Document:

Exhibit 10.12

 

 

 

Greylock
Partners, LLC

 

 

 

August 6, 2014

 

Overseas Shipholding Group, Inc.

1301 Avenue of the Americas, 42nd Floor

New York, New York 10017

 

Introduction

 

Overseas Shipholding Group, Inc. hereby retains Greylock Partners,
LLC (“Greylock Partners”) to provide certain consulting services for OSG, and its affiliates (collectively, the “OSG”)
effective as of the date of execution hereof. Greylock Partners will provide Services (as defined herein) to OSG as set forth below.
This letter of engagement (the “Engagement”) and the related Standard Terms and Conditions together constitute the
engagement contract and supersedes any prior agreement (the “Engagement Contract”) pursuant to which the Services will
be provided.

 

Scope of Services

 

Greylock Partners shall provide the scope of work described
in Exhibit A hereto. In addition, Greylock Partners will provide the services to support the OSG’s preparation of financial
information, data, analysis as needed to support OGS’s information and reporting needs which shall solely be the responsibility
of OSG.

 

Finally, Greylock Partners shall provide support services as
needed by John Ray for the Office of the Chairman to the extent not provided by OSG personnel. Time spent by John Ray in his position
as Chairman of OSG shall not be charged to OSG, except that John Ray will receive compensation in his capacity as a Director according
to the terms approved by the Board of Directors.

 

Engagement Staffing

 

We have structured the following engagement team for the performance
of the Engagement Contract:

 

John Ray will participate as the Senior Managing Director, working
closely with the management team and Greylock staff members to ensure we are delivering on your expectations and on our commitments
to you.

 

Kathryn Schultea will participate as the Managing Director,
maintaining overall responsibility for the daily efforts of Engagement on behalf of Greylock Partners LLC.

 

Mary Cilia and Raj Perubhatla will participate as Managing Directors
coordinating daily management of the identified Scope of Services and related deliverables.

 

Subject matter experts will provide support as required during
the course of this Engagement.

 

 

 

    	 

    	 

    

 

 

  

Fees

 

Greylock Partners shall bill according to the rates set forth
below. Greylock Partners will assign the work to its personnel according to the subject matter and skill set required. Consultants
may be added or substituted from time to time as necessary to complete the work. The hourly rate may be revised periodically. Greylock
Partners shall provide prompt notice of all such rate revisions.

 

 

	 	Per Hour
	Senior Managing Director	$850 - $900
	Managing Director	$750 - $800
	Senior Director	$700 - $750
	Director	$500 - $700
	Associate	$400 - $500

 

In addition to the fees outlined above, Greylock Partners will
bill for reasonable expenses that are incurred on your behalf during this Engagement, including, but not limited to airfare, meals,
hotel accommodations, telephone, duplicating and printing and other reasonable and necessary charges. On a bi-monthly basis commencing
August 16, 2014, Greylock Partners shall provide the Company, with a copy to the Chairman of the Audit Committee, with an estimate
of the approximate work of hours estimated for each category of Services described in Exhibit A. At the time of delivery of each
billing, commencing with the billing period starting August 16, 2014, Greylock Partners shall compare the actual charges to the
estimated charges and to the extent the aggregate charges exceed the estimated billing by more than 10%, Greylock Partners will
explain any material variance with the submission of the billing.

 

Terms and Conditions

 

The attached Standard Terms and Conditions set forth the duties
of each party with respect to the Services. Further, this letter and the Standard Terms and Conditions attached comprise the entire
Engagement Contract for the provision of the Services to the exclusion of any other express or implied terms, whether expressed
orally or in writing, including any conditions, warranties and representations, and shall supersede all previous proposals, letters
of engagement, undertakings, agreements, understandings, correspondence and other communications, whether written or oral, regarding
the Services.

 

Acknowledgement and Acceptance

 

Please acknowledge your acceptance of the terms of this Engagement
Contract by signing both the confirmation below and the attached Standard Terms and Conditions and returning a copy of each to
us at the above address.

 

If you have any questions regarding this letter or the attached
Standard Terms and Conditions, please do not hesitate to contact John Ray.

 

	GREYLOCK PARTNERS, LLC	 	OVERSEAS SHIPHOLDING GROUP, INC.
	 	 	 	 	 
	 	 	 	 	 
	By: 	/s/ John J. Ray III	 	By:	 /s/ Ian T. Blackley 
	 	 	 	 	 
	 	John J. Ray III	 	 	 
	 	Sr. Managing Director	 	 	 

 

 

 

    	 

    	 

    

 

 

 

EXHIBIT ‘A’

 

CLAIMS DISTRIBUTIONS

 

Initial Distribution

		·	Effective Date distributions to seven main creditors
(IRS, CEXIM, DSF, Revolver, 3 Notes)

		·	Distributions by Wire within 10 days of Effective
Date (Claims Traders, Derivatives and Charter rejection Claims)

		·	Distributions utilizing internal payables systems
within 10 days of Effective Date for all other creditors with allowed claims

		·	Employee distributions utilizing existing OSG payroll
system and ADP within 10 days of the Effective Date

		·	Produce transmittal letters and reconciliations to
accompany all distributions

		·	Coordinate remittance of all withholding taxes

		·	Produce reporting and coordinate with Company to reflect
all distributions in the books and records and reconcile to the claims distributions database

 

Distribution Tracking and Reconciliation

		·	Track all distributions in claims distributions database
and provide reporting to management, BOD, accounting, tax, etc., as necessary

		·	Reconcile distribution account on a monthly basis

		·	Record distributions returned undeliverable and not
negotiated within 90 days

		·	Investigate voided distributions to obtain information
required to re-distribute (i.e. updated address, corrected wire instructions, etc.)

