State
    of Delware
	 	Secretary
    of State
	 	Division
    of Corporations
	 	Delivered
    02:39 PM 03/18/2013
		Filed 02:39 PM 03/18/2013
	 	SRV
    130326954 - 5251646 FILE




 


POINT
CAPITAL, INC.


 


CERTIFICATE
OF DESIGNATION OF PREFERENCES, 


RIGHTS
AND LIMITATIONS


OF


SERIES
A CONVERTIBLE PREFERRED STOCK


 


PURSUANT
TO SECTION 151 OF THE 


Delaware
GENERAL CORPORATION LAW


 


The
undersigned, Richard A. Brand, Chief Executive Officer, does hereby certify that:


 


1.    He
is the Chief Executive Officer of Point Capital, Inc.,a Delaware corporation (the
“Corporation”).


 


2.    The
Corporation is authorized to issue five million (5,000,000) shares of preferred stock, none of which are
presently issued and outstanding.


 


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 provides for a class of its authorized stock known as preferred stock, consisting
of 5,000,000 shares, $0.0001 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 1,000,000 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:


 


TERMS
OF PREFERRED STOCK


 


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


 


“1940
Act” means the Investment Company Act of 1940, as amended, or any successor statute.



 



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“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).


 


“Asset
Coverage” and “asset coverage,” as defined for purposes of Sections 18(h) and 61 of the 1940 Act, of at
least 200% with respect to all outstanding senior securities of the Corporation, including all outstanding shares of Preferred
Stock (or such other asset coverage as may in the future be specified in or under the 1940 Act or by rule, regulation or order
of United States Securities and Exchange Commission as the minimum asset coverage for senior securities of a Business Development
Company), calculated as of the time of such determination.


 


“Asset
Coverage Cure Date” means, with respect to the failure by the Corporation to maintain Asset Coverage as of the close
of business on the last Business Day of a Calendar Quarter (as required by Section 8(c)), the date that is thirty (30) calendar
days following the Filing Date with respect to such Calendar Quarter.


 


“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.


 


“Business
Development Company” shall have the meaning set forth in Section 2(a)(48) of the 1940 Act, or any successor provision.


 


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


 



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“Calendar
Quarter” shall mean any of the three month periods ending March 31, June 30, September 30, or December 31, of each year.


 


“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),
other than a legal entity majority owned by, or a group wholly consisting of, officers and directors of the corporation and their
Affiliates, 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 or exercise of
Preferred Stock and the Securities issued together with the 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 50% 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 50% 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.


 


“Closing”
means a closing of the purchase and sale of the Securities pursuant to Section 1.02 of the Purchase Agreement.


 


“Closing
Date” means a Trading Day on which all of the Transaction Documents have been executed and delivered by the Corporation
and each of the purchasers purchasing shares of Preferred Stock at the Closing, and all conditions precedent to (i) the purchasers’
obligations to pay the Purchase Price, and (ii) the Corporation’s obligations to deliver the shares of Preferred Stock have
been satisfied or waived.


 


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


 


“Common
Stock” means the Corporation’s common stock, par value $0.0001 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).


 



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“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.


 


“Default”
shall have the meaning as set forth in Section 3(g)(i).


 


“Default
Period” shall have the meaning as set forth in Section 3(g)(i).


 


“Default
Rate” shall have the meanings as set forth in Section 3(g)(i).


 


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


 


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


 


“Dividend
Default” shall have the meaning as set forth in Section 3(g)(i).


 


“Dividend
Payment Date” means the last Business Day of each Dividend Period.


 


“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
Period” means, with respect to each share of Preferred Stock, in the case of the first Dividend Period, the period beginning
on the Date of Original Issue and ending on and including December 31, 2013 and for each subsequent Dividend Period, the period
beginning on and including the first calendar day of the year following the month in which the previous Dividend Period ended
and ending the last calendar day of such year.


 


“Dividend
Rate” means, as of any date, the Fixed Dividend Rate as adjusted, if a Default Period shall be in existence on such
date, in accordance with the provisions of Section 2.2(g).


 


“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 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, and (j) for each Trading Day in a period of 20 consecutive Trading Days prior to
the applicable date in question, the closing price for the Common Stock on the principal Trading Market exceeds the
Conversion Price.


