Document:

Exhibit 10.2

 

THIS SECURITY (AND THE SECURITIES ISSUABLE
UPON CONVERSION OF THIS SECURITY) HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED
BY SUCH SECURITIES. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. 

PANACEA LIFE SCIENCES, INC. 

 

Convertible
Note

 

	Issuance Date:  December
3, 2019	Original Principal Amount: $7,000,000

Note No.: 1

 

FOR VALUE RECEIVED,
Panacea Life Sciences, Inc., a Colorado corporation (the “Company”), hereby promises to pay to 22nd
Century Group, Inc., a Nevada corporation, or its registered assigns (the “Holder”), the amount set out above
as the Original Principal Amount (as reduced in connection with the conversion of this Note, the “Principal”)
on the Maturity Date and to pay interest (“Interest”) on any outstanding Principal at the Interest Rate (as
defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same is paid
in full, whether upon the Maturity Date, the Conversion Date or otherwise (in each case in accordance with the terms hereof). Upon
payment in full of all Principal and Interest payable hereunder (or upon conversion of this Note (as defined below), this Note
shall be surrendered to the Company for cancellation. Certain capitalized terms used herein are defined in Section 22.

 

THE OBLIGATIONS DUE
UNDER THIS NOTE ARE SECURED BY A SECURITY AGREEMENT (THE “SECURITY AGREEMENT”) DATED AS OF THE DATE HEREOF AND
EXECUTED BY THE COMPANY FOR THE BENEFIT OF HOLDER. ADDITIONAL RIGHTS OF HOLDER ARE SET FORTH IN THE SECURITY AGREEMENT.

 

1.       PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal.
The Company may prepay any portion of the outstanding Principal, without penalty, upon at least ten (10) Business Days’ prior
written notice to the Holder.

 

     

     

    

 

2.       INTEREST;
INTEREST RATE. Interest on this Note shall (i) accrue at the Interest Rate, (ii) commence accruing on the Issuance Date, (iii)
be computed on the basis of a 365-day year for the actual number of days elapsed, and (iii) be payable in cash to the Holder on
the first day of the calendar month following the calendar month in which it accrues, commencing on January 1, 2020, and continuing
to be due on the same day of each succeeding calendar month thereafter so long as this Note is outstanding, together with a final
payment of all unpaid accrued interest which shall be due on the Maturity Date or the Conversion Date (or on any such earlier date
of payment of this Note is prepaid in full). From and after the occurrence and during the continuance of any Event of Default,
the applicable Interest Rate shall automatically be increased by five percent (5%) per annum above the Interest Rate otherwise
applicable in accordance with the terms hereof. In the event that such Event of Default is subsequently cured, the adjustment referred
to in the preceding sentence shall cease to be effective as of the date of such cure. Any payment of Principal or Interest scheduled
for a day which is not a Business Day shall be due on the next following Business Day.

 

3.       CONVERSION.
At any time after the Issuance Date but prior to the Maturity Date, the Holder shall have the right, but not the obligation, to
convert, upon three (3) Business Days prior written notice to the Company, the outstanding Principal and any accrued and unpaid
Interest thereon into shares of Series B Preferred Stock at a conversion price per share equal to $1.875, subject to adjustment
as herein provided (the “Conversion Price”). Such notice shall state the amount of the outstanding Principal
and accrued and unpaid Interest to be converted. If the notice provides that the Holder is converting all of the outstanding Principal,
any accrued and unpaid Interest that will not be converted into shares of Series B Preferred Stock shall be paid by the Company
to the Holder by check or wire transfer of immediately available funds to an account specified in writing by the Holder on or prior
to the date the Company delivers the shares of Series B Preferred Stock to the Holder. The Company shall not issue any fraction
of a share of Series B Preferred Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share
of Series B Preferred Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. Any
conversion of this Note pursuant to this Section 3 shall be deemed to have been made upon the satisfaction of all of the conditions
set forth in this Section 3 and on and after such date the Holder entitled to receive the shares of Series B Preferred Stock upon
such conversion shall be treated for all purposes as the record holder of such shares. If this Note is converted in part only,
upon conversion of such part hereof, the Company shall execute and deliver to the Holder upon surrender of this Note a new Note
in the aggregate principal amount equal to the then unconverted portion of the Principal of this Note plus any accrued but unpaid
Interest and in all other respects identical to this Note.

