Exhibit 10.54


 


 


 






    	 



    	 



    

 





 


AMARANTUS
BIOSCIENCE HOLDINGS, INC.


 


AMENDED AND RESTATED


 


CERTIFICATE OF DESIGNATION OF PREFERENCES,



RIGHTS AND LIMITATIONS


OF


SERIES E
12% CONVERTIBLE PREFERRED STOCK


 


(PURSUANT
TO NRS 78.1955)


 


The undersigned, Gerald
E. Commissiong and Marc E. Faerber, do hereby certify that:


 


1. They are the Chief
Executive Officer and Secretary, respectively, of Amarantus BioScience Holdings, Inc., a Nevada corporation (the “Corporation”).


 


2. The Corporation
is authorized to issue 10,000,000 shares of preferred stock, of which 250,000 are designated Series A Convertible Preferred Stock,
2,500,000 are designated Series B Convertible Preferred Stock, 750,000 are designated Series C Convertible Preferred Stock and
1,300 are designated Series D 8% Convertible Preferred Stock.


 


3. The following resolutions
were duly adopted by the board of directors of the Corporation (the “Board of Directors”):


 


WHEREAS, the Certificate
of Incorporation of the Corporation, as amended, provides for a class of its authorized stock known as preferred stock, consisting
of 10,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;


 


WHEREAS, the Board
of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption
and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and
the designation thereof, of any of them; and


 


WHEREAS, it is the
desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other
matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase Agreement,
up to 13,335 shares of the preferred stock which the Corporation has the authority to issue, as follows:


 


NOW, THEREFORE, BE
IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange
of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters
relating to such series of preferred stock as follows:


 




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TERMS OF PREFERRED STOCK


 


Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.


 


“Alternate
Consideration” shall have the meaning set forth in Section 7(e).


 


“Bankruptcy
Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined
in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary
thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Corporation or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for
it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e)
the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Corporation
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts, or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its
consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.


 


“Base
Conversion Price” shall have the meaning set forth in Section 7(b).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.


 


“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).


 






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“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 40% of the voting securities of the Corporation (other than by means of conversion of Preferred Stock), (b) the
Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and,
after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than
60% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells or
transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior to
such transaction own less than 60% of the aggregate voting power of the acquiring entity immediately after the transaction, (d)
a replacement at one time or within a one year period of more than one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals
who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority
of the members of the Board of Directors who are members on the Original Issue Date), or (e) the execution by the Corporation of
an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses
(a) through (d) above.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the Corporation’s common stock, par value $0.001 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.


 


“Conversion
Amount” means the sum of the Stated Value at issue.


 


“Conversion
Date” shall have the meaning set forth in Section 6(a).


 


“Conversion
Price” shall have the meaning set forth in Section 6(b).


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.


 


“Dilutive
Issuance” shall have the meaning set forth in Section 7(b).


 






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“Dilutive
Issuance Notice” shall have the meaning set forth in Section 7(b).


 


“Dividend
Conversion Rate” means the lesser of (a) the Conversion Price or (b) 95% of the lowest VWAPs for the 15 consecutive Trading
Days ending on the Trading Day that is immediately prior to the applicable Dividend Payment Date.


 


“Dividend
Conversion Shares” shall have the meaning set forth in Section 3(a).


 


“Dividend
Notice Period” shall have the meaning set forth in Section 3(a).


 


“Dividend
Payment Date” shall have the meaning set forth in Section 3(a).


 


“Dividend
Share Amount” shall have the meaning set forth in Section 3(a).