 



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“Electronic
Means” means email transmission, facsimile transmission or other similar electronic means of communication providing
evidence of transmission (but excluding online communications systems covered by a separate agreement) acceptable to the sending
party and the receiving party, in any case if operative as between any two parties, or, if not operative, by telephone (promptly
confirmed by any other method set forth in this definition), which, in the case of notices to the Redemption and Paying Agent
and the Custodian, shall be sent by such means to each of its representatives set forth in the Redemption and Paying Agent Agreement
and the Custodian Agreement, respectively.


 


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


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of
the Corporation pursuant to 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, (b) the Qualified Offering (as defined in the Purchase Agreement), (c) securities upon the exercise or exchange
of or conversion of any securities issued pursuant to the Purchase Agreement and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of the Purchase Agreement,
provided that such securities have not been amended since the date of the Purchase Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of any such securities, and (d) 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 equity holders of a Person) which is,
itself or through its subsidiaries, an operating company or 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.


 


“Filing
Date” means, with respect to any Calendar Quarter, the date of filing of the Corporation’s SEC Report with respect
to such Calendar Quarter.


 


“Forced
Conversion Date” shall have the meaning set forth in Section 8(a).


 


“Forced
Conversion Notice” shall have the meaning set forth in Section 8(a).


 


“Forced
Conversion Notice Date” shall have the meaning set forth in Section 8(a).


 



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“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 $250,000 (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 $250,000 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.


 


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


 


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


 


“Liquidation
Preference” means $100.00 per share.


 


“Network
1” shall mean Network 1 Financial Services, Inc.


 


“Mandatory
Redemption Price” shall have the meaning as set forth in Section 8(c)(i).


 


“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).


 


“Optional
Redemption” shall have the meaning set forth in Section 8(b).


 


“Optional
Redemption Amount” shall have the meaning set forth in Section 8(b).


 


“Optional
Redemption Date” shall have the meaning set forth in Section 8(b).


 


“Optional
Redemption Notice” shall have the meaning set forth in Section 8(b).


 


“Optional
Redemption Notice Date” shall have the meaning set forth in Section 8(b).


 


“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.


 


“Permitted
Indebtedness” means (a) the Indebtedness existing on the Original Issue Date,(b) lease obligations and purchase money
indebtedness of up to $100,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations
with respect to newly acquired or leased assets, and (c) Indebtedness incurred in connection with a Qualified Offering.


 



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“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Corporation)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Corporation’s
business, such as carriers’, warehouse men’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Corporation’s business, and which (x) do not individually or in the
aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of
the business of the Corporation and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject
to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clause (a) thereunder, (d) Liens incurred
in connection with Permitted Indebtedness under clause (b) thereunder, provided that such Liens are not secured by assets of the
Corporation or its Subsidiaries other than the assets so acquired or leased, and (e) the rights granted to Network 1 pursuant
to the Engagement Agreement dated March __, 2013 between the Corporation and Network 1.


 


“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 as of March__, 2013, among the Corporation and the
original Holders, as amended, modified or supplemented from time to time in accordance with its terms.


 


“Purchase
Price” 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 in United States
dollars and in immediately available funds.


 


“Purchase
Rights” shall have the meaning set forth in Section 7(c)


 


“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.


 


“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).


 


“Stated
Value” shall have the meaning set forth in Section 2.


 


“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.


 



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“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 trading; provided, that in the event that the Common
Stock is not listed or quoted for trading on a Trading Market on the date in question, then Trading Day shall mean a Business
Day.


 


“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, the OTC Bulletin Board, the OTC QB Marketplace or the OTC QX Marketplace (or any successors to any of
the foregoing).


 


“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, 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 a transfer agent for the Corporation’s Common Stock and the Securities, and any successor transfer
agent of the Corporation.


 


“Triggering
Event” shall have the meaning set forth in Section 10(a).


 


“Triggering
Redemption Amount” means, for each share of Preferred Stock, the sum of (a) the greater of (i) 100% of the Stated Value
and (ii) the product of (y) the VWAP on the Trading Day immediately preceding the date of the Triggering Event and (z) the Stated
Value divided by the then Conversion Price, (b) all accrued but unpaid dividends thereon and (c) all liquidated damages and other
costs, expenses or amounts due in respect of the Preferred Stock.


