Exhibit 4.1
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.
STRATEGIC PARTNER WARRANT
Basanite,
inc.
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Warrant Shares: 40,000,000
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Issue Date: December 10, 2021
Initial Exercise Date: (i) December 10, 2021,
with respect to fifty percent (50%) of the Warrant Shares (as defined below) and (ii) immediately following satisfaction of the Funding
Condition (as defined below) with respect to the remaining fifty percent (50%) of the Warrant Shares.
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THIS STRATEGIC PARTNER WARRANT (the
“Warrant”) certifies that, for value received, U.S. Supplies, Inc., a Florida corporation, or its assigns as
permitted hereunder (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 (as defined above) and on or prior to 5:00 p.m. (New York City
time) on December 10, 2026 (the “Termination Date”), but not thereafter, to subscribe for and purchase from Basanite,
Inc., a Nevada corporation (the “Company”), up to Forty Million (40,000,000) shares (as subject to adjustment
hereunder, the “Warrant Shares”) of restricted common stock, par value $0.001 per share, of the Company (the “Common
Stock”), subject to vesting of this Warrant as provided for in Section 1(b). The purchase price of one share of Common Stock
under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant shall initially be issued in certificated
form in the name of the Holder. Both Holder and the Company shall be referred to together as “Parties” and individually
as “Party”.
Section 1. Background;
Funding Condition.
a) Background. This
Warrant is being issued concurrently with the execution of that certain Distribution Agreement, dated December 10, 2021, between the Company
and the Holder.
b) Vesting; Funding Condition.
It is expressly agreed that this Warrant shall vest and become exercisable as follows: (i) the irrevocable right to purchase fifty percent
(50%) (or 20,000,000) of the Warrant Shares shall vest immediately as of the Issue Date and (ii) the right to purchase the remaining fifty
percent (50%) (or 20,0000,000) of the Warrant Shares shall only vest upon satisfaction of the Funding Condition. As used herein, the term
“Funding Condition” means the actual receipt of the Company, following the Issue Date, of new investment into the Company
of not less than $5,000,000 from one or any combination of the following entities or individuals: (i) the Holder and its affiliates, (ii)
CR Business Consultants, Inc. and its affiliates or (iii) any person or entity first introduced to the Company by any of the foregoing.
Section 2. Exercise.
a) Exercise of Warrant.
Exercise of the vested portion of 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 facsimile copy
or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (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(c)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. 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) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the exercise of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for exercise hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price.
The exercise price per Warrant Share under this Warrant shall be $0.33, subject to adjustment hereunder (the “Exercise
Price”).
c) Cashless Exercise.
If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not
available for, the 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:
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(A) =
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as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise
or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a
Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading
hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the
date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof
after the close of “regular trading hours” on such Trading Day;
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(B) =
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the Exercise Price of this Warrant, as adjusted hereunder; and
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(X) =
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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.
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If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary
to this Section 2(c).
(d) Mechanics of Exercise
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(i)
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Delivery of Warrant Shares Upon Exercise. The Company shall cause
its Transfer Agent to deposit the Warrant Shares and cause the Transfer Agent to credit the Warrant Shares to the account of the Holder’s
or its designee’s balance account with The Depository Trust Company or its nominee (“DTC”) or another established
clearing corporation performing similar functions) 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 the Holder or (B) the Warrant Shares are eligible for resale by the Holder without
volume or manner-of-sale limitations pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”),
and otherwise by physical delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or
its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”); provided that the Warrant Share Delivery Date shall not be deemed to have occurred until such time that the Company
has received the aggregate Exercise Price. Upon delivery of the Notice of Exercise and the Exercise Price, 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. 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 Stock on the
date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered
or Holder rescinds such exercise. The Company agrees to maintain a registrar (which can be the depositary) that is a participant in the
FAST program so long as this Warrant remains outstanding and exercisable. “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 Stock
as in effect on the date of delivery of the Notice of Exercise.
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“VWAP” means, for any date, the
price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock
for such date (or the
nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are
then reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per Common Stock so reported, or (d) in all other cases, the fair market value of an Common Stock as determined in good
faith by the Board of Directors of the Company.
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(ii)
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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, at the time of delivery of the
Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to exercise the unexercised Warrant Shares called
for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
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(iii)
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Rescission Rights. If the Company fails to cause the Transfer Agent
to transmit to the Holder the Warrant Shares pursuant to Section 2(c)(i) 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).
