Exhibit 10.1


 





Execution Version







 





REGISTRATION RIGHTS AGREEMENT


 


This REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of September 17, 2014, is by and among 22nd Century Group,
Inc., a Nevada corporation (the “Company”), and each of the undersigned buyers (each, a “Buyer”
and collectively, the “Buyers”).


 


RECITALS


 


A.In connection
with the Securities Purchase Agreement by and among the parties hereto, dated as of September 17, 2014 (as may be amended from
time to time, the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to the Buyers shares of Common Stock (as defined in the Securities
Purchase Agreement).


 


B.To induce the
Buyer to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws.


 


AGREEMENT


 


NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:


 


1.DEFINITIONS.


 


Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used
in this Agreement, the following terms shall have the following meanings:


 


(a)“Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.


 


(b)“Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement.


 


(c)“Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.


 


(d)“Effectiveness
Deadline” means with respect to the Registration Statement required to be filed pursuant to Section 2(a), the earlier
of the (A) 90th calendar day after the Filing Deadline and (B) the 3rd Business Day after the date the Company
is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will
not be subject to further review.


 






    	 



    	 



    

 


(e)“Filing
Deadline” means with respect to the Registration Statement required to be filed pursuant to Section 2(a), the later of
(i) the earlier of (a) the day on which all material non-public information about the Company has been publicly disclosed and (b)
October 15, 2014 and (ii) the closing of the transactions contemplated by the Securities Purchase Agreement.


 


(f)“Investor”
means each Buyer or any transferee or assignee of any Registrable Securities to whom any Buyer assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee
thereof to whom a transferee or assignee of any Registrable Securities assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9.


 


(g)“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, or any other entity of any kind
or nature whatsoever, a trust, an unincorporated organization or a government or any department or agency or portion thereof.


 


(h)“register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness
of such Registration Statement(s) by the SEC.


 


(i)“Registrable
Securities” means (i) the shares of Common Stock issued pursuant to the Securities Purchase Agreement and (ii) any shares
of Common Stock issued as a result of any stock split, stock dividend, recapitalization, exchange or similar event.


 


(j)“Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering
Registrable Securities.


 


(k)“Required
Holders” means the holders of at least a majority of the Registrable Securities.


 


(l)“Required
Registration Amount” means the maximum number of shares of Common Stock issued pursuant to the Securities Purchase Agreement.


 


(m)“Rule
144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration.


 


(n)“Rule
415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.


 


(o)“SEC”
means the United States Securities and Exchange Commission or any successor thereto.


 






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2.REGISTRATION.


 


(a)Mandatory Registration.
The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the SEC a Registration
Statement on Form S-3 covering the resale of all of the Registrable Securities, provided that such Registration Statement shall
register for resale at least the number of shares of Common Stock equal to the Required Registration Amount as of the date such
Registration Statement is initially filed with the SEC (together with such other number of shares of Common Stock constituting
Registrable Securities as may be registered thereunder pursuant to Rule 416), provided further that if Form S-3 is unavailable
for such a registration, the Company shall use such other form as is required by Section 2(c). The Registration Statement required
to be filed pursuant to the terms of this Agreement shall contain (except if otherwise directed by the Required Holders) the “Selling
Stockholder” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit
B. The Company shall use its commercially reasonable efforts to have such Registration Statement be filed pursuant to the terms
of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline.


 


(b)Legal Counsel.
Subject to Section 5 hereof, Crede CG III, Ltd. (“Crede”) shall have the right to select one (1) legal counsel
to review, solely on its behalf, any registration pursuant to this Section 2 (“Legal Counsel”), which shall
be Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. or such other counsel as thereafter designated by Crede.


 


(c)Ineligibility
to Use Form S-3.  In the event that Form S-3 is not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable
to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form S-3 as soon as practical
after such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements then in
effect and the availability for use of each prospectus contained therein until such time as a Registration Statement on Form S-3
covering the resale of all the Registrable Securities has been declared effective by the SEC and the prospectus contained therein
is available for use.


 


(d)Sufficient
Number of Shares Registered. In the event the number of shares available under any Registration Statement is insufficient to
cover from time to time the Required Registration Amount, the Company shall amend such Registration Statement (if permissible),
or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover
at least the Required Registration Amount as soon as practicable, but in any event not later than fifteen (15) days after the necessity
therefor arises (but taking account of any position of the staff of the SEC (the “Staff”) with respect to the
date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration Statement (as the
case may be) to be filed with the SEC). The Company shall use its commercially reasonable efforts to cause such amendment to such
Registration Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following
the filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.
For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under
the applicable Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as
of such time by (ii) 1.00, except as provided in Section 2(f).