 





“Equity
Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) the Corporation shall have paid all liquidated damages and other amounts owing to the applicable Holder
in respect of the Preferred Stock, (c) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares
issuable in lieu of cash payments of dividends) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to the Corporation as set forth in a written opinion letter
to such effect, addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a Trading
Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market
(and the Corporation believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common
Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Triggering
Event and no existing event which, with the passage of time or the giving of notice, would constitute a Triggering Event, (g) the
issuance of the shares in question to the applicable Holder would not violate the limitations set forth in Section 6(d) herein,
(h) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that
has not been consummated, (i) the applicable Holder is not in possession of any information provided by the Corporation that constitutes,
or may constitute, material non-public information, (j) for each Trading Day in a period of 20 consecutive Trading Days prior to
the applicable date in question, the daily trading volume for the Common Stock on the principal Trading Market exceeds $100,000
per Trading Day, and (k) the Company’s Common Stock must be DTC and DWAC eligible.


  


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


 






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“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Corporation
pursuant to the Company’s existing stock option plan or any stock or option plan duly adopted by a majority of the non-employee
members of the Board of Directors of the Corporation or a majority of the members of a committee of non-employee directors established
for such purpose; provided, however, such issuances to consultants under this clause (a) shall not exceed five (5%)
percent of the issued and outstanding shares of the Corporation in any fiscal quarter, (b) securities upon the exercise or exchange
of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into
shares of Common Stock, issued and outstanding on the date of this Agreement, or pursuant to other agreements of the Company existing
prior to the date hereof and listed on Schedule 3.1(g) of the Purchase Agreement, provided that such securities and/or agreements
have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Corporation, provided that any such issuance shall only be to a Person
(or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits in addition
to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing in securities.


 


“Fundamental
Transaction” shall have the meaning set forth in Section 7(e).


 


“GAAP”
means United States generally accepted accounting principles.


 


“Holder”
shall have the meaning given such term in Section 2.


 


“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Corporation’s balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business, and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP.


 


“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities
which are explicitly senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.


 


“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 






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“Liquidation”
shall have the meaning set forth in Section 5.


 


“Mandatory Conversion Price”
shall have the meaning set forth in Section 6(e).


 


“New
York Courts” shall have the meaning set forth in Section 11(d).


 


“Notice
of Conversion” shall have the meaning set forth in Section 6(a).


 


“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Preferred
Stock” shall have the meaning set forth in Section 2.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated on or about the Original Issue Date, among the Corporation
and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.


 


“Qualified
Public Offering” means a public offering of the Company’s securities resulting in gross proceeds of at least $10,000,000
and the Company’s common stock being listed on a national securities exchange.


 


“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Securities”
means the Preferred Stock and the Conversion Shares.


 


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


 


“Share
Delivery Date” shall have the meaning set forth in Section 6(c).


 






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“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.


 


“Subscription
Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to
the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to
the heading “Subscription Amount,” in United States dollars and in immediately available funds.


 


“Subsidiary”
means any subsidiary of the Corporation as set forth on Schedule 3.1(a) of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.


 


“Successor
Entity” shall have the meaning set forth in Section 7(e).


 


“Trading
Day” means a day on which the principal Trading Market is open for business.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, the Transfer Agent Instruction Letter, all
exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated
pursuant to the Purchase Agreement.


 


“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Corporation with a mailing address of 18 Lafayette
Place, Woodmere, New York, 11598 and a facsimile number of (646) 536-3179, and any successor transfer agent of the Corporation.


 


“Transfer
Agent Instruction Letter” shall have the meaning ascribed to such term in the Purchase Agreement.


 


“Triggering
Event” means, wherever used herein any of the following events (whatever the reason for such event and whether such event
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or
any order, rule or regulation of any administrative or governmental body):


 


                                                             
i.                             
the Corporation shall fail to deliver certificates representing Conversion Shares issuable upon a conversion hereunder that
comply with the provisions hereof prior to the fifth Trading Day after such shares are required to be delivered hereunder, or the
Corporation shall provide written notice to any Holder, including by way of public announcement, at any time, of its intention
not to comply with requests for conversion of any shares of Preferred Stock in accordance with the terms hereof;


 






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ii.                             
the Corporation shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In within three calendar
days after notice therefor is delivered hereunder;


 


                                                         
iii.                             
the Corporation shall fail to have available a sufficient number of authorized and unreserved shares of Common Stock to
issue to such Holder upon a conversion hereunder;


 


