Document:

Exhibit 4.1

 

[FORM OF WARRANT]

 

KUSHCO
HOLDINGS, INC.

 

Warrant
To Purchase Common Stock

 

Warrant No.:

 

Date of Issuance: February __, 2020 (“Issuance
Date”)

 

KushCo Holdings, Inc.,
a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, _________________, 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), _________________ (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined
below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”). Except
as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 20. This Warrant
is one of the Warrants to Purchase Common Stock (the “Registered Warrants”) issued pursuant to (i) that certain
Securities Purchase Agreement, dated as of February 6, 2020 (the “Subscription Date”), by and between the Company
and the investor(s) referred to therein, as amended from time to time (the “Securities Purchase Agreement”)
and (ii) the Company’s Registration Statement on Form S-3 (File number 333-231019) (the “Registration Statement”).

 

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 (an “Exercise 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. Within one (1) Trading
Day following the delivery of the Exercise Notice, 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
(the “Aggregate Exercise Price”) in cash or 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 nor shall any
ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice
be required. 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 first (1st) Trading Day following the date on which the Company has received an Exercise Notice,
the Company shall transmit by facsimile or electronic mail 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”), which confirmation shall constitute an instruction to the Transfer Agent to process such Exercise Notice in
accordance with the terms herein. So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then
on or prior to the second (2nd) Trading Day following the date on which the Exercise Notice has been delivered to the Company,
or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st)
Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st)
Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (the “Share
Delivery Deadline”), the Company shall (i) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, 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 (ii) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight
courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise. The Company shall be
responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares
via DTC, if any, including without limitation for same day processing. 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 and upon surrender of this Warrant to the Company
by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2)
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 7(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, stamp, issuance and similar taxes, costs
and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. From the Issuance Date through and including the Expiration Date,
the Company shall maintain a transfer agent that participates in the DTC’s Fast Automated Securities Transfer Program. The
Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof
are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required
to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or
notice of a Cashless Exercise) with respect to such exercise.

 

     

     

    

 

(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $2.00, 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, on or prior to the Share
Delivery Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
to issue and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled
and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast
Automated Securities Transfer Program, to credit the balance account of the Holder or the Holder’s designee with DTC for
such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may
be) or (II) if the Registration Statement (or prospectus contained therein) covering the issuance of the Warrant Shares that are
the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance of such
Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares 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 (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Delivery Failure”), and if on or after such Share
Delivery Deadline 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 issuable upon such exercise that the Holder
is entitled to receive from the Company (a “Buy-In”), then, in addition to all other remedies available to the
Holder, the Company shall, 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 other 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 (and to issue such shares of Common Stock) or credit the balance account of such Holder
or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon
the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to
which the Holder is entitled upon the Holder’s exercise 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 Warrant Shares 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
and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”). Nothing
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of
this Warrant as required pursuant to the terms hereof. Additionally, if the Company fails for any reason to deliver to the Holder
the Warrant Shares subject to an Exercise Notice by the Share Delivery Deadline, the Company shall pay to the Holder, in cash,
as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the Weighted Average
Price of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Deadline
until such Warrant Shares are delivered or Holder rescinds such exercise. In addition to the foregoing rights, (i) if the Company
fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery
Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date
of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the
issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior
to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant
Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant
Shares 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, the Holder shall have the option, by delivery of notice to the Company, to
(x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.

 

     

     

    

 

(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of
exercise hereof the Registration Statement is not effective (or the prospectus contained therein is not available for use) for
the issuance of all of the Warrant Shares, then the Holder may only exercise this Warrant in whole or in part, at such time by
means of a cashless exercise in which the Holder shall be entitled to receive upon such exercise the “Net Number” of
Warrant Shares determined according to the following formula (a “Cashless Exercise”):

 

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

D

 

For purposes of the foregoing
formula:

 

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

 

B = the quotient of (x) the sum
of the Weighted Average Price of the Common Stock of each of the three (3) Trading Days ending at the close of business on the
Principal Market immediately prior to the time of exercise as set forth in the applicable Exercise Notice, divided by (y) three
(3).

 

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

 

D =        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(d) hereof on a day that is
not a Trading Day or (2) both executed and delivered pursuant to Section 1(d) hereof on a Trading Day prior to the opening
of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable
Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter pursuant to Section 1(d) hereof, or (iii) 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(d) hereof after the close of “regular trading hours” on such Trading Day.

 

    	 	1	 

     

    

 

If the Warrant Shares
are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the
Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.

 

(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, the Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

 

(f)          Limitations
on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right
to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null
and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the
number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude
shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially
owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion
of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or
warrants, including other Registered Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation
on conversion or exercise analogous to the limitation contained in this Section 1(f)(i). For purposes of this Section 1(f)(i),
beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number
of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case
may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent,
if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares
of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase
is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to
the Holder any exercise price paid by the Holder for the Reduction Shares. 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 or by electronic mail to the
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that
the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution
Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares
of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the
Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice
to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st)
day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified
in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the
other Attribution Parties and not to any other holder of Registered Warrants that is not an Attribution Party of the Holder. For
purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage
shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to exercise 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. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f)(i) to the
extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder
of this Warrant.

 

     

     

    

 

(g)          Reservation
of Shares.

 

(i)          Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under
this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Registered Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall
the number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection
with any exercise or redemption of Registered Warrants or such other event covered by Section 2(a) below. The Required Reserve
Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the
holders of the Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants held
by each holder on the date of Closing (without regard to any limitations on exercise) or increase in the number of reserved shares,
as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer
any of such holder’s Registered Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized
Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Registered Warrants
shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Registered Warrants then held by such holders (without regard to any limitations on exercise).