		·	Maintain address updates for purposes of annual tax
reporting

 

Subsequent Distributions

		·	Periodic distributions to claims reserved for in the
Disputed Claims Reserve (“DCR”) if and when such claims become allowed

		·	Reissue voided distributions on a periodic basis,
as necessary

 

Annual Tax Reporting (Forms 1099 and 1042)

		·	Prepare detailed distribution reports to assist with
annual tax reporting

		·	Coordinate annual tax reporting and applicable timing
with tax advisors

		·	Assist with tracking down updated addresses for returned
tax forms

		·	Research and respond to various distribution related
tax authority inquiries

 

Maintain Claims Distribution Hotline/Website Information

		·	Provide periodic updates regarding distribution for
website publication

		·	Research and respond to creditor inquiries regarding
distributions, withholding taxes, address updates, etc.

 

DCR

		·	Maintain and reconcile DCR account at the claim level
on a monthly basis

		·	Periodic review of balances to determine if excess
is available for distribution back to the company

		·	Coordinate all transfers in and out of the account
for distribution to creditors or to the company

 

 

 

    	 

    	 

    

  

 

  

CLAIMS RECONCILIATION AND RESOLUTION

 

Claims Reconciliation

		·	Manage all open claims and coordinate actions to be
taken on remaining open claims

		·	Review all new claims that are filed and reconcile
with company’s records and previous court actions related to the creditor

		·	Assist counsel with document and research requests
related to open claims

		·	Prepare exhibit files for objections and stipulations

		·	Review and comment on objections and stipulations
provided by counsel based on reconciliation with claims database

		·	Reconcile court orders to claims register and resolve
related issues with claims agent

 

Claims Database

		·	Obtain periodic updates from the claims agent reflecting
recent court updates and claims register changes

		·	Periodically update information in the claims database
as changes in status occur and new claims are filed

		·	Provide periodic reporting regarding the status of
claims to management, BOD, accounting, tax, etc.

 

Closing out of Claims Register/DCR

		·	Upon final resolution of all claims, perform a one-time
reconciliation with claims agent to ensure that the claims database is in agreement with the official claims register

		·	Obtain copy of final claims register from the claims
register once reconciliation is complete and all issues are resolved.

		·	Assist claims agent with filing final claims register
with the court.

		·	Prepare final reporting from the claims database and
provide to the company along with final claims register from the claims agent.

		·	Make final distribution from the DCR to the distribution
account and the company, as required

		·	Close DCR bank account

		·	Coordinate formal closing of the trust and final tax
reporting with tax advisors

 

PERIODIC REPORTING / US TRUSTEE FEES

 

Monthly Operating Reports/Form 26

		·	Prepare and file final monthly operating reports,
as necessary

		·	Prepare monthly reporting packages for the UCC and
other Creditor Groups, as necessary

 

Quarterly Status Reports

		·	Prepare quarterly status reports and coordinate submission
of reports with counsel

		·	Provide distribution information as required in the
report

		·	Provide other case wind down information as required
in the report

 

US Trustee Fees

		·	Prepare monthly report of cash disbursements by debtor

		·	Prepare quarterly report consolidating the three months
of cash expenditures by debtor

		·	Calculate US Trustee fees for the quarter

		·	Prepare remittance advice and coordinate payment with
the Company

		·	Maintain records and proof of mailing for each quarter’s
payment

		·	Reconcile statements provided by the US Trustee’s
office

		·	Contact the US Trustee and resolve any discrepancies
in fee calculations

 

 

  

    	 

    	 

    

  

 

 

SOURCES / USES CASH

 

Oversight and reconciliation of distribution of the monies held
in the Sources/Uses Cash Account

		·	Segregate sources/uses cash into a separate account
to be used to find only those specific items included on the list

		·	Establish and maintain list of items funded into account

		·	Establish procedures with the company to request funding
from this account for items on the list

		·	Review and approve requests to transfer funds to cover
expenses provided for on the list

		·	Monthly reconciliation of account balance to list

		·	Monthly tracking of estimates to actuals for all items
on the list

 

Track Professional Fees

		·	Prepare tracking list of all expected professional
fees from estimates and related agreements

		·	Review and approve professional fees as bills are
submitted and update tracking list

		·	Monthly review of bills submitted to remaining estimates
to determine sufficiency of reserves

		·	Contact professionals to resolve any discrepancies
or billing issues

CLOSING OF THE CASE

 

Track and Maintain Closing Issues List

		·	Establish and maintain a closing issues list with
all conditions precedent to closing the case

		·	Assign responsibility and estimated timing for each
item on the list

		·	Coordinate with all involved and update the list on
a monthly basis, identifying issues related to the estimated timing and execution of items on the list

 

Motion for Final Decree

		·	Coordinate with counsel on all items that need to
be covered in the filing

		·	Establish responsibilities for drafting the various
required sections

		·	Provide any needed schedules/reports to be included
with the filing

 

TRANSITIONAL WORK

 

		·	Asbestos claim tracking and case reconciliations

		·	Entity dissolutions

		·	Legal back-up support

		·	Litigation tracking

		·	Contact database support and finalization post emergence

		·	Resolution changes and post emergence D&O finalization

		·	Closing of offices and transition of financial/accounting
responsibilities and books/records

		·	WARN tracking through final employee reduction in
force efforts

		·	NEIP II tracking and supporting documentation

		·	Execution of post-emergence proposed cash movements
and related payment/cash receipt processes

		·	Review and update cash account signatories and treasury
approval processes

		·	10-Q/10-K/8-K review and comment

		·	Sarbanes-Oxley compliance review and comment

 

 

 

    	 

    	 

    

 

 

 

		·	Registration statement and related pro forma review and comment

		·	Exit financing covenant and restriction compliance review and comment

		·	Exit financing quarterly and annual reporting review and comment

		·	Forgiveness of intercompany accounts project review and comment

		·	Reconciliation of subsidiary investment accounts project review and comment

		·	Monthly reporting package for BOD review and comment

		·	Support and complete document retention for period of the bankruptcy work

		·	Oversight of establishing new employee equity plan

		·	Coordinate of employee related matters for new agreements for executive team members

		·	Finalize reduction in force initiatives with outsourcing transition

		·	Support 2015 benefit design packages and implementation thereof

  

Litigation Support

 

		·	Assist with document production and discovery requirements
with respect to class action lawsuits

		·	Assist with respect to management of the Proskauer
litigation and the management of discovery in the case.