 






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(e)Effect of Failure
to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement covering the resale
of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to Section 2(f)) and required
to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline (a “Filing
Failure”) (it being understood that if the Company files a Registration Statement without affording each Investor a reasonable
opportunity to review and comment on the same as required by Section 3(c) hereof, the Company shall be deemed to not have satisfied
this clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B) not declared effective by the SEC on or before
the Effectiveness Deadline (an “Effectiveness Failure”) (it being understood that if on the fourth Business
Day immediately following the Effective Date for such Registration Statement the Company shall not have filed a “final”
prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance with Section 3(b) (whether or not such
a prospectus is technically required by such rule), the Company shall be deemed not to have satisfied this clause (i)(B) and such
event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as defined below), on
any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities required to be included
on such Registration Statement (disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration
Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose
such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension of more than one (1)
Business Day or delisting of (or a failure to timely list) the shares of Common Stock on the Principal Market (as defined in the
Securities Purchase Agreement) (unless such shares of Common Stock are delisted as part of a simultaneous transfer to a different
national securities exchange), or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order)
or the prospectus contained therein is not properly available for use for any reason (a “Maintenance Failure”),
or (iii) if the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the 1934 Act such that it
is not in compliance with Rule 144(c)(1) (a “Current Public Information Failure”) as a result of which any of
the Investors are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume
restrictions), then, as damages to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying
shares of Common Stock, the Company shall pay to each holder of Registrable Securities relating to such Registration Statement
an amount in cash equal to one percent (1%) of the sum of such Investor’s purchase price for the Common Stock purchased pursuant
to the Securities Purchase Agreement (the “Investment”) (1) within ten (10) days of the date of such Filing
Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and one (1) percent (1%)
of the Investment on every thirty (30) day anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) an Effectiveness
Failure until such Effectiveness Failure is cured; (III) a Maintenance Failure until such Maintenance Failure is cured; and (IV)
a Current Public Information Failure until the earlier of (i) the date such Current Public Information Failure is cured and (ii)
such time that such public information is no longer required pursuant to Rule 144. The payments to which a holder of Registrable
Securities shall be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.”
Following the initial Registration Delay Payment for any particular event or failure (which shall be paid within ten (10) days
of the date of such event or failure, as set forth above), if an event or failure giving rise to the Registration Delay Payments
is cured prior to any thirty (30) day anniversary of such event or failure, then no additional Registration Delay Payment shall
be required. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing,
such Registration Delay Payments shall bear interest at the rate of one and one half percent (1.5%) per month (prorated for partial
months) until paid in full. Notwithstanding the foregoing, (i) no single event or failure with respect to a particular Registration
Statement shall give rise to more than one type of Registration Delay Payment with respect to such Registration Statement (other
than a Filing Failure and Effectiveness Failure relating to the same Registration Statement), (ii) no Registration Delay Payments
shall be owed to an Investor (other than with respect to a Maintenance Failure resulting from a suspension or delisting of (or
a failure to timely list) the shares of Common Stock on the Principal Market) with respect to any period during which all of such
Investor’s Registrable Securities may be sold by such Investor without restriction under Rule 144 and without the need for
current public information required by Rule 144(c)(1) (including, without limitation, volume restrictions) and (iii) with respect
to any Registrable Securities excluded from a Registration Statement by election of an Investor.


 