                                                         
iv.                             
unless specifically addressed elsewhere in this Certificate of Designation as a Triggering Event, the Corporation shall
fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of the Transaction
Documents, and such failure or breach shall not, if subject to the possibility of a cure by the Corporation, have been cured within
30 calendar days after the date on which written notice of such failure or breach shall have been delivered;


 


                                                           
v.                             
the Corporation shall redeem more than a de minimis number of Junior Securities other than as to repurchases
of Common Stock or Common Stock Equivalents from departing officers and directors, provided that, while any of the Preferred Stock
remains outstanding, such repurchases shall not exceed an aggregate of $100,000 from all officers and directors;


 


                                                         
vi.                             
the Corporation shall be party to a Change of Control Transaction;


 


                                                       
vii.                             
there shall have occurred a Bankruptcy Event;


 


                                                     
viii.                             
the Common Stock shall fail to be listed or quoted for trading on a Trading Market for more than five Trading Days, which
need not be consecutive Trading Days or the transfer of shares of Common Stock through the Depository Trust Company System is no
longer available or “chilled”; or


 


                                                         
ix.                             
any monetary judgment, writ or similar final process shall be entered or filed against the Corporation, any subsidiary or
any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall
remain unvacated, unbonded or unstayed for a period of 45 calendar days.


 






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“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b) of the Purchase Agreement.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board,
(c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the fees and
expenses of which shall be paid by the Corporation.


 


Section
2. Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series E 12% Convertible
Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 13,335 (which
shall not be subject to increase without the written consent of all of the holders of the Preferred Stock (each, a “Holder”
and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.001 per share
and a stated value equal to $1,000, subject to increase set forth in Section 3 below (the “Stated Value”).


 


Section
3. Dividends.


 


a)                 
Dividends in Cash or in Kind. Holders shall be entitled to receive, and the Corporation shall pay, cumulative dividends
at the rate per share (as a percentage of the Stated Value per share) of 12% per annum payable quarterly on January 1, April 1,
July 1 and October 1, beginning on the first such date after the Original Issue Date and on each Conversion Date (with respect
only to Preferred Stock being converted) (each such date, a “Dividend Payment Date”) (if any Dividend Payment
Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day) in cash, or at the Corporation’s
option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock as set forth in this Section 3(a),
or a combination thereof (the dollar amount to be paid in shares of Common Stock, the “Dividend Share Amount”).
The form of dividend payments to each Holder shall be determined in the following order of priority: (i) if funds are legally available
for the payment of dividends and the Equity Conditions have not been met during the 20 consecutive Trading Days immediately prior
to the applicable Dividend Payment Date (the “Dividend Notice Period”), in cash only, (ii) if funds are legally
available for the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period, at the sole election
of the Corporation, in cash or shares of Common Stock which shall be valued at the Dividend Conversion Rate, (iii) if funds are
not legally available for the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period, in
shares of Common Stock which shall be valued at the Dividend Conversion Rate, and (iv) if funds are not legally available for the
payment of dividends and the Equity Conditions have not been met during the Dividend Notice Period, then, at the election of such
Holder, such dividends shall accrue to the next Dividend Payment Date or shall be accreted to, and increase, the outstanding Stated
Value. In addition, as a condition to paying dividends in shares of Common Stock, as to such Dividend Payment Date, prior to such
Dividend Notice Period (but not more than five (5) Trading Days prior to the commencement of such Dividend Notice Period), the
Corporation shall have delivered to each Holder’s account with The Depository Trust Company a number of shares of Common
Stock to be applied against such Dividend Share Amount equal to the quotient of (x) the applicable Dividend Share Amount divided
by (y) the Dividend Conversion Rate, assuming for such purposes that the Dividend Payment Date is the Trading Day immediately prior
to the commencement of the Dividend Notice Period (the “Dividend Conversion Shares”). The Holders shall have
the same rights and remedies with respect to the delivery of any such shares as if such shares were being issued pursuant to Section
6 herein.