 

 

 

    	 

    	 

    

 

 

 

Attachment – As stated

 

 

 

    	 

    	 

    

 

 

  

STANDARD
TERMS AND CONDITIONS

 

The following are the Standard Terms and Conditions on which
Greylock Partners will provide the Services to Overseas Shipholding Group, Inc. ( “OSG” ) as set forth within the letter
of engagement dated as of August 6, 2014. The Engagement letter and the Standard Terms and Conditions (collectively the “Engagement
Contract”) form the entire agreement between Greylock Partners and OSG relating to the Services and replace and supersede
any previous proposals, letters of engagement, undertakings, agreements, understandings, correspondence and other communications,
whether written or oral, regarding the Services. The headings and titles in the Engagement Contract are included to make it easier
to read but do not form part of the Engagement Contract.

 

		1.	Reports and Advice

 

1.1           Use and purpose of advice and reports – Any
advice given or report issued by Greylock Partners, other than any report Greylock Partners must file publicly as required by
law, is provided for OSG’s use and benefit and only in connection with the purpose in respect of which the Services are
provided. Unless required by law or as provided in the preceding sentence, OSG shall not provide any advice given or report issued
by Greylock Partners to any third party (other than OSG’s advisors, consultants and agents), without Greylock Partners’
prior written consent. In no event, regardless of whether consent has been provided, shall Greylock Partners assume any responsibility
to any third party to which any advice or report is disclosed or otherwise made available.

 

		2.	Information and Assistance

 

2.1           Provision
of information and assistance – Greylock Partner’s performance of the Services is dependent upon timely and complete
access to such information and assistance as Greylock Partners may reasonably require from time to time.

 

2.2           No assurance on financial data – While Greylock
Partners work may include an analysis of financial and accounting data, the Services will not include an audit, compilation or
review of any kind of any financial statements or components thereof. OSG or its other consultants will be responsible for any
and all financial information provided to Greylock Partners during the course of this Engagement, and Greylock Partners will not
examine or compile or verify any such financial information. Moreover, the circumstances of the Engagement may cause Greylock Partners
advice to be limited in certain respects based upon, among other matters, the extent of sufficient and available data and the opportunity
for supporting investigations in the time period. Accordingly, as part of this Engagement, Greylock Partners will not express any
opinion or other form of assurance on financial information provided by OSG.

 

2.3           Prospective financial information – In
the event the Services involve prospective financial information, Greylock Partners work will not constitute an examination or
compilation, or apply agreed-upon procedures, in accordance with standards established by the American Institute of Certified Public
Accountants or otherwise, and Greylock Partners will express no assurance of any kind on such information. There will usually be
differences between estimated and actual results, because events and circumstances frequently do not occur as expected, and those
differences may be material. Greylock Partners will take no responsibility for the achievability of results or events projected
or anticipated by OSG’s management.

 

 

 

    	 

    	 

    

 

 

 

		3.	Additional Services

 

3.1           Responsibility for other parties – Greylock
Partners is not responsible for the work and fees of any other party engaged by, or affiliated with, OSG to provide services in
connection with the Engagement, provided that Greylock Partners shall be responsible for any of its officers, employees and independent
contractors employed by it. Except as provided in this Engagement Contract, Greylock Partners shall not be responsible for providing
or reviewing the advice or services of any such third party, including advice as to legal, investment banking, regulatory, accounting
or taxation matters.

 

		4.	Confidentiality

 

For purposes of this Section 4, “Information”
means all non-public, confidential or proprietary materials and information relating to the respective businesses and operations
of OSG, whether owned by it or third parties, that is disclosed by OSG or its representatives or is acquired in the course of discussions
or investigations, in whatever form provided, and includes, without limitation: (a) financial, accounting and tax information;
(b) business plans, products and services, marketing and sales information, customer lists, volumes and pricing information; (c)
purchasing information; (d) employee lists, policies and files; (d) trade secrets, operating and training procedures, production
processes, research and development data, samples, test results, formulas, designs, specifications, know-how, inventions and ideas,
improvements, discoveries, software (including passwords and source and object code), database technologies, and any other intellectual
property and other technical information; (e) all agreements and transaction information; (f) all notes, summaries, studies, analyses
and other material that are prepared by Greylock Partners or its representatives and contain or are generated from Information.

 

“Information” does not include information
that: (i) is or becomes generally known by or available to the public other than as a result of a disclosure by Greylock Partners
or its representatives in breach of this Engagement Contract; (ii) Greylock Partners can show, by competent evidence, was known
to it or any of its representatives on a non-confidential basis prior to disclosure thereof to Greylock Partners or its representatives;
(iii) becomes available to Greylock Partners or any of its representatives on a non-confidential basis from a source other than
OSG or its representatives, provided that such source is not known to Greylock Partners or such representative to be subject to
any prohibition against transmitting such information to it; or (iv) is independently developed by Greylock Partners or any of
its representatives without reliance on the Information.

 

4.1          Use and Disclosure Restrictions – Greylock
Partners acknowledges that all Information is valuable and confidential to OSG, remains its respective property and will be kept
by Greylock Partners and its representatives and agents in strict confidence. Greylock Partners will only use or copy the Information
for the purpose of performing the Services under this Engagement Contract. Greylock Partners will not, directly or indirectly,
disclose Information to any person, except (a) on a confidential basis to its agents and representatives who need to know such
Information for performing the Services under this Engagement Contract, (b) as specifically consented to in writing by the OSG
or (c) as required by law (but subject, in the case of clause (c), to 4.2 below). Greylock Partners will exercise reasonable care
to preserve the confidentiality of the Information and will employ at least the same safeguards as it uses to protect its own confidential
information of a similar nature. Greylock Partners will not modify, disassemble, decompile or otherwise reverse engineer the Information.
Greylock Partners will be responsible for all uses, copying and disclosures of Information by its representatives and agents. Greylock
Partners acknowledges and agrees that a breach of the confidentiality provision shall irreparable harm to the Company and that
remedies at law may be inadequate to redress any such breach, and therefore Greylock Partners acknowledges and agrees that the
Company will be entitled to injunctive or similar equitable remedy against Greylock Partners and Greylock Partners will not take
any action to oppose or hinder the Company in obtaining such relief.

