Document:

Exhibit 4.3

 

THE ISSUANCE AND SALE OF THE SECURITY
REPRESENTED BY THIS NOTE HAS NOT 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 TO THE HOLDER (IF REQUESTED BY THE
COMPANY (AS DEFINED BELOW)), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE 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.

 

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL
ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), THE CHIEF FINANCIAL OFFICER, A REPRESENTATIVE
OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON
REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). THE CHIEF FINANCIAL OFFICER MAY BE REACHED AT
THE FOLLOWING ADDRESS: 11958 MONARCH STREET, GARDEN GROVE, CA 92841.

 

THIS NOTE AND THE RIGHTS AND OBLIGATIONS
EVIDENCED HEREBY ARE SUBJECT TO THAT CERTAIN CONSENT AND INTERCREDITOR AGREEMENT (AS AMENDED, RESTATED, AMENDED AND RESTATED, SUPPLEMENTED
OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), DATED AS OF AUGUST 21, 2019 BY AND AMONG MONROE
CAPITAL MANAGEMENT ADVISORS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND EACH OF THE INVESTORS LISTED ON THE SCHEDULE OF INVESTORS
ATTACHED THERETO, AND ACKNOWLEDGED BY THE COMPANY AND CERTAIN OF ITS SUBSIDIARIES PARTY THERETO; AND THE HOLDER (AS DEFINED BELOW),
BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS NOTE, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN
AND CONTROL.

 

KushCo
Holdings, Inc.

 

Senior
Note

 

	Issuance Date:  April 30, 2019

Exchange Date: August 21, 2019	Original Principal Amount: U.S.

$21,300,000

 

     

     

    

 

FOR VALUE RECEIVED,
KushCo Holdings, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of HB Sub Fund
II LLC or its registered assigns (“Holder”) the amount set forth above as the Original Principal Amount (as
reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when
due, whether upon the Maturity Date or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and, upon any Event of Default that is continuing, to pay interest (“Interest”) on any outstanding Principal
at the Default Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance Date”)
until the same becomes due and payable, whether upon the Maturity Date or upon acceleration, conversion, redemption or otherwise
(in each case in accordance with the terms hereof). This Senior Note (including all Senior Notes issued in exchange, transfer or
replacement hereof, this “Note”) is the only Senior Note issued pursuant to that certain Exchange Agreement,
dated August 21, 2019 (the “Exchange Date”), by and between the Company and the Holder (the “Exchange
Agreement”), in exchange, in part, for that certain Senior Note, with an initial aggregate principal amount of $21,300,000
(the “Original Note”) issued pursuant to that certain Securities Purchase Agreement, dated as of April 30, 2019
(the “Subscription Date”), by and among the Company and the investors (the “Buyers”) referred
to therein, as amended from time to time (collectively, the “Notes”, and such other Senior Notes issued pursuant
to the Securities Purchase Agreement or otherwise in exchange, transfer or replacement therefor, if any, collectively, the “Other
Notes”). Certain capitalized terms used herein are defined in Section 24.

 

1.            PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing 120% of all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 17(c)) on such Principal and
Interest. Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal,
accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any.

 

2.            INTEREST;
INTEREST RATE.

 

(a)           This
Note was issued with original issue discount as described in the Securities Purchase Agreement. This Note shall not bear Interest
except upon the occurrence (and during the continuance) of an Event of Default (as defined below), in which case this Note shall
bear interest at a rate of eighteen percent (18.0%) per annum (the “Default Rate”). In the event that such Event
of Default is subsequently cured or waived in accordance with the terms of this Note (and no other Event of Default then exists
(including, without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest
Date)), Interest hereunder shall cease to accrue as of the calendar day immediately following the date of such cure or waiver;
provided that the Interest as calculated and unpaid during the continuance of such Event of Default shall continue to apply to
the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure or waiver
of such Event of Default. To the extent any accrued and unpaid Interest remains outstanding on the Original Note as of the Exchange
Date, this Note shall as of the Exchange Date have an identical amount of accrued and unpaid Interest outstanding hereunder; provided,
however, Holder hereby acknowledges and agrees that, to the actual knowledge of the Holder as of the Exchange Date, no Interest
has accrued on the Original Note as of the Exchange Date.

 

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(b)           Interest
on this Note shall (i) commence accruing upon the occurrence of an Event of Default, (ii) be computed on the basis of a 360-day
year and twelve 30-day months, (iii) be payable in arrears on each Interest Date in accordance with the terms of this Note and
(iv) if unpaid on an Interest Date, shall compound on such Interest Date. Interest shall be paid on such Interest Date in cash.
Prior to the payment of Interest on an Interest Date, Interest on this Note shall be payable upon any redemption in accordance
with Section 7 or any required payment upon any Bankruptcy Event of Default (as defined below).