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(iv)
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No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
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(v)
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Charges, Taxes and Expenses. Issuance of Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant
Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares
are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto. The Company shall pay all Depositary 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.
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(vi)
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Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of Common Stock held by the Holder and its Attribution Parties plus the number of Common Stock underlying such Warrant Shares issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common
Stock underlying Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion
or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(d), 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(d) 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(d), in determining the number of outstanding
Common Stock, a Holder may rely on the number of outstanding Common Stock as reflected in (A) the Company’s most recent periodic
or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Common
Stock then outstanding. In any case, the number of outstanding Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock representing the Warrant
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(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of Common Stock outstanding immediately after giving effect to the issuance of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(d) 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(d) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant.
Section 3. Certain
Adjustments.
a) 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 on its Common Stock or any other equity or equity equivalent securities payable in Common Stock (which, for avoidance
of doubt, shall not include any Common Stock issued by the Company upon exercise of this Warrant), as applicable, (ii) subdivides outstanding
Common Stock into a larger number of shares or Common Stock, as applicable, (iii) combines (including by way of reverse share split) outstanding
Common Stock into a smaller number of shares, as applicable, or (iv) issues by reclassification Common Stock or any shares of capital
stock of the Company, as applicable, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of 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. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event
that the Company
or any Subsidiary thereof, as applicable,
sells or grants any option to purchase, or 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 Stock or Common stock Equivalents, at an effective price per share
less than the Exercise Price then in effect.
b) Subsequent Rights
Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common
Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of
Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any limitations 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 Stock, as applicable, are to be determined for
the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to
participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase
Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, shares 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 shares of Common Stock acquirable upon complete exercise of
this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of Common Stock, as applicable, are to be determined for the participation in such Distribution (provided, however, to
the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of
any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
d) Fundamental Transactions.
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 Stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than
50% of the outstanding Common Stock (not including any Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share underlying the Warrant Shares 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(d) on the exercise of this Warrant), the number
of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(d) on the exercise of this Warrant). If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in
a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the
Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and which required no additional consideration upon exercise, and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
e) Most Favored
Nation. While this Warrant is outstanding, if the Company sells or issues any warrants to purchase Common Stock ("Subsequent
Warrants") which contain material terms that are more favorable to the holders of the Subsequent Warrants than the terms of this
Warrant, the Company will provide the Holder with written notice of such sale or issuance, including the terms of the Subsequent Warrants,
no later than five (5) Business Days after the closing date thereof. In the event the Holder determines, in its sole discretion, that
any Subsequent Warrants contains terms more favorable to the holder(s) thereof than the terms set forth in this Warrant the Holder may
elect to exchange the Warrant for such Subsequent Warrant based on the amount of Warrant Shares exercisable under the Warrant, if any,
thereunder. If the Holder elects to exchange the Warrant for a Subsequent Warrant, the Company agrees to enter into a side letter with
the Holder relating to such Subsequent Warrant, which side letter will provide for (based on the good faith agreement of the Holder and
the Company) any material terms of this Warrant which are not provided for in the Subsequent Warrant.
f) 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 Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of
Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
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(i)
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Adjustment. Whenever this Warrant is adjusted pursuant to any provision
of this Section 3, the Company shall promptly notify, in writing, the Holder of the adjusted terms of this Warrant 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.
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(ii)
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Notice to Allow Exercise by Holder. If (A) the Company shall declare
a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash
dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders
of the Company shall be required in connection with any reclassification of the , any consolidation or merger to which the Company is
a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock 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 facsimile or email
to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 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 Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their
Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity
of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or
contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such
notice with the Commission pursuant to a Current Report on Form 8-K, except in the case where the filing of such Form 8-K would reasonably
impair the Company’s ability to conduct a financing pursuant to the applicable provisions of the Securities Act or the rules and
regulations thereunder, in which case the Company shall afford the Holder (in writing, which may be undertaken via email) the opportunity
to not receive such notice. 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.
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(h) Qualified Re-IPO.