 

 

 

    	 

    	 

    

 

 

  

Except as required by law, or as publicly available or permitted
by the Engagement Contract, Greylock Partners will not, and will direct its representatives and agents not to, disclose to any
person, other than those persons engaged by OSG, the Engagement, that any discussions or negotiations are taking place concerning
the Project or any of the terms, conditions or other facts with respect to the Project, including the status thereof.

 

4.2          Legally Required Disclosure – If Greylock
Partners or any of its representatives or agents becomes legally compelled (whether by law, rule, regulation, subpoena or similar
court or other lawful process) to disclose Information, Greylock Partners will promptly notify OSG so that OSG may (but it need
not) seek a protective order or other appropriate remedy, with Greylock Partners’ cooperation, or waive compliance with the
provisions of this Engagement Contract. In any event, Greylock Partners and its representatives will furnish only that portion
of the Information which, based on written advice of legal counsel, it believes is legally required and will exercise reasonable
efforts to obtain reliable assurances that confidential treatment will be accorded to such Information.

 

4.3          Return and Destruction of Materials – Promptly
after OSG’s request at any time and upon termination or expiration of this Engagement Contract, Greylock Partners will return
all Information consisting of original documents received from OSG or its representatives and it will destroy all other Information
that is in tangible form and is in its or its representatives’ and agents’ possession, without retaining copies. Promptly
after OSG’s request, Greylock Partners will certify such return or destruction in writing.

 

4.4          No Right Granted – Nothing in this Agreement
is intended to grant to Greylock Partners or any of its representatives any intellectual property right or license or any other
rights or interest for, in or to the Information except to the extent such intellectual property or license is owned by or in the
name of Greylock Partners.

 

4.5          Disclosing Confidential Information –
Notwithstanding the above, either party will be entitled to disclose confidential information of the other to a third party
to the extent that such third party is subject to a confidentiality agreement (or such other arrangement acceptable to OSG) with
OSG to protect confidential information, or (subject to 4.2 above) such disclosure is required by valid legal process or by order
of court of competent jurisdiction, provided that (and without breaching any legal or regulatory requirement) where reasonably
practicable not less than 5 business days’ notice in writing is first given to the other party.

 

 

  

    	 

    	 

    

 

 

 

		5.	Termination

 

5.1           Termination of Engagement – Either party may
terminate the Engagement Contract upon 30 days notice.

 

5.2           Continuation of terms – The terms of the
Engagement that by their context are intended to be performed after termination or expiration of this Engagement Contract and are
intended to survive such termination or expiration shall continue to bind all parties, provided, however, that Greylock
Partners shall be entitled to compensation, as set forth in the Engagement Contract, only up to and through the date on which Greylock
Partners resigns, or is terminated by OSG.

 

6.             Indemnification; Limitation of Liability –
You agree to indemnify and hold harmless Greylock Partners and its partners, directors, officers, independent consultants,
employees, consultants, agents or representatives (collectively “Representatives”) against any loss, cost, expense,
or liability, including attorney fees and costs (collectively “Liability”) related to the provision of the Services
under the Engagement Contract, except to the extent such Liability is determined by final nonappealable order of a court of competent
jurisdiction to have resulted from the gross negligence, fraud or reckless, intentional or willful misconduct of Greylock Partners
or its Representatives. In no event shall either party be liable for consequential, indirect or punitive damages, incidental damages,
damages for lost profits or opportunities or other like damages or claims of any kind and further, the maximum liability of Greylock
Partners hereunder, other than circumstances determined by final non-appealable order of a court of competent jurisdiction to
be fraud, reckless, intentional or willful misconduct, shall be the amount of fees paid to Greylock Partners. In circumstances
where any limitation on damages or indemnification provision hereunder is unavailable, the aggregate liability of Greylock Partners
for any claim shall not exceed an amount that is proportional to the relative fault that the conduct of Greylock Partners bears
to all other conduct giving rise to such claim. Neither party may settle or compromise any liability for which indemnity may be
sought hereunder without the prior consent of the other party which shall not be unreasonably withheld.

7.             Governing Law and Jurisdiction – The Engagement Contract shall be governed by and interpreted in accordance
with the laws of the State of New York, without giving effect to the choice of law provisions thereof. The parties agree that
any such dispute shall be heard and resolved in a state or federal court or competent jurisdiction located in the State of New
York (New York County). It is understood and agreed that no failure or delay by OSG in exercising any right, power or privilege
hereunder shall operate as a waiver hereof nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any rights, power or privilege hereunder.

 

Confirmation of Standard Terms and Conditions

 

We agree to engage Greylock Partners, LLC upon the terms and
conditions set forth herein.

  

Overseas Shipholding Group, Inc.

 

By: /s/ John J. Ray III 

  

Date: September 12 , 2014Exhibit 4.1

 

EXECUTION VERSION

 

TRANCHE 1A WARRANT

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR (IF REQUESTED BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY
OR (II) RULE 144 PROMULGATED UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THIS SECURITY AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

22ND CENTURY GROUP, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:

 

Date of Issuance: September 29, 2014 (“Issuance Date”)

 

22nd Century Group, Inc., a Nevada corporation
(the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Crede CG III, Ltd., the registered holder hereof or its permitted assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange,
transfer or replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date but not after
11:59 p.m., New York time, on the Expiration Date (as defined below), One Million Two Hundred Fifty Thousand (1,250,000) (subject
to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 17.

 

    	 

    	 

    

 

1.EXERCISE
OF WARRANT.

