Document:

Exhibit 4.1

 

[FORM OF WARRANT]

 

NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD OR SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

KUSHCO HOLDINGS, INC.

 

Warrant To Purchase Common
Stock

 

Warrant No.:

 

Number of Shares of Common Stock: ____________

 

Date of Issuance: August 21, 2019 ("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, [SUBSCRIBER], 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 19. This Warrant
is one of the Warrants to Purchase Common Stock (the "Subscription Warrants") issued pursuant to that certain
Subscription Agreement, dated as of August 21, 2019 (the "Subscription Date"), by and among the Company and the
investors (the "Subscribers") referred to therein, as amended from time to time (the "Subscription Agreement").

 

     

     

    

 

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 electronic mail 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 (a "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.

 

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(b)          Exercise
Price. For purposes of this Warrant, "Exercise Price" means $4.25, 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 applicable
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 (as defined in the Registration Rights Agreement) (or prospectus contained therein) covering the resale of the Warrant
Shares that are the subject of the Exercise Notice (the "Unavailable Warrant Shares") is not available for the
resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as is required pursuant
to the Registration Rights Agreement (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 two (2)
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 applicable 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 Exercise Notice), $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.

 

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(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, in its sole discretion, 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)

                                      B

 

For purposes of the
foregoing formula:

 

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

 

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

 

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

 

For purposes of Rule
144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, the Company hereby acknowledges and agrees 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 Subscription Agreement.
The Company agrees not to take any position contrary to this Section 1(d).

 

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(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. Notwithstanding anything to the contrary contained herein, 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 the other Subscription
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). For purposes of this Section 1(f), 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), 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 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
Subscription 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) 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) 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.

 

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(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 Subscription 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 Subscription 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 Subscription Warrants based on number of shares of Common Stock issuable upon exercise of Subscription Warrants
held by each holder on the Closing Date (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 Subscription 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 Subscription Warrants shall
be allocated to the remaining holders of Subscription Warrants, pro rata based on the number of shares of Common Stock issuable
upon exercise of the Subscription 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 Subscription
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 Subscription 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.

 

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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)          Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

 

(c)          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).

 

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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).

 

    8

     

    

 

(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, 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.

 

    9

     

    

 

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 Subscription 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 Subscription Warrants, the number
of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Subscription 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.

 

    10

     

    

 

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 Subscription
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.

 

    11

     

    

 

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 6.3 of the Subscription
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 fifteen (15) 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
Required Holders. Any amendment or change by the Company and the Required Holders in accordance with the immediately preceding
sentence shall be binding on the Holder and all holders of the Subscription Warrants. 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).

 

    12

     

    

 

11.        GOVERNING
LAW; JURISDICTION; JURY TRIAL. 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 in Section 6.3 of the Subscription 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 Subscribers 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 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.

 

    13

     

    

 

(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 solely by the Company, and such investment bank's resolution of such dispute
shall be final and binding upon all parties absent manifest error.

 

(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

     

    

 

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. Subject to compliance with applicable
federal and state securities laws, this Warrant and the Warrant Shares may be offered for sale, sold, pledged, 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.

 

    15

     

    

 

18.     
   TAX MATTERS. To the extent that the parties ascribe a
value to the Warrants, for U.S. federal income tax purposes, the parties agree to treat the Warrants as being issued in
exchange for the Subscriber’s commitment to extend the loans pursuant to the Financing Agreement (as defined in the
Subscription Agreement) and the parties agree to amortize the value ascribed to the Warrants over the term of the Financing
Agreement in a manner comparable to the amortization of original issue discount.

 

19.    
    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" shall have the meaning ascribed to such term in Rule 405 of the Securities Act.

 

(d)          
"Attribution Parties" means, collectively, the following Persons: (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 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.

 

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(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 Pink Open Market (f/k/a OTC Pink) published by OTC Markets Group Inc. (or a similar organization or agency succeeding to
its functions of reporting prices). 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 Principal Market, The Nasdaq Capital Market, the NYSE American, The Nasdaq Global Select Market, The
Nasdaq Global Market or The New York Stock Exchange, Inc.

 

    17

     

    

 

(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.

