Document:

EXCHANGE AGREEMENT
(the “Agreement”) is made as of May 30, 2014 (the “Effective Date”), by and
between CBD Energy Limited, an Australian corporation (the “Company”), and Wind Farm Financing Pty Ltd
(the “Noteholder”).

 

WHEREAS, on
May 30, 2012, the Company and Partners for Growth III, L.P. (“PFG”) and others entered into that certain
Convertible Note Facility Agreement, which agreement has been amended and restated from time and time and most recently pursuant
to the Global Amending Deed executed on November 28, 2013 (the “Note Agreement”), pursuant to which,
the Noteholder purchased from the Company convertible promissory notes with an aggregate face value of A$4,895,832 (the “Notes”).

 

WHEREAS, in 2013, PFG assigned
its rights and obligations under the Note Agreement to the Noteholder and Noteholder subsequently made additional advances to the
Company under the Note Agreement, and entered into other agreements pertaining to the Notes and other obligations of the Company
to Noteholder under the Note Agreement (the “Obligations”).

 

WHEREAS, as of the Effective Date
the Notes and the Obligations are in excess of US$2,000,000.

 

WHEREAS,
the Notes are convertible into Company ordinary shares at a price of US$30.00 per share, subject to adjustment as provided
in the Note Agreement (the “Conversion Price”), at Noteholder’s sole option, subject to the terms and conditions
of the Note Agreement, but the Company cannot cause Noteholder to convert the Notes.

 

WHEREAS, the
Company has filed a preliminary prospectus on Form F-1 (File Number 333- 194780) originally filed with the SEC on March 25, 2014
(the “Registration Statement”) pertaining to its intended sale of Securities (the “Offering”).
For purposes hereof “Securities” means Company ordinary shares, or units comprised of ordinary shares
and warrants, as set forth in the Registration Statement, as amended, when declared effective by the SEC.

 

WHEREAS, the
Company is seeking to induce Noteholder to exchange US$2,000,000 (the “Exchange Amount”) in total of
the Note and obligations under the Note (“Note Obligations”), into Securities on the Exchange Date (as
defined below).

 

WHEREAS, Noteholder
is willing to exchange the Exchange Amount of the Note Obligations on the Exchange Date for the Exchange Securities (defined below),
subject to receiving the consideration and the other terms and conditions set forth herein.

 

WHEREAS,
the Company has duly authorized the issuance to the Noteholder of the Exchange Securities (as defined below).

 

WHEREAS,
the Company has duly authorized the issuance to the Noteholder of the number of Securities (the “Exchange Securities”)
as determined in the following formula:

 

	Exchange Securities = 	US$2,000,000
	Lesser of (i) the Conversion Price or (ii) the lowest offer price of the Securities issued in the Offering 

 

 

WHEREAS, the
exchange of the Obligations for the Exchange Securities is being made in reliance upon an exemption from registration as set forth
in Section 3.3 of this Agreement.

 

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the
premises and the mutual agreements, representations and warranties, provisions and covenants contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:

 

1.                 
Exchange. On the Exchange Date, subject to the terms and conditions of this Agreement, the Noteholder shall, and the Company
shall, in reliance upon applicable exemption (as set forth in Section 3.3 hereof) from registration provided under the Securities
Act of 1933, as amended (the “Securities Act”), exchange the Obligations for the Exchange Securities.
For purposes hereof, “Exchange Date” means the date on which the shares issued pursuant to the Offering
commence trading on the Nasdaq Capital Market. On the Exchange Date, the following transactions shall occur (such transactions
in this Section 1, the “Exchange”):

 

    	 

    	 

    

 

(a) Upon consummation
of the Exchange, all of accrued interest, principal and all other obligations under the Obligations and the Obligations shall be
deemed to be cancelled. Notwithstanding the foregoing, concurrently with or promptly following the Exchange, Noteholder shall deliver
or cause to be delivered to the Company (or its designee) the Obligations, free and clear of all liens, or a certificate to the
effect that all obligations of the Company with respect to the Obligations have been extinguished, provided however, that Noteholder’s
failure to deliver such certificate shall not affect the extinguishment of all obligations of the Company with respect to the Obligations.
..

 

(b) On the Exchange Date,
or as soon thereafter as practicable, in exchange for the Obligations, the Company shall cause the transfer agent for the Company
ordinary shares to issue the Exchange Securities to the Noteholder. The parties agree that the holding period of the Exchange Securities,
for purposes of Rule 144 under the Securities Act of 1933 tacks back to the original issue dates of the Obligations. In recognition
of the duration of the holding period and the representations of Noteholder set forth in Section 5 hereof, the Company shall use
its best efforts to arrange, at its sole expense, such opinion of legal counsel as may be required by the Company’s stock
transfer agent to issue the Exchange Securities to Noteholder without restrictions.

 

(c) The Company and the
Noteholder shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate
the Exchange.

 

2.                 
Waiver and Release.

 

2.1             
Upon consummation of the Exchange as contemplated by this Agreement, the Noteholder acknowledges satisfaction of all Obligations
under the Obligations. Noteholder hereby acknowledges that such Noteholder has not relied on any representations or statements
of the Company or any other person not set forth herein.

  

3.                 
Representations and Warranties of the Company. The Company hereby represents and warrants to Noteholder that:

 

 

3.1             
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the Australia. The Company is duly qualified to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its business or properties.

 

3.2             
Authorization. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the performance of all obligations of the Company hereunder and thereunder,
including, without limitation, the authorization of the Exchange, and the issuance (or reservation for issuance) of the Exchange
Securities have been taken on or prior to the date hereof.

