Document:

Exhibit 4.1 

 

Exhibit A

 

COMMON STOCK PURCHASE WARRANT

 

22ND
CENTURY GROUP, inc.

 

	Warrant Shares: [                           ]	 	Issue
    Date: November [              ], 2019

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [         ] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after Issue Date (the “Initial Exercise Date”) and on or prior to the close of business on November [         ],
2024 (the “Termination Date”) but not thereafter, to subscribe for and purchase from 22nd Century Group, Inc.,
a Nevada corporation (the “Company”), up to [         ] shares (as subject to adjustment hereunder, the
 “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall
be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                   Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Warrant Exercise Agreement
(the “Exercise Agreement”), dated as of November 25, 2019, among the Company and the holders signatory thereto.

 

Section 2.                   Exercise.

 

a)                  Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books
of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed
hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn
on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this
Warrant to the Company for cancellation within two (2) Trading Days of the date the final Notice of Exercise is delivered to
the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice
of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of
the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.

 

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b)                 
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $1.25, subject
to adjustment hereunder (the “Exercise Price”).

 

c)                 
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or
the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder or the resale of the Warrant
Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

 

		(A) =	the last VWAP immediately preceding the time of delivery
of the Notice of Exercise giving rise to the applicable “cashless exercise,” as set forth in the applicable Notice
of Exercise (to clarify, the "last VWAP" will be the last VWAP as calculated over an entire Trading Day such that, in
the event that this Warrant is exercised at a time that the Trading Market is open, the prior Trading Day's VWAP shall be used
in this calculation);

 

		(B)=	the Exercise Price of this Warrant, as adjusted hereunder;
and

 

		(X)=	the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.

 

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the
holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares.  The Company
agrees not to take any position contrary to this Section 2(c).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is
then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (b)  if OTCQB or
OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and
if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

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d)                 
Mechanics of Exercise.

 

i.           
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with
The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant
Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via “cashless exercise”,
and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder
or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified
by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice
of Exercise (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to
the issuance of such shares, having been paid.

 

ii.           
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

 

iii.          
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.          Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the
Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the
provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A)
pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of
the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon
request of the Company, evidence of the amount of such loss. Nothing herein shall limit a 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 shares of Common Stock upon exercise
of the Warrant as required pursuant to the terms hereof.

 

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v.           
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.

 

vi.          Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid
by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii.        
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

 

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e)                  Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s
Affiliates (such Persons, "Attribution Parties")), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this
Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of
the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding
sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is
not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder
is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to
be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the
Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of
this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written
or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing 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 or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock
was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of
this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company and
shall only be effective with regard to such Holder. The provisions of this Section 2(e) shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or
to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this Section 2(e) shall apply to a successor holder of this Warrant.

 

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Section 3.                    Certain
Adjustments.

 

a)                 
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)                  Exercise
Agreement Warrant Share Reduction. The number of Warrant Shares issuable pursuant to this Warrant shall be reduced on a
share for share basis by the number of Original Warrants not exercised for cash at the New Exercise Price by the initial
Holder of this Warrant pursuant to the terms of the Exercise Agreement prior to its termination. As an example, if
the initial Holder of this Warrant beneficially owned 100,000 Original Warrants as of the date of the Exercise Agreement and
only exercised 50,000 of such Original Warrants for cash prior to the termination of the Exercise Agreement, then the number
of Warrant Shares issuable pursuant to this Warrant shall be reduced to 50,000. Notwithstanding anything to the contrary set
forth herein, (i) commencing on the Issue Date, if the Resale Registration Statement (as defined in the Exercise Agreement)
is not effective, or (ii) commencing on the earlier of (x) the date of the delivery by the Company of the Required Notice (as
defined in the Exercise Agreement) and (y) 4:30 p.m. EST on December 5, 2019, the Resale Registration Statement (as defined
in the Exercise Agreement) is not available for the resale of all of the Warrant Shares (as defined in the Exercise
Agreement), in the case of (i) or (ii), for an aggregate of ten (10) Trading Days thereafter and prior to February 29, 2020,
the provisions of this Section 3(b) shall not apply.