 


“Triggering
Redemption Payment Date” shall have the meaning set forth in Section 10(b).


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock in accordance
with the terms of this Certificate of Designation.


 


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


 


“Voting
Period” shall have the meaning as set forth in Section 4(b)(i).


 


“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 Common Stock is not then listed
or quoted for trading on a Trading Market and if prices for the Common Stock are then reported on the OTC Pink Marketplace maintained
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
closing price per share of the Common Stock so reported, or (c) 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.


 



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Section
2.    Designation, Amount and Par Value. The series of preferred stock shall be designated as
the Corporation’s Series A Convertible Preferred Stock (the “Preferred Stock”) and the number of
shares so designated shall be up to 10,000,000 (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 $0.0001 per share and a stated value equal to $100,subject to
increase set forth in Section 3 below (the “Stated Value”).





 


Section
3.    Dividends and Distributions.


 


a)
The holders of the shares of Preferred Stock shall be entitled to receive dividends, on an as-converted basis when, as, and if
paid on any Junior Securities stock.


 


b)    Other
Securities. So long as at least 15% of the originally issued shares of Preferred Stock shall remain outstanding, neither
the Corporation nor any Subsidiary thereof shall redeem, purchase or otherwise acquire directly or indirectly any Junior
Securities except as expressly permitted by Section 10(b). So long as any shares of Preferred Stock are outstanding, the
Corporation may not, without the vote or consent of a Majority in Interest, authorize, establish and create and issue and
sell shares of one or more series of a class of senior securities of the Corporation representing stock under Sections 18 and
61 of the 1940 Act, ranking senior to or on a parity with the Preferred Stock as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or the winding up of the affairs of the Corporation.


 


c)    Special
Reserves. The Corporation acknowledges and agrees that the capital of the Corporation (as such term is used in Section
154 of the Delaware General Corporation Law) in respect of the Preferred Stock and any future issuances of the
Corporation’s capital stock shall be equal to the aggregate par value of such Preferred Stock or capital stock, as the
case may be, and that, on or after the date of the Purchase Agreement, it shall not increase the capital of the Corporation
with respect to any shares of the Corporation’s capital stock issued and outstanding on such date. The Corporation also
acknowledges and agrees that it shall not create any special reserves under Section 171 of the Delaware General Corporation
Law without the prior written consent of each Holder.


 


Section
4.    Voting.


 


a)    Voting
Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no
voting rights. Holders of Preferred Stock shall vote together with the holders of Common Stock on an as converted basis but
may not vote such Preferred Stock, which would exceed the Beneficial Ownership Limitation. In any event, and notwithstanding
the foregoing limitation, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without
the affirmative vote of the Holders of at least 67% in Stated Value of the then outstanding shares of the Preferred Stock provided
such holders must include Alpha Capital Anstalt so long as Alpha Capital Anstalt holds not less than $100,000 of
Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter
or amend this Certificate of Designation, (b) authorize or create any class of stock ranking as to dividends, redemption
or distribution of assets upon a Liquidation (as defined in Section 5) senior to, or otherwise pari passu with,
the Preferred Stock, (c) amend its certificate of incorporation or other charter documents in any manner that adversely
affects any rights of the Holders, (d) increase the number of authorized shares of Preferred Stock, or (e) enter into any
agreement with respect to any of the foregoing.


 



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b)    Voting
For Additional Directors.


 


(i)    During
any period in which any one or more of the conditions described in this Section 4(b) shall exist (such period
being referred to herein as a “Voting Period”), the number of Directors constituting the Board of Directors
shall be automatically increased by the smallest number that, when added to the two Directors elected exclusively by the holders
of shares of Preferred Stock, would constitute a majority of the Board of Directors as so increased by such smallest number; and
the Holders of Preferred Stock, shall be entitled, voting as a class on a one-vote-per-share basis (to the exclusion of the holders
of all other securities and classes of capital stock of the Corporation), to elect such smallest number of additional Directors,
together with the two Directors that such Holders are in any event entitled to elect. A Voting Period shall commence: if at any time Holders of shares of
Preferred Stock are otherwise entitled under the 1940 Act to elect a majority of the Board of Directors.