 

3.3             
Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Noteholder contained herein,
the offer and issuance by the Company of the Exchange Securities are exempt from registration under the Securities Act and all
applicable state securities laws. The offer and issuance of the Exchange Securities are exempt from registration under the Securities
Act pursuant to the exemption provided by Section 3(a)(9), Reg S or other applicable exemption thereof.

 

3.4             
Valid Issuance of the Securities. The Exchange Securities when issued and delivered in accordance with the terms of this
Agreement, for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable.

 

3.5             
No Consideration Paid. No commission or other remuneration has been paid by the Company for soliciting the exchange of the
Obligations for the Exchange Securities as contemplated hereby.

 

4. Registration
Rights

 

    	 

    	 

    

 

4.1.              
Unless Noteholder is otherwise permitted to sell the Exchange Securities pursuant to Rule 144 or any successor rule or another
applicable exemption, whenever the Company proposes to register any of its Ordinary Shares under the Securities Act (other than
a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 of the Securities Act
is applicable, or a Registration Statement on Form F-4, S-4, S-8 or any successor form thereto or another form not available for
registering the Exchange Securities for sale to the public), or that certain Registration Statement on Form F-1 (SEC File No.
333-194780), whether for its own account or for the account of one or more stockholders of the Company and the form of Registration
Statement to be used may be used for any registration of registrable securities (a "Piggyback Registration"),
the Company shall give prompt written notice (in any event no later than 10 days prior to the filing of such Registration Statement)
to the Noteholder of its intention to effect such a registration and, subject to Section 4 (b) and Section 4(c) hereof, shall
include in such registration all Exchange Securities of Holder with respect to which the Company has received a written request
for inclusion in such registration within 5 business days after the Company's notice has been given to Noteholder. The Company
may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion and provided
further, shall have no notice obligations to Noteholder pursuant to this Section 4 if the Company is advised in writing by the
managing underwriter of a primary underwritten offering that in its opinion that the inclusion of any registrable securities,
including any Exchange Securities, in such Piggyback Registration would adversely affect the price per share of the Company ordinary
shares to be sold in such offering.

 

4.2.              
If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the managing underwriter
advises the Company (if any holders of Exchange Securities have elected to include such securities in such Piggyback Registration)
in writing that in its opinion the number of Company ordinary shares proposed to be included in such registration, including all
Exchange Securities and all other Company ordinary shares proposed to be included in such underwritten offering, exceeds the number
of Company ordinary shares which can be sold in such offering and/or that the number of such ordinary shares proposed to be included
in any such registration would adversely affect the price per share of the Company ordinary shares to be sold in such offering,
the Company shall include in such registration (i) first, if applicable, the number of Company ordinary shares that the Company
proposes to sell; and (ii) second, the number of Company ordinary shares that holders of registrable securities with registration
rights senior to Noteholder propose to sell; and (iii) third, the number of Company ordinary shares requested to be included therein
by Noteholder; and (iv) fourth the number of Company ordinary shares requested to be included therein by other holders of registrable
securities, excluding Holder, allocated pro rata among all such holders on the basis of the number of registrable securities owned
by each such holder and (v) fifth, the number of Company ordinary shares requested to be included therein by holders of Company
ordinary shares (other than holders of registrable securities), allocated among such holders in such manner as they may agree.
Notwithstanding the foregoing, (a) so long as Noteholder holds Exchange Securities that Noteholder is not permitted to sell pursuant
to Rule 144 or any successor rule or other exemption, without Noteholder’s consent, no future shareholder of the Company
shall be granted piggyback registration rights after the date hereof that would reduce the number of shares includable by Noteholder
in a registration covered by these registration rights provisions; and (b) Noteholder shall have the right to withdraw all or any
portion of its Exchange Securities from a proposed registration at any time prior to the effective date thereof.

 

4.3.              
This Section 4 assumes a registration of registrable securities in the U.S. subject to applicable U.S. federal securities laws,
rules and regulations as a U.S. issuer. If the Company is a foreign private issuer, the references to the Securities Act, Securities
Exchange Act and relevant forms shall be deemed to mean the equivalent sections and forms relevant to foreign private issuers.

 

5.                 
Representations and Warranties of the Noteholder. The Noteholder hereby represents, warrants and covenants that:

 

5.1             
Organization; Authority. The Noteholder has the power and authority to enter into and to consummate the transactions contemplated
hereby and otherwise to carry out its obligations hereunder. This Agreement has been duly executed by the Noteholder, and when
delivered by the Noteholder in accordance with the terms hereof, will constitute the valid and legally binding obligation of the
Noteholder, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

    	 

    	 

    

 

5.2             
Own Account. The Noteholder understands that the Exchange Securities are “restricted securities” as that term
is used in Rule 144(a)(3) and have not been registered under the Securities Act or any applicable state securities law. Noteholder
has been the beneficial owner of the Unpaid Note for a period of at least one (1) year as computed in accordance with paragraph
(d) of the Rule 144 (the “Rule”). and acquired Noteholder’s interest in the Note as principal for its own account
and not with a view to or for distributing or reselling the Note or any securities issued pursuant to the Note (including without
limitation the Exchange Securities) or any part thereof in violation of the Securities Act or any applicable state securities law,
has no present intention of distributing any of such securities in violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such securities (this representation and warranty not limiting the Noteholder’s right to sell the Exchange Securities
pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws) in violation
of the Securities Act or any applicable state securities law. The Noteholder is acquiring the Exchange Securities hereunder in
the ordinary course of its business.

