Exhibit 4.1


 


FORM OF REGISTRATION RIGHTS AGREEMENT


 


This Registration
Rights Agreement (this “Agreement”) is made and entered into effective as of                     ,
2021 among SmartKem, Inc., a Delaware corporation (f.k.a. Parasol Investments Corp.) (the “Company”),
the persons who have purchased the Offering Shares and/or Offering Warrants (each as defined below) and have executed omnibus or
counterpart signature page(s) hereto (each, a “Purchaser” and collectively, the “Purchasers”),
the persons or entities identified on Schedule 1 hereto holding Placement Agent Warrants (collectively, the “Brokers”),
the persons or entities identified on Schedule 2 hereto holding Exchange Shares (as defined below), the persons or entities
identified on Schedule 3 hereto holding Registrable Pre-Exchange Shares (as defined below), and the persons
or entities identified on Schedule 4 hereto holding Advisory Shares (as defined below). Capitalized terms used herein shall
have the meanings ascribed to them in Section 1 below or in the Subscription Agreement (as defined below).


 


RECITALS:


 


WHEREAS,
the Company has offered and sold in compliance with Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated
thereunder to accredited investors in a private placement offering (the “Offering”) shares of the common
stock of the Company, par value $0.0001 per share, pursuant to certain Subscription Agreements entered into by and between the
Company and Purchasers of the Offering Shares and Offering Warrants set forth on the signature pages affixed thereto (the “Subscription
Agreements”); and


 


WHEREAS,
the Company has agreed to enter into a registration rights agreement with each of the Purchasers in the Offering who purchased
the Offering Shares and Offering Warrants, with the Brokers, or their designees, who hold Placement Agent Warrants, and with the
holders of Exchange Shares, Registrable Pre-Exchange Shares or Advisory Shares, as applicable; and


 


WHEREAS,
contemporaneously with the initial closing of the Offering, pursuant to a Share Exchange Agreement by and between the Company,
SmartKem Limited, a U.K. company (“SmartKem”), and the former shareholders of SmartKem pursuant
to which all of the outstanding capital stock of SmartKem was exchanged for shares of the Company’s Common Stock and SmartKem
became a wholly owned Subsidiary of the Company (the “Share Exchange”);


 


NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth
herein, the parties mutually agree as follows:


 


1.        Certain
Definitions. As used in this Agreement, the following terms shall have the following respective meanings:


 


“Advisory
Shares” means the 50,000 shares of Common Stock held by the persons or entities identified on Schedule 4 hereto.


 


“Agent Warrant
Shares” means the shares of Common Stock issued or issuable upon exercise of the Placement Agent Warrants.


 






    	 	 



     


    

 


“Approved
Market” means the OTCQB, OTCQX, the Nasdaq Stock Market, the New York Stock Exchange or the NYSE American.


 


“Blackout
Period” means, with respect to a distribution or registration, a period during which the Company, in the good faith
judgment of its board of directors, determines (because of the existence of, or in anticipation of, any acquisition, financing
activity, or other material corporate development or other material transaction involving the Company, or the unavailability for
reasons beyond the Company’s control of any required financial statements, disclosure of material information which is in
its best interest not to publicly disclose, or any other event or condition of similar material significance to the Company) that
the registration and/or distribution of the Registrable Securities to be covered by such registration statement, if any, or the
circumstances described in Section 4(h) below, would be seriously detrimental to the Company and its stockholders, in each
case commencing on the day the Company notifies the Holders that they are required, because of the determination described above,
to suspend offers and sales of Registrable Securities and ending on the earlier of (1) the date upon which the material non-public information
resulting in the Blackout Period is disclosed to the public or ceases to be material and (2) such time as the Company notifies
the selling Holders that sales pursuant to such Registration Statement or a new or amended Registration Statement or prospectus
may resume; provided, however, that the aggregate of all Blackout Periods shall not exceed thirty (30)
consecutive Trading Days or more than sixty (60) Trading Days in any twelve (12) month period (except for suspension
of the use of the Registration Statement in connection with the filing of a post-effective amendment to the Registration Statement
to update the prospectus therein in connection with the filing of the Company’s Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q or Periodic Reports on Form 8-K, which Blackout Period may extend for the amount of time reasonably required to respond
to comments of the staff of the Commission (the “Staff”) on such amendment).


 


“Business
Day” means any day of the year, other than a Saturday, Sunday, or other day on which banks in the State of New York
are required or authorized to close.


 


“Commission”
means the U. S. Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.


 


“Common
Stock” means the common stock, par value $0.0001 per share, of the Company and any and all shares of capital stock
or other equity securities of: (i) the Company which are added to or exchanged or substituted for the Common Stock by reason
of the declaration of any stock dividend or stock split, the issuance of any distribution or the reclassification, readjustment,
recapitalization or other such modification of the capital structure of the Company; and (ii) any other corporation, now or
hereafter organized under the laws of any state or other governmental authority, with which the Company is merged, which results
from any consolidation or reorganization to which the Company is a party, or to which is sold all or substantially all of the shares
or assets of the Company, if immediately after such merger, consolidation, reorganization or sale, the Company or the stockholders
of the Company own equity securities of such other corporation.


 


“Effective
Date” means the date of the final closing of the Offering.


 






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“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.


 


“Exchange
Shares” means the 12,275,000 shares of Common Stock issued or issuable in exchange for all of the capital stock of
SmartKem that were outstanding immediately prior to the closing of the Share Exchange ((x) inclusive of the shares of Common Stock
issuable or issued upon exercise of the warrants of SmartKem that are being assumed by, or exchanged for warrants of, the Company
in connection with the Share Exchange, and (y) exclusive of shares of Common Stock issuable upon (i) exercise of the options to
purchase stock of SmartKem that are being assumed by, or exchanged for options of, the Company in connection with the Share Exchange
and (ii) conversion of convertible debt of SmartKem that is being assumed by, or exchanged for convertible debt of, the Company
in connection with the Share Exchange), and any shares of Common Stock issued or issuable with respect to such shares upon any
stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.


 


“Excluded
Registrable Securities” shall have the meaning set forth in Section 3(d)(i) of this Agreement.


 


“Family
Member” means (a) with respect to any individual, such individual’s spouse, any descendants (whether natural
or adopted), any trust all of the beneficial interests of which are owned by any of such individuals or by any of such individuals
together with any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate
of any such individual, and any corporation, association, partnership or limited liability company all of the equity interests
of which are owned by those above described individuals, trusts or organizations and (b) with respect to any trust, the owners
of the beneficial interests of such trust.


