Document:

Exhibit 10.3

 

SECURITIES EXCHANGE AND NOTE PURCHASE
AGREEMENT

 

This Debt Exchange
Agreement and Release (this “Agreement”) is made and entered into as of __, 2018 (the “Effective Date”),
by and among BioHiTech Global, Inc., a Delaware corporation (“BHTG”), BioHiTech America LLC, a Delaware limited liability
company (“BHTA”) wholly owned by BHTG (BHTG and BHTA collectively and individually referred to as the “Company”)
and Frank E. Celli (the “Creditor”).

 

BACKGROUND

 

WHEREAS, the
Company is indebted to the Creditor in the amounts as of the dates set forth on the attached Exhibit A hereto (the “Obligations”);

 

WHEREAS, the
Company, together with certain of its Subsidiaries, intends to enter into a Note Purchase and Security Agreement (the “Purchase
Agreement”) with Michaelson Capital Special Finance Fund II, L.P. (the “Lender”) whereby, pursuant to the terms
of the Purchase Agreement, the Lender is requiring the Creditor reduce any and all indebtedness from the Company to Two Million
Dollars ($2,000,000) (the “Debt Redemption”);

 

WHEREAS, in
order to effectuate the Debt Reduction, the Company has requested the Creditor exchange a portion of the Obligations in the amount
of Four Million Dollars ($4,000,000) (the “Debt”) in consideration for 400,000 shares (the “Exchange Shares”)
of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), which
is convertible into the BHTG common stock, par value $0.0001 per share (the “Common Stock”) and warrants (the “Warrants”)
as fully described in the Common Stock Purchase Warrant, to acquire up to 50% of the number of shares of Common Stock into which
the Preferred Stock is convertible (the “Warrants Shares”). The Exchange Shares, Preferred Stock and Common Stock,
Warrants, Warrant Shares and the “Note” (as that term is defined herein) are collectively referred to herein as the
“Securities”;

 

WHEREAS, in
addition to the Securities, the Company shall issue and sell to Creditor a promissory note in the principal amount of Two Million
Dollars ($2,000,000) (the “Note”).

 

NOW THEREFORE,
for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Securities Exchange,
Purchase and Sale.

 

(a) Exchange
of Debt. Subject to the terms and conditions herein, the Creditor agrees to accept the Exchange Shares and the Warrants in
the form attached hereto as Exhibit A, in full satisfaction of the Company’s obligation to repay the Debt. The Company agrees
to issue the Exchange Shares and Warrants to the Creditor promptly following the execution of this Agreement.

 

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(b) Issuance
of Note. Subject to the terms and conditions herein, the Company hereby agrees to issue to Creditor, and the Creditor
hereby agrees to receive from the Company the Note in the form of Exhibit B attached hereto as a modification of the unpaid
portion of the obligation which remains unpaid and is not the Debt being exchanged for the Securities as set forth
herein.

 

(c) Exempt
Issuance. The Company and the Creditor are executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities Act”), including Regulation D promulgated thereunder, and/or
upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all
of the investments to be made hereunder.

 

2. Representations
of Creditor. Creditor represents and warrants to the Company:

 

(a) That the Debt is
a valid obligation, due and payable to the Creditor as of the Effective Date.

 

(b) The Creditor is
an individual person or persons or is duly incorporated, organized or otherwise formed, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, organized or otherwise formed.

 

(c) The Creditor has
the requisite power and authority to enter into and to perform its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof and the execution, delivery and performance of this Agreement by the Creditor
and no further consent or authorization of the Creditor, its Board of Directors or its shareholders, members or other interest
holders is required.

 

(d) This Agreement has
been duly executed by the Creditor and constitutes a legal, valid and binding obligation of the Creditor enforceable against the
Creditor in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization or moratorium
or similar laws affecting the rights of creditors generally and the application of general principles of equity.

 

(e) The Creditor is
not required to give any notice to, make any filing, application or registration with, obtain any authorization, consent, order
or approval of or obtain any waiver from any person or entity in order to execute and deliver this Agreement or to consummate the
transactions contemplated hereby.

 

(f) Neither the execution
and the delivery by the Creditor of this Agreement, nor the consummation by the Creditor of the transactions contemplated hereby,
will (a) violate any law, rule, injunction, or judgment of any governmental agency or court to which the Creditor is subject or
any provision of its charter, bylaws, trust agreement, or other governing documents or (b) conflict with, result in a breach of,
or constitute a default under, any agreement, contract, lease, license, instrument, or other arrangement to which the Creditor
is a party or by which the Creditor is bound or to which any of its assets is subject.

 

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(g) The Creditor is
acquiring the Exchange Shares for its own account and not with a present view toward the public sale or distribution thereof.

 

(h) The Creditor is
an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”). The Creditor hereby represents and warrants that, either by reason of the Creditor’s business or financial experience
or the business or financial experience of the Creditor’s advisors (including, but not limited to, a “purchaser representative”
(as defined in Rule 501(h) promulgated under Regulation D), attorney and/or an accountant each as engaged by the Creditor at its
sole risk and expense) the Creditor (a) has the capacity to protect its own interests in connection with the transaction contemplated
hereby and/or (b) the Creditor has prior investment experience, including investments in securities of privately-held companies
or companies whose securities are not listed, registered, quoted and/or traded on a national securities exchange, to the extent
necessary, the Creditor has retained, at its sole risk and expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement and the purchase of the Debentures hereunder; if an entity,
the Creditor was not formed for the sole purpose of purchasing the Debentures.

 

(i) The Creditor agrees,
acknowledges and understands that the Creditor and its advisors, if any, have been furnished with all materials relating to the
business, finances and operations of the Company that have been requested by the Creditor or its advisors. The Creditor represents
and warrants that the Creditor and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The
Creditor agrees, acknowledges and understands that neither such inquiries nor any other due diligence investigation conducted by
the Creditor or any of its advisors or representatives modify, amend or affect the Creditor’s right to rely on the Company’s
representations and warranties contained herein.