 

(ii)         Insufficient
Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the Registered
Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve 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 all the Registered Warrants then outstanding. 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 sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting
of its stockholders 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 stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is
able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C.

 

     

     

    

  

2.           ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

 

(a)          Adjustment
Upon Subdivision or Combination of Common Stock. 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. If the Company, at any time on or after
the Subscription 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 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 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 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).

 

3.           RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription
Date and on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date
of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the
Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not
be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership)
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or
times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at
which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

 

     

     

    

 

4.           PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and on
or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of
this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the
Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance
or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such
Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such
Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent
shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right
(and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly
in abeyance) to the same extent as if there had been no such limitation).

 

(b)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing, pursuant to written agreements in form and substance satisfactory to the Required Holders, all of the obligations of
the Company under this Warrant and all other Transaction Documents in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, but which is exercisable for a corresponding number of shares of capital
stock equivalent to the shares of Common Stock issuable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for the Company (so that from and after the date of such Fundamental Transaction, each and every provision of this Warrant referring
to the “Company” shall instead refer to the Successor Entity), and the Successor Entity may exercise every prior right
and power of the Company and shall assume all prior obligations of the Company under this Warrant with the same effect as if the
Successor Entity had been named as the Company in this Warrant. On or prior to the consummation of each Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time
after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property purchasable upon the exercise of this 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 for purposes
of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such
Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or the record, eligibility
or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the exercise
of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting
the provisions of Section 1(g) hereof, the Holder may elect, at its sole discretion, by delivery of a written notice to the Company,
to permit a Fundamental Transaction without the required assumption of this Warrant. In addition to and not in substitution for
any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of Common Stock
are entitled to receive securities, cash, assets or other property with respect to or in exchange for Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to ensure that, and any applicable Successor Entity shall ensure
that, the Holder will thereafter have the right to receive upon exercise of this Warrant at any time after the consummation of
the Corporate Event, shares of Common Stock or capital stock of the Successor Entity or, if so elected by the Holder, in lieu of
the shares of Common Stock (or other securities, cash, assets or other property) (except such items still issuable under Sections
3 and 4(a), which shall continue to be receivable thereafter) issuable upon exercise of this Warrant prior to such Corporate Event,
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 consummation of such Corporate Event or the record, eligibility
or other determination date for the event resulting in such Corporate Event, had this Warrant been exercised immediately prior
to such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event
(without regard to any limitations on exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in
a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply similarly and equally
to successive Fundamental Transactions and Corporate Events.

 

     

     

    

 

5.           NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, as amended,
bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance 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 (a) 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, (b) 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 and (c) shall, so long as any of the Warrants are 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 the Warrants, the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise). Notwithstanding anything
herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise
this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use
its reasonable best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals
as necessary to permit such exercise into shares of Common Stock

 

6.           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 6, 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.

 

7.           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 7(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 7(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 to
the Company in customary and reasonable form (but without the obligation to post a bond) 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 7(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 7(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 7(a)
or Section 7(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.

 

8.           NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 3.3 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with
the terms hereof), 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 ten Trading 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 Common 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 Common 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. It
is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive
and may not be disputed or challenged by the Company.

 

9.           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.

 

10.           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.         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. The
Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company at the address set forth on the signature page to the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. 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 the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder. 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.

 

12.         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. Terms used in this Warrant but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the date of Closing (as defined in the Securities Purchase Agreement) in such other
Transaction Documents unless otherwise consented to in writing by the Holder.

 

13.         DISPUTE
RESOLUTION.

 

(a)          Submission
to Dispute Resolution.

 

(i)          In
the case of a dispute relating to the Exercise Price, the Closing Sale Price, or fair market value or the arithmetic calculation
of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of
any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile
or email (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, within ten (10) Trading Days after the Holder learns of the circumstances giving rise to such dispute
(or, if the Holder thereafter learns new information with respect to such circumstances, within ten (10) Trading Days after the
Holder learns of such new information). If the Holder and the Company are unable to promptly resolve such dispute relating to such
Exercise Price, such Closing Sale Price, or such fair market value or such arithmetic calculation of the number of Warrant Shares
(as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or
the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder and the Company
shall mutually agree upon, and select, an independent, reputable investment bank to resolve such dispute at the expense of the
Company.

 

(ii)         The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the investment bank was selected by the parties hereto (the “Dispute Submission Deadline”)
(the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required
Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver
all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the
Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).

 

     

     

    

 

(iii)        The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be paid 50/50 by the Company and the Holder.

 

(b)          Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New
York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel
arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii)the terms of this Warrant and
each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the
applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations
and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution
of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the
terms of this Warrant and any other applicable Transaction Documents, (iii) either the Company or the Holder shall have the right
to submit any dispute described in this Section 13 to any state or federal court sitting in The City of New York, Borough of Manhattan
in lieu of utilizing the procedures set forth in this Section 13 and (iv) nothing in this Section 13 shall limit the Holder from
obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described
in this Section 13).

 

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 and the other Transaction Documents, 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.
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 specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting
a bond or other security. 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 (including, without
limitation, compliance with Section 1(g)(ii) 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 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.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts
due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the
Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.

 

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

  

17.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material,
nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.