 


“Holder”
means (i) each Purchaser or any of such Purchaser’s respective successors and Permitted Assignees who acquire rights
in accordance with this Agreement with respect to any Registrable Securities directly or indirectly from a Purchaser or from any
Permitted Assignee; (ii) each Broker or any of such Broker’s respective successors and Permitted Assignees who acquire rights
in accordance with this Agreement with respect to any Registrable Securities directly or indirectly from an Broker or from any
Permitted Assignee; (iii) each holder of Registrable Pre-Exchange Shares or its respective successors and Permitted Assignees
who acquire rights in accordance with this Agreement with respect to any Registrable Securities directly or indirectly from such
holder or from any Permitted Assignee thereof; (iv) each holder of the Exchange Shares or its respective successors and Permitted
Assignees who acquire rights in accordance with this Agreement with respect to any Registrable Securities directly or indirectly
from such holder or from any Permitted Assignee thereof; and (v) each holder of Advisory Shares or its respective successors and
Permitted Assignees who acquire rights in accordance with this Agreement with respect to any Registrable Securities directly or
indirectly from such holder or from any Permitted Assignee thereof.


 


“Majority
Holders” means, at any time, Holders of both (i) a majority of the Registrable Securities then outstanding and (ii)
a majority of the Offering Shares and Offering Warrant Shares then outstanding or issuable that constitute Registrable Securities.


 


“Offering
Shares” means the shares of Common Stock issued to the Purchasers pursuant to the Subscription Agreements, and any
shares of Common Stock issued or issuable with respect to such shares upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing.


 


“Offering
Warrants” means the Pre-Funded Warrants (as defined in the Subscription Agreement) issued to the Purchasers pursuant
to the Subscription Agreements, and any replacement warrants issued or issuable with respect to such shares upon any stock split,
dividend or other distribution, recapitalization or similar event with respect to the foregoing.


 


“Offering
Warrant Shares” means the shares of Common Stock issued or issuable upon exercise of the Pre-Funded Warrants.


 






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“Permitted
Assignee” means (a) with respect to a partnership, its partners or former partners in accordance with their
partnership interests, (b) with respect to a corporation, its stockholders in accordance with their interest in the corporation,
(c) with respect to a limited liability company, its members or former members in accordance with their interest in the limited
liability company, (d) with respect to an individual party, any Family Member of such party and any trust for the direct or
indirect benefit of an individual or a Family Member of such individual, (e) with respect to a trust, to the trustor or beneficiary
of such trust or to the estate of a beneficiary of such trust, (f) an entity or trust that is controlled by, controls, or
is under common control with a transferor, (g) any affiliate of a transferor in any transaction in which the transferor distributes
Restricted Securities to such affiliate for no consideration or (h) a party to this Agreement.


 


“Piggyback
Registration” shall have the meaning set forth in Section 3(d)(i) of this Agreement.


 


“Placement
Agent Warrants” shall have the meaning set forth in the Subscription Agreement.The terms “register,”
 “registered,” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness
of such registration statement.


 


“Registrable Pre-Exchange
Shares” means 1,000,000 shares of Common Stock held by stockholders of the Company prior to the Share Exchange and
remaining outstanding immediately following the effective time of the Share Exchange, and any shares of Common Stock issued or
issuable with respect to such shares upon any stock split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing.


 


“Registrable Pre-Exchange
Stockholder” means a person holding Registrable Pre-Exchange Shares immediately prior to the effective time
of the Share Exchange.


 


“Registrable
Securities” means (a) the Offering Shares, (b) the Offering Warrant Shares, (c) the Agent Warrant Shares,
(d) the Exchange Shares, (e) the Registrable Pre-Exchange Shares, (f) the Advisory Shares and (g) other shares of Restricted
Common Stock held by the Holders, hereinafter acquired or issuable in respect of the foregoing shares of Common Stock by way of
conversion, dividend, stock-split, distribution or exchange, merger, consolidation, recapitalization or reclassification or similar
transaction. Such securities shall cease to be Registrable Securities hereunder when they are (i) sold or otherwise transferred
pursuant to a Registration Statement, (ii) sold under Rule 144 of the Securities Act.


 






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“Registration
Default Period” means the period beginning on the date of which any Registration Event occurs and ending on the date
on which such Registration Event is cured, inclusive.


 


“Registration
Effectiveness Date” means the date that is one hundred and fifty (150) calendar days after the Effective Date, which
one hundred and fifty day period shall be extended for each day of a U.S. government shut down that results in the Commission temporarily
discontinuing review of, or acceleration of the effectiveness of, registration statements, if any.


 


“Registration
Event” means the occurrence of any of the following events:


 


(a)    the
Company fails to file with the Commission the Registration Statement on or before the Registration Filing Date;


 


(b)    the
Registration Statement is not declared effective by the Commission on or before the Registration Effectiveness Date;


 


(c)    after
the SEC Effective Date, the Registration Statement ceases for any reason to remain effective or the Holders of Registrable Securities
covered thereby are otherwise not permitted to utilize the prospectus therein to resell the Registrable Securities covered thereby,
except for Blackout Periods permitted herein; or


 


(d)    following
the listing or inclusion for quotation on an Approved Market, the Registrable Securities, if issued and outstanding, are not listed
or included for quotation on an Approved Market, or trading of the Common Stock is suspended or halted on the Approved Market,
which at the time constitutes the principal markets for the Common Stock, for more than three (3) full, consecutive Trading
Days (other than as a result of (A) actions or inactions of parties other than the Company or its affiliates or of the Approved
Market not reasonably in the control of the Company, or (B) suspension or halt of substantially all trading in equity securities
(including the Common Stock) on the Approved Market).


 


“Registration
Filing Date” means the date that is sixty (60) calendar days after the Effective Date.


 


“Registration
Statement” means any registration statement that the Company is required to file or files pursuant to Section 3(a)
or 3(d) of this Agreement to register the Registrable Securities and any successor registration statement.


 


“Restricted
Common Stock” means any shares of Common Stock that are subject to resale restrictions
pursuant to the Securities Act and the rules and regulations promulgated thereunder, including, but not limited to, securities:
(1) acquired directly or indirectly from the issuer or an affiliate of the issuer in unregistered offerings such as private placements;
(2) acquired through an employee stock benefit plan or as compensation for professional services; or (3) considered “restricted
securities” under Rule 144. For purposes of clarity Restricted Common Stock does not include Common Stock that is restricted
solely as a result of contractual restrictions, including but not limited to lock-up or similar contractual agreements.


 


“Rule
144” means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented
from time to time, or any similar successor rule that may be promulgated by the Commission.


 






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“Rule
145” means Rule 145 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented
from time to time, or any similar successor rule that may be promulgated by the Commission.


 


“Rule
415” means Rule 415 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented
from time to time, or any similar successor rule that may be promulgated by the Commission.


 


“Securities
Act” means the Securities Act of 1933, as amended, or any similar federal statute promulgated in replacement thereof,
and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.


