Document:

Exhibit 10.1

 

EXECUTIVE AGREEMENT

 

This EXECUTIVE AGREEMENT
(this “Agreement”) is entered into on this 24th day of September, 2019 and shall be effective as of September
24, 2019 (the “Effective Date”), by Penn National Gaming, Inc., a Pennsylvania corporation (the “Company”),
and the senior executive who has executed this Agreement below (“Executive”).

 

WHEREAS, Executive’s
current employment agreement, entered into on October 19, 2016, effective as of January 1, 2017, expires on January 1, 2020 (the
“Current Agreement”).

 

WHEREAS, the Company
and Executive have agreed to extend the Current Agreement and facilitate a transition as described below.

 

WHEREAS, each of the
parties wishes to enter into this Agreement, the terms of which are intended to be in compliance with the requirements of Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”, see Section 22 below).

 

WHEREAS, the Compensation
Committee of the Board of Directors of the Company, the Board of Directors and the Chief Executive Officer have determined that
it is in the best interests of the Company and its shareholders to enter into this Agreement and Executive is willing to serve
as an employee of the Company subject to the terms and conditions of this Agreement.

 

WHEREAS, this Agreement
is intended to amend, restate and supersede the Current Agreement.

 

NOW, THEREFORE, the
parties, in exchange for the mutual promises described herein and other good and valuable consideration and intending to be legally
bound, agree as follows:

 

1.
       Employment. The Company hereby agrees to continue to employ Executive and
Executive hereby accepts such employment, in accordance with the terms, conditions and provisions hereinafter set forth in this
Agreement.

 

1.1.     Duties
and Responsibilities. Executive shall continue to serve as Executive Vice President and Chief Financial Officer of the Company.
Executive shall perform all duties and accept all responsibilities incident to such position as may be reasonably assigned to him
by the Chief Executive Officer of the Company or the Board of Directors of the Company. Executive’s principal place of employment
shall be in Wyomissing, Pennsylvania.

 

1.2.
    Term. The term of this Agreement shall begin on the Effective Date and
shall terminate on March 31, 2020 (the “Term”) or the termination of Executive’s employment with the Company;
provided, however, notwithstanding anything in this Agreement to the contrary, Sections 6 through 24 shall survive the termination
of Executive’s employment with the Company. At the end of the Term, Executive shall be deemed to have resigned from all officer,
director, manager member or other such positions with the Company or its affiliates or subsidiaries.

 

1.3.     Extent
of Service. Executive agrees to use Executive’s best efforts to carry out Executive’s duties and responsibilities
and, consistent with the other provisions of this Agreement, to devote substantially all of Executive’s business time, attention
and energy thereto. The foregoing shall not be construed as preventing Executive from serving on the board of philanthropic organizations,
commercial entities (but only if and to the extent that Executive is so serving as of the date hereof) or providing oversight with
respect to his personal investments, so long as such service does not materially interfere with Executive’s duties hereunder.

 

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2.       Compensation.
For all services rendered by Executive to the Company during the Term, the Company shall compensate Executive as set forth below.

 

2.1.     Base
Salary. During the Term, the Company shall pay to Executive his current base salary, payable in accordance with the Company’s
payroll practices as in effect from time to time.

 

2.2.     Bonus.
Executive shall participate in the Company’s annual incentive compensation plan applicable to other similarly situated senior
executives (“Peer Executives”) for his service in 2019. Executive shall not be entitled to participate in the Company’s
annual incentive compensation plan for his service in 2020.

 

2.3.     Equity
Compensation. Executive agrees that he will not be eligible to receive any additional equity-based compensation and that all
equity-based compensation that has not vested on or before March 31, 2020 shall be cancelled and forfeited.

 

2.4.     Payments
and Benefits at the End of Term. At the end of the Term, subject to compliance with the terms of this Agreement (including
Sections 7 through 9) and the execution of a release substantially in the form attached hereto as Exhibit A (“Release”),
Executive will be entitled to:

 

(a)      the
items described in Section 5 (below);

 

(b)      exercise
any vested stock appreciation rights and vested stock options until the earlier of (i) one additional year beyond the one year
period from March 31, 2020 described in the applicable equity plans or (ii) the expiration of the original terms of the vested
stock appreciation rights and vested stock options.

 

(c)      accelerated
vesting on March 31, 2020 of the third tranche of Executive’s 2018 performance share awards at target under the Company’s
2018 Performance Share Program as provided in the attached Exhibit B;

 

(d)      accelerated
vesting on March 31, 2020 of the second and third tranches of Executive’s 2019 and 2020 performance share awards and phantom
stock unit awards at target under the Company’s 2019 Performance Share Program as provided in the attached Exhibit B; and

 

(e)      Payment
of any deferred compensation at such time and amounts as determined in accordance with the terms of the Penn National Gaming, Inc.
Deferred Compensation Plan and Executive’s election(s) thereunder.

 

2.5.     Other
Benefits. Executive shall be entitled to participate in all other employee benefit plans and programs, including, without limitation,
health, vacation, retirement, deferred compensation or SERP, made available generally to other Peer Executives, as such plans and
programs may be in effect from time to time and subject to the eligibility requirements and other terms of each plan. Nothing in
this Agreement shall prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or
programs from time to time, as the Company deems appropriate.