 

5.3             
Noteholder Status. At the time the Noteholder was offered the Exchange Securities, it was, and as of the date hereof it
is either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. The Noteholder has
not participated and will not participate in the direct or indirect underwriting of any distribution of the Exchange Securities
and the Noteholder is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. Noteholder is not
aware of any material, non-public information about the Company.

 

5.4             
Experience of the Noteholder. The Noteholder, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the
Exchange Securities, and has so evaluated the merits and risks of such investment. The Noteholder is able to bear the economic
risk of an investment in the Exchange Securities and, at the present time, is able to afford a complete loss of such investment.

 

5.5             
Reliance on Exemptions. The Noteholder understands that the Exchange Securities are being offered and issued to it in reliance
on specific exemptions from the registration requirements of United States federal and state securities laws and the Company and
its outside counsel, the Company’s transfer agent and Noteholder’s counsel are authorized to rely upon the truth and
accuracy of, and the Noteholder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Noteholder set forth herein in order to determine the availability of such exemptions, the eligibility of the Noteholder
to acquire the Exchange Securities and in connection with the other matters set forth herein. Noteholder consents to its broker
communicating with the Company in connection with any sale of the Exchange Securities. 

 

5.6             
Ownership. The Noteholder is the record and beneficial owner of, and has good and marketable title to the Obligations, free
and clear of any and all liens, security interests, charges or encumbrances, agreements, voting trusts, proxies or other arrangements
or restrictions of any kind whatsoever.

  

5.7             
Rule 144 Representations.

 

(a)               
Neither the Noteholder nor any of its affiliates is, and for the three months immediately preceding the date of this Agreement,
has been (i) an officer, director, employee or “affiliate” of the Company (as that term is defined in Rule 144(a)(1)
promulgated under the Securities Act) or (ii) a “beneficial owner” of more than 10% of the shares of Common Stock (as
defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b)              
No commission or other remuneration has been paid by the Noteholder to the Company in connection with the exchange of the Obligations
for the Exchange Securities as contemplated hereby.

 

6.                 
Covenants of the Noteholder.

 

    	 

    	 

    

 

6.1             
Trading in Ordinary Shares. The Noteholder hereby agrees that for the period commencing on the Effective Date and ending
on the earlier to occur of the Exchange Date or the Termination Date, Noteholder shall not maintain a Net Short Position (as defined
below). For purposes hereof, a “Net Short Position” by the Noteholder means a position whereby the Noteholder
has executed one or more sales of Company ordinary shares that is marked as a short sale (but not including any sale marked “short
exempt”) and that is executed at a time when the Noteholder has no equivalent offsetting long position in the ordinary shares
(or is deemed to have a long position hereunder or otherwise in accordance with Regulation SHO of the Exchange Act). For purposes
of determining whether the Noteholder has an equivalent offsetting long position in the Company ordinary shares, all Company ordinary
shares that are owned by the Noteholder shall be considered.

 

 

6.2 Standstill.
Prior to Termination Date hereof, Noteholder shall take no action to enforce its rights arising from defaults under the Obligations,
if any.

 

 

7.                 
Indemnification.

 

7.1             
Indemnification by the Company. The Company agrees to indemnify, hold harmless, reimburse and defend the Noteholder, and
its officers, directors, agents, affiliates, members, managers, control persons, and principal shareholders, against any claim,
cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon
the Noteholder or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or
breach of any representation or warranty by Company in this Agreement or in any exhibits or schedules attached hereto, or other
agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance
by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered into by
the Company and Noteholder relating hereto.

 

7.2             
Indemnification by the Noteholder. The Noteholder agrees to indemnify, hold harmless, reimburse and defend the Company
and any of its officers, directors, agents, affiliates, members, managers, control persons, and principal shareholders, against
any claim, cost, expense, liability, obligation, loss or damage of any nature, (including without limitation claims relating to
the failure to include a restrictive legend on the Exchange Securities) and reasonable legal fees related thereto, incurred by
or imposed upon the Noteholder or any such person which results, arises out of or is based upon (i) any material misrepresentation
or misstatements of facts or the delivery of misleading or false information by the Noteholder or breach of any representation
or warranty by the Noteholder in this Agreement or in any exhibits or schedules attached hereto, or other agreement delivered
pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Noteholder
of any covenant or undertaking to be performed by the Noteholder hereunder, or any other agreement entered into by the Company
and the Noteholder relating hereto. 

 

8.                 
Miscellaneous

 

8.1             
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

8.2             
Governing Law; Jurisdiction; Jury Trial. 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 or 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, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

    	 

    	 

    

 

8.3             
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

8.4             
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient; if not, then on the next business day, (c) five (5) business days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be sent to (a) in the case of the
Company to CBD Energy Limited, Suite 2, Level 2, 53 Cross Street, Double Bay, NSW 2028, Australia, Attention: Richard Pillinger
or (b) in the case of the Noteholder, to the address as set forth on the signature page or exhibit pages hereof or, in either case,
at such other address as such party may designate by TEN (10) business days advance written notice to the other parties hereto.

 

8.5 Term and Termination.
If the Exchange Date has not occurred on or prior to June 30, 2014 (the “Termination Date”), this Agreement shall terminate.
Upon termination, this Agreement shall have no effect upon the rights and obligations of any Party under the Obligations. 

 

8.6             
Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement 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 Noteholder. Any amendment or waiver effected in accordance with this paragraph shall be binding upon Noteholder
and the Company, provided that no such amendment shall be binding on a holder that does not consent thereto to the extent such
amendment treats such party differently than any party that does consent thereto.

 

8.7             
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded
and shall be enforceable in accordance with its terms.

 

8.8             
Entire Agreement. This Agreement represents the entire agreement and understandings between the parties concerning the Exchange
and the other matters described herein and therein and supersedes and replaces any and all prior agreements and understandings
solely with respect to the subject matter hereof and thereof.