 

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c)                 
[RESERVED]

 

d)                 
Pro Rata Distributions. During such time as this Warrant is outstanding, if 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 or
options 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
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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, to the extent that the Holder's
right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of
Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for
the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

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

 

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f)                  
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

g)                 
Notice to Holder.

 

i.           
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3,
the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment
and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii.            Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize
the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the
Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number of email address as it
shall appear upon the Warrant Register of the Company, (unless such notice is filed with the Commission, which in such case,
no additional notice is required to be provided to the Holder), at least 10 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be
specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such
notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.

 

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Section 4.                    Transfer
of Warrant.

 

a)                 
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder
shall surrender this Warrant to the Company within two (2) Trading Days of the date the Holder delivers an assignment form to
the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by
a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)                  New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be
issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may
be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the
number of Warrant Shares issuable pursuant thereto.

 

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c)                 
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.
                    Miscellaneous.

 

a)                 
No Rights as Stockholder Until Exercise. Except as set forth Section 3, this Warrant does not entitle the Holder
to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section
2(d)(i).

 

b)                 
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

 

c)                 
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

 

d)                 
Authorized Shares.

 

The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares
upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be
duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

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Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

 

e)                 
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant
shall be determined in accordance with the provisions of the Exercise Agreement.

 

f)                  
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal
securities laws. The Holder further acknowledges that this Warrant may not be exercised while the Resale Registration Statement
(as defined in the Exercise Agreement) is effective and available for the resale of all Warrant Shares (as defined in the Exercise
Agreement) until the earlier of (i) the termination of the Exercise Agreement and (ii) the date that all of the Original Warrants
owned by the initial Holder of this Warrant have been exercised for cash pursuant to the Exercise Agreement.

 

g)                  Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any
other provision of this Warrant or the Exercise Agreement, if the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder
such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

    11 

     

    

 

h)                 
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the
Company shall be delivered in accordance with the notice provisions of the Exercise Agreement.

 

i)                  
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.

 

j)                  
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)                 
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)                  
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder.

 

m)                
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

n)                 
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

 

********************

(Signature Page Follows)

 

    12 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

 

	 	22ND CENTURY GROUP, INC.    
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:  

 

    13 

     

    

 

NOTICE OF EXERCISE

 

To:            22nd
century group, INC.

 

(1)  
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)  
Payment shall take the form of (check applicable box):

 

 ̈
in lawful money of the United States; or

 

 ̈
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

 

(3)  
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

[SIGNATURE
OF HOLDER]

 

	Name of Investing Entity:	 

	Signature of Authorized Signatory of Investing Entity:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

     

     

    

 

ASSIGNMENT
FORM

 

(To assign the
foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	 	
	 	 	(Please Print)
	Address:	 	
	 	 	 
	 	 	(Please Print)
	Dated: _______________ __, ______	 	 
	 	 	 
	Holder’s Signature:	 	 	 
	 	 	 	 
	Holder’s Address:Exhibit 10.1

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise
Agreement (this “Agreement”), dated as of November 25, 2019, is by and between 22nd Century Group, Inc. a Nevada
corporation (the “Company”), and the undersigned holder (the “Holder”) of warrants to purchase
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”).

 

WHEREAS, the Holder
beneficially owns in the aggregate the number of warrants to purchase Common Stock at an exercise price of $2.15 per share that
are exercisable until December 20, 2022, as set forth on the Holder's signature page hereto (the “Original Warrants”).