 


“SEC Effective
Date” means the date the Registration Statement is declared effective by the Commission.


 


“Trading
Day” means any day on which the Approved Market that at the time constitutes the principal securities market for
the Common Stock, is open for general trading of securities (or if there is no Approved Market that at the time constitutes the
principal securities market for the Common Stock, then any day on which the New York Stock Exchange is open for general trading
of securities).


 


2.        Term.
This Agreement shall terminate with respect to each Holder on the earlier of: (i) the date that is five (5) years from
the SEC Effective Date, and (ii) the date on which no Registrable Securities are outstanding (the “Term”).
Notwithstanding the foregoing, Section 3(b), Section 6, Section 8, Section 9 and Section 10 shall survive the
termination of this Agreement.


 


3.        Registration.


 


(a)    Registration
on Form S-1. The Company shall prepare and file with the Commission a Registration Statement on Form S-1, or
any other form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall
be available for the resale by the Holders of all of the Registrable Securities on a delayed or continuous basis (including in
stock exchange transactions and underwritten offerings), and the Company shall (i) make the initial filing of the Registration
Statement with the Commission no later than the Registration Filing Date, (ii)  use its commercially reasonable efforts to
cause such Registration Statement to be declared effective no later than the Registration Effectiveness Date and (iii) use
its commercially reasonable efforts to keep such Registration Statement continuously effective (including by filing a new Registration
Statement if the initial Registration Statement expires) for a period of five (5) years after the SEC Effective Date or for
such shorter period as such securities no longer constitute Registrable Securities hereunder (the “Effectiveness Period”); provided, however,
that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 3(a),
or keep such registration effective pursuant to the terms hereunder, in any particular jurisdiction in which the Company would
be required to qualify to do business as a foreign corporation or as a dealer in securities under the securities laws of such jurisdiction
or to execute a general consent to service of process in effecting such registration, qualification or compliance, in each case
where it has not already done so. Upon the Company becoming eligible to register the Registrable Securities for resale by the Holders
on Form S-3, the Company shall use commercially reasonable efforts to amend the Registration Statement to a Registration Statement
on Form S-3 or file a Registration Statement on Form S-3 in substitution of the Registration Statement as initially filed as soon
as reasonably practicable thereafter. The Company shall be entitled to suspend sales of Registrable Securities pursuant to a Registration
Statement and the use of any related prospectus during a Blackout Period for the reasons and time periods set forth in the definition
thereof. In the event that the Staff should limit the number of Registrable Securities that may be sold pursuant to the Registration
Statement, the Company may remove from the Registration Statement such number of Registrable Securities as specified by the Commission
on behalf of all of the holders of Registrable Securities from the Registrable Securities on a pro rata basis among the holders
thereof (such Registrable Securities, the “Reduction Securities”). In such event, the Company shall give
the Holders prompt notice of the number of Registrable Securities excluded from the Registration Statement. The Company shall use
its commercially reasonable efforts at the first opportunity that is permitted by the Commission to, register for resale the Reduction
Securities (pro rata among the Holders of such Reduction Securities) using one or more Registration Statements that it is then
entitled to use, until all of the Reduction Securities have been so registered; provided, however, that the Company shall not be
required to register such Reduction Securities during a Blackout Period. The Company shall use its commercially reasonable efforts
to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible, and shall use
its commercially reasonable efforts to keep such Registration Statement continuously effective (including by filing a new Registration
Statement if the initial Registration Statement expires) under the Securities Act during the Effectiveness Period. Notwithstanding
the foregoing, the Company shall be entitled to suspend the effectiveness of such Registration Statement at any time prior to the
expiration of the Effectiveness Period for the reasons and time periods during a Blackout Period. No liquidated damages shall accrue
or be payable to any Holder pursuant to Section 3(b) below with respect to any Registrable Securities that are excluded by
reason of (i) the Staff limiting the number of Registrable Securities that may be sold pursuant to a registration statement (provided
that the Company continues to use commercially reasonable efforts to register such Reduction Securities for resale by other available
means) or (ii) such Holder failing to provide to the Company information concerning the Holder and the manner of distribution of
the Holder’s Registrable Securities that is required by the SEC or in response to SEC comments to be disclosed in a registration
statement utilized in connection with the registration of registrable securities. Notwithstanding anything herein to the contrary,
if the Commission limits the Company’s ability to file, or prohibits or delays the filing of a new registration statement,
the Company’s compliance with such limitation, prohibition or delay solely to the extent of such limitation, prohibition
or delay shall not be deemed a failure by the Company to use commercially reasonable efforts as set forth above or elsewhere in
this Agreement and shall not require the payment of any liquidated damages by the Company under this Agreement.


 



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(b)    Liquidated
Damages. If a Registration Event occurs, then the Company will make payments to each Holder of Registrable Securities, as liquidated
damages to such Holder by reason of the Registration Event, a cash sum calculated at a rate of twelve percent (12%) per annum of
the total of the following, to the extent applicable to such Holder: (i) if the Holder purchased Offering Shares or Offering Warrants
pursuant to a Subscription Agreement, the aggregate purchase price paid by such Holder pursuant to the Subscription Agreement for
the Offering Shares or Offering Warrants with respect to Registrable Securities held by such Holder as of the date of such Registration
Event, or (ii) if the Holder is a Holder of Agent Warrant Shares, Exchange Shares, Registrable Pre-Exchange Shares or Advisory
Shares, the product of $2.00 (as adjusted for stock splits, stock dividends, combinations, recapitalizations or similar events)
multiplied by the number of Agent Warrant Shares, Exchange Shares, Registrable Pre-Exchange Shares or Advisory Shares held by such
Holder as of the date of such Registration Event, but in the case of each of clauses (i) and (ii) above, only with respect to such
Holder’s Registrable Securities that are affected by such Registration Event and only for the applicable Registration Default
Period. Notwithstanding the foregoing, (i) the maximum amount of liquidated damages that may be paid by the Company pursuant to
this Section 3(b) shall be an amount equal to five percent (5%) of the applicable foregoing amounts described in clauses (i)
and (ii) in the preceding sentence with respect to such Holder’s Registrable Securities that are affected by all Registration
Events in the aggregate, and (ii) no penalties shall accrue with respect to any Registrable Securities removed from the Registration
Statement in response to a comment from the Staff limiting the number of shares of Registrable Securities which may be included
in the Registration Statement, or after the shares may be resold without volume or other limitations under Rule 144 under the Securities
Act or another exemption from registration under the Securities Act. For clarity, and by way of example, if the sum of clauses
(i) and (ii) for a specified Holder in the first sentence of this Section 3(b) is $10,000,000, liquidated damages payable by the
Company to such Holder by reason of one or more Registration Events affecting all Registrable Securities of such Holder would accrue
at a rate of twelve percent (12%) per annum until such time that all liquidated damages payable to such Holder reached a cap of
$500,000 in the aggregate for all Registration Events. Each payment of liquidated damages pursuant to this Section 3(b) shall
be due and payable in cash in arrears within five (5) days after the end of each full 30-day period of the Registration
Default Period until the termination of the Registration Default Period and within five (5) days after such termination. Until
the maximum amount of liquidated damages is paid, such payments shall constitute the Holder’s sole and exclusive remedy for
any Registration Event. The Registration Default Period shall terminate upon the earlier of such time as the Registrable Securities
that are affected by the Registration Event cease to be Registrable Securities or (i) the filing of the Registration Statement
in the case of clause (a) of the definition of Registration Event, (ii) the SEC Effective Date in the case of clause
(b) of the definition of Registration Event, (iii) the ability of the Holders to effect sales pursuant to the Registration
Statement in the case of clause (c) of the definition of Registration Event, and (iv) the listing or inclusion and/or
trading of the Common Stock on an Approved Market, as the case may be, in the case of clause (d) of the definition of Registration
Event; provided, that in the event of a cure of one or more of the Registration Events described in clauses (i)-(iv) above when
a separate Registration Event shall be continuing, the Registration Default Period shall continue until all such Registration Events
have ceased. The amounts payable as liquidated damages pursuant to this Section 3(b) shall be payable in lawful money of the United
States.