 

8.9             
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

8.10             
Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the
singular, the singular the plural, the part the whole, (b) references to any gender include all genders, (c) “including”
has the inclusive meaning frequently identified with the phrase “but not limited to” and (d) references to “hereunder”
or “herein” relate to this Agreement.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

 

	 	THE COMPANY
	 	 	 
	 	CBD ENERGY LIMITED
	 	 	 
	 	 	 
	 	By: 	 /s/ CBD ENERGY LIMITED  
	 	 	Name: 
	 	 	Title: 

 

	 	NOTEHOLDER:
	 	 	 
	 	WIND FARM FINANCING PTY LTD
	 	 	 
	 	By: 	 /s/ WIND FARM FINANCING PTY LTD
	 	 	Name: 
	 	 	Title: 
	 	 	 

 

	 	
        Ian Bloodworth

        Level 1, 160 Pitt Street

        Sydney, NSW 2000
	 
	 	 	 

 

 

 

[Signature Page to Note Exchange Agreement]CERTIFICATE
OF DESIGNATION 

OF
THE PREFERENCES, RIGHTS AND LIMITATIONS

OF
THE

SERIES
C 12% CONVERTIBLE PREFERRED STOCK

OF

ECO
BUILDING PRODUCTS, INC.

 

The
undersigned, the Chief Executive Officer of Eco Building Products, Inc., a Colorado corporation (the “Company”),
in accordance with the provisions of the Colorado Business Corporation Act, does hereby certify that, pursuant to the authority
conferred upon the Board of Directors by the Articles of Incorporation of the Company, the following resolution creating a series
of preferred stock, designated as Series C 12% Convertible Preferred Stock, was duly adopted on June 3, 2014 as follows:

 

RESOLVED,
that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company by provisions of the Articles
of Incorporation of the Company (the “Articles of Incorporation”), there hereby is created out of the shares
of the Company’s preferred stock, par value $0.001 per share, of the Company authorized in Section 12 of the Articles of
Incorporation, a series of Preferred Stock of the Company, to be named “Series C 12% Convertible Preferred Stock,”
consisting of (3,235,294,118) shares, which series shall have the following designations, powers, preferences and relative and
other special rights and the following qualifications, limitations and restrictions:

 

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

 

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

 

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

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, or (g) the
Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Base
Conversion Price” shall have the meaning set forth in Section 7(b).

 

    	C-1

    	 

    

 

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

 

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

 

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

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act),
other than a legal entity majority owned by, or a group wholly consisting of, officers and directors of the corporation and their
Affiliates, of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or
otherwise) of in excess of 66% of the voting securities of the Company (other than by means of conversion or exercise of Preferred
Stock and the Securities issued together with the Preferred Stock), (b) the Company merges into or consolidates with any other
Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders
of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor
entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring
entity immediately after the transaction, (d) a replacement at one time or within a one year period of more than one-half of the
members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors
on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination
to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the Original
Issue Date), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing
for any of the events set forth in clauses (a) through (d) above.

 

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

 

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

 

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

 

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

 

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

 

    	C-2

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

“Dividend
Conversion Rate” means the lower of (a) 60% of the lowest VWAP for the 25 consecutive Trading Days ending on the Trading
Day that is immediately prior to the applicable Dividend Payment Date or (b) the lowest conversion price of previous conversions.

 

“Dividend
Notice Period” shall have the meaning set forth in Section 3(a).

 

“Dividend
Payment Date” shall have the meaning set forth in Section 3(a).

 

“Dividend
Share Amount” shall have the meaning set forth in Section 3(a).

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC”
means Deposit Withdrawal at Custodian as defined by the DTC.

 

“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation)
by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Conversion Shares via DWAC.

 

“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) the Company shall have paid all liquidated damages and other amounts owing to the applicable Holder in
respect of the Preferred Stock, (c) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable
in lieu of cash payments of dividends) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current
public information requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a Trading Market and
all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market (and
the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the
foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common Stock
for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Triggering
Event and no existing event which, with the passage of time or the giving of notice, would constitute a Triggering Event, (g)
the issuance of the shares in question to the applicable Holder would not violate the limitations set forth in Section 6(d) herein,
(h) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that
has not been consummated, (i) the applicable Holder is not in possession of any information provided by the Company that constitutes,
or may constitute, material non-public information, (j) for each Trading Day in a period of 20 consecutive Trading Days prior
to the applicable date in question, the daily trading volume for the Common Stock on the principal Trading Market exceeds $100,000
per Trading Day, and (i) the Company’s Common Stock must be DTC and DWAC eligible.

 

    	C-3

    	 

    

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees , officers or directors of the Company
pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company
or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise
or exchange of or conversion of any securities issued pursuant to the Purchase Agreement and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of the Purchase Agreement, provided
that such securities have not been amended since the date of the Purchase Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of any such securities, and (c) securities issued pursuant
to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that
any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries,
an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

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

 

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

 

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

 

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

 

“GAAP”
means United States generally accepted accounting principles.

 

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

  

“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $250,000 (other than trade accounts payable incurred
in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business, and (c) the present value of any lease payments in excess of $250,000 due under leases required to be capitalized in
accordance with GAAP.

 

    	C-4

    	 

    

 

“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Company.

 

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

 

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

 

“Make-Whole
Payment” shall have the meaning set forth in Section 3(a).

 

“New
York Courts” shall have the meaning set forth in Section 12(d).