 

    18

     

    

 

(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)          "Monroe"
means Monroe Capital Management Advisors, LLC.

 

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

 

(q)          "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.

 

(r)          "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.

 

(s)          "Principal
Market" means the OTCQX.

 

(t)          "Registration
Rights Agreement" means that certain Registration Rights Agreement dated as of the Subscription Date by and among the
Company and the Subscribers.

 

(u)          "Required
Holders" means the Holders of the Subscription Warrants representing at
least a majority of the shares of Common Stock issuable upon exercise of the Subscription Warrants then outstanding (without taking
into account any limitations on the exercise of the Subscription Warrants set forth therein) and shall include Monroe so long as
Monroe or any of its Affiliates holds any Subscription Warrants.

 

(v)         "SEC"
means the United States Securities and Exchange Commission or the successor thereto.

 

(w)          "Subsidiary"
shall have the meaning ascribed to such term in the Financing Agreement.

 

(x)          "Subject
Entity" means any Person, Persons or Group or any Affiliate or associate
of any such Person, Persons or Group.

 

    19

     

    

 

(y)          "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.

 

(z)          "Trading
Day" means 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).

 

(aa)         "Transaction
Documents" shall have the meaning ascribed to such term in the Subscription Agreement.

 

(bb)         "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 Pink Open Market (f/k/a OTC Pink) published
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices). 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]

 

    20

     

    

 

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:   Chairman 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, resulting in a delivery obligation of the
Company to the Holder of __________ shares of Common Stock representing the applicable Net Number.

 

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
4.2

 

EXECUTION
VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS
AGREEMENT (this "Agreement"), dated as of August 21, 2019, by and among KushCo Holdings, Inc., a Nevada corporation,
with headquarters located at 11958 Monarch Street, Garden Grove, CA 92841 (the "Company"), and the investors listed
on the Schedule of Subscribers attached hereto (each, a "Subscriber" and collectively, the "Subscribers").

 

WHEREAS:

 

A.           In
connection with the Subscription Agreement by and among the parties hereto of even date herewith (the "Subscription Agreement")
and the Financing Agreement (as hereinafter defined), the Company has agreed, upon the terms and subject to the conditions of the
Subscription Agreement, to issue to each Subscriber warrants (the "Warrants") which will be exercisable to purchase
shares of the Company's common stock, par value $0.001 per share (the "Common Stock") (as exercised, collectively,
the "Warrant Shares") in accordance with the terms of the Warrants.

 

B.           In
accordance with the terms of the Subscription Agreement, the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws.

 

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

 

1.            Definitions.

 

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

 

(a)          "Additional
Effective Date" means the date an Additional Registration Statement is declared effective by the SEC.

 

(b)          "Additional
Effectiveness Deadline" means the date which is the earlier of (x) the sixtieth (60th) calendar day after the
earlier of the Additional Filing Date and the Additional Filing Deadline and (y) the fifth (5th) Business Day after
the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Additional Registration Statement
will not be reviewed or will not be subject to further review; provided, however, that if the Additional Effectiveness
Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Additional Effectiveness Deadline shall
be extended to the next Business Day on which the SEC is open for business.

 

     

     

    

 

(c)          "Additional
Filing Date" means the date on which an Additional Registration Statement is filed with the SEC.

 

(d)          "Additional
Filing Deadline" means if Cutback Shares are required to be included in any Additional Registration Statement, the later
of (i) the date sixty (60) calendar days after the date substantially all of the Registrable Securities registered under the immediately
preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date or the most recent Additional
Effective Date, as applicable.

 

(e)          "Additional
Registrable Securities" means, (i) any Cutback Shares not previously included on a Registration Statement and (ii) any
capital stock of the Company issued or issuable with respect to the Warrants, the Warrant Shares, or the Cutback Shares, as applicable,
as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any
limitations on the exercise of the Warrants.

 

(f)           "Additional
Registration Statement" means a registration statement or registration statements of the Company filed under the 1933
Act covering the resale of any Additional Registrable Securities.

 

(g)          "Additional
Required Registration Amount" means any Cutback Shares not previously included on a Registration Statement, all subject
to adjustment as provided in Section 2(f), without regard to any limitations on the exercise of the Warrants.

