Document:

Exhibit 10.2

 

CERTIFICATE
OF DESIGNATIONS OF

SERIES D CONVERTIBLE PREFERRED STOCK OF

SIGMA LABS, INC.

 

I,
John Rice, hereby certify that I am the Chief Executive Officer of Sigma Labs, Inc (the “Company”), a corporation
organized and existing under the D Chapter 78 of the Nevada Revised Statues (the “NRS”), and further do hereby
certify:

 

That
pursuant to the authority expressly conferred upon the Board of Directors of the Company (the “Board”) by the
Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), and Section 78.195
of Chapter 78 of the NRS, the Board on January 24, 2020 adopted the following resolution determining it desirable and in the best
interests of the Company and its shareholders for the Company to create a series of Seven Thousand, Seven Hundred and Ninety Six
(7,796) shares of preferred stock designated as “Series D Convertible Preferred Stock”, none of which shares
have been issued:

 

RESOLVED,
that pursuant to the authority vested in the Board this Company, in accordance with the provisions of the Articles of Incorporation,
a series of preferred stock, par value $0.001 per share, of the Company be and hereby is created, and that the designation and
number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of
the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

 

TERMS
OF SERIES D CONVERTIBLE PREFERRED STOCK

 

1.
Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company
designated as “Series D Convertible Preferred Stock” (the “Preferred Shares”). The authorized number
of Preferred Shares shall be 7,538 shares. Each Preferred Share shall have a par value of $0.001. Capitalized terms not defined
herein shall have the meaning as set forth in Section 31 below.

 

2.
Ranking. Except to the extent that the holders of at least a majority of the outstanding Preferred Shares (the “Required
Holders”) expressly consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined
below) in accordance with Section 16, all shares of capital stock of the Company (including the Series E Preferred Stock to be
issued on or prior to the Initial Issuance Date (as defined below)) 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
(such junior stock is referred to herein collectively as “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. Without
limiting any other provision of this Certificate of Designations, without the prior express consent of the Required Holders, voting
separate as a single class, the Company shall not hereafter authorize or issue any additional or other shares of capital stock
that is (i) of senior 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 “Senior Preferred Stock”), (ii)
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”) or (iii) any Junior
Stock having a maturity date or any other date requiring redemption or repayment of such shares of Junior Stock prior to such
time as no Preferred Shares remain outstanding. 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, designations, privileges and preferences provided
for herein and no such merger or consolidation shall result inconsistent therewith.

 

    	 

    	 

    

 

3.
Dividends. 

 

(a)
From and after January __, 2020 (the “Initial Issuance Date”), each holder of a Preferred Share (each, a “Holder”
and collectively, the “Holders”) shall be entitled to receive dividends (“Dividends”), which
Dividends shall be computed on the basis of a 360-day year and twelve 30-day months and shall increase the Stated Value of the
Preferred Shares on each Dividend Date (each, a “Capitalized Dividend”).

 

(b)
Prior to the capitalization of Dividends on an Dividend Date, Dividends on the Preferred Shares shall accrue at the Dividend Rate
and be payable by way of inclusion of the Dividends in the Conversion Amount on each Conversion Date in accordance with Section
4(c)(i) or upon any redemption in accordance with Section 11 or upon any required payment upon any Bankruptcy Triggering Event.
From and after the occurrence and during the continuance of any Triggering Event, the Dividend Rate shall automatically be increased
to fifteen percent (15.0%) per annum (the “Default Rate”). In the event that such Triggering Event is subsequently
cured (and no other Triggering Event then exists), the adjustment referred to in the preceding sentence shall cease to be effective
as of the calendar day immediately following the date of such cure; provided that the Dividends as calculated and unpaid at such
increased rate during the continuance of such Triggering Event shall continue to apply to the extent relating to the days after
the occurrence of such Triggering Event through and including the date of such cure of such Triggering Event.

 

4.
Conversion. At any time after the Initial Issuance Date, 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(d), at any time or times on or after the Initial
Issuance Date, each Holder shall be entitled to convert any portion of the outstanding Preferred Shares held by such Holder into
validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 4(c) at the Conversion Rate (as
defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. 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. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses
(including, without limitation, fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to
the issuance and delivery of Common Stock upon conversion of any Preferred Shares.

 

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(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Preferred Share pursuant to Section
4(a) shall be determined by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price (the “Conversion
Rate”):

 

(i)
 “Conversion Amount” means, with respect to each Preferred Share, as of the applicable date of determination,
the sum of (A) the Stated Value thereof plus (B) the Additional Amount thereon, plus (C) any accrued and unpaid Late Charges (as
defined below in Section 24(c)) with respect to such Stated Value and Additional Amount as of such date of determination, plus
(D) the Make-Whole Amount.

 

(ii)
 “Conversion Price” means, with respect to each Preferred Share, as of any Conversion Date or other date of
determination, $[1.00]1, subject to adjustment as provided herein.

 

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

 

(i)
 Optional Conversion. To convert a Preferred Share into shares of Common Stock on any date (a “Conversion Date”),
a Holder shall deliver (whether via facsimile, electronic mail or otherwise), 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 the share(s) of Preferred Shares subject to such conversion
in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company. If required
by Section 4(c)(iii), within two (2) 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, if
any, representing the Preferred Shares (the “Preferred Share Certificates”) so converted as aforesaid (or an
indemnification undertaking with respect to the Preferred Shares in the case of its loss, theft or destruction as contemplated
by Section 18(b)). On the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation and representation as to whether such shares of Common Stock may then be resold pursuant to Rule
144 or an effective and available registration statement, in the form attached hereto as Exhibit II, of receipt
of such Conversion Notice to such Holder and the Company’s transfer agent (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 each date on which the Company has received a Conversion Notice (or
such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade
initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share
Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in The Depository Trust
Company’s (“DTC”) Fast Automated Securities Transfer Program and such shares of Common Stock are eligible
to be resold pursuant to Rule 144 or an effective registration statement, credit such aggregate number of shares of Common Stock
to which such Holder shall be entitled pursuant to such conversion to such Holder’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program or such shares of Common Stock are not eligible to be resold pursuant to Rule 144 or an
effective registration statement, upon the request of such Holder, 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 shares of Common Stock 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)(iii) is greater than the number of Preferred
Shares being converted, then the Company shall, as soon as practicable and in no event later than two (2) 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 (in accordance with Section 18(d)) representing the number of Preferred Shares not converted. 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. Notwithstanding anything to the
contrary contained in this Certificate of Designations or the Registration Rights Agreement, after the effective date of a Registration
Statement (as defined in the Registration Rights Agreement) and prior to a Holder’s receipt of the notice of a Grace Period
(as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended shares of
Common Stock to such Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration
Rights Agreement) with respect to which such Holder has entered into a contract for sale, and delivered a copy of the prospectus
included as part of the particular Registration Statement to the extent applicable, and for which such Holder has not yet settled.
Notwithstanding the foregoing, prior to the earlier to occur of (x) the Share Increase Shareholder Approval Date (as defined in
the Securities Purchase Agreement) and (y) the Shareholder Meeting Deadline (as defined in the Securities Purchase Agreement),
no Holder shall be permitted to convert Preferred Shares hereunder (or exercise Common Warrants of such Holder, as applicable)
to the extent that after such conversion such Holder shall have received, whether upon conversion of Preferred Shares and/or exercise
of Common Warrants, as applicable, more than such Holder’s Authorized Share Allocation (as defined below). For the avoidance
of doubt, no ink original Conversion Notices, other notices or medallion guarantees will be required by any Holder to convert
any Preferred Shares or for such Holder take any other action in connection herewith.

 

1
Insert greater of (x) $1.00 and (y) 90% of Closing Bid Price as of the close of the Principal Market as of the Trading Day
immediately prior to the time of execution of the Securities Purchase Agreement

 

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(ii)
 Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the
applicable Share Delivery Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program or the applicable shares are not eligible to be resold pursuant to Rule 144 or an effective registration statement,
to issue and deliver to such Holder (or its designee) a certificate for the number of shares of Common Stock to which such Holder
is entitled and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program and such shares are eligible to be resold pursuant to Rule 144 or an effective
registration statement, to credit such Holder’s or its designee’s balance account with DTC for such number of shares
of Common Stock to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount (as the case may
be) or (II) if an effective Registration Statement covering the resale of the applicable shares of Common Stock that are the subject
of the Conversion Notice (the “Unavailable Conversion Shares”) is not available for the resale of such Unavailable
Conversion Shares (solely to the extent such Unavailable Conversion Shares were ever available pursuant to such Registration Statement)
and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) notify
such Holder and (y) deliver the shares of Common Stock electronically without any restrictive legend by crediting such aggregate
number of shares of Common Stock to which such Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing
clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause (I)
above, a “Conversion Failure”), then, in addition to all other remedies available to such Holder, (X) the Company
shall pay in cash to such Holder on each day after the Share Delivery Deadline that the issuance of such shares of Common Stock
is not timed effected an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to
such Holder on or prior to the Share Delivery Deadline and to which such Holder is entitled, multiplied by (B) any trading price
of the Common Stock selected by such Holder in writing as in effect at any time during the period beginning on the applicable
Conversion Date and ending on the applicable Share Delivery Deadline, and (Y) such Holder, upon written notice to the Company,
may void its Conversion Notice with respect to, and retain or have returned, as the case may be, all, or any portion, of such
Preferred Shares that has not been converted pursuant to such Conversion Notice; provided that the voiding of an Conversion Notice
shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant
to this Section 4(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline either (A)
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or such Warrant Common Shares are
not eligible to be resold pursuant to Rule 144 or an effective registration statement, the Company shall fail to issue and deliver
to such Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share register
or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program and such Warrant Common Shares
are eligible to be resold pursuant to Rule 144 or an effective registration statement, the Transfer Agent shall fail to credit
the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which such Holder is entitled upon such Holder’s conversion hereunder or pursuant to the Company’s obligation
pursuant to clause (ii) below or (B) a Notice Failure occurs, and if on or after such Share Delivery Deadline such Holder purchases
(in an open market transaction or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares
of Common Stock issuable upon such conversion that such Holder is entitled to receive from the Company and has not received from
the Company in connection with such Conversion Failure or Notice Failure, as applicable (a “Buy-In”), then,
in addition to all other remedies available to such Holder, the Company shall, within two (2) Business Days after receipt of such
Holder’s request and in such Holder’s discretion, either: (I) pay cash to such Holder in an amount equal to such Holder’s
total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (including, without limitation, by any other Person in respect, or on behalf, of such Holder) (the “Buy-In
Price”), at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares
of Common Stock) or credit to the balance account of such Holder or such Holder’s designee, as applicable, with DTC for
the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as the case
may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver
to such Holder a certificate or certificates representing such shares of Common Stock or credit the balance account of such Holder
or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which such Holder is entitled
upon such Holder’s conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice
and ending on the date of such issuance and payment under this clause (II) (the “Buy-In Payment Amount”). Nothing
herein shall limit the 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 Company’s failure to timely
deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the conversion
of Preferred Shares as required pursuant to the terms hereof. 

 

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(iii)
 Registration; Book-Entry. At the time of issuance of any Preferred Shares hereunder, the applicable Holder may, by written
request (including by electronic-mail) to the Company, elect to receive such Preferred Shares in the form of one or more Preferred
Share Certificates or in Book-Entry form. The Company (or the Transfer Agent, as custodian for the Preferred Shares) shall maintain
a register (the “Register”) for the recordation of the names and addresses of the Holders of each Preferred
Share and the Stated Value of the Preferred Shares and whether the Preferred Shares are held by such Holder in Preferred Share
Certificates or in Book-Entry form (the “Registered Preferred Shares”). The entries in the Register shall be
conclusive and binding for all purposes absent manifest error. The Company and each Holder of the Preferred Shares shall treat
each Person whose name is recorded in the Register as the owner of a Preferred Share for all purposes (including, without limitation,
the right to receive payments and Dividends hereunder) notwithstanding notice to the contrary. A Registered Preferred Share may
be assigned, transferred or sold only by registration of such assignment or sale on the Register. Upon its receipt of a written
request to assign, transfer or sell one or more Registered Preferred Shares by such Holder thereof, the Company shall record the
information contained therein in the Register and issue one or more new Registered Preferred Shares in the same aggregate Stated
Value as the Stated Value of the surrendered Registered Preferred Shares to the designated assignee or transferee pursuant to
Section 18, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of such Registered
Preferred Shares within two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect
such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 4,
following conversion of any Preferred Shares in accordance with the terms hereof, the applicable Holder shall not be required
to physically surrender such Preferred Shares held in the form of a Preferred Share Certificate to the Company unless (A) the
full or remaining number of Preferred Shares represented by the applicable Preferred Share Certificate are being converted (in
which event such certificate(s) shall be delivered to the Company as contemplated by this Section 4(c)(iii)) 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 the applicable Preferred Share Certificate. Each Holder and the Company shall maintain
records showing the Stated Value, Dividends and Late Charges converted and/or paid (as the case may be) and the dates of such
conversions and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to such Holder and the
Company, so as not to require physical surrender of a Preferred Share Certificate upon conversion. If the Company does not update
the Register to record such Stated Value, Dividends and Late Charges converted and/or paid (as the case may be) and the dates
of such conversions and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall
be automatically deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of such Holder
establishing the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the
absence of manifest error. 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 Preferred Share Certificate
shall bear the following legend: 

 

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

 

(iv)
Pro Rata Conversion; Disputes. In the event that 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 23.

 

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(d)
Limitation on Beneficial Ownership.