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(f)Offering.
Notwithstanding anything to the contrary contained in this Agreement, in the event the Staff or the SEC seeks to characterize any
offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or
on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to
become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale
at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor) without being named therein
as an “underwriter,” then the Company shall reduce the number of shares to be included in such Registration Statement
by all Investors until such time as the Staff and the SEC shall so permit such Registration Statement to become effective as aforesaid.
In making such reduction, the Company shall reduce the number of shares to be included by all Investors on a pro rata basis (based
upon the number of Registrable Securities otherwise required to be included for each Investor) unless the inclusion of shares by
a particular Investor or a particular set of Investors are resulting in the Staff or the SEC’s “by or on behalf of
the Company” offering position, in which event the shares held by such Investor or set of Investors shall be the only shares
subject to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other basis as would result
in the exclusion of the least number of shares by all such Investors). In addition, in the event that the Staff or the SEC requires
any Investor seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified
as an “underwriter” in order to permit such Registration Statement to become effective, and such Investor does not
consent to being so named as an underwriter in such Registration Statement, then, in each such case, the Company shall reduce the
total number of Registrable Securities to be registered on behalf of such Investor, until such time as the Staff or the SEC does
not require such identification or until such Investor accepts such identification and the manner thereof. Any reduction pursuant
to this paragraph will first reduce all securities that are not Registrable Securities, if any such securities are permitted by
the Required Holders to be included in accordance with the terms of this Agreement. In the event of any reduction in Registrable
Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon delivery of a written request
to the Company signed by such Investor, the Company to file a registration statement within thirty (30) days of such request (subject
to any restrictions imposed by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner reasonable
acceptable to such Investor, and the Company shall following such request cause to be and keep effective such registration statement
in the same manner as otherwise contemplated in this Agreement for registration statements hereunder, in each case until such time
as: (i) all Registrable Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement
in a manner acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction (including,
without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to “affiliate”
status) and without the need for the current public information required by Rule 144(c)(1) or (iii) such Investor agrees to be
named as an underwriter in any such Registration Statement in a manner acceptable to such Investor as to all Registrable Securities
held by such Investor and that have not theretofore been included in a Registration Statement under this Agreement. For avoidance
of doubt, in the event that the number of shares being registered is reduced pursuant to this Section 2(f), the Company shall owe
no Registration Delay Payments or other payments due to such reduction.


 






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(g)Piggyback Registrations.
Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement, if there is not an effective
Registration Statement covering all of the Registrable Securities or the prospectus contained therein is not available for use
and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account
or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated
under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit
plans), then the Company shall deliver to each Investor a written notice of such determination and, if within fifteen (15) days
after the date of the delivery of such notice, any such Investor shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such Investor requests to be registered; provided, however,
the Company shall not be required to register any Registrable Securities pursuant to this Section 2(g) that are (i) eligible
for resale pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and without the need for
current public information required by Rule 144(c)(1) or (ii) that are the subject of a then-effective Registration Statement,
or (iii) the Company’s underwriter(s) or placement agent(s) with respect to such registration statement advise the Company
that the inclusion of such Registrable Securities could have an adverse impact on the Company’s sale of securities.


 





(h)No Inclusion
of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any Registration
Statement without the prior written consent of the Required Holders. Until the Applicable Date (as defined in the Securities Purchase
Agreement), the Company shall not enter into any agreement providing any registration rights to any of its security holders and
the Company shall not file any other registration statement until such time.





 






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3.RELATED OBLIGATIONS.


 


The Company shall use
its commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method
of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:



 


(a)The Company shall
prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but in no event later than
the Filing Deadline) and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon
as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable Grace Periods, the
Company shall keep the Registration Statement effective (and the prospectus contained therein available for use) pursuant to Rule
415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all
times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities required to
be covered by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to
Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required by Rule
144(c)(1) or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). The Company shall ensure that, when filed and at all times while effective,
other than during an Allowable Grace Period, each Registration Statement (including, without limitation, all amendments and supplements
thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with the
Registration Statement (1) shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
in which they were made) not misleading and (2) will disclose (whether directly or through incorporation by reference to other
SEC filings to the extent permitted) all material information regarding the Company and its securities. The Company shall submit
to the SEC, within two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular
Registration Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement
(as the case may be) and (ii) the consent of Legal Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately
sought), a request for acceleration of effectiveness of such Registration Statement to a time and date not later than three (3)
Trading Days after the submission of such request).


 


(b)Subject to Section
3(q) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without limitation, post-effective
amendments) and supplements to the Registration Statement and the prospectus used in connection with such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep each the Registration
Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933
Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in such Registration Statement; provided, however, on the Business Day following
the Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus
to be used in connection with sales pursuant to the Registration Statement (whether or not such a prospectus is technically required
by such rule). In the case of amendments and supplements to any Registration Statement which are required to be filed pursuant
to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form
8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”),
the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.