 

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

 

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

 

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

 

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

 

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

 

“Optional
Redemption Amount” means the sum of (a) 115% of the aggregate Stated Value then outstanding, (b) accrued but unpaid
dividends and (c) all liquidated damages and other amounts due in respect of the Preferred Stock.

 

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

 

“Permitted
Indebtedness” means (a) the Indebtedness existing on the Original Issue Date (or committed to and final terms agreed
to on the Original Issue Date) and set forth on Schedule 3.1(aa) attached to the Purchase Agreement, (b) lease obligations
and purchase money indebtedness of up to $250,000, in the aggregate, incurred in connection with the acquisition of capital assets
and lease obligations with respect to newly acquired or leased assets and (c) any factor, inventory finance or asset-backed lending
arrangements up to $10,000,000 in the aggregate.

 

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

 

    	C-5

    	 

    

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

 

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

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of February 26, 2014, among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full of all Preferred
Stock (including Underlying Shares issuable as payment of dividends on the Preferred Stock).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	C-6

    	 

    

 

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

 

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

 

“Transfer
Agent” means a transfer agent for the Company’s Common Stock and the Securities, and any successor transfer agent
of the Company. If the Company does not have a transfer agent for its Common Stock on the date in question since its shares of
Common Stock are not listed for trading on a stock exchange or automated quotation service, then Transfer Agent shall mean the
Company.

 

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

 

“Triggering
Redemption Amount” means, for each share of Preferred Stock 120% of the Stated Value and all accrued but unpaid dividends
hereon in addition to the payment of (a) all liquidated damages and other costs, expenses or amounts due in respect of the Preferred
Stock and (b) the Make-Whole Amount.

 

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

 

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

 

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

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed
or quoted for trading on a Trading Market and if prices for the Common Stock are then reported on the OTC Pink Marketplace maintained
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
closing price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

Section
2.         Designation, Amount and Par Value. The series of preferred stock
shall be designated as the Company’s Series C 12% Convertible Preferred Stock (the “Preferred Stock”)
and the number of shares so designated shall be up to 3,235,294,118 (which shall not be subject to increase without the written
consent of all of the holders of the Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $0.001 per share and a stated value equal to $100, subject to increase
set forth in Section 3 below (the “Stated Value”).

 

    	C-7

    	 

    

 

Section
3.         Dividends.

 

a)        Dividends
in Cash or in Kind; Make-Whole Payment. Holders shall be entitled to receive, and the Company shall pay, cumulative dividends
at the rate per share (as a percentage of the Stated Value per share) from the initial Closing Date and for so long as Preferred
Stock is outstanding, of 12% per annum (subject to increase pursuant to Section 10(b)), payable on request by the Holder or on
conversion of all remaining Preferred Stock (each such date, a “Dividend Payment Date”) (if any Dividend Payment
Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day) in cash, or at the Company’s
option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock as set forth in this Section
3(a), or a combination thereof (the amount to be paid in shares of Common Stock, the “Dividend Share Amount”);
provided, however, upon the conversion of Preferred Stock prior to May 30, 2015, the Company shall also pay
to the Holders of the Preferred Stock so converted cash, or at the Company’s option, in duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock as set forth in this Section 3(a), or a combination thereof, with respect
to the Preferred Stock so converted in an amount equal to $18 per $100 of Stated Value of the Preferred Stock, less the amount
of all prior quarterly dividends paid on such converted Preferred Stock before the relevant Conversion Date (the “Make-Whole
Payment”). The form of dividend payments and Make-Whole Payments to each Holder shall be determined in the following
order of priority: (i) if funds are legally available for the payment of dividends and the Equity Conditions have not been met
during the 5 consecutive Trading Days immediately prior to the applicable Dividend Payment Date or Conversion Date (the “Dividend
Notice Period”), in cash only, (ii) if funds are legally available for the payment of dividends and the Equity Conditions
have been met during the Dividend Notice Period, at the sole election of the Company, in any combination of cash or shares of
Common Stock which shall be valued solely for such purpose at 60% of the average of the VWAPs for the 25 consecutive Trading Days
ending on the Trading Day that is immediately prior to the applicable Dividend Payment Date or Conversion Date, (iii) if funds
are not legally available for the payment of dividends and the Equity Conditions have been met during the Dividend Notice Period,
in shares of Common Stock which shall be valued solely for such purpose at 60% of the average of the VWAPs for the 25 consecutive
Trading Days ending on the Trading Day that is immediately prior to the applicable Dividend Payment Date or Conversion Date, and
(iv) if funds are not legally available for the payment of dividends and the Equity Conditions have not been met during the Dividend
Notice Period, then, at the election of such Holder, such dividends shall accrue to the next applicable Dividend Payment or Date
Conversion Date or shall be accreted to, and increase, the outstanding Stated Value. The Holders shall have the same rights and
remedies with respect to the delivery of any such shares as if such shares were being issued pursuant to Section 6. In the event
the Company notifies the Holders that it will pay dividends in whole or in part in shares of Common Stock based on its good faith
and reasonable belief that the Company it will be in compliance with the Equity Conditions during the Dividend Notice Period,
and the Company determines on or before the first day of the Dividend Notice Period that it will not be in compliance with the
Equity Conditions, it shall so notify the Holders and each Holder may elect to receive Common Stock or cash.

  

b)         Company’s
Ability to Pay Dividends in Cash or Kind. The Company shall promptly notify the Holders at any time the Company shall become
able or unable, as the case may be, to legally pay cash dividends. If at any time the Company has the right to pay dividends in
cash or shares of Common Stock, the Company must provide the Holders with at least 5 Trading Days’ notice of its election
to pay a regularly scheduled dividend in shares of Common Stock (the Company may indicate in such notice that the election contained
in such notice shall continue for later periods until revised by a subsequent notice). The aggregate number of shares of Common
Stock otherwise issuable to a Holder on a Dividend Payment Date shall be reduced by the number of shares of Common Stock previously
issued to such Holder in connection with such Dividend Payment Date.