Notwithstanding the foregoing, if, prior to the full exercise of this Warrant, the Company completes a underwritten firm commitment public
offering of the Common Stock under the Securities Act of 1933, as amended, provided that the gross proceeds to the Company in such offering
exceed $15 million and pursuant to which the Common Stock is listed for trading on any tier of the Nasdaq Stock Market, the New York Stock
Exchange or the NYSE American (a “Qualified Re-IPO”), and the exercise price of any warrant to purchase common stock
issued to investors in the Qualified Re-IPO (the “Re-IPO Warrant Exercise Price”) is less than the Exercise Price then
in effect, then the Exercise Price shall be adjusted downward on a one-time basis to equal to the Re-IPO Warrant Exercise Price, which
revised exercise price may be further adjusted pursuant to the terms hereof.
(i) Pre-Qualified Re-IPO
Financings. Notwithstanding the foregoing, if, prior to the full exercise of this Warrant and prior to the consummation of a Qualified
Re-IPO, the Company sells securities at a price less than the Exercise Price then in effect, or issues derivative securities with an exercise
or conversion price below less than the Exercise Price then in effect, the Exercise Price shall be adjusted downward to equal such lesser
sales or exercise or conversion price; provided, however, that the foregoing shall not apply to an “Exempt Issuance”,
which is defined as the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant
to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Company’s Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company,
(b) securities upon the exercise or exchange
of or conversion of any securities issued by the Company in its August 2021 private placement through Aegis Capital Corp. (the “Placement
Agent”), warrants to the Placement Agent in connection with such private placement and/or other securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the Issue Date, provided that such securities have not been amended
since the Issue Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of
such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided
that such securities are issued as “restricted securities” (as defined in Rule 144), and provided that any such issuance shall
only be to a person or entity (or to the equityholders of such entity) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits
in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing in securities, and (d) the Qualified Re-IPO.
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(c) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date 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.
b) New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto.
c) 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 the Holder or transferee of this Warrant,
as the case may be, provide a customary legal opinion from counsel reasonably acceptable to the Company and other customary documentation
necessary for such transfer.
e) 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.
Section 5. Miscellaneous.
a) Independent Terms
of Distribution Agreement as a Separate Contract. Although references to the Distribution Agreement are made in this Warrant, it is
understood that this Warrant shall be deemed as a separate and independent instrument or a contract. Parties agree that terms of this
Warrant remain independent and are not incorporated by reference in the terms of the Distribution Agreement. The intent of the Company
and the Holder is keep the controversies arising from or relating to the Warrant and separately from or relating to the Distribution Agreement
completely separate as the Company and the Holder agree that the contemplated transactions under the Warrant and the Distribution Agreement
are separate and independent transactions for all purposes and that the reference to the Distribution Agreement herein is made for the
sole purpose of keeping the business terms clear between the Company and the Holder and to avoid ambiguity.
b) No Rights as
Security Holder; No Exercise Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other
rights as a security holder of the Company prior to the exercise hereof as set forth in Section 2(c)(i), except as expressly set forth
in Section 3. Without limiting any rights of a Holder to receive cash payments as expressly provided for herein, in no event shall the
Company be required to net cash settle an exercise of this Warrant.
c) 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.
d) 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. “Business
Day(s)” mean Monday through Friday excluding any national, legal or bank holiday in the United States of America or as established
by the federal government of the United States of America. If any time period set forth in this Agreement expires upon a Saturday, Sunday
or U.S. national, legal or bank holiday, such period shall be extended to and through the next succeeding Business Day.
e) Authorized Shares.
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(i)
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The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any 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
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 Warrant Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon exercise of the rights represented by this Warrant, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue).
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(ii)
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Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above
the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of
this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
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(iii)
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Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable, 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.