 


(ii)    As
soon as practicable after the accrual of any right of the Holders of shares of Preferred Stock to elect additional Directors as
described in Section 4(b)(i), the Corporation shall call a special meeting of such Holders (i) by mailing or delivery by Electronic
Means or (ii) in such other manner and by such other means as are specified in the terms of such Preferred Stock, a notice of
such special meeting to such Holders, such meeting to be held not less than ten (10) nor more than thirty (30) calendar days after
the date of the delivery by Electronic Means or mailing of such notice. If the Corporation fails to call such a special meeting,
it may be called at the expense of the Corporation by any such Holder on like notice. The record date for determining the Holders
of shares of Preferred Stock entitled to notice of and to vote at such special meeting shall be the close of business on the fifth
(5th) Business Day preceding the calendar day on which such notice is mailed. At any such special meeting and at each meeting
of Holders of shares of Preferred Stock held during a Voting Period at which Directors are to be elected, such Holders, voting
together as a class (to the exclusion of the Holders of all other securities and classes of capital stock of the Corporation),
shall be entitled to elect the number of Directors prescribed in Section 4(b)(i) on a one-vote-per-share basis.


 


(iii)    The
terms of office of the incumbent Directors of the Corporation at the time of a special meeting of Holders of the shares of Preferred
Stock to elect additional Directors in accordance with Section 4(b)(i) shall not be affected by the election at such meeting by
the Holders of shares of Preferred Stock of the number of Directors that they are entitled to elect, and the Directors so elected
by the Holders of shares of Preferred Stock together with the two (2) Directors elected by the Holders of shares of Preferred
Stock in accordance with Section 4(a) hereof and the remaining Directors elected by the holders of the shares of Common Stock
and Preferred Stock, shall constitute the duly elected Directors of the Corporation.


 



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(iv)    Simultaneously
with the termination of a Voting Period, the terms of office of the additional Directors elected by the Holders of the shares
of Preferred Stock pursuant to Section 4(b)(i) shall terminate, the remaining Directors shall constitute the Directors of the
Corporation and the voting rights of the Holders of shares of Preferred Stock to elect additional Directors pursuant to Section
4(b)(i) shall cease, subject to the provisions of the last sentence of Section 4(b)(i).


 


c)    1940
Act Matters. Unless a higher percentage is provided for in the Certificate of Incorporation, the affirmative vote of the Holders
of at least a Majority in Interest voting as a separate class, shall be required (A) to approve the Corporation ceasing to be
a Business Development Company, or to approve the Corporation’s withdrawal of its election as a Business Development Company,
or (B) to approve any plan of reorganization (as such term is used in the 1940 Act) adversely affecting such shares.


 


d)    Voting
Rights Set Forth Herein Are Sole Voting Rights. Unless otherwise required by law or the Certificate of Incorporation, the
Holders of shares of Preferred Stock shall not have any relative rights or preferences or other special rights with respect to
voting other than those specifically set forth in this Section 4.


 


e)    No
Cumulative Voting. The Holders of shares of Preferred Stock shall have no rights to cumulative voting.


 





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 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. 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.


 



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b)    Conversion
Price. The conversion price for the Preferred Stock shall equal $0.20, subject to adjustment herein(the “Conversion
Price”).


 


c)    Mechanics
of Conversion


 


i.    Delivery
of Certificate Upon Conversion. Not later than five(5) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder  a
certificate or certificates representing the Conversion Shares which, on or after the one year anniversary of the Closing
Date (provided that the Holder provides the Corporation or the Corporation’s counsel with any reasonable certifications
requested by the Corporation with respect to future sales of such Conversion Shares) 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. On or after the earlier of the one year anniversary of the Closing Date, the Corporation shall use
commercially reasonable 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 if the Corporation if then a participant in such system.


 


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.


 






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iii.    Obligation
Absolute; Partial Liquidated Damages. Except as otherwise set forth in this Section 6(c)(iii),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 for each Trading Day after such second Trading Day after the Share Delivery Date until such certificates
are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or
declare a Triggering Event pursuant to Section 10 hereof for the Corporation’s failure to deliver Conversion Shares within
the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights
shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. The
maximum amount of liquidated damages payable to a Holder pursuant to this Section 6(c)(iii) shall not exceed 6% of the Stated
Value of Preferred Stock purchased by such Holder.