 






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(c)The Company shall
(A) permit Legal Counsel to review and comment upon (i) the Registration Statement at least two (2) Business Days prior to its
filing with the SEC and (ii) all amendments and supplements to the Registration Statement (including, without limitation, the prospectus
contained therein) (except for Annual Reports on 10-K, Quarterly Reports on Form 10-Q, proxy statement, Current Reports on Form
8-K and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file
any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably objects (except for Annual
Reports on 10-K, Quarterly Reports on Form 10-Q, proxy statement, Current Reports on Form 8-K and any similar or successor reports).
The Company shall promptly furnish to Legal Counsel without charge, (i) copies of any correspondence from the SEC or the Staff
to the Company or its representatives relating to the Registration Statement, (ii) after the same is prepared and filed with
the SEC, one (1) electronic copy of the Registration Statement and any amendment(s) and supplement(s) thereto, including, without
limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of the Registration Statement, one (1) electronic copy of the prospectus included
in the Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel
in performing the Company’s obligations pursuant to this Section 3.


 


(d)The Company shall
promptly furnish to each Investor whose Registrable Securities are included in the Registration Statement, without charge, (i)
after the same is prepared and filed with the SEC, one (1) electronic copy of the Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of the Registration
Statement, one (1) electronic copy of the prospectus included in the Registration Statement and all amendments and supplements
thereto and (iii) such other documents, including, without limitation, copies of any preliminary or final prospectus, as such Investor
may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor;
provided, that any such item which is available on the SEC’s EDGAR System (or successor thereto) need not be furnished in
physical form.


 


(e)Upon the reasonable
request of an Investor, the Company shall use its commercially reasonable efforts to (i) register and qualify, unless an exemption
from registration and qualification applies, the resale by Investors of the Registrable Securities covered by the Registration
Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii)
prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section
3(e), (y) subject itself to general taxation in any such jurisdiction or (z) file a general consent to service of process in any
such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt
of actual notice of the initiation or threatening of any proceeding for such purpose.


 






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(f)The Company shall
notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware
of such event, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or 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 (provided that in no event shall such notice
contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(q), promptly
prepare a supplement or amendment to the Registration Statement and the prospectus contained therein to correct such untrue statement
or omission and deliver one (1) electronic copy of such supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel, legal counsel for each other Investor or such Investor may reasonably request). The Company
shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, when the Registration Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile or e-mail on the same day of such effectiveness
and by overnight mail), and when the Company receives written notice from the SEC that the Registration Statement or any post-effective
amendment will be reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements to the Registration Statement
or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment
to the Registration Statement would be appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state
governmental authority for any additional information relating to the Registration Statement or any amendment or supplement thereto
or any related prospectus. The Company shall respond as promptly as practicable to any comments received from the SEC with respect
to the Registration Statement or any amendment thereto.


 


(g)The Company shall
(i) use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of the
Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of an
exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension
is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel and
each Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.


 






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(h)Intentionally
omitted.


 


(i)If any Investor
may be required under applicable securities law to be described in the Registration Statement as an underwriter and such Investor
consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available for inspection
by (i) such Investor, (ii) legal counsel for such Investor identified by such Investor in a writing delivered to the Company, and
(iii) one (1) firm of accountants or other agents retained by such Investor (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold in
strict confidence and not to make any disclosure (except to such Investor) or use of any Record or other information which the
Company’s board of directors determines in good faith to be confidential, and of which determination the Inspectors are so
notified, unless (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (3) the information in such Records has been made
generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as
defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning that disclosure of such Records
is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and such Investor,
if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.


 


(j)The Company shall
hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such Registration
Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to
the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it
shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such
Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.


 






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(k)Without limiting
any obligation of the Company under the Securities Purchase Agreement, the Company shall use its commercially reasonable efforts
either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable
Securities covered by each Registration Statement on the OTC Bulletin Board, or (iii) if, despite the Company’s efforts to
satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or (ii), without
limiting the generality of the foregoing, to use commercially reasonable efforts to arrange for at least two market makers to register
with the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities.


 


(l)The Company shall
cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the Registrable Securities to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts (as the case may be) as the Investors may reasonably request
from time to time and registered in such names as the Investors may request.


 


(m)If requested by
an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to Section 3(q) hereof,
(i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests
to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information
with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein
if reasonably requested by an Investor holding any Registrable Securities.


 


(n)The Company shall
use its commercially reasonable efforts to cause the Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities in the United States as may be necessary to consummate the
disposition of such Registrable Securities.


 


(o)The Company shall
otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.