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f) Governing Law,
Pre-Mediation Settlement Conference, Mediation, and Arbitration. 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
Nevada, 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 proceed as provided herein. The Parties irrevocably
submit to the exclusive jurisdiction of the state and federal courts located in Broward County, Florida and the JAMS office in Miami,
Florida solely with respect to the interpretation and enforcement of the terms of this Warrant under internal laws of the State of Nevada
and all transactions contemplated herein. Parties expressly waive and agree not to assert, as a defense in any action, suit or proceeding
for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit, or proceeding may be
brought or is not maintainable in said tribunal or that the venue thereof may not be appropriate or that this Warrant may not be enforced
in or by such courts or JAMS office, and the Parties hereto irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined solely in the state or federal courts located in Broward County, Florida or the JAMS office in Miami, Florida
as provided herein. Should a lawsuit be necessary to enforce this Warrant, the Parties agree that jurisdiction and venue shall lie solely
in Broward County, Florida. In the event of any litigation or arbitration relating to the subject matter of this Warrant, the prevailing
Party shall be entitled to receive from the non-prevailing Party, its reasonable attorneys’ fees (including Trial and Appellate
attorney's fees) and costs. Any disputes between the Parties hereto, whether arising under this Warrant or otherwise, which the Parties
cannot resolve between themselves using good faith shall be resolved in person at the offices of either Party or at the office of their
counsel or at the office of a mediator or an arbitrator or through the use of remote technology such as phone or video conferencing as
follows:
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(i)
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The Parties shall use good faith efforts to resolve disputes among themselves
without using a neutral third party or a mediator within 20 Business Days of notice of such dispute. Such efforts shall include escalation
of such dispute to the corporate officer level of each Party and each Party may engage counsel to assist in such settlement efforts prior
to mediating such dispute with a mediator.
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(ii)
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If the Parties are unable to resolve the dispute among themselves, it shall
be referred to a court certified mediator, and any mediation shall be held in Broward County at the office of the Company or at the office
of JAMS in Miami, Florida. The Parties shall share equally in the cost of said mediation and mutually attempt to select a mediator from
JAMS. In the event that the Parties are unable to agree upon a mediator from the list of mediators at JAMS within 15 Business Days of
the date on which either Party requests mediation of a matter, the mediator shall be appointed by JAMS.
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(iii)
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In the event that said dispute is not resolved in mediation, the Parties
shall submit the dispute to a neutral arbitrator at JAMS. The arbitration shall be held in Broward County at the office of the Company
or at the office of JAMS in Miami, Florida. The prevailing party shall recover all fees and costs of said arbitration. In the event that
the Parties are unable to agree upon an arbitrator from the list of arbitrators at JAMS within 15 Business Days of the date on which either
Party requests arbitration of a matter, the arbitrator shall be appointed by JAMS. The Parties further agree that full discovery shall
be allowed to each Party to the arbitration and a written award shall be entered forthwith. Any and all types of relief that would otherwise
be available in Court shall be available to both Parties in the arbitration. The decision of the arbitrator shall be final and binding.
Arbitration shall be the exclusive legal remedy of the Parties. Judgment upon the award may be entered in any court of competent jurisdiction.
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(iv)
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If either Party refuses to comply with a ruling or decision of the arbitrator
and a lawsuit is brought to enforce said ruling or decision, it is agreed that the Party not complying with the ruling or decision of
the arbitrator shall pay the court costs and reasonable attorney's fees (including Trial and Appellate attorney's fees) incurred in enforcing
the ruling or decision of the arbitrator.
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(v)
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Any rights of injunctive relief shall be in addition to and not in derogation
or limitation of any other legal rights.
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g) Restrictions.
The Holder acknowledges that the Warrant shares and the underlying shares of Common Stock acquired upon the exercise of this Warrant,
if not registered, will have restrictions upon resale imposed by state and federal or foreign securities laws.
h) Nonwaiver and
Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant
or the Purchase Agreement, 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.
i) Notices.
Any notice, demand or other communication required or permitted by this Warrant must be in writing and shall be deemed to have been given
and received:
if delivered by overnight
delivery service or messenger, when delivered, or
if mailed, on the third
business day after deposit in the United States mail, certified or registered postage prepaid, return receipt requested, or
if faxed, telexed or telegraphed
or emailed, twenty-four hours after being dispatched by fax or electronic data exchange (with telephone confirmation) addressed to the
respective Parties at the following addresses, telegram or telex or email (through last known email address); in every case addressed
to the Party to be notified as follows:
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If to Holder:
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U.S. Supplies, Inc.
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1305 Hill Avenue
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West Palm Beach, FL 33407
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Attention: Manuel A. Rodriguez, President
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mrodriguez@cppb.us
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If to Company:
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Basanite, Inc.
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2041 NW 15th Avenue
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Pompano Beach, FL 33069
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Attention: Simon R. Kay, Interim Acting Chief Executive Officer
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sk@basaniteindustries.com
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Copy to: Harsh Arora, Esq.