 


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.


 



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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.


 


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 the 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.


 



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d)    Beneficial
Ownership Limitation. The Corporation shall not affect 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 (including, without limitation, the Preferred Stock) 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 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon conversion of the 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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Section
7.    Certain Adjustments.


 


a)    Stock
Dividends and Stock Splits. If the Corporation, at any time while the 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,the 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 the 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 of 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. If the Corporation, at any time while the Preferred Stock is outstanding, distributes to all holders of
Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or
warrants to subscribe for or purchase any security (other than the Common Stock, which shall be subject to Section 7(c)), then
in each such case the Conversion Price shall be adjusted by multiplying such Conversion Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator
shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record
date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness or rights or
warrants so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors of the
Corporation in good faith. In either case the adjustments shall be described in a statement delivered to the Holders describing
the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record
date mentioned above.


 



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e)    Fundamental
Transaction. If, at any time while the 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, (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 the
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 the 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 the Preferred Stock is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 6(d) on the conversion of the 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
the 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 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 the Preferred Stock, deliver to the
Holder in exchange for Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to the 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 the Preferred Stock (without regard to any limitations on the conversion of the 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 the 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.


 


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.


 



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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 the 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
the 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.


 



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Section
8.    Conversion and Redemption.


 


a)    Forced
Conversion. Notwithstanding anything to the contrary in this Certificate of Designation and subject to the limitation
set forth in Section 6(d), if (i) there is an effective and current registration statement which includes for resale
all of the Common Stock underlying the Preferred Stock or such Common Stock is freely resellable pursuant to Rule 144 without
any volume or manner of sale restrictions, (ii) the VWAP for each of any 20 trading days during any 30 consecutive Trading
Day period, which 30 consecutive Trading Day period shall not include any days prior to the execution date of the Purchase
Agreement (“Threshold Period”), exceeds 200% of the Conversion Price each day during the Threshold Period
(subject to adjustment for reverse and forward stock splits and the like), and (iii) the average daily dollar volume of the
Corporation’s Common Stock during such 30 day period exceeds $25,000 per day, the Corporation may, within one Trading
Day after the end of any such Threshold Period, deliver a written notice to all Holders (a “Forced Conversion
Notice” and the date such notice is delivered to all Holders, the “Forced Conversion Notice
Date”) to cause each Holder to convert all or part of such Holder’s Preferred Stock (as specified in such
Forced Conversion Notice), it being agreed that the “Conversion Date” for purposes of Section 6 shall be deemed
to occur on the third (3rd) Trading Day following the Forced Conversion Notice Date (such third Trading Day, the
“Forced Conversion Date”). The Corporation may not deliver a Forced Conversion Notice, and any Forced
Conversion Notice delivered by the Corporation shall not be effective, unless all of the Equity Conditions have been met on
each Trading Day during the applicable Threshold Period through and including the date that the Conversion Shares issuable
pursuant to such conversion are actually delivered to the Holders pursuant to the Forced Conversion Notice. Any
Forced Conversion Notices shall be applied ratably to all of the Holders based on each Holder’s initial purchases of
Preferred Stock hereunder, provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro
rata allocation, thereby decreasing the aggregate amount forcibly converted hereunder if less than all shares of the
Preferred Stock are forcibly converted. For purposes of clarification, a Forced Conversion shall be subject to all of the
provisions of Section 6, including, without limitation, the provisions requiring payment of liquidated damages and
limitations on conversions. A Forced Conversion will not be effective in excess of the Beneficial Ownership Limitation under
Section 6(d).