 






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b)                 
Corporation’s Ability to Pay Dividends in Cash or Kind. The Corporation shall promptly notify the Holders at
any time the Corporation shall become able or unable, as the case may be, to legally pay cash dividends. If at any time the Corporation
has the right to pay dividends in cash or shares of Common Stock, the Corporation must provide the Holders with at least 20 Trading
Days’ notice of its election to pay a regularly scheduled dividend in shares of Common Stock (the Corporation may indicate
in such notice that the election contained in such notice shall continue for later periods until revised by a subsequent notice).
The aggregate number of shares of Common Stock otherwise issuable to a Holder on a Dividend Payment Date shall be reduced by the
number of shares of Common Stock previously issued to such Holder in connection with such Dividend Payment Date. If any Dividend
Conversion Shares are issued to a Holder in connection with a Dividend Payment Date and are not applied against a Dividend Share
Amount, then such Holder shall promptly return such excess shares to the Corporation.


 


c)                 
Dividend Calculations. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting
of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue
from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends. Payment of dividends in shares of Common Stock shall otherwise occur pursuant to
Section 6(c)(i) herein and, solely for purposes of the payment of dividends in shares, the Dividend Payment Date shall be deemed
the Conversion Date. Dividends shall cease to accrue with respect to any Preferred Stock converted, provided that, the Corporation
actually delivers the Conversion Shares within the time period required by Section 6(c)(i) herein. Except as otherwise provided
herein, if at any time the Corporation pays dividends partially in cash and partially in shares, then such payment shall be distributed
ratably among the Holders based upon the number of shares of Preferred Stock held by each Holder on such Dividend Payment Date.


 






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d)                
Late Fees. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within three Trading
Days following a Dividend Payment Date shall continue to accrue and shall entail a late fee, which must be paid in cash, at the
rate of 112% per annum or the lesser rate permitted by applicable law which shall accrue daily from the Dividend Payment Date through
and including the date of actual payment in full.


 


e)                 
Other Securities. So long as any Preferred Stock shall remain outstanding, neither the Corporation nor any Subsidiary
thereof shall redeem, purchase or otherwise acquire directly or indirectly any Junior Securities. So long as any Preferred Stock
shall remain outstanding, neither the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend
or make any distribution upon (other than a dividend or distribution described in Section 6 or dividends due and paid in the ordinary
course on preferred stock of the Corporation at such times when the Corporation is in compliance with its payment and other obligations
hereunder), nor shall any distribution be made in respect of, any Junior Securities as long as any dividends due on the Preferred
Stock remain unpaid, nor shall any monies be set aside for or applied to the purchase or redemption (through a sinking fund or
otherwise) of any Junior Securities or shares pari passu with the Preferred Stock.


 


f)                  
Stock Dividend. If the Corporation, at any time while this Preferred Stock is outstanding pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common
Stock Equivalents of the Corporation (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), the Corporation shall pay such dividend or
make such distribution to the holders of the Preferred Stock in such amounts as each share of Preferred Stock would have been entitled
to receive if such share of Preferred Stock was converted into shares of Common Stock at the time of payment of such stock dividend
or distribution.


 


g)                 
Make-Whole Amount. Upon conversion of the Series E Preferred Stock, the Holder shall receive the Dividend Share Amount
that, but for the applicable conversion, would have accrued and become payable pursuant to this Section 3 with respect to the Series
E Preferred Stock being so converted, for the period commencing on the date of the issuance of the Series E Preferred Stock and
ending on thethree year (one year in the event of a Qualified Public Offering) anniversary of such issuance, less any dividends
previously paid by the Corporation on such shares of Series E Preferred Stock.


 






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Section 4. Voting
Rights. Except as otherwise expressly required by law, each holder of Series E Preferred Stock shall be entitled to vote on
all matters submitted to shareholders of the Corporation and shall be entitled to such number of votes that is equal to the number
of Common Stock that each share of Series E Preferred Stock is convertible into, pursuant to Section 6, herein. Except as otherwise
required by law, the holders of shares of Series E Preferred Stock shall vote together with the holders of Common Stock on all
matters and shall not vote as a separate class.