 

18.         NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing,
(i) if delivered (a) from within the domestic United States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from outside the United States, by International
Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered by first-class registered or certified
mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized overnight carrier, one (1) Business
Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after so mailed and (D) if delivered
by electronic mail, when sent and (E) if delivered by facsimile, when sent (provided that confirmation of transmission is generated
and kept by the sending party), and will be delivered and addressed as follows:

 

(i)          if
to the Company, to:

 

KushCo Holdings, Inc.

6261 Katella Avenue, Suite 250

Cypress, CA 90630

Attention: Chief Financial Officer

Email: chris.tedford@kushco.com

 

With a copy to:

 

Reed Smith LLP

599 Lexington Avenue, 26th
Floor

New York, NY 10022

Attention: Aron Izower, Esq. and
Marc D. Hauser, Esq.

Email: AIzower@ReedSmith.com and
MHauser@reedsmith.com

 

(ii) if to the Holder, at such
address or other contact information delivered by the Holder to Company or as is on the books and records of the Company.

 

19.         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 any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment 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 Common Stock, or (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 Common 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. It is expressly understood and agreed that the time of exercise specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

     

     

    

 

20.         CERTAIN
DEFINITIONS.

 

For purposes of this Warrant, the following
terms shall have the following meanings:

 

(a)          “1933
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

(b)          “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

(c)          
 “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.

 

(d)          
 “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates
of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the
Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would
or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act.
For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum
Percentage.

 

(e)          “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

 

(f)          
 “Bloomberg” means Bloomberg Financial Markets, L.P.

 

(g)          “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.

 

     

     

    

 

(h)         “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 13. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

(i)          “Common
Stock” means (i) the Company’s shares of common stock, $0.001 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.

 

(j)          “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.

 

(k)          “Eligible
Market” means The NASDAQ Capital Market, the NYSE American, The NASDAQ Global Select Market, The NASDAQ Global Market
or The New York Stock Exchange, Inc.

 

(l)          “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

(m)        “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not
held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

     

     

    

 

(n)        
 “Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.

 

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

 

(p)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.

 

(q)          “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.

 

(r)          “Principal
Market” means the OTCQX.

 

(s)          “Required
Holders” means the Holders of this Warrant representing at least a majority
of shares of Common Stock underlying this Warrant then outstanding.

 

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

 

(u)          “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(v)         “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(w)         “Trading
Day” means, as applicable, (x) with respect to all price or trading volume 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.

 

     

     

    

 

(x)          “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.

 

(y)          “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 13 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

 

[signature page follows]

 

     

     

    

  

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.

 

	 	
        KUSHCO HOLDINGS,
        Inc. 

         

	 	 
	 	By:	 
	 	 	Name: Nicholas Kovacevich
	 	 	Title:   President and Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

KUSHCO HOLDINGS, INC.

 

The undersigned holder
hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of KushCo Holdings,
Inc., a Nevada corporation (the “Company”) as specified below. 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 Aggregate Exercise Price shall be made as:

 

____________ a “Cash Exercise”
with respect to _________________ Warrant Shares; and/or

 

____________
a “Cashless Exercise” with respect to _______________ Warrant Shares.

 

2.          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
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.

 

3.          Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common
Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:

 

 ̈          Check
here if requesting delivery as a certificate to the following name and to the following address:

	 	 
	Issue to:	 
	 	
         

         

	 	
         

         

 

 ̈          Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

	DTC Participant:	 
	 	 
	DTC Number:	 
	 	 
	Account Number:	 

 

	Date:	 	 	 	,	 	 

 

 

 

	 	 
	Name of Registered Holder	 

 

     

     

    

 

	By:	 	 
	 	Name: 	 
	 	Title:	 

 

	 	Tax ID:	 	 

 

	 	Facsimile:	 	 

 

	 	E-mail Address:	 	 

 

     

     

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice and hereby directs Action Stock Transfer Corp., as transfer agent, to issue the above indicated
number of shares of Common Stock on or prior to the applicable Share Delivery Date.

 

	 	KushCO HOLDINGS, Inc.
	 	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:Exhibit 10.1

 

[FORM OF SECURITIES PURCHASE AGREEMENT]

 

THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”) is made and entered into as of the 6th day of February, 2020, by and between KushCo
Holdings, Inc., a Nevada corporation (the “Company”) and the purchaser executing the purchase signature page
attached hereto (the “Purchaser”);

 

WHEREAS, the Company
has prepared and filed with the Securities and Exchange Commission (the “SEC”), in accordance with the provisions
of the Securities Act of 1933, as amended (the “Securities Act”), and the applicable rules and regulations thereunder,
a registration statement on Form S-3 (Commission File No. 333-231019), including a base prospectus and a prospectus supplement
to the base prospectus, relating to the securities to be issued and sold pursuant to this Agreement. The term “Registration
Statement” as used herein refers to such registration statement (including all financial schedules and exhibits), as
amended or as supplemented, and includes information contained in the base prospectus and the prospectus supplement thereto (the
 “Prospectus”) filed with the SEC pursuant to Rule 424(b) of the rules under the Securities Act and deemed to
be part thereof at the time of effectiveness (the “Effective Date”) pursuant to Rule 430A of the rules under
the Securities Act; and

 

WHEREAS, the Company
intends to pay A.G.P/Alliance Global Partners (the “Placement Agent”) a fee in respect of the sale of Units
(as defined below) to Purchaser, and the Company has entered into a Placement Agency Agreement (the “Placement Agency
Agreement”) with the Placement Agent that contains certain customary representations, warranties, covenants and agreements
of the Company for the benefit of the Placement Agent alone.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