 

3.            RIGHTS
UPON EVENT OF DEFAULT.

 

(a)            Event
of Default. Each of the following events shall constitute an “Event of Default” and each of the events in
clauses (iii), (iv) and (v) shall constitute a “Bankruptcy Event of Default”:

 

(i)       the
Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other
amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to
pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement)
or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby
and thereby, except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure
remains uncured for a period of at least three (3) Trading Days;

 

(ii)       the
redemption of, or acceleration prior to maturity of, at least (x) $2,000,000 of Indebtedness (as defined in the Securities Purchase
Agreement) individually or (y) $5,000,000 of Indebtedness, in the aggregate, in either case, of the Company or any of its Subsidiaries,
other than with respect to any Other Notes;

 

(iii)       bankruptcy,
insolvency, reorganization, moratorium or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not
be dismissed within forty-five (45) days of their initiation;

 

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

 

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(v)       the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization, moratorium,
liquidation or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary
as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment
or composition of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a
decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such
other decree, order, judgment or other similar document unstayed and in effect for a period of forty-five (45) consecutive days;

 

(vi)       a
final judgment or judgments for the payment of money in excess of either (x) $2,000,000, individually, or (y) $5,000,000, in the
aggregate, in either case, are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within
thirty (30) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty
(30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from
a credit worthy party shall not be included in calculating the amounts set forth above so long as the Company provides the Holder
a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder)
to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be)
will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;

 

(vii)       the
Company and/or any Subsidiary, individually or in the aggregate, either fails to pay, when due, or within any applicable waiver
or grace period, any payment with respect to any Indebtedness in excess of (x) $2,000,000, individually, or (y) $5,000,00, in the
aggregate, in either case, due to any third party (other than, with respect to unsecured Indebtedness only, payments contested
by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate
reserves have been set aside for the payment thereof in accordance with GAAP);

 

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(viii)       other
than as specifically set forth in another clause of this Section 3(a), the Company or any Subsidiary breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition that is curable, only if such breach remains uncured for a period of ten (10) consecutive Trading Days;

 

(ix)       any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of clauses (a), (b), (d), (e) or
(n) of Section 9 of this Note;

 

(x)       any
Change of Control occurs;

 

(xi)       any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.

 

(b)           Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within one (1) Business Day deliver written notice thereof via facsimile and overnight courier (an “Event
of Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of an Event of Default
Notice and the Holder becoming aware of an Event of Default (such earlier date, the “Event of Default Right Commencement
Date”) and ending (such ending date, the “Event of Default Right Expiration Date”, and each such period,
an “Event of Default Redemption Right Period”) on the twentieth (20th) Trading Day after the later
of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default Notice that includes (I)
a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company,
such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company
to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior
to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the
Company to redeem (regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration
Date) all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”)
to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company pursuant to this Section 3(b) shall be redeemed by the Company at
a price in cash equal to the product of (i) the Outstanding Amount multiplied by (ii) the Redemption Premium (the “Event
of Default Redemption Price”). Redemptions required by this Section 3(b) shall be made in accordance with the provisions
of Section 7. To the extent redemptions required by this Section 3(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments.

 

    	 	5	 

     

    

 

(c)          Mandatory
Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, upon any Bankruptcy Event of
Default, whether occurring prior to or following the Maturity Date, the Company shall immediately pay to the Holder an amount in
cash equal to the Event of Default Redemption Price, in addition to any and all other amounts due hereunder, without the requirement
for any notice or demand or other action by the Holder or any other Person or entity, provided that the Holder may, in its sole
discretion, waive such right to receive payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall
not affect any other rights of the Holder hereunder, including any other rights in respect of such Bankruptcy Event of Default,
and any right to payment of the Event of Default Redemption Price or any other Redemption Price, as applicable.

 

4.            RIGHTS
UPON FUNDAMENTAL TRANSACTION. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor
Entity assumes in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance
with the provisions of this Section 4 pursuant to written agreements in form and substance satisfactory to the Required Holders
(as defined in the Securities Purchase Agreement) and approved by the Required Holders prior to such Fundamental Transaction, including
agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount and
interest rate equal to the principal amounts and the interest rates of the Notes held by such holder and having similar ranking
to the Notes, and satisfactory to the Required Holders. Upon the occurrence of any Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Note referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such Successor
Entity had been named as the Company herein. The provisions of this Section shall apply similarly and equally to successive Fundamental
Transactions.

 

5.            REDEMPTIONS
AT THE COMPANY’S ELECTION.

 