 

WHEREAS, the Holder
desires to exercise such Original Warrants in the amounts set forth on the applicable signature pages hereto and, immediately prior
to such exercise and in consideration of the Holder’s exercise of such Original Warrants, the Company has agreed to issue
the Holder, in addition to the shares of Common Stock to which such exercising Holder is entitled pursuant to the exercise of the
Original Warrants, an equal number of new warrants as the number of Original Warrants held by the Holder, such new warrant to be
in the form attached hereto as Exhibit A (the “New Warrants”). The shares of Common Stock underlying the Original
Warrants are referred to herein as the “Warrant Shares”. The shares of Common Stock underlying the New Warrants
are referred to herein as the "New Warrant Shares" and collectively with the New Warrants and Warrant Shares,
the "Securities".

 

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

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions. Capitalized
terms not defined in this Agreement shall have the meanings ascribed to such terms in the New Warrants.

 

ARTICLE II

EXERCISE OF ORIGINAL WARRANTS

 

Section 2.1 Exercise of Warrants.
(a) Subject to the conditions in Section 2(e) of each of the Original Warrants, by executing this Agreement, the Company and the
Holder hereby agree that the Holder shall be deemed to have exercised the number of Original Warrants set forth on the signature
page hereto at a reduced exercise price of $1.00 per share (the “New Exercise Price”), for aggregate cash proceeds
to the Company in the amount set forth on the Holder’s signature page hereto, pursuant to the terms of the Original Warrants,
as amended hereby with respect to the New Exercise Price. The Holder shall deliver the aggregate cash exercise price for such Original
Warrants at the New Exercise Price to the bank account set forth on the Company’s signature page hereto within two Trading
Days after the date hereof and the Company shall deliver the Warrant Shares to the Holder via the Depository Trust Company Deposit
or Withdrawal at Custodian system pursuant to the terms of the Original Warrants, but pursuant to DWAC instructions set forth on
the Holder’s signature page hereto. The date of the closing of the exercise of the Original Warrants shall be referred to
as the “Closing Date”. Notwithstanding anything to the contrary contained herein, if the Holder has exercised
all of its Original Warrants on the Closing Date, the provisions of clauses (b) and (c) of this Section 2.1 shall not apply to
the Holder.

 

    1

     

    

 

(b)        After
the Closing Date, if and whenever the Holder, together with its Attribution Parties (as defined in Section 2(e) of the Original
Warrants), can exercise Original Warrants for 3,943,211 Warrant Shares (the "Threshold Amount") in compliance
with the Beneficial Ownership Limitation, the Holder hereby covenants and agrees to promptly exercise for cash the Holder's Attribution
Party Pro Rata Percentage (as defined below) of such Threshold Amount of the Original Warrants held by it by delivery of a Notice
of Exercise pursuant to the terms and conditions of the applicable Original Warrants, as amended hereby with respect to the New
Exercise Price. The parties hereto further agree that the Holder may voluntarily exercise for cash, from time to time, the Original
Warrants pursuant to the terms and conditions of the applicable Original Warrants, which exercises shall count toward the number
of Original Warrants that are required to be exercised to satisfy the Threshold Amount. As used herein "Attribution Party
Pro Rata Percentage" means the percentage calculated by dividing (i) the total number of Original Warrants held by the Holder,
by (ii) the total number of Original Warrants held by the Holder and its Attribution Parties.

 

(c)        In
addition to the foregoing, subject to the Holder's ability to exercise Original Warrants in compliance with the Beneficial Ownership
Limitations (as defined in and as set forth in Section 2(e) the Original Warrants held by the Holder), on January 27, 2020, the
Holder agrees to exercise for cash as many Original Warrants as it can exercise still be in compliance with the Beneficial Ownership
Limitations contained in the Original Warrants pursuant to the terms and conditions of the applicable Original Warrants. If any
Original Warrants remain unexercised after January 27, 2020, on the thirty day anniversary of such date, the Holder agrees to exercise
for cash as many Original Warrants as it can receive upon such exercise and still be in compliance with the Beneficial Ownership
Limitations contained in the Original Warrants pursuant to the terms and conditions of the applicable Original Warrants. Any exercises
pursuant to this clause (c) shall be done in accordance with the provisions set forth in the Original Warrants, as amended hereby
with respect to the New Exercise Price. While any Original Warrants are held by the Holder, the Holder covenants and agrees not
to purchase any shares of Common Stock of the Company (including, but not limited to, while the Resale Registration Statement (as
defined below) is effective and available for the resale of all of the Warrant Shares, an exercise of any New Warrants), other
than pursuant to exercises of Original Warrants. During the term of this Agreement, the Holder agrees not to transfer any of the
Original Warrants other to transferees who assume the obligations under this Agreement. The obligations under Section 2.1 shall
terminate on February 29, 2020 and all subsequent exercises of the Original Warrants shall be at the original exercise price of
$2.15 and the New Exercise Price shall no longer apply.