1.1 Closing.
Purchaser shall purchase from the Company, and the Company shall issue and sell to Purchaser, a number of units (the “Units”),
each consisting of (i) one share (a “Share” and, collectively, the “Shares”) of common stock
of the Company, par value $0.001 per share (the “Common Stock”) and (ii) one warrant (the “Warrant”
and, collectively, the “Warrants”) to purchase 0.5 shares of Common Stock (and the fractional amount being the “Warrant
Ratio”), equal to Purchaser’s subscription amount as set forth on the signature page hereto (the “Subscription
Amount”) divided by the Purchase Price (as defined below). Upon satisfaction of the conditions set forth in Section 1.3,
the closing shall occur at the offices of the Company on February 10, 2020, or at such other place or on such other date as the
parties shall mutually agree, but in no event later than the second (2nd) Trading Day (as defined below in Section 3.3)
following the date hereof (or, if this Agreement is executed after 4:30 p.m. New York City time, the third (3rd) Trading
Day) (the “Closing”). The shares of Common Stock issuable upon the exercise of the Warrants are referred to
herein as the “Warrant Shares”. The Warrant Shares, collectively with the Shares and the Warrants, are referred to
herein as the “Securities”.

 

1.2 Per Unit Purchase
Price. The per unit purchase price shall be equal to $1.60 (the “Purchase Price”).

 

1.3 Closing Conditions.

 

(a) As a condition to
the Purchaser’s obligation to close, at the Closing, the Company shall have satisfied each of the conditions set forth below
or shall deliver or cause to be delivered to Purchaser the items set forth below, as appropriate:

 

(i) this Agreement
duly executed by the Company;

 

(ii) the Warrants duly
executed by the Company;

  

(iii) the representations
and warranties made by the Company herein, including in Annex II hereto, shall be true and correct in all material respects on
the date made and on the date of the Closing;

 

     

     

    

 

(iv) all covenants,
agreements and conditions contained in this Agreement, including in Annex II hereto, to be performed by the Company on or prior
to the date of the Closing shall have been performed or complied with in all material respects; and

 

(v) no statute, regulation,
executive order, decree, ruling or injunction shall have been enacted, promulgated, endorsed or threatened or is pending by or
before any governmental authority of competent jurisdiction which prohibits or threatens to prohibit the consummation of the transaction
contemplated by this Agreement.

  

(b) As a condition to
the Company’s obligation to close, at the Closing, Purchaser shall have satisfied each of the conditions set forth below
or shall deliver or cause to be delivered to the Company the items set forth below, as appropriate:

 

(i) this Agreement
duly executed by Purchaser;

 

(ii) the Purchaser
shall have complied with its obligations relating to settlement, funding and closing set forth on Annex I hereto (the terms of
which are expressly incorporated into this Agreement);

 

(iii) the representations
and warranties made by Purchaser herein shall be true and correct in all material respects on the date made and on the date of
the Closing;

 

(iv) Purchaser shall
have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by Purchaser at or before the Closing; and

 

(v) no statute, regulation,
executive order, decree, ruling or injunction shall have been enacted, promulgated, endorsed or threatened or is pending by or
before any governmental authority of competent jurisdiction which prohibits or threatens to prohibit the consummation of the transaction
contemplated by this Agreement.

 

(c) As of the date of
the Closing, there shall have been no Material Adverse Effect (as defined below) with respect to the Company since the date hereof.

 

(d) Purchaser’s
obligation to purchase the Units will be subject to the termination rights set forth in the Placement Agency Agreement having not
been exercised.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

2.1 Representations
and Warranties of the Company. Except as set forth in the Company’s public filings under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), the Company hereby makes the following representations and warranties
as of the date hereof and as of the date of the Closing to Purchaser:

 

(a) Organization and
Qualification. The Company is an entity duly incorporated, validly existing and in good standing under the laws of the State
of Nevada, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business
as currently conducted. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by the Company makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be
expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement or that certain
Escrow Agreement dated as of the date hereof, by and among the Company, the Placement Agent and Continental Stock Transfer &
Trust Company (the “Escrow Agreement,” and together with this Agreement, the “Transaction Agreements”),
(ii) a material adverse effect on the results of operations, assets, business or financial condition of the Company, or (iii) a
material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under
the Transaction Agreements (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

    	 		 

     

    

 

(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by the Transaction Agreements and the Warrant and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of the Transaction Agreements and the Warrant by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no further action
is required by the Company in connection therewith. Each of the Transaction Agreements and the Warrant have been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally; and (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

 

(c) No Conflicts.
The execution, delivery and performance of the Transaction Agreements and the Warrant by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the
Company’s Amended and Restated Certificate of Incorporation or Bylaws, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse
Effect.

 

(d) Filings, Consents
and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local or other governmental authority or other person
in connection with the execution, delivery and performance by the Company of the Transaction Agreements and the Warrants, other
than (i) the filing with the SEC of a Form 8-K and prospectus supplement relating to the Registration Statement, and applicable
Blue Sky filings, if any, and (ii) such as have already been obtained.