 


Section 5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the
Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon
under this Certificate of Designation, for each share of Preferred Stock before any distribution or payment shall be made to the
holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then
the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective
amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change
of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail written notice of any such Liquidation, not
less than 45 days prior to the payment date stated therein, to each Holder.


 


Section 6. Conversion.


 


a)                 
Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to
time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject
to the limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion
Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex
A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred
Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of
Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date
may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Corporation (such date,
the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall
be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form
be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest
or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s)
representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are
so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following
the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof
shall be canceled and shall not be reissued.


 






    	12



    	 



    

 


b)                 
Conversion Price. The conversion price for the Preferred Stock shall equal $0.05, subject to adjustment herein commencing
on October 31, 2015 (the “Conversion Price”); provided, however, in the event that during
any period that Preferred Stock is outstanding, a Holder delivers a Notice of Conversion within 5 Trading Days following a period
that the average of 3 consecutive VWAPs is less than $0.06 (subject to adjustment for reverse and forward stock splits and the
like)(“Trigger Period”), the Conversion Price shall be thereafter reduced, and only reduced, to equal the lesser
of the then Conversion Price (as previously adjusted pursuant to this provision) and 65% of the average of the lowest 2 consecutive
VWAPs out of the prior 10 consecutive Trading Days prior to the delivery of such Conversion Notice.  Such adjustment may occur
on multiple occasions during any Trigger Period and shall permanently reduce, and never increase, the Conversion Price. Notwithstanding
the foregoing if the common stock of the Company is listed on NASDAQ and the price is $0.12 at the time of listing and for 10 consecutive
Trading Days after such listing (subject to adjustment for reverse and forward stock splits and the like), then the adjustment
of the Conversion Price above shall be 80% instead of 65% of the average of the lowest 2 consecutive VWAPs out of the prior 10
consecutive Trading Days.


 


		c)	Mechanics of Conversion



 


                                                                   
i.                       
Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) a certificate
or certificates representing the Conversion Shares which, on or after the six month anniversary of the Original Issue Date, shall
be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement)
representing the number of Conversion Shares being acquired upon the conversion of the Preferred Stock (including, if the Corporation
has given continuous notice pursuant to Section 3(b) for payment of dividends in shares of Common Stock at least 20 Trading Days
prior to the date on which the Notice of Conversion is delivered to the Corporation, shares of Common Stock representing the payment
of accrued dividends otherwise determined pursuant to Section 3(a) but assuming that the Dividend Notice Period is the 20 Trading
Days period immediately prior to the date on which the Notice of Conversion is delivered to the Corporation and excluding for such
issuance the condition that the Corporation deliver the Dividend Share Amount as to such dividend payment prior to the commencement
of the Dividend Notice Period), and (B) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected
or is required to pay accrued dividends in cash). On or after the six month anniversary of the Original Issue Date, the Corporation
shall use its best efforts to deliver any certificate or certificates required to be delivered by the Corporation under this Section
6 electronically through the Depository Trust Company or another established clearing corporation performing similar functions.


 






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ii.                       
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are
not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written
notice to the Corporation at any time on or before its receipt of such certificate or certificates, to rescind such Conversion,
in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation
and the Holder shall promptly return to the Corporation the Common Stock certificates issued to such Holder pursuant to the rescinded
Conversion Notice.


 


                                                               
iii.                       
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion
Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any
action or inaction by a 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,
or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such
Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may
not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the Corporation
posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock which is subject
to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and
the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the
Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the Corporation fails
to deliver to a Holder such certificate or certificates pursuant to Section 6(c)(i) on the second Trading Day after the Share Delivery
Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty,
for each $5,000 of Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing to $100 per Trading Day on
the third Trading Day and increasing to $200 per Trading Day on the sixth Trading Day after such damages begin to accrue) for each
Trading Day after such second Trading Day after the Share Delivery Date until such certificates are delivered or Holder rescinds
such conversion. .