 

2.6.     Reimbursement
of Expenses. During the Term, the Company shall reimburse Executive for all reasonable expenses incurred by him in the performance
of his duties in accordance with the Company’s policies applicable to Peer Executives.

 

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3.
      Termination by the Company.

 

(a)      Termination.
The Company may terminate Executive’s employment at any time without Cause (as such term is defined in subsection (c) below),
with Cause, or at the end of the Term by non-renewal of this Agreement.

 

(b)      Without
Cause. The Company may terminate Executive’s employment at any time without Cause (as such term is defined in subsection
(c) below) by delivery of written notice to Executive, which notice shall set forth the effective date of such termination.

 

(c)      With
Cause. The Company may terminate Executive’s employment at any time for Cause effective immediately upon delivery of
written notice to Executive. As used herein, the term “Cause” shall mean:

 

(i)       Executive
shall have been convicted of, or pled guilty or nolo contendere to, a criminal offense involving allegations of fraud, dishonesty
or physical harm during the term of this Agreement;

 

(ii)      Executive
is found (or is reasonably likely to be found) disqualified or not suitable to hold a casino or other gaming license by a governmental
gaming authority in any jurisdiction where Executive is required to be found qualified, suitable or licensed;

 

(iii)     Executive
breaches any significant Company policy (such as the Business Code of Conduct or the Harassment Policy) or term of this Agreement,
including, without limitation, Sections 6 through 9 of this Agreement and, in each case, fails to cure such breach within 15 days
after receipt of written notice thereof (to the extent curable);

 

(iv)     Executive
misappropriates corporate funds or resources as determined in good faith by the Audit Committee of the Board;

 

(v)      the
Company determines in its reasonable discretion that Executive has failed to perform Executive’s duties with the Company
(other than any such failure resulting from incapacity due to physical disability or mental illness) or in the case of repeated
insubordination;

 

(vi)     the
Company determines in its reasonable discretion that Executive has engaged in illegal conduct or gross misconduct which is or is
reasonably expected to be materially injurious to the Company or one of its affiliates;

 

(vii)    Executive's
death (this Agreement and Executive’s employment will terminate automatically upon Executive’s death); or

 

(viii)   Executive's
inability to perform the essential functions of Executive's job (with or without reasonable accommodation)
by reason of disability, where such inability continues for a period of ninety (90) days continuously.

 

4.        Termination
by Executive. Executive may voluntarily terminate employment for any reason effective upon 60 days’ prior written notice
to the Company, in which case the payment and benefits described in Section 2.1 above following termination date of employment
and in Section 2.4 above and Section 5 below shall not be payable (other than any amounts payable to Executive under the Penn National
Gaming, Inc. Deferred Compensation Plan and Executive’s election(s) thereunder).

 

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5.        Severance
Pay and Benefits. Subject to the terms and conditions set forth in this Agreement, if Executive’s
employment is terminated due to the expiration of the Term or non-renewal by the Company or under Section 3(b) at or before the
end of the Term, then the Company will provide Executive with the following severance pay and benefits (except in the event of
a breach of the Release, as defined below); provided, for purposes of Section 409A, each payment of severance pay under this Section
5 shall be considered a separate payment:

 

(a)
     Amount of Post-Employment Base Salary. Subject to Sections 5(d) and 22,
the Company shall pay to Executive an amount equal to 24 months (the “Severance Period”) of base salary at the rate
in effect on the date of Executive’s separation from service (the “Termination Date”). Such amount shall be paid
over the Severance Period in accordance with the Company’s regular payroll procedures for similarly situated executives following
the Termination Date.

 

(b)      Amount
of Post-Employment Bonus. In addition to the Post-Employment Base Salary provided under Section 5(a) above, and subject
to Section 5(d), the Company shall pay to Executive an amount equal to the product of 1.5 times the amount of the average of the
last two full years bonuses paid to Executive based on the actual performance of the Company. Such amount paid to Executive
under this Section 5(b) shall be paid on the date annual bonuses are paid to similarly-situated executives after the Termination
Date. 

 

(c)      Continued
Medical Benefits Coverage. During the Severance Period, Executive and Executive’s dependents will have the opportunity
under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”) to elect COBRA
continuation coverage. If Employee so elects and pays for COBRA coverage in a timely manner, the Company shall reimburse Executive
for the cost of purchasing COBRA coverage through the end of the Severance Period (or until such earlier date as Executive and
Executive’s dependents cease to receive COBRA coverage).

 

(d)      Release
Agreement. Executive’s entitlement to any severance pay and benefit entitlements under
this Section 5 is conditioned upon Executive’s first entering into the Release and the Release becoming effective no later
than the sixtieth day following the employment termination date, the Release shall be delivered to Executive within 14 days after
the Termination Date. Notwithstanding any other provision hereof, all severance payments to Executive shall be delayed until after
the expiration of any applicable revocation period with respect to the Release, but in the event the applicable revocation period
spans two calendar years, the payments shall commence in the second calendar year. Executive also acknowledges that any severance
pay under this Section 5 is subject to the Company’s then current recoupment policy.