 






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(c)    Other
Limitations. Notwithstanding the provisions of Section 3(b) above, if the Commission does not declare the Registration
Statement effective on or before the Registration Effectiveness Date, and the reason for the Commission’s determination is
that (i) the offering of any of the Registrable Securities constitutes a primary offering of securities by the Company, (ii) Rule
415 may not be relied upon for the registration of the resale of any or all of the Registrable Securities, and/or (iii) a Holder
of any Registrable Securities must be named as an underwriter and such Holder does not consent to be so named in the Registration
Statement, the Holders shall not be entitled to liquidated damages with respect to the Registrable Securities not registered; provided
that the Company continues to use its commercially reasonable efforts at the first opportunity that is permitted by the Commission
to register for resale all such Registrable Securities, using one or more registration statements that it is then entitled to use.
The Company shall use its commercially reasonable efforts to cause each such registration statement to be declared effective under
the Securities Act as soon as possible, and shall use its commercially reasonable efforts to keep such registration statement continuously
effective under the Securities Act during the Effectiveness Period. Notwithstanding the foregoing, the Company shall be entitled
to suspend the effectiveness of such Registration Statement at any time prior to the expiration of the Effectiveness Period for
the reasons and time periods during a Blackout Period. No liquidated damages shall accrue or be payable to any Holder with respect
to any Registrable Securities that are excluded by reason of the Staff limiting the number of Registrable Securities that may be
sold pursuant to a registration statement; provided that the Company continues to use commercially reasonable efforts to register
such Registrable Securities for resale by other available means. Notwithstanding anything herein to the contrary, if the Commission
limits the Company’s ability to file, or prohibits or delays the filing of a new registration statement, the Company’s
compliance with such limitation, prohibition or delay solely to the extent of such limitation, prohibition or delay shall not be
deemed a failure by the Company to use commercially reasonable efforts as set forth above or elsewhere in this Agreement and shall
not require the payment of any liquidated damages by the Company under this Agreement.


 






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(d)      Piggyback
Registrations.


 


(i)         With
respect to any Registrable Securities not otherwise included in a Registration Statement pursuant to Section 3(a) as a result of
any limitation imposed by the Staff, or otherwise (the “Excluded Registrable Securities”), whenever the
Company proposes to register (including, for this purpose, a registration effected by the Company for other shareholders) any of
its securities under the Securities Act (other than pursuant to (i) a Registration pursuant to Section 3(a) hereof or (ii) registration
pursuant to a registration statement on Form S-4 or S-8 or any successor forms thereto), and the registration form to be used may
be used for the registration of Registrable Securities, the Company will give written notice to each holder of Excluded Registrable
Securities of its intention to effect such a registration and will, subject to the provisions of Subsection 3(d)(ii) hereof, and
to the extent permitted by the Staff, include in such registration all Excluded Registrable Securities with respect to which the
Company has received a written request for inclusion therein within twenty (20) days after the receipt of the Company’s notice
(a “Piggyback Registration”).


 


(ii)       If
a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities, and
the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration a pro rata share of Excluded Registrable Securities requested to be included
in such Registration Statement as calculated by dividing the number of Excluded Registrable Securities requested to be included
in such Registration Statement by the number of the Company’s securities requested to be included in such Registration Statement
by all selling security holders. In such event, the holder of Excluded Registrable Securities shall continue to have registration
rights under this Agreement with respect to any Excluded Registrable Securities not so included in such Registration Statement.


 


(iii)       Notwithstanding
the foregoing, if, at any time after giving a notice of Piggyback Registration and prior to the effective date of the Registration
Statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give written notice of such determination to each record holder of Excluded
Registrable Securities and, following such notice, (i) in the case of a determination not to register, shall be relieved of its
obligation to register any Excluded Registrable Securities in connection with such registration, and (ii) in the case of a determination
to delay registering, shall be permitted to delay registering any Excluded Registrable Securities for the same period as the delay
in registering such other securities.


 






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4.        Registration
Procedures. The Company will keep each Holder reasonably advised as to the filing and effectiveness of the Registration Statement.
At its expense with respect to the Registration Statement, the Company will:


 


(a)    subject
to compliance with Section 5(b), prepare and file with the Commission with respect to the Registrable Securities, the Registration
Statement in accordance with Section 3(a) hereof, and use its commercially reasonable efforts to cause such Registration Statement
to become effective and to remain effective for the Effectiveness Period;


 


(b)    not
name any Holder in the Registration Statement as an underwriter without that Holder’s prior written consent;


 


(c)    if
the Registration Statement or any post-effective amendment thereto is subject to review by the Commission, promptly respond to
all comments, diligently pursue resolution of any comments to the satisfaction of the Commission and file all amendments and supplements
to such Registration Statement as may be required to respond to comments from the Commission and otherwise to enable such Registration
Statement to be declared effective;


 


(d)    during
the Effectiveness Period, prepare and file with the Commission such amendments and supplements to such Registration Statement as
may be necessary to keep such Registration Statement continuously effective, current and up-to-date for the applicable time period
required hereunder and, if applicable, file any Registration Statement pursuant to Rule 462(b) under the Securities Act; cause
the related prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the Securities Act;


 