 






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iv.                       
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights
available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable certificate or certificates
by the Share Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage
firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to
receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A)
pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which
(x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y)
the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion
at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including
any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Preferred Stock
equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion shall be deemed rescinded)
or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied
with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to
which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder
$1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the
Buy-In and, upon request of the Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.


 


                                                                 
v.                       
Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred
Stock and payment of dividends on the Preferred Stock, each as herein provided, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement)
be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares
of Preferred Stock and payment of dividends hereunder. The Corporation covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 






    	15



    	 



    

 


                                                               
vi.                       
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion
of the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Conversion Price or round up to the next whole share.


 


                                                             
vii.                       
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Preferred
Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that
of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such certificates
unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer
Agent fees required for same-day processing of any Notice of Conversion.


 





d)                
Beneficial Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder
shall not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion
set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting
as a group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Preferred
Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are
issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or
any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the
Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by
such Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible
(in relation to other securities owned by such Holder together with any Affiliates) and of how many shares of Preferred Stock are
convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be
such Holder’s determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned
by such Holder together with any Affiliates) and how many shares of the Preferred Stock are convertible, in each case subject to
the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the
Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth
in this paragraph and the Corporation shall have no obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the
following: (i) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may be, (ii)
a more recent public announcement by the Corporation or (iii) a more recent written notice by the Corporation or the Transfer Agent
setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Corporation
shall within two Trading Days confirm orally and in writing to such 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 Corporation, including the Preferred Stock, by such Holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of
the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon not less than 61 days’ prior notice
to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to
its Preferred Stock provided that the Beneficial Ownership Limitation in no event exceeds 19.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Preferred
Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase or decrease will not
be effective until the 61st day after such notice is delivered to the Corporation and shall only apply to such Holder
and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.


 






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e)                 
Mandatory Conversion. Notwithstanding anything herein to the contrary, simultaneously with the consummation of a
Qualified Public Offering, each share of outstanding Preferred Stock, shall be converted into shares of Common Stock of the Company
at a conversion price per share of Preferred Stock equal to the lower of $0.05 or 85% of the public offering price of the Qualified
Public Offering (“Mandatory Conversion Price”). In addition, upon consummation of a Qualified Public Offering
30% (25% if no warrants are sold to the public in the Qualified Public Offering) of the Stated Amount of the outstanding Preferred
Stock together with any Make-Whole Amount shall, at the Company’s option, in whole or in part, be paid in cash or in shares
of common stock priced at the Mandatory Conversion Price.


 


Section 7. Certain
Adjustments.


 


a)                 
Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common
Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued
by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares
of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding any treasury shares of the Corporation) 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 this Section 7(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of
a subdivision, combination or re-classification.


 


b)                 
Subsequent Equity Sales. If, at any time while this Preferred Stock is outstanding, the Corporation or any Subsidiary,
as applicable sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues
(or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such
lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion
Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment
will be made under this Section 7(b) in respect of an Exempt Issuance. If the Corporation enters into a Variable Rate Transaction,
despite the prohibition set forth in the Purchase Agreement, the Corporation shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. The Corporation
shall notify the Holders in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents
subject to this Section 7(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Corporation provides a Dilutive Issuance Notice pursuant to this Section 7(b), upon the occurrence of any Dilutive
Issuance, the Holders are entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether a Holder accurately refers to the Base Conversion Price in the Notice of
Conversion.


 






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c)                 
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares 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 conversion of such Holder’s
Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
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 shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


d)                
Pro Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a "Distribution"), at any time after the issuance of this Preferred Stock, 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 Conversion of this Preferred Stock (without regard
to any limitations on Conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before
the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to
the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial
ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall
be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).


 






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e)                 
Fundamental Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly
or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another
Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the
Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without
regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of Common Stock of the
successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 6(d) on the conversion of this Preferred Stock). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of
Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions
and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause
any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction
Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 7(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the holder of this Preferred Stock, deliver to the Holder in exchange for this
Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without
regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion
price which applies the conversion price hereunder to such shares of capital stock (but 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 number
of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred Stock
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the
other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise
every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.