 

(e) Capitalization.
All of the outstanding shares of the Company’s Common Stock are, and all of the Shares, when issued, will be, duly authorized,
validly issued, fully paid and nonassessable, and free and clear of all liens created by the Company. The Warrant Shares have been
duly authorized, and if and when issued and delivered by the Company against payment therefor as provided by the Warrants, shall
be validly issued, fully paid and nonassessable, and free and clear of all liens created by the Company. All of the outstanding
shares of the Company’s Common Stock were, the Shares will be, and the Warrant Shares (if and when issued) will be, issued
in material compliance with all applicable federal and state securities laws, including available exemptions therefrom, and none
of such issuances were, and the issuance of the Shares and the Warrant Shares will not be, made in violation of any pre-emptive
or other rights. The Company has reserved from its duly authorized capital stock the number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants. The issuance of the Shares and the Warrant Shares will not trigger any anti-dilution
rights of any existing securities of the Company.

 

(f) Registration Statement.
The Registration Statement has become effective under the Securities Act, and no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the SEC; and any
request on the part of the SEC for additional information has been complied with.

 

(g) Securities Law
Disclosure. The Company shall (i) by 9:30 a.m. (New York City time) on February 6th, 2020, issue a press release disclosing
the material terms of the transactions contemplated hereby, and (ii) file a Current Report on Form 8-K, including this Agreement,
the Placement Agency Agreement and the form of Warrant as exhibits thereto, with the SEC within the time required by the Exchange
Act. From and after the issuance of such press release, the Company represents to the Purchaser that it shall have publicly disclosed
all material, non-public information delivered to the Purchaser by the Company or any of its subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions contemplated by this Agreement, the Placement Agency
Agreement and the form of Warrant. In addition, effective upon the issuance of such press release, the Company acknowledges and
agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its subsidiaries or any of their respective officers, directors, agents, employees or affiliates on the one hand, and the
Purchaser or any of its affiliates on the other hand, shall terminate.

 

    	 		 

     

    

 

The Company acknowledges and agrees that
the Purchaser may rely on the representations and warranties made to the Placement Agent contained in Section 1 of the Placement
Agency Agreement, and that the representations contained in this Section 2.1 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in the Placement Agency Agreement or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby.

 

2.2 Representations
and Warranties of Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of the date of the Closing
to the Company as follows:

 

(a) Organization;
Authority. If Purchaser is not a natural person, such Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right, corporate, limited liability or partnership power and authority
to enter into and to consummate the transactions contemplated by the Transaction Agreements and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by Purchaser of the transactions contemplated by the Transaction Agreements
has been duly authorized by all necessary corporate or similar action on the part of Purchaser. The Transaction Agreements to which
it is a party have been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms thereof, will
constitute valid and legally binding obligations of Purchaser, enforceable against it in accordance with their terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

 

(b) Information; Confidentiality.
Purchaser and its advisors, if any, have been furnished with all publicly available materials relating to the business, finances
and operations of the Company and such other publicly available materials relating to the offer and sale of the Units as have been
requested by Purchaser. Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company.
Neither such inquiries nor any other due diligence investigations conducted by Purchaser or its advisors, if any, or its representatives
shall modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained
herein. Purchaser understands that its investment in the Units involves a high degree of risk. Purchaser has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Units.

 

(c) No Governmental
Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Units or the fairness or suitability of the investment in the Units,
nor have such authorities passed upon or endorsed the merits of the offering of the Units.

 

(d) Sales; Short Selling.
From and after the date Purchaser received any information about the existence of this offering, Purchaser has not offered, pledged,
sold, contracted to sell, sold any option or contract to purchase, purchased any option or contract to sell, granted any option,
right or warrant to purchase, loaned, or otherwise transferred or disposed of, directly or indirectly, any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common Stock, entered into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, or directly
or indirectly, through related parties, affiliates or otherwise sold “short” or “short against the box”
(as those terms are generally understood, provided that, for the avoidance of doubt, the locating and/or borrowing of shares of
Common Stock shall not be included in this Section 2.2(d)) any equity security of the Company. Purchaser covenants that it will
not, nor will it authorize or permit any person acting on its behalf to, engage in any such transactions until following the public
disclosure of the transaction as contemplated by Section 2.1(g).

 

    	 		 

     

    

 

(e) Information Regarding
Purchaser. Purchaser has provided the Company with true, complete, and correct information regarding all applicable items set
forth on Purchaser’s signature page to this Agreement.

 

(f) Placement Agent
as Beneficiary Purchaser expressly acknowledges and agrees that all representations, warranties, covenants and agreements made
or given by the Purchaser to the Company herein, are also irrevocably made and given for the benefit of the Placement Agent and
that the Placement Agent is entitled to rely on the same in connection with the placement of the Units as if such representations,
warranties, covenants and agreements, as applicable, were made directly to the Placement Agent.

 

(g) Non-Reliance on
Placement Agent. Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement
of the Units and not to the Purchaser. Purchaser further acknowledges that (i) the Placement Agent, its affiliates, and their respective
representatives make no representation or warranty with regard to the merits of the offering of the Units or as to the completeness
or accuracy of any information or materials such Purchaser may have received in connection therewith, and Purchaser has not relied
and will not rely on any information, representations or advice furnished by or on behalf of any of the Placement Agent, its affiliates
or their respective representatives, orally or in writing, in making a decision to purchase the Units, (ii) it will be responsible
for conducting its own due diligence investigation with respect to the Company and the offer and sale of the Units, (iii) it will
be purchasing Units based on the results of its own due diligence investigation of the Company and (iv) it has negotiated the offer
and sale of the Units directly with the Company, and the Placement Agent will not be responsible for the ultimate success of any
such investment.

