8
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 590 Madison Avenue, 21st Floor New York, NY 10022, Attention: Ellery W. Roberts, Chief
Executive Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each
Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered
via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in
this Section 5.8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.
5.9
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 Shares or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.10
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.
5.11
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 to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
5.12
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holders of a majority in interest of the Warrants then outstanding, on the other hand.
5.13
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.
5.14
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.
********************
[Investor
Series A Warrant Signature Page Follows]
[Investor
Series A Warrant Signature Page]
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.
| |
1847 HOLDINGS LLC |
| |
|
|
| |
By: |
|
| |
Name: |
Ellery W. Roberts |
| |
Its: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXRCISE
| 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.
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2.3, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3.
| 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
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
Common Shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| Address: |
|
| Phone Number: |
|
| Email Address: |
|
| Date: |
|
| Holder’s Signature |
|
| Holder’s Address |
|
SERIES
B WARRANT TO PURCHASE COMMON SHARES
1847
HOLDINGS LLC
Warrant
Shares: |
Initial Exercise
Date: October 30, 2024 |
| |
Issue Date: October 30, 2024 |
THIS
WARRANT TO PURCHASE COMMON SHARES (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 5:00 p.m. (New York City time) on October
30, 2029 (the “Termination Date”) but not thereafter, to subscribe for and purchase from 1847 Holdings LLC,
a limited liability company formed under the laws of the State of Delaware (the “Company”), up to _____ Common
Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one (1) Common Share
under this Series B Warrant (this “Warrant”) shall be equal to the Exercise Price, as defined in Section 2.2.
1.
Definitions. In addition to the terms defined elsewhere in this Warrant or in the Placement Agency Agreement, dated October
28, 2024, the following terms have the meanings indicated in this Section 1:
1.1
“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.
1.2
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a)
if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the
nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported
on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Shares so reported, or (d) in all other cases, the fair market value of a Common Shares as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
1.3
“Board of Directors” means the board of directors of the Company.
1.4
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1.5
“Commission” means the United States Securities and Exchange Commission.
1.6
“Common Shares” means the Common Shares of the Company, no par value per share, and any other class of securities
into which such securities may hereafter be reclassified or changed.
1.7
“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Shares, 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 Shares.
1.8
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.9
“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.
1.10
“Placement Agency Agreement” means the placement agency agreement, dated as of October 28, 2024, between the
Company and Spartan Capital Securities, LLC, as amended, modified or supplemented from time to time in accordance with its terms.
1.11
“Registration Statement” means the Company’s registration statement on Form S-1 (File No. 333-282201).
1.12
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.13
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of NYSE
American (or any successor entity) from the shareholders of the Company, or board of directors in lieu thereof, with respect to issuance
of all of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.13.1.
to give full effect to the adjustment in the exercise price and number of Warrant Shares following a Dilutive Issuance pursuant to
Section 3.2.
1.13.2.
to consent to any adjustment to the exercise price or number of Common Shares underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.8.
1.13.3.
to consent to the voluntary adjustment, from time to time, of the exercise price of any and all currently outstanding warrants pursuant
to Section 3.9.
1.14
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
1.15
“Trading Day” means a day on which the Common Shares are traded on a Trading Market.
1.16
“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted
for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.17
“Transfer Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address
of 18 Lafayette Pl, Woodmere, NY 11598, and any successor transfer agent of the Company.
1.18
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional Common Shares either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future determined price.
1.19
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if
the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such
date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares
are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined
by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
1.20
“Warrants” means this Warrant and other Common Shares purchase warrants issued by the Company pursuant to the
Registration Statement.
2.
Exercise.
2.1
Exercise of Warrant. Subject to the provisions of Section 2.5 herein, 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 of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially
in the form attached hereto as Exhibit 2.1 (the “Notice of Exercise”). Within the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2.4.1
herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant 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 2.3 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 on which 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) Trading
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.
Notwithstanding
the foregoing in this Section 2.1, a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this
Warrant held in book-entry form through the Depository Trust Company or its nominee (“DTC”) (or another established
clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2.1 by delivering to DTC
(or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect
exercise that are required by DTC (or such other clearing corporation, as applicable).
2.2
Exercise Price. The exercise price per Warrant Share shall be $2.52, subject to adjustment hereunder (the “Exercise
Price”).