(a)           Company
Optional Redemption. At any time after the Issuance Date, so long as no Event of Default has occurred or is continuing, the
Company shall have the right to redeem all, or any portion, of the Outstanding Amount then remaining under this Note (the “Company
Optional Redemption Amount”) on the Company Optional Redemption Date (each as defined below) (a “Company Optional
Redemption”). The portion of this Note subject to redemption pursuant to this Section 5(a) shall be redeemed by the Company
in cash at a price (the “Company Optional Redemption Price”) equal to the applicable Company Optional Redemption
Percentage of the sum of (A) applicable portion of the Purchase Price (as defined in the Securities Purchase Agreement) of the
portion of the Principal to be redeemed as of the Company Optional Redemption Date, (B) accrued and unpaid Interest with respect
to such Principal and (C) accrued and unpaid Late Charges with respect to such Principal and Interest. The Company may exercise
its right to require redemption under this Section 5(a) by delivering a written notice thereof by facsimile or electronic mail
and overnight courier to all, but not less than all, of the holders of Notes (the “Company Optional Redemption Notice”
and the date all of the holders of Notes received such notice is referred to as the “Company Optional Redemption Notice
Date”). The Company may deliver no more than three (3) Company Optional Redemption Notices hereunder and such Company
Optional Redemption Notices shall be irrevocable. Each Company Optional Redemption Notice shall (x) state the date on which the
Company Optional Redemption shall occur (the “Company Optional Redemption Date”) which date shall not be less
than five (5) Trading Days nor more than twenty (20) Trading Days following the Company Optional Redemption Notice Date, (y) certify
that no Event of Default has occurred or is continuing and (z) state the Company Optional Redemption Price of the Notes which is
being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section
5(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date (including, without limitation, the
amount of Principal and, if any, Interest and/or, Late Charges, and any calculations with respect thereto). Notwithstanding anything
herein to the contrary, (i) if no Event of Default has occurred as of the Company Optional Redemption Notice Date but an Event
of Default occurs at any time prior to the Company Optional Redemption Date, (A) the Company shall provide the Holder a subsequent
notice to that effect and (B) unless the Holder waives the Event of Default, the Company Optional Redemption shall be cancelled
and the applicable Company Optional Redemption Notice shall be null and void and not counted towards the maximum allowable notices
as provided above. In the event of the Company’s redemption of any portion of this Note under this Section 5(a), the Holder’s
damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and
the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption
premium due under this Section 5(a) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty.

 

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(b)           Pro
Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
5(a), then it must simultaneously take the same action with respect to all of the Other Notes.

 

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

 

7.            REDEMPTIONS.

 

(a)           Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days
after the Company’s receipt of the Holder’s Event of Default Redemption Notice. The Company shall deliver the applicable
Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. Notwithstanding anything
herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive a cash payment
under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption
Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document
and, upon payment in full in accordance herewith, shall satisfy the Company’s payment obligation under such other Transaction
Document. In the event of a redemption of less than all of the Outstanding Amount of this Note, at the request of the Holder, and
upon surrender of this Note to the Company by the Holder, the Company shall promptly cause to be issued and delivered to the Holder
a new Note (in accordance with Section 12(d)) representing the outstanding Principal which has not been redeemed. In the event
that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter
and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require
the Company to promptly return to the Holder all or any portion of this Note representing the Outstanding Amount that was submitted
for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the
Company’s receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Outstanding
Amount, and (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 12(d)), to the
Holder, and in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an
amount equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this
Section 7, if applicable) minus (2) the Principal portion of the Outstanding Amount submitted for redemption. The Holder’s
delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company’s
obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Outstanding
Amount subject to such notice.

 

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(b)           Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption or repayment
as a result of an event or occurrence substantially similar to the events or occurrences described in Section 3(c) or Section 4
(each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day
of its receipt thereof, forward to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives a
Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including
the date which is two (2) Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice
and ending on and including the date which is two (2) Business Days after the Company’s receipt of the Holder’s applicable
Redemption Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice
and such Other Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata
amount from each holder of the Notes (including the Holder) based on the principal amount of the Notes submitted for redemption
pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven (7) Business Day
period.

 

8.            VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly provided
in this Note.

 

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9.            COVENANTS.
Until all of the Notes have been prepaid, redeemed or otherwise satisfied in accordance with their terms, except as may be approved
in advance in writing, by the Required Holders:

 

(a)           Rank.
All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other Indebtedness
of the Company and its Subsidiaries (other than Permitted Senior Indebtedness and other Permitted Indebtedness secured by a Permitted
Lien).

 

(b)           Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the
Other Notes and (ii) other Permitted Indebtedness).

 

(c)           Existence
of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”)
other than Permitted Liens.

 

(d)           Restricted
Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
(other than the Notes or Permitted Senior Indebtedness) whether by way of payment in respect of principal of (or premium, if any)
or interest on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment,
(i) an event constituting an Event of Default has occurred and is continuing or (ii) an event that with the passage of time and
without being cured would constitute an Event of Default has occurred and is continuing or (iii) at any time the Company is (or
is reasonably likely to become in any 91 day period, in the reasonable judgment of the Holder) Insolvent (as defined in the Securities
Purchase Agreement).

 

(e)           Restriction
on Redemption and Cash Dividends. Except as permitted under Section 4(l) of the Securities Purchase Agreement, the Company
shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, redeem, repurchase or declare or
pay any cash dividend or cash distribution on any of its capital stock.

 

(f)            Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the
Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other
than (i) sales, leases, licenses, sub licenses, assignments, transfers, conveyances and other dispositions of such assets or rights
by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice or required by the terms
of the Intercreditor Agreement, (ii) sales of inventory and product in the ordinary course of business, (iii) sales, leases, licenses,
sub-licenses assignments, transfers, conveyances and other dispositions of assets or rights by the Company and its Subsidiaries
that are not both material to and necessary for the Company’s primary lines of business, or (iv) sales, leases, licenses,
assignments, transfers, conveyances and other dispositions of assets or rights by the Company and its Subsidiaries to joint ventures,
provided that (x) with respect to any joint venture, other than the Equipment Financing JV (as defined in the Securities
Purchase Agreement), the Company beneficially owns at least 50% of the equity interests in each such joint venture and (y) the
fair market value of the assets or rights being conveyed to all such joint ventures (including the Equipment Financing JV) does
not exceed, in the aggregate, $10,000,000; provided, further that, in the case of assets being conveyed, directly
or indirectly, to the Equipment Financing JV or any of its direct or indirect subsidiaries or affiliates, such assets do not exceed
in the aggregate $5,000,000.