 

6.
      No Conflicts of Interest. Executive agrees that throughout the period of
Executive’s employment hereunder, Executive will not perform any activities or services, or accept other employment, that
would materially interfere with or present a conflict of interest concerning Executive’s employment with the Company. Executive
agrees and acknowledges that Executive’s employment is conditioned upon Executive adhering to and complying with the business
practices and requirements of ethical conduct set forth in writing from time to time by the Company in its employee manual, code
of conduct or similar publication. Executive represents and warrants that no other contract, agreement or understanding to which
Executive is a party or may be subject to will be violated by the execution of this Agreement by Executive. Executive further agrees
to not accept any position on the board of a for-profit company without the written consent of the Penn National Gaming, Inc. Chief
Executive Officer or General Counsel.

 

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7.
       Confidentiality.

 

(a)      Definition.
“Confidential Information” means data and information relating to the business of the Company or its affiliates, (i)
which the Company or its affiliates have disclosed to Executive, or of which Executive became aware as a consequence of or in the
course of Executive’s employment with the Company, (ii) which have value to the Company or its affiliates, and (iii) which
are not generally known to its competitors. Confidential Information will not include any data or information that the Company
or its affiliates have voluntarily disclosed to the public (except where Executive made or caused that public disclosure without
authorization), that others have independently developed and disclosed to the public, or that otherwise enters the public domain
through lawful means.

 

(b)      Restrictions.
Executive agrees to treat as confidential and will not, without the prior written approval of the Company in each instance, directly
or indirectly use (other than in the performance of Executive’s duties of employment with the Company or its affiliates),
publish, disclose, copyright or authorize anyone else to use, publish, disclose or copyright, any Confidential Information obtained
during Employee’s employment with the Company or its affiliates, whether or not the Confidential Information is in written
or other tangible form. This restriction will continue to apply for a period of two (2) years after the Termination Date. Executive
acknowledges and agrees that the prohibitions against disclosure and use of Confidential Information recited in this section are
in addition to, and not in lieu of, any rights or remedies that the Company or its affiliates may have available under applicable
laws.

 

(c)      Nothing
in this Agreement or in the Release shall prohibit Executive from reporting possible violations of federal law or regulation to
any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of applicable
federal or state law or regulation.

 

8.
       Non-Competition.

 

(a)      As
used in this Section 8, the term “Restriction Period” shall mean a period equal to: (i) the 12-month period immediately
following the termination of this Agreement for any reason (including, but not limited to, termination by Executive or the expiration
of the Term of this Agreement), if Executive’s employment terminates under circumstances where Executive is not entitled
to payments under Section 5 or 10 or (ii) the Severance Period if Executive’s employment terminates under circumstances where
Executive is entitled to payments under Section 5 or 10.

 

(b)      During
the term of this Agreement and for the duration of the Restriction Period thereafter, Executive shall not, except with the prior
written consent of the Company, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit Executive’s name to be used in connection with, any Competing Business. A
“Competing Business” includes any business enterprise which owns or operates, or is publicly seeking to own or operate,
a gaming facility located within 150 miles of any facility in which Company or its affiliates owns or operates or is actively seeking
to own or operate a facility at such time (the “Restricted Area”). Executive acknowledges that any business which offers
gaming, racing, sports wagering or internet real money / social gaming, and which markets to any customers in the Restricted Area,
is a Competing Business.

 

(c)      The
foregoing restrictions shall not be construed to prohibit Executive’s ownership of less than 5% of any class of securities
of any corporation which is engaged in any of the foregoing businesses and has a class of securities registered pursuant to the
Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither Executive nor any
group of persons including Executive in any way, either directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Executive’s
rights as a shareholder, or seeks to do any of the foregoing.

 

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(d)      Executive
acknowledges that the covenants contained in Sections 7 through 9 hereof are reasonable and necessary to protect the legitimate
interests of the Company and its affiliates and, in particular, that the duration and geographic scope of such covenants are reasonable
given the nature of this Agreement and the position that Executive will hold within the Company. Executive further agrees to disclose
the existence and terms of such covenants to any employer that Executive works for during the Restriction Period.

 

9.
       Non-Solicitation. Executive will not, except with the prior written consent
of the Company, during the term of this Agreement and for a period of 18 months after the termination of this Agreement for any
reason (including, but not limited to, termination by Executive or the expiration of the Term of this Agreement), directly or indirectly,
solicit or hire, or encourage the solicitation or hiring of, any person who is, or was within a six month period prior to such
solicitation or hiring, an executive or management (or higher) level employee of the Company or any of its affiliates, for any
position as an employee, independent contractor, consultant or otherwise for the benefit of any entity not affiliated with the
Company.

 

10.
     Change of Control.

 

(a)      Definition.
The term Change of Control (“COC”) shall have the meaning given to such term in the Company’s then current Long
Term Incentive Compensation Plan.

