Document:

Exhibit 4.2

 

THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS WARRANT 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.

 

LOTON, CORP 

 

COMMON STOCK WARRANT

	 	 	Effective Date:

 

Loton,
Corp, a Nevada corporation (the “Company”) hereby certifies that, for value received, (together with his/its
registered assigns, “Holder”), is entitled to purchase from the Company up to shares of Common Stock (each such
share, a “Warrant Share” and all such shares, the “Warrant Shares”), at any time and from
time to time from and after (the “First Exercise Date”), through and including (the “Expiration Date”),
subject to the following terms and conditions set forth below.

 

The parties
agree and acknowledge that this Warrant (i) is issued as of the Effective Date listed above and (ii) as consideration for this
Warrant, the Holder hereby releases the Company and its principals from any and all claims relating to the Holder’s present
or prior investments in the Company and from any other claim, existing on or prior to the Effective Date.

 

1.                                      
Definitions. As used in this Warrant, the following terms shall have the respective definitions set forth
in this Section 1.

 

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

 

“California
Courts” means the state and federal courts sitting in Los Angeles County, California.

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any securities into which such common stock
may hereafter be reclassified.

 

“Exercise Price” means $0.01.

    

     

    

“Person”
means any entity, corporation, company, association, joint venture, joint stock company, partnership (whether general, limited
or limited liability), trust, limited liability company, real estate investment trust, organization, individual (including any
personal representative, executor or heir of a deceased individual), nation, state, government (including any agency, department,
bureau, board, division or instrumentality thereof), trustee, receiver or liquidator.

 

“Trading
Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock
is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on
any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the highest tier of
the OTC Markets on which the Common Stock is then quoted (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii)
hereof, then Trading Day shall mean a Business Day.

 

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

 

2.                                      
Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company
for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

3.                                      
Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant
Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company
at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially
the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

 

4.                                      
Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time
and from time to time from and after the First Exercise Date through and including the Expiration Date. At 5:00 p.m., Los Angeles
time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.
The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder.

 

    2 

     

    

 

5.                            Delivery
of Warrant Shares.

 

(a)   
To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate
Warrant Shares represented by this Warrant is being exercised. Upon delivery of the Exercise Notice (in the form attached hereto)
to the Company (with the attached Warrant Shares Exercise Log) at its address for notice set forth herein and upon payment of
the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall
promptly issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which shall bear a
restricted stock legend under the Securities Act, similar to the one on the face of this Warrant, unless (i) such exercise is
pursuant to Section 10(b) and (ii) as of the Date of Exercise the Holder is not, and has not been for the previous 90 days, an
“affiliate” of the Company (as defined in Rule 144 under the Securities Act). A “Date of Exercise”
means the date on which the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log
attached to it), appropriately completed and duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares
so indicated by the Holder to be purchased.

 

6.                                      
Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible
for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

 

7.                                      
Replacement of Warrant. If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and
pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation
of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.

 

8.                                      
Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available
out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling
it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant (taking into account the adjustments and restrictions of Section 9).
The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

 

9.                           Payment
of Exercise Price. The Holder shall pay the Exercise Price in cash.

    3 

     

    

 

10.                                
Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation,
any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m.
(Los Angeles time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00
p.m. (Los Angeles time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses
for such communications shall be: (i) if to the Company, to Loton Corp., 269 South Beverly Drive, Beverly Hills, CA 90212, Attn:
Executive Chairman, or to Facsimile No.: (310) 601-2510 (or such other address as the Company
shall indicate in writing in accordance with this Section), or (ii) if to the Holder, to the address or facsimile number appearing
on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this
Section.

 

11.                       Investor
Representations.

 

(a)   
Holder hereby confirms that this Warrant and any shares of Common Stock or other securities of the Company issued upon
exercise hereof (collectively, “Securities”) are or will be acquired for investment for the Holder’s
own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Holder
has no present intention of selling, granting any participation in, or otherwise distributing the same. The Holder further represents
that it does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the Securities.