 

    	C-8

    	 

    

 

c)         Dividend
Calculations. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve 30
calendar day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date
whether or not earned or declared and whether or not there are profits, surplus or other funds of the Company legally available
for the payment of dividends. Payment of dividends in shares of Common Stock shall otherwise occur pursuant to Section 6(c)(i)
herein and, solely for purposes of the payment of dividends in shares, the Dividend Payment Date shall be deemed the Conversion
Date. Dividends shall cease to accrue with respect to any Preferred Stock converted, provided that, the Company actually delivers
the Conversion Shares within the time period required by Section 6(c)(i) herein. Except as otherwise provided herein, if at any
time the Company pays dividends partially in cash and partially in shares, then such payment shall be distributed ratably among
the Holders based upon the number of shares of Preferred Stock held by each Holder on such Dividend Payment Date.

 

d)         Late
Fees. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within five Trading Days following
a Dividend Payment Date shall continue to accrue and shall entail a late fee, which must be paid in cash, at the rate of 18% per
annum or the lesser rate permitted by applicable law which shall accrue daily from the Dividend Payment Date through and including
the date of actual payment in full.

 

e)         Other
Securities. So long as at least 15% of the originally issued shares of Preferred Stock shall remain outstanding, neither the
Company nor any Subsidiary thereof shall redeem, purchase or otherwise acquire directly or indirectly any Junior Securities except
as expressly permitted by Section 10(b). So long as any Preferred Stock shall remain outstanding, neither the Company nor any
Subsidiary thereof shall directly or indirectly pay or declare any dividend or make any distribution upon (other than a dividend
or distribution described in Section 6 or dividends due and paid in the ordinary course on preferred stock of the Company at such
times when the Company is in compliance with its payment and other obligations hereunder), nor shall any distribution be made
in respect of, any Junior Securities as long as any dividends due on the Preferred Stock remain unpaid, nor shall any monies be
set aside for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Junior Securities or shares
pari passu with the Preferred Stock.

 

Section
4.          Voting Rights. Except as otherwise provided herein or as otherwise
required by law, the Preferred Stock shall have no voting rights. In any event, and notwithstanding the foregoing limitation,
as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the Holders of
at least 67% in Stated Value of the then outstanding shares of the Preferred Stock (a) alter or change adversely the powers, preferences
or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or create any class of
stock ranking as to dividends, redemption or distribution of assets upon a Liquidation (as defined in Section 5) senior to, or
otherwise pari passu with, the Preferred Stock, (c) amend its Articles of Incorporation or other charter documents
in any manner that adversely affects any rights of the Holders, (d) increase the number of authorized shares of Preferred Stock,
or (e) enter into any agreement with respect to any of the foregoing.

 

    	C-9

    	 

    

 

Section
5.          Liquidation. Upon any liquidation, dissolution or winding-up
of the Company, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive
out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value, plus any accrued and unpaid
dividends thereon and any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for
each share of Preferred Stock before any distribution or payment shall be made to the holders of any Junior Securities and if
the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders
shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such shares
if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be deemed
a Liquidation. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date
stated therein, to each Holder.

 

Section
6.          Conversion.

 

a)         Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after
the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations
set forth in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders
shall effect conversions by providing the Company with the form of conversion notice attached hereto as Annex A (a “Notice
of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the
number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent
to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the
applicable Holder delivers by facsimile such Notice of Conversion to the Company (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
to the Company is deemed delivered hereunder. The calculations and entries set forth in the Notice of Conversion shall control
in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing the shares of Preferred Stock to the Company unless all of the shares of Preferred
Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of
Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed
in accordance with the terms hereof shall be canceled and shall not be reissued.

 

b)         Conversion
Price. The conversion price for the Preferred Stock shall equal 60% of the lowest VWAP during
the 30 Trading Day-period immediately prior to the applicable Conversion Date, subject to adjustment
herein (the “Conversion Price”); provided, however, that each and every Holder of Preferred Stock shall have
the ability on up to twenty (20) distinct occasions to calculate the Conversion Price using the following formula: 60%
of the lowest VWAP during the 60 Trading Day-period immediately prior to the applicable Conversion Date, subject
to adjustment herein.

 

    	C-10

    	 

    

		c)	Mechanics
                                         of Conversion

 

i.            Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the converting Holder (A) a certificate or certificates
representing the Conversion Shares which, on or after the six-month anniversary of the Original Issue Date shall be free of restrictive
legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number
of Conversion Shares being acquired upon the conversion of the Preferred Stock (including, if the Company has given continuous
notice pursuant to Section 3(c) for payment of dividends in shares of Common Stock at least 20 Trading Days prior to the date
on which the Notice of Conversion is delivered to the Company, shares of Common Stock representing the payment of accrued dividends
otherwise determined pursuant to Section 3(a) but assuming that the Dividend Notice Period is the 20 Trading Days period immediately
prior to the date on which the Notice of Conversion is delivered to the Company and excluding for such issuance the condition
that the Company deliver the Dividend Share Amount as to such dividend payment prior to the commencement of the Dividend Notice
Period), and (B) a bank check in the amount of accrued and unpaid dividends (if the Company has elected or is required to pay
accrued dividends in cash) and (C) a bank check in the amount of the Make-Whole Amount. All certificate or certificates required
to be delivered by the Company under this Section 6(c) shall be delivered electronically through the Depository Trust Company
or another established clearing corporation performing similar functions. If the Conversion Date is prior to the six month anniversary
of the Original Issue Date, then the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE
144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