 

(b)      Payments.
In the event of a Change of Control, and either (A) Executive’s employment is terminated without Cause within 12 months after
the effective date of the Change of Control or (B) Executive resigns from employment for Post-COC Good Reason (as such term is
defined in subsection (f) below) within 12 months after the effective date of the Change of Control (the effective date of such
termination or resignation, the “Activation Date”), subject to Section 10(d), Executive shall be entitled to receive,
on the sixtieth day following the employment termination date, a cash payment in an amount equal to the product of two times the
sum of the Executive’s: (i) base salary and (ii) targeted amount of annual cash bonus, at the rate in effect coincident with
the Change of Control or the Activation Date, whichever is greater; provided, however, that if the Change of Control is not a “change
in control event” for purposes of Code Section 409A, then only those amounts that do not constitute non-qualified deferred
compensation under Section 409A shall be paid in a lump sum and the remaining payments shall be paid over the Severance Period
in accordance with the Company’s regular payroll procedures for similarly-situated executives. Such payment shall be in lieu
of any payment to which Executive would be entitled under Section 5(a)-(b), provided that Executive shall also be entitled to receive
the benefits set forth in Section 5(c).

 

(c)      Restrictive
Provisions. As consideration for the payments under Sections 10(b) or 5, Executive agrees not to challenge the enforceability
of any of the restrictions contained in Sections 7, 8 or 9 of this Agreement upon or after the occurrence of a Change of Control.

 

(d)      Release
Agreement and Payment Terms. Executive’s entitlement to any severance pay and benefit entitlements under this Section
10 is conditioned upon Executive’s first entering into a Release as provided by the Company to Executive within 14 days after
the Activation Date and the Release becoming effective no later than the sixtieth day following the Activation Date. Notwithstanding
any other provision hereof, all payments to Executive shall be delayed until after the expiration of any applicable revocation
period with respect to the Release, but in the event the applicable revocation period spans two calendar years, the payments shall
commence in the second calendar year.

 

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(e)      Post-COC
Good Reason. As used herein, the term “Post-COC Good Reason” shall mean the occurrence of any of the following
events that the Company fails to cure within 10 days after receiving written notice thereof from Executive (which notice must be
delivered within 30 days of Executive becoming aware of the applicable event or circumstance): (i) assignment to Executive of any
duties inconsistent in any material respect with Executive’s position (including status, titles and reporting requirements),
authority, duties or responsibilities or inconsistent with Executive’s legal or fiduciary obligations; (ii) any reduction
in Executive’s compensation or substantial reduction in Executive’s benefits taken as a whole; (iii) any travel requirements
materially greater than Executive’s travel requirements prior to the Change of Control; (iv) an office relocation of greater
than 50 miles from Executive’s then current office or (v) any breach of any material term of this Agreement by the Company.

 

11.      Property
Surrender. After the termination of this Agreement for any reason (including, but not limited to, termination by Executive
or the expiration of the Term of this Agreement), Executive shall immediately surrender and deliver to the Company all property
that belongs to the Company, including, but not limited to, any keys, equipment, computers, phones, credit cards, disk drives and
any documents, correspondence and other information, including all Confidential Information, of any type whatsoever, from the Company
or any of its agents, servants, employees, suppliers, and existing or potential customers, that came into Executive’s possession
by any means during the course of employment.

 

12.      Governing
Law. This Agreement shall be governed by and construed in accordance with the internal laws (and not the law of conflicts)
of the Commonwealth of Pennsylvania.

 

13.      Jurisdiction.
The parties hereby irrevocably consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes in
connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be commenced, prosecuted and continued only in the state or federal courts having jurisdiction for matters
arising in Wyomissing, Pennsylvania, which shall be the exclusive and only proper forum for adjudicating such a claim.

 

14.      Notices.
All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith
shall be in writing and shall be deemed to have been given when hand delivered, delivered by guaranteed next-day delivery or shall
be deemed given on the third business day when mailed by registered or certified mail, as follows (provided that notice of change
of address shall be deemed given only when received):

 

If to the Company,
to:

 

Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite
200

Wyomissing, Pennsylvania 19610

Attention: Chief Executive Officer
(with a copy to the General Counsel)

 

If to Executive, to:

 

Executive’s
then current home address as provided by Executive to the Company.

 

or to such other names or addresses as
the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the
manner specified in this Section 14.

 

15.      Contents
of Agreement; Amendment and Assignment. This Agreement sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior or contemporaneous agreements or understandings with respect to thereto.
This Agreement cannot be changed, modified, extended, waived or terminated except upon a written instrument signed by the party
against which it is to be enforced. Executive may not assign any of Executive’s rights or obligations under this Agreement.
The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of its assets
or business by means of liquidation, dissolution, merger, consolidation, transfer of assets, stock transfer or otherwise.

 

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16.      Severability.
If any provision of this Agreement or application thereof to anyone under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement
which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable
such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. In addition, if any
court determines that any part of Sections 7, 8 or 9 hereof is unenforceable because of its duration, geographical scope or otherwise,
such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable.