 

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

 

(i)           "Closing
Date" shall have the meaning set forth in the Subscription Agreement.

 

(j)           "Cutback
Shares" means any of the Initial Required Registration Amount or the Additional Required Registration Amount of Registrable
Securities not included in all Registration Statements previously declared effective hereunder as a result of a limitation on the
maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant to Rule 415.
For the purpose of determining the Cutback Shares, in order to determine any applicable Required Registration Amount, unless an
Investor gives written notice to the Company to the contrary with respect to the allocation of its Cutback Shares, the Warrant
Shares shall be excluded on a pro rata basis among the Investors until all of the Warrant Shares have been excluded.

 

(k)          "Designee"
means Monroe Capital Management Advisors, LLC.

 

(l)           "effective"
and "effectiveness" refer to a Registration Statement that has been declared effective by the SEC and is available
for the resale of the Registrable Securities required to be covered thereby.

 

(m)         "Effective
Date" means the Initial Effective Date and the Additional Effective Date, as applicable.

 

    	2

     

    

 

(n)          "Effectiveness
Deadline" means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

 

(o)          "Eligible
Market" means the Principal Market, The Nasdaq Capital Market, the NYSE American, The Nasdaq Global Select Market, The
Nasdaq Global Market or The New York Stock Exchange, Inc.

 

(p)          "Filing
Deadline" means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.

 

(q)          "Financing
Agreement" means that certain Financing Agreement of even date herewith by and among the Company, certain other loan parties
thereto, the lenders from time to time party thereto, Designee, as administrative agent for lenders thereunder, and as collateral
agent for the lenders thereunder, as amended, amended and restated, supplemented or otherwise modified from time to time.

 

(r)           "Initial
Effective Date" means the date that the Initial Registration Statement has been declared effective by the SEC.

 

(s)          "Initial
Effectiveness Deadline" means the date which is the earlier of (x) the sixtieth (60th) calendar day after the
earlier of the Initial Filing Date and the Initial Filing Deadline and (y) the fifth (5th) Business Day after the date
the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Initial Registration Statement will not
be reviewed or will not be subject to further review; provided, however, that if the Initial Effectiveness Deadline
falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial Effectiveness Deadline shall be extended
to the next Business Day on which the SEC is open for business.

 

(t)           "Initial
Filing Date" means the date on which the Initial Registration Statement is filed with the SEC.

 

(u)          "Initial
Filing Deadline" means the date which is forty five (45) calendar days after the Closing Date.

 

(v)          "Initial
Registrable Securities" means (i) the Warrant Shares issued or issuable upon exercise of the Warrants and (ii) any capital
stock of the Company issued or issuable with respect to the Warrant Shares or the Warrants as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, in each case without regard to any limitations on the exercise
of the Warrants.

 

(w)         "Initial
Registration Statement" means a registration statement or registration statements of the Company filed under the 1933
Act covering the resale of the Initial Registrable Securities.

 

(x)          "Initial
Required Registration Amount" means the maximum number of Warrant Shares issued and issuable pursuant to the Warrants,
calculated as of the Trading Day immediately preceding the applicable date of determination and all subject to adjustment as provided
in Section 2(f), without regard to any limitations on the exercise of the Warrants.

 

    	3

     

    

 

(y)          "Investor"
means a Subscriber or any transferee or assignee thereof to whom a Subscriber assigns its rights under this Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom
a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement
in accordance with Section 9.

 

(z)          "Other
Registrable Securities" means (i) the Other Warrant Shares issued or issuable upon exercise of the Other Warrants and
(ii) any capital stock of the Company issued or issuable with respect to the Other Warrant Shares or the Other Warrants as a result
of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, in each case without regard to any
limitations on the exercise of the Other Warrants.

 

(aa)        "Other
Warrants" means any warrants to purchase Common Stock issued to any of the Subscribers and/or any of their respective
Affiliates on or prior to the applicable date of determination.

 

(bb)       "Other
Warrant Shares" means the shares of Common Stock issuable upon exercise of the Other Warrants, without giving effect to
any limitation on exercise set forth in the Other Warrants.