 


(p)Within one (1)
Business Day after the Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in substantially the form attached hereto as Exhibit A.


 






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(q)Notwithstanding
anything to the contrary herein (but subject to the last sentence of this Section 3(q)), at any time after the Effective Date of
the Registration Statement, the Company may delay the disclosure of material, non-public information concerning the Company or
any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the board of directors of the
Company, in the best interest of the Company and otherwise required (a “Grace Period”), provided that the Company
shall promptly notify the Investors in writing of the (i) existence of material, non-public information giving rise to a Grace
Period (provided that in each such notice the Company shall not disclose the content of such material, non-public information to
any of the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace Period ends, provided
further that (I) no Grace Period shall exceed seven (7) consecutive days and during any three hundred sixty-five (365) day period
all such Grace Periods shall not exceed an aggregate of twenty (20) days, (II) the first day of any Grace Period must be at
least five (5) Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist during the sixty (60)
Trading Day period immediately following the Effective Date of the Registration Statement (provided that such sixty (60) Trading
Day period shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso
during which such Registration Statement is not effective or the prospectus contained therein is not available for use) (each,
an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, such Grace Period
shall begin on and include the date the Investors receive the notice referred to in clause (i) above and shall end on and include
the later of the date the Investors receive the notice referred to in clause (ii) above and the date referred to in such notice.
The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration
of each Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving
rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary contained
in this Section 3(q), the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities
with respect to which such Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part
of the Registration Statement to the extent applicable, prior to such Investor’s receipt of the notice of a Grace Period
and for which the Investor has not yet settled. For avoidance of doubt, in the event of an Allowable Grace Period, the Company
shall owe no Registration Delay Payments or other payments due to such reduction.


 


(r)The Company shall
take all other reasonable actions necessary to expedite and facilitate disposition by each Investor of its Registrable Securities
pursuant to the Registration Statement.


 


4.OBLIGATIONS OF THE INVESTOR.


 


(a)At least five
(5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor
in writing of the information the Company seeks from each such Investor with respect to the Registration Statement. It shall be
a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall promptly furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it,
as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and
shall execute such documents in connection with such registration as the Company may reasonably request.


 






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(b)Each Investor
agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment
is required. Notwithstanding anything to the contrary in this Section 4(b), the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement
in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale
prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section
3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.


 


(c)Each Investor
covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection
with sales of Registrable Securities pursuant to a Registration Statement.


 


(d)Each Investor,
by such Investor’s 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 each Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.


 


5.EXPENSES OF REGISTRATION.


 


All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by the Company.


 






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6.INDEMNIFICATION.


 


(a)To the fullest
extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each of its directors,
officers, managers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers,
managers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling
Persons (each, an “Indemnified Person”), against any losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), amounts paid in settlement or reasonable and documented expenses, joint and several (collectively,
“Claims”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation
or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under
the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue
Sky Filing”) or the omission or alleged omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus
(as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (ii) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse
the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other
reasonable and documented expenses incurred by them in connection with investigating or defending any such Claim, provided, however,
that each Indemnified Party’s remedies, including any right of damages, shall be subject to Section 9(k) of the Securities
Purchase Agreement. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified
Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement
thereto and (ii) shall not be available to a particular Investor to the extent such Claim is based on a failure of such Investor
to deliver or to cause to be delivered the prospectus made available by the Company (to the extent applicable), including, without
limitation, a corrected prospectus, if such prospectus or corrected prospectus was made available by the Company pursuant to Section
3(d) and then only if, and to the extent that, following the receipt of the corrected prospectus no grounds for such Claim would
have existed; and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer
of any of the Registrable Securities by any of the Investors pursuant to Section 9.


 






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In connection with any
Registration Statement in which an Investor is participating, such Investor agrees to severally and not jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning
of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection
with such Registration Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such Investor will
reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating
or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect
to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed, provided further
that such Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to such Investor as a result of the sale of 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 such Indemnified Party
and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.