 

17.      Remedies.
No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law
or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law
or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time
to time and as often as may be deemed expedient or necessary by such party in its sole discretion. Executive acknowledges that
money damages would not be a sufficient remedy for any breach of this Agreement by Executive and that the Company shall be entitled
to specific performance and injunctive relief as remedies for any such breach, in addition to all other remedies available at law
or equity to the Company.

 

18.      Construction.
This Agreement is the result of thoughtful negotiations and reflects an arms’ length bargain between two sophisticated parties,
each with an opportunity to be represented by counsel. The parties agree that, if this Agreement requires interpretation, neither
party should be considered “the drafter” nor be entitled to any presumption that any ambiguities are to be resolved
in such party’s favor.

 

19.      Beneficiaries/References.
Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries
to receive any compensation or benefit payable under this Agreement following Executive’s death or incapacity by giving the
Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate
or other legal representative. Except as provided in this provision or Company affiliates, no third party beneficiaries are intended.

 

20.      Withholding.
All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any
payments under this Agreement all federal, state and local taxes, as the Company is required to withhold pursuant to any law or
governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local
taxes due with respect to any payment received under this Agreement.

 

21.      Regulatory
Compliance. The terms and provisions hereof shall be conditioned on and subject to compliance with all laws, rules, and regulations
of all jurisdictions, or agencies, boards or commissions thereof, having regulatory jurisdiction over the employment or activities
of Executive hereunder.

 

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22.      Section
409A. Any amounts that constitute nonqualified deferred compensation as defined in Section 409A that become payable upon a
termination of employment shall be payable only if such termination of employment constitutes a separation from service (as defined
in Section 409A). The payments due under this Agreement are intended to be exempt from Code Section 409A, but to the extent that
such payments are not exempt, this Agreement is intended to comply with the requirements of Section 409A and shall be construed
accordingly. Any payments or distributions to be made to Executive under this Agreement upon a separation from service (as defined
in Section 409A) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A and
do not satisfy an exemption from the time and form of payment requirements of Section 409A, shall in no event be made or commence
until six months after such separation from service if Executive is a specified employee (as defined in Section 409A). Each payment
of nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section
409A. Any reimbursements made pursuant to this Agreement shall be paid as soon as practicable but no later than 90 days after Executive
submits evidence of such expenses to the Company (which payment date shall in no event be later than the last day of the calendar
year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year
shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation
or exchange for another benefit. Notwithstanding anything herein to the contrary, the Company shall not have any liability to the
Executive or to any other person if the payments and benefits provided in this Agreement that are intended to be exempt from or
compliant with Code Section 409A are not so exempt or compliant.

 

23.      Defend
Trade Secrets Act.  Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have
criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that  (A) is
made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and
(ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, if Executive files a lawsuit
for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s
attorney, and may use the trade secret information in the court proceeding, if Executive (X) files any document containing the
trade secret under seal, and (Y) does not disclose the trade secret, except pursuant to court order.

 

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24.      Clawback
Policy. Executive acknowledges that Executive has received the Company’s Clawback Policy and agrees to be bound by it.

 

IN WITNESS WHEREOF,
the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

  

	 	PENN
                                         NATIONAL GAMING, INC.
	 	 
	 	 	 
	 	By:	/s/
    Timothy J. Wilmott
	 	Name:	Timothy
    J. Wilmott
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	/s/
                                         William J. Fair 
	 	William
                                         J. Fair 

 

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Exhibit A

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This is a Separation
Agreement and General Release (hereinafter referred to as the "Agreement") between _______________ (hereinafter
referred to as the "Employee") and _____________ and its affiliates (hereinafter referred to as the "Employer").
In consideration of the mutual promises and commitments made in this Agreement, and intending to be legally bound, Employee, on
the one hand, and the Employer on the other hand, agree to the terms set forth in this Agreement.

 

1.       Employee
is party to an Executive Agreement dated [DATE] (the "Executive Agreement"). Employer and Employee hereby acknowledge
that Employee’s employment was terminated on [DATE].

 

2.      (a)       Following the execution
of this Agreement, Employee will be entitled to the post-employment benefits and subject to the post-employment responsibilities
set forth in Employee’s Executive Agreement.

 

(b)       If
Employee accepts any employment with the Employer, or an affiliate or related entity of the Employer, and becomes reemployed during
the Severance Period (as defined in the Executive Agreement), Employee acknowledges and agrees that Employee will forfeit all future
severance payments from the date on which reemployment commences.

 

3.      (a)       When used in this Agreement,
the word "Releasees" means the Employer and all or any of its past and present parent, subsidiary and affiliated corporations,
members, companies, partnerships, joint ventures and other entities and their groups, divisions, departments and units, and their
past and present directors, trustees, officers, managers, partners, supervisors, employees, attorneys, agents and consultants,
and their predecessors, successors and assigns.

 

(b)       When
used in this Agreement, the word "Claims" means each and every claim, complaint, cause of action, and grievance, whether
known or unknown and whether fixed or contingent, and each and every promise, assurance, contract, representation, guarantee, warranty,
right and commitment of any kind, whether known or unknown and whether fixed or contingent.