 

(b)   
Holder is, and upon any issuance of Securities will be, an “accredited investor” as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act.

 

(c)   Holder has the requisite knowledge and experience in financial and business matters to assess the relative merits and risks of
investment in the Securities and has had a full opportunity to discuss with the Company all material aspects of investment in
the Securities, including the opportunity to ask, and to receive answers to its full satisfaction, regarding such questions as
it has deemed necessary to evaluate such investment.

 

(d)   
Except to the extent specifically set forth herein, the Company is making no representations and warranties with respect
to the Company or the Securities.

 

		12.	Miscellaneous.

 

(a)   
This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and
the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their successors and assigns.

 

    4 

     

    

 

(b)   
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense
of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against a party hereto
or its respective affiliates, employees or agents) shall be commenced exclusively in the California Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the California Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any California Court,
or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant
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 manner permitted by 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 Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce
any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

(c)   
The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit
or affect any of the provisions hereof.

 

(d)   
In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby
and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(e)   
Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder
with respect to the Warrant Shares.

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK, SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company
has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

	 	LOTON, CORP
	 	 
	 	By: 	
	 	Name:

Title:	Robert Ellin
Executive
Chairman & President

 

AGREED AND ACKNOWLEDGED:

 

	Tax ID:	 	 
	 	 	 
	 	 	 
	Please include address for Delivery of Shares via Fedex
below:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

    6 

     

    

EXERCISE NOTICE LOTON,
CORP

 

WARRANT EFFECTIVE:

 

 

 

The undersigned Holder hereby
irrevocably elects to purchase shares of Common Stock pursuant to the above referenced Warrant. Capitalized terms used herein and
not otherwise defined have the respective meanings set forth in the Warrant.

 

(1)   
The undersigned Holder hereby exercises its right to purchase Warrant Shares pursuant to the Warrant.

 

(2)   
The Holder intends that payment of the Exercise Price shall be made as a “Cash Exercise”.

 

(3)   
The holder shall pay the sum of $ 1250.00 to the Company in accordance with the terms of the Warrant.

 

(4)   
Pursuant to this Exercise Notice, the Company shall deliver to the holder Warrant Shares in accordance with the terms of the Warrant.

 

	Dated:  	Name of Holder:
	 	 
		
        By:
	

	 	Name:	 
	 	Title:	 
	 	
         

        
	 

	 	(Print)	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

    7 

     

    

 

Warrant Shares Exercise Log

 

 

	Date	Number of Warrant Shares Available to be Exercised	Number of Warrant Shares Exercised	Number
    of Warrant Shares Remaining  to be Exercised
	 	 

                                                                                 
	 

                                                                                 

                                                                                 

                                                                                 

                                                                                 

                                                                                 

                                                                                 

                                                                                 

                                                                                 
	 

 

    8 

     

    

 

LOTON, CORP

 

WARRANT ORIGINALLY
ISSUED

WARRANT

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of
Warrant]

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto___________________________________________the right represented by the
above-captioned Warrant to purchase_______________shares of Common Stock to which such Warrant relates and
appoints_________________attorney to transfer said right on the books of the Company with full power of substitution in the
premises.

 

Dated:________,____

 

	 	 	(Signature
must conform in all respects to name of holder as specified on the face of the Warrant)

	 	 	 
	 	 	 
	 	 	Address of Transferee
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	In the presence of:	 	 
	 	 	 
	 	 	 

 

 

9Exhibit 4.1

 

 

magnegas
corporation

 

CERTIFICATE
OF DESIGNATION OF PREFERENCES, 

RIGHTS
AND LIMITATIONS

OF

SERIES
B CONVERTIBLE PREFERRED STOCK

 

PURSUANT
TO SECTION 151 OF THE 

Delaware
GENERAL CORPORATION LAW

 

The
undersigned, Ermanno P. Santilli and Scott Mahoney, do hereby certify that:

 

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

 

2.
The Corporation is authorized to issue Ten Million (10,000,000) shares of preferred stock, $0.001 par value, of which One Million
(1,000,000) shares of preferred stock, designated as “Series A Preferred Stock”, have been issued and are outstanding.