 

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(g)           Maturity
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the 91st calendar day after
the Maturity Date (other than Permitted Purchase Money Indebtedness in an aggregate amount not to exceed $100,000 and capital leases
consisting of Permitted Indebtedness in an aggregate amount not to exceed $100,000).

 

(h)           Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business related or incidental thereto.
The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose in any manner that is adverse to the Holder.

 

(i)            Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified
and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the nature
of the business conducted by it makes such qualification necessary, except in each case where the failure to be so qualified could
not be reasonably expected to have a Material Adverse Effect.

 

(j)            Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties which are necessary or material to the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases
to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder,
except in each case where the failure to maintain could not be reasonably expected to have a Material Adverse Effect.

 

    	 	10	 

     

    

 

(k)           Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable
to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company and/or any
of its Subsidiaries that are necessary to the conduct of its business as now conducted, except in each case where the failure to
maintain could not reasonably be expected to have a Material Adverse Effect.

 

(l)            Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with insurance companies
or associations with recognized financial responsibility in such amounts and covering such risks, consistent with past practices,
as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are
engaged.

 

(m)          Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party
to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange
of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) in the ordinary course
of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of
its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an Affiliate thereof; (ii) transactions between the Company and/or any
of its Subsidiaries, on the one hand, and the Company and/or any other Subsidiary, on the other hand; (iii) sales of equity interests
of the Parent to Affiliates of the Parent and the granting of registration and other customary rights in connection therewith,
and (iv) reasonable and customary director and officer compensation (including bonuses and stock option programs), benefits and
indemnification arrangements, in each case approved by the Board of Directors (or a committee thereof) of the Company and/or such
Subsidiary, as applicable; provided, that nothing in this Note shall in any way limit or restrict the Company’s ability to
provide services to the Equipment Financing JV and/or any of its subsidiaries, so long as such services are provided on arm’s
length terms and for fair value, as determined in the reasonable business judgment of the Company.

 

(n)           Restricted
Issuances. The Company shall not, directly or indirectly, issue (i) any Notes (other than as contemplated by the Securities
Purchase Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes.

 

(o)           Independent
Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing,
(y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z)
at any time the Holder reasonably believes an Event of Default may have occurred or be continuing, and has provided notice to the
Company of such belief, the Company shall hire an independent, reputable investment bank selected by the Company and approved by
the Holder to investigate as to whether any breach of this Note has occurred (the “Independent Investigator”).
If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator shall notify
the Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection
with such investigation, the Independent Investigator may, during normal business hours and upon reasonable notice, inspect all
contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and, to the
extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and
accountants (including the accountants’ work papers) and any books of account, records, reports and other papers not contractually
required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent
Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall
furnish the Independent Investigator with such financial and operating data and other information with respect to the business
and properties of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent
Investigator to discuss the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect
thereto to, the Company’s officers, directors, key employees and independent public accountants or any of them (and by this
provision the Company authorizes said accountants to discuss with such Independent Investigator the finances and affairs of the
Company and any Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.

 

    	 	11	 

     

    

 

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

 

11.          TRANSFER.
This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject only to the provisions
of Section 2(g) of the Securities Purchase Agreement.

 

12.          REISSUANCE
OF THIS NOTE.

 

(a)           Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 12(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 12(d)) to the Holder representing the outstanding Principal not being transferred. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that following redemption of any portion of this Note, the
outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

 

(b)           Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note (in accordance with Section 12(d)) representing the outstanding Principal.

 

    	 	12	 

     

    

 

(c)           Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 12(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.

 

(d)           Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 12(a) or Section 12(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have an exchange date, as indicated
on the face of such new Note, which is the same as the Exchange Date of this Note, (v) shall have the same rights and conditions
as this Note, and (vi) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note,
from the Issuance Date.

 

13.          REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note and the other Transaction
Documents shall be cumulative and in addition to all other remedies available under this Note and any of 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 Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms
of this Note. The Company 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, redemptions 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 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. Subject to applicable restrictions pertaining to confidentiality and applicable law, and executed of
a customary non-disclosure agreement by the Holder, the Company shall provide all information and documentation to the Holder that
is reasonably requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Note.

 

    	 	13	 

     

    

 

14.          PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note 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
Note or to enforce the provisions of this Note (excluding, for such purpose, any legal proceeding or action to the extent no payment
default or other Event of Default has occurred hereunder) or (b) there occurs any bankruptcy, reorganization, receivership of the
Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company
shall pay the reasonable 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, reasonable attorneys’ fees and disbursements.
The Company expressly acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that
the purchase price paid for this Note was less than the original Principal amount hereof.

 

15.          CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed
against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note
instead of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections
of this Note. Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have
the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing
by the Holder.

 

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

 

17.          NOTICES;
CURRENCY; PAYMENTS.

 

(a)           Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.