 

(a)Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date in whole or in part, by delivery (whether
via facsimile 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. For the avoidance of doubt, this Warrant shall not be subject to any vesting
conditions and shall be immediately exercisable on any day on or after the Issuance Date. Within one (1) Trading Day following
an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount 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 (in
respect of such specific exercise, the “Aggregate Exercise Price”) via wire transfer of immediately available
funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise
(as defined in Section 1(d)). 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 certificate and issuance of a new Warrant certificate 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 certificate after delivery of the Warrant
Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the later of (i) the date on which
the Company has received an Exercise Notice or (ii) the date on which the Company receives the Aggregate Exercise Price, the Company
shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as
Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the second
(2nd) Trading Day following the later (such later date is referred to herein as the “Delivery Date”)
of (i) the date on which the Company has received such Exercise Notice or (ii) if the Aggregate Exercise Price is not paid by the
Holder within one (1) Trading Day following such exercise as contemplated above in this Section 1(a), the date on which the Company
receives the Aggregate Exercise Price, the Company shall (X) provided that (I) the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program and (II) either a Registration Statement (as
defined in the Registration Rights Agreement between the Company and Crede CG III, Ltd.) for the resale by the Holder of the applicable
Warrant Shares to be issued pursuant to such Exercise Notice is effective or such Warrant Shares are otherwise eligible for resale
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (or a successor rule thereto) (“Rule 144”),
credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if either of the immediately
preceding clauses (I) or (II) are not satisfied, 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 Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice, 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 such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section
1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant
Shares being acquired upon an exercise, then, at the request of the Holder and upon surrender hereof by the Holder at the principal
office of the Company, the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise
and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 8(d)) representing
the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all transfer taxes and other fees which may be payable with respect to the issuance
and delivery of the Warrant Shares upon exercise of this Warrant.

 

    	2

    	 

    

 

(b)Exercise
Price. For purposes of this Warrant, “Exercise Price” means $3.36, subject to adjustment as provided herein.

 

(c)Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue (or cause to be
issued) to the Holder on or before the applicable Delivery Date, a certificate for the number of shares of Common Stock to which
the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s
balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
of this Warrant (as the case may be), then, in addition to all other remedies available to the Holder, the Company shall pay in
cash to the Holder on each day after such third (3rd) Trading Day following the Delivery Date that the issuance of such shares
of Common Stock is not timely effected an amount equal to 1.5% of the product of (A) the aggregate number of shares of Common Stock
not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock
on the Trading Day immediately preceding the last possible date on which the Company could have issued such shares of Common Stock
to the Holder without violating Section 1(a). In addition to the foregoing, if the Company shall fail to issue and deliver (or
cause to be issued and delivered) a certificate to the Holder and register such shares of Common Stock on the Company’s share
register or to credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise or exchange hereunder (as the case may be) on or prior to the applicable Delivery
Date, and if on or after such Delivery Date, the Holder (or any other Person in respect, or on behalf, of the Holder) purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or
any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion
of the number of shares of Common Stock, issuable upon such exercise or exchange that the Holder so anticipated receiving from
the Company, then, in addition to all other remedies available to the Holder, the Company shall, in lieu of payments under the
previous sentence, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and reasonable
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person
in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation
to so issue and deliver such certificate or credit the Holder’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise or exchange hereunder (as the case may be) (and to issue
such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise or exchange hereunder (as the case may
be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period
commencing on the date of the applicable Exercise Notice or Exchange Notice, as the case may be, and ending on the date of such
issuance and payment under this clause (ii).

 

    	3

    	 

    

 

(d)Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of an exercise
hereof an Equity Conditions Failure with respect to clauses (ii) or (iii) of the definition of Equity Conditions shall then exist,
then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to
make a cashless exercise (each a “Cashless Exercise” ) under this paragraph (d). A Cashless Exercise under this
paragraph (d) may be made, at the election of the Holder from time to time and irrespective of any other election to make a Cashless
Exercise, so that upon such exercise Holder shall receive the “Net Number” of shares of Common Stock determined according
to the following formula:

 

Net Number = (A x B) - (A x C)

B

 

For purposes of the foregoing formula:

 

A = the total number of shares with respect to which this Warrant
is then being exercised.

 

B = as applicable: (i) the Closing Sale Price of the Common
Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed
and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to
Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day or (ii) the Closing Sale Price of the Common
Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice
is both executed and delivered pursuant to Section 1(a) hereof after the opening of “regular trading hours” on such
Trading Day.

 

C = the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

 

Notwithstanding anything to the contrary contained herein, exercise
of this Warrant on a cashless basis may also be made from time to time at the election of the Holder (and irrespective of any election
to make a Cashless Exercise under this paragraph (d)), pursuant to the exchange provisions of Section 5 of this Warrant.

 

(e)Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to Holder such dispute shall
be resolved in accordance with Section 14.

 

    	4

    	 

    

 

(f)Limitations
on Exercises and Exchanges. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable
or exchangeable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially
own in excess of 9.9% (the “Maximum Percentage”) of the Common Stock after giving effect to such exercise or
exchange. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable or exchangeable
(vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of
which such securities shall be exercisable or exchangeable (as among all such securities owned by the Holder) shall, subject to
such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise
or exchange (as the case may be). No prior inability to exercise or exchange this Warrant pursuant to this paragraph shall have
any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability
or exchangeability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including,
without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and regulations promulgated
thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms
of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum
Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder
of this Warrant. The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive
this paragraph without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise or exchange of convertible
or exercisable or exchangeable securities into Common Stock, including, without limitation, pursuant to this Warrant. Upon request
by the Company, Holder shall certify to the Company upon exercise of this Warrant how many shares of Common Stock are beneficially
owned by Holder for determining compliance with this Section 1(f).

 

(g)Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
or exchange of this Warrant). 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 Common Stock to satisfy
its obligation to reserve for issuance upon exercise or exchange of this Warrant at least a number of shares of Common Stock equal
to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise or exchange of this Warrant
(the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for this Warrant. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days
after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of
an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each
shareholder with a proxy statement and shall use its reasonable efforts to solicit its shareholders’ approval of such increase
in authorized shares of Common Stock.