 

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

 

WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of Ten Million (10,000,000) shares, $0.001 par value per share, issuable from time to time in one or more series, One Million
(1,000,000) of such shares of preferred stock are designated as “Series A Preferred Stock” and have been issued and
are outstanding;

 

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

 

WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions
and other matters relating to a series of the preferred stock, which shall consist of Two Thousand Seven Hundred (2,700) shares
of the preferred stock which the Corporation has the authority to issue.

 

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

 

    1 

     

    

 

TERMS
OF PREFERRED STOCK

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Debenture”
means that certain convertible debenture issued pursuant to the Securities Purchase Agreement dated June 27, 2016, by and between
the Company and the purchasers signatory thereto.

 

    2 

     

    

  

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

 

“Exchange
Agreement” means the Exchange Agreement, dated May 9, 2017, among the Corporation and the original Holders, as amended,
modified or supplemented from time to time in accordance with its terms.

 

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

 

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

 

“Leak-Out
Agreement” means the Leak-Out Agreement, dated May 9, 2017, among the Corporation and the original Holders, as amended,
modified or supplemented from time to time in accordance with its terms.

 

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

 

“New
York Courts” shall have the meaning set forth in Section 8(d).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market
(or any successor entity) from the shareholders of the Corporation with respect to the transactions contemplated by the Exchange
Agreement, including the issuance of all of the underlying shares in excess of 19.99% of the issued and outstanding Common Stock
on the date of execution of the Exchange Agreement.

 

    3 

     

    

  

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

 

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

 

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

 

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

 

“Transaction
Documents” means this Certificate of Designation, the Exchange Agreement, the Leak-Out Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to
the Exchange Agreement.

 

“Transfer
Agent” means Corporate Stock Transfer, the current transfer agent of the Company, and any successor transfer agent of
the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock.

 

Section
2. Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series B Convertible
Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to Two Thousand
Seven Hundred (2,700) shares of Preferred Stock (which shall not be subject to increase without the written consent of all of
the holders of the Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $1,000, subject to increase
set forth in Section 3 below (the “Stated Value”).

 

Section
3. Dividends. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section
7, Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock
basis, disregarding for such purpose any conversion limitations hereunder) to and in the same form as dividends actually paid
on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall
be paid on shares of Preferred Stock. The Corporation shall not pay any dividends on the Common Stock unless the Corporation simultaneously
complies with this provision.

 

    4 

     

    

 

Section
4. Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall
have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the
affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely
the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its
certificate of incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase
the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

 

Section
5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary
(a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus,
of the Corporation the same amount that a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding
for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders
of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment
date stated therein, to each Holder.

 

Section
6. Conversion.

 

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

 

    5 

     

    

 

b)                 
Conversion Price. The conversion price for the Preferred Stock shall equal $0.30, subject to adjustment herein (the
“Conversion Price”).

 

c)                 
Mechanics of Conversion

 

i.                       
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) three (3) Trading Days and (ii)
the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) the number of
Conversion Shares being acquired upon the conversion of the Preferred Stock, which Conversion Shares shall be free of restrictive
legends and trading restrictions, and (B) a bank check in the amount of accrued and unpaid dividends, if any. The Corporation
shall use its best efforts to deliver the Conversion Shares required to be delivered by the Corporation under this Section 6 electronically
through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on
the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice
of Conversion. Notwithstanding the foregoing, with respect to any Notice(s) of Conversion delivered by 12:00 p.m. (New York City
time) on the Original Issue Date, the Corporation agrees to deliver the Conversion Shares subject to such notice(s) by 4:00 p.m.
(New York City time) on the Original Issue Date.