 

4.       In
consideration of the promises of the Employer set forth in this Agreement and the Executive Agreement, and intending to be legally
bound, Employee hereby irrevocably remises, releases and forever discharges all Releasees of and from any and all Claims that Employee
(on behalf of either Employee or any other person or persons) ever had or now has against any and all of the Releasees, or which
Employee (or Employee’s heirs, executors, administrators or assigns or any of them) hereafter can, shall or may have against
any and all of the Releasees, for or by reason of any cause, matter, thing, occurrence or event whatsoever through the effective
date of this Agreement. Employee acknowledges and agrees that the Claims released in this paragraph include, but are not limited
to, (a) any and all Claims based on any law, statute or constitution or based on contract or in tort on common law, and (b) any
and all Claims based on or arising under any civil rights laws, such as any [STATE] employment laws, or Title VII of the Civil
Rights Act of 1964 (42 U.S.C. § 2000e et seq.), or the Federal Age Discrimination in Employment Act (29 U.S.C. §
621 et seq.) (hereinafter referred to as the "ADEA"), and (c) any and all Claims under any grievance or complaint
procedure of any kind, and (d) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment
with, the termination of Employee’s employment with, Employee’s performance of any services in any capacity for, or
any other arrangement or transaction with, each or any of the Releasees. Employee also understands, that by signing this Agreement,
Employee is waiving all Claims against any and all of the Releasees released by this Agreement; provided, however, that
as set forth in section 7 (f) (1) (c) of the ADEA, as added by the Older Workers Benefit Protection Act of 1990, nothing in this
Agreement constitutes or shall (i) be construed to constitute a waiver by Employee of any rights or claims that may arise after
this Agreement is executed by Employee, or (ii) impair Employee’s right to file a charge with the U.S. Securities and Exchange
Commission (“SEC”), the U.S. Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations
Board (“NLRB”) or any state agency or to participate in an investigation or proceeding conducted by the SEC, EEOC,
NLRB or any state agency or as otherwise required by law. Notwithstanding the foregoing, Employee agrees to waive Employee’s
right to recover individual relief in any charge, complaint, or lawsuit filed by Employee or anyone on Employee’s behalf,
except that this does not waive the Employee’s ability to obtain monetary awards from the SEC’s whistleblower program.

 

    11

     

    

 

5.       
Employee further certifies that Employee is not aware of any actual or attempted regulatory, SEC, EEOC or other legal violations
by Employer and that Employee’s separation is not a result of retaliation based on any legal rights or opposition to an illegal
practice.

 

6.       Employee
covenants and agrees not to sue the Releasees and each or any of them for any Claims released by this Agreement and to waive any
recovery related to any Claims covered by this Agreement.

 

7.       Pursuant
to the Defend Trade Secrets Act of 2016, Employee acknowledges that Employee will not have criminal or civil liability under any
Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State,
or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or
investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding,
if such filing is made under seal. In addition, if Employee files a lawsuit for retaliation by the Company for reporting a suspected
violation of law, Employee may disclose the trade secret to Employee’s attorney, and may use the trade secret information
in the court proceeding, if Employee (X) files any document containing the trade secret under seal, and (Y) does not disclose the
trade secret, except pursuant to court order.

 

8.       Employee
agrees to provide reasonable transition assistance to Employer (including without limitation assistance on regulatory matters,
operational matters and in connection with litigation) for a period of one year from the execution of this Agreement at no additional
cost; provided, such assistance shall not unreasonably interfere with Employee’s pursuit of gainful employment or result
in Employee not having a separation from service (as defined in Section 409A of the Internal Revenue Code of 1986). Any assistance
beyond this period will be provided at a mutually agreed cost.

 

9.       Employee
agrees that, except as specifically provided in this Agreement, there is no compensation, benefits, or other payments due or owed
to Employee by each or any of the Releasees, including, without limitation, the Employer, and there are no payments due or owed
to Employee in connection with Employee’s employment by or the termination of Employee’s employment with each or any
of the Releasees, including without limitation, any interest in unvested options, SARs, restricted stock or other equity issued
to, expected by or contemplated by any of the Releasees (which interest is specifically released herein) or any other benefits
(including, without limitation, any other severance benefits). For clarity, Employee acknowledges that upon Employee’s separation
date, Employee has no further rights under any bonus arrangement or option plan of Employer. Employee further acknowledges that
Employee has not experienced or reported any work-related injury or illness.

 

10.       Except
where the Employer has disclosed or is required to disclose the terms of this Agreement pursuant to applicable federal or state
law, rule or regulatory practice, Employer and Employee agree that the terms of this Agreement are confidential. Employee will
not disclose or publicize the terms of this Agreement and the amounts paid or agreed to be paid pursuant to this Agreement to any
person or entity, except to Employee’s spouse, Employee’s attorney, Employee’s accountant, and to a government
agency for the purpose of payment or collection of taxes or application for unemployment compensation benefits. Employee agrees
that Employee’s disclosure of the terms of this Agreement to Employee’s spouse, Employee’s attorney and Employee’s
accountant shall be conditioned upon Employee obtaining agreement from them, for the benefit of the Employer, not to disclose or
publicize to any person or entity the terms of this Agreement and the amounts paid or agreed to be paid under this Agreement. Employee
understands that, notwithstanding any provisions of this Agreement, Employee is not prohibited or in any way restricted from reporting
possible violations of law to a government agency or entity, and Employee is not required to inform Employer if Employee makes
such reports.

