THIS WARRANT AND THE SHARES ISSUABLE
UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE SET
FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF FEBRUARY , 2018 (THE “SECURITIES PURCHASE AGREEMENT”),
NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN
COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT, THE SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY.
Right to Purchase _______
shares of Common Stock, par value $0.001 per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT,
for value received, ___________________ (“Holder”) or its assigns, is entitled to purchase from Adial Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), at any time or from time to time during the period specified in Paragraph 2
hereof and subject to adjustment as provided herein, _________ fully paid and nonassessable shares of the Company’s
Common Stock, par value $0.001 per share (the “Common Stock”), at an exercise price per share equal to $________ per
share of Common Stock (the “Exercise Price”). The term “Warrant Shares,” as used herein, refers to the
shares of Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price are subject to adjustment as provided in
Paragraph 4 hereof. The term “Warrant” means this Stock Purchase Warrant issued pursuant to that certain Securities
Purchase Agreement, dated ___________ __, 2018, by and among the Company and the Investor listed on the execution page thereof
(the “Securities Purchase Agreement”). In addition to the terms and conditions set forth herein, this Warrant is subject
to the terms and conditions of the Securities Purchase Agreement.
This Warrant is subject to the following
terms, provisions, and conditions:
of Exercise; Issuance of Certificates; Payment for Shares. Subject
to the provisions hereof, this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant, together
with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”), to the Company during normal
business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company
as it may designate by notice to the Holder), and upon payment to the Company in cash, by certified or official bank check or by
wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or
by “cashless exercise” as provided below. The Warrant Shares so purchased shall be deemed to be issued to the Holder
or such Holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such
shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified
in the Exercise Agreement, shall be delivered to the Holder within a reasonable time, not exceeding three (3) business days, after
this Warrant shall have been so exercised. If this Warrant shall have been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Holder a new Warrant representing
the number of shares with respect to which this Warrant shall not then have been exercised.
This Warrant may also
be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
||the average VWAP on the thirty (30) Trading Days immediately preceding the date on which Holder elects to exercise this Warrant
by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;|
||the Exercise Price of this Warrant, as adjusted; and|
||the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of
a cash exercise rather than a cashless exercise.|
means, for any Trading Day, the price determined by the first of the following clauses that applies: (a) if Common Stock is then
traded or quoted on the Trading Market, the daily volume weighted average price of Common Stock for such Trading Day on the Trading
Market; (b) if Common Stock is not then traded or quoted on the Trading Market and if prices for Common Stock are then reported
in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of Common Stock so reported as of such Trading Day; or (c) in all other
cases, the fair market value of a share of Common Stock as of such Trading Day, as determined by an independent appraiser selected
in good faith by the Holder and reasonably acceptable to the Company.
means, at any time, a day on which the Trading Market is open for the general trading or quotation of securities and Common Stock
is traded or quoted thereon or, if Common Stock is not then traded or quoted on the Trading Market, a business day.
means, at any time, the securities exchange, quotation system or over-the-counter trading facility on which Common Stock is principally
traded or quoted at such time.
of Exercise. This Warrant is exercisable at any
time or from time to time on or after the date on which this Warrant is issued and delivered pursuant to the terms of the Securities
Purchase Agreement and before 5:00 p.m., New York, New York time on the fifth (5th) anniversary of the date of issuance (the “Exercise
Agreements of the Company. The Company hereby
covenants and agrees as follows:
(a) Shares to
be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued,
fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof.
of Shares. During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise in full of this
and Assigns. This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition
of all or substantially all the Company’s assets.
Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time to time as provided in this Paragraph 4.
In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a cent, such Exercise Price shall be rounded up to
the nearest cent.
or Combination of Common Stock. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a greater number of shares,
then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the
date of record for effecting such combination, the Exercise Price in effect immediately prior to such combination will be proportionately
in Number of Warrant Shares. Upon each adjustment of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of Warrant Shares issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.
Merger or Sale. In case of any consolidation of the Company with, or merger of the Company into any other corporation or
other entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection
with a plan of complete liquidation of the Company, then as a condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the Holder of this Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as would be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of this Warrant in connection with such consolidation, merger or sale or conveyance.
In any such case, the Company will make appropriate provision to insure that the provisions of this Paragraph 4 hereof will thereafter
be applicable as nearly as may be in relation to any shares of stock or securities thereafter deliverable upon the exercise of
this Warrant. The Company will not effect any consolidation, merger or sale or conveyance unless prior to the consummation thereof,
the successor corporation or other entity (if other than the Company) assumes by written instrument the obligations under this
Paragraph 4(c) and the obligations to deliver to the Holder of this Warrant such shares of stock, securities or assets as, in accordance
with the foregoing provisions, the Holder may be entitled to acquire.