 

4.       ADJUSTMENT
OF CONVERSION PRICE. If the Company, at any time after the Issuance Date, (i) pays a stock dividend on one or more classes
of its then outstanding shares of Series B Preferred Stock, or otherwise makes a distribution on any class of capital stock that
is payable in shares of Series B Preferred Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its then outstanding shares of Series B Preferred Stock into a larger number of shares, or (iii) combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Series B Preferred Stock
into a smaller number of shares, then in each such case the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Series B Preferred Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Series B Preferred Stock outstanding immediately after such event. Any adjustment made pursuant
to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that a Conversion Price is used in any calculation hereunder, then in such calculation
such Conversion Price shall be adjusted appropriately to reflect such event.

 

    	 	2	 

     

    

 

5.       RIGHTS
UPON EVENT OF DEFAULT.

 

(a)       Event
of Default. Each of the following events shall constitute an “Event of Default”:

 

(i)       the
Company’s failure to pay to the Holder any amount of Principal or Interest when and as due under this Note and the continuation
of such failure for a period of at least ten (10) Business Days;

 

(ii)       the
commencement by the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be adjudicated as bankrupt or insolvent, or the consent
by it to the entry of a decree, order, judgment or other similar document in respect of the Company in an involuntary case or proceeding
under any such applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution
of a composition of debts, or the admission by it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such action; or

 

(iii)       the
commencement against the Company by a third party of an Insolvency Proceeding and the same shall not be dismissed within sixty
(60) days of their initiation;

 

(b)       If
an Event of Default specified in Sections 5(a)(i) occurs, then the Holder may, by written notice to the Company, declare this Note
to be forthwith due and payable, as to Principal and all accrued Interest, whereupon this Note shall become forthwith due and payable,
without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company. If any
Event of Default specified in Sections 5(a)(ii) or (iii) occurs, the Principal of and accrued Interest on this Note shall
automatically forthwith become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Company.

 

(c)       If
any Event of Default occurs and is continuing, the Holder may pursue any available remedy to collect the payment of Principal and
Interest or to enforce the performance of any provision of this Note. If an Event of Default occurs and is continuing, the holder
of this Note may proceed to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding.
No course of dealing and no delay on the part of the holder of this Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred
by this Note upon the holder hereof shall be exclusive of any other right, power or remedy referred to herein or now or hereafter
available at law, in equity, by statute or otherwise.

 

    	 	3	 

     

    

 

6.       NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its articles of incorporation or bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will
at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights
of the Holder of this Note.

 

7.       VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note.

 

8.       COVENANTS.
Until all of the Notes have been converted or otherwise satisfied in accordance with their terms, the Company shall maintain and
preserve its existence, rights and privileges.

 

9.       AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change or amendment to this Note.

 

10.       TRANSFER.
This Note may be offered, sold, assigned or transferred by the Holder in whole or in part, subject only to the provisions of the
restrictive legend set forth at the top of the first page of this Note; provided that, so long as no Event of Default has
occurred and is continuing, any such sale, assignment or transfer shall be subject to the prior written consent of the Company.

 

11.       REISSUANCE
OF THIS NOTE.

 

(a)       Transfer.
If this Note is to be transferred as permitted under Section 10 above, the Holder shall surrender this Note to the Company
along with a duly executed copy of the transfer instrument attached hereto as Exhibit A, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 11(c)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 10(c)) to the Holder representing the outstanding Principal not being transferred.

 

(b)       Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note (in accordance with Section 11(c)) representing the outstanding Principal.

 

(c)       Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining
outstanding, (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance
Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid
Interest on the Principal of this Note, from the Issuance Date.

 

    	 	4	 

     

    

 

12.       REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages
for any failure by the Company to comply with the terms of this Note. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond
or other security being required. The Company shall provide all information and documentation to the Holder that is requested by
the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.

 

13.       CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note. Terms used in this Note but defined in the Purchase Agreement shall have the meanings ascribed
to such terms on the Issuance Date in the Purchase Agreement unless otherwise consented to in writing by the Holder.