 

(cc)        "Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.

 

(dd)       "Principal
Market" means OTCQX.

 

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

 

(ff)         "Registrable
Securities" means the Initial Registrable Securities and the Additional Registrable Securities.

 

(gg)       "Registration
Statement" means the Initial Registration Statement, the Subsequent Registration Statement and the Additional Registration
Statement, as applicable.

 

(hh)       "Required
Holders" means the holders of at least a majority of the Registrable Securities and shall include the Designee so long
as the Designee or any of its affiliates holds any Registrable Securities.

 

(ii)          "Required
Registration Amount" means either the Initial Required Registration Amount or the Additional
Required Registration Amount(s), as applicable.

 

    	4

     

    

 

(jj)          "Rule
415" means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous
or delayed basis.

 

(kk)        "SEC"
means the United States Securities and Exchange Commission.

 

(ll)          "Trading
Day" means 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 on such day, 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).

 

2.            Registration.

 

(a)          Initial
Mandatory Registration. The Company shall prepare, and, as soon as practicable but in no event later than the Initial Filing
Deadline, file with the SEC the Initial Registration Statement on Form S-3 covering the resale of all of the Initial Registrable
Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available
for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of
Section 2(e). The Initial Registration Statement prepared pursuant hereto shall register for resale at least the number of shares
of Common Stock equal to the Initial Required Registration Amount determined as of the date the Initial Registration Statement
is initially filed with the SEC, subject to adjustment as provided in Section 2(f). The Initial Registration Statement shall contain
(except if otherwise directed by the Required Holders) the "Plan of Distribution" and "Selling Stockholders"
sections in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have
the Initial Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Initial
Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Initial Effective Date, the Company shall
file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant
to such Initial Registration Statement.

 

    	5

     

    

 

(b)          Additional
Mandatory Registrations. The Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing
Deadline, file with the SEC an Additional Registration Statement on Form S-3 covering the resale of all of the Additional Registrable
Securities not previously registered on an Additional Registration Statement hereunder. To the extent the staff of the SEC does
not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement, the Company shall
file Additional Registration Statements successively trying to register on each such Additional Registration Statement the maximum
number of remaining Additional Registrable Securities until the Additional Required Registration Amount has been registered with
the SEC. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available
for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of
Section 2(e). Each Additional Registration Statement prepared pursuant hereto shall register for resale at least that number of
shares of Common Stock equal to the Additional Required Registration Amount determined as of the date such Additional Registration
Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(f). Each Additional Registration
Statement shall contain (except if otherwise directed by the Required Holders) the "Plan of Distribution" and
"Selling Stockholders" sections in substantially the form attached hereto as Exhibit B. The Company shall
use its reasonable best efforts to have each Additional Registration Statement declared effective by the SEC as soon as practicable,
but in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the
Additional Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus
to be used in connection with sales pursuant to such Additional Registration Statement.

 

(c)          Allocation
of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase
or decrease in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the
number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable
Securities or increase or decrease thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number
of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included in a
Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors which are covered by such Registration Statement. In no event shall the Company include any securities other
than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders; provided,
however, that the Company may, in its sole discretion, include in a Registration Statement the Other Registrable Securities
and up to 400,000 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date hereof) issued or issuable upon exercise of warrants issued to HB Sub Fund II LLC
on the Closing Date (the "HB Shares"); provided, however, that in the event not all of the Registrable
Securities, the Other Registrable Securities and the HB Shares may be included in such Registration Statement as a result of a
limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant
to Rule 415, then, the HB Shares, the Registrable Securities and the Other Registrable Securities shall be excluded on a pro rata
basis among the holders of such HB Shares, Registrable Securities and Other Registrable Securities until all of the HB Shares,
the Registrable Securities and the Other Registrable Securities have been excluded.

 

(d)          Legal
Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review and oversee
any registration pursuant to this Section 2 ("Legal Counsel"), which shall be Schulte Roth & Zabel LLP or
such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with
each other in performing the Company's obligations under this Agreement.