 

(h) Purchaser Status.
At the time such Purchaser was offered the Securities, it was, and as of the date hereof is, either (i) an institutional investor
as such term is used in Section 5542(b)(8) of the Uniform Securities Act of 2002 or (ii) a resident of the State of California
who, by reason of his or her business or financial experience has the capacity to protect his or her own interests in connection
with the transaction contemplated by this Agreement and such Purchaser is purchasing the Securities for his or her own account
(or a trust account if the Purchaser is a trustee) and not with a view to or for sale in connection with the distribution of the
Securities.

 

ARTICLE III

MISCELLANEOUS

 

3.1 Fees and Expenses.
Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the sale of the Units.

 

3.2 Entire Agreement.
This Agreement, together with the annexes, exhibits and schedules thereto, contains the entire understanding of the parties with
respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

3.3 Notices. Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the time of transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email address specified on the signature pages attached hereto prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or email address at the facsimile number or email address on the signature pages attached hereto on
a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and communications is set forth on the signature pages attached
hereto. For purposes of this Agreement, “Trading Day” shall mean a day on which the Company’s Common Stock is
traded on a national securities exchange or over-the-counter market, or, if the Company’s Common Stock is not then eligible
for trading on a national securities exchange or over-the-counter market, any day except Saturday, Sunday and any day on which
banking institutions in the State of New York are authorized or required by law or other governmental action to close.

  

    	 		 

     

    

 

3.4 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment,
by the Company and Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

3.5 Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.

 

3.6 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
Neither Company nor Purchaser may assign this Agreement or any rights or obligations hereunder without the prior written consent
of the other party.

 

3.7 Termination.
In the event that the Placement Agency Agreement is terminated by the Placement Agent pursuant to the terms thereof, this Agreement
shall terminate without any further action or obligation on the part of the parties hereto.

 

3.8 Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York.

 

3.9 Survival. The
representations, warranties, agreements and covenants contained herein shall survive the Closing and delivery of the Units.

 

3.10 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

3.11 Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement 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 Agreement.

 

3.12 Replacement
of Securities. If any certificate or instrument evidencing any of the Securities is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction and customary and reasonable indemnity, if requested, but not the posting of any surety or similar bond. The
applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement certificate.

 

3.13 Exculpation
of the Placement Agent. Each of the Company and Purchaser agrees for the express benefit of the Placement Agent, its affiliates
and their respective representatives that:

 

(a) None of the Placement
Agent, its affiliates or their representatives: (i) have any duties or obligations under this Agreement; (ii) shall be liable for
any improper payment made in accordance with this Agreement and the information provided herein by the Company; (iii) make any
representation or warranty, or have any responsibilities as to the validity, accuracy, value or genuineness of any information,
certificates or documentation delivered by or on behalf of the Company pursuant to this Agreement; or (iv) shall be liable (x)
for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement or (y) for anything which any of them may do or refrain from doing in connection
with this Agreement, except for such party’s own gross negligence or willful misconduct or required by law.

 

    	 		 

     

    

 

(b) The Placement Agent,
its affiliates and their respective representatives shall be entitled to rely on, and shall be protected in acting upon, any certificate,
instrument, opinion, notice, letter or any other document or security delivered to any of them by or on behalf of the Company.

 

3.14. Indemnification
of Placement Agent. The Purchaser agrees to indemnify and hold harmless the Placement Agent, its affiliates and their
respective representatives from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including,
but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of any improper payment or settlement of the Shares or Warrants made in accordance with this
Agreement and the information provided herein by the Purchaser.

  

(Signature Pages Follow)

 

    	 		 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.

 

 

KUSHCO HOLDINGS, INC. 

 

	By:	 	 
	Name:	 	 
	Title:	 	 

 

Address for Notice:

KushCo Holdings, Inc.

6261 Katella Avenue, Suite 250

Cypress, California 90630

Attention: Arun Kurichety

 

 

With a copy to (which shall not constitute
notice):

 

Reed Smith LLP

599 Lexington Avenue, 26th Floor

New York, New York 10022

Facsimile: (212) 521-5450

Attn: Aron Izower and Marc D. Hauser

 

		Subscription Amount:
	 	 

	 	$	 

	 	 
	 	 
	 	Purchase Price Per Unit: $	 
	 	 	 

	 	Total Units:	 
	 	 

	 	Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.
	 	 
	 	 
	 	Dated as of: _____________ __, 2020
	 	 
	 	 
	 	 
	 	 
	 	PURCHASER
	 	 

	 	By:	 
	 	 	 

	 	Print Name:	 
	 	 	 

	 	Title:	 
	 	 	 

	 	Address:	 

 

    	 		 

     

    

 

Annex I

 

Closing and Delivery of the Units and
Funds.

 

	 	1.	Closing.

 

The Purchasers will
be notified in advance by the Placement Agent, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”) of the time and date of the Closing. At the Closing, the Company shall
cause Action Stock Transfer Corporation (the “Transfer Agent”) to deliver to the Purchaser the number of Shares
set forth on the signature page to the Agreement registered in the name of the Purchaser or, if so indicated on the Purchaser Questionnaire
attached hereto as Exhibit A-1, in the name of a nominee designated by the Purchaser and (b) the aggregate purchase
price for the Units being purchased by the Purchaser will be delivered by or on behalf of the Purchaser to the Company.