 

(i)
Beneficial Ownership. The Company shall not effect the conversion of any of the Preferred Shares held by a Holder, and
such Holder shall not have the right to convert any of the Preferred Shares held by such Holder pursuant to the terms and conditions
of this Certificate of Designations and any such conversion shall be null and void and treated as if never made, to the extent
that after giving effect to such conversion, such Holder together with the other Attribution Parties collectively would beneficially
own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after
giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by such Holder and the other Attribution Parties shall include the number of shares of Common Stock held by such Holder
and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of the Preferred Shares with
respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) conversion of the remaining, nonconverted Preferred Shares beneficially owned by such Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including,
without limitation, any convertible notes, convertible preferred stock or warrants, including the Preferred Shares, the Preferred
Warrants and the Common Warrants) beneficially owned by such Holder or any other Attribution Party subject to a limitation on
conversion or exercise analogous to the limitation contained in this Section 4(d)(i). For purposes of this Section 4(d)(i), beneficial
ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding
shares of Common Stock a Holder may acquire upon the conversion of such Preferred Shares without exceeding the Maximum Percentage,
such Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case
may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent,
if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Company receives a Conversion Notice from a Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall notify such Holder in writing of the number of shares of
Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s beneficial
ownership, as determined pursuant to this Section 4(d)(i), to exceed the Maximum Percentage, such Holder must notify the Company
of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time,
upon the written or oral request of any Holder, the Company shall within one (1) Business Day confirm orally and in writing or
by electronic mail 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 Company, including
such Preferred Shares, by such Holder and any other Attribution Party since the date as of which the Reported Outstanding Share
Number was reported. In the event that the issuance of shares of Common Stock to a Holder upon conversion of such Preferred Shares
results in such Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum
Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which such Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds
the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio,
and such Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company,
any Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after
delivery of such notice) or decrease the Maximum Percentage of such Holder to any other percentage not in excess of 9.99% as specified
in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to such Holder and the
other Attribution Parties and not to any other Holder that is not an Attribution Party of such Holder. For purposes of clarity,
the shares of Common Stock issuable to a Holder pursuant to the terms of this Certificate of Designations in excess of the Maximum
Percentage shall not be deemed to be beneficially owned by such Holder for any purpose including for purposes of Section 13(d)
or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert such Preferred Shares pursuant to this paragraph shall have
any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 4(d)(i) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 4(d)(i) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of such Preferred Shares.

 

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(ii)
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of any Preferred Shares
or otherwise pursuant to the terms of this Certificate of Designations if the issuance of such shares of Common Stock would exceed
the aggregate number of shares of Common Stock which the Company may issue upon conversion of the Preferred Shares without breaching
the Company’s obligations under the rules and regulations the listing rules of the Principal Market (the number of shares
which may be issued without violating such rules and regulations, including rules related to the aggregate offerings under NASDAQ
Listing Rule 5635(d), the “Exchange Cap”), except that such limitation shall not apply in the event that the
Company (A) obtains the approval of its shareholders as required by the applicable rules and regulations of the Principal Market
for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the
Company that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such
approval or such written opinion is obtained, no Holder shall be issued in the aggregate, upon conversion of any Preferred Shares
in an amount greater than the product of (i) the Exchange Cap as of the Initial Issuance Date multiplied by (ii) the quotient
of (1) the aggregate number of Preferred Shares issued to such Holder on the Initial Issuance Date divided by (2) the aggregate
number of Preferred Shares issued to the Holders on the Initial Issuance Date (with respect to each Holder, the “Exchange
Cap Allocation”). In the event that any Holder shall sell or otherwise transfer any of such Holder’s Preferred
Shares, the transferee shall be allocated a pro rata portion of such Holder’s Exchange Cap Allocation with respect to such
portion of such Preferred Shares so transferred, and the restrictions of the prior sentence shall apply to such transferee with
respect to the portion of the Exchange Cap Allocation so allocated to such transferee. Upon conversion in full of a holder’s
Preferred Shares, the difference (if any) between such holder’s Exchange Cap Allocation and the number of shares of Common
Stock actually issued to such holder upon such holder’s conversion in full of such Preferred Shares shall be allocated,
to the respective Exchange Cap Allocations of the remaining holders of Preferred Shares on a pro rata basis in proportion to the
shares of Common Stock underlying the Preferred Shares then held by each such holder of Preferred Shares. In the event that after
the Shareholder Meeting Deadline (as defined in the Securities Purchase Agreement) the Company is prohibited from issuing any
shares of Common Stock pursuant to this Section 4(d)(ii)(the “Exchange Cap Shares”) to a Holder, the Company
shall pay cash to such Holder in exchange for the redemption of such number of Preferred Shares held by such Holder that are not
convertible into such Exchange Cap Shares at a price equal to the sum of (i) the product of (x) such number of Exchange Cap Shares
and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date such Holder
delivers the applicable Conversion Notice with respect to such Exchange Cap Shares to the Company and ending on the date of such
issuance and payment under this Section 4(d)(ii) and (ii) to the extent of any Buy-In related thereto, any Buy-In Payment Amount,
any brokerage commissions and other out-of-pocket expenses, if any, of such Holder incurred in connection therewith.

 

(e)
Right of Alternate Conversion.

 

(i)
General. Subject to Section 4(d), at any time, such Holder may, at such Holder’s option, by delivery of a Conversion
Notice to the Company (the date of any such Conversion Notice, each an “Alternate Conversion Date”), convert
all, or any number of Preferred Shares (such Conversion Amount of the Preferred Shares to be converted pursuant to this Section
4(e)(ii), each, an “Alternate Conversion Amount”) into shares of Common Stock at the Alternate Conversion Price
(each an “Alternate Conversion”). 

 

(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, a Holder may voluntarily convert any Alternate Conversion
Amount of Preferred Shares pursuant to Section 4(c) (with “Alternate Conversion Price” replacing “Conversion
Price” for all purposes hereunder with respect to such Alternate Conversion and, if such Conversion Notice is delivered
during a Triggering Event Redemption Right Period (as defined below), with “Redemption Premium of the Conversion Amount”
replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate
Conversion) by designating in the Conversion Notice delivered pursuant to this Section 4(e) of this Certificate of Designations
that such Holder is electing to use the Alternate Conversion Price for such conversion; provided that in the event of the Conversion
Floor Price Condition, on the applicable Alternate Conversion Date the Company shall also deliver to the Holder the applicable
Alternate Conversion Floor Amount. Notwithstanding anything to the contrary in this Section 4(e), but subject to Section 4(d),
until the Company delivers shares of Common Stock representing the applicable Alternate Conversion Amount of Preferred Shares
to such Holder, such Preferred Shares may be converted by such Holder into shares of Common Stock pursuant to Section 4(c) without
regard to this Section 4(e).

 

    	8

    	 

    

 

5.
Triggering Event Redemptions.

 

(a)
Triggering Event. Each of the following events shall constitute a “Triggering Event” and each of the
events in clauses (x), (xi) and (xii) shall constitute a “Bankruptcy Triggering Event”:

 

(i)
 the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC
on or prior to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement)
or the failure of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five
(5) days after the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement);

 

(ii)
while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the
issuance of a stop order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of
Registrable Securities (as defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities
in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of
five (5) consecutive days or for more than an aggregate of ten (10) days in any 365-day period (excluding days during an Allowable
Grace Period (as defined in the Registration Rights Agreement));

 

(iii)
 the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market
for a period of five (5) consecutive Trading Days;

 

    	9

    	 

    

 

(iv)
 the Company’s (A) failure to cure a Conversion Failure (as defined herein) or a Delivery Failure (as defined in the Common
Warrants) by delivery of the required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion
Date or exercise date (as the case may be) or (B) notice, written or oral, to any holder of Preferred Shares, Preferred Warrants
or Common Warrants, including, without limitation, by way of public announcement or through any of its agents, at any time, of
its intention not to comply, as required, with a request for exercise of any Common Warrants for Warrant Common Shares in accordance
with the provisions of the Common Warrants or a request for conversion of any Preferred Shares into shares of Common Stock that
is requested in accordance with the provisions of this Certificate of Designations, other than pursuant to Section 4(d) hereof
or a request for conversion of any Preferred Warrants into Preferred Shares that is requested in accordance with the provisions
of this Certificate of Designations;

 

(v)
 except to the extent the Company is in compliance with Section 10(b) below, at any time after the earlier to occur of (x) the
Share Increase Shareholder Approval Date and (y) the Shareholder Meeting Deadline, and following the tenth (10th) consecutive
day that a Holder’s Authorized Share Allocation (as defined in Section 10(a) below) is less than the sum of (A) 200% of
the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion, in full, of all of the Preferred
Shares then held by such Holder at the Alternate Conversion Price then in effect (without regard to any limitations on conversion
set forth in this Certificate of Designations) (B) 100% of the number of Preferred Shares that such Holder would be entitled to
receive upon exercise, in full, of all of such Holder’s Preferred Warrants and (C) 150% of the number of shares of Common
Stock that such Holder would then be entitled to receive upon exercise in full of all of such Holder’s Common Warrants (without
regard to any limitations on exercise set forth in the Common Warrants);

 

(vi)
 the Company’s failure to capitalize any Dividend on any Dividend Date (whether or not declared by the Board);

 

(vii)
 the Company’s failure to pay any amount when and as due under this Certificate of Designations (including, without limitation,
the Company’s failure to pay any redemption payments or amounts hereunder), the Securities Purchase Agreement or any other
Transaction Document or any other agreement, document, certificate or other instrument delivered in connection with the transactions
contemplated hereby and thereby (in each case, whether or not permitted pursuant to the NRS), solely to the extent such failure
remains uncured for a period of at least five (5) Trading Days;

 

(viii)
 the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the applicable
Holder upon conversion or exercise (as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired
by such Holder under the Securities Purchase Agreement as and when required by such Securities or the Securities Purchase Agreement,
unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five
(5) days;

 

    	10

    	 

    

 

(ix)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $$125,000 of
Indebtedness (as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries;

 

(x)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not
be dismissed within thirty (30) days of their initiation;

 

(xi)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company
or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part
of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability
to pay its debts generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance
of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other
similar action under federal, state or foreign law;

 

(xii)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of
a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt
or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;

 

    	11

    	 

    

 

(xiii)
 a final judgment or judgments for the payment of money aggregating in excess of $$125,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled
or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however,
any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the
$$125,000 amount set forth above so long as the Company provides each Holder a written statement from such insurer or indemnity
provider (which written statement shall be reasonably satisfactory to each Holder) to the effect that such judgment is covered
by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance
or indemnity within thirty (30) days of the issuance of such judgment;

 

(xiv)
 the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable
grace period, any payment with respect to any Indebtedness in excess of $$125,000 due to any third party (other than, with respect
to unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by
proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with
GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $$125,000, which
breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii)
suffer to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result
in a default or event of default under any agreement binding the Company or any Subsidiary, which default or event of default
would or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities,
properties, condition (including financial condition) or prospects of the Company or any of its Subsidiaries, individually or
in the aggregate;

 

(xv)
 other than as specifically set forth in another clause of this Section 5(a), the Company or any Subsidiary breaches any representation
or warranty in any material respect (other than the representations or warranties subject to material adverse effect on materiality
limitation, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document,
except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured
for a period of five (5) consecutive Trading Days;

 

(xvi)
 a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Triggering
Event has occurred;

 

    	12

    	 

    

 

(xvii)
if neither John Rice or Mark Ruport is the chief executive officer of the Company and a qualified replacement, acceptable to the
Holder, in its sole discretion, is not appointed in either case within fifteen (15) Business Days;

 

(xviii)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13(m) of this Certificate
of Designations;

 

(xix)
 any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs; or

 

(xx)
any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be
contested, directly or indirectly, by the Company or any Subsidiary, or a proceeding shall be commenced by the Company or any
Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability
thereof or the Company or any of its Subsidiaries shall deny in writing that it has any liability or obligation purported to be
created under one or more Transaction Documents.

 

(b)
Notice of a Triggering Event; Redemption Right. Upon the occurrence of a Triggering Event with respect to the Preferred
Shares, the Company shall within one (1) Business Day deliver written notice thereof via facsimile or electronic mail and overnight
courier (with next day delivery specified) (an “Triggering Event Notice”) to each Holder. At any time after
the earlier of a Holder’s receipt of a Triggering Event Notice and such Holder becoming aware of a Triggering Event (such
earlier date, the “Triggering Event Right Commencement Date”) and ending (such ending date, the “Triggering
Event Right Expiration Date”, and each such period, an “Triggering Event Redemption Right Period”)
on the sixtieth (60th) Trading Day after the later of (x) the date such Triggering Event is cured and (y) such Holder’s
receipt of a Triggering Event Notice that includes (I) a reasonable description of the applicable Triggering Event, (II) a certification
as to whether, in the opinion of the Company, such Triggering Event is capable of being cured and, if applicable, a reasonable
description of any existing plans of the Company to cure such Triggering Event and (III) a certification as to the date the Triggering
Event occurred and, if cured on or prior to the date of such Triggering Event Notice, the applicable Triggering Event Right Expiration
Date, such Holder may require the Company to redeem (regardless of whether such Triggering Event has been cured on or prior to
the Triggering Event Right Expiration Date) all or any of the Preferred Shares by delivering written notice thereof (the “Triggering
Event Redemption Notice”) to the Company, which Triggering Event Redemption Notice shall indicate the number of the
Preferred Shares such Holder is electing to redeem. Each of the Preferred Shares subject to redemption by the Company pursuant
to this Section 5(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion
Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate (with “Alternate
Conversion Price” replacing “Conversion Price” for all purposes hereunder with respect thereto and with “Redemption
Premium of the Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion
Rate above with respect thereto) with respect to the Conversion Amount in effect at such time as such Holder delivers a Triggering
Event Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale
Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Triggering Event
and ending on the date the Company makes the entire payment required to be made under this Section 5(b) (the “Triggering
Event Redemption Price”). Redemptions required by this Section 5(b) shall be made in accordance with the provisions
of Section 11. To the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of the Preferred Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 5(b), but subject to Section 4(d), until the Triggering Event Redemption Price (together
with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together
with any Late Charges thereon) may be converted, in whole or in part, by such Holder into Common Stock pursuant to the terms of
this Certificate of Designations. In the event of the Company’s redemption of any of the Preferred Shares under this Section
5(b), a Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict
future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for such Holder.
Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable
estimate of such Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption upon a Triggering
Event shall not constitute an election of remedies by the applicable Holder or any other Holder, and all other rights and remedies
of each Holder shall be preserved.

 

    	13

    	 

    

(c)
Mandatory Redemption upon Bankruptcy Triggering Event. Notwithstanding anything to the contrary herein, and notwithstanding
any conversion that is then required or in process, upon any Bankruptcy Triggering Event, the Company shall immediately redeem,
in cash, each of the Preferred Shares then outstanding at a redemption price equal to the applicable Triggering Event Redemption
Price (calculated as if such Holder shall have delivered the Triggering Event Redemption Notice immediately prior to the occurrence
of such Bankruptcy Triggering Event), without the requirement for any notice or demand or other action by any Holder or any other
person or entity, provided that a Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Triggering
Event, in whole or in part, and any such waiver shall not affect any other rights of such Holder or any other Holder hereunder,
including any other rights in respect of such Bankruptcy Triggering Event, any right to conversion, and any right to payment of
such Triggering Event Redemption Price or any other Redemption Price, as applicable.

 

6.
Rights Upon Fundamental Transactions.

 

(a)
Assumption. 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 Designations and the other Transaction Documents in
accordance with the provisions of this Section 6(a) 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 Designations, 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 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 Designations 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 Designations 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 or redemption 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 and 15, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption
of the Preferred Shares prior to such Fundamental Transaction, such shares of the 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 happening
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 Designations),
as adjusted in accordance with the provisions of this Certificate of Designations. Notwithstanding the foregoing, such Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 6(a) to permit the Fundamental
Transaction without the assumption of the Preferred Shares. 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 or redemption
of the Preferred Shares.

