Exhibit
4.2


 


EXHIBIT
A-2


 


magnegas
corporation


 


CERTIFICATE
OF DESIGNATION OF PREFERENCES, 


RIGHTS
AND LIMITATIONS


OF


SERIES
D-2 CONVERTIBLE PREFERRED STOCK


 


PURSUANT
TO SECTION 151 OF THE 


Delaware
GENERAL CORPORATION LAW


 


The undersigned,
__________ and ____________, do hereby certify that:


 


1.
They are the President and Secretary, respectively, of MagneGas Corporation, a Delaware corporation (the “Corporation”).


 


2.
The Corporation is authorized to issue 10,000,000 shares of preferred stock, ______ of which have been issued.


 


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 10,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;


 


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


 


WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions
and other matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase
Agreement, up to 940 shares of the preferred stock which the Corporation has the authority to issue, as follows:


 


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


 




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TERMS OF
PREFERRED STOCK


 


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


 


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


 


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


 


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


 


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


 


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


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount and (ii) the
Corporation’s obligations to deliver the Securities have been satisfied or waived.


 


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


 


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


 


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


 


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


 


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


 




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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.


 


“Conversion
Shares Registration Statement” means a registration statement that registers the resale of all Conversion Shares of
the Holders, who shall be named as “selling stockholders” therein and meets the requirements of the Registration Rights
Agreement.


 


“Effective
Date” means the date that the Conversion Shares Registration Statement filed by the Corporation pursuant to the Registration
Rights Agreement is first declared effective by the Commission.


 


“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 for such purpose, by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) up to 1,000,000
shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations and the like), in the aggregate,
to professional service providers pursuant to a written agreement, provided that such shares of Common Stock are not registered
and carry no registration rights, (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 equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Corporation and shall provide to the Corporation          
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.


 


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


 


“GAAP”
means United States generally accepted accounting principles.


 




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


 


“Issuable
Maximum” shall have the meaning set forth in Section 6(e).


 


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


 


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


 


“New
York Courts” shall have the meaning set forth in Section 9(d).


 


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


 


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


 


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


 


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


 


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


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the
Corporation and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.


 


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


 


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


 




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


 


“Series
D-1 Certificate of Designation” means the Series D-1 Certificate of Designation filed by the Corporation with the Secretary
of the State of Delaware.


 


“Series
D-1 Preferred Stock” means the Series D-1 Convertible Preferred Stock issued pursuant to the Purchase Agreement.


 


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


 


“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market
(or any successor entity) from the shareholders of the Corporation with respect to the transactions contemplated by the Transaction
Documents, including the issuance of all of the Shares, the Conversion Shares, and the shares of Common Stock underlying the Series
D-1 Preferred Stock in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date.


 


“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to the Purchase Agreement.


 


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


 


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


 


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


 


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


 


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


 




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


 


“Transaction
Documents” means this Certificate of Designation, the Series D-1 Certificate of Designation, the Purchase Agreement,
the Registration Rights Agreement, the Warrants, the Voting 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 Corporate Stock Transfer, the current transfer agent of the Corporation, with a mailing address of 3200
Cherry Creek Drive South, Suite 430, Denver, CO 80209 and any successor transfer agent of the Corporation.


 


“Voting
Agreement” means the written agreement, in the form of Exhibit E attached to the Purchase Agreement, of all of
the officers, directors and stockholders holding more than 10% of the issued and outstanding shares of Common Stock on the date
of the Purchase Agreement to vote all Common Stock over which such Persons have voting control as of the record date for the meeting
of stockholders of the Corporation, amounting to, in the aggregate, at least 50.1% of the issued and outstanding Common Stock.


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Holder at the Closing in accordance with Section 2.2(a)
of the Purchase Agreement, which Warrants shall be exercisable 6 months from the date of issuance and have a term of exercise
equal to 5 years from the initial exercise date, in the form of Exhibit C attached to the Purchase Agreement.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 


Section
2.           Designation, Amount and Par Value. The series of
preferred stock shall be designated as its Series D-2 Convertible Preferred Stock (the “Preferred Stock”) and
the number of shares so designated shall be up to 940 (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 $____ per share and a stated value equal to $1,000, subject to increase
set forth in Section 3 below (the “Stated Value”).


 


Section
3.           Dividends. Except for stock dividends or distributions
for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive, and the Corporation shall pay,
dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends
actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends
shall be paid on shares of Preferred Stock.


 




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Section
4.           Voting Rights. Except as otherwise provided herein
or as otherwise required by law, the Preferred Stock shall have no voting rights. However, as long as any shares of Preferred
Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of 67% of the then outstanding shares
of the 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 or (b) enter into any agreement with respect to any of the foregoing.


 


Section
5.           Liquidation. Upon any liquidation, dissolution
or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be
entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the Stated Value, plus
any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon under this Certificate
of Designation, for each share of Preferred Stock before any distribution or payment shall be made to the holders of any Junior
Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to
be distributed to the Holders shall be ratably distributed among the Holders and the holders of the Series D-1 Preferred Stock
in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
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) and Section 6(e)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion
Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex
A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred
Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of
Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date
may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Corporation (such date,
the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall
be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion
form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest
or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s)
representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby
are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly
following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the
terms hereof shall be canceled and shall not be reissued.


 




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b)          Conversion
Price. The conversion price for the Preferred Stock shall equal $1.00, subject to adjustment herein (the “Conversion
Price”).