 

Section 2.2 Issuance of New Warrants.
Effective as of the Closing Date, the Company shall issue to the Holder pursuant to the registration statement on Form S-3 (registration
number 333-215391) a number of New Warrants equal to the number of Original Warrants held, and within 3 Trading Days of the Closing
Date, the Company shall deliver to the Holder such New Warrants.

 

Section 2.3 Filing of Form 8-K.
Within the time period required by law, the Company shall issue a Current Report on Form 8-K, reasonably acceptable to the Holder
disclosing the material terms of the transactions contemplated hereby, which shall include this form of Agreement (the “8-K
Filing”).

 

Section 2.4 Required Notice.
On or prior to 4:30 p.m. EST on December 5, 2019, the Company shall confirm to the Holder in writing that it is not in
possession of any material, nonpublic information received from the Company (the “Required Notice”), any
of its Subsidiaries or any of their respective officers, directors, employees or agents, that has not been publically
disclosed. In addition, the Company hereby acknowledges and agrees, effective upon the earlier of the delivery of the
Required Notice and 4:30 p.m. EST on December 5, 2019, 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, employees or agents, on the one hand, and the Holder or any of its affiliates, on the other hand, shall terminate.
The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors,
employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the date hereof without the express prior written consent of the Holder. To the extent that the
Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, delivers any material,
non-public information to the Holder without the Holder’s consent, the Company hereby covenants and agrees that the
Holder shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material,
non-public information.

 

    2

     

    

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1 Representations and
Warranties of the Company. The Company hereby makes the representations and warranties set forth below to the Holder that as
of the date of its execution of this Agreement:

 

(a) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action
on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection
therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

(b) Organization.
The Company is a duly organized and validly existing corporation in good standing under the laws of the State of Nevada.

 

(c) Registration
Statement. The Warrant Shares are registered for resale on a Form S-3 Registration Statement and the Company knows of no reasons
why such registration statement shall not remain available for the resale of such Warrant Shares at all times prior to the earlier
of (i) Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2019 or (ii) March 18, 2020 (the
earlier of (i) and (ii), the “Registration Termination Date”). The Company shall use commercially reasonable
efforts to keep the Registration Statement effective and available for the resale of the Warrant Shares underlying the Original
Warrants until the Registration Termination Date. If the Company is unable to keep the Registration Statement effective and available
despite their commercially reasonable efforts at all times prior to the Registration Termination Date, either the Company or the
Holder may, by delivering written notice to the other, terminate all remaining obligations under this Agreement.

 

(d) No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, 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, result in the creation of any lien upon any of the properties or assets of the Company, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any
material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other
material understanding to which the Company is a party or by which any property or asset of the Company is bound or affected,
or (iii) conflict with or 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.

 

    3

     

    

 

(e) Disclosure.
All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including but not limited to the disclosure set forth in the SEC
Reports, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. As used
herein, “SEC Reports” means all reports, schedules, forms, statements and other documents required to be filed
by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the reporting requirements
of the 1934 Act, including all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated
by reference therein.

 

(f) Issuance of
Securities. The issuance of the New Warrants are duly authorized and, upon issuance in accordance with the terms of this Agreement,
the New Warrants shall be validly issued and free from all preemptive or similar rights (except for those which have been validly
waived prior to the date hereof), taxes, liens and charges and other encumbrances with respect to the issue thereof. As of the
Closing Date, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds
the maximum number of Warrant Shares issuable upon exercise of the New Warrants (without taking into account any limitations on
the exercise of the New Warrants set forth therein). Upon exercise of the New Warrants in accordance with the New Warrants, the
Warrant Shares when issued will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded
to a holder of Common Stock.