 

    	6

     

    

 

(e)          Ineligibility
for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder,
the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable
to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available,
provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

(f)           Sufficient
Number of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section
2(a) or Section 2(b) is insufficient to cover the Required Registration Amount of Registrable Securities required to be covered
by such Registration Statement or an Investor's allocated portion of the Registrable Securities pursuant to Section 2(c), the Company
shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor,
if applicable), or both, so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not
later than fifteen (15) calendar days after the necessity therefor arises. The Company shall use its reasonable best efforts to
cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.
For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed "insufficient
to cover all of the Registrable Securities" if at any time the number of shares of Common Stock available for resale under
the Registration Statement is less than the Required Registration Amount. The calculation set forth in the foregoing sentence shall
be made without regard to any limitations on the exercise of the Warrants and such calculation shall assume that the Warrants are
then exercisable in full into shares of Common Stock.

 

3.            Related
Obligations.

 

At such time as the Company
is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), the Company will use its
reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

 

(a)          The
Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use
its reasonable best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as
soon as practicable after such filing (but in no event later than the Effectiveness Deadline). The Company shall keep each Registration
Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all
of the Registrable Securities covered by such Registration Statement without restriction or limitation pursuant to Rule 144 and
without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act or (ii)
the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the "Registration
Period"). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
in which they were made) not misleading. The term " reasonable best efforts" shall mean, among other things, that the
Company shall submit to the SEC, within two (2) Business Days after the later of the date that (i) the Company learns that no review
of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular
Registration Statement, as the case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which approval is
immediately sought), a request for acceleration of effectiveness of such Registration Statement to a time and date not later than
two (2) Business Days after the submission of such request. The Company shall respond in writing to comments made by the SEC in
respect of a Registration Statement as soon as practicable, but in no event later than fifteen (15) calendar days after the receipt
of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.

 

    	7

     

    

 

(b)          The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule
424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have
been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q, Form 8-K
or any analogous report under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements
with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement
such Registration Statement.

 

(c)          The
Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least four (4) Business Days
prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto
in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness
of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall
not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from
the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) unless the following
are filed with the SEC through EDGAR and are available to the public through the EDGAR system, promptly after the same is prepared
and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) unless the
following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, upon the effectiveness
of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company's obligations pursuant to this Section
3.

 

    	8

     

    

 

(d)          The
Company shall, upon request, furnish to each Investor whose Registrable Securities are included in any Registration Statement,
without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement
and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or
final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

 

(e)          The
Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities
or "blue sky" laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding
for such purpose.

 

    	9

     

    

 

(f)           The
Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after
becoming aware of such event but in any event on the same Trading Day as such event, as a result of which the prospectus included
in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject
to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or
omission, and, if requested, deliver ten (10) copies of such supplement or amendment to Legal Counsel and each Investor (or such
other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal
Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed,
and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall
be delivered to Legal Counsel and each Investor by facsimile or email on the same day of such effectiveness and by overnight mail),
(ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information,
and (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.
By 9:30 a.m. New York City time on the date following the date any post-effective amendment has become effective, the Company shall
file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement.

 

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

 

(h)          If
any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an
Investor believes that it could reasonably be deemed to be an underwriter of Registrable Securities, at the reasonable request
of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given
in an underwritten public offering, addressed to the Investors.

 

    	 	 10	 

     

    

 

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

 

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

 

(k)          The
Company shall use its reasonable best efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement
to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or (ii) secure the inclusion
for quotation of all of the Registrable Securities on the Principal Market. The Company shall pay all fees and expenses in connection
with satisfying its obligation under this Section 3(k).

 

(l)           The
Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

 

    	 	 11	 

     

    

 

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

 

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

 

(o)          The
Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter
next following the applicable Effective Date of a Registration Statement.

 

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

 

(q)          Within
two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.