 

	 	2.	Delivery of Funds.

 

The Purchaser shall
settle the Shares purchased by such Purchaser through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) delivery
system or shall receive the Shares in book-entry format in the name of the beneficial holder. No later than one (1) business
day after the execution of the Agreement by the Purchaser and the Company, the Purchaser shall remit by wire transfer the
amount of funds equal to the aggregate purchase price for the Units being purchased by the Purchaser to the following account designated
by the Company and the Placement Agent pursuant to the terms of that certain Escrow Agreement (the “Escrow Agreement”)
dated as of the date hereof, by and among the Company, the Placement Agent and Continental Stock Transfer & Trust Company
(the “Escrow Agent”):

 

Continental Stock Transfer &
Trust Company

ABA #

Account Name: Continental Stock
Transfer & Trust Company as Agent for Kushco Holdings Inc September 2019 Escrow

Account Number: 

 

Such funds shall be held in escrow until
the Closing and delivered by the Escrow Agent on behalf of the Purchasers to the Company upon the satisfaction, in the sole judgment
of the Placement Agent, of the conditions set forth in Section 1.3 of the Agreement. The Company and the Purchaser agree to indemnify
and hold the Escrow Agent harmless from and against any and all losses, costs, damages, expenses and claims (including, without
limitation, court costs and reasonable attorneys fees) (“Losses”) arising under this Section 2 or
otherwise with respect to the funds held in escrow pursuant hereto or arising under the Escrow Agreement, unless it is finally
determined that such Losses resulted directly from the willful misconduct or gross negligence of the Escrow Agent. Anything in
the Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for any special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action.

 

	 	3.	Delivery of Units.

 

No later than one (1) business day
after the execution of the Agreement by the Purchaser and the Company, the Purchaser, if the Shares are to be issued in
street name on behalf of the Purchaser, shall direct the broker-dealer at which the account or accounts to be credited with the
Shares being purchased by such Purchaser are maintained, which broker/dealer shall be a DTC participant, to set up a DWAC instructing
the Transfer Agent, to credit such account or accounts with the Shares. Such DWAC instruction shall indicate the settlement date
for the deposit of the Shares, which date shall be provided to the Purchaser by the Placement Agent. Simultaneously with the delivery
to the Company by the Escrow Agent of the funds held in escrow pursuant to Section 2 above, the Company shall
direct the Transfer Agent to credit the Purchaser’s account or accounts with the Shares pursuant to the information contained
in the DWAC.

 

    	 		 

     

    

 

If the Purchaser elects to hold the Shares in the name of the
beneficial holder, the Shares shall be issued in book-entry format. Simultaneously with the delivery to the Company by the Escrow
Agent of the funds held in escrow pursuant to Section 2 above, the Company shall direct the Transfer Agent to
issue the Shares pursuant to the ownership information provided by the Purchaser.

 

At the Closing, the Company shall cause to be delivered to the
Purchaser a Warrant to purchase a number of whole Warrant Shares determined by multiplying the number of Total Units set forth
on the signature page by the Warrant Ratio and rounding up to the nearest whole number.

 

    	 		 

     

    

 

 

EXHIBIT A-1

PURCHASER QUESTIONNAIRE

 

Pursuant to Section 1 of Annex
I to the Agreement, please provide us with the following information:

 

	1.  The exact name that your Shares and Warrants are to be registered in. You may use a nominee name if appropriate:	
         

         

	2.  The relationship between the Purchaser and the registered holder listed in response to item 1 above:	
         

         

	3.  The mailing address of the registered holder listed in response to item 1 above:	
         

         

	4.  The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above:	
         

         

	5.  Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Units are maintained):	
         

         

	6.  DTC Participant Number:	
         

         

	7.  Name of Account at DTC Participant being credited with the Shares:	
         

         

	8.  Account Number at DTC Participant being credited with the Shares:	
         

         

 

    	 		 

     

    

 

Annex II

 

Additional Agreements by the Company.

 

Section 1. Additional Representations and Warranties. Except
as set forth in the Company’s public filings under the Exchange Act, the Company hereby makes the following representations
and warranties as of the date hereof and as of the date of the Closing to the Purchaser:

 

1.1 Litigation. Except as
otherwise disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, there is no action, suit, inquiry,
notice of violation, proceeding or investigation pending, or to the Company’s knowledge, threatened against or affecting
the Company, any of its subsidiaries or any of their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”),
which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement, the Escrow Agreement,
the Securities Purchase Agreements or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and there is no pending or, to the Company’s knowledge, contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any of its subsidiaries under the Exchange Act or the Securities Act.

 

1.2. Transactions With Affiliates
and Employees. Except as described in the Registration Statement, the Time of Sale Prospectus or the Prospectus that have
not been described as required, none of the officers or directors of the Company or any of its subsidiaries and, to the knowledge
of the Company, none of the employees of the Company or any of its subsidiaries is presently a party to any transaction with the
Company or any of its subsidiaries (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000
other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company, and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

1.3. No Integrated
Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 2.2 of the
Agreement, neither the Company, nor any of its affiliates, nor any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind (a “Person”) acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval
provisions of any Trading Market on which any of the securities of the Company are listed or designated. “Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
OTCQB or OTCQX (or any successors to any of the foregoing).

 

Section 2. Additional Covenants of the Company.

 

2.1. Integration. The Company
shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing
of such subsequent transaction.

 

    	 		 

     

    

 

2.2. Warrant Shares. The Company
shall use best efforts to keep a registration statement (including the Registration Statement) registering the issuance of the
Warrant Shares effective during the term of the Warrants.

 

2.3. Shareholder Rights Plan.
No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser is an
 “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the
Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the
Agreement, the Placement Agency Agreement or Warrant or under any other agreement between the Company and the Purchaser.