 

14.       FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party.

 

15.       NOTICES;
CURRENCY; PAYMENTS.

 

(a)       Notices.
All notices and other communications given or made pursuant hereto shall be in writing to the addresses set forth on the signature
page hereof and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii)
five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with an internationally recognized overnight courier, specifying next day delivery, with written verification of
receipt.

 

(b)       Currency.
All Principal, Interest and other amounts owing under this Note or any Transaction Document that, in accordance with their terms,
are paid in cash, shall be paid in United States Dollars.

 

(c)       Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth
herein, such payment shall be made in lawful money of the United States of America by (i) wire transfer of immediately available
funds to such Person according to wire transfer instructions previously provided to the Company in writing or (ii) a certified
check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided
to the Company in writing. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business
Day, the same shall instead be due on the next succeeding day which is a Business Day.

 

    	 	5	 

     

    

 

16.       CANCELLATION.
After all Principal and accrued and unpaid Interest at any time owed on this Note have been paid in full (or upon conversion of
this Note in accordance with Section 3 hereof, together with payment of any Interest due and owing upon conversion in accordance
with Section 3 hereof), this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation
and shall not be reissued.

 

17.       WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all
other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

18.       SEVERABILITY.
If any provision of this Note is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Note shall not in any way be affected or impaired thereby and the parties will attempt to agree upon
a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Note.

 

19.       GOVERNING
LAW/JURISDICTION. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
THAT WOULD DEFER TO THE LAW OF ANOTHER JURISDICTION. THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF
THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE DISTRICT OF DELAWARE OR THE COURTS OF THE STATE OF DELAWARE FOR THE
ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR THE HOLDER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED
HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY
THE COMPANY OR THE HOLDER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND THE HOLDER EACH HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS
TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT
DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS 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. THE COMPANY AND THE HOLDER HEREBY WAIVE ALL RIGHTS
TO A TRIAL BY JURY.

 

    	 	6	 

     

    

 

20.       MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed
by the Company to the Holder and, if there shall remain any excess after such application, such excess shall be refunded to the
Company.

 

21.       COLLECTION.
The Company agrees to pay all reasonable costs or expenses incurred by the Holder or the Agent, on behalf of the holders of the
Notes, including reasonable attorneys’ fees (including those for appellate proceedings), incurred in connection with any
Event of Default or in connection with the collection or attempted collection or enforcement hereof, whether or not legal proceedings
may have been instituted.

 

22.       CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

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

 

(b)       “Conversion
Date” means the date upon which this Note is converted pursuant to Section 3.

 

(c)       “Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code (Chapter
11 of Title 11 of the United States Code) or under any other bankruptcy or insolvency law, assignments for the benefit of creditors,
or proceedings seeking reorganization, arrangement, or other similar relief.

 

(d)       “Interest
Rate” means ten percent (10%) per annum, as may be adjusted pursuant to Section 2 hereof.

 

(e)       “Maturity
Date” means the earlier to occur of (i) the fifth (5th) anniversary of the Issuance Date or (ii) the date that Warrant
is initially exercised by the Holder.

 

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

 

(g)       “Series
B Preferred Stock” means the Series B Preferred Stock, par value $0.01 per share, of the Company.

 

(h)       “Warrant”
means that certain Warrant to purchase shares of Series B Preferred Stock at an exercise price of $2.344 per share issued by the
Company to the Holder on the date hereof.

  

    	 	7	 

     

    

 

IN WITNESS WHEREOF,
this Note is executed as of the date first above written.

  

	 	“Company”	 
	 	 	 	 	 
		PANACEA LIFE SCIENCES, INC.  	 
	 	 	 
	 	 	 	 	 
	 	By:	/s/ Leslie Buttorff	 
	 	 	Name:	Leslie Buttorff	 
	 	 	Title:	CEO	 

 

	 	Address:	16194 W 45th Ave	 
	 	 	Golden, CO 80403	 

 

“Holder”

 

 

22nd CENTURY GROUP, INC. 