(e)    not
less than four (4) Trading Days prior to filing the Registration Statement or any related prospectus or any amendment or supplement
thereto, the Company shall furnish to the Holders (or, if so specified by any Holder, legal counsel to such Holder) copies of or
a link to all such documents proposed to be filed (other than those incorporated by reference) and duly consider in good faith
any comments received from the Holders (or from legal counsel to such Holders, as applicable);


 


(f)    furnish,
without charge, to each Holder of Registrable Securities covered by such Registration Statement (i) a reasonable number of
copies of such Registration Statement (including any exhibits thereto other than exhibits incorporated by reference), each amendment
and supplement thereto as such Holder may reasonably request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other prospectus filed under Rule 424 of the Securities Act)
as such Holders may reasonably request, in conformity with the requirements of the Securities Act, and (iii) such other documents
as such Holder may reasonably require to consummate the disposition of the Registrable Securities owned by such Holder, but only
during the Effectiveness Period; provided that the Company shall have no obligation to furnish any document pursuant to this clause
that is available on the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system;


 






    	 	10	 



     


    

 


(g)    use
its reasonable best efforts to register or qualify the securities covered by such Registration Statement under such other applicable
securities laws of such jurisdictions within the United States, including Blue Sky laws, as any Holder of Registrable Securities
covered by such Registration Statement reasonably requests and as may be reasonably necessary for the marketability of the Registrable
Securities (such request to be made by the time the applicable Registration Statement is deemed effective by the Commission) and
do any and all other acts and things reasonably necessary to enable such Holder to consummate the disposition in such jurisdictions
of the Registrable Securities owned by such Holder; provided, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or (ii)
consent to general service of process in any such jurisdiction where it has not already done so;


 


(h)    as
promptly as practicable after becoming aware of any event, notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the happening of any event that will, after the occurrence
of such event, cause the prospectus included in such Registration Statement, if not amended or supplemented, to contain an untrue
statement of a material fact or an omission to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading and the Company shall promptly thereafter
prepare and furnish to such Holder a supplement or amendment to such prospectus (or prepare and file appropriate reports under
the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not
contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading, unless suspension of
the use of such prospectus otherwise is authorized herein or in the event of a Blackout Period, in which case no supplement or
amendment need be furnished (or Exchange Act filing made) until the termination of such suspension or Blackout Period; provided
that any and all information provided to the Holder pursuant to such notification shall remain confidential to each Holder until
such information otherwise becomes public, unless disclosure by a Holder is required by law;


 


(i)    comply,
and continue to comply during the Effectiveness Period, in all material respects with the Securities Act and the Exchange Act and
with all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such Registration
Statement;


 


(j)    as
promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities being offered or sold
pursuant to the Registration Statement of the issuance by the Commission or any other federal or state governmental authority of
any stop order or other suspension of effectiveness of the Registration Statement or the initiation of any proceedings for that
purpose;


 


(k)    use commercially
reasonable efforts to obtain all other approvals, consents, exemptions or authorizations from such governmental agencies or authorities
as may be necessary to enable the Holders and underwriters to consummate the disposition of Registrable Securities;


 






    	 	11	 



     


    

 


(l)    enter into customary
agreements (including any underwriting agreements in customary form, including any representations and warranties and lock-up provisions
therein), and take such other actions as may be reasonably required in order to expedite or facilitate the disposition of Registrable
Securities;


 


(m)  use
its commercially reasonable efforts to furnish, or cause to be furnished, on the date that such Registrable Securities are delivered
to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in form and substance reasonably acceptable to the
managing underwriter, addressed to the underwriters and (ii) a “comfort” letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance reasonably acceptable to the managing underwriter, addressed
to the underwriters;


 


(n)   use commercially
reasonable efforts to comply with all applicable rules and regulations of the Commission and make available to its shareholders,
as soon as reasonably practicable, but no later than sixteen (16) months after the effective date of any Registration Statement
(as defined in Rule 168(c) under the Securities Act), an earnings statement that satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;


 


(o)    provide officers’
certificates and other customary closing documents;


 


(p)    use
its commercially reasonable efforts to cause the shares of Common Stock to be quoted or listed on an Approved Market;


 


(q)    cooperate
with each Holder and each underwriter participating in the disposition of such Registrable Securities and underwriters’ counsel
in connection with any filings required to be made with the Financial Industry Regulatory Authority (“FINRA”)
and


 


(r)      use
its commercially reasonable efforts to:


 


(i)              
cause a FINRA-registered broker-dealer (the “Market Maker”)(A) sponsor the Common Stock, (B) file
with FINRA, no later than fifteen (15) days after the Registration Statement is initially filed with the Commission, a Form 211
together with the required documentation and information in connection therewith, (C) respond promptly to any requests from FINRA
for additional information in connection therewith (and the Company will provide reasonable cooperation to the Market-Maker in
fulfillment thereof), and (D) clear the Market Maker by FINRA to initiate quotation of the Common Stock on an Approved Market at
the earliest practicable date after the filing of the Form 211; and


 


(ii)             
cause the Common Stock to be DTC-, DWAC- and DRS-eligible no later than the initiation of quotation of the Common Stock
on an Approved Market.


 


(s) cause appropriate
officers as are reasonably requested by a managing underwriter or investment bank to participate in a “road show” or
similar marketing effort being conducted by such underwriter with respect to an underwritten public offering;


 






    	 	12	 



     


    

 


(t)    provide
a transfer agent and registrar that is/are registered with the Commission, which may be a single entity, for the shares of Common
Stock at all times, and cooperate with the Holders to facilitate the timely preparation and delivery of the Registrable Securities
to be delivered to a transferee pursuant to a resale of Registrable Securities pursuant to the Registration Statement (whether
electronically or in certificated form) which Registrable Securities shall be free, to the extent permitted by the applicable Subscription
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in
such names as any such Holders may request;


 


(u)    cooperate
with the Holders of Registrable Securities being offered pursuant to the Registration Statement to issue and deliver, or cause
its transfer agent to issue and deliver, certificates or evidence of book-entry positions representing Registrable Securities to
be offered pursuant to the Registration Statement within a reasonable time after the delivery of certificates or evidence of book-entry
positions representing the Registrable Securities to the transfer agent or the Company, as applicable, and enable such certificates
or positions to be in such denominations or amounts as the Holders may reasonably request and registered in such names as the Holders
may request;


 


(v)    notify
the Holders, the Placement Agents and their counsel as promptly as reasonably possible and (if requested by any such Person) confirm
such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a Prospectus or any prospectus supplement
or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “no review,” “review” or a “completion of a review” of such Registration
Statement and whenever the Commission comments in writing on such Registration Statement (in which case the Company shall provide
true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a selling
stockholder, but not information which the Company believes would constitute material and non-public information); and
(C) with respect to the Registration Statement or any post-effective amendment, when the same has been declared effective,
provided, however, that such notice under this clause (C) shall be delivered to each Holder; (ii) during the Effectiveness
Period, of any request by the Commission or any other federal or state governmental authority for amendments or supplements
to a Registration Statement or prospectus or for additional information that pertains to the Holders as selling stockholders; or
(iii) during the Effectiveness Period, of the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any proceeding for such purpose;