2.3
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 or the resale of the Warrant Shares by 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 2.1 hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b) 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 Shares 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 (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2.1 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 2.1 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, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. Assuming (i) the Holder is not an Affiliate
of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities Act with respect to Holder and
the Warrant Shares are met in the case of such a cashless exercise, the Company agrees that the Company will cause the removal of the
legend from such Warrant Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent
at its own expense to ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares
issuable upon the exercise of the Warrant prior to removing the legend. The Company agrees not to take any position contrary to this
Section 2.3.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2.3.
2.4
Mechanics of Exercise.
2.4.1.
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 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) 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) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver the aggregate Exercise
Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 Shares on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date 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, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date
of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior
to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the
Placement Agency Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time)
on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery
Date.
2.4.2.
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.
2.4.3.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however,
that the Holder shall be required to return any Warrant Shares subject to any such rescinded exercise notice concurrently with the return
to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to
acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
2.4.4.
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 2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder
to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means 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, Common Shares 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 Common Shares 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares 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 Common Shares upon exercise of the
Warrant as required pursuant to the terms hereof.
2.4.5.
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.
2.4.6.
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 as Exhibit 2.4.6 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.
2.4.7.
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
2.5
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 Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall
include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but
shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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
unconverted portion of any other securities of the Company (including, without limitation, any other Common Share 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding shares of Common Share,
a Holder may rely on the number of outstanding Common Shares 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 Common Shares outstanding. Upon the written or oral request of a Holder,
the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding.
In any case, the number of outstanding Common Shares 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 Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election
by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect
to the issuance of Common Shares 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 2.5, provided that the Beneficial Ownership Limitation in no
event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon
exercise of this Warrant held by the Holder and the provisions of this Section 2.5 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 2.55 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.
3.
Certain Adjustments.
3.1
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or
otherwise makes a distribution or distributions of Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares 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 Common
Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of Common Shares 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 3.1
shall become effective immediately after the record date for the determination of shareholders 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.
3.2
Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding,
shall sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any
right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition)
any Common Shares or Common Share Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower
price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”)
(it being understood and agreed that if the holder of the Common Shares or Common Share Equivalents or such other securities so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive
Common Shares at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for
less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation
(or, if earlier, the announcement (provided such Dilutive Issuance occurs)) of each Dilutive Issuance the Exercise Price shall be reduced
and only reduced to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that the
aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate
Exercise Price on the Issuance Date. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section
3.2 in respect of an Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance
or deemed issuance of any Common Shares or Common Share Equivalents subject to this Section 3.2, indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this
Section 3.2, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the
Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If the Company
enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Shares or Common Share Equivalents at the
lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised.
3.3
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company
grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to
all (or substantially all) of the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that,
to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder 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 Common Shares 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).
3.4
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 all (or substantially all) holders of Common Shares, 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) (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 Common Shares 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 Common Shares are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder 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 Common Shares 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.
3.5
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 or
any Subsidiary, directly or indirectly, effects any sale, lease, 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 Shares 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 Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory
share exchange pursuant to which the Common Shares are 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, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or
more of the voting power of the common equity of the Company (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 2.5 on the exercise of this Warrant), the number of Common Shares 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 Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 s Common Share 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 Shares 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, 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 (as defined below) of the remaining unexercised portion of
this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction
is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be
entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at
the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Shares of
the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination
thereof, or whether the holders of Common Shares are given the choice to receive from among alternative forms of consideration in connection
with the Fundamental Transaction; provided, further, that if holders of Common Shares of the Company are not offered or paid any consideration
in such Fundamental Transaction, such holders of Common Shares will be deemed to have received Common Share/shares of the Successor Entity
(which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes
Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable contemplated
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 contemplated Fundamental Transaction and the
Termination Date, (B) an expected volatility equal to the greater of (1) 100% and (2) the 100 day volatility as obtained from the HVT
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement
of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater
of (i) 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 (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the public
announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if
earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3.5 and (D) a remaining option time
equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination
Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds
(or such other consideration) within the later of (i) five (5) Business Days after the Holder’s election and (ii) the date of consummation
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 in accordance with the provisions of this Section 3.5 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 that is exercisable for a corresponding number of shares of capital stock
of such Successor Entity (or its parent entity) equivalent to the Common Shares 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 Common
Shares prior 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 be added to the term “Company” under this Warrant (so that from and after the occurrence
or consummation of such Fundamental Transaction, each and every provision of this Warrant referring to the “Company” shall
refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity
or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the
Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant with the same
effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein.