  

	By:	/s/ Clifford B. Fleet	 
	 	Name: 	Clifford B. Fleet	 
	 	Title: 	President and CEO	 

 

	 	 	 	 
	Address:	8560 Main Street	 
	 	Suite 4	 
	 	Williamsville, NY 14221	 

  

     

     

    

 

EXHIBIT A

 

FOR VALUE RECEIVED, the undersigned
hereby sell(s), assign(s) and transfer(s) unto [NAME OF ASSIGNEE] the within instrument of Panacea Life Sciences, Inc.
and does hereby irrevocably constitute and appoint [_________] as Attorney to transfer said instrument on the books of the
within-named Company, with full power of substitution in the premises.

 

Please Insert Social Security or Other Identifying Number of
Assignee:                                                            

 

Dated: ______________ ____, 20__

 

 

	By:	 	 
	 	Name: 	 	 
	 	Title: 	 	 

 

NOTICE: The signature to this assignment
must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement
or any change whatever.Exhibit 10.3

 

THIS SECURITY (AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY) HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED
BY SUCH SECURITIES. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES

 

PANACEA
LIFE SCIENCES, INC. 

 

Warrant
To Purchase Series B Preferred Stock

 

Warrant No.: 2019-1

Date of Issuance: December 3, 2019

 

Panacea Life Sciences,
Inc., a Colorado corporation (the “Company”), hereby certifies that, for value received, 22ND CENTURY
GROUP, INC., a Nevada corporation (“Holder”), is entitled to purchase, at the Exercise Price (as defined below)
per Warrant Share (as defined below) at any time on or following the Exercise Trigger Date (defined below) up to that number of
shares of the Series B Preferred Stock, subject to adjustment as herein provided (as so adjusted from time to time, the “Warrant
Shares”) that would constitute (i) when issued and when added to the shares of Series B Preferred Stock previously issued
to the Holder pursuant to that certain Series B Preferred Stock Purchase Agreement, and (ii) after taking into account the redemption
of the Company Common Stock in accordance Section 1(f) hereof, fifty one percent (51%) of the outstanding shares of capital stock
of the Company on a fully-diluted basis, that is, treating as outstanding for this purpose all shares of capital stock issuable
upon exercise or conversion of outstanding warrants, debentures, options, purchase rights or convertible securities (whether or
not exercisable or convertible as of the date hereof), as of the date of exercise.

 

		1.	EXERCISE OF WARRANT.

 

Duration.
This Warrant shall be exercisable by the registered holder thereof on any Business Day on or following the Exercise Trigger Date.

 

Exercise.
Subject to the provisions of this Warrant, on or following the Exercise Trigger Date, the holder shall have the right to purchase
from the Company (and the Company shall be obligated to issue and sell to such holder) at the Exercise Price per share, the number
of fully paid and non-assessable Warrant Shares up to the maximum amount described in Section 1 of this Warrant. The Warrant shall
be exercisable upon the earlier of (i) the five-year anniversary of the Date of Issuance, and (ii) the first day of the fiscal
year of the Company immediately following the Company achieving at least $200 million in gross revenues (calculated in accordance
with accounting principles generally accepted in the United States of America) for two (2) consecutive fiscal years (the “Exercise
Trigger Date”). This Warrant shall continue to be exercisable on or following the Exercise Trigger Date. 

 

     

     

    

 

Exercise Price.
For purposes of this Warrant, “Exercise Price” means a price per Warrant Share equal to $2.344, subject to adjustment
as provided herein.

 

Manner of Exercise.
Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or following the Exercise
Trigger Date, in whole or in part, by delivery (whether via facsimile, email, or otherwise) of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise
this Warrant. Within three (3) Business Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment
to the Company in any of the following forms (in the Holder’s sole discretion, subject to Section 1(f) below) (i) cash by
wire transfer of immediately available funds, (ii) shares of XXII Common Stock or (iii) a combination of cash by wire transfer
of immediately available funds and shares of XXII Common Stock, in any each case, equal to the Exercise Price in effect on the
date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate
Exercise Price”). The Holder shall not be required to deliver the original of this Warrant in order to effect an
exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares
shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with
the terms hereof. On or before the second (2nd) Business Day following the date on which the Company has received such
Exercise Notice and payment of the Aggregate Exercise Price for the number of Warrant Shares for which this Warrant was so exercised,
the Company shall issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s
agent or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice,
a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Series B Preferred Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of an Exercise Notice and payment of the Aggregate Exercise Price for the number of Warrant Shares for
which this Warrant was so exercised, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates
evidencing such Warrant Shares. 