 






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(b)Promptly after
receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement of
any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified Person or Indemnified
Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid
by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying
party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified
Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such Claim (including, without
limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the case may be) and the indemnifying
party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such Indemnified Person or such Indemnified Party and the
indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the case may be) notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party
shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying party, provided
further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may be). The Indemnified
Party or Indemnified Person (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person (as the case may be) which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the case may be) reasonably apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for
any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent
of the Indemnified Party or Indemnified Person (as the case may be), consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party or Indemnified Person (as the case may be) of a release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person (as the
case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party (as the case may
be) under this Section 6, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability
to defend such action. Notwithstanding anything to the contrary contained above or otherwise in this Agreement, Buyer shall be
entitled, as to itself and any of its related Indemnified Parties, including without limitation its agents and representatives,
maintain the control of the defense of any action for which it (or they) may seek indemnification hereunder, and the Company and
its counsel shall fully cooperate in such defense as Buyer and its counsel may request, all at the cost and expense of the Company
(including without limitation, the attorneys’ fees and other costs and expenses of Buyer’s and its related Indemnified
Parties’ legal counsel). Any amounts for which the Company is responsible pursuant to the immediately preceding sentence
shall be paid promptly to, or as directed by, Buyer from time to time, and may be offset by Buyer, at its discretion, against any
amounts from time to time owed by Buyer to the Company under the Transaction Documents.


 






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(c)No Person involved
in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable
Securities who is not guilty of fraudulent misrepresentation.


 


(d)The indemnification
required by this Section 6 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 Indemnified Damages are incurred.


 


(e)Intentionally
omitted.


 






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7.CONTRIBUTION.


 


To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however:
(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the
fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person
is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall
be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation;
and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received
by such seller from the sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions
of this Section 7, no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds actually received by such Investor from the sale of the Registrable Securities subject to the Claim exceeds the amount
of any damages that such Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b),
by reason of such untrue or alleged untrue statement or omission or alleged omission.


 


8.REPORTS UNDER THE 1934 ACT.


 


With a view to making
available to the Investors the benefits of Rule 144, the Company agrees to:


 


a.make and keep public
information available, as those terms are understood and defined in Rule 144;


 


b.file with the SEC
all reports and other documents required of the Company under the 1934 Act so long as the Company remains subject to such requirements
(it being understood and agreed that nothing herein shall limit any obligations of the Company under the Securities Purchase Agreement)
and the filing of such reports and other documents as required for the applicable provisions of Rule 144; and


 


c.furnish to each
Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting, submission and posting requirements of Rule 144 and the 1934 Act, (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the
SEC if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit
the Investors to sell such securities pursuant to Rule 144 without registration.


 


9.ASSIGNMENT OF REGISTRATION RIGHTS.


 


All or any portion
of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case
may be) of all or any portion of such Investor’s Registrable Securities if: (i) such Investor agrees in writing with such
transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished
to the Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable
time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such
transferee or assignee (as the case may be), and (b) the securities with respect to which such registration rights are being transferred
or assigned (as the case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition
of such securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities
laws if so required; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence
such transferee or assignee (as the case may be) agrees in writing with the Company to be bound by all of the provisions contained
herein; (v) such transfer or assignment (as the case may be) shall have been made in accordance with the applicable requirements
of the Securities Purchase Agreement; and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance
with all applicable federal and state securities laws.


 






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10.AMENDMENT OF REGISTRATION RIGHTS.


 


Provisions of this
Agreement may be amended only with the written consent of the Company and the Required Holders. Any amendment effected in accordance
with this Section 10 shall be binding upon each Investor and the Company, provided that no such amendment shall be effective to
the extent that it applies to less than all of the holders of the holders of Registrable Securities. No waiver shall be effective
unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders (in
a writing signed by all of the Required Holders) may waive any provision of this Agreement, and any waiver of any provision of
this Agreement made in conformity with the provisions of this Section 10 shall be binding on each Investor, provided that no such
waiver shall be effective to the extent that it applies to less than all the Investors (unless a party gives a waiver as to itself
only). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.


 


11.MISCELLANEOUS.


 


(a)Solely for purposes
of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or is deemed to own,
of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election
received from such record owner of such Registrable Securities.