 

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

 

iii.                       
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion
Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such
Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may
not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged
in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the
Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock which
is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying
dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction,
the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the Corporation
fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to such
conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $5,000 of
Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing to $100 per Trading Day on the third Trading
Day and increasing to $200 per Trading Day on the sixth Trading Day after such damages begin to accrue) for each Trading Day after
the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit
a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period
specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit
a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

    6 

     

    

 

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

 

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

 

    7 

     

    

 

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

 

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

 

d)                
Beneficial Ownership Limitation. The Corporation
shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert any portion of the Preferred
Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder
(together with such Holder’s Affiliates, and any Persons acting as a group together with such Holder or any of such Holder’s
Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon
conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially
owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation
contained herein (including, without limitation, the Preferred Stock or the Warrants) beneficially owned by such Holder or any
of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 6(d),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred
Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties)
and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of
a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be
converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how
many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion
that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no
obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For
purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent periodic
or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii)
a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within two Trading Days confirm orally
and in writing to such Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation,
including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or,
upon election by a Holder prior to the issuance of any shares of Preferred Stock, 9.99%) of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Preferred
Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 6(d) applicable to its Preferred Stock provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon conversion of this Preferred Stock held by the Holder and the provisions of this Section 6(d) shall
continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
Preferred Stock.

 

    8 

     

    

  

e)                 
Issuance Limitations. Notwithstanding anything herein
to the contrary, if the Corporation has not obtained Shareholder Approval, then the Corporation may not issue, upon conversion
of the Preferred Stock, a number of shares of Common Stock which, when aggregated with (i) any shares of Common Stock issued pursuant
to the Exchange Agreement, (ii) any shares of Common Stock issued in connection with any conversion of Preferred Stock issued
pursuant to the Exchange Agreement and (iii) any shares of Common Stock issued in connection with any conversion of the Debenture,
would exceed 11,913,546 shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations
and the like).

 

Section
7. Certain Adjustments.

 

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

 

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

 

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

 

    9 

     

    

 

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

 

    10 

     

    

 

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

 

f)                  
Notice to the Holders.

 

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

 

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

 

    11 

     

    

 

Section
8.Miscellaneous.

 

a)                 
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including,
without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile or e-mail, or sent by
a nationally recognized overnight courier service, addressed to the Corporation, at 11885 44th St. N. Clearwater, Florida 33762;
Attention: Chief Financial Officer, or such other facsimile number, e-mail address or address as the Corporation may specify for
such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile or e-mail,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address
or address of such Holder appearing on the books of the Corporation, or if no such facsimile number, e-mail address or address
appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Exchange Agreement.
Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail at the e-mail address
set forth in this Section 8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number or e-mail at the e-mail address set forth in
this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.

 

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

 

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

 

    12 

     

    

 

d)                
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate
of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware,
without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party
shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.

 

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

 

    13 

     

    

 

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

 

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

 

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

 

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

 

 

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

    14 

     

    

 

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

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate this [___] day of May 2017.

 

	 	 	 
	Name:	Ermanno
    P. Santilli	 	Name:	Scott
    Mahoney
	Title:
                                         
	President
	 	Title:
	Secretary

 

 

    15 

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

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

 

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

 

Conversion
calculations:

 

	Date
                                         to Effect Conversion:
	 
	 	 
	Number
                                         of shares of Preferred Stock owned prior to Conversion:
	 
	 	 
	Number
                                         of shares of Preferred Stock to be Converted:
	 
	 	 
	Stated
                                         Value of shares of Preferred Stock to be Converted:
	 
	 	 
	Number
                                         of shares of Common Stock to be Issued:
	 
	 	 
	Applicable
                                         Conversion Price:
	 
	 	 
	Number
                                         of shares of Preferred Stock subsequent to Conversion:
	 

 

	Address
    for Delivery:	 	 
	or	 	 
	DWAC
    Instructions:	 	 
	Broker
    no:	 	 
	Account no:	 	 

 

	 	“HOLDER”
	 	 
	 	By: 	 
	 	 	 
	 	 	Name: 
	 	 	Title: 

 

 

    16

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