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Kelley Kronenberg
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10360 West State Road 84
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Ft. Lauderdale, FL 33324
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harora@kklaw.com
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j) Limitation of
Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to receive 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 shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
k) 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.
l) 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.
m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
p) WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDINGOR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS WARRANT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.
q) Facsimile or Electronic
Copy. A facsimile or electronic copy of this Warrant and any signatures affixed hereto shall be considered for all purposes as originals.
Delivery of this Warrant may be effectuated by electronic communication (including by PDF sent by electronic mail, facsimile or similar
means of electronic communication). Signatures delivered by electronic communication shall have the same legal effect as manual signatures.
Each Party will make commercially reasonable efforts to provide an original signature, but failure to do so will not affect the validity
of a party’s electronic signature. Pursuant to the Electronic Signatures in Global and National Commerce Act (ESIGN) the Parties
hereby expressly agree to the other’s election to use electronic signature software operated by DocuSign for execution of this Warrant.
The electronic signature generated by this software shall have the same legal effect as a handwritten signature and shall be considered
legally admissible evidence of the parties’ intention to be legally bound by this Warrant. The Parties declare that they have received
all information required to be fully aware of the electronic signature process and each Party hereby waives any claim, which it may have
against the other Party as a result of the use of such electronic signature software.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company
has caused this Strategic Partner Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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basanite, inc.
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By:
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/s/ Simon R Kay
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Name: Simon R Kay
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Title: Interim Acting Chief Executive Officer
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Agreed to and Accepted:
U.S. SUPPLIES, INC.
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By:
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/s/ Manuel A. Rodriguez
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Name: Manuel A. Rodriguez
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Title: President
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NOTICE OF EXERCISE
(1) The undersigned hereby elects
to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Strategic Partner 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
in lawful money of the United States. [if cashless exercise is permitted, this notice shall state here the number of Warrant Shares to
be issued and the calculation therefor pursuant to the terms of the Strategic Partner Warrant]
(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:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor/Non U.S. Person.
The undersigned is either (i) an “accredited investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended (the “Securities Act”), or (ii) a Non U.S. Person as defined under Regulation S promulgated under the Securities
Act. To the extent that the undersigned is a non U.S. Person, the undersigned (x) is not acquiring the securities for the account or benefit
of any U.S. Person, (y) is not in the United States and (z) is not a “distributor” (as defined in Regulation S promulgated
under the Securities Act).
[SIGNATURE
OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing
Entity: __________________________________________________
Name of Authorized Signatory: ____________________________________________________________________
Title of Authorized Signatory: _____________________________________________________________________
Date:
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Strategic
Partner Warrant, execute this form and supply required information. Do not use this form to exercise Warrant Shares.)
FOR VALUE RECEIVED, the foregoing
Strategic Partner Warrant and all rights evidenced thereby are hereby assigned to
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Name:
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(Please Print)
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Address:
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(Please Print)
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Phone Number:
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Email Address:
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Dated: _______________ __, ______
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Holder’s Signature: __________________________
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Holder’s Address: ___________________________
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17
EXHIBIT 10.1
Basanite,
Inc.
2041 NW 15TH Avenue, Pompano Beach, FL
33069
December 10, 2021
Re: Offer Letter –
Basanite Inc. Board of Directors
Dear ______________:
Basanite, Inc., a Nevada corporation
(the “Company”), is pleased to offer you a director position on the Company’s Board of Directors (the “Board”),
subject to the terms and conditions of this letter agreement (this “Agreement”).
1. Term.
Upon your appointment to the Board, which will be approved by the Board promptly following the mutual execution by the parties of this
Agreement, your term as director shall continue until the earlier of your death, disability, removal from office or resignation. Your
position on the Board shall be up for re-nomination and re-election each year at the Company’s annual shareholder’s meeting
in accordance with the Company’s by-laws (as amended and/or restated from time to time) (the “by-laws”), and
the terms and provisions of this Agreement shall remain in full force and effect until you no longer serve on the Board for any reason
(except for the provisions of this Agreement which expressly survive termination).