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

 

    	C-11

    	 

    

 

iii.         Obligation
Absolute; Partial Liquidated Damages. Except as otherwise set forth in this Section 6(c)(iii), the Company’s obligation
to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute
and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to such Holder in connection with the issuance of such Conversion Shares;
provided, however, that such delivery shall not operate as a waiver by the Company of any such action that the Company
may have against such Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock,
the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder
has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder,
restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained,
and the Company posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock
which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying
dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction,
the Company shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the Company fails to
deliver to a Holder such certificate or certificates pursuant to Section 6(c)(i) on the Share Delivery Date, the Company shall
pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Stated Value of Preferred Stock being
converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such damages
begin to accrue) for each Trading Day after the Share Delivery Date until such certificates are delivered or Holder rescinds such
conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare a Triggering Event pursuant
to Section 10 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and such
Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking
to enforce damages pursuant to any other Section hereof or under applicable law.

  

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

 

    	C-12

    	 

    

 

v.           Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock at least 200% of the Required Minimum for the sole purpose of issuance upon conversion
of the Preferred Stock and payment of dividends on the Preferred Stock, each as herein provided, free from preemptive rights or
any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Preferred Stock), not
less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding
shares of Preferred Stock and payment of dividends hereunder. The Company covenants that all shares of Common Stock that shall
be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

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

 

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

 

    	C-13

    	 

    

 

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

 

    	C-14

    	 

    

 

Section
7.          Certain Adjustments.

 

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

 

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

 

    	C-15

    	 

    

 

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

 

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

 

    	C-16

    	 

    

 

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

 

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

  

g)         Notice
to the Holders.

 

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

 

    	C-17

    	 

    

 

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

 

 Section
8.          Forced Conversion and Optional Redemption.  

 

a)         Forced
Conversion. Notwithstanding anything herein to the contrary, if after the six month anniversary of the Original Issue Date
the VWAP for any consecutive 15 Trading Days exceeds 200% of the then effective Conversion Price, the Company may, in
its sole discretion, deliver a written notice to all Holders (a “Forced Conversion Notice” and the date
such notice is delivered to all Holders, the “Forced Conversion Notice Date”) to cause each Holder to
convert all or part of such Holder’s Preferred Stock (as specified in such Forced Conversion Notice)
plus all accrued but unpaid dividends thereon and all liquidated damages and other amounts due in respect of the Preferred
Stock pursuant to Section 6 (but remaining in accordance with Section 6(d)), it being agreed that the “Conversion
Date” for purposes of Section 6 shall be deemed to occur on the third Trading Day following the Forced
Conversion Notice Date (such third Trading Day, the “Forced Conversion Date”). The Company
may not deliver a Forced Conversion Notice, and any Forced Conversion Notice delivered by the Corporation
shall not be effective, unless all of the Equity Conditions have been met on such Forced Conversion Notice Date. Any Forced
Conversion Notices shall be applied ratably to all of the Holders based on each Holder’s initial purchases of Preferred
Stock hereunder, provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro rata allocation,
thereby decreasing the aggregate amount forcibly converted hereunder if less than all shares of the Preferred Stock are
forcibly converted. For purposes of clarification, a Forced Conversion shall be subject to all of the provisions of
Section 6, including, without limitation, the provisions requiring payment of liquidated damages and limitations on conversions.

  

    	C-18

    	 

    

 

b)         Optional
Redemption at Election of Company. Notwithstanding anything herein to the contrary, subject to the provisions of this Section
8, if prior to the five month anniversary of Original Issue Date the VWAP for any 15 consecutive Trading
Day period exceeds 200% of the then effective Conversion Price, the Company may, in its sole discretion, deliver a notice
to the Holders (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the
“Optional Redemption Notice Date”) of its irrevocable election to redeem all of the then outstanding Preferred
Stock, for cash in an amount equal to the Optional Redemption Amount on the 20th Trading Day following the Optional
Redemption Notice Date (such date, the “Optional Redemption Date” and such redemption, the “Optional
Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company may
only effect an Optional Redemption if each of the Equity Conditions shall have been met on each Trading
Day occurring during the 20 Trading Day period commencing on the Optional Redemption Notice Date through the Optional
Redemption Date and through and including the date payment of the Optional Redemption Amount is actually made.
If any of the Equity Conditions shall cease to be satisfied at any time during the 20 Trading Day period commencing
on the Optional Redemption Notice Date, the Optional Redemption Notice shall be null and void, ab initio,
unless the Holder gives written consent otherwise. The Company covenants and agrees that it will honor all Notices of Conversion
tendered from the time of delivery of the Optional Redemption Notice through the date the Optional Redemption Amount is
paid in full.

 

c)         Redemption
Procedure. The payment of cash pursuant to an Optional Redemption shall be made on the Optional Redemption Date.
If any portion of the cash payment for an Optional Redemption has not been paid by the Company on the Optional
Redemption Date, interest shall accrue thereon until such amount is paid in full at a rate equal to the lesser of 18% per annum
or the maximum rate permitted by applicable law.