 

(j) The Creditor agrees,
acknowledges and understands that:

 

(i) the Securities
have not been and, except as set forth herein, are not being registered under the Securities Act or any applicable state securities
or “blue sky” laws. Consequently, the Creditor may have to bear the risk of holding the Securities for an indefinite
period of time because the Securities may not be transferred unless: (i) the resale of the Securities is registered pursuant to
an effective registration statement under the Securities Act; (ii) the Creditor has delivered to the Company an opinion of counsel
reasonably acceptable to the Company and its counsel (in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from
such registration; or (iii) the Securities are sold or transferred pursuant to Rule 144 promulgated under the Securities Act (“Rule
144”);

 

(ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and, if Rule 144 is not applicable,
any resale of the Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the Securities and Exchange Commission (the “Commission”) promulgated
thereunder; and

 

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(iii) except as set
forth in herein, neither the Company nor any other person is under any obligation to register the Securities under the Securities
Act or any state securities or “blue sky” laws or to comply with the terms and conditions of any exemption thereunder.

 

(k) The Creditor agrees,
acknowledges and understands that the Securities will bear restrictive legends in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

 

THESE SHARES HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY.

 

(l) The Creditor has
not engaged, consented to or authorized any broker, finder or intermediary to act on its behalf, directly or indirectly, as a broker,
finder or intermediary in connection with the transactions contemplated by this Agreement. The Creditor hereby agrees to indemnify
and hold harmless the Company from and against all fees, commissions or other payments owing to any such person or firm acting
on behalf of the Creditor hereunder.

 

3. Representations by BHTG and BHTA.

 

(a) Each of BHTG and
BHTA is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation, with the requisite power and authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither BHTG or BHTA is in violation or default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or charter documents. Each of BHTG and BHTA is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, does not have and would not reasonably be expected to result in (i) a material adverse effect on the legality,
validity or enforceability of any material agreement to which BHTG or BHTA is a party (a “Material Agreement”), (ii)
a material adverse effect on the results of operations, assets, business, or condition (financial or otherwise) of BHTG or BHTA,
or (iii) a material adverse effect on ability of BHTG or BHTA to perform in any material respect on a timely basis its Obligations
under any Material Agreement (any of (i), (ii), or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

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(b) The Company
has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its Obligations hereunder. The execution and delivery of each of the Agreement by BHTG
and BHTA and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action
on the part of BHTG and BHTA and no further action is required by BHTG and BHTA, the Board of Directors the Managing Members
or the equity holders of BHTG or BHTA in connection therewith. This Agreement has been (or upon delivery will have been) duly
executed by BHTG and BHTA and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against BHTG and BHTA in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

(c) The execution, delivery
and performance of the Agreement by BHTG and BHTA and the consummation by BHTG and BHTA of the other transactions contemplated
hereby do not and will not: (i) conflict with or violate any provision of the certificate or articles of incorporation, bylaws
or other organizational or charter documents, of BHTG or BHTA or (ii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company
is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound
or affected.

 

(d) Neither BHTG or
BHTA is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority in connection with the execution, delivery and performance
by BHTG or BHTA of this Agreement.

 

(e) The Securities acquired
under this Agreement, will be duly authorized and, upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable, free and clear of all liens imposed by BHTG other than restrictions on transfer provided
for herein.

 

4. Releases by Creditor.
Except as set forth herein, the Creditor fully and forever releases, discharges and acquits BHTG and BHTA and its respective officers,
directors, stockholders, employees, predecessors and successors in interest, assigns, attorneys and agents of each of the foregoing
from and against any and all claims, demands, obligations, duties, liabilities, damages, expenses, indebtedness, debts, breaches
of contract or warranty, duty or relationship, acts, omissions, or liability of any type, kind, nature, description or character
whatsoever, whether now known or unknown, whether liquidated or unliquidated, which arise out of or in connection with the Debt
or any agreement or other arrangement governing or related thereto.

 

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5. Entire Agreement. This Agreement
contains the entire agreement of the parties hereto and supersedes all prior agreements and understandings, oral or written between
the parties hereto. No modification or amendment of any of the terms, conditions or provisions herein may be made otherwise than
by written agreement signed by the parties hereto.

 

6. Miscellaneous.

 

(a) Governing Law; Jurisdiction. 
This Agreement will be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles
of conflict of laws.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, 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 this Agreement shall be commenced in the state and federal courts sitting in the City
of New York, County of New York (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 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 Agreement.

 

(b) Counterparts; Electronic
Signatures.  This Agreement may be executed in two or more counterparts, all of which are considered one and the same agreement
and will become effective when counterparts have been signed by each party and delivered to the other parties.  This Agreement,
once executed by a party, may be delivered to the other parties hereto by (e.g. electronic submission, facsimile transmission or
e-mail of a copy of this Agreement bearing the signature of the party so delivering this Agreement).

 

(c) Headings. 
The headings of this Agreement are for convenience of reference only, are not part of this Agreement and do not affect its interpretation.

 

(d) Severability. If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

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(e) Remedies. 
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Subscriber and the Company will be entitled to specific performance under this Agreement.  The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement
and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy
at law would be adequate.

 

(f) Entire Agreement;
Amendments.  This Agreement (including all schedules and exhibits hereto) constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein.  This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.  Except as set forth in herein, no provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

(g) Notices. All notices,
demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at
the address or number designated below (if delivered on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

If to Company, to:

 

BioHiTech Global, Inc.

80 Red Schoolhouse Road, Suite
101

Chestnut Ridge, NY 10977

Attention: Brian C. Essman, CFO

Email: bessman@biohitech.com

  

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With a copy by fax only to (which
copy shall not constitute notice):

 

Kane Kessler, P.C.

666 Third Avenue

New York, New York 10019

Attn: Peter Campitiello, Esq.

Email: pcampitiello@kanekessler.com

facsimile: 212-245-3009

 

If to Creditor, to:

 

(h) Successors and Assigns. 
This Agreement is binding upon and inures to the benefit of the parties and their successors and assigns.  The Creditor acknowledges
that the Company may assign this Agreement and any rights or obligations hereunder without the prior written consent of the Creditor
and the Creditor may not assign this Agreement or any rights or obligations hereunder upon the Closing without the prior written
consent of the Company. 

 

(i) Third Party Beneficiaries. 
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

(j) Further Assurances. 
Each party will do and perform, or cause to be done and performed, all such further acts and things, and will execute and deliver
all other agreements, certificates, instruments and documents, as another party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(k) Waiver.  It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.

 

(l) Other Documents. 
The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

(m) Waiver
of Jury Trial.  In any action, suit or proceeding in any jurisdiction brought by any party against any other party, the parties
each knowingly and intentionally, to the greatest extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably
and expressly waive forever trial by jury.

 

The parties have duly
executed this Agreement as of the Effective Date.