 


(w)    during
the Effectiveness Period, refrain from bidding for or purchasing any Common Stock or any right to purchase Common Stock or attempting
to induce any person to purchase any such security or right if such bid, purchase or attempt would in any way limit the right of
the Holders to sell Registrable Securities by reason of the limitations set forth in Regulation M of the Exchange Act;


 


(x)    use
its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or
suspending the effectiveness of a Registration Statement or suspending or preventing the use of any related prospectus, or (ii)
any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction,
at the earliest practicable moment;


 






    	 	13	 



     


    

 


(y) use commercially
reasonable efforts to assist a Holder in facilitating any sales (including but not limited to private sales) or other transfers
of Registrable Securities by, among other things, providing officers’ certificates and other customary closing documents
reasonably requested by a Holder without charge to the Holder (but the Holder shall be responsible for any third-party expenses)
; and


 


(aa)(i) cause
legal counsel to the Company, at the Company’s expense, to issue to the transfer agent for the Common Stock, within one (1)
Trading Day after the SEC Effective Date, a “blanket” legal opinion in customary form to the effect that the shares
covered by the Registration Statement have been registered for resale under the Securities Act and may be reissued upon resale
by each selling stockholder named in the Registration Statement without any legend or restriction relating to their status as “restricted
securities” as defined in Rule 144, upon receipt by the transfer agent of a certification by the holder thereof in form and
substance reasonably satisfactory to the Company’s counsel, that such selling stockholder has sold such shares in accordance
with the plan of distribution included in the Registration Statement, and (ii) cause the transfer agent for the Common Stock to
issue such shares without any such legend within one (1) Trading Day after the transfer agent’s receipt of such certification.


 


5.        Obligations
of the Holders.


 


(a)    At
any time, and from time to time, after the Registration Effectiveness Date, the Company may notify one or more of the Holders (in
each case, the “Specified Holders”) in writing (each, a “Suspension Notice”)
of the happening of: (i) any event of the kind described in Section 4(h) or (j); (ii) any Blackout Period; or (iii) only with respect
to a Holder who is an “insider” covered by such program, any suspension by the Company, pursuant to a written insider
trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered
by such program to transact in the Company’s securities because of the existence of material non-public information (each,
a “Suspension Event”). Upon receipt of any Suspension Notice, each Specified Holder shall as promptly
as practicable discontinue disposition of such Holder’s Registrable Securities covered by the Registration Statement until
such Specified Holder receives the supplemented or amended prospectus contemplated by Section 4(h), such blackout period shall
have terminated or the restriction on the ability of “insiders” to transact in the Company’s securities is removed,
as applicable, and, if so directed by the Company, each such Specified Holder will deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Specified Holder’s possession, of the most recent prospectus
covering such Specified Holder’s Registrable Securities at the time of receipt of such Suspension Notice. The foregoing right
to delay or suspend may be exercised by the Company for no longer than sixty (60) Trading Days in any consecutive 12-month
period (and for the avoidance of doubt, if the delay or suspension relates to a Blackout Period, the period of delay or suspension
shall also count against the maximum number of days for Blackout Periods in the definition of such term).


 


(b)    The
Holders of the Registrable Securities shall provide such information as may reasonably be requested by the Company in connection
with the preparation of the Registration Statement, including amendments and supplements thereto, in order to effect the registration
of any Registrable Securities under the Securities Act pursuant to Section 3(a) of this Agreement and in connection with the
Company’s obligation to comply with federal and applicable state securities laws, including a completed questionnaire in
the form attached to this Agreement as Annex A (a “Selling Securityholder Questionnaire”).


 






    	 	14	 



     


    

 


(c)    Each
Holder, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of the Registration Statement hereunder, unless such Holder has notified the Company
in writing of its election to exclude all of its Registrable Securities from such Registration Statement.


 


6.       Registration
Expenses. The Company shall pay all expenses arising from or incident to the performance of, or compliance with, this Agreement,
including, without limitation, (i) the Commission, stock exchange, OTC Markets Group, FINRA and other registration and filing fees,
(ii) rating agencies fees, (iii) all fees and expenses incurred in connection with complying with any securities or blue sky laws
(including reasonable and documented fees, charges and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iv) all printing (including financial printer), messenger and delivery expenses, (v) the fees, charges
and disbursements of counsel to the Company and of its independent public accountants and any other accounting and legal fees,
charges and expenses incurred by the Company (including any expenses arising from any special audits or “comfort letters”
required in connection with or incident to any registration), (vi) the fees, charges and disbursements of any special experts retained
by the Company in connection with any registration pursuant to the terms of this Agreement, (vii) all internal expenses of the
Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (viii) the fees
and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange, (ix) Securities
Act liability insurance (if the Company elects to obtain such insurance), regardless of whether a Registration Statement filed
in connection with such registration is declared effective and (x) reasonable and documented fees, charges and disbursements of
a single counsel to the Holders selected by the Company and reasonably acceptable to the Holders of at least a majority of the
Registrable Securities, in an amount not to exceed $10,000; provided, that, in any underwritten registration, the Company
shall have no obligation to pay any underwriting discounts, selling commissions or transfer taxes attributable to the Registrable
Securities being sold by the Holders thereof, which underwriting discounts, selling commissions and transfer taxes shall be borne
by such Holders. Except as provided in this Section 6 and Section 8 of this Agreement, the Company shall not be responsible
for the expenses of any attorney or other advisor employed by a Holder or for any other fees, disbursements and expenses incurred
by Holders not specifically agreed to in this Agreement.


 


7.       Assignment
of Rights. No Holder may assign its rights under this Agreement to any party without the prior written consent of the Company; provided, however,
that any Holder may assign its rights under this Agreement without such consent (a) to a Permitted Assignee with respect
to the Registrable Securities transferred to such Permitted Assignee (which Registrable Securities continue to constitute Restricted
Common Stock following such assignment) as long as (i) such transfer or assignment is effected in accordance with applicable
securities laws; (ii) such transferee or assignee agrees in writing to become bound by and subject to the terms of this Agreement;
and (iii) such Holder notifies the Company in writing of such transfer or assignment, stating the name and address of the
transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned;
or (b) as otherwise permitted under the applicable Subscription Agreement. The Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the Majority Holders (other than by merger or consolidation
or to an entity which acquires the Company including by way of acquiring all or substantially all of the Company’s assets,
which shall not require such consent).