 

(r)           Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors
of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required
(a "Grace Period"); provided, that the Company shall promptly (i) notify the Investors in writing of the existence
of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the
content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii)
notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed
fifteen (15) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate
of forty five (45) days and the first day of any Grace Period must be at least five (5) Trading Days after the last day of any
prior Grace Period (each, an "Allowable Grace Period"). For purposes of determining the length of a Grace Period
above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall
end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in
such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon
expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Subscription Agreement in connection with any sale of Registrable Securities with respect to which an Investor
has entered into a contract for sale, prior to the Investor's receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

 

    	 	 12	 

     

    

 

(s)          Neither
the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing
with the SEC, the Principal Market or any Eligible Market and any Subscriber being deemed an underwriter by the SEC shall not relieve
the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Subscription Agreement);
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the "Plan
of Distribution" section attached hereto as Exhibit B in the Registration Statement.

 

(t)           Neither
the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on
or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing
the rights granted to the Subscribers in this Agreement or otherwise conflicts with the provisions hereof.

 

4.            Obligations
of the Investors.

 

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

 

(b)          Each
Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested
by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from such
Registration Statement.

 

    	 	 13	 

     

    

 

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

 

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

 

5.            Expenses
of Registration.

 

All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall also reimburse the
Investors for the reasonable fees and disbursements of Legal Counsel in connection with the registration, filing or qualification
pursuant to Sections 2 and 3 of this Agreement which amount shall not exceed $15,000 in the aggregate for each such registration,
filing or qualification without the prior written consent of the Company.

 

6.            Indemnification.

 

In the event any Registrable
Securities are included in a Registration Statement under this Agreement:

 

    	 	 14	 

     

    

 

(a)          To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, members, employees, agents, representatives of, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts paid in settlement or expenses,
joint or several (collectively, "Claims"), incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a
party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission to state
a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant
to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations"). For the avoidance of doubt, the Violations set forth in this Section 6(a) are intended
to apply, and shall apply, to direct claims asserted by any Subscriber against the Company as well as any third party claims asserted
by an Indemnified Person (other than a Subscriber) against the Company. Subject to Section 6(c), the Company shall reimburse the
Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company
by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant
to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer
of the Registrable Securities by the Investors pursuant to Section 9.

 

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

 

    	 	 15	 

     

    

 

(c)          Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel
with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, as applicable,
the representation by such counsel of the Indemnified Person or Indemnified Party, as the case may be, and the indemnifying party
would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and
any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to
in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall
reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall,
without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into
any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation and such
settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect
to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that
the indemnifying party is prejudiced in its ability to defend such action. The provisions of this Section 6(c) shall not apply
to direct claims between the Company and a Subscriber.

 

    	 	 16	 

     

    

 

(d)          The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

 

(e)          The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.

 

7.            Contribution.

 

To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however,
that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved
in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller
of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement.

 

8.            Reports
Under the 1934 Act.

 

With a view to making
available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company to the public without registration ("Rule
144"), the Company agrees to:

 

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

 

(b)          file
with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and

 

(c)          furnish
to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company,
if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

 

    	 	 17	 

     

    

 

9.            Assignment
of Registration Rights.

 

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

 

10.          Amendment
of Registration Rights.

 

Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the
reimbursement of legal fees) also is offered to all of the parties to this Agreement.

 

11.          Miscellaneous.

 

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

 

(b)          Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon delivery, when delivered personally; (ii) upon delivery, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); (iii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection
notice) or (iv) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses, facsimile numbers and email addresses for such communications shall
be:

 

    	 	 18	 

     

    

 

If to the Company:

 

	KushCo Holdings, Inc.
	11958 Monarch Street
	Garden Grove, California 92841
	Telephone:	(714) 462-4603
	Attention:	Arun Kurichety, Esq., General Counsel
	Email:	arun.kurichety@kushco.com

 

With a copy (for informational
purposes only) to:

 

	Burns & Levinson LLP
	125 Summer Street
	Boston, MA 02110
	Telephone:	(617) 345-3000
	Facsimile:	(617) 345-3299
	Attention:	Frank A. Segall, Esq.
	Email:	fsegall@burnslev.com  

 

If to the Transfer Agent:

 

	Action Stock Transfer Corporation
	2469 E. Fort Union Blvd, Suite 214
	Salt Lake City, UT 84121
	Telephone:	(801) 274-1088
	Attention:	Justeene Blankenship
	Email:	jb@actionstocktransfer.com

 

If to Legal Counsel:

 