 

    	14

    	 

    

 

(b)
Notice of a Change of Control Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading
Days prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the
public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail
and overnight courier to each Holder (a “Change of Control Notice”). At any time during the period beginning
after a Holder’s receipt of a Change of Control Notice or such Holder becoming aware of a Change of Control if a Change
of Control Notice is not delivered to such Holder in accordance with the immediately preceding sentence (as applicable) and ending
on twenty (20) Trading Days after the later of (A) the date of consummation of such Change of Control or (B) the date of receipt
of such Change of Control Notice or (C) the date of the announcement of such Change of Control, such Holder may require the Company
to redeem all or any portion of such Holder’s Preferred Shares by delivering written notice thereof (“Change of
Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the number of Preferred
Shares such Holder is electing to have the Company redeem. Each Preferred Share subject to redemption pursuant to this Section
6(b) shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control
Redemption Premium multiplied by (y) the Conversion Amount of the Preferred Shares being redeemed, (ii) the product of (x) the
Change of Control Redemption Premium multiplied by (y) the product of (A) the Conversion Amount of the Preferred Shares being
redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock
during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the applicable Change
of Control and (2) the public announcement of such Change of Control and ending on the date such Holder delivers the Change of
Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control Redemption
Premium multiplied by (z) the product of (A) the Conversion Amount of the Preferred Shares being redeemed multiplied by (B) the
quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common
Stock to be paid to such holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash
consideration constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities
as of the Trading Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities
on the Trading Day immediately following the public announcement of such proposed Change of Control and the Closing Sale Price
of such securities on the Trading Day immediately prior to the public announcement of such proposed Change of Control) divided
by (II) the Conversion Price then in effect (the “Change of Control Redemption Price”). Redemptions required
by this Section 6(b) shall have priority to payments to all other shareholders of the Company in connection with such Change of
Control. To the extent redemptions required by this Section 6(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of the Preferred Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 6(b), but subject to Section 4(d), until the applicable Change of Control Redemption
Price (together with any Late Charges thereon) is paid in full to the applicable Holder, the Preferred Shares submitted by such
Holder for redemption under this Section 6(b) may be converted, in whole or in part, by such Holder into Common Stock pursuant
to Section 4(c) or in the event the Conversion Date is after the consummation of such Change of Control, stock or equity interests
of the Successor Entity substantially equivalent to the Company’s shares of Common Stock pursuant to Section 4(c). In the
event of the Company’s redemption of any of the Preferred Shares under this Section 6(b), such Holder’s damages would
be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for a Holder. Accordingly, any redemption premium due under
this Section 6(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss
of its investment opportunity and not as a penalty. The Company shall make payment of the applicable Change of Control Redemption
Price concurrently with the consummation of such Change of Control if a Change of Control Redemption Notice is received prior
to the consummation of such Change of Control and within two (2) Trading Days after the Company’s receipt of such notice
otherwise (the “Change of Control Redemption Date”). Redemptions required by this Section 6 shall be made in
accordance with the provisions of Section 11.

 

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

 

(a)
Purchase Rights. In addition to any adjustments pursuant to Section 8 and Section 15 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 all or substantially all of 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 and assuming for such purpose that all the Preferred Shares were converted at the Alternate Conversion Price as of the
applicable record date) held by such Holder immediately prior to 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 such Holder’s
right to participate in any such Purchase Right would result in such Holder and the other Attribution Parties exceeding the Maximum
Percentage, then such Holder shall not be entitled to participate in such Purchase Right to such extent of the Maximum Percentage
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial
ownership) to such extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase
Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held
in abeyance, if applicable) for the benefit of such Holder until such time or times, if ever, as its right thereto would not result
in such Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times such Holder shall be
granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision,
such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no
such limitation.

 

(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 ensure that each Holder will thereafter have the right, at such Holder’s option, 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 set forth in this Certificate of Designations)
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. Provision made pursuant the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. 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 or redemption of the Preferred Shares set forth in this Certificate
of Designations.

 

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8.
Rights Upon Issuance of Other Securities.

 

(a)
Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company
grants, issues or sells (or enter into any agreement to grant, issue or sell), or in accordance with this Section 8(a) is deemed
to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by
or for the account of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold)
for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in
effect immediately prior to such issuance or sale or deemed issuance or sale (such Conversion Price then in effect is referred
to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately
after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance
Price under this Section 8(a)), the following shall be applicable:

 

(i)
 Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue
or sell) any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise
of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option
or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such
price per share. For purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is
at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share
of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y)
the lowest exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming
all possible market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts
paid or payable to the holder of such Option (or any other Person) with respect to nay one share of Common Stock upon the granting,
issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus the value of any other consideration consisting
of cash, debt forgiveness, assets or any other property received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise
pursuant to the terms thereof or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange
of such Convertible Securities. 

 

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(ii)
 Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters in to any agreement to issue
or sell) any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable
(or may become issuable assuming all possible market conditions) upon the conversion, exercise or exchange thereof or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price
per share. For purposes of this Section 8(a)(ii), the “lowest price per share for which one share of Common Stock is at
any time issuable (or may become issuable assuming all possible market conditions) upon the conversion, exercise or exchange thereof
or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible
Security and upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and
(y) the lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable (or may
become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to
the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person)
with respect to any one share of Common Stock upon the issuance or sale of such Convertible Security plus the value of any other
consideration received or receivable consisting of cash, debt forgiveness, assets or other property by, or benefit conferred on,
the holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Conversion
Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions
of this Section 8(a), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such
issuance or sale.

 

(iii)
 Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred
to in Section 8(b) below), the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion
Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially
granted, issued or sold. For purposes of this Section 8(a)(iii), if the terms of any Option or Convertible Security that was outstanding
as of the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a) shall be
made if such adjustment would result in an increase of the Conversion Price then in effect.

 

    	18

    	 

    

 

(iv)
 Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Required Holders,
the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary
Securities”), together comprising one integrated transaction (or one or more transactions if such issuances or sales
or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are
consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing), the consideration
per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest
price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to Section 8(a)(i) or 8(a)(ii)
above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such
Secondary Securities, the sum of (A) the Black Scholes Consideration Value of each such Option, if any, (B) the fair market value
(as determined by the Required Holders in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment
Right, if any, and (C) the fair market value (as determined by the Required Holder) of such Convertible Security, if any, in each
case, as determined on a per share basis in accordance with this Section 8(a)(iv). If any shares of Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose
of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value), will be the fair
value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount
of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value), will be deemed
to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares
of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or
publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company.

 

    	19

    	 

    

 

(v)
 Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)
to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the
case may be).

 

(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section
6 or Section 8(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) 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 6 or Section 8(a), if the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) 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(b) shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section
8(b) 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.

 

(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this
Section 8(b), if the Company in any manner issues or sells or enters into (whether initially or pursuant to any subsequent amendment
thereof) any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable
Price Securities”) after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable
or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock,
including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution
provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for
such variable price being herein referred to as, the “Variable Price”), the Company shall provide written notice
thereof via facsimile or electronic mail and overnight courier to each Holder on the date of such agreement and/or the issuance
of such shares of Common Stock, Convertible Securities or Options, as applicable. From and after the date the Company enters into
such agreement or issues any such Variable Price Securities, each Holder shall have the right, but not the obligation, in its
sole discretion to substitute the Variable Price for the Conversion Price upon conversion of the Preferred Shares by designating
in the Conversion Notice delivered upon any conversion of Preferred Shares that solely for purposes of such conversion such Holder
is relying on the Variable Price rather than the Conversion Price then in effect. A Holder’s election to rely on a Variable
Price for a particular conversion of Preferred Shares shall not obligate such Holder to rely on a Variable Price for any future
conversions of Preferred Shares.

 

    	20

    	 

    

 

(d)
Stock Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs
any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each,
a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”)
and the Event Market Price is less than the Conversion Price then in effect (after giving effect to the adjustment in Section
8(b) above), then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event Date, the Conversion
Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 88(b) above) shall
be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately
preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment shall be made.

 

(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to protect any Holder from dilution (other than with respect to
Excluded Securities) or if any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other
rights with equity features), then the Board shall in good faith determine and implement an appropriate adjustment in the Conversion
Price so as to protect the rights of such Holder, provided that no such adjustment pursuant to this Section 8(b) will increase
the Conversion Price as otherwise determined pursuant to this Section 8, provided further that if such Holder does not accept
such adjustments as appropriately protecting its interests hereunder against such dilution, then the Board and such Holder shall
agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments,
whose determination shall be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.

 

(f)
Calculations. All calculations under this Section 8 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned
or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

 

(g)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time
any Preferred Shares remain outstanding, with the prior written consent of the Required Holders, reduce the then current Conversion
Price to any amount and for any period of time deemed appropriate by the Board.

 

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9.
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation,
Bylaws (as defined in the Securities Purchase Agreement) 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 Designations, and will at all times in good faith carry out all the
provisions of this Certificate of Designations and take all action as may be required to protect the rights of the Holders hereunder.
Without limiting the generality of the foregoing or any other provision of this Certificate of Designations or the other Transaction
Documents, the Company (a) 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, (b) 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 (c) 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). Notwithstanding anything
herein to the contrary, if after the sixty (60) calendar day anniversary of the Initial Issuance Date, each Holder is not permitted
to convert such Holder’s Preferred Shares in full for any reason (other than pursuant to restrictions set forth in Section
4(d)(i) hereof), the Company shall use its reasonable best efforts to promptly remedy such failure, including, without limitation,
obtaining such consents or approvals as necessary to effect such conversion into shares of Common Stock.

 

10.
Authorized Shares.

 

(a)
Reservation. So long as any Preferred Shares remain outstanding, the Company shall (i) on or prior to the Share Increase
Shareholder Approval Date (as defined in the Securities Purchase Agreement), reserve 3,852,879 shares of Common Stock (the “Initial
Reserve Amount”) for issuance pursuant to this Certificate of Designations (and/or the Common Warrants, as designated
from time to time in writing by a Holder with respect to such Holder’s Authorized Share Allocation (as defined below) and
not with respect to any other Holder’s Authorized Share Allocation) and (ii) after the Share Increase Shareholder Approval
Date, at all times reserve at least 200% of the number of shares of Common Stock as shall from time to time be necessary to effect
the conversion, including without limitation, Alternate Conversions of all of the Preferred Shares then outstanding (without regard
to any limitations on conversions) (the “Subsequent Reserve Amount”, and together with the Initial Reserve
Amount, as applicable, the “Required Reserve Amount”). The Required Reserve Amount (including, without limitation,
each increase in the number of shares so reserved) shall be allocated pro rata among the Holders based on the number of the 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 that 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 the Preferred Shares then held by the Holders.

 

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(b)
Insufficient Authorized Shares. If, notwithstanding Section 10(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 unreserved shares of
Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Preferred Shares at least a number of shares
of Common Stock equal to the Required Reserve 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 the Required Reserve Amount for the Preferred Shares then outstanding (or deemed outstanding pursuant
to Section 10(a) above). 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 of its shareholders 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 shareholder with a proxy statement and
shall use its reasonable best efforts to solicit its shareholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal (or, if a majority
of the voting power then in effect of the capital stock of the Company consents to such increase, in lieu of such proxy statement,
deliver to the shareholders of the Company an information statement that has been filed with (and either approved by or not subject
to comments from) the SEC with respect thereto). In the event that the Company is prohibited from issuing shares of Common Stock
to a Holder upon any conversion due to the failure by the Company to have sufficient shares of Common Stock available out of the
authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure
Shares”), in lieu of delivering such Authorized Failure Shares to such Holder, the Company shall pay cash in exchange
for the redemption of such portion of the Conversion Amount of the Preferred Shares convertible into such Authorized Failure Shares
at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale
Price of the Common Stock on any Trading Day during the period commencing on the date such Holder delivers the applicable Conversion
Notice with respect to such Authorized Failure Shares to the Company and ending on the date of such issuance and payment under
this Section 10(a); and (ii) to the extent such Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such Holder of Authorized Failure Shares, any brokerage commissions and other out-of-pocket
expenses, if any, of such Holder incurred in connection therewith. Nothing contained in Section 10(a) or this Section 10(b) shall
limit any obligations of the Company under any provision of the Securities Purchase Agreement.

 

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11.
Redemptions.

 

(a)
General. If a Holder has submitted a Triggering Event Redemption Notice in accordance with Section 5(b), the Company shall
deliver the applicable Triggering Event Redemption Price to such Holder in cash within five (5) Business Days after the Company’s
receipt of such Holder’s Triggering Event Redemption Notice. If a Holder has submitted a Change of Control Redemption Notice
in accordance with Section 6(b), the Company shall deliver the applicable Change of Control Redemption Price to such Holder in
cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation of such
Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. Notwithstanding
anything herein to the contrary, in connection with any redemption hereunder at a time a Holder is entitled to receive a cash
payment under any of the other Transaction Documents, at the option of such Holder delivered in writing to the Company, the applicable
Redemption Price hereunder shall be increased by the amount of such cash payment owed to such Holder under such other Transaction
Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation
under such other Transaction Document. In the event of a redemption of less than all of the Preferred Shares, the Company shall
promptly cause to be issued and delivered to such Holder a new Preferred Share Certificate (in accordance with Section 18) (or
evidence of the creation of a new Book-Entry) representing the number of Preferred Shares which have not been redeemed. In the
event that the Company does not pay the applicable Redemption Price to a Holder within the time period required for any reason
(including, without limitation, to the extent such payment is prohibited pursuant to the NRS), at any time thereafter and until
the Company pays such unpaid Redemption Price in full, such Holder shall have the option, in lieu of redemption, to require the
Company to promptly return to such Holder all or any of the Preferred Shares that were submitted for redemption and for which
the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of
such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Preferred Shares, (y) the Company
shall immediately return the applicable Preferred Share Certificate, or issue a new Preferred Share Certificate (in accordance
with Section 18(d)), to such Holder (unless the Preferred Shares are held in Book-Entry form, in which case the Company shall
deliver evidence to such Holder that a Book-Entry for such Preferred Shares then exists), and in each case the Additional Amount
of such Preferred Shares shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as
the case may be, and as adjusted pursuant to this Section 11, if applicable) minus (2) the Stated Value portion of the Conversion
Amount submitted for redemption and (z) the Conversion Price of such Preferred Shares shall be automatically adjusted with respect
to each conversion effected thereafter by such Holder to the lowest of (A) the Conversion Price as in effect on the date on which
the applicable Redemption Notice is voided, (B) the greater of (x) the Floor Price and (y) 75% of the lowest Closing Bid Price
of the Common Stock during the period beginning on and including the date on which the applicable Redemption Notice is delivered
to the Company and ending on and including the date on which the applicable Redemption Notice is voided and (C) the greater of
(x) the Floor Price and (y) 75% of the quotient of (I) the sum of the five (5) lowest VWAPs of the Common Stock during the twenty
(20) consecutive Trading Day period ending and including the applicable Conversion Date divided by (II) five (5) (it being understood
and agreed that all such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination
or other similar transaction during such period); provided that in the event of the Conversion Floor Price Condition, on the applicable
Conversion Date in connection herewith the Company shall also deliver to the Holder the applicable Redemption Conversion Floor
Amount in cash on the applicable Conversion Date. A Holder’s delivery of a notice voiding a Redemption Notice and exercise
of its rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges which
have accrued prior to the date of such notice with respect to the Preferred Shares subject to such notice.