 


(b)Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) with respect
to Section 3(c), by e-mail (provided confirmation of transmission is electronically generated and kept on file by the sending party);
or (iv) one (1) Business Day after deposit with a nationally recognized overnight delivery service with next day delivery specified,
in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such
communications shall be:






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	 	If to the Company:
	 	 
	 	22nd Century Group, Inc.
	 	9530 Main Street
	 	Clarence, New York 14031
	 	E-mail address: 99@xxiicentury.com
	 	Facsimile:	 (716) 877-3064
	 	Attention:	 Chief Executive Officer
	 	 	 
	 	With a copy to:	 
	 	 	 
	 	John J. Wolfel, Esq.
	 	Foley & Lardner LLP
	 	One Independent Drive
	 	Suite 1300	 
	 	Jacksonville, Florida 32202
	 	E-mail address:  jwolfel@foley.com
	 	Facsimile:	(904) 359-8700
	 	 	 
	 	If to Legal Counsel:
	 	 
	 	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
	 	666 Third Avenue
	 	New York, New York 10017
	 	Facsimile:	(212) 983-3115
	 	E-mail:	krkoch@mintz.com
	 	Attention:	Kenneth R. Koch, Esq.




 


If to a Buyer, to its
address, facsimile number or e-mail address (as the case may be) set forth in the Securities Purchase Agreement, with copies to
Buyer’s representatives as set forth therein, or to such other address and/or facsimile number and/or to the attention of
such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the
effectiveness of such change, provided that Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. shall only be provided notices
sent to Crede. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine or e-mail transmission containing the time,
date and recipient facsimile number or e-mail address or (C) provided by a courier or overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.


 






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Failure of any party
to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall
not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any bond or other security being required), this being in addition
to any other remedy to which any party may be entitled by law or equity.


 


(c)All questions
concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws
of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(d)This Agreement,
the other Transaction Documents, the NDA, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the other Transaction Documents, the NDA, the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely
with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction
Document or NDA shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with, or any
instrument that any Investor received from, the Company or any of its Subsidiaries prior to the date hereof with respect to any
prior investment made by such Investor in the Company, (ii) waive, alter, modify or amend in any respect any obligations of the
Company or any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any agreement entered into
prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Investor or any instrument that any
Investor received prior to the date hereof from the Company and/or any of its Subsidiaries and all such agreements and instruments
shall continue in full force and effect or (iii) limit any obligations of the Company under any of the other Transaction Documents.


 






    	21



    	 



    

 


Subject to compliance
with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person,
other than the parties hereto, their respective permitted successors and assigns and the Persons referred to in Sections 6 and
7 hereof.


 


(e)The headings in
this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like import shall
be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.


 


(f)This Agreement
may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered
by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page,
such signature page 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 signature page were an original thereof.


 


(g)Each party shall
do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


(h)The language used
in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict
construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms used in
this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date
in such other Transaction Documents unless otherwise consented to in writing by each Investor.


 


(i)All consents and
other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by the Required Holders.


 








(j)The obligations
of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under
this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges
that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or
create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors are
not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions
contemplated by this Agreement or any of the other the Transaction Documents. Each Investor shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Investor 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 Investor, and was done solely for the convenience of the Company and not because
it was required or requested to do so by any Investor. It is expressly understood and agreed that each provision contained in this
Agreement and in each other Transaction Document is between the Company and an Investor, solely, and not between the Company and
the Investors collectively and not between and among Investors.


 


[signature pages follow]


 









    	22



    	 



    

 


IN WITNESS WHEREOF,
each of the Buyers and the Company has caused its respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 








	 	COMPANY:
	 	 	 
	 	22nd CENTURY GROUP, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	BUYERS:
	 	 	 
	 	CREDE CG III, LTD.
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:













 




    	 



    	 



    

 


EXHIBIT A


 


FORM OF NOTICE OF EFFECTIVENESS


 


OF REGISTRATION STATEMENT


 


Continental Stock and Transfer Company


17 Battery Park Place


New York, New York 10004


[___________]








	Facsimile:	[___________]
	Attention:	[___________]







 


 





	 	Re:	22nd CENTURY GROUP, INC.










 


Ladies and Gentlemen:


 


We are counsel to 22nd
Century Group, Inc., a Nevada corporation (the “Company”), and have represented the Company in connection with
that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the
Company and the investor listed on the Schedule of Buyers attached to the Securities Purchase Agreement (the “Holder”)
pursuant to which the Company issued to the Holders shares of Common Stock. Pursuant to the Securities Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration
Rights Agreement) under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form
S-3 (File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission
(the “SEC”) relating to the Registrable Securities which names each of the Holders as a selling stockholder
thereunder.


 


In connection with
the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]
and we have no knowledge, after inquiry, that any stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the
1933 Act pursuant to the Registration Statement. 