 

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	COMPANY	 	CREDITOR
	 	 	 	 
	BIOHITECH GLOBAL, INC.	 	FRANK E. CELLI
	 	 	 	 
	By:  	 	 	 
	 	Name: Brian C. Essman	 	 
	 	Title: Chief Financial Officer and Treasurer	 	 

 

	BIOHITECH AMERICA, LLC	 
	 	 	 
	By:	 	 
	 	Name: Brian C. Essman	 
	 	Title:  Chief Financial Officer and Treasurer	 

 

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EXHIBIT A

 

	Creditor	 	Date of 
 Debt	 	Original

     Principal 
 Amount	 	 	Interest	 	Total 
 Amount	 
	Frank E. Celli, Fourth Amended and Restated Secured Promissory Note dated February 1, 2017 with BHTA	 	Through Effective Date	 	$	4,500,000.00	 	 	Interest shall remain separate and payable, together with monthly compounding interest rate of 10.25% based on a 360 day year, upon maturity of the Note following this agreement	 	$	863,212.62	*
	Monetary advances to the Company from Frank E. Celli	 	Through Effective Date	 	$	544,477.00	 	 	Interest shall remain separate and payable, together with monthly compounding interest rate of 10.25% based on a 360 day year, upon maturity of the Note following this agreement	 	$	146,292.23	*

 

*Interest accrued as of December 31, 2017, additional interest
accrued from January 1, 2018 through the Effective Date shall be added to the indicated balances.

 

    10Exhibit 10.4

 

CERTIFICATE OF DESIGNATION OF

SERIES
C CONVERTIBLE PREFERRED STOCK

OF BIOHITECH GLOBAL, INC.

 

BioHiTech Global, Inc.,
a corporation organized and existing under the laws of the State of Delaware ("Company"), hereby certifies that
the Board of Directors of the Company (the "Board of Directors" or the "Board"), pursuant to
authority of the Board of Directors as required by applicable corporate law, and in accordance with the provisions of its certificate
of incorporation and bylaws, has and hereby authorizes a series of the Company's previously authorized Preferred Stock, par value
$0.0001 per share (the "Preferred Stock"), and hereby states the designation and number of shares, and fixes the
rights, preferences, privileges, powers and restrictions thereof, as follows: 

 

1.          Designation
and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated as
“Series C Convertible Preferred Stock” (the “Preferred Shares”). The authorized number of Preferred
Shares shall be one million (1,000,000) shares. Each Preferred Share shall have a par value of $0.0001. Capitalized terms not defined
herein shall have the meanings as set forth in Section 23 below.

 

2.          Ranking.
The Preferred Shares shall rank junior to any existing and future Indebtedness, and to the Series A Convertible Preferred Stock,
par value $0.0001 per share (the Series A Preferred Shares”); in respect of the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding-up of the Company (collectively, the “Senior Securities”)
or any future series of existing Indebtedness or preferred stock of pari passu rank to the Preferred Shares in respect of the preferences
as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of the Company (collectively, the
“Parity Stock”), all shares of the Series B Convertible Preferred Stock, par value $0.0001 per share (the Series
B Preferred Shares”) and all other shares of capital stock of the Company shall be junior in rank to all Preferred Shares
with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding-up of
the Company (collectively, the “Junior Stock”). The rights of all such shares of capital stock of the Company
shall be subject to the rights, powers, preferences and privileges of the Preferred Shares. In the event of the merger or consolidation
of the Company with or into another corporation, the Preferred Shares shall maintain their relative rights, powers, preferences,
privileges, and designations provided for herein and no such merger or consolidation shall result inconsistent therewith.

 

3.          Dividends.

 

(a)          From
and after the date of issuance of any Preferred Shares (the “Initial Issuance Date”), each holder of such Preferred
Shares (each, a “Holder” and collectively, the “Holders”) shall be entitled to receive dividends
(the “Dividends”), which Dividends shall be paid by the Company out of funds legally available therefor, payable,
subject to the conditions and other terms hereof, in shares of Common Stock or cash on the Stated Value of such Preferred Shares
at the Dividend Rate which shall be cumulative and shall continue to accrue whether or not declared and whether or not in any fiscal
year there shall be net profits or surplus available for the payment of dividends in such fiscal year. Dividends on the Preferred
Shares shall commence accumulating on the Initial Issuance Date and shall be computed on the basis of a 365-day year and actual
days elapsed. Subject to Section 4(c), Dividends shall be payable quarterly, at the option of the Company, in cash or shares of
Common Stock, in arears on each Dividend Payment Date, commencing on June 30, 2018 and following on the last day of the month following
each quarter on each September 30, December 31, March 31, and June 30, thereafter, until the Note, together with any and all unpaid
interest thereon is paid in full(each, a “Dividend Date”). If a Dividend Date is not a Business Day (as defined
below), then the Dividend shall be due and payable on the Business Day immediately following such Dividend Date. Additionally,
after the first Dividend Date, the Holder may request the payment of any accrued Dividends on any Conversion Date (each, an “Optional
Dividend Date”).

 

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(b)          Dividends
shall be payable on the Dividend Date, to the Holders of record of the Preferred Shares on the applicable Dividend Date, in shares
of Common Stock (the “Dividend Shares”) so long as there has been no Equity Conditions Failure and so long as
the delivery of Dividend Shares would not violate the provisions of Section 4(e); provided, however, that the Company
may, at its option, pay Dividends on any Dividend Date in cash (the “Cash Dividends”) or in a combination of
Cash Dividends and, so long as there has been no Equity Conditions Failure, Dividend Shares. The Company shall deliver a written
notice (each, a “Dividend Election Notice”) to each Holder on the Dividend Notice Due Date (the date such notice
is delivered to all of the Holders, the “Dividend Notice Date”), which notice (1) either (A) confirms that Dividends
to be paid on such Dividend Date shall be paid entirely in Dividend Shares or (B) elects to pay Dividends as Cash Dividends, Dividend
Shares, or as a combination of Dividend Shares and Cash Dividends and, in any event, specifies the amount of Dividends that shall
be paid as Cash Dividends and the amount of Dividends, if any, that shall be paid in Dividend Shares and (2) certifies that there
has been no Equity Conditions Failure as of such time, if any portion of the Dividends shall be paid in Dividend Shares. Notwithstanding
anything herein to the contrary, if no Equity Conditions Failure has occurred as of the Dividend Notice Date but an Equity Conditions
Failure occurs at any time prior to the Dividend Date, (A) the Company shall provide each Holder a subsequent notice to that effect
and (B) unless such Holder waives the Equity Conditions Failure, the Dividend payable to such Holder on such Dividend Date shall
be paid as Cash Dividends to be paid to each Holder on a Dividend Date in Dividend Shares shall be paid in a number of fully paid
and non-assessable shares (rounded to the nearest whole share, with 0.50 or more of a share being rounded up to the nearest whole
share and 0.49 or less of a share being rounded down to the nearest whole share) of Common Stock equal to the quotient of (1) the
amount of Dividends payable to such Holder on such Dividend Date less any Cash Dividends paid and (2) the Conversion Price in effect
on the applicable Dividend Date.