 

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(b)
Redemption by Multiple Holders. Upon the Company’s receipt of a Redemption Notice from any Holder for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 5(b)
or Section 6(b), the Company shall immediately, but no later than one (1) Business Day of its receipt thereof, forward to each
other Holder by facsimile or electronic mail a copy of such notice. If the Company receives one or more Redemption Notices, during
the seven (7) Business Day period beginning on and including the date which is two (2) Business Days prior to the Company’s
receipt of the initial Redemption Notice and ending on and including the date which is two (2) Business Days after the Company’s
receipt of the initial Redemption Notice and the Company is unable to redeem all of the Conversion Amount of such Preferred Shares
designated in such initial Redemption Notice and such other Redemption Notices received during such seven (7) Business Day period,
then the Company shall redeem a pro rata amount from each Holder based on the Stated Value of the Preferred Shares submitted for
redemption pursuant to such Redemption Notices received by the Company during such seven (7) Business Day period.

 

12.
Voting Rights. Holders of Preferred Shares shall have no voting rights, except as required by law (including without limitation,
the NRS) and as expressly provided in this Certificate of Designations. To the extent that under the NRS the vote of the holders
of the Preferred Shares, voting separately as a class or series, as applicable, is required to authorize a given action of the
Company, the affirmative vote or consent of the Required Holders of the shares of the Preferred Shares, voting together in the
aggregate and not in separate series unless required under the NRS, represented at a duly held meeting at which a quorum is presented
or by written consent of the Required Holders (except as otherwise may be required under the NRS), voting together in the aggregate
and not in separate series unless required under the NRS, shall constitute the approval of such action by both the class or the
series, as applicable. Subject to Section 4(d)(i), to the extent that under the NRS holders of the Preferred Shares are entitled
to vote on a matter with holders of shares of Common Stock, voting together as one class, each Preferred Share shall entitle the
holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then
convertible (subject to the ownership limitations specified in Section 4(d)(i) hereof) using the record date for determining the
stockholders of the Company eligible to vote on such matters as the date as of which the Conversion Price is calculated. Holders
of the Preferred Shares shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy
materials and other information sent to stockholders) with respect to which they would be entitled to vote, which notice would
be provided pursuant to the Company’s bylaws and the NRS.

 

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13.
Covenants. 

 

(a)
Incurrence of Indebtedness. So long as the Minimum Ownership Condition (as defined in the Securities Purchase Agreement)
exists, the Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, incur or guarantee,
assume or suffer to exist any Indebtedness (other than Permitted Indebtedness).

 

(b)
Existence of Liens. So long as the Minimum Ownership Condition exists, the Company shall not, and the Company shall cause
each of its Subsidiaries to not, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company
or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.

 

(c)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or
in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness (other than any amounts payable pursuant to this Certificate of Designations) whether by way of payment in respect
of principal of (or premium, if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made
or, after giving effect to such payment, (i) an event constituting a Triggering Event has occurred and is continuing or (ii) an
event that with the passage of time and without being cured would constitute a Triggering Event has occurred and is continuing.

 

(d)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries
to not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock
(other than as required by the Certificate of Designations).

 

(e)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any
assets or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related
transactions, other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets
or rights by the Company and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales
of inventory and product in the ordinary course of business.

 

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(f)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the third anniversary
of the Initial Issuance Date.

 

(g)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly
contemplated to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially
related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, modify its or their corporate structure or purpose.

 

(h)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain,
duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in
which the transaction of its business makes such qualification necessary.

 

(i)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the
provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture
thereof or thereunder.

 

(j)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary
or advisable to maintain all of the Intellectual Property Rights of the Company and/or any of its Subsidiaries that are necessary
or material to the conduct of its business in full force and effect.

 

(k)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent
and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and
business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

 

(l)
Transactions with Affiliates. Other than the Insider Financing (as defined in the Securities Purchase Agreement) and the
transactions described on Schedule 13(l) attached hereto, the Company shall not, nor shall it permit any of its Subsidiaries
to, enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with
any affiliate, except transactions in the ordinary course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to
it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that is not an affiliate
thereof.

 

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(m)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the Required
Holders, (i) issue any Preferred Shares (other than as contemplated by the Securities Purchase Agreement and this Certificate
of Designations) or (ii) issue any other securities that would cause a breach or default under this Certificate of Designations,
the Preferred Warrants or the Common Warrants.

 

(n)
Independent Investigation. At the request of any Holder either (x) at any time when a Triggering Event has occurred and
is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute a Triggering
Event or (z) at any time such Holder reasonably believes a Triggering Event may have occurred or be continuing, the Company shall
hire an independent, reputable investment bank selected by the Company and approved by such Holder to investigate as to whether
any breach of the Certificate of Designations has occurred (the “Independent Investigator”). If the Independent
Investigator determines that such breach of the Certificate of Designations has occurred, the Independent Investigator shall notify
the Company of such breach and the Company shall deliver written notice to each Holder of such breach. In connection with such
investigation, the Independent Investigator may, during normal business hours, inspect all contracts, books, records, personnel,
offices and other facilities and properties of the Company and its Subsidiaries and, to the extent available to the Company after
the Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants (including the accountants’
work papers) and any books of account, records, reports and other papers not contractually required of the Company to be confidential
or secret, or subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies
and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator
with such financial and operating data and other information with respect to the business and properties of the Company as the
Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs,
finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s
officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes
said accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries),
all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.

 

14.
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 shareholders (the
“Liquidation Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but
pari passu with any Parity Stock then outstanding, an amount per Preferred Share equal to the greater of (A) 125% of the Conversion
Amount of such Preferred Share on the date of such payment and (B) the amount per share such Holder would receive if such Holder
converted such Preferred Share into Common Stock immediately prior to 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 14. All the preferential amounts to be paid to the Holders under this Section 14
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 14 applies. 

 

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15.
Distribution of Assets. In addition to any adjustments pursuant to Section 7(a) and Section 8, if the Company shall declare
or make any dividend or other distributions of its assets (or rights to acquire its assets) to any or all 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) (the “Distributions”), then each Holder, as holders of Preferred Shares, will
be entitled to such Distributions as if such Holder had held the number of shares of Common Stock acquirable upon complete conversion
of the Preferred Shares (without taking into account any limitations or restrictions on the convertibility of the Preferred Shares
and assuming for such purpose that the Preferred Share was converted at the Alternate Conversion Price as of the applicable record
date) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that
to the extent that such Holder’s right to participate in any such Distribution would result in such Holder and the other
Attribution Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Distribution
to such extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as
a result of such Distribution (and beneficial ownership) to such extent of any such excess) and the portion of such Distribution
shall be held in abeyance for the benefit of such Holder until such time or times as its right thereto would not result in such
Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times, if any, such Holder shall be
granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution
held similarly in abeyance) to the same extent as if there had been no such limitation).

 

16.
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 Articles
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: (a) amend or repeal any provision
of, or add any provision to, its Articles 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 hereunder, regardless of whether any such
action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; (b) increase
or decrease (other than by conversion) the authorized number of Preferred Shares; (c) without limiting any provision of Section
2, create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock; (d)
purchase, repurchase or redeem any shares of Junior Stock (other than pursuant to the terms of the Company’s equity incentive
plans and options and other equity awards granted under such plans (that have in good faith been approved by the Board)); (e)
without limiting any provision of Section 2, pay dividends or make any other distribution on any shares of any Junior Stock; (f)
issue any Preferred Shares other than as contemplated hereby or pursuant to the Securities Purchase Agreement; or (g) without
limiting any provision of Section 9, whether or not prohibited by the terms of the Preferred Shares, circumvent a right of the
Preferred Shares hereunder. 

 

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17.
Transfer of Preferred Shares. A Holder may transfer some or all of its Preferred Shares without the consent of the Company.

 

18.
Reissuance of Preferred Share Certificates and Book Entries.

 

(a)
Transfer. If any Preferred Shares are to be transferred, the applicable Holder shall surrender the applicable Preferred
Share Certificate to the Company (or, if the Preferred Shares are held in Book-Entry form, a written instruction letter to the
Company), whereupon the Company will forthwith issue and deliver upon the order of such Holder a new Preferred Share Certificate
(in accordance with Section 18(d)) (or evidence of the transfer of such Book-Entry), registered as such Holder may request, representing
the outstanding number of Preferred Shares being transferred by such Holder and, if less than the entire outstanding number of
Preferred Shares is being transferred, a new Preferred Share Certificate (in accordance with Section 18(d)) to such Holder representing
the outstanding number of Preferred Shares not being transferred (or evidence of such remaining Preferred Shares in a Book-Entry
for such Holder). Such Holder and any assignee, by acceptance of the Preferred Share Certificate or evidence of Book-Entry issuance,
as applicable, acknowledge and agree that, by reason of the provisions of Section 4(c)(i) following conversion or redemption of
any of the Preferred Shares, the outstanding number of Preferred Shares represented by the Preferred Shares may be less than the
number of Preferred Shares stated on the face of the Preferred Shares.

 

(b)
Lost, Stolen or Mutilated Preferred Share Certificate. Upon receipt by the Company of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of a Preferred Share Certificate (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
any 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 such Preferred Share Certificate, the Company shall execute and deliver to such Holder a new
Preferred Share Certificate (in accordance with Section 18(d)) representing the applicable outstanding number of Preferred Shares.

 

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(c)
Preferred Share Certificate and Book-Entries Exchangeable for Different Denominations and Forms. Each Preferred Share Certificate
is exchangeable, upon the surrender hereof by the applicable Holder at the principal office of the Company, for a new Preferred
Share Certificate or Preferred Share Certificate(s) or new Book-Entry (in accordance with Section 18(d)) representing, in the
aggregate, the outstanding number of the Preferred Shares in the original Preferred Share Certificate, and each such new Preferred
Share Certificate and/or new Book-Entry, as applicable, will represent such portion of such outstanding number of Preferred Shares
from the original Preferred Share Certificate as is designated in writing by such Holder at the time of such surrender. Each Book-Entry
may be exchanged into one or more new Preferred Share Certificates or split by the applicable Holder by delivery of a written
notice to the Company into two or more new Book-Entries (in accordance with Section 18(d)) representing, in the aggregate, the
outstanding number of the Preferred Shares in the original Book-Entry, and each such new Book-Entry and/or new Preferred Share
Certificate, as applicable, will represent such portion of such outstanding number of Preferred Shares from the original Book-Entry
as is designated in writing by such Holder at the time of such surrender.

 

(d)
Issuance of New Preferred Share Certificate or Book-Entry. Whenever the Company is required to issue a new Preferred Share
Certificate or a new Book-Entry pursuant to the terms of this Certificate of Designations, such new Preferred Share Certificate
or new Book-Entry (i) shall represent, as indicated on the face of such Preferred Share Certificate or in such Book-Entry, as
applicable, the number of Preferred Shares remaining outstanding (or in the case of a new Preferred Share Certificate or new Book-Entry
being issued pursuant to Section 18(a) or Section 18(c), the number of Preferred Shares designated by such Holder) which, when
added to the number of Preferred Shares represented by the other new Preferred Share Certificates or other new Book-Entry, as
applicable, issued in connection with such issuance, does not exceed the number of Preferred Shares remaining outstanding under
the original Preferred Share Certificate or original Book-Entry, as applicable, immediately prior to such issuance of new Preferred
Share Certificate or new Book-Entry, as applicable, and (ii) shall have an issuance date, as indicated on the face of such new
Preferred Share Certificate or in such new Book-Entry, as applicable, which is the same as the issuance date of the original Preferred
Share Certificate or in such original Book-Entry, as applicable.

 

19.
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate
of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations and
any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive
relief), and 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 Designations. 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).
No failure on the part of a Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by such Holder of any right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right or remedy
of any Holder at law or equity or under Preferred Shares or any of the documents shall not be deemed to be an election of such
Holder’s rights or remedies under such documents or at law or equity. 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 specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting
a bond or other security. 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 Designations.

 

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20.
Payment of Collection, Enforcement and Other Costs. If (a) any Preferred Shares are placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or a Holder otherwise takes action to collect
amounts due under this Certificate of Designations with respect to the Preferred Shares or to enforce the provisions of this Certificate
of Designations or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting
Company creditors’ rights and involving a claim under this Certificate of Designations, then the Company shall pay the costs
incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership
or other proceeding, including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges
and agrees that no amounts due under this Certificate of Designations with respect to any Preferred Shares shall be affected,
or limited, by the fact that the purchase price paid for each Preferred Share was less than the original Stated Value thereof.

 

21.
Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted by the Company and the Holders
and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate of Designations are
for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations. Unless
the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular
and plural forms thereof. The terms “including,” “includes,” “include” and words of like import
shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Certificate of Designations instead of just the provision in
which they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.
Terms used in this Certificate of Designations and not otherwise defined herein, but defined in the other Transaction Documents,
shall have the meanings ascribed to such terms on the Initial Issuance Date in such other Transaction Documents unless otherwise
consented to in writing by the Required Holders.

 

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22.
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 Designations 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. Notwithstanding the
foregoing, nothing contained in this Section 22 shall permit any waiver of any provision of Section 4(d).

 

23.
Dispute Resolution. 

 

(a)
Submission to Dispute Resolution. 

 

(i)
 In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, a Black Scholes Consideration
Value, an Alternate Conversion Price, an Alternate Conversion Floor Amount, a Redemption Conversion Floor Amount, a VWAP or a
fair market value or the arithmetic calculation of a Conversion Rate, or the applicable Redemption Price (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 or electronic mail (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 Bid Price, such Closing Sale Price, such Conversion Price, such Black
Scholes Consideration Value, such Alternate Conversion Price, such Alternate Conversion Floor Amount, such Redemption Conversion
Floor Amount, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption
Price (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. 