 

(b)           Currency.
All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing
under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the
U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange
rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an
amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period
of time).

 

    	 	14	 

     

    

 

(c)           Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth
herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of
the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available
funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions.
Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall
instead be due on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction
Documents which is not paid when due (except to the extent such amount is simultaneously accruing Interest at the Default Rate
hereunder) shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount
at the rate of eighteen percent (18.0%) per annum from the date such amount was due until the same is paid in full (“Late
Charge”).

 

18.          CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this
Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

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

 

20.          GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
enforcement, interpretation and performance of this Note 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
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 thereby, 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 to limit in any way any right to serve process
in any manner permitted by law. Nothing contained herein (i) 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 UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS
NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

    	 	15	 

     

    

 

21.          JUDGMENT
CURRENCY.

 

(a)           If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Note or any other Transaction Document
in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 21 referred to as the “Judgment Currency”) an amount due in U.S. dollars under this Note, the
conversion shall be made at the Exchange Rate prevailing on the Business Day immediately preceding:

 

(i)       the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(ii)       the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 21(a)(ii) being hereinafter referred to as the “Judgment Conversion
Date”).

 

(b)           If
in the case of any proceeding in the court of any jurisdiction referred to in Section 21(a)(ii) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(c)           Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.

 

22.          SEVERABILITY.
If any provision of this Note 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 Note so long as this Note 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).

 

    	 	16	 

     

    

 

23.          MAXIMUM
PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event
that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

 

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

 

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

 

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

 

(c)           “Bankruptcy
Proceeding” means, with respect to any Person, (i) the occurrence of a voluntary case or proceeding under any applicable
federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in
respect of such Person in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence
of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts
generally as they become due, the taking of corporate action by such Person in furtherance of any such action or the taking of
any action by any Person to commence a UCC foreclosure sale or any other similar action under federal, state or foreign law or
(ii) the entry by a court of (A) a decree, order, judgment or other similar document in respect of such Person of a voluntary or
involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (B) a decree, order, judgment or other similar document adjudging such Person as bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of such
Person under any applicable federal, state or foreign law or (C) a decree, order, judgment or other similar document appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order,
judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for
a period of thirty (30) consecutive days.

 

    	 	17	 

     

    

 

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

 

(e)           “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect,
wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities
and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities
with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation)
of such entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.

 

(f)          
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.

 

(g)           “Company
Optional Redemption Percentage” means, for any given Company Optional Redemption Date, the applicable percentage opposite
the period (each, a “Company Optional Redemption Period”) in which such Company Optional Redemption Date occurs
in the table below:

 

	Company Optional Redemption Period	Company Optional 

Redemption Percentage
	Prior to July 30, 2019	106.5%
	From July 30, 2019 through, and including, October 30, 2019	112%
	From October 30, 2019 through, and including, February 28, 2020	115%
	From February 28, 2020 through, and including, the Maturity Date	120%

 

    	 	18	 

     

    

 

(h)           “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)(other than the Equipment Financing JV or one or more of the Equipment Financing JV’s direct or indirect subsidiaries)
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 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 or share 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 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 Common Stock,
(y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Note 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 shareholders of the Company to surrender their shares of Common Stock without approval of
the shareholders of the Company or (C) that the Company shall, 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.

 

    	 	19	 

     

    

 

(i)            “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

(j)            “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.

 

(k)         
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.

 

(l)           “Interest
Date” means, with respect to any given calendar month, the first Trading Day of such calendar month.

 

(m)          “Maturity
Date” shall mean October 30, 2020; provided, however, the Maturity Date may be extended at the option of the Holder (i)
in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred
and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the
date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or an Event of Default Redemption Notice is delivered prior to the Maturity Date.

 

(n)           “Outstanding
Amount” means the sum of (A) the portion of the Principal to be redeemed or otherwise with respect to which this determination
is being made, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid Late Charges with respect
to such Principal and Interest.

 

(o)           “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market (as defined in the Securities Purchase Agreement), or,
if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.

 

(p)           “Permitted
Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set forth on Schedule
3 to the Exchange Agreement, as in effect as of the Exchange Date (including, without limitation, without any increase in principal,
shortening of maturity date or other amendment, waiver or modification thereof adverse to the Holder in any respect), (iii) unsecured
Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by this
Note, both (x) as reflected in a written subordination and intercreditor agreement, by and among the holders of Notes and such
Indebtedness, acceptable to the Holder and approved by the Holder in writing, and (y) which do not mature prior to the 91st
calendar day after the Maturity Date, (iv) Indebtedness secured by Permitted Liens or unsecured but as described in clauses (iv)
and (v) of the definition of Permitted Liens (“Permitted Purchase Money Indebtedness”); (v) Permitted Senior
Indebtedness; (vi) any of the following Indebtedness, in an aggregate amount not to exceed $4,750,000: (A) Indebtedness permitted
under clause (d) of the definition of “Permitted Indebtedness” under the Senior Secured Financing Agreement as in effect
on the Exchange Date, relating to “Permitted Intercompany Investments” (as defined therein as of the Exchange Date);
(B) Indebtedness permitted under clause (h) of the definition of “Permitted Indebtedness” under the Senior Secured
Financing Agreement as in effect on the Exchange Date, relating to, among other things, cash management obligations and credit
cards; (C) Indebtedness permitted under clause (j) of the definition of “Permitted Indebtedness” under the Senior Secured
Financing Agreement as in effect on the Exchange Date, relating to the letters of credit issued in the ordinary course of business;
and (D) Indebtedness permitted under clause (r) of the definition of “Permitted Indebtedness” under the Senior Secured
Financing Agreement as in effect on the Exchange Date, relating to other unsecured Indebtedness; (vii) Indebtedness, in an aggregate
amount not to exceed $3,000,000, permitted under subsection (l) of the definition of “Permitted Indebtedness” under
the Senior Secured Financing Agreement as in effect on the Exchange Date, relating to previously existing Indebtedness of a Person
whose assets or equity interests are acquired by the Company and/or any of its subsidiaries.