 

    	5

    	 

    

 

(h)Activity
Restrictions. (i) For so long as Holder or any of its Affiliates holds any Warrants or any Warrant Shares, neither Holder nor
any Affiliate will: (i) vote any shares of Common Stock beneficially owned by it, solicit any proxies, or seek to advise or influence
any Person with respect to any voting securities of the Company; (ii) engage or participate in any actions, plans or proposals
which relate to or would result in (A) acquiring additional securities of the Company, alone or together with any other Person,
which would result in Holder or its Affiliates beneficially owning (within the meaning of Section 13(d) under the 1934 Act) more
than 9.9% of the Common Stock, (B) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving
Company or any of its Subsidiaries, (C) a sale or transfer of a material amount of assets of the Company or any of its Subsidiaries,
(D) any change in the present board of directors or management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board, (E) any material change in the present capitalization or dividend
policy of the Company, (F) any other material change in the Company’s business or corporate structure, including but not
limited to, if the Company is a registered closed-end investment company, any plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the Investment Company Act of 1940, (G) changes in the Company’s charter,
bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any
Person, (H) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized
to be quoted in an inter-dealer quotation system of a registered national securities association, (I) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or (J) any action, intention,
plan or arrangement similar to any of those enumerated above; or (iii) request the Company or its directors, officers, employees,
agents or representatives to amend or waive any provision of this paragraph. The restrictions contained in this paragraph (h) shall
not limit Holder’s rights to enforce its rights or exercise its rights as to the Securities or under this Warrant.

 

(i)Provided
that no Equity Conditions Failure then exists with respect to clauses (ii) or (iii) of the definition of Equity Conditions, if
the trading price on the Principal Market at the time of an exercise of this Warrant is greater than the then applicable Exercise
Price then in effect, then in respect of such particular exercise Holder may only exercise this Warrant for a cash exercise price
(and not by means of a Cashless Exercise under Section 1(d) above or on a cashless basis under Section 5 below). For avoidance
of doubt, provided that the conditions in this Section 1(i) are satisfied at such time, no cashless exercises or exchanges (under
Section 5) may occur.

 

    	6

    	 

    

 

2.ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)Stock
Dividends and Splits. If the Company, at any time on or after the date of the Issuance Date, (i) pays a stock dividend on one
or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its then outstanding shares of 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 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 Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common
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 shareholders 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 calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

(b)Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 2, the
number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).

 

(c)Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of cent and the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

3.[Intentionally
Omitted].

 

4.EXTRAORDINARY
TRANSACTIONS. If, (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the
Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender
offer or exchange offer by the Company is completed pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash
or property (in any such case, an “Extraordinary Transaction”), then this Warrant will become the right thereafter
to receive, upon exercise, the same amount and kind of securities, cash or property as the Holder would have been entitled to receive
upon the occurrence of such Extraordinary Transaction if it had been, immediately prior to such Extraordinary Transaction, the
holder of the number of Warrant Shares then issuable upon exercise in full of the relevant Warrant (the “Alternate Consideration”)
in lieu of Common Stock. The aggregate Exercise Price for each Warrant will not be affected by any such Extraordinary Transaction,
but the Company shall apportion such aggregate Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in an Extraordinary Transaction, then the Holder, to the extent practicable,
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of its Warrant following such Extraordinary
Transaction. In addition, at the request of the Holder, upon surrender of this Warrant, any successor to the Company or surviving
entity in such Extraordinary Transaction shall issue to such Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof.
Each such new warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to
an Extraordinary Transaction.

 

    	7

    	 

    

 

5.EXCHANGE
RIGHTS. In addition to the rights of the Holder under Section 1 hereof, this Warrant shall be exchangeable by the Holder on
a cashless basis as further set forth below (and subject to the limitations set forth in Section 1(h)(ii) hereof).

 

(a)Exchange
Right. Subject to Section 1(f), the Holder shall be entitled at any time and from time to time from and after the date that
is sixty-one (61) days after the closing of the purchase of shares of Common Stock by Holder pursuant to the Securities Purchase
Agreement, dated September __, 2014 (the “Securities Purchase Agreement”), and prior to the Expiration Date,
by written notice to the Company in the form of Exhibit B attached hereto (an “Exchange Notice”
) to exchange (an “Exchange”) all or any portion of this Warrant for fully paid and non-assessable shares of
Common Stock, all as further set forth in this Section 5.

 

(b)Exchange
Number. The number of shares of Common Stock issuable in respect of such Exchange shall be determined by dividing (x) the Exchange
Amount (as defined below) in respect of such Exchange by (y) the Exchange Price (as defined below) in respect of such Exchange
(such number of shares of Common Stock so issuable being the “Exchange Number”). The Exchange Number shall be
capped at Five Million (5,000,000) shares of Common Stock and in no event shall the number of shares of Common Stock issued upon
exercise or exchange of this Warrant exceed Five Million (5,000,000) shares.

 

(c)Definitions.

 

(i)“Exchange
Amount” means the Black-Scholes Exchange Value of the portion of the Warrant being exchanged pursuant to Section 5(a),
determined as of the applicable Exchange Date (as defined below).

 

(ii)“Exchange
Price” means the Closing Bid Price as of two (2) Trading Days prior to the Exchange Date.

 

    	8

    	 

    

 

(d)Mechanics
of Exchange.

 

(i)Optional
Exchange. To exchange any Exchange Amount on any date (an “Exchange Date”), the Holder shall transmit by
facsimile or e-mail (or otherwise deliver), for receipt on such date, a copy of an executed Exchange Notice. The Holder shall not
be required to deliver the original of this Warrant in order to effect an exchange hereunder. Execution and delivery of an Exchange
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 Exchange 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. Any delivery of an Exchange Notice prior to 4:00
p.m. shall be deemed as being received on that same day.

 

(ii)Exchange
for Shares of Common Stock. Within one (1) Trading Day after following the date on which the Company has received an Exchange
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exchange Notice, in the form
attached hereto as Exhibit C, to the Holder and the Transfer Agent. On or before the second (2nd) Trading
Day following the date on which the Company has received such Exchange Notice, the Exchange Number of shares of Common Stock shall
be issued to Holder, or at Holder’s instruction, as if such shares of Common Stock were issuable upon an exercise under Section
1 hereof.