 

XXII Common Stock.
If upon exercise of this Warrant in accordance with Section 1(d) hereof the Holder determines (in its sole discretion) to pay
all or a portion of the Aggregate Exercise Price by delivering to the Company shares of XXII Common Stock, the value of each share
of XXII Common Stock shall be equal to the 30-day VWAP on the date of exercise; provided that in no event shall the value of each
share of XXII Common Stock be less than $1.00. 

 

Redemption of Company
Common Stock. Promptly, and in any event within five (5) Business Days following any exercise
of this Warrant (subject to any applicable holding period), the Company shall redeem shares of Company Common Stock beneficially
owned by Quintel. The shares of Company Common Stock shall be redeemed by the Company by exchanging the cash and/or shares of
XXII Common Stock received by the Company, as applicable, as payment of all or a portion of the Aggregate Exercise Price. Each
share of Company Common Stock to be redeemed shall be valued at the Exercise Price and each share of XXII Common Stock shall be
valued at the 30-day VWAP on the date of exercise; provided that in no event shall the value of each share of XXII Common Stock
be less than $1.00.

 

 

    	 	2	 

     

    

 

Principal Market
Regulation. The Holder shall only issue shares of XXII as payment of the Aggregate Exercise Price
in an amount that would not cause the Company to breach its obligations under the rules or regulations of the Principal Trading
Market (the “Exchange Cap”), except that such limitation shall not apply in the event that XXII (i) obtains
the approval of its stockholders as required by the applicable rules of the Principal Trading Market for issuances of XXII Common
Stock in excess of such amount, or (ii) obtains a written opinion from outside counsel to XXII that such approval is not required,
which opinion shall be reasonably satisfactory to the Company. Until such approval or written opinion is obtained, the Holder shall
not issue to the Company, upon exercise of this Warrant or issuance under the Purchase Agreement, shares of XXII Common Stock in
an amount greater than the Exchange Cap. 

 

Partial Exercise.
The Warrant shall be exercisable at any time on or following the Exercise Trigger Date, either as an entirety or for part only
of the number of Warrant Shares evidenced by this Warrant. If less than all of the Warrant Shares evidenced by this Warrant are
exercised at any time on or following the Exercise Trigger Date in exchange for payment of the Exercise Price for such Warrant
Shares, the Company shall issue, at its expense, a new Warrant, in substantially the form of this Warrant, for the remaining number
of Warrant Shares evidenced by this Warrant.

 

Insufficient Authorized
Shares. From and after the Issuance Date, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Series B Preferred Stock as shall be necessary to satisfy the Company’s obligation
to issue shares of Series B Preferred Stock hereunder. If, notwithstanding the foregoing, and not in limitation thereof, at any
time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of
Series B Preferred Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant (the “Required
Reserve Amount”), then the Company shall promptly take all action necessary to increase the Company’s authorized
shares of Series B Preferred Stock, as applicable, to an amount sufficient to allow the Company to reserve the Required Reserve
Amount. 

 

2.       ADJUSTMENT
OF EXERCISE PRICE. Without limiting any provision of Section 3, if the Company, at any time after the Issuance Date, (i) pays
a stock dividend on one or more classes of its then outstanding shares of Series B Preferred Stock or Company Common Stock, or
otherwise makes a distribution on any class of capital stock that is payable in shares of Series B Preferred Stock or Company Common
Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding
shares of Series B Preferred Stock or Company Common Stock into a larger number of shares or (iii) combines (by combination, reverse
stock split or otherwise) one or more classes of its then outstanding shares of Series B Preferred Stock or Company Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Series B Preferred Stock or Company Common Stock, as applicable, outstanding immediately before
such event and of which the denominator shall be the number of shares of Series B Preferred Stock or Company Common Stock, as applicable,
outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision
or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is used
in any calculation hereunder, then in such calculation such Exercise Price shall be adjusted appropriately to reflect such event.

 

    	 	3	 

     

    

 

		3.	FUNDAMENTAL TRANSACTIONS.

 

Fundamental Transactions.
Prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Series B Preferred Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Series B Preferred Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to
receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu
of the shares of the Series B Preferred Stock (or other securities, cash, assets or other property) issuable upon the exercise
of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening
of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be
in a form and substance reasonably satisfactory to the Holder.