	Schulte Roth & Zabel LLP
	919 Third Avenue
	New York, New York  10022
	Telephone:	(212) 756-2000
	Facsimile:	(212) 593-5955
	Attention:	Ji Hye You, Esq.
	Email:	jihye.you@srz.com

 

If to a Subscriber, to its address, facsimile
number and/or email address set forth on the Schedule of Subscribers attached hereto, with copies to such Subscriber's representatives
as set forth on the Schedule of Subscribers, or such other address as may be designated in writing hereafter, in the same manner,
by such Person by two (2) Business Days' prior notice to the other party in accordance with this Section 11(b). Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine or email transmission containing the time, date, recipient facsimile number or e-mail
address and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service
in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	 	 19	 

     

    

 

(c)          Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

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

 

(e)          If
any provision of this Agreement 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 Agreement so long as this Agreement 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).

 

(f)           This
Agreement, the other Transaction Documents (as defined in the Subscription Agreement) and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement,
the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

 

    	 	 20	 

     

    

 

(g)          Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

(h)          The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(i)           This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

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

 

(k)          All
consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Warrants then held by the Investors
have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.

 

(l)           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.

 

(m)          This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(n)          The
obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of
this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein,
and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated herein.

 

    	 	 21	 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	KUSHCO HOLDINGS, INC.
	 	 
	 	By:	/s/ Christopher Tedford
	 	 	Name:	Christopher Tedford
	 	 	Title:	Chief Financial Officer

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	Monroe Capital private credit fund III LP
	 	 	 
	 	 	By: Monroe Capital private credit fund IIi LLC,

its general partner
	 	 	 
	 	 	 	By:	/s/  Mike Meyer
	 	 	 	Name:	Mike Meyer
	 	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	Monroe Capital Private Credit fund iiI (Unleveraged) LP
	 	 	 
	 	 	By: Monroe
Capital private credit Fund iIi LLC,

its general partner
	 	 	 
	 	 	 	By:	/s/  Mike Meyer
	 	 	 	Name:	Mike Meyer
	 	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	Monroe PRIvate credit Fund A LP
	 	 	 
	 	 	By: Monroe private Credit Fund A LLC,

                     its general partner

	 	 	 
	 	 	 	By:	/s/  Mike Meyer
	 	 	 	Name:	Mike Meyer
	 	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	Monroe capital PRIvate credit Fund I LP
	 	 	 
	 	 	By: Monroe CAPital private Credit Fund I LLC,

its general partner
	 	 	 
	 	 	 	By:	/s/  Mike Meyer
	 	 	 	Name:	Mike Meyer
	 	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	Monroe CAPITAL PRIvate credit Fund VT LP
	 	 	 
	 	 	By: Monroe CAPITAL private Credit Fund VT LLC,

its general partner
	 	 	 
	 	 	 	By:	/s/  Mike Meyer
	 	 	 	Name:	Mike Meyer
	 	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

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

 

	 	MONROE CAPITAL FUND O, LLC 
	 	 
	 	 	By:	/s/  Mike Meyer
	 	 	Name:	Mike Meyer
	 	 	Title:	Director

 

[Signature Page to Registration Rights
Agreement]

 

     

     

    

 

SCHEDULE OF SUBSCRIBERS

 

	Subscriber	 	Subscriber Address

and Telephone Number	 	Subscriber's Representative's

 Address 

and Facsimile Number
	 	 	 	 	 
	Monroe Capital Private Credit Fund III LP	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com
	 	 	 	 	 
	Monroe Capital Private Credit Fund III (Unleveraged) LP	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com
	 	 	 	 	 
	Monroe Private Credit Fund A LP	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com
	 	 	 	 	 
	Monroe Capital Private Credit Fund I LP	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com
	 	 	 	 	 
	Monroe Capital Private Credit Fund VT LP	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com
	 	 	 	 	 
	Monroe Capital Fund O, LLC	 	Monroe Capital LLC

311 S. Wacker Drive, 64th floor

Chicago, IL 60606

Attention: Mike Meyer

Telephone:  312-523-2393	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attn:  Ji Hye You, Esq.