For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.5 regardless of (i) whether
the Company has sufficient authorized Common Shares for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction
occurs prior to the Initial Exercise Date.
3.6
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 Common Shares deemed to be issued and outstanding as of
a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
3.7
Notice to Holder.
3.7.1.
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 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.
3.7.2.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C)
the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares
of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Share, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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.
3.8
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, if at any time and from
time to time on or after the Issue Date there occurs any share split, share dividend, share combination recapitalization or other similar
transaction involving the Common Shares (each, a “Share Combination Event”, and such date thereof, the “Share
Combination Event Date”) and the lowest VWAP during the period commencing Five (5) consecutive Trading Days immediately
preceding and the Five (5) consecutive Trading Days immediately following the Share Combination Event Date (the “Event Market
Price”) (provided if the Share Combination Event is effective after close of Trading on the primary Trading Market, then
commencing on the next Trading Day which period shall be the “Share Combination Adjustment Period”) is less
than the Exercise Price then in effect (after giving effect to the adjustment in clause 3.1 above), then at the close of trading
on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth
(5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price of this Warrant on the Issue Date for the Warrant Shares then outstanding shall
remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise Price in this Section 3.8 shall not reduce the Exercise
Price below the Floor Price (as defined below); provided further that notwithstanding the foregoing, if one or more Share Combination
Events occurred prior to obtaining Shareholder Approval (if required), then effective upon Shareholder Approval, the Exercise Price will
automatically be reduced to equal the greater of (x) the lowest Event Market Price with respect to any Share Combination Event that occurred
prior to obtaining Shareholder Approval, and (y) the Floor Price, and in any such event the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price of this Warrant on the Issue Date for the Warrant Shares then outstanding shall
remain unchanged. For the avoidance of doubt, (i) if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any given Exercise Date during
the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable Exercise Date,
such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior
to such Exercise Date and the Event Market Price on such applicable Exercise Date will be the lowest VWAP of the Common Shares immediately
during such the Share Combination Adjustment Period prior to such Exercise Date and ending on, and including the Trading Day immediately
prior to such Exercise Date, and (ii) all adjustments pursuant to this Section 3.8 shall also be subject to Section 3.1 above, including
any Event Market Price. Notwithstanding anything herein to the contrary, the “aggregate Exercise Price” used in the determination
of the increase in Warrant Shares above shall be based on the aggregate Exercise Price on the Closing Date (reduced ratably for prior
exercises), and shall not be based on an aggregate Exercise Price resulting from a reduction in the Exercise Price without a proportionate
increase in the number of Warrant Shares (i.e., pursuant to this Section 3.8 or otherwise).
3.9
Voluntary Adjustment by Company. Subject to the rules and regulations of the Trading Market and the consent of the Holders
of a majority in interest of the Warrants then outstanding, the Company may at any time during the term of this Warrant reduce the then
current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors.
3.10
Shareholder Approval. If required, the Company shall seek Shareholder Approval (which may also be at the annual meeting
of shareholders) within the time period and the manner provided in the Purchase Agreement.
3.11
Floor Price. Notwithstanding anything in Section 3 to the contrary, the Holder shall not be entitled to utilize an Exercise
Price of less than $0.10 per Warrant Share (the “Floor Price”).
4.
Transfer of Warrant.
4.1
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) 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
as Exhibit 2.4.6 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 on which 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.
4.2
New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), 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 4.1, 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.
4.3
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.
5.
Miscellaneous.
5.1
No Rights as Shareholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein,
in no event shall the Company be required to net cash settle an exercise of this Warrant.
5.2
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.
5.3
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.
5.4
Authorized Shares.
5.4.1.
Reservation of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Shares a sufficient number of Common 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 Shares 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 (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2.
Non circumvention. Except and to the extent as waived or consented to by the Holders of a majority in interest of the Warrants
then outstanding, the Company shall not by any action, including, without limitation, amending its certificate of formation 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.