 

(b)       Application.
The provisions of this Section 3 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.

 

4.CERTAIN
EVENTS.If any event occurs as to which the other provisions of Sections 2 and 3 are not strictly applicable but the lack
of any adjustment would not fairly protect the purchase rights of the Holder of this Warrant in accordance with the basic intent
and principles of such provisions, or if strictly applicable would not fairly protect the purchase rights of the Holder of this
Warrant in accordance with the basic intent and principles of such provisions, then at the request of the Holder the Company shall
appoint a firm of independent certified public accountants of recognized national standing reasonably satisfactory to the Holder,
which shall give their opinion upon the adjustment, if any, on a basis consistent with the basic intent and principles established
in the other provisions of Sections 2 and 3, necessary to preserve, without dilution, the exercise rights of the registered holder
of this Warrant. Upon receipt of such opinion, the Company shall forthwith make the adjustments described therein.

 

5.       REPRESENTATIONS
AND WARRANTIES OF HOLDER. The Holder hereby represents and warrants to the Company that:

 

(a)        Holder
acknowledges that this Warrant is issued to the Holder in reliance upon the Holder’s representation to the Company that this
Warrant will be acquired for investment for the Holder’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Holder has no present intention of selling, granting any participation
in, or otherwise distributing the same. Holder further represents that the Holder does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to
this Warrant.

 

(b)       Holder
is an investor in securities of companies in the development stage and acknowledges that it, he or she is able to fend for itself,
himself or herself, can bear the economic risk of its, his or her investment, and has such knowledge and experience in financial
or business matters that it, he or she is capable of evaluating the merits and risks of the investment in this Warrant. Holder
also represents it, he or she has not been organized solely for the purpose of acquiring this Warrant.

 

(c)       Holder
is an “accredited investor” within the meaning of Rule 501 of Regulation D, as presently in effect, as promulgated
by the Securities and Exchange Commission (the “SEC”) under the Securities Act.

 

    	 	4	 

     

    

 

(d)       Holder
understands that this Warrant is characterized as a “restricted security” under the federal securities laws inasmuch
as it is being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances.
In this connection, Holder represents that it is familiar with Rule 144 as promulgated by the SEC under the Securities Act, as
presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

6.       NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of the Company’s articles of incorporation,
the Company’s bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as
may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Series B Preferred receivable upon the exercise of this Warrant above the Exercise
Price then in effect and (ii) shall take all such actions as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of Series B Preferred Stock upon the exercise of this
Warrant.

 

7.       WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

8.       REISSUANCE
OF WARRANTS.

 

(a)       Transfer of Warrant.
If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 8(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number
of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 8(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)       Lost, Stolen or
Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder satisfactory to the Company and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company
shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

 

    	 	5	 

     

    

 

(c)       Exchangeable for
Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however,
no warrants for fractional shares of Series B Preferred Stock shall be given.

 

(d)       Issuance of New
Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Sections 8(a) or 8(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Series
B Preferred Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is
the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

9.       NOTICES.
Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Warrant
shall be in writing to the addresses set forth on the signature pages hereof and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (iii) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with an internationally
recognized overnight courier, specifying next day delivery, with written verification of receipt.

 

10.       NOTICES
OF CERTAIN CORPORATE ACTIONS. The Company shall provide the Holder with prompt written notice of all actions taken pursuant
to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Series B Preferred Stock, (B) with respect to any grants, issuances or sales of any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Series
B Preferred Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being
provided to the Holder and (iii) at least ten (10) Business Days prior to the consummation of any Fundamental Transaction.

 

11.       AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party.

 

12.       SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	 	6	 

     

    

 

13.       GOVERNING
LAW. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of Law provision or rule (whether of the State of Delaware or any other jurisdiction).

 

14.       REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure
by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as
expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such
breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance
with the terms and conditions of this Warrant. The issuance of shares and certificates for shares as contemplated hereby upon the
exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect
thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

15.       TRANSFER.
This Warrant may not be offered for sale, sold, transferred or assigned by the Holder except in a manner consistent with the restrictive
legend on the first page of this Warrant; provided, however, that no such assignment shall relieve the Holder of
its obligations hereunder if such assignee fails to perform such obligations.