 


b)    Optional
Redemption at Election of Corporation. Subject to the provisions of this Section 8, at any time after the issue date of
Preferred Stock, the Corporation may deliver a notice to the Holders (an “Optional Redemption Notice” and
the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date” ) of its
irrevocable election to redeem some or all of the then outstanding Preferred Stock, for cash in an amount equal to the Stated
Value of the outstanding Preferred Stock (“Optional
Redemption Amount”) on the 20th Trading Day following the Optional Redemption Notice Date (such date,
the “Optional Redemption Date” and such redemption, the “Optional Redemption” ). The
Optional Redemption Amount is payable in full on the Optional Redemption Date. The Corporation may only effect an Optional
Redemption if (i) each of the Equity Conditions shall have been met on each Trading Day occurring during the period
commencing on the Optional Redemption Notice Date through the Optional Redemption Date and through and including the date
payment of the Optional Redemption Amount is actually made, and (ii) the conditions set forth in Section 8(a)(i), (ii) and
(iii) have been satisfied each such date. If any of the Equity Conditions or the conditions set forth in Sections 8(a)(i),
(ii) and (iii) shall cease to be satisfied at any time during such period, then a Holder may elect to cancel the Optional
Redemption Notice as to such Holder by notice to the Corporation within 3 Trading Days after the first day on which any such
Equity Condition or other condition has not been met (provided that if, by a provision of the Transaction Documents, the
Corporation is obligated to notify the Holders of the non-existence of an Equity Condition, such notice period shall be
extended to the third Trading Day after proper notice from the Corporation) in which case the Optional Redemption Notice
shall be null and void, ab initio. The Corporation covenants and agrees that it will honor all Notices of Conversion
tendered from the time of delivery of the Optional Redemption Notice through the date the Optional Redemption Amount is paid
in full. An Optional Redemption Notice will not be effective in connection with an amount of Preferred Stock which on an as
converted basis would be in excess of the Beneficial Ownership Limitation under Section 6(d).


 



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c)    Asset
Coverage Mandatory Redemption. For so long as any shares of Preferred Stock are outstanding and the Company is a
Business Development Company, the Corporation shall have Asset Coverage of at least 200% as of the close of business on the last
Business Day of a Calendar Quarter, such Asset Coverage to be determined exclusively by reference to the asset coverage ratio
reported as of the last Business Day of such Calendar Quarter in the Corporation’s SEC Report with respect to such
Calendar Quarter.


 


(i)    If
the Corporation fails to comply with the Asset Coverage requirement as provided in Section 8(c) as of the last Business Day of
any Calendar Quarter and such failure is not cured as of the Asset Coverage Cure Date, the Corporation shall, to the extent permitted
by the 1940 Act and Delaware law, by the close of business on such Asset Coverage Cure Date, fix a redemption date and proceed
to redeem a sufficient number of shares of Preferred Stock, to enable it to meet the requirements of Section 8(c)(ii). In the
event that any shares of Preferred Stock then outstanding are to be redeemed pursuant to this Section 8(c)(i), the Corporation
shall redeem such shares at a price per share (the “Mandatory Redemption Price”) equal to (y) the Liquidation
Preference per share plus (z) an amount equal to any unpaid dividends and distributions on such share accumulated to (but
excluding) the date fixed for such redemption by the Board of Directors (whether or not earned or declared by the Corporation,
but excluding interest thereon).


 


(ii)    On
the Redemption Date for a redemption contemplated by Section 8(c)(i), the Corporation shall redeem, out of funds legally
available therefor, such number of shares of Preferred Stock as shall be equal to the lesser of (x) the minimum number of
shares of Preferred Stock, the redemption of which, if deemed to have occurred immediately prior to the opening of business
on the Asset Coverage Cure Date, would result in the Corporation having Asset Coverage on such Asset Coverage Cure Date of at
least 200% (provided, however, that if there is no such minimum number of shares of Preferred Stock the
redemption or retirement of which would have such result, all shares of Preferred Stock then outstanding shall be redeemed),
and (y) the maximum number of shares of Preferred Stock that can be redeemed out of funds expected to be legally available
therefor in accordance with the certificate of incorporation of the Corporation and applicable law, provided further,
that in connection with redemption for failure to maintain such Asset Coverage requirement, the Corporation may at its sole
option, but is not required to (unless Holder exercises its rights under Section 10), redeem a sufficient number of shares of
Preferred Stock pursuant to this Section 8(c) that would result, if deemed to have occurred immediately prior to the opening
of business on the Asset Coverage Cure Date, in the Corporation having Asset Coverage on such Asset Coverage Cure Date of up
to and including 215%. The Corporation shall effect such redemption on the date fixed by the Corporation therefor, which date
shall not be later than ninety (90) calendar days after such Asset Coverage Cure Date, except that if the Corporation does
not have funds legally available for the redemption of all of the required number of shares of Preferred Stock which have
been designated to be redeemed or the Corporation otherwise is unable to effect such redemption on or prior to ninety (90)
calendar days after such Asset Coverage Cure Date, the Corporation shall redeem those shares of Preferred Stock which it was
unable to redeem on the earliest practicable date on which it is able to effect such redemption. If fewer than all of the
outstanding shares of Preferred Stock are to be redeemed pursuant to this Section 8(c), the number of shares of
Preferred Stock to be redeemed shall be redeemed pro rata among the outstanding shares of Preferred Stock.