 

    12

     

    

 

11.       Employee
agrees not to make any false, misleading, defamatory or disparaging statements, including in blogs, posts on Facebook, twitter,
other forms of social media or any such similar communications, about Employer (including without limitation Employer’s products,
services, partners, investors or personnel) and to refrain from taking any action designed to harm the public perception of the
Employer or any of the Releasees. Employee further agrees that Employee has disclosed to Employer all information, if any, in Employee’s
possession, custody or control related to any legal, compliance or regulatory obligations of Employer and any failures to meet
such obligations.

 

12.       The
terms of this Agreement are not to be considered as an admission on behalf of either party. Neither this Agreement nor its terms
shall be admissible as evidence of any liability or wrongdoing by each or any of the Releasees in any judicial, administrative
or other proceeding now pending or hereafter instituted by any person or entity. The Employer is entering into this Agreement solely
for the purpose of effectuating a mutually satisfactory separation of Employee's employment.

 

13.       Sections
12 and 13 (Governing Law, Jurisdiction) of the Executive Agreement shall also apply to this Agreement.

 

14.       This
Agreement and the Executive Agreement (including, but not limited to Sections 7 through 9) constitute a complete and final agreement
between the parties and supersede and replace all prior or contemporaneous agreements, offer letters, severance policies and plans,
negotiations, or discussions relating to the subject matter of this Agreement and no other agreement shall be binding upon each
or any of the Releasees, including, but not limited to, any agreement made hereafter, unless in writing and signed by an officer
of the Employer, and only such agreement shall be binding against the Employer.

 

15.       Employee
is advised, and acknowledges that Employee has been advised, to consult with an attorney before signing this Agreement.

 

16.       Employee
acknowledges that Employee is signing this Agreement voluntarily, with full knowledge of the nature and consequences of its terms.

 

17.       All
executed copies of this Agreement and photocopies thereof shall have the same force and effect and shall be as legally binding
and enforceable as the original.

 

18.       Employee
acknowledges that Employee has been given up to twenty-one (21) days within which to consider this Agreement before signing it.
Subject to paragraph 19 below, this Agreement will become effective on the date of Employee's signature hereof.

 

    13

     

    

 

19.       For
a period of seven (7) calendar days following Employee’s signature of this Agreement, Employee may revoke the Agreement,
and the Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired. Employee may
revoke this Agreement at any time within that seven (7) day period, by sending a written notice of revocation to the Human Resources
Department of Employer. Such written notice must be actually received by the Employer within that seven (7) day period in order
to be valid. If a valid revocation is received within that seven (7) day period, this Agreement shall be null and void for all
purposes and no severance shall be paid. If Employee does not revoke this agreement, payment of the severance pay amount set forth
in the Employee’s Executive Agreement will be paid in the manner and at the time(s) described in the Executive Agreement.

 

IN WITNESS WHEREOF,
the Parties have read, understand and do voluntarily execute this Separation Agreement and General Release which consists of [NUMBER]
pages.

 

	EMPLOYER	EMPLOYEE
	 	 
	By:	         	 	        
	 	 
	Date:	 	 	Date:	       

 

    14

     

    

 

Exhibit B

 

	Performance Share Plan	Tranche	Type of 

Award	Performance

 Period	Vesting Date	Number of

 Performance

 Shares Vesting

 at target
	2018 Performance Share Plan	3rd	Performance Shares	1/1/2020 to 12/31/2020	3/31/2020	6,417
	2019 Performance Share Plan	2nd	Performance Shares	1/1/2020 to 12/31/2020	3/31/2020	7,984
	2019 Performance Share Plan	3rd	Performance Shares	1/1/2021 to 12/31/2021	3/31/2020	7,984
	2019 Performance Share Plan	2nd	Phantom Stock Units	1/1/2020 to 12/31/2020	3/31/2020	7,984
	2019 Performance Share Plan	3rd	Phantom Stock Units	1/1/2021 to 12/31/2021	3/31/2020	7,984

 

    15Exhibit 4.1

 

[FORM
OF WARRANT]

 

KUSHCO
HOLDINGS, INC.

 

Warrant
To Purchase Common Stock

 

Warrant No.:

 

Date of Issuance: September __, 2019 (“Issuance
Date”)

 

KushCo Holdings, Inc.,
a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, _________________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common
Stock (including any Warrants to purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined
below), _________________ (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined
below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”). Except
as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 20. This Warrant
is one of the Warrants to Purchase Common Stock (the “Registered Warrants”) issued pursuant to (i) that certain
Securities Purchase Agreement, dated as of September 26, 2019 (the “Subscription Date”), by and between the
Company and the investor(s) referred to therein, as amended from time to time (the “Securities Purchase Agreement”)
and (ii) the Company’s Registration Statement on Form S-3 (File number 333-231019) (the “Registration Statement”).