 

(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 23 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).

 

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(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. The Company expressly acknowledges and agrees that (i) this Section 23 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 23, (ii) a dispute relating to a Conversion Price
includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred
under Section 8(a), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether
any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded
Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E)
whether a Dilutive Issuance occurred, (iii) the terms of this Certificate of Designations 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 Designations
and any other applicable Transaction Documents, (iv) 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 23 to any
state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in
this Section 23 and (v) nothing in this Section 23 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 23).

 

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24.
Notices; Currency; Payments. 

 

(a)
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 Designations, including in reasonable detail a description of such action and the reason therefor.
Whenever notice is required to be given under this Certificate of Designations, unless otherwise provided herein, such notice
must be in writing and shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall
provide each Holder with prompt written notice of all actions taken pursuant to this Certificate of Designations, including in
reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the
Company shall give written notice to each Holder (i) immediately upon 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 holders of shares of Common Stock 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 in conjunction
with such notice being provided to such Holder.

 

(b)
Currency. All dollar amounts referred to in this Certificate of Designations are in United States Dollars (“U.S.
Dollars”), and all amounts owing under this Certificate of Designations shall be paid in U.S. Dollars. All amounts denominated
in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on
the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into
U.S. Dollars pursuant to this Certificate of Designations, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference to, or over,
a period of time, the date of calculation shall be the final date of such period of time).

 

(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designations,
unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by wire
transfer of immediately available funds pursuant to wire transfer instructions that Holder shall provide to the Company in writing
from time to time. Whenever any amount expressed to be due by the terms of this Certificate of Designations 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
under the Transaction Documents 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 fifteen percent (15%) per annum from the date such amount was due
until the same is paid in full (“Late Charge”).

 

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25.
Waiver of Notice. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest
and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Certificate
of Designations and the Securities Purchase Agreement.

 

26.
Governing Law. This Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Certificate of Designations shall be governed by, the internal
laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
Nevada. Except as otherwise required by Section 23 above, the Company hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein (i) shall be deemed or operate to preclude any Holder from bringing suit or taking other legal
action against the Company in any other jurisdiction to collect on the Company’s obligations to such Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such
Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 23 above. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS CERTIFICATE OF DESIGNATIONS OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

27.
Judgment Currency.

 

(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in this Section 27 referred to as the “Judgment
Currency”) an amount due in U.S. dollars under this Certificate of Designations, the conversion shall be made at the
Exchange Rate prevailing on the Trading Day immediately preceding:

 

(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date: or 

 

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(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date
as of which such conversion is made pursuant to this Section 27(a)(ii) being hereinafter referred to as the “Judgment
Conversion Date”).

 

(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 27(a)(ii) above, there is a change in
the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment
Conversion Date.

 

(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of this Certificate of Designations.

 

28.
Severability. If any provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Certificate of Designations so long as this
Certificate of Designations as so modified continues to express, without material change, the original intentions of the parties
as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does
not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of
the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace
the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s). 

 

29.
Maximum Payments. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be
deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such
law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the applicable Holder and
thus refunded to the Company. 

 

30.
Stockholder Matters; Amendment. 

 

(a)
Stockholder Matters. Any shareholder action, approval or consent required, desired or otherwise sought by the Company pursuant
to the NRS, the Articles of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Preferred
Shares may be effected by written consent of the Company’s shareholders or at a duly called meeting of the Company’s
shareholders, all in accordance with the applicable rules and regulations of the NRS. This provision is intended to comply with
the applicable sections of the NRS permitting shareholder action, approval and consent affected by written consent in lieu of
a meeting.

 

    	37

    	 

    

 

(b)
Amendment. Except for Section 4(d)(i), which may not be amended or waived hereunder, this Certificate of Designations 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 NRS, of the Required Holders, voting separate as a single class, and with such other
shareholder approval, if any, as may then be required pursuant to the NRS and the Articles of Incorporation.

 

31.
Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

 

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

 

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

 

(c)
“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 and any other unpaid amounts then due and payable hereunder with respect
to such Preferred Share.

 

(d)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with
respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 8(a)) of shares of Common Stock (other
than rights of the type described in Section 7(a) hereof) that could result in a decrease in the net consideration received by
the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights,
cash adjustment or other similar rights).

 

(e)
“Affiliate” or “Affiliated” means, with respect to any Person, any other Person that directly
or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this
definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock
having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.

 

(f)
“Alternate Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately
available funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained
by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding
the relevant Alternate Conversion Date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting
(I) the number of shares of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Deadline
with respect to such Alternate Conversion from (II) the quotient obtain by dividing (x) the applicable Conversion Amount that
the Holder has elected to be the subject of the applicable Alternate Conversion, by (y) the applicable Alternate Conversion Price
without giving effect to clause (x) of such definition.

 

    	38

    	 

    

 

(g)
“Alternate Conversion Price” with respect to any Alternate Conversion
that price which shall be the lower of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the
applicable Alternate Conversion and (ii) the greater of (x) the Floor Price and (y) 85% of the price computed as the quotient
of (I) the sum of the VWAP of the Common Stock for each Trading Day in five (5) consecutive Trading Day period ending and including
the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided by (II) five
(5) (such period, the “Alternate Conversion Measuring Period”). All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately
decreases or increases the Common Stock during such Alternate Conversion Measuring Period.

 

(h)
“Approved Stock Plan” means any employee benefit plan which has been approved by the Board prior to or subsequent
to the Subscription Date pursuant to which shares of Common Stock and options to purchase Common Stock may be issued to any employee,
officer, consultant or director for services provided to the Company in their capacity as such.

 

(i)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Initial Issuance Date, directly
or indirectly managed or advised by a Holder’s investment manager or any of its Affiliates or principals, (ii) any direct
or indirect Affiliates of such Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as
a Group together with such Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s
Common Stock would or could be aggregated with such Holder’s and the other Attribution Parties for purposes of Section 13(d)
of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively such Holder and all other Attribution Parties
to the Maximum Percentage.

 

(j)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment
Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with
respect to the issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or
Adjustment Right (as the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).

 

    	39

    	 

    

 

(k)
“Bloomberg” means Bloomberg, L.P.

 

(l)
“Book-Entry” means each entry on the Register evidencing one or more Preferred Shares held by a Holder in lieu
of a Preferred Share Certificate issuable hereunder.

 

(m)
“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.

 

(n)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization
or reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification
to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power
of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification
or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company
or any of its Subsidiaries.

 

(o)
“Change of Control Redemption Premium” means 125%.

 

(p)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, 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 bid price or the closing
trade price (as the case may be) then the last bid price or last trade price, respectively, 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 closing bid price or last trade price, respectively, 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 closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported
for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually
determined by the Company and the Required Holder. If the Company and the Required Holders 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 23. All such determinations
shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar
transactions during such period.

 

    	40

    	 

    

 

(q)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued the Preferred Shares, the Preferred Warrants and the Common Warrants pursuant to the terms of the
Securities Purchase Agreement.

 

(r)
“Common Stock” means (i) the Company’s shares of common stock, $0.001 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.

 

(s)
“Common Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include
all warrants issued in exchange therefor or replacement thereof.

 

(t)
“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.

 

(u)
“Conversion Floor Price Condition” means that the relevant Alternate Conversion Price or other conversion price
determined pursuant to Section 11(a) hereof, as applicable, is being determined based on clause (x) of such definition or section,
as applicable.

 

(v)
“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.

 

(w)
“Current Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly,
(i) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates
all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current
Subsidiaries”.

 

    	41

    	 

    

 

(x)
“Dividend Date” means, with respect to any given calendar month, the first Trading Day of such calendar month,
but with the first Dividend Date commencing on March 1, 2020.

 

(y)
“Dividend Rate” means nine percent (9%) per annum, as may be adjusted from time to time in accordance with
Section 3(b).

 

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

 

(aa)
“Event Market Price” means, with respect to any Stock Combination Event
Date, the quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) Trading Days with
the lowest VWAP of the Common Stock during the fifteen (15) consecutive Trading Day period ending and including the Trading Day
immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided by (y) five (5).

 

(bb)
“Excluded Securities” means (i) shares of Common Stock or options to purchase Common Stock issued to directors,
consultants, officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an
Approved Stock Plan (as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable
upon exercise of such options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than
15% of the Common Stock issued and outstanding immediately prior to the Subscription Date, in the aggregate and (B) the exercise
price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder
and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects
any of the Holders; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than options
to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the Subscription
Date, provided that the conversion price of any such Convertible Securities (other than options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other
than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other
than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise
materially changed in any manner that adversely affects any of the Holders; (iii) the shares of Common Stock issuable upon conversion
of the Preferred Shares or otherwise pursuant to the terms of this Certificate of Designations; provided, that the terms of this
Certificate of Designations are not amended, modified or changed on or after the Subscription Date (other than antidilution adjustments
pursuant to the terms thereof in effect as of the Subscription Date), (iv) the Warrant Preferred Shares issuable upon exercise
of the Preferred Warrants; provided, that the terms of the Preferred Warrants are not amended, modified or changed on or after
the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date),
(vi) the shares of Common Stock issuable upon exercise of the Common Warrants; provided, that the terms of the Common Warrants
are not amended, modified or changed on or after the Subscription Date (other than antidilution adjustments pursuant to the terms
thereof in effect as of the Subscription Date) and (vii) shares of Common Stock and Common Stock issued upon the conversion or
exercise of Convertible Securities or Options (other than options to purchase Common Stock issued pursuant to an Approved Stock
Plan on or after the date of this Certificate of Designations that are covered by clause (i) above) issued or issuable pursuant
to strategic alliances, strategic mergers and acquisitions, strategic partnerships, strategic license agreements and other similar
transactions, provided that (I) the primary purpose of such issuance is not to raise capital, (II) the purchaser or acquirer of
such shares of Common Stock, Options and/or Convertible Securities in such issuance solely consists of the actual participants
in such strategic transaction or the stockholders, partners, members or Affiliates of the such participants, and (III) to the
extent there are multiple participants in such transaction, the number or amount (as the case may be) of such shares of Common
Stock, Options and/or Convertible Securities issued to such Person by the Company in such transaction shall not be disproportionate
to such Person’s actual participation in such strategic transaction.

 

    	42

    	 

    

 

(cc)
“Floor Price” means $0.1856.

 

(dd)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of
the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule
13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities as of the date of this Certificate of Designations calculated as if any shares of
Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such
Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender
their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument
or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent
necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.

 

    	43

    	 

    

 

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

 

(ff)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.

 

(gg)
“Holder Pro Rata Amount” means, with respect to any Holder, a fraction (i) the numerator of which is the number
of Preferred Shares issued to such Holder pursuant to the Securities Purchase Agreement on the Initial Issuance Date and (ii)
the denominator of which is the number of Preferred Shares issued to all Holders pursuant to the Securities Purchase Agreement
on the Initial Issuance Date.

 

(hh)
“Indebtedness” means 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 United States generally accepted accounting principles consistently applied for
the periods covered thereby (other than trade payables entered into in the ordinary course of business consistent with past practice),
(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 in the event
of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement
which, in connection with United States 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, deed of
trust, lien, pledge, charge, security interest or other encumbrance of any nature whatsoever in or upon any property or assets
(including accounts and contract rights) with respect to any asset or property 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.

 

    	44

    	 

    

 

(ii)
“Intellectual Property Rights” means, with respect to the Company and its Subsidiaries, all of their rights
or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship,
patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual
property rights and all applications and registrations therefor.

 

(jj)
“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.

 

(kk)
“Make-Whole Amount” means as of any given date, the amount of any Dividend that, but for any conversion hereunder
on such given date, would have accrued with respect to the Conversion Amount being redeemed hereunder at the Dividend Rate then
in effect for the period from such given date through the third (3rd) anniversary of the Initial Issuance Date.

 

(ll)
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities,
operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any,
individually or taken as a whole, or on the transactions contemplated hereby or on the other Transaction Documents (as defined
below), or by the agreements and instruments to be entered into in connection therewith or on the authority or ability of the
Company to perform its obligations under the Transaction Documents.

 

(mm)
“New Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription
Date, directly or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest
of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and
all of the foregoing, collectively, “New Subsidiaries.”

 

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

 

(oo)
“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.

 

(pp)
“Permitted Indebtedness” means (i) Indebtedness set forth on Schedule 3(s) to the Securities Purchase Agreement,
as in effect as of the Subscription Date, (ii) Indebtedness secured by Permitted Liens or unsecured but as described in clauses
(iv) and (v) of the definition of Permitted Liens and (iii) Permitted Senior Indebtedness.

 

(qq)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any
Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in
the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries
to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or
lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of such equipment, in either case, with respect
to Indebtedness in an aggregate amount not to exceed $250,000, (v) Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payments of custom duties in connection with the importation of goods, (vii) Liens arising from judgments, decrees
or attachments in circumstances not constituting a Triggering Event under Section 5(a)(ix) and (viii) Liens with respect to Permitted
Senior Indebtedness.

 

    	45

    	 

    

 

(rr)
“Permitted Senior Indebtedness” means the principal of (and premium, if any), interest on, and all fees and
other amounts (including, without limitation, any reasonable out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket
legal fees and disbursements), collateral protection expenses and other reimbursement or indemnity obligations relating thereto)
payable by Company and/or its Subsidiaries under or in connection with any credit facility to be entered into by the Company and/or
its Subsidiaries with one or more financial institutions (and on terms and conditions), in form and substance reasonably satisfactory
to the Required Holders; provided, however, that (i) no Permitted Senior Indebtedness is outstanding during the Restricted Period
(as defined in the Securities Purchase Agreement (or until such earlier time as approved by the Required Holders), (ii) the aggregate
outstanding amount of such Indebtedness permitted hereunder (taking into account the maximum amounts which may be advanced under
the loan documents evidencing such Permitted Senior Indebtedness) does not at any time exceed $2,000,000, (iii) such Permitted
Senior Indebtedness shall not be convertible or exchangeable, directly or indirectly, into Common Stock of the Company and (iv)
no Convertible Securities or Options shall be issued in connection with such Permitted Senior Indebtedness.

 

(ss)
“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.

 

(tt)
“Preferred Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall
include all warrants issued in exchange therefor or replacement thereof.

 

(uu)
“Principal Market” means the Nasdaq Capital Market.