5.4.3.
Authorizations, Exemptions and Consents. Before taking any action that 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.
5.5
Governing Law. 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 Warrant 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. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6
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.
5.7
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, notwithstanding the fact
that the right to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver
by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission
thereunder. Without limiting any other provision of this Warrant, 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.
5.8
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 590 Madison Avenue, 21st Floor New York, NY 10022, Attention: Ellery W. Roberts, Chief
Executive Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each
Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered
via e-mail at the e-mail address set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in
this Section 5.8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K.
5.9
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 Shares or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.10
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.
5.11
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 to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
5.12
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holders of a majority in interest of the Warrants then outstanding, on the other hand.
5.13
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.
5.14
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.
********************
[Investor
Series B Warrant Signature Page Follows]
[Investor
Series B Warrant Signature Page]
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.
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1847 HOLDINGS LLC |
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By: |
|
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Name: |
Ellery W. Roberts |
| |
Its: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXRCISE
| 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.
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2.3, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3.
| 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
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
Common Shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| Address: |
|
| Phone Number: |
|
| Email Address: |
|
| Date: |
|
| Holder’s Signature |
|
| Holder’s Address |
|
ANNEX
C
1847
HOLDINGS LLC
AMENDMENT
NO. 4 TO
SECOND
AMENDED AND RESTATED OPERATING AGREEMENT
This
AMENDMENT NO. 4 TO SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this “Amendment”) of 1847 Holdings LLC,
a Delaware limited liability company (the “Company”), shall be effective as of [ ], 2025, and is entered into
by 1847 Partners LLC, as the Manager. Capitalized terms used, but not otherwise defined, in this Amendment have the meanings ascribed
to them in the Second Amended and Restated Operating Agreement of the Company, dated January 19, 2018, as amended (the “Operating
Agreement”).
BACKGROUND
A.
Section 3.2(a) of the Operating Agreement provides that the number of Common Shares that the Company is authorized to issue may be increased
from time to time by an amendment to the Operating Agreement upon the adoption of a resolution by the affirmative vote of at least a
majority of the Entire Board of Directors declaring such amendment to be advisable and the approval of such amendment by the affirmative
vote of the holders of a majority of the Common Shares then Outstanding present in person or represented by proxy at a meeting of the
Members.
B.
On December 30, 2024, the Entire Board of Directors unanimously adopted resolutions by written consent that authorized and approved this
Amendment to amend Section 3.2(a) of the Operating Agreement to increase the number of Common Shares that the Company is authorized to
issue.
C.
On the date hereof, the Company held a special meeting of Members at which a majority of the Common Shares present in person or represented
by proxy approved this Amendment.
AGREEMENT
Accordingly,
the Operating Agreement is hereby amended as follows:
1.
Amendment to Section 3.2(a). The first sentence of Section 3.2(a) of the Operating Agreement is hereby amended and restated in
its entirety to read as follows:
“The
Company and the Board of Directors, by resolution on behalf of the Company, are authorized to issue up to Two Billion (2,000,000,000)
Common Shares in one or more series.”
2.
No Other Changes. All terms and provisions of the Operating Agreement shall otherwise remain valid, binding and unchanged.
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Amendment as of the date and year
set forth above.
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1847 PARTNERS LLC |
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By: |
|
| |
Name: |
Ellery W. Roberts |
| |
Title: |
Manager |
ANNEX
D
AMENDMENT
NO. 3
TO
1847
HOLDINGS LLC
2023
EQUITY INCENTIVE PLAN
The
1847 Holdings LLC 2023 Equity Incentive Plan, as amended (the “Plan”), is hereby amended as follows:
The
first sentence of Section 4.1 of the Plan is hereby amended in its entirety to read as follows:
“Subject
to adjustment as provided in Section 4.3 herein, the maximum number of Shares available for issuance to Participants under the Plan shall
be 5,000,000 Shares.”
Except
as herein amended, the provisions of the Plan shall remain in full force and effect.
Effective
as of [ ], 2025
1847 (AMEX:EFSH)
Historical Stock Chart
From Dec 2024 to Jan 2025
1847 (AMEX:EFSH)
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From Jan 2024 to Jan 2025