 






    	19



    	 



    

 


f)                  
Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation)
issued and outstanding.


 


g)                 
Notice to the Holders.


 


                                                                   
i.                       
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section
7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.


 


                                                                 
ii.                       
Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants
to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of
the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which
the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory
share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize
the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the
Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock,
and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if
a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or
any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.


 






    	20



    	 



    

 





Section
8. [RESERVED]


 


Section
9. Negative Covenants. As long as any shares of Preferred Stock are outstanding, unless the holders of at least
67% in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given prior written consent, the Corporation
shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:


 


a)                 
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;


 


b)                 
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its
Common Stock, Common Stock Equivalents or Junior Securities, other than as to the Conversion Shares as permitted or required under
the Transaction Documents;


 


c)                 
pay cash dividends or distributions on Junior Securities of the Corporation; 


 


d)                
enter into any transaction with any Affiliate of the Corporation which would be required to be disclosed in any public filing
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the
disinterested directors of the Corporation (even if less than a quorum otherwise required for board approval); or


 


e)                 
enter into any agreement with respect to any of the foregoing.


 


Section 10. [RESERVED]


 


 


Section 11.Miscellaneous.


 


a)                 
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including,
without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Corporation, at the address set forth above Attention: Gerald Commissiong,
facsimile number (408) 852-4427, or such other facsimile number or address as the Corporation may specify for such purposes by
notice to the Holders delivered in accordance with this Section 11. Any and all notices or other communications or deliveries to
be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of
the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business
of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed
given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in
this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.


 






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b)                 
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter
or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends
and accrued interest, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency,
herein prescribed.


 


c)                 
Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated,
lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of
a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the
shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.


 


d)                
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate
of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without
regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto
or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), 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 such New York Courts, or such New York Courts are improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an action
or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 






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e)                 
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation
shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision
of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon
strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive
that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this
Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.


 


f)                  
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance
of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance,
it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.


 


g)                 
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day.


 


h)                 
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of
Designation and shall not be deemed to limit or affect any of the provisions hereof.


 






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i)                   
Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase
Agreement. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume
the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series E 12% Convertible Preferred
Stock.


 


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


 






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RESOLVED, FURTHER,
that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and
they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations
in accordance with the foregoing resolution and the provisions of Nevada law.


 


IN WITNESS WHEREOF,
the undersigned have executed this Certificate this 2nd day of April 2015.


 


	
        

        /s/ Gerald E. Commissiong

        Name: Gerald E. Commissiong

        Title: President and Chief Executive Officer 
	
        

        /s/ Marc E. Faerber 

        Name: Marc E. Faerber

        Title: Secretary



 




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ANNEX A


 


NOTICE OF CONVERSION


 


(To
be Executed by the Registered Holder in order to Convert Shares of Preferred Stock)


 


The undersigned hereby elects to convert
the number of shares of Series E 12% Convertible Preferred Stock indicated below into shares of common stock, par value $0.001
per share (the “Common Stock”), of Amarantus BioScience Holdings, Inc., a Nevada corporation (the “Corporation”),
according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person
other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be
charged to the Holders for any conversion, except for any such transfer taxes.


 


Conversion calculations:


 


	
        Date to Effect Conversion: _____________________________________________

         

	
        Number of shares of Preferred Stock owned
        prior to Conversion: _______________

         

	
        Number of shares of Preferred Stock to
        be Converted: ________________________

         

	
        Stated Value of shares of Preferred Stock
        to be Converted: ____________________

         

	
        Number of shares of Common Stock to be
        Issued: ___________________________

         

	
        Applicable Conversion Price:____________________________________________

         

	
        Number of shares of Preferred Stock subsequent
        to Conversion: ________________

         

	
        Address for Delivery: ______________________

        or

        DWAC Instructions:

        Broker no: _________

        Account no: ___________




 


	 	[HOLDER]
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	Title:


 






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