 

(vv)
“Redemption Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately
available funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained
by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding
the relevant Conversion Date and (II) the applicable conversion price determined in accordance with Section 11(a) above and (B)
the difference obtained by subtracting (I) the number of shares of Common Stock delivered (or to be delivered) to the Holder on
the applicable Share Delivery Deadline with respect to such conversion from (II) the quotient obtain by dividing (x) the applicable
Conversion Amount that the Holder has elected to be the subject of the applicable conversion, by (y) the applicable conversion
price determined in accordance with Section 11(a) above without giving effect to clause (x) of such definition.

 

(ww)
“Redemption Notices” means, collectively, the Triggering Events Redemption Notices, and the Change of Control
Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”

 

(xx)
“Redemption Premium” means 125%.

 

(yy)
“Redemption Prices” means, collectively, any Triggering Event Redemption Price, Change of Control Redemption
Price, and each of the foregoing, individually, a “Redemption Price.”

 

    	46

    	 

    

 

(zz)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date,
by and among the Company and the initial holders of the Preferred Shares relating to, among other things, the registration of
the resale of the Preferred Shares, the Common Stock issuable upon conversion of the Preferred Shares or otherwise pursuant to
the terms of this Certificate of Designations and exercise of the Common Warrants, as may be amended from time to time.

 

(aaa)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.

 

(bbb)
“Securities Purchase Agreement” means that certain securities purchase agreement by and among the Company and
the initial holders of Preferred Shares, dated as of the Subscription Date, as may be amended from time in accordance with the
terms thereof.

 

(ccc)
“Series E Preferred Stock” shall mean [DESCRIPTION OF INSIDER PREFERRED TO COME FROM COMPANY].

 

(ddd)
“Stated Value” shall mean, with respect to any given Preferred Share, the sum of (x) $1,000 per Preferred Share,
and (y) the aggregate amount of any Capitalized Dividends per such Preferred Share, in each case, 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.

 

(eee)
“Subscription Date” means January __, 2020.

 

(fff)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.

 

(ggg)
“Subsidiaries” means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries,
and each of the foregoing, individually, a “Subsidiary.”

 

(hhh)
“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.

 

(iii)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, 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 applicable Holder or (y) with respect to all determinations other than price determinations
relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

 

    	47

    	 

    

 

(jjj)
“Transaction Documents” means the Securities Purchase Agreement, this Certificate of Designations, the Preferred
Warrants, the Common Warrants and each of the other agreements and instruments entered into or delivered by the Company or any
of the Holders in connection with the transactions contemplated by the Securities Purchase Agreement, all as may be amended from
time to time in accordance with the terms thereof.

 

(kkk)
“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 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30
start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security
in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New
York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly
Pink Sheets LLC). 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 the Required Holders. If the Company
and the Required Holders 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 23. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction during such period.

 

(lll)
“Warrant Common Shares” means, collectively, the shares of Common Stock issuable upon exercise of the Common
Warrants.

 

(mmm)
“Warrant Preferred Shares” means, collectively, the Preferred Shares issuable upon exercise of the Preferred
Warrants.

 

32.
Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations,
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 within one (1) Business Day of such receipt
or prior to (or simultaneous with) such delivery, as applicable, 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 such Holder explicitly in writing in such
notice (or immediately upon receipt of notice from such Holder, as applicable), and in the absence of any such written indication
in such notice (or notification from the Company immediately upon receipt of notice from such Holder), such 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 any of its Subsidiaries. If the Company or any of its Subsidiaries provides material non-public information to a Holder that
is not simultaneously filed in a Current Report on Form 8-K and such Holder has not agreed to receive such material non-public
information, the Company hereby covenants and agrees that such Holder shall not have any duty of confidentiality to the Company,
any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a
duty to any of the foregoing not to trade on the basis of, such material non-public information. Nothing contained in this Section
32 shall limit any obligations of the Company, or any rights of any Holder, under Section 4(i) of the Securities Purchase Agreement.

 

*
* * * *

 

    	48

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Certificate of Designations of Series D Convertible Preferred Stock of Sigma Labs,
Inc to be signed by its __________ on this ___ day of January, 2020.

 

	 	SIGMA
LABS, INC.
	 	 	 
	 	By: 	
	 		Name:
	 		Title:

 

    	 

    	 

    

 

EXHIBIT I

 

SIGMA
LABS, INC.

CONVERSION
NOTICE

 

Reference
is made to the Certificate of Designations, Preferences and Rights of the Series D Convertible Preferred Stock of Sigma Labs,
Inc (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations,
the undersigned hereby elects to convert the number of shares of Series D Convertible Preferred Stock, $[   ] par value per share
(the “Preferred Shares”), of Sigma Labs, Inc a Nevada corporation (the “Company”), indicated
below into shares of common stock, $0.001 value per share (the “Common Stock”), of the Company, as of the date
specified below.

 

	Date
    of Conversion:	 
	 	 
	Aggregate
    number of Preferred Shares to be converted	 
	 	 
	Aggregate
    Stated Value of such Preferred Shares to be converted:	 
	 	 
	Aggregate
    accrued and unpaid Dividends and accrued and unpaid Late Charges with respect to such Preferred Shares and such Aggregate
    Dividends to be converted:	 
	 	 
	AGGREGATE
    CONVERSION AMOUNT TO BE CONVERTED:	 
	 	 
	Please
    confirm the following information:
	 
	Conversion
    Price:	 
	 	 
	Number
    of shares of Common Stock to be issued:	 
	 	 	 	 	 

[  ]
If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use
the following Alternate Conversion Price:____________

 

Please
issue the Common Stock into which the applicable Preferred Shares are being converted to Holder, or for its benefit, as follows:

 

	 	[  ]	Check
    here if requesting delivery as a certificate to the following name and to the following address:

 

	Issue
    to:	 
	 	 
	 	 

 

    	 

    	 

    

 

[  ]
Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

 

	DTC
    Participant:	 
	 	 
	DTC
    Number:	 
	 	 
	Account
    Number:	 
	 	 	 

Date:
_____________ __, __________

 

______________________________

Name
of Registered Holder

 

By:
____________________________

Name:

Title:

 

Tax
ID:_____________________

 

Facsimile:___________________

 

E-mail
Address:

 

    	 

    	 

    

 

EXHIBIT
II

 

ACKNOWLEDGMENT

 

The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock
[are][are not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and
delivery to the Company of a customary 144 representation letter) or (ii) an effective and available registration statement and
(c) hereby directs _________________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer
Agent Instructions dated _____________, 20__ from the Company and acknowledged and agreed to by ________________________.

 

	 	SIGMA
LABS, INC.
	 	 	 
	 	By: 	
	 	 	Name:
    
	 	 	Title:Exhibit
10.3

 

REGISTRATION
RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 27, 2020, is by and among Sigma
Labs, Inc., a Nevada corporation with offices located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507 (the “Company”),
and the undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).

 

RECITALS

 

A.
In connection with the Securities Purchase Agreement by and among the parties hereto, dated as of January 27, 2020 (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell to each Buyer (i) the Preferred Shares (as defined in the Securities Purchase Agreement) which will
be convertible into Conversion Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Certificate
of Designations (as defined in the Securities Purchase Agreement), (ii) Common Warrants (as defined in the Securities Purchase
Agreement) which will be exercisable to purchase Warrant Common Shares (as defined in the Securities Purchase Agreement) in accordance
with the terms of the Common Warrants, and (iii) Preferred Warrants (as defined in the Securities Purchase Agreement) which will
be exercisable to purchase Preferred Shares in accordance with the terms of the Preferred Warrants.

 

B.
To induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder,
or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:

 

1.
Definitions.

 

Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the following meanings:

 

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

 

(b)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.

 

(c)
“Effective Date” means the date that the applicable Registration Statement has been declared effective by the
SEC.

 

    	 	 	 

    	 	 	 

    

 

(d)
“Effectiveness Deadline” means (i) with respect to the initial Registration Statement required to be filed
pursuant to Section 2(a), the earlier of the (A) 90th calendar day after the Closing Date and (B) 2nd Business
Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review and (ii) with respect to any additional Registration Statements
that may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) 90th calendar day
following the date on which the Company was required to file such additional Registration Statement and (B) the 2nd
Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration
Statement will not be reviewed or will not be subject to further review.

 

(e)
“Filing Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant
to Section 2(a), the 30th calendar day after the Closing Date and (ii) with respect to any additional Registration Statements
that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file
such additional Registration Statement pursuant to the terms of this Agreement.

 

(f)
“Investor” means a Buyer or any transferee or assignee of any Registrable Securities, Common Warrants or Preferred
Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any
Registrable Securities, Common Warrants or Preferred Warrants, as applicable, assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with Section 9.

 

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

 

(h)
“register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415
and the declaration of effectiveness of such Registration Statement(s) by the SEC.

 

(i)
“Registrable Securities” means (i) the Preferred Shares, (ii) the Conversion Shares, (iii) the Warrant Common
Shares and (iv) any capital stock of the Company or a Successor Entity (as defined in the Common Warrant) issued or issuable with
respect to the Preferred Shares pursuant to the Certificate of Designations, the Common Warrants or the Preferred Warrants, including,
without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise
and (2) shares of capital stock of the Company into which the shares of Common Stock and/or Preferred Shares, as applicable, are
converted, exercised or exchanged and shares of capital stock of a Successor Entity into which the shares of Common Stock and/or
Preferred Shares, as applicable, are converted, exercised or exchanged, in each case, without regard to any limitations on conversion
of the Preferred Shares or exercises of the Common Warrants.

 

    	 	2	 

    	 	 	 

    

 

(j)
“Registration Statement” means a registration statement or registration statements of the Company filed under
the 1933 Act covering Registrable Securities.

 

(k)
“Required Holders” means, as of any given time, the holders of a majority of the Registrable Securities as
of such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such time).

 

(l)
“Required Registration Amount” means (i) 100% of the sum of (x) the Preferred Shares outstanding as of such
date of determination and (y) the maximum number of Preferred Shares issuable upon exercise of the Preferred Warrants outstanding
as of such date of determination (ii) 150% of the maximum number of Warrant Common Shares issuable upon exercise of the Common
Warrants (without taking in to account any limitations on exercise set forth therein) and (ii) 200% of the maximum number of Conversion
Shares issuable upon conversion of the Preferred Shares (assuming for purposes hereof that (w) the Preferred Shares are convertible
at the applicable floor price as of such date of determination, (x) all Warrant Preferred Shares issuable upon exercise of the
Preferred Warrants as of such date of determination are deemed issued and outstanding as of such date of determination, (y) dividends
on the Preferred Shares shall accrue through the third anniversary of the Closing Date and (z) any such conversion shall not take
into account any limitations on the conversion of the Preferred Shares set forth in the Certificate of Designations), all subject
to adjustment as provided in Section 2(d) and/or Section 2(f).

 

(m)
“Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time
to time, or any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities
of the Company to the public without registration.

 

(n)
“Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time
to time, or any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or
delayed basis.

 

(o)
“SEC” means the United States Securities and Exchange Commission or any successor thereto.

 

2.
Registration.

 

(a)
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline,
file with the SEC an initial Registration Statement on Form S-3 covering the resale of all of the Registrable Securities, provided
that such initial Registration Statement shall register for resale at least the number of Preferred Shares and shares of Common
Stock, as applicable, as required in the Required Registration Amount as of the date such Registration Statement is initially
filed with the SEC; provided further that if Form S-3 is unavailable for such a registration, the Company shall use such other
form as is required by Section 2(c). Such initial Registration Statement, and each other Registration Statement required to be
filed pursuant to the terms of this Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit
B. The Company shall use its reasonable best efforts to have such initial Registration Statement, and each other Registration
Statement required to be filed pursuant to the terms of this Agreement, declared effective by the SEC as soon as practicable,
but in no event later than the applicable Effectiveness Deadline for such Registration Statement.

 

    	 	3	 

    	 	 	 

    

 

(b)
Legal Counsel. Subject to Section 5 hereof, Kelley Drye & Warren LLP, counsel solely to the lead investor (“Legal
Counsel”) shall review and oversee any registration, solely on behalf of the lead investor, pursuant to this Section
2.

 

(c)
Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate
form reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements
then in effect until such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities has
been declared effective by the SEC and the prospectus contained therein is available for use.

 

(d)
Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement is
insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s
allocated portion of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement
(if permissible), or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding the date of the filing
of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen
(15) days after the necessity therefor arises (but taking account of any Staff (as defined below) position with respect to the
date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration Statement (as the
case may be) to be filed with the SEC). The Company shall use its reasonable best efforts to cause such amendment to such Registration
Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following the
filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.
For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under
the applicable Registration Statement is less than the product determined by multiplying (i) the Common Stock required in the
definition of “Required Registration Amount” as of such time by (ii) 0.90. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on conversion, amortization and/or redemption of the Preferred Shares
or exercise of the Common Warrants (and such calculation shall assume that (A) the Preferred Shares are then convertible in full
into shares of Common Stock at the floor price then in effect and no redemptions of the Preferred Shares shall have occurred prior
to the third anniversary of the Closing Date, (B) the Common Warrants have been exercised in full, and (C) the Preferred Warrants
have been exercised in full).