 






    	 	15	 



     


    

 


8.        Indemnification.


 


(a)    To
the fullest extent permitted by applicable law, the Company shall, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder, its affiliates, directors, officers, stockholders, members, managers, partners, employees
and agents and each other person, if any, who controls or is under common control with such Holder within the meaning of Section 15
of the Securities Act (collectively, the “Holder Indemnified Parties”), against any and all losses, claims,
damages, liabilities, costs, expenses, judgments, fines, penalties, charges and amounts paid in settlement (or actions or proceedings,
whether commenced or threatened, in respect thereof) (collectively, “Losses”) that arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Securities were registered under the Securities Act, any preliminary prospectus,
free writing prospectus as defined under Rule 433(d) of the Securities Act (“Free Writing Prospectus”),
any “testing-the-water” communication that is a written communication within the meaning of Rule 405 under the Securities
Act (“Testing the Water Communication”), any road show communication as defined in Rule 433(h) under
the Securities Act (“Road Show Communication”), final prospectus or summary prospectus contained therein,
or any amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material
fact required to be stated or necessary to make the statements therein in light of the circumstances in which they were made not
misleading, and the Company shall reimburse the Holder Indemnified Parties for any legal or any other expenses reasonably incurred
by them in connection with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided, however,
that the Company shall not be liable in any such case (i) to the extent, but only to the extent, that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of or is based upon (x) an untrue statement in
or omission from such registration statement, any such preliminary prospectus, Free Writing Prospectus, Testing the Water Communication,
Road Show Communication, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with
written information included in the Selling Securityholder Questionnaire, attached hereto as Annex A, furnished by a Holder or
its representative (acting on such Holder’s behalf) to the Company expressly for use in the preparation thereof or (y) the
failure of a Holder to comply with the covenants and agreements contained in Section 5 hereof respecting the sale of Registrable
Securities. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holder
Indemnified Parties and shall survive the transfer of such shares by the Holder.


 


(b)    As
a condition to including Registrable Securities in the registration statement filed pursuant to this Agreement, each Holder agrees,
severally and not jointly, to be bound by the terms of this Section 8 and to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, each of its directors, officers, partners, and each underwriter, if any, and each other person,
if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any Losses, insofar as such
Losses arise out of or are based upon any untrue statement of a material fact contained in any registration statement, any preliminary
prospectus, Free Writing prospectus, Testing the Water Communication, Road Show Communication, final prospectus, summary prospectus,
amendment or supplement thereto, or arise out of or are based upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is included or omitted in reliance upon and in conformity with written information included in the Selling
Securityholder Questionnaire, attached hereto as Annex A, furnished by the Holder or its representative (acting on such Holder’s
behalf) to the Company expressly for use in the preparation thereof, and such Holder shall reimburse the Company, and its directors,
officers, partners, and any such controlling persons for any legal or other expenses reasonably incurred by them in connection
with investigating, defending, or settling any such loss, claim, damage, liability, action, or proceeding; provided, however,
that the indemnity obligation contained in this Section 8(b) shall in no event exceed the amount of the net proceeds received
by such Holder as a result of the sale of such Holder’s Registrable Securities pursuant to such registration statement. Such
indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer by any Holder of such shares.


 






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(c)    Promptly
after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in
this Section 8 (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided, however,
that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
under this Section 8, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice in
any material respect. In case any such action is brought against an indemnified party, unless in the reasonable judgment of counsel
to such indemnified party a conflict of interest between such indemnified party and indemnifying parties may exist or the indemnified
party may have defenses not available to the indemnifying party in respect of such claim, the indemnifying party shall be entitled
to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and, after
notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection
with the defense thereof, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified
and indemnifying parties arises in respect of such claim or the indemnified party may have defenses not available to the indemnifying
party in respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim
in a diligent manner, other than reasonable costs of investigation. Neither an indemnified party nor an indemnifying party shall
be liable for any settlement of any action or proceeding effected without its consent (which shall not be unreasonably withheld
or delayed). No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth
herein, and without limiting any of the rights set forth above, in any event any party shall have the right to retain, at its own
expense, counsel with respect to the defense of a claim. Each indemnified party shall furnish such information regarding itself
or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.


 


(d)    If
an indemnifying party does not or is not permitted to assume the defense of an action pursuant to Section 8(c) or in the case
of the expense reimbursement obligation set forth in Sections 8(a) and 8(b), the indemnification required by Sections 8(a) and
8(b) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or Losses are incurred.


 






    	 	17	 



     


    

 


(e)    If
the indemnification provided for in Section s 8(a) and 8(b) is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party,
in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party
as a result of such loss, liability, claim, damage or expense (i) in such proportion as is appropriate to reflect the proportionate
relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by
the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party than the amount hereinafter calculated, then in such
proportion as is appropriate to reflect not only the proportionate relative fault of the indemnifying party and the indemnified
party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other,
as well as any other relevant equitable considerations. Notwithstanding any other provision of this Section 8(e), no Holder
shall be required to contribute any amount in excess of the amount by which the net proceeds received by such Holder from the sale
of the Registrable Securities pursuant to the Registration Statement exceeds the amount of damages that such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement of a material fact or omission, except in the case of
fraud or willful misconduct. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.


 


(f)    The
indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the indemnifying parties
may have to the indemnified parties and are not in diminution or limitation of the indemnification provisions under the applicable
Subscription Agreement.


 


9.       (a)
Rule 144. The Company shall file with the Commission “Form 10 information” (as defined in Rule 144(i)(3) under
the Securities Act) reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1)(i) as promptly as
practicable following the closing of the Share Exchange. For a period ending on the earlier of (i) five (5) years from the Effective
Date, or (ii) the acquisition of the Company (whether by merger, tender or exchange offer, sale or assignment of assets or other
purchase) as a result of which the Company is no longer subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will use its commercially reasonable efforts to timely file all reports required to be filed by the Company after
the date hereof under the Exchange Act and the rules and regulations adopted by the Commission thereunder, and if the Company is
not required to file reports pursuant to such sections, it will prepare and furnish to the Holders and make publicly available
in accordance with Rule 144(c) such information as is required for the Holders to sell shares of Common Stock under Rule 144.


 


(b) Stock Exchange
Listing. The Company shall use commercially reasonable efforts to cause the Common Stock to be registered under Section 12(b)
of the Exchange Act and listed on the Nasdaq Stock Market or the New York Stock Exchange as soon as practicable after the Company
meets all of the applicable listing criteria for any tier of such stock exchanges. Except as otherwise provided herein, all expenses
in connection with the matters contemplated by this Section 9(b) shall be borne by the Company.