 

    	 	20	 

     

    

 

(q)           “Permitted
Liens” means (i) any Lien for taxes not yet overdue or delinquent or that is being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’
liens, landlords’ liens, and other similar liens, arising in the ordinary course of business with respect to a liability
that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or
in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness
incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the
time of its acquisition, provided that (x) the Lien is confined solely to the equipment so acquired and improvements thereon, and
(y) the proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $3,000,000
and (z) the maturity date of such Indebtedness is at least ninety-one (91) calendar days after the Maturity Date, (v) Liens incurred
in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv)
above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien
and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods,
(vii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section
3(a)(vi), (viii) pledges or deposits securing obligations under worker’s compensation, unemployment insurance, social security
or public liability laws or similar legislation; (ix) pledges or deposits securing bids, tenders, contracts (other than contracts
for the payment of money) or leases made in the ordinary course of business; (x) deposits securing public or statutory obligations;
(xi) deposits of money securing, or in lieu of, surety, appeal or customs bonds in proceedings; (xii) zoning restrictions, easements,
licenses, or other restrictions on the use of real property or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or marketability of such real estate; (xiii) Liens securing
the Permitted Senior Indebtedness; (xiv) the California franchise tax Lien with respect to KIM International Corporation in the
amount of $2,646.96; (xv) Liens on cash or cash equivalents securing reimbursement obligations under letters of credit permitted
by clause (vi)(C) of the definition of Permitted Indebtedness in an aggregate amount not to exceed 105% of the amount of all such
letters of credit outstanding at such time; (xvi) other Liens which do not secure Indebtedness for borrowed money or letters of
credit and as to which the aggregate amount of the obligations secured thereby does not exceed $250,000; (xvii) Liens solely on
any cash earnest money deposits made in connection with any letter of intent or purchase agreement with respect to an acquisition;
and (xviii) non-exclusive licenses of intellectual property rights in the ordinary course of business.

 

    	 	21	 

     

    

 

(r)            “Permitted
Senior Indebtedness” means principal of (and premium, if any), interest on, and all fees and other amounts (including,
without limitation, any reasonable out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket legal fees and
disbursements), collateral protection expenses and other reimbursement or indemnity obligations relating thereto) payable by Company
and/or its Subsidiaries under or in connection with the Senior Secured Financing Agreement (including any refinancing or replacement
thereof, collectively, the “Current Facility”); provided, however, that (i) the aggregate outstanding
principal amount of the Current Facility shall not at any time exceed $35 million, (ii) the sum of outstanding principal and available
borrowings under the Current Facility, in the aggregate, for any given time shall not exceed the sum of (A) 90% of the aggregate
amount of all accounts receivable of the Company and its Subsidiaries then outstanding and (B) 90% of the value of inventory of
the Company and its Subsidiaries as of such given time, in each case as determined in accordance with GAAP, consistently applied
in accordance with past practices; (iii) margins applicable to the interest rates with respect to the Current Facility shall not
be increased by more than 275 basis points from the interest rate margins as set forth in the Senior Secured Financing Agreement
as in effect on the Exchange Date, except in connection with the imposition of a default rate of interest in accordance with
the terms of Senior Secured Financing Agreement as of the Exchange Date; (iv) the Unused Line Fee (as defined in the Senior Secured
Financing Agreement as of the Exchange Date) shall not be increased by more than 50 basis points in excess of the rate as set forth
in the Senior Secured Financing Agreement as in effect on the Exchange Date; (v) recurring fees (including any loan servicing fee)
with respect to the Current Facility shall not be increased by more than $150,000 in the aggregate for any year in excess of the
amounts as set forth in the Senior Secured Financing Agreement as in effect on the Exchange Date (but excluding the Unused Line
Fee (as defined in the Senior Secured Financing Agreement as of the Exchange Date); (vi) any one-time amendment, consent or waiver
fee shall not exceed $150,000 for any amendment or consent and, in the case of any waiver, $150,000 for each default or event of
default being waived (and any such fees, in the aggregate, together with any other fees pursuant to clause (v) above, shall not
exceed $1,000,000 in any twelve calendar month period); (vii) no such Indebtedness is convertible or exchangeable, as applicable,
into any securities of the Company or any of its Subsidiaries (and no securities of the Company or any of its Subsidiaries have
been issued (or are required to be issued pursuant to any agreement) to any Person in connection therewith), except that the Company
may, in its sole discretion, issue warrants to purchase any class or series of its capital stock in connection with the issuance
of such Indebtedness provided that the Company concurrently issues warrants to the Holder on the same terms, and with the same
proportion of aggregate exercise price of such warrants to the aggregate original principal amount, as provided in the Subsequent
Placement; and (viii) the maturity date of the Current Facility shall not be prior to the 91st calendar day after the
Maturity Date.