 

    	 	4	 

    	 	 	 

    

 

(e)
Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement
covering the resale of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to
Section 2(f)) and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the
Filing Deadline for such Registration Statement (a “Filing Failure”) (it being understood that if the Company
files a Registration Statement without affording each Investor and Legal Counsel the opportunity to review and comment on the
same as required by Section 3(c) hereof, the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall
be deemed to be a Filing Failure) or (B) not declared effective by the SEC on or before the Effectiveness Deadline for such Registration
Statement (an “Effectiveness Failure”) (it being understood that if on the Business Day immediately following
the Effective Date for such Registration Statement the Company shall not have filed a “final” prospectus for such
Registration Statement with the SEC under Rule 424(b) in accordance with Section 3(b) (whether or not such a prospectus is technically
required by such rule), the Company shall be deemed to not have satisfied this clause (i)(B) and such event shall be deemed to
be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as defined below), on any day after the Effective
Date of a Registration Statement sales of all of the Registrable Securities required to be included on such Registration Statement
(disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure to timely list) the shares
of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any other limitations imposed by
the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order) or
the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii)
if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any
reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation,
the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a “Current Public Information Failure”) as a result of which any of the Investors
are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions),
then, as partial relief for the damages to any holder by reason of any such delay in, or reduction of, its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity, including,
without limitation, specific performance), the Company shall pay to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1%) of the sum of each Stated Value (as defined in the Certificate of Designations)
of each Preferred Share included on such Registration Statement (together with the sum of the value of any shares of Common Stock
included in such Registration Statement without corresponding Preferred Shares, if any (measured as the product of such aggregate
number of shares of Common Stock and the Conversion Price as of the date of such Registration Statement), the product of (x) such
aggregate number of shares of Common Stock included in such Registration Statement and (y) the Conversion Price (as defined in
the Certificate of Designations) (or Alternate Conversion Price, if applicable to such share of Common Stock). (1) on the date
of such Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2)
on every thirty (30) day anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) an Effectiveness Failure
until such Effectiveness Failure is cured; (III) a Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current
Public Information Failure until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time
that such public information is no longer required pursuant to Rule 144 (in each case, pro rated for periods totaling less than
thirty (30) days). The payments to which a holder of Registrable Securities shall be entitled pursuant to this Section 2(e) are
referred to herein as “Registration Delay Payments.” Following the initial Registration Delay Payment for any
particular event or failure (which shall be paid on the date of such event or failure, as set forth above), without limiting the
foregoing, if an event or failure giving rise to the Registration Delay Payments is cured prior to any thirty (30) day anniversary
of such event or failure, then such Registration Delay Payment shall be made on the third (3rd) Business Day after
such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with the foregoing,
such Registration Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months) until
paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (other than with respect
to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely list) the shares of Common Stock
on the Principal Market) with respect to any period during which all of such Investor’s Registrable Securities may be sold
by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions) and without the need
for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

 

    	 	5	 

    	 	 	 

    

 

(f)
Offering. Notwithstanding anything to the contrary contained in this Agreement, in the event the staff of the SEC (the
“Staff”) or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant
to this Agreement as constituting an offering of securities by, or on behalf of, the Company, or in any other manner, such that
the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner that does
not constitute such an offering and that permits the continuous resale at the market by the Investors participating therein (or
as otherwise may be acceptable to each Investor) without being named therein as an “underwriter,” then the Company
shall reduce the number of shares to be included in such Registration Statement by all Investors until such time as the Staff
and the SEC shall so permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company
shall reduce the number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities
otherwise required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set
of Investors are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in
which event the shares held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set
of Investors on a pro rata basis by such Investors or on such other basis as would result in the exclusion of the least number
of shares by all such Investors); provided, that, with respect to such pro rata portion allocated to any Investor, such Investor
may elect the allocation of such pro rata portion among the Registrable Securities of such Investor. In addition, in the event
that the Staff or the SEC requires any Investor seeking to sell securities under a Registration Statement filed pursuant to this
Agreement to be specifically identified as an “underwriter” in order to permit such Registration Statement to become
effective, and such Investor does not consent to being so named as an underwriter in such Registration Statement, then, in each
such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Investor, until
such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification and
the manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued
pursuant to the the Securities Purchase Agreement, the Certificate of Designations, the Common Warrants, and/or the Preferred
Warrants, as applicable. In the event of any reduction in Registrable Securities pursuant to this paragraph, an affected Investor
shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the Company to file
a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required
by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall following
such request cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this Agreement
for registration statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor have
been registered and sold pursuant to an effective Registration Statement in a manner acceptable to such Investor or (ii) all Registrable
Securities may be resold by such Investor without restriction (including, without limitation, volume limitations) pursuant to
Rule 144 (taking account of any Staff position with respect to “affiliate” status) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (iii) such Investor agrees to be named as
an underwriter in any such Registration Statement in a manner acceptable to such Investor as to all Registrable Securities held
by such Investor and that have not theretofore been included in a Registration Statement under this Agreement (it being understood
that the special demand right under this sentence may be exercised by an Investor multiple times and with respect to limited amounts
of Registrable Securities in order to permit the resale thereof by such Investor as contemplated above).

 

(g)
Piggyback Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement,
if there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein
is not available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering
statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities
(other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with
the Company’s stock option or other employee benefit plans), then the Company shall deliver to each Investor a written notice
of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Investor shall
so request in writing, the Company shall include in such registration statement or offering statement all or any part of such
Registrable Securities such Investor requests to be registered; provided, however, the Company shall not be required to register
any Registrable Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration Statement.

 

    	 	6	 

    	 	 	 

    

 

(h)
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based
on the number of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number
of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise
transfers any of such Investor’s Registrable Securities, each transferee or assignee (as the case may be) that becomes an
Investor shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included in a Registration Statement
and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors
which are covered by such Registration Statement.

 

(i)
No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities
on any Registration Statement filed in accordance herewith without the prior written consent of the Required Holders. Until the
Applicable Date (as defined in the Securities Purchase Agreement), the Company shall not enter into any agreement providing any
registration rights to any of its security holders, except as otherwise permitted under the Securities Purchase Agreement.

 

3.
Related Obligations.

 

The
Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:

 

(a)
The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its reasonable best efforts to cause such Registration Statement
to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject
to Allowable Grace Periods (as defined below), the Company shall keep each Registration Statement effective (and the prospectus
contained therein available for use) pursuant to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing
market prices (and not fixed prices) at all times until the earlier of (i) the date as of which all of the Investors may sell
all of the Registrable Securities required to be covered by such Registration Statement (disregarding any reduction pursuant to
Section 2(f)) without restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need
for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which the Investors
shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times
while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus
(including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (1)
shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary
to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading
and (2) will disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all
material information regarding the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day
after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by
the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) the consent
of Legal Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration
of effectiveness of such Registration Statement to a time and date not later than forty-eight (48) hours after the submission
of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon
as practicable, but in no event later than fifteen (15) Business Days after the receipt of comments by or notice from the SEC
that an amendment is required in order for a Registration Statement to be declared effective.

 

    	 	7	 

    	 	 	 

    

 

(b)
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without
limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with
each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration
Statement, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company required to be covered by such Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth
in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following each
Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus to
be used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus is technically
required by such rule). In the case of amendments and supplements to any Registration Statement which are required to be filed
pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report
on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934
Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such
report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC
on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such
Registration Statement.

 

(c)
The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration
Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration
Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior
to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel or any legal counsel for any other Investor reasonably objects. The Company shall not submit a request for acceleration
of the effectiveness of a Registration Statement or any amendment or supplement thereto or to any prospectus contained therein
without the prior consent of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall promptly furnish
to Legal Counsel and legal counsel for each other Investor, without charge, (i) copies of any correspondence from the SEC or the
Staff to the Company or its representatives relating to each Registration Statement, provided that such correspondence shall not
contain any material, non-public information regarding the Company or any of its Subsidiaries (as defined in the Securities Purchase
Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one
(1) copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with Legal Counsel and legal counsel for each other Investor in performing the Company’s obligations
pursuant to this Section 3.

 

    	 	8	 

    	 	 	 

    

 

(d)
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto
(or such other number of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including,
without limitation, copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such Investor.

 

(e)
The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions,
such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general
taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt
of actual notice of the initiation or threatening of any proceeding for such purpose.

 

    	 	9	 

    	 	 	 

    

 

(f)
The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, may include an untrue statement of a material fact or omission to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company
or any of its Subsidiaries), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement
and such prospectus contained therein to correct such untrue statement or omission and deliver ten (10) copies of such supplement
or amendment to Legal Counsel, legal counsel for each other Investor and each Investor (or such other number of copies as Legal
Counsel, legal counsel for each other Investor or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel, legal counsel for each other Investor and each Investor in writing (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor and each Investor
by facsimile or e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives written notice
from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC, (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, (iii) of the Company’s
reasonable determination that a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt
of any request by the SEC or any other federal or state governmental authority for any additional information relating to the
Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall respond as promptly
as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto (it
being understood and agreed that the Company’s response to any such comments shall be delivered to the SEC no later than
fifteen (15) Business Days after the receipt thereof).

 

(g)
The Company shall (i) use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness
of each Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the
loss of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order
or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify
Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities of the issuance of such
order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

    	 	10	 

    	 	 	 

    

 

(h)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants
in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public
offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed
to the Investors.

 

(i)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, upon the written request of such Investor and execution of a customary
non-disclosure agreement, the Company shall make available for inspection by (i) such Investor, (ii) legal counsel for such Investor
and (iii) one (1) firm of accountants or other agents retained by such Investor (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the
“Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers,
directors and employees to supply all information which any Inspector may reasonably request; provided, however, each Inspector
shall agree in writing to hold in strict confidence and not to make any disclosure (except to such Investor) or use of any Record
or other information which the Company’s board of directors determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission
in any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (3) the information
in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any
other Transaction Document (as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement
between the Company and such Investor, if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities
in a manner which is otherwise consistent with applicable laws and regulations.

 

(j)
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required
to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction
Document. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought
in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor
and allow such Investor, at such Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

    	 	11	 

    	 	 	 

    

 

(k)
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its reasonable best
efforts either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities
exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the
Registrable Securities covered by each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement),
or (iii) if, despite the Company’s reasonable best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful
in satisfying the preceding clauses (i) or (ii), without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the Financial Industry Regulatory Authority (“FINRA”)
as such with respect to such Registrable Securities. In addition, the Company shall cooperate with each Investor and any broker
or dealer through which any such Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant
to FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 3(k).

 

(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend, subject to applicable laws) representing
the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations
or amounts (as the case may be) as the Investors may reasonably request from time to time and registered in such names as the
Investors may request.

 

(m)
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to
Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings
of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus contained
therein if reasonably requested by an Investor holding any Registrable Securities.

 

(n)
The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition
of such Registrable Securities.

 

    	 	12	 

    	 	 	 

    

 

(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of each Registration Statement.

 

(p)
The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder.

 

(q)
Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.

 

(r)
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after the
Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information
concerning the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the
board of directors of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”), provided that the Company shall promptly notify the Investors in writing of the
(i) existence of material, non-public information giving rise to a Grace Period (provided that in each such notice the Company
shall not disclose the content of such material, non-public information to any of the Investors) and the date on which such Grace
Period will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period shall exceed ten (10)
consecutive days and during any three hundred sixty five (365) day period all such Grace Periods shall not exceed an aggregate
of thirty (30) days, (II) the first day of any Grace Period must be at least five (5) Trading Days after the last day of any prior
Grace Period and (III) no Grace Period may exist during the sixty (60) Trading Day period immediately following the Effective
Date of such Registration Statement (provided that such sixty (60) Trading Day period shall be extended by the number of Trading
Days during such period and any extension thereof contemplated by this proviso during which such Registration Statement is not
effective or the prospectus contained therein is not available for use) (each, an “Allowable Grace Period”).
For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors receive the
notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof shall not
be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be
bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable.

 

    	 	13	 

    	 	 	 

    

 

(s)
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its
Registrable Securities pursuant to each Registration Statement.

 

(t)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure
or filing with the SEC, the Principal Market or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall
not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities
Purchase Agreement); provided, however, that the foregoing shall not prohibit the Company from including the disclosure found
in the “Plan of Distribution” section attached hereto as Exhibit B in the Registration Statement.

 

(u)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.

 

4.
Obligations of the Investors.

 

(a)
At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement.
It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the Company may reasonably request.

 

(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

(c)
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that
no supplement or amendment is required.

 

(d)
Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Registrable Securities
(including, but not limited to those represented by a certificate(s) from which the legend has been removed), pursuant to either
the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom,
and that if Registrable Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan
of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing
Registrable Securities is predicated upon the Company’s (and its attorneys’) reliance upon this understanding.

 

    	 	14	 

    	 	 	 

    

 

5.
Expenses of Registration.

 

All
reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees,
printers and accounting fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by
the Company. The Company shall reimburse Legal Counsel for its fees and disbursements in connection with registration, filing
or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration,
filing or qualification.

 

6.
Indemnification.

 

(a)
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and
each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the
directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any losses, obligations, claims, damages, liabilities,
contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’
fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether
pending or threatened, whether or not an Indemnified Person is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained
in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation
by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv)
any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due
and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section
6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person
expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the
Investors pursuant to Section 9.

 

    	 	15	 

    	 	 	 

    

 

(b)
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such
Investor will reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and
the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld
or delayed, provided further that such Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the applicable sale of Registrable Securities pursuant
to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities by any of the Investors
pursuant to Section 9.

 

(c)
Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the
commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of
such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses;
(ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory
to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such
Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the
case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party
(as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall
be at the expense of the indemnifying party, provided further that in the case of clause (iii) above the indemnifying party shall
not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person
or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate
with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party
and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person
(as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent.
No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person (as the case may
be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a
release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault
on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying
party is materially and adversely prejudiced in its ability to defend such action.

 

    	 	16	 

    	 	 	 

    

 

(d)
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages are incurred.

 

(e)
The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of
the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.

 

7.
Contribution.

 

To
the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been
liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the
sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities
shall be limited in amount to the amount of net proceeds received by such seller from the applicable sale of such Registrable
Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no Investor shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Investor
from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such Investor
has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged
untrue statement or omission or alleged omission.

 

8.
Reports Under the 1934 Act.

 

With
a view to making available to the Investors the benefits of Rule 144, the Company agrees to:

 

(a)
make and keep public information available, as those terms are understood and defined in Rule 144;

 

    	 	17	 

    	 	 	 

    

 

(b)
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any
obligations of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and

 

(c)
furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement
by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

 

9.
Assignment of Registration Rights.

 

All
or any portion of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee
(as the case may be) of all or any portion of such Investor’s Registrable Securities, Common Warrants or Preferred Warrants
if: (i) such Investor agrees in writing with such transferee or assignee (as the case may be) to assign all or any portion of
such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such transfer or assignment
(as the case may be); (ii) the Company is, within a reasonable time after such transfer or assignment (as the case may be), furnished
with written notice of (a) the name and address of such transferee or assignee (as the case may be), and (b) the securities with
respect to which such registration rights are being transferred or assigned (as the case may be); (iii) immediately following
such transfer or assignment (as the case may be) the further disposition of such securities by such transferee or assignee (as
the case may be) is restricted under the 1933 Act or applicable state securities laws if so required; (iv) at or before the time
the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the case
may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment
(as the case may be) shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement,
the Certificate of Designations, the Common Warrants and the Preferred Warrants (as the case may be); and (vi) such transfer or
assignment (as the case may be) shall have been conducted in accordance with all applicable federal and state securities laws.
The Investors shall require any transferee of Registrable Securities which are to be included in a Registration Statement to agree
to the provisions of this Section 9 and the Company shall not be required to include any Person’s Preferred Shares or Conversion
Shares who holds Registrable Securities, but who was not an original Investor and/or signatory to this Agreement, in any Registration
Statement, who has not complied with the terms of this Section 9.