 

(c)          When
any Dividend Shares are to be paid on a Dividend Date to any Holder, the Company shall (i) (A) provided that (x) the Company’s
transfer agent (the “Transfer Agent”) is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program and (y) such Dividend Shares to be so issued are eligible for resale pursuant to Rule
144 (as defined in the Securities Exchange Agreement), credit such aggregate number of Dividend Shares to which such Holder shall
be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit and Withdrawal at Custodian
system, or (B) if either of the immediately preceding clauses (x) or (y) is not satisfied, issue and deliver on the applicable
Dividend Date, to the address set forth in the register maintained by the Company for such purpose pursuant to the Securities Exchange
Agreement or to such address as specified by such Holder in writing to the Company at least two (2) Business Days prior to the
applicable Dividend Date, a certificate, registered in the name of such Holder or its designee, for the number of Dividend Shares
to which such Holder shall be entitled and (ii) with respect to each Dividend Date, pay to such Holder, in cash by wire transfer
of immediately available funds, the amount of any Cash Dividend. The Company shall pay any and all taxes that may be payable with
respect to the issuance and delivery of Dividend Shares.

 

    2 

     

    

 

4.          Conversion.
Each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined
below) on the terms and conditions set forth in this Section 4.

 

(a)          Holder’s
Conversion Right. Subject to the provisions of Section 4(e), at any time or times after the twelve month anniversary of the
Initial Issuance Date (the “Initial Conversion Date”) each Holder shall be entitled to convert any whole number
of Preferred Shares into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 4(d) at
the Conversion Rate (as defined below).

 

(c)          Conversion
Rate. The number of validly issued, fully paid and non-assessable shares of Common Stock issuable upon conversion (the “Conversion
Shares”) of each Preferred Share pursuant to Section 4(a) shall be determined according to the following formula (the
“Conversion Rate”):

 

Conversion Amount

Conversion Price

 

No fractional
shares of Common Stock are to be issued upon the conversion of any Preferred Shares. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole
share.

 

(d)          Mechanics
of Conversion. The conversion of each Preferred Share shall be conducted in the following manner:

 

(i)        Holder’s
Conversion. Subject to the provisions of Section 4(f), to convert Preferred Shares into validly issued, fully paid and non-assessable
shares of Common Stock on any date (a “Conversion Date”), a Holder shall deliver (via electronic mail), for
receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion of Preferred Shares
subject to such conversion in the form attached hereto as Exhibit A (the “Conversion Notice”)
to the Company, which Conversion Notice shall be subject to an adjustment pursuant to Section 8 to the Conversion Price set forth
on such Conversion Notice upon the close of the Principal Market on the Conversion Date. If required by Section 4(d)(vi), within
three (3) Trading Days following a conversion of any such Preferred Shares as aforesaid, such Holder shall surrender to a nationally
recognized overnight delivery service for delivery to the Company the original certificates representing the share(s) of Preferred
Shares (the “Preferred Share Certificates”) so converted as aforesaid.

 

    3 

     

    

 

(ii)         Company’s
Response. On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile or electronic mail an acknowledgment of confirmation, in the form attached hereto as Exhibit
B, of receipt of such Conversion Notice to such Holder and the Transfer Agent, which confirmation shall constitute an instruction
to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second (2nd)
Trading Day following the date of receipt by the Company of such Conversion Notice, the Company shall (1) provided that (x) the
Transfer Agent is participating in DTC Fast Automated Securities Transfer Program and (y) such Conversion Shares and Dividend Shares
(as applicable) to be so issued are eligible for resale pursuant to Rule 144 credit such aggregate number of Conversion Shares
and Dividend Shares (as applicable) to which such Holder shall be entitled to such Holder’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if either of the immediately preceding clauses (x)
or (y) are not satisfied, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice,
a certificate, registered in the name of such Holder or its designee, for the number of Conversion Shares and Dividend Shares (as
applicable) to which such Holder shall be entitled. If the number of Preferred Shares represented by the Preferred Share Certificate(s)
submitted for conversion pursuant to Section 4(c)(vi) is greater than the number of Preferred Shares being converted, then the
Company shall if requested by such Holder, as soon as practicable and in no event later than three (3) Trading Days after receipt
of the Preferred Share Certificate(s) and at its own expense, issue and deliver to such Holder (or its designee) a new Preferred
Share Certificate representing the number of Preferred Shares not converted.

 

(iii)        Record
Holder. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

(iv)     
  Intentionally omitted.

 

(v)         Pro
Rata Conversion; Disputes. In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion
Date and the Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert
from each Holder electing to have Preferred Shares converted on such date a pro rata amount of such Holder’s Preferred Shares
submitted for conversion on such date based on the number of Preferred Shares submitted for conversion on such date by such Holder
relative to the aggregate number of Preferred Shares submitted for conversion on such date. In the event of a dispute as to the
number of shares of Common Stock issuable to a Holder in connection with a conversion of Preferred Shares, the Company shall issue
to such Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 22.

 

    4 

     

    

 

(vi)         Book-Entry.
Notwithstanding anything to the contrary set forth in this Section 4, upon conversion of any Preferred Shares in accordance with
the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing the Preferred Shares
to the Company following conversion thereof unless (A) the full or remaining number of Preferred Shares represented by the certificate
are being converted (in which event such certificate(s) shall be delivered to the Company as contemplated by this Section 4(d)(vi))
or (B) such Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting
reissuance of Preferred Shares upon physical surrender of any Preferred Shares. Each Holder and the Company shall maintain records
showing the number of Preferred Shares so converted by such Holder and the dates of such conversions or shall use such other method,
reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of the certificate representing
the Preferred Shares upon each such conversion. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge
and agree that, by reason of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred
Shares represented by such certificate may be less than the number of Preferred Shares stated on the face thereof. Each certificate
for Preferred Shares shall bear the following legend:

 

ANY TRANSFEREE OR ASSIGNEE OF THIS
CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE COMPANY’S CERTIFICATE OF DESIGNATION RELATING TO THE SHARES OF SERIES
C PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(vi) THEREOF. THE NUMBER OF SHARES OF SERIES B PREFERRED
STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK STATED ON THE FACE HEREOF
PURSUANT TO SECTION 4(c)(vi) OF THE CERTIFICATE OF DESIGNATION RELATING TO THE SHARES OF SERIES C PREFERRED STOCK REPRESENTED BY
THIS CERTIFICATE.