 

    	 	22	 

     

    

 

(s)          “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or and any Governmental Entity (as defined in the Securities Purchase Agreement) or any department or agency thereof.

 

(t)            “Prime
Rate” means the “prime rate” which from time to time published in the “Money Rates” column of The
Wall Street Journal (Eastern Edition, New York Metro); provided, however, if the Money Rates column of The Wall
Street Journal (Eastern Edition, New York Metro) ceases to be published or otherwise does not designate a “prime
rate” as of a Business Day, Holder has the right to obtain such information from a similar business publication of its selection.

 

(u)           “Redemption
Notices” means, collectively, the Event of Default Redemption Notices and the Company Optional Redemption Notices, and
each of the foregoing, individually, a “Redemption Notice.”

 

(v)           “Redemption
Premium” means 135%.

 

(w)          “Redemption
Prices” means, collectively, Event of Default Redemption Prices, and the Company Optional Redemption Prices, and each
of the foregoing, individually, a “Redemption Price.”

 

(x)          
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription
Date, by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended
from time to time.

 

(y)           "Senior
Secured Financing Agreement" means that certain Financing Agreement, dated August 21, 2019 (as amended, supplemented or
otherwise modified from time to time), by and among the Company, each subsidiary of the Company party thereto, the lenders from
time to time party hereto, Monroe Capital Management Advisors, LLC, a Delaware limited liability company ("Monroe"),
as collateral agent for the Lenders, and Monroe, as administrative agent for the Lenders.

 

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

 

(aa)         “Subscription Date” means April 30, 2019.

 

(bb)        “Subsidiaries”
shall have the meaning as set forth in the Securities Purchase Agreement.

 

    	 	23	 

     

    

 

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

 

(dd)         “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market (as defined in the Securities Purchase Agreement), 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) unless such
day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for
trading of securities.

 

25.          DISCLOSURE.
At any time from and after the Issuance Date, upon receipt or delivery by the Company of any notice in accordance with the terms
of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material,
non-public information relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after
any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise.
In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of
its Subsidiaries, the Company so shall indicate to the 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,
non-public information relating to the Company or any of its Subsidiaries. If the Company or any of its Subsidiaries provides material
non-public information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed
to receive such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty
of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, Affiliates
or agents with respect to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information.
Nothing contained in this Section 25 shall limit any obligations of the Company, or any rights of the Holder, under the Securities
Purchase Agreement.

 

[signature page follows]

 

    	 	24	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Note to be duly executed as of the Exchange Date set out above.

 

 

	 	KUSHCO HOLDINGS, INC.
	 	 	 	 
	 	By:	/s/  Nicholas Kovacevich
	 	 	Name:	Nicholas Kovacevich
	 	 	Title:	Chairman and Chief Executive OfficerExhibit 4.4

 

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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS WARRANT.

 

KUSHCO HOLDINGS, INC.

 

Warrant To Purchase Common
Stock

 

Warrant No.: W-1

 

Date of Issuance: August 21, 2019 (the
“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, HB Sub Fund II LLC,
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), 650,000 (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 21. This Warrant is one of the Warrants to Purchase Common Stock (the “Exchange Warrants”)
issued pursuant to that certain Exchange Agreement, dated August 21, 2019, by and between the Company and the Holder (the “Exchange
Agreement”), in exchange, in part, for that certain Senior Note issued by the Company to the Holder pursuant to Section
1 of that certain Securities Purchase Agreement, dated as of April 30 2019, by and among the Company and the investors referred
to therein, as amended from time to time (as amended to date, the “Securities Purchase 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 (the "Share
Delivery Deadline"), the Company shall (i) provided that the Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number
of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal at Custodian system, or (ii) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight
courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise. The Company shall be
responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares
via DTC, if any, including without limitation for same day processing. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company
by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2)
Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs
and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. From the Issuance Date through and including the Expiration Date,
the Company shall maintain a transfer agent that participates in the DTC’s Fast Automated Securities Transfer Program. The
Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required to
deliver Warrant Shares with respect to an exercise prior to the Holder's delivery of the Aggregate Exercise Price (or notice of
a Cashless Exercise) with respect to such exercise.

 

    	2

     

    

 

(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 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 a registration statement (or prospectus contained therein) covering the resale or issuance of the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”, and such registration statement,
the “Registration Statement”) is not available for the issuance of such Unavailable Warrant Shares and the Company
fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the
immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event
described in clause (I) above, a “Delivery Failure”), and if on or after such Share Delivery Deadline the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of all or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder is entitled to receive
from the Company (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company
shall, within 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 Share Delivery Deadline, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the Weighted Average Price of
the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the
fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Deadline until
such Warrant Shares are delivered or Holder rescinds such exercise. In addition to the foregoing rights, (i) if the Company fails
to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date,
then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as
the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission
of an exercise shall not affect the Company's obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering
the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale,
as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice
of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying
such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit
/ Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise
Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company's obligation
to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y)
switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.