 

(g) No Integrated
Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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
require approval of shareholders of the Company for purposes of any applicable shareholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the
Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person acting on
their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated with other offerings
for purposes of any such applicable shareholder approval provisions.

 

(i) No Disqualification
Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act, none of
the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating
in the offering hereunder, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company
in any capacity at the time of sale (each, an "Issuer Covered Person" and, together, "Issuer Covered Persons")
is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
 "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company
has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Holder a copy
of any disclosures provided thereunder.

 

    4

     

    

 

Section 3.2 Representations and
Warranties of the Holder. The Holder hereby makes the representations and warranties set forth below to the Company that as
of the date of its execution of this Agreement.

 

(a) Due Authorization.
The Holder represents and warrants that (i) the execution and delivery of this Agreement by it and the consummation by it
of the transactions contemplated hereby have been duly authorized by all necessary action on its behalf and (ii) this Agreement
has been duly executed and delivered by the Holder and constitutes the valid and binding obligation of the Holder, enforceable
against it in accordance with its terms.

 

(b) No Conflicts.
The Holder represents and warrants that the execution, delivery and performance of this Agreement by the Holder and the consummation
by the Holder of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the
Holder’s organizational or charter documents, or (ii) conflict with or result in a violation of any agreement, law,
rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority which would interfere
with the ability of the Holder to perform its obligations under this Agreement.

 

(c) Access to Information.
The Holder acknowledges that it has had the opportunity to review this Agreement and the SEC Reports and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning
the terms and conditions of the exercise of the Original Warrants and the merits and risks of investing in the Warrant Shares;
(ii) access to information about the Company and its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. The Holder acknowledges and agrees that neither The Special Equities Group, LLC,
a division of Bradley Woods and Co. Ltd. (the “Advisor”) nor any Affiliate of the Advisor has provided the Holder
with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither
the Advisor nor any Affiliate has made or makes any representation as to the Company or the quality of the securities issued and
issuable hereunder. In connection with the issuance of the securities hereunder to the Holder, neither the Advisor nor any
of its Affiliates has acted as a financial advisor or fiduciary to the Holder.

 

(d) Holder Status.
The Holder represents and warrants that is an “accredited investor” as defined in Rule 501 under the Securities Act
of 1933, as amended.

 

(e) Knowledge.
The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Warrant Shares, and
has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the
Warrant Shares and, at the present time, is able to afford a complete loss of such investment. The Holder further understands that
after upon Registration Termination Date, the Warrant Shares may not be sold pursuant to the Form S-3 Registration Statement and
thereafter must be sold in compliance with Rule 144 or another available exemption from registration.

 

    5

     

    

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1 Prospectus
Supplement. On or prior to the Closing Date, the Company shall file with the Commission a supplement (the
 "Supplement") to the prospectus supplement dated November 28, 2017 pursuant to Rule 424(b)(3) as part of the
Registration Statement on S-3 (registration number 333-221270) (the "Resale Registration Statement") to give effect
to the New Exercise Price.

 

Section 4.2 Subsequent Equity Sales.

 

(a)              
Except as provided herein, from the date hereof until the earlier of (i) 100 days after the
Closing Date and (ii) the Trading Day following the date that the Common Stock’s VWAP (as defined in the New Warrants) exceeds
$1.35 (subject to adjustment for forward and reverse stock splits and the like) for a period of 5 consecutive Trading Days (such
period, the "Standstill Period"), neither the Company nor any Subsidiary shall issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents. In addition,
during the Standstill Period, neither the Company nor any Subsidiary shall file any registration statement, amendment to a registration
statement or prospectus supplement other than (i) the Supplement and (ii) a registration statement registering the resale of any
shares of Common Stock issuable upon exercise of the Original Warrants or the New Warrants (and any warrants issued contemporaneously
with the issuance of the New Warrants in a substantially similar transaction as contemplated by this Agreement). As used herein
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or
other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof
to receive, Common Stock.