  

Section
9.          Negative Covenants. As long as at least 15% of the originally
issued shares of Preferred Stock are outstanding, unless the holders of at least 67% in Stated Value of the then outstanding shares
of Preferred Stock shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries
to, directly or indirectly:

 

a)         other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom. Notwithstanding the foregoing, this Section 9(a) shall not
apply to indebtedness incurred pursuant to Section 4.12(a) of the Purchase Agreement;

 

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

 

c)         repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock, Common
Stock Equivalents or Junior Securities, other than as to the Conversion Shares as permitted or required under the Transaction
Documents;

 

    	C-19

    	 

    

 

d)         pay
cash dividends or distributions on Junior Securities of the Company;

 

e)         enter
into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors
of the Company (even if less than a quorum otherwise required for board approval); or

 

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

 

In
addition, as long as any shares of Preferred Stock are outstanding, unless the holders of at least 67% in Stated Value of the
then outstanding shares of Preferred Stock shall have otherwise given prior written consent, the Company shall not, directly or
indirectly, amend its charter documents, including, without limitation, its Articles of Incorporation and bylaws, in any manner
that materially and adversely affects any rights of the Holder except to the extent required to effect a reverse stock split permitted
by the Purchase Agreement.

 

Section
10.          Redemption Upon Triggering Events.

 

a)         “Triggering
Event” means, wherever used herein any of the following events (whatever the reason for such event and whether such
event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):

 

i.            any
default in the payment of interest, liquidated damages and other amounts owing to a Holder on any Preferred Stock, as and when
the same shall become due and payable (whether on a Conversion Date or otherwise) which default, solely in the case of an interest
payment or other default is not cured within 5 Trading Days;

  

ii.         the
Company shall fail to observe or perform any other covenant or agreement contained in the Preferred Stock (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in
clause (ix) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice
of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become
or should have become aware of such failure;

 

iii.         a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.         any
representation or warranty made in this Preferred Stock, any other Transaction Documents, any written statement pursuant hereto
or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be
untrue or incorrect in any material respect as of the date when made or deemed made;

 

v.           the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

    	C-20

    	 

    

 

vi.         the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.         the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;

 

viii.         the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of
all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);

 

ix.         the
Company shall fail for any reason to deliver certificates via DWAC to a Holder prior to the third Trading Day after a Conversion
Date pursuant to Section 6(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Preferred Stock in accordance with the terms hereof;

 

x.         the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

  

xi.            if
the Borrower or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make
a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for
relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;

 

xii.         if
any order, judgment or decree shall be entered, without the application, approval or consent of the Borrower or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Borrower
or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Borrower or any Subsidiary, or of all or
any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of
sixty (60) days;

 

    	C-21

    	 

    

 

xiii.         the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Borrower or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

xiv.         the
Company shall fail to maintain sufficient reserved shares pursuant to Section 4.11 of the Purchase Agreement;

 

xv.           any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days; or

 

xvi.         the
Company fails to increase its authorized shares of common stock or effectuate a reverse stock split, pursuant to Section 4.18
of the Purchase Agreement, within 60 days of the signing of the Purchase Agreement.

 

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

  

Section
11.         Security. As collateral security for the full, prompt, complete
and final payment and performance of all the Company’s obligations under this Certificate of Designation, the Company hereby
grants to the holders of the Series C 12% Convertible Preferred Stock a lien on and security interest in, all of Company’s
right, title and interest in, to and under all of the Company’s property and assets, whether now owned or hereafter acquired,
unless otherwise provided in an amendment to this Certificate of Designation.

 

    	C-22

    	 

    

 

Section
12.         Miscellaneous.

 

a)         Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation,
any Notice of Conversion, shall be in writing and delivered as set forth in the Purchase Agreement, or such other facsimile number
or address as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section 12.
Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
number or address of such Holder appearing on the books of the Company, or if no such facsimile number or address appears on the
books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or
other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m.
(New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

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

 

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

  

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

 

    	C-23

    	 

    

 

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

 

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

  

g)         Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Preferred Stock
shall be cumulative and in addition to all other remedies available under this Preferred Stock 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 the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with
the terms of this Preferred Stock.  The Company covenants to the 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 the Holder and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the Holder 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, the Holder
shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened
breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall
provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s
compliance with the terms and conditions of this Preferred Stock.

 

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

 

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

 

j)         Status
of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Company, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no longer be designated as Series C 12% Convertible Preferred Stock.

 

***

  

    	C-24

    	 

    

 

IN
WITNESS WHEREOF, the undersigned has executed and subscribed this Certificate and does affirm the foregoing as true this 3rd
day of June, 2014.

 

	 	ECO BUILDING PRODUCTS, INC. 
	 	 	 
	 	By:	          
	 	Name: Steve Conboy
	 	Title:   Chief Executive Officer

  

    	 

    	 

    

 

ANNEX A

 

NOTICE OF CONVERSION

 

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

Preferred Stock)

 

The undersigned
hereby elects to convert the number of shares of Series C 12% Convertible Preferred Stock indicated below into shares of common
stock, par value $0.001 per share (the “Common Stock”), of Eco Building Products, Inc., a Colorado corporation
(the “Company”), according to the conditions hereof, as of the date written below. If shares of Common Stock
are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as may be required by the Company in accordance with
the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

 

Conversion
calculations:

 

	Date
        to Effect Conversion: _____________________________________________

         

	Number
        of shares of Preferred Stock owned prior to Conversion: _______________

         

	Number
        of shares of Preferred Stock to be Converted: ________________________

         

	Stated
        Value of shares of Preferred Stock to be Converted: ____________________

         

	Number
        of shares of Common Stock to be Issued: ___________________________

         

	Applicable
        Conversion Price:____________________________________________

         

	Number
        of shares of Preferred Stock subsequent to Conversion: ________________

         

	Address
        for Delivery: ______________________

        or

        DWAC
        Instructions:

        Broker
        no: _________

        Account
        no: ___________

 

	 	[HOLDER]
	 	 
	 	By:___________________________________
	 	Name:
	 	Title:

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