 

    	3

     

    

 

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

 

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

         D
 

 

For purposes of the
foregoing formula:

 

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

 

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

 

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

 

    	4

     

    

 

D = as
applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(d) hereof on a day that is
not a Trading Day or (2) both executed and delivered pursuant to Section 1(d) hereof on a Trading Day prior to the opening
of "regular trading hours" (as defined in Rule 600(b)(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 pursuant to Section 1(d) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the
applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered
pursuant to Section 1(d) hereof after the close of "regular trading hours" on such Trading Day.

 

If the Warrant Shares
are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the
Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date the Original Note was originally issued pursuant to the Securities Purchase Agreement. At any time on and after October
30, 2019, assuming (x) the Holder is not an affiliate of the Company and (y) at such time of determination the Company has not
failed to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public
information requirement under Rule 144(c), this Warrant shall not be required to bear any restrictive legend and, upon any Cashless
Exercise of this Warrant, the Warrant Shares to be issued in such exercise hereunder shall be freely transferable by the Holder
pursuant to and in accordance with Rule 144.

 

(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.

 

    	5

     

    

 

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

 

    	6

     

    

 

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

 

    	7

     

    

 

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

 

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

 

3.          RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above,
if, on or after the Issuance 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).

 

    	8

     

    

 

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

 

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

 

    	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 Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock
as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations
on exercise). Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance
Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth
in Section 1(f) hereof), the Company shall use its reasonable best efforts to promptly remedy such failure, including, without
limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock

 

6.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein,
the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights,
or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the
Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.

 

    	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 warrants for
fractional shares of Common Stock shall be given.

 

(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

8.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the terms of the Exchange Agreement. The Company shall provide the Holder with prompt written notice of all actions taken
pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof),
including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing,
the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of
Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least ten
Trading Days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution
upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly understood
and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.

 

    	11

     

    

 

9.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant
(other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the written consent of the Holder. No waiver shall be
effective unless it is in writing and signed by an authorized representative of the waiving party.

 

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

 

11.         GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed
by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth on the signature
page to the Exchange 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

     

    

 

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

 

13.         DISPUTE
RESOLUTION.

 

(a)          Submission
to Dispute Resolution.

 

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

 

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

 

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

 

    	13

     

    

 

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

 

14.         REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other
Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the
like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant
shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Warrant (including, without limitation, compliance with Section 1(g)(ii) hereof). The issuance of shares and certificates
for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares
for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder
or its agent on its behalf.

 

15.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of
an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes
action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy,
reorganization, receivership of the company or other proceedings affecting company creditors’ rights and involving a claim
under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’
fees and disbursements.

 

    	14

     

    

 

16.         TRANSFER.
Subject to compliance with Section 4.7 of the Exchange Agreement, 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.

 

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

 

(i)          if
to the Company, to:

 

KushCo Holdings, Inc.

11958 Monarch Street

Garden Grove, CA 92841

Attention: Chief Financial Officer

Email: chris.tedford@kushco.com

 

With a copy
to:

 

Reed Smith LLP

101 Second Street

Suite 1800

San Francisco, CA 94105-3659

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

Email: mhauser@reedsmith.com
and aizower@reedsmith.com

 

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

 

19.         The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, or (B) with respect
to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder. It is expressly understood and agreed that the time of exercise specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

    	15

     

    

 

20.         CERTAIN
DEFINITIONS.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	16

     

    

 

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

 

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

 

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

 

(i)          “Common
Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

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

 

(k)          “Eligible
Market” means the 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.

 

(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.

 

    	17

     

    

 

(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 Issuance Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

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

 

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

 

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

 

    	18

     

    

 

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

 

(r)          “Principal
Market” means the OTCQX.

 

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

 

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

 

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

 

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

 

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

 

(x)          
“Transaction Documents” means the Transaction Documents (as defined in the Securities Purchase Agreement), as
amended by the Exchange Agreement.

 

    	19

     

    

 

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

 

[signature page follows]

 

    	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:	/s/  Nicholas Kovacevich
	 	 	Name: 	Nicholas Kovacevich
	 	 	Title:	President and Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

EXERCISE
NOTICE

 

TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

KUSHCO
HOLDINGS, INC.

 

The undersigned holder
hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of KushCo Holdings,
Inc., a Nevada corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

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

 

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

 

____________
a "Cashless Exercise" with respect to _______________ Warrant Shares.

 

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

 

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

 

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

 

	Issue to:	 
	 	 
	 	 

 

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

 

	DTC Participant:	 
	DTC Number:	 
	Account Number:	 

 

     

     

    

 

	Date: 	_______________ ___, ___	 
	 	 
	Name of Registered Holder	 

 

	By:	        	   
	 	Name:	 
	 	Title:	 

 

	 	Tax ID:	 	 
	 	Facsimile:	 	 
	 	E-mail Address:	 	 

 

     

     

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

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

 

	 	KushCO HOLDINGS, Inc.
	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:

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