2. Services.
You shall render services as a member of the Board, as well as a member of the any Board committee to which you may be assigned by the
Board (hereinafter your “Duties”). You acknowledge that to the extent you do not qualify as an “independent director”
(as defined under applicable rules and regulations), your ability to participate on Board committees will be limited. As part of your
Duties, you shall attend and participate in all meetings of the Board and of the committee(s) of which you are a member as called in accordance
with the terms of the Company’s by-laws and/or the committee charters. You may attend and participate at each such meeting via teleconference,
video conference or in person. You shall consult with the other members of the Board and committee(s) regularly and as reasonably necessary
via telephone, electronic mail or other reasonable forms of correspondence. At all times, you shall exercise in good faith and adhere
to all applicable fiduciary duties and other federal, state, stock exchange and other laws, rules and regulations, as well as any Company
policies applicable to you (including, without limitation, any insider trading policy, communications policy and code of ethics).
3. Services
for Others. While a member of the Board, you will be free to perform services for other persons or entities; provided, however,
that you agree that you do not presently perform and do not intend to perform, during your service on the Board, similar Duties, consulting
or other services for companies whose businesses are or would be, in any way, directly competitive with the Company. Should you propose
to perform similar Duties, consulting or other services for any such company, you agree to notify the Company in writing in advance (specifying
the name of the organization for whom you propose to perform such services) and to provide information to the Company sufficient to allow
the Board to determine if the performance of such services would conflict with areas of interest to the Company.
Page Two
4. Compensation.
In consideration for your service as a member of the Board, you shall receive a compensation package with a value of $80,000 per year
(the “Compensation Amount”). Unless the Board or the compensation committee thereof shall approve otherwise, until
such time as the Company is cash-flow positive for four (4) consecutive quarters (as indicated in the Company’s publicly-filed financial
statements) (“Cash Flow Positive”), the Compensation Amount shall be paid solely in the form of shares of Company common
stock, options to purchase Company common stock, and/or restricted share units of Company common stock (collectively, “Company
Equity”), in each case as determined by the Board or the compensation committee thereof. Such Company Equity compensation shall
be issued annually and will be subject to a one-year vesting period. After the Company is Cash Flow Positive, the Compensation Amount
shall be paid in a mix of cash and Company Equity, it being currently contemplated that the cash portion will be $45,000 and the Company
Equity portion will be $35,000. Should you serve on any committee of the Board, you will also be entitled to receive prevailing compensation
for such committee service as determined by the Board or the compensation committee thereof from time to time. The Company also agrees
to reimburse all of your documented and pre-approved travel, hotel, car rental, meals and other reasonable expenses relating to your attendance
at meetings of the Board.
You acknowledge that your compensation
as a director in future periods is subject to the determination of the Board or the compensation committee thereof and may differ in future
periods based on the determination of the Board or the compensation committee thereof; provided that in all instances, your compensation
for service on the Board shall be on par with other similarly situated directors of the Company.
5. D&O
Insurance Policy. You shall be included as an insured under such directors’ and officers’ liability insurance (the
“D&O Insurance”) that the Company, at its sole discretion, maintains in an amount in coverage and with a carrier
as determined in the Board’s discretion; provided, however, that the foregoing shall not be construed as obligating the Company
to maintain any directors’ and officers’ liability insurance.
6. No
Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without
the prior written consent of the Company.
7. Confidential
Information; Non-Disclosure. In consideration of your access to the premises of the Company and/or you access to certain Confidential
Information of the Company (as defined below), in connection with your business relationship with the Company, you hereby represent and
agree as follows:
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a.
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Definition. For purposes of this Agreement the term “Confidential Information”
means:
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i.
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Any information which the Company possesses that has been created, discovered or developed in whole or
in part by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged;
or
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Page Three
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ii.
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Any information which is related to the business of the Company and is generally not known by non-Company
personnel.
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iii.
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By way of illustration, but not limitation, Confidential Information includes trade secrets and any information
concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws,
and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test
results, specifications, data, know-how, software, formats, marketing plans and analyses, business plans and analyses, strategies, forecasts,
customer and supplier identities, contracts and agreements, accounting information, information about the Company’s financial results
of operations, and other information which would a director of a publicly-traded company would reasonably be expect to keep confidential.
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b.
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Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include:
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i.
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Any information which becomes generally available to the public other than as a result of your breach
of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;
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ii.
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Information received from a third party in rightful possession of such information who is not restricted
from disclosing such information; and
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iii.
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Information known by you prior to receipt of such information from the Company, which prior knowledge
can be documented and which prior knowledge was not obtained in breach of any duty to the Company
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c. Documents.