 


This letter shall serve
as our authorization that the shares of Common Stock are freely transferable by the Holders pursuant to the Registration Statement.
You need not require further letters from us to effect any future legend-free issuance or reissuance of such shares of Common Stock
to the Holders.


 






    	A-1



    	 



    

 


This letter may be
revoked at any time by Foley & Lardner LLP with notice to Continental Stock Transfer & Trust Company, in which instance
this letter shall be of no further force or effect.





	 	Very truly yours,
	 	 	 
	 	[ISSUER’S COUNSEL]
	 	 	 
	 	By:	 







 








	cc:	LIST NAMES OF HOLDERS










 




    	A-2



    	 



    

 


EXHIBIT B


 


SELLING STOCKHOLDERS


 


For additional information
regarding the issuance of the common stock, see “Private Placement of Common Stock.” We are registering the shares
of common stock in order to permit the selling stockholders to offer the shares for resale from time to time.


 


The table below lists
the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based
on their ownership of shares of common stock as of ________, 2014.


 


The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders.


 


In accordance with
the terms of a registration rights agreement with the holders of the common stock, this prospectus generally covers the resale
of the maximum number of shares of common stock issued and issuable pursuant to the Securities Purchase Agreement.


 


The selling stockholders
may sell all, some or none of its shares in this offering. See “Plan of Distribution.”


 








	Name of Selling Stockholders 	 	
        Number of Shares of 

        

        Common Stock Owned

        

        Prior to Offering 

        
	 	Maximum Number of 

Shares of Common Stock to 

be Sold Pursuant to this 

Prospectus 	 	Number of shares of 

Common Stock 

Owned

 After Offering
	 	 	 	 	 	 	 
	[Crede CG III, Ltd.] (1)	 	 	 	 	 	 
	 	 	 	 	 	 	 










 


(1)  The sole stockholder of
[Crede CG III, Ltd.] is Crede Capital Group, LLC. Acuitas Financial Group, LLC holds all of the membership interests of Crede Capital
Group, LLC and Terren Peizer holds all of the membership interests of Acuitas Financial Group, LLC. Voting and dispositive power
with respect to the shares held by Crede CG III, Ltd. is exercised by Terren Peizer, the sole and Managing Member of Acuitas Financial
Group, LLC, Crede Capital Group, LLC and Managing Director of Crede CG III, Ltd., who acts as investment advisor to these entities.
Terren Peizer, Acuitas Financial Group, LLC and Crede Capital Group, LLC disclaim beneficial ownership with respect to the shares
held by Crede CG III, Ltd.





 




    	B-1



    	 



    

 


PLAN OF DISTRIBUTION


 


We are registering
the shares of common stock to permit the resale of these shares of common stock by the holders of the common stock from time to
time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the
shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.


 


The selling stockholders
may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through
one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale,
at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions, pursuant to one or more of the following methods:


 


		·	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;



 





		·	in the over-the-counter market;



 


		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;



 


		·	through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;



 


		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



 


		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;



 


		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



 


		·	an exchange distribution in accordance with the rules of the applicable exchange;



 


		·	privately negotiated transactions;



 


		·	short sales made after the date the Registration Statement is declared effective by the SEC;



 


		·	broker dealers may agree with a selling securityholder to sell a specified number of such shares at a stipulated price per
share;



 


		·	a combination of any such methods of sale;



 





		·	any other method permitted pursuant to applicable law.



 






    	B-2



    	 



    

 


The selling stockholders
may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather
than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described
in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions
or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). The selling stockholders may also loan or
pledge shares of common stock to broker-dealers that in turn may sell such shares.


 


The selling stockholders
may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time
to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of
common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.


 


To the extent required
by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in
the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered
and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other
terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would
exceed eight percent (8%).


 


Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.


 






    	B-3



    	 



    

 


There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.


 


The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders
and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged
in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock.
All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage
in market-making activities with respect to the shares of common stock.


 


We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in
accordance with the registration rights agreements or the selling stockholder will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholders specifically for use in this prospectus, in accordance with the related
registration rights agreements or we may be entitled to contribution.


 


We agreed to keep this
prospectus effective until the earlier of (i) the date on which the shares may be resold by the selling stockholders without registration
and without regard to any volume or manner-of-sale limitations by reason of Rule 144 or (ii) all of the shares have been sold pursuant
to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the
shares of common stock covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.


 


Once sold under the
registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands
of persons other than our affiliates.





 



    	B-4