 

16.       CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)       “30-day
VWAP” means, as of any date, the volume weighted average price per share of the XXII Common Stock on the Principal
Trading Market (as reported by Bloomberg L.P. (or its successor) or, if not available, by another authoritative source mutually
agreed by the Company and the Holder) from 9:30 a.m. (New York City time) on the Trading Day that is thirty (30) Trading Days preceding
such date to 4:00 p.m. (New York City time) on the last Trading Day immediately preceding such date.

 

(b)       “Affiliate”
means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is
under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act.
With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment
manager as such Holder will be deemed to be an Affiliate of such Holder.

 

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

 

    	 	7	 

     

    

 

(d)       “Company
Common Stock” means the common stock, par value $0.01 per share of the Company.

 

(e)       “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances,
directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire,
any shares of Company Common Stock or Series B Preferred Stock.

 

(f)       “Fundamental
Transaction” means that (i) the Company or any of its subsidiaries shall, directly or indirectly, in one or more
related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its subsidiaries is the surviving
corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination),
or (5) reorganize, recapitalize or reclassify the Company Common Stock, or (ii) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and the rules and regulations promulgated thereunder) other than Quintel or the Holder, or Affiliates of either,
is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of greater than 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

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

 

(h)       “Options”
means any rights, warrants or options to subscribe for or purchase shares of Company Common Stock or Convertible Securities.

 

(i)       “Principal
Trading Market” means the trading market on which the XXII Common Stock is primarily listed on and quoted for trading,
and which, as of the Issue Date is The NYSE American.

 

(j)       “Quintel”
means Quintel-MC, Incorporated, a Colorado corporation.

 

(k)       “Series
B Preferred Stock” means the series B preferred stock, par value $0.01 per share, of the Company.

 

(l)       “Series
B Preferred Stock Purchase Agreement” means the Series B Preferred Stock Purchase Agreement, dated as of December
3, 2019, by and between the Company and the Holder.

 

(m)       “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof
have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers
or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).

 

    	 	8	 

     

    

 

(n)       “Trading
Day” means a day on which the Principal Trading Market is open for trading.

 

(o)       “XXII
Common Stock” means the common stock, par value $ $0.00001 per share of XXII.

 

[signature page follows]

 

    	 	9	 

     

    

 

IN WITNESS WHEREOF,
the Company and the Holder have caused this Warrant to Purchase Capital Stock to be duly executed as of the Issuance Date set out
above.

 

	 	PANACEA LIFE SCIENCES, INC. 
	 	 
	 	 	 	 
	 	By:	/s/ Leslie Buttorff
	 	 	Name:	Leslie Buttorff
	 	 	Title:	CEO
	 	 	 	 
	 	Address:
	 	16194 W 45th Ave
	 	Golden, CO 80403
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	22ND CENTURY GROUP, INC. 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Clifford B. Fleet
	 	 	Name:	Clifford B. Fleet
	 	 	Title:	President and CEO
	 	 	 	 
	 	Address: 
	 	8560 Main Street
	 	Suite 4
	 	Williamsville, New York 14221

 

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE SERIES B PREFERRED
STOCK

 

PANACEA
LIFE SCIENCES, INC. 

 

The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Series B Preferred Stock (“Warrant Shares”)
of Panacea Life Sciences, Inc., a Colorado corporation (the “Company”), evidenced by Warrant No. _______
(the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.

 

1.       Payment
of Exercise Price. The Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant. The Aggregate Purchase Price shall be delivered as follows:

 

[___] Exercise for
Cash

[___] Exercise for
shares of Holder Common Stock

[___] Exercise for
a combination of Cash and Holder Common Stock

  

2.       Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, ___________ shares of
Series B Preferred Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to
the following address:

 

_______________________

_______________________

_______________________

_______________________

 

3.       Redemption.
Pursuant to Section 4(f) of the Warrant, the Company will redeem ______________ shares of Company Common Stock beneficially owned
by Quintel within two (2) Business Days following any exercise of the Warrant.

 

Date: _______________ __, ______

 

	 	 
	Name of Registered Holder	 

 

	By:	 	 
	 	Name:	 	 
	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}]]