You agree that, without the express written consent of the Company, you will not (except in direct relation to the performance of your
Duties and in the best interest of the Company) remove from the Company’s premises or otherwise keep or store electronically, any
notes, formulas, programs, data, records, machines or any other documents, data or information which in any manner contain or constitute
Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along
with any reproductions or copies to the Company upon the Company’s demand or at such time as you no longer serve on the Board.
d. No
Disclosure and Use. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to
any person or entity, directly or indirectly, any Confidential Information or anything relating to such information without the prior
written consent of the Company, except in good faith as may be necessary in the course of the performance of your Duties and in the best
interests of the Company. You further agree that you will not use, directly or indirectly, any Confidential Information without the prior
written consent of the Company, except in good faith as may be necessary in the course of the performance of your Duties and in the best
interests of the Company.
This Section 7 shall survive
termination of this Agreement.
Page Four
8. Entire
Agreement; Amendment; Waiver. This Agreement expresses the entire understanding with respect to the subject matter hereof and
supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement
may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver
of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the
same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance
by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such
provision or any other provision of this Agreement.
9. Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada applicable
to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.
The Agreement has been executed and delivered by the
undersigned and is made effective as of the date set first set forth above.
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Sincerely,
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BASANITE, INC.
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By:
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Michael V. Barbera
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Chairman of the Board
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AGREED AND ACCEPTED:
_____________________________
[ ]
Exhibit 99.1
Basanite Announces Strategic
Supply and Distribution Agreements
Adds Two Construction Industry
Veterans to the Basanite Board of Directors
POMPANO, FL / ACCESSWIRE
/ December 13, 2021 / Basanite Inc., (OTCQB: BASA) (“Basanite” or the “Company”), a manufacturer of environmentally
friendly, high-performance composite construction materials made from basalt fiber and basalt fiber reinforced polymer (“BFRP”),
today announced Basanite has entered into a strategic partnership, comprised of two (2) principal five (5) year agreements: an Exclusive
Supplier Agreement with Concrete Products of the Palm Beaches, Inc. (“CPPB”), and a Distribution Agreement with U.S. Supplies,
Inc. (”USS”).
These agreements and related
collaboration are expected to accelerate the validation and acceptance of Basanite’s products in the construction market, creating
potential for significant new domestic and international orders for Basanite.
Highlights
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·
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Supplier Agreement with CPPB, a custom
precast manufacturer, under which Basanite will serve as sole supplier of basalt fiber and BFRP products for use in CPPB’s
concrete products.
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·
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Distributor Agreement with USS, a domestic and international
distributor of building products and supplies, under which Basanite products will be offered to USS’ large customer base in the
U.S. and exclusively in seven Central and South American countries.
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·
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Two construction industry veterans appointed to Basanite’s
Board of Directors: Manuel A. (Manny) Rodriguez, President of CPPB and USS, and Frederick H. (Fred) Tingberg, Jr., a successful construction
industry executive and consultant to CPPB.
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·
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USS has received a warrant to purchase 40 million shares of Basanite
common stock at $0.33 per share, with half vesting immediately and the remaining half to vest when USS and its associates invest $5 million
in new capital into Basanite.
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·
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With the new capital from the strategic partners, Basanite is
required to purchase five (5) additional BasaMax™ machines in order to meet the anticipated demand.
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“We are delighted to enter this strategic
partnership with USS and CPPB and welcome Manny and Fred to our board of directors,” stated Simon Kay, Basanite’s Acting Interim
Chief Executive Officer. “Together, we will change how buildings and structures are built, using Basanite’s green, sustainable,
advanced composite products, designed specifically to address corrosion issues in an eco-friendly manner.”
“Moreover, with the recent passage
of the Federal Infrastructure Bill, America is looking towards the rebuilding and repairing of its bridges, tunnels, buildings, highways,
ports, seawalls, and underground hydraulic structures” Mr. Kay continued. “These infrastructure elements are failing due to
corrosion of steel reinforcement in the concrete, primarily the rebar. Basanite’s reinforcement products offer the solution as they
are completely corrosion proof.”
“We are ‘all in’ with this collaboration
because we believe Basanite manufactures the most technically advanced composite reinforcement construction products available today”
said Manny Rodriguez, President of CPPB and USS. “Basanite’s products are green and sustainable; completely corrosion free;
stronger and lighter than steel; non-conductive; and offer a long-life cycle. They are also safer to transport and use on the job site.