 

(e)          Taxes.
The Company shall pay any and all documentary, stamp, transfer (but only in respect of the registered holder thereof), issuance
and other similar taxes that may be payable with respect to the issuance and delivery of shares of Common Stock upon the conversion
of Preferred Shares.

 

    5 

     

    

 

(f)          Intentionally
omitted.

 

(g)          Anti-Dilution.
If, at any time while the Preferred Shares are outstanding, the Company sells or grants any option to purchase or sells or grants
any right to reprice, or otherwise disposes of or issues, any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock at or with a conversion formula that creates an effective price per share that is lower than the
then Conversion Price (such lower price or conversion formula, 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 4(g) in respect of an Exempt Issuance. The Company
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 4(g), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price, conversion formula and other pricing terms (such notice, the “Dilutive Issuance Notice”). For the avoidance
of doubt, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 4(g), upon the occurrence of
any Dilutive Issuance, the Holders will be 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 the Holder accurately refers to the Base Conversion Price
in the Notice of Conversion.

 

5.          Reserved.

 

6.          Rights
Upon Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this Certificate of Designation and the other Transaction
Documents in accordance with the provisions of this Section 6 pursuant to written agreements in form and substance satisfactory
to the Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver
to each holder of Preferred Shares in exchange for such Preferred Shares a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Certificate of Designation, including, without limitation, having
a Stated Value and Dividend Rate equal to the stated value and dividend rate of the Preferred Shares held by the Holders and having
similar ranking to the Preferred Shares, and reasonably satisfactory to the Required Holders and (ii) the Successor Entity
(including its Parent Entity) is a publicly traded corporation whose shares of common stock are quoted on or listed for trading
on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the
other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Certificate of Designation
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein and therein.
In addition to the foregoing, upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to each Holder
confirmation that there shall be issued upon conversion of the Preferred Shares at any time after the consummation of such Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still
issuable under Sections 7(a) and 12, which shall continue to be receivable thereafter)) issuable upon the conversion of the Preferred
Shares prior to such Fundamental Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor
Entity (including its Parent Entity) which each Holder would have been entitled to receive upon the consummation of such Fundamental
Transaction had all the Preferred Shares held by each Holder been converted immediately prior to such Fundamental Transaction (without
regard to any limitations on the conversion of the Preferred Shares contained in this Certificate of Designation), as adjusted
in accordance with the provisions of this Certificate of Designation. The provisions of this Section 6 shall apply similarly and
equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion of the
Preferred Shares.

 

    6 

     

    

 

7.          Rights
Upon Issuance of Purchase Rights and Other Corporate Events.

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 8 below, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had
held the number of shares of Common Stock acquirable upon complete conversion of all the Preferred Shares (without taking into
account any limitations or restrictions on the convertibility of the Preferred Shares) held by such Holder immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that such Holder’s right to participate in any such Purchase Right would result in such Holder exceeding
the Maximum Percentage, then such 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 such Holder until such time, if ever, as its right thereto would not result in such Holder exceeding
the Maximum Percentage).

  

    7 

     

    

 

(b)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that each Holder will thereafter have the right to receive upon a conversion of all the Preferred Shares held by such
Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which
such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such
Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility
of the Preferred Shares contained in this Certificate of Designation) or (ii) in lieu of the shares of Common Stock otherwise receivable
upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the
consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Preferred Shares
held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common
Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provisions of this Section 7 shall
apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion
of the Preferred Shares contained in this Certificate of Designation.

 

8.          Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 7 or Section
12, if the Company at any time on or after the First Closing subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price
in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 7 or
Section 12, if the Company at any time on or after the First Closing combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 8 shall become effective immediately
after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 8 occurs during
the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately
to reflect such event.

 

    8 

     

    

 

9.          Authorized
Shares.

 

(a)          Reservation.
The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock equal to
100% of the Conversion Rate with respect to the Conversion Amount of each Preferred Share as of the Initial Issuance Date (assuming
for purposes hereof, that all the Preferred Shares issuable pursuant to the Securities Purchase have been issued, such Preferred
Shares are convertible at the Conversion Price and without taking into account any limitations on the conversion of such Preferred
Shares set forth in herein) (assuming for purposes hereof, that all the Preferred Shares issuable pursuant to the Securities Exchange
Agreement have been issued and without taking into account any limitations on the issuance of securities set forth herein). So
long as any of the Preferred Shares are outstanding, the Company shall take all action necessary to reserve and keep available
out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Preferred
Shares, as of any given date, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the
conversion of all of the Preferred Shares issued or issuable pursuant to the Securities Exchange Agreement assuming for purposes
hereof, that all the Preferred Shares issuable pursuant to the Securities Exchange Agreement have been issued and without taking
into account any limitations on the issuance of securities set forth herein, provided that at no time shall the number of shares
of Common Stock so available be less than the number of shares required to be reserved by the previous sentence (without regard
to any limitations on conversions contained in this Certificate of Designation) (the “Required Amount”). The
initial number of shares of Common Stock reserved for conversions of the Preferred Shares and each increase in the number of shares
so reserved shall be allocated pro rata among the Holders based on the number of Preferred Shares held by each Holder on the Initial
Issuance Date or increase in the number of reserved shares (as the case may be) (the “Authorized Share Allocation”).
In the event a Holder shall sell or otherwise transfer any of such Holder’s Preferred Shares, each transferee shall be allocated
a pro rata portion of such Holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any
Person which ceases to hold any Preferred Shares shall be allocated to the remaining Holders of Preferred Shares, pro rata based
on the number of Preferred Shares then held by such Holders.

  

(b)          Insufficient
Authorized Shares. If, notwithstanding Section 9(a) and not in limitation thereof, at any time while any of the Preferred Shares
remain outstanding the Company does not have a sufficient number of authorized and unissued shares of Common Stock to satisfy its
obligation to have available for issuance upon conversion of the Preferred Shares at least a number of shares of Common Stock equal
to the Required Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary
to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve and have
available the Required Amount for all of the Preferred Shares then outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety
(90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting or obtain written consent of
its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement or information statement, as applicable, and shall use its best
efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its Board
to recommend to the stockholders that they approve such proposal.