 

1.           EXERCISE
OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”), in
whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following the delivery of the Exercise Notice, the Holder shall deliver payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised
(the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did
not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)).
The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder nor shall any
ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice
be required. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same
effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have
the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms
hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice,
the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice,
in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer
Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Exercise Notice in
accordance with the terms herein. So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then
on or prior to the second (2nd) Trading Day following the date on which the Exercise Notice has been delivered to the Company,
or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st)
Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st)
Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (the “Share
Delivery Deadline”), the Company shall (i) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate
number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal at Custodian system, or (ii) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight
courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise. The Company shall be
responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares
via DTC, if any, including without limitation for same day processing. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company
by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2)
Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs
and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. From the Issuance Date through and including the Expiration Date,
the Company shall maintain a transfer agent that participates in the DTC’s Fast Automated Securities Transfer Program. The
Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof
are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required
to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or
notice of a Cashless Exercise) with respect to such exercise.

     

     

    

 

(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $2.25, 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 the Registration Statement (or prospectus contained therein) covering the issuance of the Warrant Shares that are
the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance of such
Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Delivery Failure”), and if on or after such Share
Delivery Deadline the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of all or any portion of the number of shares of Common Stock issuable upon such exercise that the Holder
is entitled to receive from the Company (a “Buy-In”), then, in addition to all other remedies available to the
Holder, the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion,
either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other
Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation
to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder
or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon
the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to
which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B) the lowest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice
and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”). Nothing
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of
this Warrant as required pursuant to the terms hereof. Additionally, if the Company fails for any reason to deliver to the Holder
the Warrant Shares subject to an Exercise Notice by the Share Delivery Deadline, the Company shall pay to the Holder, in cash,
as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the Weighted Average
Price of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share Delivery Deadline
until such Warrant Shares are delivered or Holder rescinds such exercise. In addition to the foregoing rights, (i) if the Company
fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery
Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date
of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the
issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior
to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant
Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee’s balance account with DTC
through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to
(x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.

 

     

     

    

 

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

 

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

D

 

For purposes of the foregoing
formula:

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

 

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

 

     

     

    

 

(g)          Reservation
of Shares.

 

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

 

(ii)         Insufficient
Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the Registered
Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company
shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for all the Registered Warrants then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting
of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is
able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C.

 

     

     

    

 

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

 

(a)          Adjustment
Upon Subdivision or Combination of Common Stock. The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 2. If the Company, at any time on or after
the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise
Price shall be adjusted appropriately to reflect such event.

 

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

 

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

 

     

     

    

 

4.           PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

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

 

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

 

     

     

    

 

5.           NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, as amended,
bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or
sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (b) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock upon the exercise of this Warrant and (c) shall, so long as any of the Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise). Notwithstanding anything
herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise
this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use
its reasonable best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals
as necessary to permit such exercise into shares of Common Stock

 

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

 

7.           REISSUANCE
OF WARRANTS.

 

(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and,
if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

     

     

    

 

(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for
fractional shares of Common Stock shall be given.

 

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

 

8.           NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 3.3 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with
the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price
and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and
(ii) at least ten Trading Days prior to the date on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that
such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It
is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive
and may not be disputed or challenged by the Company.

 

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

 

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

 

     

     

    

 

11.         GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of
New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The
Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to the Company at the address set forth on the signature page to the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court
ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

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

 

13.         DISPUTE
RESOLUTION.

 

(a)          Submission
to Dispute Resolution.

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

     

     

    

 

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

 

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

  

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

 

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

 

(i)          if
to the Company, to:

 

KushCo Holdings, Inc.

6261 Katella Avenue, Suite 250

Cypress, CA 90630

Attention: Chief Financial Officer

Email: chris.tedford@kushco.com

 

With a copy to:

 

Reed Smith LLP

599 Lexington Avenue, 26th
Floor

New York, NY 10022

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

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

 

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

 

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

 

     

     

    

 

20.         CERTAIN
DEFINITIONS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

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

 

(r)          “Principal
Market” means the OTCQX.

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

[signature page follows]

  

    	 	18	 

     

    

 

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

 

	 	KUSHCO HOLDINGS, Inc. 
	 	 
	 	By:	 
	 	 	Name: Nicholas Kovacevich
	 	 	Title:   President and Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

KUSHCO HOLDINGS, INC.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

	 	 
	Issue to:	 
	 	
         

         

	 	
         

         

 

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

 

	DTC Participant:	 
	 	 
	DTC Number:	 
	 	 
	Account Number:	 

 

	Date:	 	 	 	,	 	 

 

	 	 
	Name of Registered Holder	 

 

     

     

    

 

	By:	 	 
	 	Name: 	 
	 	Title:	 

 

	 	Tax ID:	 	 

 

	 	Facsimile:	 	 

 

	 	E-mail Address:	 	 

 

     

     

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

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

 

	 	KushCO HOLDINGS, Inc.
	 	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title:

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