Tax. The issuance of certificates for Warrant
Shares upon the exercise of this Warrant shall be made without charge to the Holder of this Warrant or such shares for any issuance
tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder of this Warrant.
Rights or Liabilities as a Shareholder. This
Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company. No provision of this
Warrant, in the absence of affirmative action by the Holder to purchase Warrant Shares, and no mere enumeration herein of the rights
or privileges of the Holder, shall give rise to any liability of such Holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of the Company.
Exchange, and Replacement of Warrant.
on Transfer. This Warrant and the rights granted to the Holder are transferable, in whole or in part, upon surrender of
this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company,
provided, however, that any transfer or assignment shall be subject to the conditions set forth in Paragraph 7(f) hereof and to
the applicable provisions of the Securities Purchase Agreement. Until due presentment for registration of transfer on the books
of the Company, the Company may treat the registered Holder as the owner and Holder for all purposes, and the Company shall not
be affected by any notice to the contrary. Notwithstanding the above, Holder may subdivide this warrant (i.e. transfer it in part)
no more than 3 times without the written consent of the Company in its sole discretion.
Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
office or agency of the Company, for new Warrants of like tenor representing in the aggregate the right to purchase the number
of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number
of shares as shall be designated by the Holder at the time of such surrender.
of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided
in this Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all taxes (other than securities
transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the Holder or transferees) and charges payable
in connection with the preparation, execution, and delivery of Warrants pursuant to this Paragraph 7.
The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to the Holder), a register for this Warrant, in which the Company shall record the name and address of the person in
whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.
or Transfer Without Registration. If, at the time of the surrender of this Warrant in connection with any exercise, transfer,
or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be
registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities
or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the Holder
or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel
are reasonably acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration
under said Act and under applicable state securities or blue sky laws, (ii) that the Holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited
investor” as defined in Rule 501(a) promulgated under the Securities Act; provided that no such opinion, letter or status
as an “accredited investor” shall be required in connection with a transfer pursuant to Rule 144 under the Securities
Act. The first holder of this Warrant, by taking and holding the same, represents to the Company that such holder is acquiring
this Warrant for investment and not with a view to the distribution thereof. In no event shall the Holder be permitted to assign
the Warrant unless provided with express written consent by the Company.
All notices, requests, and other communications required
or permitted to be given or delivered hereunder to the Holder of this Warrant shall be in writing, and shall be personally delivered,
or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such
holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or
delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered
mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company at the address set forth
in the Securities Purchase Agreement, or at such other address as shall have been furnished to the Holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as
provided above. All notices, requests, and other communications shall be deemed to have been given either at the time of the receipt
thereof by the person entitled to receive such notice at the address of such person for purposes of this Paragraph 9, or, if mailed
by registered or certified mail or with a recognized overnight mail courier upon deposit with the United States Post Office or
such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be.
Law. THIS WARRANT SHALL BE ENFORCED,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT,
THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY
IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE
ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING
PARTY IN CONNECTION WITH SUCH DISPUTE.
Waivers. No purported amendment to any provision of this Warrant shall be binding on the parties unless each party has
duly executed and delivered to the other party a written instrument which states that it constitutes an amendment to this Warrant
and specifies the provision(s) hereof that are being amended. No purported waiver of any provision of this Warrant shall be binding
on any party unless it has duly executed and delivered to the other party a written instrument which states that it constitutes
a waiver of one or more provisions of this Warrant and specifies the provision(s) hereof that are being waived. Any such waiver
shall be effective only to the extent specifically set forth in such written instrument. No waiver of any right, power or remedy
of a party shall be deemed to be a waiver of any other right, power or remedy of such party or shall, except to the extent so waived,
impair, limit or restrict the exercise of such right, power or remedy.
Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions hereof.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Warrant, that the Holder shall be entitled, in addition to all other available remedies at
law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or
curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has
caused this Warrant to be signed by its duly authorized officer.
Dated as of February __, 2018
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 20__
The undersigned, pursuant
to the provisions set forth in the within Warrant, hereby agrees to purchase ________ shares of Common Stock covered by such Warrant.
The undersigned intends that payment of the Exercise Price shall be made as (check one):
____ “cash exercise” in the
amount of $_________
____ “cashless exercise” pursuant
to Section 1 of the Warrant.
Please issue a certificate or certificates
for such shares of Common Stock in the name of and pay any cash for any fractional share to:
above signature should correspond exactly with the name on the face of the within Warrant, if applicable.|
FORM OF ASSIGNMENT
FOR VALUE RECEIVED,
the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to
the number of shares of Common Stock covered thereby set forth hereinbelow, to:
|Name of Assignee
||No of Shares|
, and hereby irrevocably constitutes and appoints ___________________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full power of substitution
in the premises.
Dated: ________ __, 20__
|In the presence
of Signing Officer or Agent (if any):
above signature should correspond exactly with the name on the face of the within Warrant, if applicable.|