 

    9 

     

    

  

10.         Voting
Rights. 

 

(a)          In
addition to any other rights provided for herein or by law, the holders of the Preferred Shares shall be entitled to vote, together
with the holders of Common Stock, as one class on all matters as to which holders of Common Stock shall be entitled to vote, in
the same manner and with the same effect (subject to the provisions of the next sentence) as such Common Stock holders. In any
such vote, each of the Preferred Shares shall entitle the holder thereof to vote at the rate of four (4) votes per each of the
Preferred Shares owned by the Holder.

 

(b)          In
the event the holders of the Preferred Shares are required to vote as a class, the affirmative vote of holders of not less than
a majority of the then outstanding Preferred Shares shall be required to approve each such matter to be voted upon and if any matter
is approved by such requisite percentage of holders of the Preferred Shares, such approval shall bind all holders of the Preferred
Shares.

 

(c)          As
set forth in Section 13, the terms of the Preferred Shares may be amended, modified or waived only with the consent of the holders
of a majority of the then outstanding shares of the Preferred Shares, voting as one class, either expressed in writing or at a
meeting called for that purpose.

 

(d)          Each
share of the Preferred Shares shall entitle the holder thereof to one vote on all matters to be voted on by the holders of the
Preferred Shares as a class.

 

11.         Liquidation,
Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets
of the Company, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation
Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, an amount per Preferred Share
equal to the Stated Value on the date of such payment, provided that if the Liquidation Funds are insufficient to pay the full
amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive
a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity
Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage
of the full amount of Liquidation Funds payable to all holders of Preferred Shares and all holders of shares of Parity Stock. To
the extent necessary, the Company shall cause such actions to be taken by each of its Subsidiaries so as to enable, to the maximum
extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 11.
All the preferential amounts to be paid to the Holders under this Section 11 shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the holders
of shares of Junior Stock in connection with a Liquidation Event as to which this Section 11 applies.

 

    10 

     

    

 

12.         Participation.
In addition to any adjustments pursuant to Section 8, the Holders shall, as holders of Preferred Shares, be entitled to receive
such dividends paid and distributions made to the holders of shares of Common Stock to the same extent as if such Holders had converted
each Preferred Share held by each of them into shares of Common Stock (without regard to any limitations on conversion herein or
elsewhere) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the
preceding sentence shall be made concurrently with the dividend or distribution to the holders of shares of Common Stock (provided,
however, to the extent that a Holder’s right to participate in any such dividend or distribution would result in such Holder
exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such dividend or distribution to such
extent (or the beneficial ownership of any such shares of Common Stock as a result of such dividend or distribution to such extent)
and such dividend or distribution to such extent shall be held in abeyance for the benefit of such Holder until such time, if ever,
as its right thereto would not result in such Holder exceeding the Maximum Percentage).

 

13.         Vote to Change
the Terms of or Issue Preferred Shares. In addition to any other rights provided by law, except where the vote or written consent
of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation, without
first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the
Required Holders, voting together as a single class, the Company shall not amend or repeal any provision of, or add any provision
to, its Certificate of Incorporation or bylaws, or file any certificate of designations or articles of amendment of any series
of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges
or powers, or restrictions provided for the benefit, of the Preferred Shares, regardless of whether any such action shall be by
means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; provided, however, the Company
shall be entitled, without the consent of the Required Holders unless such consent is otherwise required by the DGCL, to (a) amend
the Certificate of Incorporation to effectuate one or more reverse stock splits of its issued and outstanding Common Stock for
purposes of maintaining compliance with the rules and regulations of the Principal Market; (b) purchase, repurchase or redeem any
shares of capital stock of the Company junior in rank to the Preferred Shares (other than pursuant to equity incentive agreements
(that have in good faith been approved by the Board) with employees giving the Company the right to repurchase shares upon the
termination of services); or (c) issue any preferred stock that is junior in rank to the Preferred Shares.

 

14.         Lost
or Stolen Certificates. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificates representing Preferred Shares (as to which a written certification and the indemnification
contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of an indemnification undertaking
by the applicable Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation
of the certificate(s), the Company shall execute and deliver new certificate(s) of like tenor and date.

 

15.         Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designation
shall be cumulative and in addition to all other remedies available under this Certificate of Designation and any of the other
Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no
remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy. Nothing herein shall
limit any Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms
of this Certificate of Designation. The Company covenants to each Holder that there shall be no characterization concerning this
instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion
and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled,
in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without
the necessity of showing economic loss and without any bond or other security being required, to the extent permitted by applicable
law. The Company shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder
to confirm the Company’s compliance with the terms and conditions of this Certificate of Designation.

 

    11 

     

    

 

16.         Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of
Designation, and will at all times in good faith carry out all the provisions of this Certificate of Designation and take all action
as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision
of this Certificate of Designation, the Company (i) shall not increase the par value of any shares of Common Stock receivable
upon the conversion of any Preferred Shares above the Conversion Price then in effect, (ii) shall take all such actions as
may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon the conversion of Preferred Shares and (iii) shall, so long as any Preferred Shares are outstanding, take all
action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose
of effecting the conversion of the Preferred Shares, the maximum number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of the Preferred Shares then outstanding (without regard to any limitations on conversion contained
herein).

 

17.         Failure
or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. This Certificate of Designation shall be deemed to be jointly drafted
by the Company and all Holders and shall not be construed against any Person as the drafter hereof.

 

18.         Notices.
The Company shall provide each Holder of Preferred Shares with prompt written notice of all actions taken pursuant to the terms
of this Certificate of Designation, including in reasonable detail a description of such action and the reason therefor. Whenever
notice is required to be given under this Certificate of Designation, unless otherwise provided herein, such notice must be in
writing and shall be given in accordance with the signature page of the Securities Exchange Agreement. Without limiting the generality
of the foregoing, the Company shall give written notice to each Holder (i) promptly following any adjustment of the Conversion
Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days
prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon
the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to all holders of shares of Common Stock as a class or (C) for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided, in each case, that such information
shall be made known to the public prior to, or simultaneously with, such notice being provided to any Holder.

 

    12 

     

    

 

19.         Transfer
of Preferred Shares. Subject to the restrictions set forth in the Securities Exchange Agreement, a Holder may transfer some
or all of its Preferred Shares without the consent of the Company.