 



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d)    Compliance
with Law. To the extent that any redemption is not made by reason of the absence of legally available funds therefor in accordance
with the certificate of incorporation of the Corporation and applicable law, such redemption shall be made as soon as practicable
to the extent such funds become available. In effecting any redemption pursuant to this Section 8, the Corporation shall use its
best efforts to comply with all applicable conditions precedent to effecting such redemption under the 1940 Act and any applicable
Delaware law, but shall effect no redemption except in accordance with the 1940 Act and any applicable Delaware law.


 


Section
9.    Negative Covenants. As long as at least 15% of the originally
issued shares of Preferred Stock are outstanding, unless the holders of at least 67% in Stated Value of the then outstanding
shares of Preferred Stock, which holders must include Alpha Capital Anstalt so long as Alpha Capital Anstalt holds not less
than $100,000 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)    other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom;


 


b)    other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


c)    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;


 


d)    other
than as permitted pursuant to Section 3(c), pay cash dividends or distributions on Junior Securities of the Corporation;


 


e)    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


 


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


 


In
addition, 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, which holders must include Alpha Capital Anstalt so long
as Alpha Capital Anstalt holds not less than $100,000 of Preferred Stock, shall have otherwise given prior written consent,
the Corporation shall not, directly or indirectly, 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.


  



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 Section
10.    Redemption Upon Triggering Events.


 


a)    “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 seventh 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;


 


ii.    the
Corporation shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In within five 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,
which failure or breach could have a Material Adverse Effect, 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 be party to a Change of Control Transaction;


 


vi.    there
shall have occurred a Bankruptcy Event;


 


vii.    the
Common Stock shall fail to be listed or quoted for trading on a Trading Market for more than twenty Trading Days in any
twelve month period, which need not be consecutive Trading Days;


 


viii.    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; or


 


ix.    the
Corporation shall not have been in compliance with the Asset Coverage requirements.


 


b)    Upon
the occurrence of a Triggering Event, each Holder shall (in addition to all other rights it may have hereunder or under
applicable law) have the right, exercisable at the sole option of such Holder, to require the Corporation with respect to
each share of Preferred Stock to redeem each share of Preferred Stock then held by such Holder for a redemption price, in
cash, equal to the Triggering Redemption Amount or increase the dividend rate on all of the outstanding Preferred Stock held
by such Holder to 6% per annum (“Default Rate”) thereafter. The Triggering Redemption Amount shall be due
and payable within five Trading Days of the date on which the notice for the payment therefor is provided by a Holder (the
“Triggering Redemption Payment Date”). If the Corporation fails to pay in full the Triggering Redemption
Amount hereunder on the date such amount is due in accordance with this Section, the Corporation will pay interest thereon at
a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing daily from such date
until the Triggering Redemption Amount, plus all such interest thereon, is paid in full. For purposes of this Section, a
share of Preferred Stock is outstanding until such date as the applicable Holder shall have received Conversion Shares upon a
conversion (or attempted conversion) thereof that meets the requirements hereof or has been paid the Triggering Redemption
Amount in cash.


 



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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 as set forth in the Purchase Agreement, 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.


 


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.


 



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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 Delaware,
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 New Jersey (the “New Jersey
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 Jersey Courts, or such New Jersey 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.


 


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
obligation 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 A 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 Delaware law.


 


IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 18th day of March, 2013.


 


/s/ Richard
A. Brand


Name:
Richard A. Brand


Title:
Chief Executive Officer


 




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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 A Convertible Preferred Stock indicated below into
shares of common stock, par value $0.0001 per share (the “Common Stock”), of Point Capital, Inc., a
Delaware 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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