 


c)          Mechanics
of Conversion


 


i.             Delivery
of Conversion Shares Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder the number of Conversion
Shares being acquired upon the conversion of the Preferred Stock, which, on or after the earlier of (i) the six month anniversary
of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions. On or after
the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation shall deliver
the Conversion Shares 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.


 


ii.          Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares 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 Conversion Shares, 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 Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.


 




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


 




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iv.          Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares 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 Conversion Shares 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 the Conversion Shares upon
conversion of the shares of Preferred Stock as required pursuant to the terms hereof.


 


v.            Reservation
of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of
its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock, 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. 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 and, if the Conversion
Shares Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance
with such Conversion Shares Registration Statement (subject to such Holder’s compliance with its obligations under the Registration
Rights Agreement).


 


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.


 




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vii.          Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to
any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion
Shares, 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 Conversion Shares 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 Conversion Shares 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 and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.


 


d)          Beneficial
Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not
have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth
on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a
group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Preferred
Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are
issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or
any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the
Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without
limitation, the Preferred Stock or the Warrants) 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 this Preferred Stock held by the Holder and the provisions
of this Section 6(d) shall continue to apply. Any such increase or decrease will not be effective until the 61st day
after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.


 




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e)          Issuance
Limitations. Notwithstanding anything herein to the contrary, if the Corporation has not obtained Shareholder Approval, then
the Corporation may not issue, upon conversion of the Preferred Stock, a number of shares of Common Stock which, when aggregated
with any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (i) in connection
with any conversion of Preferred Stock issued pursuant to the Purchase Agreement, (ii) with any conversion of Series D-1 Preferred
Stock issued pursuant to the Purchase Agreement, (iii) in connection with the Shares issued pursuant to the Purchase Agreement,
and (iv) in connection with the exercise of any warrants issued to any registered broker-dealer as a fee in connection with the
issuance of the Securities pursuant to the Purchase Agreement, would exceed _______1
shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations and the like)
(such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of the Issuable
Maximum equal to the quotient obtained by dividing (x) the original Stated Value of such Holder’s Preferred Stock by (y)
the aggregate Stated Value of all Preferred Stock issued on the Original Issue Date to all Holders. In addition, each Holder may
allocate its pro-rata portion of the Issuable Maximum among Preferred Stock and Series D-1 Preferred Stock held by it in its sole
discretion. Such portion shall be adjusted upward ratably in the event a Holder no longer holds any Preferred Stock or Series
D-1 Preferred Stock and the amount of shares issued to such Holder pursuant to such Holder’s Preferred Stock and Series
D-1 Preferred Stock was less than such Holder’s pro-rata share of the Issuable Maximum. For avoidance of doubt, unless and
until any required Shareholder Approval is obtained and effective, warrants issued to any registered broker-dealer as a fee in
connection with the Securities issued pursuant to the Purchase Agreement as described in clause (iii) above shall provide that
such warrants shall not be allocated any portion of the Issuable Maximum and shall be unexercisable unless and until such Shareholder
Approval is obtained and effective.


 


Section
7.           Certain Adjustments.


 


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


 





 



1
19.99% of the number of shares of Common Stock outstanding on the Trading Day immediately
preceding the date of the Purchase Agreement.






 




    	12



    	 



    

 


b)          Subsequent
Equity Sales. From the date hereof until such date immediately following the 20 consecutive Trading Days wherein (i) the VWAP
for each Trading Day during such 20 consecutive Trading Day period exceeds $1.50 (subject to adjustment for forward and reverse
stock splits and the like) and (iii) there is an effective registration statement (including the Registration Statement) of the
Corporation that permits the Holder to resell all of the Conversion Shares thereunder, if, at any time while this Preferred Stock
is outstanding, the Corporation or any Subsidiary, as applicable sells or grants any option to purchase or sells or grants any
right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),
any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such
issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 7(b) in respect of
an Exempt Issuance. If the Corporation enters into a Variable Rate Transaction, despite the prohibition set forth in the Purchase
Agreement, the Corporation shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion
price at which such securities may be converted or exercised. The Corporation shall notify the Holders in writing, no later than
the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 7(b), indicating
therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Corporation provides
a Dilutive Issuance Notice pursuant to this Section 7(b), upon the occurrence of any Dilutive Issuance, the Holders are entitled
to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance,
regardless of whether a Holder accurately refers to the Base Conversion Price in the Notice of Conversion.


 


c)          Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred
Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 




    	13



    	 



    

 


d)          Pro
Rata Distributions. Subject to Section 3, during such time as this Preferred Stock is outstanding, if the Corporation declares
or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "Distribution"), at any time after the issuance of this Preferred Stock, then, in each
such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete Conversion of this Preferred Stock
(without regard to any limitations on Conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial
ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation).


 




    	14



    	 



    

 


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


 




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


 


g)          Notice
to the Holders.


 


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


 


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


 




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Section 8.          
[RESERVED].


 


Section 9.           Miscellaneous.


 


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


 




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


 


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


 


d)          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of 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 the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an
action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 




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


 


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


 


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


 


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


 


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 D-2 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 have executed this Certificate this ___ day of _____ 2014.


 


	 	 	 
	Name:

        Title:
	 	Name:

        Title:



 




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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 D-2 Convertible Preferred Stock indicated below into shares of common
stock, par value $0.001 per share (the “Common Stock”), of MagneGas Corporation, 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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