 

(iii)Disputes.
Dispute as to the determination of the Exchange Amount, the Exchange Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof, and shares subject to such dispute, shall be handled in the same manner as for
disputes under Section 1(e) hereof.

 

6.NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, for the purpose of avoiding or seeking 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 Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully
paid and non-assessable shares of Common Stock upon the exercise of this Warrant (or such other securities, cash, assets or other
property then deliverable on exercise of this Warrant), and (iii) shall, so long as this Warrant is outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting
the exercise of this Warrant, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the
exercise of this Warrant then outstanding (without regard to any limitations on exercise).

 

    	9

    	 

    

 

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;
provided that the Company shall not be obligated to provide such information if it is filed with the SEC through EDGAR and
available to the public through the EDGAR system.

 

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. Prior to transferring
this Warrant, the Holder shall inform the transferee of the total number of Warrant Shares then underlying this Warrant.

 

(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 to
the Company in customary and reasonable form 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.

 

(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 Common 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 Section 8(a)
or Section 8(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common 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.

 

    	10

    	 

    

 

9.NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. 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) as soon as practicable 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). If the Company (i) declares a dividend or any other distribution of cash, securities or other property in
respect of its Common Stock (other than a dividend payable solely in shares of Common Stock) or (ii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall deliver to each Holder a notice describing the
material terms and conditions of such dividend, distribution or transaction. Notwithstanding anything to the contrary in this Section
9, the failure to deliver any notice under this Section 9 or any defect therein shall not affect the validity of the corporate
action required to be described in such notice. Until the exercise of its, his or her Warrant or any portion of such Warrant, a
Holder shall not have nor exercise any rights by virtue of ownership of a Warrant as a shareholder of the Company (including without
limitation the right to notification of shareholder meetings or the right to receive any notice or other communication concerning
the business and affairs of the Company other than as provided in this Section 9.

 

10.AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) 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.

 

11.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).

 

    	11

    	 

    

 

12.GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant 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 of the Holder and the
Company 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. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate
to preclude either the Holder or the Company from bringing suit or taking other legal action against the Holder or the Company
in any other jurisdiction to enforce a judgment or other court ruling in favor of the Holder or the Company. EACH OF THE HOLDER
AND THE COMPANY 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 WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

13.CONSTRUCTION;
HEADINGS. This Warrant 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 Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

 

14.DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Exchange Amount, the Exchange Price,
the Closing Sale Price, the fair market value or the arithmetic calculation of the Warrant Shares (as the case may be), the Company
or the Holder (as the case may be) may submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile
(i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder
(as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder or the Company (as the case may
be) learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination
or calculation (as the case may be) of the Exercise Price, the Exchange Amount, the Exchange Price, the Closing Sale Price, the
fair market value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination
or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed arithmetic calculation of the Warrant Shares, the disputed determination
of the Exercise Price, the Exchange Amount, the Exchange Price, the Closing Sale Price, the fair market value (as the case may
be) to an independent, reputable investment bank of nationally recognized standing selected by the Holder and reasonably acceptable
to the Company or (b) if acceptable to the Holder, the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent, outside accountant. The Company shall use its commercially reasonable efforts to cause at its expense the investment
bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error. The party whose determination or calculation is furthest from that determined
or calculation by the investment bank or accountant shall pay the costs of such determination or calculation.

 

    	12

    	 

    

 

15.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 and any other agreement among the parties, 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 and consequential damages for any failure by the Company to comply with the terms of this Warrant; provided, however,
that Holder’s remedies, including any right of damages, shall be subject to Section 9(k) of the Securities Purchase Agreement
of even date herewith between Holder and the Company. 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 reasonably requested by the Holder to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). 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 or stamp 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.

 

16.TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

 

    	13

    	 

    

 

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

 

(a)“Black
Scholes Exchange Value” means the value of an option for the number of shares equal to the portion of the Warrant being
exchanged at the applicable Exchange Date as set forth in the applicable Exchange Notice as such value is determined calculated
using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the Closing Sale Price of the Common Stock as of the Issuance Date (adjusted upward to the same extent
that the Exercise Price hereunder has been adjusted upward pursuant to Section 2(a) hereof), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the Warrant as of such Exchange Date, (iii) a strike price
equal to the Exercise Price in effect at the time of the applicable Exchange, (iv) an expected volatility equal to 135% and (v)
a deemed remaining term of the Warrant of five (5) years (regardless of the actual remaining term of the Warrant).

 

(b)“Bloomberg”
means Bloomberg, L.P.

 

(c)“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.

 

(d)“Common
Stock” means (i) the Company’s shares of common stock, $0.00001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(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 Common Stock.

 

(f)“Equity
Conditions” means: (i) the Company shall be in compliance in all material respects with all of its obligations under
the Securities Purchase Agreement by and between the Holder and the Company, (ii) each of the Registration Statement and the Prospectus
contained therein (each as defined in the Registration Rights Agreement between the Company and Crede CG III, Ltd.) shall then
be effective and fully available for use with respect to the resale of all of the Warrant Shares issued pursuant to a cash exercise
hereof, (iii) all Common Shares and Warrant Shares (including any Warrant Shares to be received upon exercise or exchange of this
Warrant and including any Warrant Shares to be issued in a cash exercise) shall be then, or upon such issuance shall be (as the
case may be), freely tradable by Holder pursuant to the Registration Statement without restriction of any kind or nature (including,
without limitation, under applicable securities laws) (and the Company shall have no knowledge of any fact which would reasonably
be expected to negate the foregoing in the foreseeable future) other than restrictions that may result from the Holder being an
“affiliate” of the Company as defined in Rule 144 promulgated under the 1933 Act or under Rule 144(i), and (iv) no
limitation shall be applicable with respect to the issuance of any Warrant Shares for cash hereunder (other than under Section
1(f)).

 

(g)“Equity
Conditions Failure” means that on any applicable date of determination, any of the Equity Conditions are not then satisfied.

 

    	14

    	 

    

 

(h)“Expiration
Date” means the date that is the second (2nd) anniversary of the Issuance Date or, if such date falls on a day other
than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that
is not a Holiday.