 

2.4. Non-Public Information.
Except with respect to the material terms and conditions of the transactions contemplated by the Agreement, the Placement Agency
Agreement and the Warrant, which shall be disclosed pursuant to Section 2.1(g) of the Agreement, neither the Company,
nor any other Person acting on behalf of the Company, will provide any Purchaser or its agents or counsel with any information
that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser
shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. To the
extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the
Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its subsidiaries,
or any of their respective officers, directors, agents, employees or affiliates, or a duty to the Company, any of its subsidiaries
or any of their respective officers, directors, agents, employees or affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant
to the Agreement, the Placement Agency Agreement or Warrant constitutes, or contains, material, non-public information regarding
the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.

 

2.5.  Indemnification
of Purchasers. Subject to the provisions of this Section 2.5, the Company will indemnify and hold the Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in the Agreement or in the Placement Agency Agreement or Warrant or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective affiliates, by any shareholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Agreement, the Placement
Agency Agreement or Warrant (except to the extent, but only to the extent that such action is based upon a breach of such Purchaser
Party’s representations, warranties or covenants under the Agreement, the Placement Agency Agreement or Warrant or any agreements
or understandings such Purchaser Party may have with any such shareholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud,
gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of
which indemnity may be sought pursuant to the Agreement, such Purchaser Party shall promptly notify the Company in writing, and
the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel, or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under the Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in the Agreement, the Placement Agency Agreement or Warrant. The indemnification
required by this Section 2.5 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.

 

    	 		 

     

    

 

2.6. Agreement
Not to Offer or Sell Additional Common Stock. During the period commencing on and including the date hereof and continuing
through and including the 90th day following the date of the Prospectus (such period, as extended as described below, being referred
to herein as the “Lock-up Period”), the Company will not, without the prior written consent of the Purchaser
(which consent may be withheld in its sole discretion), directly or indirectly: (i) sell, offer to sell, contract to sell
or lend any shares of Common Stock or Related Securities (as defined below); (ii) effect any short sale, or establish or increase
any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) or liquidate or decrease any
 “call equivalent position” (as defined in Rule 16a-1(b) under the Exchange Act) of any shares of Common Stock
or Related Securities; (iii) pledge, hypothecate or grant any security interest in any shares of Common Stock or Related Securities;
(iv) in any other way transfer or dispose of any shares of Common Stock or Related Securities; (v) enter into any swap,
hedge or similar arrangement or agreement that transfers, in whole or in part, the economic risk of ownership of any shares of
Common Stock or Related Securities, regardless of whether any such transaction is to be settled in securities, in cash or otherwise;
(vi) announce the offering of any shares of Common Stock or Related Securities; (vii) submit, file or request the Commission
to declare effective any registration statement under the Securities Act in respect of any shares of Common Stock or Related Securities
(other than as contemplated by (1) the Agreement with respect to the shares of Common Stock, (2) the registration rights agreement,
dated August 21, 2019, by and among the Company and the investors listed therein with respect to 500,000 shares of Common Stock
issuable upon exercise of warrants referenced therein and (3) clause (D) of the proviso below with respect to shares of Common
Stock issuable upon exercise of warrants); or (viii) publicly announce the intention to do any of the foregoing; provided, however,
that the Company may (A) effect the transactions contemplated hereby; (B) issue shares of Common Stock or options to
purchase shares of Common Stock, or issue shares of Common Stock upon exercise of options, pursuant to any stock option, stock
bonus or other stock plan or arrangement described in the Registration Statement, the Time of Sale Prospectus and the Prospectus
or board advisory agreement, but only if the holders of such shares of Common Stock or options agree in writing with the Placement
Agent not to sell, offer, dispose of or otherwise transfer any such shares of Common Stock or options during such Lock-up Period
without the prior written consent of the Placement Agent (which consent may be withheld in their sole discretion); (C) issue shares
of Common Stock upon exercise of any warrants or the conversion of any convertible security outstanding on the date hereof and
referred to in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the terms of such securities
are not amended or modified to increase the number of shares of Common Stock issuable upon exercise or conversion of such securities,
to reduce the exercise or conversion price of such securities or to extend the term of any such securities (except as specifically
permitted under clause D); (D) enter into an agreement providing for the issuance by the Company of shares of Common Stock, or
any Related Security, in connection with the acquisition by the Company or any subsidiary of the securities, business, technology,
property or other assets of another person or entity, or pursuant to an employee benefit plan assumed by the Company in connection
with such acquisition and the issuance of any such securities pursuant to any such agreement; or (E) enter into any agreement providing
for the issuance of shares of Common Stock or Related Securities in connection with joint ventures, commercial relationships or
other strategic transactions, and the issuance of any securities pursuant to any such agreement; provided, however, that the number
of shares of Common Stock that the Company may sell or issue or agree to sell or issue pursuant to clauses (D) and (E) together
in the aggregate shall not exceed 5% of the total number of shares of Common Stock issued and outstanding immediately following
the completion of the transactions contemplated by the Agreement. For purposes of the foregoing, “Related Securities”
shall mean any options or warrants or other rights to acquire shares of Common Stock or any securities exchangeable or exercisable
for or convertible into shares of Common Stock, or to acquire other securities or rights ultimately exchangeable or exercisable
for, or convertible into, shares of Common Stock.

 

    	 		 

     

    

 

Section 3. Termination. The Agreement may be terminated
by the Purchaser by written notice to the Company and the Placement Agent, if the Closing has not been consummated on or before
February 14, 2020; provided, however, that no such termination will affect the right of any party to sue
for any breach by any other party (or parties).

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