 






    	 	18	 



     


    

 


10.      Miscellaneous.


 


(a)    Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the United States of America and the
State of New York, both substantive and remedial, without regard to New York conflicts of law principles. Any judicial proceeding
brought against either of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto
shall be brought in the state or federal courts of the State of New York, New York County, and, by its execution and delivery of
this Agreement, each party to this Agreement accepts the jurisdiction of such courts. The foregoing consent to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this Agreement.


 


(b)    Remedies.
Except as otherwise specifically set forth herein with respect to a Registration Event, in the event of a breach by the Company
or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall
be entitled to seek specific performance of its rights under this Agreement. Except as otherwise specifically set forth herein
with respect to a Registration Event, the Company and each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that
a remedy at law would be adequate.


 


(c)    Successors
and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon,
the successors, Permitted Assignees, executors and administrators of the parties hereto.


 


(d)    No
Inconsistent Agreements. The Company has not entered, as of the date hereof, and shall not enter, on or after the date of this
Agreement, into any agreement with respect to its securities that would have the effect of impairing the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.


 


(e)    Entire
Agreement. This Agreement and the documents, instruments and other agreements specifically referred to herein or delivered
pursuant hereto (including the Subscription Agreements) constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof.


 


(f)    Notices,
etc. All notices, consents, waivers, and other communications which are required or permitted under this Agreement shall be
in writing will be deemed given to a party (a) upon receipt, when personally delivered; (b) one (1) Business Day after
deposit with a nationally recognized overnight courier service with next day delivery specified, costs prepaid on the date of delivery,
if delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (c) the
time of transmission if sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment if
such notice or communication is delivered prior to 5:00 P.M., New York City time, on a Trading Day, or the next Trading Day after
the date of transmission, if such notice or communication is delivered on a day that is not a Trading Day or later than 5:00 P.M.,
New York City time, on any Trading Day, provided confirmation of facsimile is mechanically or electronically generated and kept
on file by the sending party and confirmation of email is kept on file, whether electronically or otherwise, by the sending party
and the sending party does not receive an automatically generated message from the recipients email server that such e-mail could
not be delivered to such recipient; (d) the date received or rejected by the addressee, if sent by certified mail, return
receipt requested, postage prepaid; or (e) seven (7) days after the placement of the notice into the mails (first class postage
prepaid), to the party at the address, facsimile number, or e-mail address furnished by the such party,


 






    	 	19	 



     


    

 


If to the Company, to:


  


SmartKem, Inc.





Manchester Technology Center,
Hexagon Tower





Delaunays Road, Blackley





Manchester, M9 8GQ UK





Attention: Robert Bahns





Email:  R.Bahns@smartkem.com


 


with copy to:


  


Lowenstein Sandler LLP





1251 Avenue of the Americas





New York, NY 10020





Attention: Jack Hogoboom





Email: jhogoboom@lowenstein.com


 


if to a Holder, to:


 


such Holder
at the address set forth on the signature page hereto or in the Company’s records;


 


or at such other address as any party shall
have furnished to the other parties in writing in accordance with this Section 10(h).


 


(g)    Delays
or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default
of the Company under this Agreement, shall impair any such right, power or remedy of such Holder nor shall it be construed to be
a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereunder occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this
Agreement, or any waiver on the part of any Holder of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or
otherwise afforded to any holder, shall be cumulative and not alternative.


 


(h)    Counterparts.
This Agreement may be executed in any number of counterparts, and with respect to any Purchaser, by execution of an Omnibus Signature
Page to this Agreement and the applicable Subscription Agreement, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one instrument. In the event that any signature is delivered
by facsimile transmission or by an e-mail, which contains a copy of an executed signature page such as a portable document
format (.pdf) file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or e-mail of an executed signature page such
as a .pdf signature page were an original thereof.


 






    	 	20	 



     


    

 


(i)    Severability.
In the case any provision of this Agreement shall be invalid, illegal or unenforceable, such provision shall be replaced with a
valid, legal and enforceable provision that as closely as possible reflects the parties’ intent with respect thereto, and
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.


  


(j)    Amendments.
Except as otherwise provided herein, the provisions of this Agreement may be amended at any time and from time to time, and particular
provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and the
Majority Holders; provided that this Agreement may not be amended and the observance of any term hereof may not be waived with
respect to any Holder without the written consent of such Holder if such amendment or waiver on its face materially and adversely
affects the rights of such Holder under this Agreement in a manner that is different than the other Holders. The Purchasers and
the Brokers acknowledge that by the operation of this Section 10(j), the Majority Holders may have the right and power to diminish
or eliminate all rights of the Purchasers and the Brokers under this Agreement.


 


(k)    Independent
Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association,
a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert
or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters
and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such
claim, with respect to such obligations or transactions. Except as expressly provided herein, each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary
for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with
respect to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision
of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by
any Holder. Except as expressly provided herein, it is expressly understood and agreed that each provision contained in this Agreement
is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among
Holders.


 


(l)       Subsequent
Registration Rights. The Company shall not enter into any agreement granting registration rights more favorable than the registration
rights set forth in this Agreement without the written consent of the Majority Holders.


 


[SIGNATURE
PAGE FOLLOWS] 


 






    	 	21	 



     


    

  


This Registration Rights Agreement is hereby
executed as of the date first above written.


 


	THE COMPANY:  SMARTKEM, INC.
	 
	 	 
	By: 	                                 	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	PURCHASERS	 	 
	 	 	 
	See Omnibus Signature Pages to Subscription Agreement	 	 
	 	 	 
	REGISTRABLE PRE-EXCHANGE STOCKHOLDER (INDIVIDUAL):	 	 REGISTRABLE PRE-EXCHANGE STOCKHOLDER (ENTITY):
	 	 	 
	 	 	 
	Print Name	 	Print Name of Entity
	 	 	 
	 	 	By: 	                            
	Signature	 	Name: 
	 	 	Title: 
	 	 	 
	HOLDER OF EXCHANGE SHARES (INDIVIDUAL):	 	HOLDER OF EXCHANGE SHARES (ENTITY):
	 	 	 
	 	 	 
	Print Name	 	 Print Name of Entity
	 	 	 
	 	 	
        By:
	 

	Signature	 	Name: 
	 	 	Title: 
	 	 	 
	BROKER (INDIVIDUAL):	 	BROKER (ENTITY):
	 	 	 
	 	 	 
	Print Name	 	Print Name of Entity
	 	 	 
	 	 	By: 	 
	Signature	 	Name: 
	 	 	Title: 
	 	 	 
	HOLDER OF ADVISORY SHARES (INDIVIDUAL):	 	HOLDER OF ADVISORY SHARES (ENTITY):
	 	 	 
	 	 	 
	Print Name	 	 Print Name of Entity
	 	 	 
	 	 	By:
 
	Signature	 	Name: 
	 	 	Title: 
	 	 	 
	All Holders: Address