 

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

 

(j)
“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.

 

(k)“Principal
Market” means the NYSE MKT.

 

(l)
“Trading Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market
for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York time) or (y) with respect to all determinations other than price
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.

 

(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).

 

18.REDEMPTION.

 

(a)Redemption
of Warrant. Provided that the Registration Statement registering the Warrant Shares is effective throughout the period
beginning on the date of the notice of redemption and ending on the date fixed for redemption, this Warrant may be redeemed, in
whole or in part, at the option of the Company, at any time after it becomes exercisable and prior to its expiration, at the office
of the Company upon the notice referred to in Section 9 hereof, at the price equal to 130% of the Exercise Price (the “Redemption
Price”).

 

(b)Date
Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem the Warrant, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by overnight mail next day delivery by the Company not less
than fifteen (15) days prior to the date fixed for redemption to the Holder of the Warrant to be redeemed at their last addresses
as they shall appear on the registration books.

 

    	15

    	 

    

 

(c)Exercise
After Notice of Redemption. The Warrant may be exercised in accordance with this Warrant at any time after notice of redemption
shall have been given by the Company and prior to the time and date fixed for redemption. On and after the redemption date, the
Registered Holder shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

 

19.FORCED
EXERCISE.

 

(a)Forced
Cash Exercise of Warrant. At the option of the Company, after the Warrant becomes exercisable and prior to its expiration,
so long as there is No Equity Conditions Failure, the Company may force the Holder to exercise the Warrant for cash as provided
herein (a “Forced Cash Exercise”). In order to force the exercise of the Warrant for cash, the following conditions
must be satisfied on the date that such notice is delivered to Holder: (i) the trading volume of the Company’s Common Stock
over twenty (20) consecutive Trading Days must be equal to or greater than an aggregate of Ten Million (10,000,000) shares of Common
Stock; (ii) the Registration Statement registering the Warrant Shares must be effective; and (iii) the Trading Price of the Common
Stock on the date prior to the delivery of the notice of exercise must be equal to or greater than 125% of the Exercise Price.

 

(b)Date
Fixed for, and Notice of Forced Cash Exercise. In the event the Company shall elect a Forced Cash Exercise, the Company shall
fix a date for the exercise, which shall be a date that is at least five (5) Business Days after such notice is delivered to Holder.
The Holder shall, promptly upon receipt of such notice, pay the cash exercise price for the Warrant Shares and the Company shall,
promptly upon receipt of such funds, deliver the Warrant Shares.

 

(c)No
Exercise of Exchange After Notice of Forced Cash Exercise. The Warrant may be not be otherwise exercised or exchanged after
notice of Forced Cash Exercise shall have been delivered by the Company to the Holder.

 

[signature page follows]

 

    	16

    	 

    

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

22ND CENTURY GROUP, INC.

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

22ND CENTURY GROUP, INC.

 

The undersigned holder hereby exercises
the right to purchaseof the            shares of Common Stock (“Warrant Shares”) of 22nd Century Group, Inc., a Nevada
corporation (the “Company”), evidenced by Warrant to Purchase Common Stock No.           (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.Form of Exercise Price. The
Holder intends that payment of the Exercise Price shall be made as:

 

	 	 	a “Cash Exercise” with respect to ______________ Warrant Shares; and/or
	 	 	 
	 	 	a “Cashless Exercise” with respect to ___________ Warrant Shares.

 

In the event that the Holder has elected
a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that this Exercise Notice was executed by the Holder at          [a.m.][p.m.] on the date set forth below.

 

2.The undersigned represents and warrants
that the Holder is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

3.Payment of Exercise Price.
In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares, the Holder shall pay
the Aggregate Exercise Price in the sum of $          to the Company in accordance with the terms of the Warrant.

 

4.Delivery of Warrant Shares and
Net Number of shares of Common Stock. The Company shall deliver to Holder, or its designee or agent as specified below,          shares
of Common Stock in respect of the exercise contemplated hereby. Delivery shall be made to Holder, or for its benefit, to the following
address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	Date: 		 
	 	 	 
		Name of Registered Holder

 

	By: 	 	 
		Name:	 
		Title:	 

 

Account  

	Number: 	
		(if electronic book entry transfer)

 

Transaction Code

	Number: 	 
		(if electronic book entry transfer)

 

    	 

    	 

    

 

EXHIBIT B

 

EXCHANGE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXCHANGE THIS

WARRANT TO PURCHASE COMMON STOCK

 

22ND CENTURY GROUP, INC.

 

The undersigned holder hereby exercises
the right to exchange the Warrant to Purchase Common Stock No.          (the “Warrant”) of 22nd Century Group, Inc.,
a Nevada corporation (the “Company”) as described. Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.

 

	Date of Exchange:   	 	 

 

		1.	The total number of shares with respect to which this Warrant is being exchanged:

 

		2.	Black Scholes Exchange Value (as defined in Section 17)
for an option to purchase [SAME # AS FROM 1 ABOVE] shares of Common Stock: $          .

 

	Resulting Exchange Amount:  $	[insert from item 2 above]

 

		3.	Exchange Price: Closing Bid Price of the Common
Stock as of two (2) Trading Days prior to the date of Exchange (as such Closing Bid Price is defined in Section 17 herein): $          .

 

Resulting Exchange Number [Exchange Amount/Exchange Price
as set forth in 3 above]:           shares of Common Stock (which shall not exceed the number of shares in item 1 above).

 

	Account for Share issuance (if Company is permitted to elect and so elects):
	  	 

 

	 
	 	 

 

	Date:  	 
	 	 
	Name of Registered Holder	 

 

	By: 	 	 
		Name:	 
		Title:	 

 

    	 

    	 

    

 

EXHIBIT C

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this [Exercise
Notice] [Exchange Notice] and hereby directs ________________ to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated ______________ 20___, from the Company and acknowledged and agreed to by
____________________.

 

22ND CENTURY GROUP, INC.

 

	By: 	 	 
		Name:	 
		Title:

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