 

(b)              
From the date hereof until the New Warrants are no longer outstanding, the Company shall be
prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A)
at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line
of credit or at-the-market offering, whereby the Company may issue securities at a future determined price (other than standard
and customary “preemptive” or “participation” rights, pursuant to a shareholder rights plan or pursuant
to an agreement with a third party for an investment, acquisition or other business combination transaction). Any Holder shall
be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to
any right to collect damages.

 

(c)               Notwithstanding
the foregoing, this Section 4.2 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options
to employees, officers, directors or consultants (consistent with past practice) of the Company pursuant to any stock
incentive plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a
majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the
exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to
investments, acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through
its subsidiaries, believed by the Company to be an operating company or an owner of an asset in a business synergistic with
the business of the Company.

 

    6

     

    

 

Section 4.3 Notices. Any and all
notices or other communications or deliveries required or permitted to be provided hereunder shall be made by email to the email
address of the Holder or the Company set forth on signature pages hereto.

 

Section 4.4 Survival. All warranties
and representations (as of the date such warranties and representations were made) made herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the parties hereto and shall
survive the issuance of the New Warrants. This Agreement shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties; provided however that no party may assign this Agreement or the obligations and rights of such
party hereunder without the prior written consent of the other parties hereto.

 

Section 4.5 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.

 

Section 4.6 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.

 

Section 4.7 Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined pursuant
to the Governing Law provision of the New Warrants.

 

Section 4.8 Entire Agreement.
The Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to
the subject matter hereof and supersede 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.

 

Section 4.9 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.

 

Section 4.10 Fees and Expenses.
Except as expressly set forth herein, 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 transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the delivery of any Warrant Shares.

 

Section 4.11 Equal Treatment of New
Warrant Holders. No consideration (including any modification of this Agreement or the New Warrants) shall be offered or paid
to any holder of New Warrants to amend or consent to a waiver or modification of any provision of this Agreement or the New Warrants
unless the same consideration is also offered to all of the holders of the New Warrants. For clarification purposes, this provision
constitutes a separate right granted to each holder of New Warrants by the Company and negotiated separately by each holder of
the New Warrants, and is intended for the Company to treat the holders of New Warrants as a class and shall not in any way be construed
as the holders of New Warrants acting in concert or as a group with respect to the purchase, disposition or voting of Securities
or otherwise.

 

(remainder of page intentionally left
blank; signature page follows)

 

    7

     

    

 

IN WITNESS WHEREOF, the undersigned
have executed this Warrant Exercise Agreement as of the date first written above.

 

COMPANY:

 

22ND CENTURY GROUP, INC.

 

	By:  	 	 
	Name:   	 	 
	Title:  	 	 
	Email: 	[                            ]	 

 

Bank Account and Wire Instructions

 

[insert]

 

    8

     

    

 

 

[HOLDER SIGNATURE PAGES TO 22ND CENTURY GROUP 

WARRANT EXERCISE AGREEMENT] 

 

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

 

	Name of Holder:	 	
 

 

	Signature of Authorized Signatory of Holder:	 	
 

 

	Name of Authorized Signatory:	 	
 

 

	Title of Authorized Signatory:	 	
 

 

	Email Address of Holder:	 	
 

 

	Number of Original Warrants held: 	 	
 

	
         

        Number of  Original Warrants deemed exercised:
	 	
 

 

	Aggregate Exercise Price of  Warrants deemed Exercised:	 

 

	Warrant Shares underlying  Warrants deemed exercised:	 

 

	Instructions for Warrant Shares to be issued upon initial exercise of Original Warrants:	 

 

	Address for Delivery of New Warrants for Holder:	 

 

    9

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