 

    	 	18	 

    	 	 	 

    

 

10.
Amendment of Registration Rights.

 

Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such
amendment or waiver that complies with the foregoing, but that disproportionately, materially and adversely affects the rights
and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior
written consent of such adversely affected Investor. Any amendment or waiver effected in accordance with this Section 10 shall
be binding upon each Investor and the Company, provided that no such amendment shall be effective to the extent that it (1) applies
to less than all of the holders of Registrable Securities or (2) imposes any obligation or liability on any Investor without such
Investor’s prior written consent (which may be granted or withheld in such Investor’s sole discretion). No waiver
shall be effective unless it is in writing and signed by an authorized representative of the waiving party. No consideration shall
be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the
same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

 

11.
Miscellaneous.

 

(a)
Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns,
or is deemed to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections
from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable Securities.

 

(b)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message from the recipient’s email server that such
e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with a nationally recognized overnight
delivery service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses,
facsimile numbers and email addresses for such communications shall be:

 

If
to the Company:

 

Sigma
Labs, Inc.

3900
Paseo del Sol

Santa
Fe, NM 87507

Telephone:
(505) 984-3251

Facsimile:
(___) ___-____

Attention:
Chief Executive Officer

Email:
rice@sigmalabsinc.com

 

    	 	19	 

    	 	 	 

    

 

With
a copy (for informational purposes only) to:

 

TroyGould
PC

1801
Century Park East, Suite 1600

Los
Angeles, CA 90067

Telephone:
(310) 553-4441

Facsimile:
(___) ___-____

Attention:
Darren Freedman

Email:
dfreedman@troygould.com

 

If
to the Transfer Agent:

 

Issuer
Direct Corporation

1981
Murray Holladay Road, Suite 100

Salt
Lake City, UT 84117

Telephone:
(801) 272-9294

Facsimile:
(___) ___-____

Attention:
Julie Felix

Email:
Julie.felix@issuerdirect.com

 

If
to Legal Counsel:

 

Kelley
Drye & Warren LLP

101
Park Avenue

New
York, NY 10178

Telephone:
(212) 808-7540

Facsimile:
(212) 808-7897

Attention:
Michael A. Adelstein, Esq.

Email:
madelstein@kelleydrye.com

 

If
to a Buyer, to its address, facsimile number and/or email address set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other
address, facsimile number, and/or email address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye
& Warren LLP shall only be provided notices sent to the lead investor. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile
machine or email containing the time, date, recipient facsimile number or email address and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

    	 	20	 

    	 	 	 

    

 

(c)
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions
to prevent or cure breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms
and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required),
this being in addition to any other remedy to which any party may be entitled by law or equity.

 

(d)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, 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 suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. 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 to such party at the address for such notices to it under this Agreement 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e)
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    	 	21	 

    	 	 	 

    

 

(f)
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto and thereto solely 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 and therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and
the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely
with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction
Document shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or
any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company, (ii)
waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits
to any Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or
any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit any obligations
of the Company under any of the other Transaction Documents.

 

(g)
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be
enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns (subject in the case
of assigns of the Investors, Section 9 hereof) and the Persons referred to in Sections 6 and 7 hereof.

 

(h)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter,
singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(i)
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains
a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page
were an original thereof.

 

(j)
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents as any other 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.

 

    	 	22	 

    	 	 	 

    

 

(k)
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section
10, terms used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms
on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by each Investor.

 

(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Preferred Shares then held by the
Investors have been converted for Registrable Securities without regard to any limitations on redemption, amortization and/or
conversion of the Preferred Shares then held by Investors.

 

(m)
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns (subject
in the case of assigns of the Investors, Section 9 hereof), and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

(n)
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations
of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor
under this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges
that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity,
or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors
are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or
the transactions contemplated by this Agreement or any of the other the Transaction Documents. Each Investor shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in
any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained herein
was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely,
and not between the Company and the Investors collectively and not between and among Investors.

 

[signature
page follows]

 

    	 	23	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	COMPANY:
	 	 
	 	SIGMA
    LABS, INC.
	 	 	 
	 	By:	/s/
    John R. Rice
	 	Name: 	John
    R. Rice
	 	Title:	President
    and CEO

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	BUYER:
	 	 
	 	IROQUOIS
    MASTER FUND LTD
	 	 	 
	 	By:	/s/
    Kimberly Page
	 	Name: 	Kimberly
    Page
	 	Title:	General
    Partner

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	BUYER:
	 	 
	 	IROQUOIS
    Capital Investment Group, LLC
	 	 	 
	 	By:	/s/
    Richard Abbe
	 	Name: 	Richard
    Abbe
	 	Title:	General
    Partner

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	BUYER:
	 	 
	 	Anson
    Investments Master Fund LP
	 	 	 
	 	By:	/s/
    Amin Nathoo
	 	Name: 	Amin
    Nathoo
	 	Title:	Director,
    Anson Advisors, Inc.

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	BUYER:
	 	 
	 	Brio
    Capital Master Fund Ltd.
	 	 	 
	 	By:	/s/
    Shaye Hirsch
	 	Name: 	Shaye
    Hirsch
	 	Title:	Director

 

    	 	 	 

    	 	 	 

    

 

EXHIBIT
A

 

FORM
OF NOTICE OF EFFECTIVENESS

OF
REGISTRATION STATEMENT

 

______________________

______________________

______________________

Attention: _____________

 

Re:
Sigma Labs, Inc.

 

Ladies
and Gentlemen:

 

[We
are][I am] counsel to Sigma Labs, Inc., a Nevada corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered
into by and among the Company and the buyers named therein (collectively, the “Holders”) pursuant to which
the Company issued to the Holders Series D Convertible Preferred Stock (the “Preferred Shares”) convertible
into the Company’s shares of common stock, $0.001 par value per share (the “Common Stock”), warrants
exercisable for shares of Common Stock (the “Common Warrants”) and warrants exercisable for Preferred Shares
(the “Preferred Warrants”). Pursuant to the Securities Purchase Agreement, the Company also has entered into
a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which the
Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement),
including the Preferred Shares outstanding as of the date hereof, Preferred Shares issuable pursuant to the Preferred Warrants
and the shares of Common Stock issuable upon conversion of the Preferred Shares and the Common Warrants under the Securities Act
of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form [S-1][S-3] (File No. 333-_____________)
(the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating
to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

 

In
connection with the foregoing, [we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that
[the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS]] [an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I] have no
knowledge, after a review of information posted on the website of the SEC at http://www.sec.gov/litigation/stoporders.shtml, that
any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened
by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

This
letter shall serve as our standing opinion to you that the Preferred Shares and shares of Common Stock underlying the Preferred
Shares are freely transferable by the Holders pursuant to the Registration Statement and the terms, conditions and requirements
of the Registration Rights Agreement. You need not require further letters from us to effect any future legend-free issuance or
reissuance of such Preferred Shares and/or shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable
Transfer Agent Instructions dated _________ __, 20__.

 

	 	Very
    truly yours,
	 	 
	 	[ISSUER’S
    COUNSEL]
	 	 
	 	By:_____________________
	 	 
	CC:	[LEAD
    INVESTOR]	 
	 	[OTHER
    BUYERS]	 

 

    	 	 	 

    	 	 	 

    

 

EXHIBIT
B

 

SELLING
STOCKHOLDERS

 

The
shares of preferred stock being offered by the selling stockholders are those previously issued to the selling stockholders and
those issuable to the selling stockholders upon exercise of the preferred warrants. The shares of common stock being offered by
the selling stockholders are those previously issued to the selling stockholders and those issuable to the selling stockholders
upon exercise of the common warrants and conversion of the preferred stock. We are registering the shares of preferred stock and
shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for
the ownership of our securities issued pursuant to the Securities Purchase Agreement, the selling stockholders have not had any
material relationship with us within the past three years.

 

The
first table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of preferred
stock held by each of the selling stockholders. The second column lists the number of shares of preferred stock beneficially owned
by the selling stockholders, based on their respective ownership of preferred stock, common warrants and preferred warrants, as
of [ , 20__], assuming exercise of the common warrants and preferred warrants held by each such selling stockholder on that date.
The third column lists the shares of preferred stock being offered by this prospectus by the selling stockholders. The fourth
column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

 

The
second table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common
stock held by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned
by the selling stockholders, based on their respective ownership of shares of common stock and preferred shares, as of [________,
20__], assuming conversion of the preferred stock and exercise of the common warrants and the preferred warrants, held by each
such selling stockholder on that date but taking account of any limitations on conversion in the certificate of designations and
limitations on exercise set forth in the common warrants. The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders and does not take in account any limitations on (i) conversion of the preferred stock set
forth in the certificate of designations or (ii) exercise of the common warrants set forth therein. The fourth column assumes
the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

 

In
accordance with the terms of a registration rights agreement with the holders of the preferred shares, this prospectus generally
covers the resale of 100% of the maximum number of preferred shares issued and issuable pursuant to the terms of the preferred
warrants and 200% of the maximum number of shares of common stock issued or issuable pursuant to Certificate of Designations and
150% of the maximum number of shares of common stock issued or issuable pursuant to the common warrants, including payment of
dividends on the preferred shares through [DATE], in each case, determined as if the outstanding preferred shares (including dividends
on the preferred shares through [DATE]) were converted in full (without regard to any limitations on conversion contained therein
solely for the purpose of such calculation) at the floor price of $[ ]. Because the conversion price of the preferred shares and
exercise price of the common warrants may be adjusted, the number of shares of common stock that will actually be issued may be
more or less than the number of shares of common stock being offered by this prospectus.

 

    	 	 	 

    	 	 	 

    

 

Under
the terms of the preferred shares and the common warrants, a selling stockholder may not convert the preferred shares or exercise
the common warrants, as applicable, to the extent (but only to the extent) such selling stockholder or any of its affiliates would
beneficially own a number of shares of our common stock which would exceed 4.99% of the outstanding shares of the Company. The
number of shares of common stock in the second column in the second table reflects these limitations. The selling stockholders
may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

 

	

    Name of Selling Stockholder	 	Number
    of Shares of Preferred Stock Owned Prior to Offering	 	Maximum
    Number of Shares of Preferred Stock to be Sold Pursuant to this Prospectus	 	Number
    of Shares of Preferred Stock of Owned After Offering
	 	 	 	 	 	 	 
	[BUYER]
    (1)	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(1)
    [                      ].	 	 	 	 	 	 
	 	 	 	 	 	 	 
	

    Name of Selling Stockholder	 	Number
    of Shares of Common Stock Owned Prior to Offering	 	Maximum
    Number of Shares of Common Stock to be Sold Pursuant to this Prospectus	 	Number
    of Shares of Common Stock of Owned After Offering
	 	 	 	 	 	 	 
	[BUYER]
    (1)	 	 	 	 	 	 
	 	 	 	 	 	 	0
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(1)
    [                ]	 	 	 	 	 	 

 

    	 	 	 

    	 	 	 

    

 

PLAN
OF DISTRIBUTION

 

We
are registering the shares of preferred stock outstanding and issuable upon exercise of the preferred warrants and common stock
issuable upon conversion of the preferred shares and exercise of the common warrants to permit the resale of these shares of preferred
stock and common stock by the holders of the preferred stock, common warrants and preferred warrants, from time to time after
the date of this prospectus. We will receive proceeds from the exercise of any common warrants and preferred warrants. We will
not receive any of the proceeds from the sale by the selling stockholders of the shares of preferred stock or common stock. We
will bear all fees and expenses incident to our obligation to register the shares of preferred stock and common stock.

 

The
selling stockholders may sell all or a portion of the shares of preferred stock and common stock held by them and offered hereby
from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of preferred stock or
common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts
or commissions or agent’s commissions. The shares of preferred stock and common stock may be sold in one or more transactions
at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated
prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more
of the following methods:

 

●
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

 

●
in the over-the-counter market;

 

●
in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

 

●
through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;

 

●
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

●
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

 

●
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

●
an exchange distribution in accordance with the rules of the applicable exchange;

 

●
privately negotiated transactions;

 

●
short sales made after the date the Registration Statement is declared effective by the SEC;

 

    	 	 	 

    	 	 	 

    

 

●
broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;

 

●
a combination of any such methods of sale; and

 

●
any other method permitted pursuant to applicable law.

 

The
selling stockholders may also sell shares of preferred stock and common stock under Rule 144 promulgated under the Securities
Act of 1933, as amended, if available, rather than under this prospectus. In addition, the selling stockholders may transfer the
shares of preferred stock and common stock by other means not described in this prospectus. If the selling stockholders effect
such transactions by selling shares of preferred stock or common stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling
stockholders or commissions from purchasers of the shares of preferred stock or common stock for whom they may act as agent or
to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of
preferred stock or common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the shares of preferred stock or common stock in the course of hedging in positions
they assume. If the Company elects to waive, in whole or in part, the restrictions on short sales by one or more selling stockholders
in the securities purchase agreement, the selling stockholders would be permitted to also sell shares of preferred stock or common
stock short and deliver shares of preferred stock or common stock, as applicable, covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge
shares of preferred stock or common stock to broker-dealers that in turn may sell such shares.

 

The
selling stockholders may pledge or grant a security interest in some or all of the preferred stock, preferred warrants, or shares
of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of preferred stock or common stock from time to time pursuant to this prospectus or any amendment
to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer and donate the shares of preferred stock or common stock in other circumstances in
which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes
of this prospectus.

 

To
the extent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer
participating in the distribution of the shares of preferred stock or common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of preferred stock or common stock is made, a prospectus supplement, if required, will be distributed, which will set forth the
aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers
or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or re-allowed or paid to broker-dealers.

 

    	 	 	 

    	 	 	 

    

 

Under
the securities laws of some states, the shares of preferred stock and common stock may be sold in such states only through registered
or licensed brokers or dealers. In addition, in some states the shares of preferred stock and common stock may not be sold unless
such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available
and is complied with.

 

There
can be no assurance that any selling stockholder will sell any or all of the shares of preferred stock or common stock registered
pursuant to the registration statement, of which this prospectus forms a part.

 

The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable,
Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of preferred stock or
common stock by the selling stockholders and any other participating person. To the extent applicable, Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with
respect to the shares of preferred stock or common stock. All of the foregoing may affect the marketability of the shares of preferred
stock or common stock and the ability of any person or entity to engage in market-making activities with respect to the shares
of preferred stock or common stock.

 

We
will pay all expenses of the registration of the shares of preferred stock and common stock pursuant to the registration rights
agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses
of compliance with state securities or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities
under the Securities Act in accordance with the registration rights agreements or the selling stockholders will be entitled to
contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities
Act that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus,
in accordance with the related registration rights agreements or we may be entitled to contribution.

 

Once
sold under the registration statement, of which this prospectus forms a part, the shares of preferred stock and common stock will
be freely tradable in the hands of persons other than our affiliates.

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