 

20.         Preferred
Shares Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company
as it may designate by notice to the Holders), a register for the Preferred Shares, in which the Company shall record the name,
address and facsimile number of the Persons in whose name the Preferred Shares have been issued, as well as the name and address
of each transferee. The Company may treat the Person in whose name any Preferred Shares is registered on the register as the owner
and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made
transfers.

 

21.         Amendment.
This Certificate of Designation or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called
for such purpose, or written consent without a meeting in accordance with the DGCL, of the Required Holders, voting separate as
a single class, and with such other stockholder approval, if any, as may then be required pursuant to the DGCL and the Certificate
of Incorporation.

 

22.         Dispute
Resolution.

 

(a)          Submission
to Dispute Resolution.

 

(i)          In the
case of a dispute relating to a Conversion Price, a VWAP, or a fair market value or the arithmetic calculation of a Conversion
Rate (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the
Company or the applicable Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company,
within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder at
any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Company are unable
to promptly resolve such dispute relating to such Closing Sale Price, such Conversion Price, such VWAP or such fair market value,
or the arithmetic calculation of such Conversion Rate (as the case may be), at any time after the second (2nd) Business
Day following such initial notice by the Company or such Holder (as the case may be) of such dispute to the Company or such Holder
(as the case may be), then such Holder may, at its sole option, select an independent, reputable investment bank to resolve such
dispute.

 

    13 

     

    

 

(ii)         Such Holder
and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 22 and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date
on which such Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred
to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either such Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer
be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment
bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and such Holder or otherwise requested by such investment bank, neither the Company nor such Holder shall be entitled
to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other
than the Required Dispute Documentation) .

 

(iii)        The Company
and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and such Holder
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall
be final and binding upon all parties absent manifest error.

 

(b)          Miscellaneous.

 

(i)          The
Company expressly acknowledges and agrees that (i) this Section 22 constitutes an agreement to arbitrate between the Company and
each Holder (and constitutes an arbitration agreement) under §7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”)
and that any Holder is authorized to apply for an order to compel arbitration pursuant to CPLR §7503(a) in order to compel
compliance with this Section 22, (ii) the terms of this Certificate of Designation and each other applicable Transaction Document
shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall
be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines
are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute
such investment bank shall apply such findings, determinations and the like to the terms of this Certificate of Designation and
any other applicable Transaction Document, (iii) the applicable Holder (and only such Holder with respect to disputes solely relating
to such Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 22 to any state or
federal court sitting in the City of New York, Borough of Manhattan, subject to any choice of law provision in the Securities Exchange
Agreement, in lieu of utilizing the procedures set forth in this Section 22 and (iv) nothing in this Section 22 shall limit such
Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters
described in this Section 22).

 

    14 

     

    

 

(ii)         Whenever
any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designation, unless otherwise expressly
set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the
account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company
in writing, provided that such Holder may elect to receive a payment of cash via wire transfer of immediately available funds by
providing the Company with prior written notice setting out such request and such Holder’s wire transfer instructions. Whenever
any amount expressed to be due by the terms of this Certificate of Designation is due on any day which is not a Business Day, the
same shall instead be due on the next succeeding day which is a Business Day. Any amount due hereunder which is not paid when due
shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate
of nine percent (9%) per year from the date such amount was due until the same is paid in full (“Late Charge”).

 

23.          Certain
Defined Terms. For purposes of this Certificate of Designation, the following terms shall have the following meanings:

 

(a)          
“Additional Amount” means, as of the applicable date of determination, with respect to each Preferred Share,
all declared and unpaid Dividends on such Preferred Share.

 

(b)           

“Bloomberg” means Bloomberg, L.P.

 

(c)           

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

 

(d)           

“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing trade price (as the case may be) then the last trade price of such security prior to 4:00:00 p.m.,
New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market
for such security, the last trade price of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg. If the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be
the fair market value as mutually determined by the Company and the applicable Holder. If the Company and such Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in
Section 22. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other
similar transaction during such period.

 

    15 

     

    

 

(e)             “Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(f)             “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant 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. 

 

(g)           
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise,
of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or
intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability
that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with respect thereto.

 

(h)           
“Conversion Amount” means, with respect to each Preferred Share, as of the applicable date of determination,
the Stated Value thereof.

 

(i)             “Conversion
Price” means $4.75, subject to adjustment as provided in this Certificate of Designation.

 

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

 

(k)          
“Dividend Notice Due Date” means the eleventh (11th) Trading Day immediately prior to the applicable
Dividend Date.

 

(l)            
“Dividend Rate” means six percent (10.25%) per annum.

 

    16 

     

    

 

(m)          “Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market, or the Principal Market.

 

(n)          
“Equity Conditions” means: (i) with respect to the applicable date of determination all of the shares of
Common Stock issuable upon conversion of all of the Preferred Shares are freely tradable without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion contained
herein); (ii) on each day during the period beginning thirty (30) days prior to the applicable date of determination and
ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”),
the Common Stock (including all of the shares of Common Stock issuable upon conversion of all of the Preferred Shares) is
listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an
Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of
determination due to business announcements by the Company); (iii) on each day during the Equity Conditions Measuring Period,
the Company shall have delivered all shares of Common Stock issuable upon conversion of Preferred Shares on a timely basis as
set forth in Section 4 hereof, and all other shares of capital stock required to be delivered by the Company on a timely
basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the
event requiring determination may be issued in full without violating Section 4(e) hereof (each Holder acknowledges that the
Company shall be entitled to assume that this condition has been met for all purposes hereunder absent written notice from
such Holder); (v) any shares of Common Stock to be issued in connection with the event requiring determination may be issued
in full without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or
designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period, no public
announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned,
terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause
any of the shares of Common Stock issuable upon conversion of any Preferred Shares to not be freely tradable without the need
for registration under any applicable state securities laws (disregarding any limitation on conversion contained herein);
(viii) no Holder shall be in possession of any material, non-public information provided to any of them by the Company, any
of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on
each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in material compliance with
each, and shall not have breached any, provision, covenant, representation or warranty of any Transaction Document; (x) there
shall be no Triggering Events; (xi) The Company’s Common Stock is not subject to a “DTC chill”; (xii) the
Company is current on all of its filings under the Exchange Act; (xiv) the Preferred Shares may be able to be delivered via
an “Automatic Conversion” of principal and/or interest.