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2000

Email:  jihye.you@srz.com

 

     

     

    

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

	Action Stock Transfer Corporation	 
	2469 E. Fort Union Blvd, Suite 214	 
	Salt Lake City, UT 84121	 
	Telephone:	(801) 274-1088	 
	Attention:	Justeene Blankenship	 
	E-mail:	jb@actionstocktransfer.com	 

 

		Re:	KushCo Holdings, Inc.

 

Ladies and Gentlemen:

 

[We
are][I am] counsel to KushCo Holdings, Inc., a Nevada corporation (the "Company"), and have represented the Company
in connection with that certain Subscription Agreement, dated as of August 21, 2019 (the "Subscription
Agreement"), entered into by and among the Company and the Subscribers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders warrants (the "Warrants") exercisable for shares of the Company's
common stock, par value $0.001 per share ("Common Stock"). Pursuant to the Subscription Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant
to which the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in the Registration
Rights Agreement), including the shares of Common Stock issuable upon exercise of the Warrants under the Securities Act of 1933,
as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement,
on ____________ ___, 2019, the Company filed a Registration Statement on Form [S-3][S-1] (File No. 333-_____________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities
which names each of the Holders as a selling stockholder thereunder.

 

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

 

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

 

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

 

		CC:	[LIST NAMES OF HOLDERS]

 

    	A-1

     

    

 

EXHIBIT B

 

SELLING STOCKHOLDERS

 

The shares of common
stock being offered by the selling stockholders are those issuable to the selling stockholders upon exercise of the warrants. For
additional information regarding the issuance of those warrants, see "Private Placement of Warrants" above. We are registering
the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except
for the ownership of the warrants issued pursuant to the Subscription Agreement and [DESCRIBE LENDER AND OTHER RELATIONSHIPS],
the selling stockholders have not had any material relationship with us within the past three years.

 

The table below lists
the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by each of the
selling stockholders. The second column lists the number of shares of common stock beneficially owned by each selling stockholder,
based on its ownership of the warrants, as of ________, 2019, assuming exercise of all warrants held by the selling stockholders
on that date, without regard to any limitations on exercise.

 

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

 

In accordance with
the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale of at least
the maximum number of shares of common stock issued and issuable upon exercise of the warrants as of the Trading Day immediately
preceding the date the registration statement is initially filed with the SEC. Because the number of shares of common stock issuable
upon exercise of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number
of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.

 

Under the terms of
the warrants, a selling stockholder may not exercise the warrants to the extent such exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common stock which would exceed 4.99% of our then outstanding
shares of common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon
exercise of the warrants which have not been exercised. The number of shares in the second column does not reflect this limitation.
The selling stockholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."

 

	Name of Selling Stockholder	 	Number of Shares of

Common Stock Owned

Prior to Offering	 	Maximum Number of Shares

of Common Stock to be Sold

Pursuant to this Prospectus	 	Number of Shares of

Common Stock Owned

After Offering
	 	 	 	 	 	 	 
	[MONROE] (1)	 	 	 	 	 	0
	 	 	 	 	 	 	 
	[Other Subscribers]	 	 	 	 	 	 

 

    	B-1

     

    

 

PLAN OF DISTRIBUTION

 

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

 

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

 

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

 

		·	in the over-the-counter market;

 

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

 

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

 

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

 

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

 

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

 

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

 

		·	privately negotiated transactions;

 

		·	short sales;

 

		·	sales pursuant to Rule 144;

 

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

 

    	B-2

     

    

 

		·	a combination of any such methods of sale; and

 

		·	any other method permitted pursuant to applicable law.

 

If the selling stockholders
effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders
or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may
sell such shares.

 

The selling stockholders
may pledge or grant a security interest in some or all of the warrants or shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the 1933 Act, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of
common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.

 

The selling stockholders
and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the 1933 Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the 1933 Act. At the time a particular offering of the shares of
common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares
of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers.

 

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

 

    	B-3

     

    

 

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

 

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

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[     ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or "blue sky" laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the 1933 Act, in accordance
with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the 1933 Act, that may arise from any written information
furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration
rights agreement, or we may be entitled to contribution.

 

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

 

    	B-4

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