They make perfect sense to address current infrastructure issues and for the infrastructure of the future. As a key customer and distributor,
as well as by participating as a Basanite board member, my companies and I are fully committed to help drive acceptance of Basanite’s
products in the construction marketplace and to generate significant new product orders for Basanite.”
About the Agreements
Basanite will be
CPPB’s exclusive provider of Basalt Fiber concrete reinforcement products, including
BasaFlexTM, Basanite’s patent pending BFRP reinforcing bar, also known as composite rebar. In addition, Basanite’s
products will be the only basalt fiber and BFRP products distributed by USS. Together, Basanite, CPPB, and USS and will
champion BasaFlexTM and other advanced Basanite products to the national and international
construction industry; construction and civil engineering firms; architectural design and build firms; city, state and federal government
agencies; and concrete manufacturing communities.
With the new business USS and CPPB are expected
to bring to Basanite, USS has been given a warrant to purchase 40 million shares of Basanite common stock at $0.33 per share, half of
which vests immediately and half of which vests when USS and its associates provide no less than $5,000,000 of new equity investment in
a future Basanite financing. A portion of these funds will be allocated to purchase five (5) additional BasaMaxTM pultrusion
manufacturing machines, to support the expected new demand from the CPPB and USS contracts.
CPPB is a custom precast manufacturer of a line
of products made from a combination of cement and aggregates, focusing on underground structures. CPPB will employ
its engineering expertise to design sustainable concrete structures, focused on the use of BasaFlex™, and other Basanite-products.
CPPB will be responsible for taking all necessary steps to obtain clearance, validation, importation authorization, product approvals,
as well as regulatory licenses or other approvals, permits or material authorizations as may be required by any governmental agency or
authority with respect to the importation, marketing, distribution, sale and use of CPPB’s concrete products incorporating Basanite’s
products.
USS plans to focus on the distribution of Basanite
products to its large customer base, including precasters; cast-in-place contractors; and state, county, city and federal governments
and agencies within the United States. USS will also distribute Basanite products on an exclusive basis in seven countries in Central
America and South America: El Salvador, Guatemala, Honduras, Mexico, Colombia, Ecuador and Peru.
More details of the Exclusive Supplier and Distribution
Agreements can be found a Form 8-K filing to be filed by Basanite with the Securities and Exchange Commission.
About Basanite
Basanite, Inc. (OTCQB: BASA), through its wholly owned subsidiary
Basanite Industries, LLC, is a manufacturer and developer of environmentally friendly, high-performance basalt fiber composite products
used in the construction industry. Superior to traditional steel elements, Basanite's sustainable products are non-corrosive, lighter,
stronger and longer lasting. For more information, please visit www.BasaniteIndustries.com.
Cautionary
Note Regarding Forward-Looking Statements
This release
contains “forward-looking statements” which are based on Company management's current expectations and assumptions as of the
date of this press release regarding the Company's business and performance, its prospects, current factors, the economy, and other future
conditions and forecasts of future events, circumstances, and results and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Words such as “believe,” “goal,” “feel,” "may,"
“plan,” "will," "expect," "anticipate," "estimate," "intend," “potential”
and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to
identify forward-looking statements. Forward-looking statements in this press release involve substantial risks and uncertainties that
could cause future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking
statements. All forward-looking statements in this press release reflect Basanite’s current analysis of existing trends and information
and represent Basanite’s judgment only as of the date of this press release. Actual results (including, without limitation, the
anticipated benefits of the Exclusive Supplier and Distribution Agreements and new Company board members, as well as the potential for
future investment in the Company, each as described herein) may differ materially from current expectations based on a number of factors,
many of which are beyond the Company’s control. For a further description of the risks and uncertainties that could cause actual
results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company (including
the risk of the Company continuing as a going concern), please see the Company’s Annual Report on Form
10-K for the year ended December 31, 2020, including but not limited to the discussion under "Risk Factors" therein, which was
filed with the Securities and Exchange Commission on March 31, 2021, as well as the Company’s other filings with the Securities
and Exchange Commission, all of which may be viewed at http://www.sec.gov.
Investor Contact
Mark Komonoski, Partner
Integrous Communications
Phone: 1-877-255-8483
Email: mkomonoski@integcom.us