 

    17 

     

    

 

(o)          
“Equity Conditions Failure” means, with respect to any date of determination, that on any day during the period
commencing twenty (20) Trading Days immediately prior to such date of determination, the Equity Conditions have not been satisfied
(or waived in writing by the Required Holders).

 

(p)            “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(q)           
“Exempt Issuance” means the issuance of (a) shares of Common Stock
or options to employees, officers, directors, advisors or independent contractors of the Company pursuant to any stock or option
plan duly adopted for such purpose, (b) shares of Common Stock, warrants or options to advisors or independent contractors of the
Company for compensatory purposes, (c) securities upon the conversion, exchange of, or redemption of any Securities issued hereunder
and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the
First Closing, provided that such securities have not been amended since such date to increase the authorized number of such securities
or to decrease the conversion price or exchange price of such securities, (d) securities issuable pursuant to any contractual
anti-dilution obligations of the Company in effect as of the First Closing, provided that such obligations have not been materially
amended since such date, and (e) securities issued pursuant to acquisitions or any other strategic transactions approved by the
Board of Directors, provided that any such issuance 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.

 

(r)             “Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than fifty percent (50%) of the outstanding shares of Voting Stock of the Company (not
including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than fifty percent (50%) of the outstanding shares of Voting Stock
of the Company (not including any shares of Voting Stock of the Company 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), or (5) reorganize, recapitalize or reclassify the Common Stock, or (ii) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated
thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of fifty percent (50%) of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of
the Company.

 

    18 

     

    

 

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

 

(t)           
“Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations
issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital
leases” in accordance with generally accepted accounting principles) (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement
are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest
or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though
the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all
Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above.

 

(u)           
“Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary
liquidation, dissolution or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially
all of the assets of the business of the Company and its Subsidiaries, taken as a whole.

 

(v)          
“Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any subsidiary, either
individually or taken as a whole, (ii) the transactions contemplated hereunder or (iii) the authority or ability of the Company
to perform any of its obligations hereunder.

 

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

 

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

 

    19 

     

    

 

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

 

(aa)          “Principal
Market” means the OTC PINK, OTCQB, OTCQX, or OTCBB.

 

(bb)          “Redemption Notices” means, collectively, the Triggering Event Redemption Notice, the Subsequent Financing
Event Redemption Notice, and each of the foregoing, individually, a “Redemption Notice”.

 

(cc)         
“Redemption Prices” means, collectively, the Triggering Event Redemption Price, the Company One-Time Redemption
Price, the Subsequent Financing Redemption Price, and each of the foregoing, individually, a “Redemption Price”.

 

(dd)         
“Required Holders” means the holders of at least a majority of the outstanding Preferred Shares.

 

(ee)         
“Securities” means, collectively, the Preferred Shares and the shares of Common Stock issuable upon conversion
of the Preferred Shares.

 

(ff)          
“Securities Exchange Agreement” shall mean that certain Securities Exchange Agreement, dated on or about
the date of the filing of this Certificate of Designation, by and between the Company and the Holder.

 

(gg)          “Stated Value” shall mean $10.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations,
reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date
with respect to the Preferred Shares.

  

(hh)
         “Stockholder Approval” means, for the purposes
of this Certificate of Designation and any other Transaction Document, the affirmative approval of the stockholders of the
Company providing for the Company’s issuance of all of the Securities as described in the Transaction Documents if and
to the extent required in accordance with applicable law and the rules and regulations of the Principal Market.

 

(ii)             “Subsidiary”
or “Subsidiaries” means any subsidiary of the Company, including, where
applicable, any direct or indirect subsidiary of the Company formed or acquired after the date hereof. 

 

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

 

    20 

     

    

 

(kk)         
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from
trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such
day is otherwise designated as a Trading Day in writing by the Required Holders.

 

(ll)         
  “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which
the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of
directors, managers, trustees or other similar governing body of such Person (irrespective of whether or not at the time capital
stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

(mm)        “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function
or, if the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on
such date shall be the fair market value as mutually determined by the Company and such Holder. If the Company and such Holder
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 22. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.

 

24.         Disclosure.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designation, unless the
Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall simultaneously with any such receipt or delivery publicly
disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall
indicate to each Holder contemporaneously with delivery of such notice, and in the absence of any such indication, each Holder
shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating
to the Company or its Subsidiaries. Nothing contained in this Section 24 shall limit any obligations of the Company, or any rights
of any Holder.

 

(Remainder of the page left intentionally
blank.)

 

    21 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Certificate of Designation of Series C Convertible Preferred Stock of Inc.
to be signed by its duly authorized officer on this 22nd day of January 2018.

 

	 	BioHiTech Global, Inc.
	 	 	 
	 	By:  	 
	 	 	Name:   Brian C. Essman
	 	 	Title:     Chief Financial Officer & Treasurer

  

    22 

     

    

 

EXHIBIT A

 

BioHiTech Global, Inc.

 

CONVERSION NOTICE

 

Reference is made to
the Certificate of Designation of Series C Convertible Preferred Stock of BioHiTech Global,
Inc. (the “Certificate of Designation”). In accordance with and pursuant to the Certificate of Designation,
the undersigned hereby elects to convert the number of shares of Series C Convertible Preferred Stock (the “Preferred
Shares”), of BioHiTech Global, Inc., a Delaware corporation (the “Company”),
indicated below into shares of common stock of the Company, as of the date specified below.

 

	Date of Conversion: 
	 

 

	Number of Preferred Shares to be converted:  	 

 

	Share certificate no(s). of Preferred Shares to be converted:  	 

 

	Tax ID Number (If applicable): 	 

 

	Conversion Price: 	 

 

	Number of shares of Common Stock to be issued:	 

 

Please issue the shares of Common Stock
into which the Preferred Shares are being converted in the following name and to the following address:

 

	Issue to: 	 
	 	 
	 	 

 

	Address: 	 

 

	Telephone Number: 	 

 

	Facsimile Number: 	 

 

	Holder: 	 

 

    23 

     

    

 

	By: 	 
	 	 
	 	 
	Title:	 
	 	 
	 	 
	Dated: 	 
	 	 

 

	Account Number (if electronic book entry transfer): 	 
	 	 
	 	 
	Transaction Code Number (if electronic book entry transfer): 	 
	 	 

 

    24 

     

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Conversion Notice and hereby directs [_________________________] to issue the above indicated number of shares
of Common Stock in accordance with the Conversion Notice dated __________, 201_ from the Company and acknowledged and agreed to
by [_____________________].

 

	 	BioHiTech Global Inc.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    25

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