Document:

Exhibit 10.1

 

EXECUTION COPY

 

SECURITIES PURCHASE
AGREEMENT

 

This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of June 12, 2017, is by and among MagneGas Corporation, a Delaware
corporation with offices located at 11885 44th St. N. Clearwater, FL 33762 (the “Company”), and each of the
investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).

 

RECITALS

 

A.           The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.

 

B.           The
Company has authorized a new series of convertible preferred stock of the Company designated as Series C Convertible Preferred
Stock, $0.001 par value, the terms of which are set forth in the certificate of designation for such series of preferred stock
(the “Certificate of Designations”) in the form attached hereto as Exhibit A (together with any
convertible preferred shares issued in replacement thereof in accordance with the terms thereof, the “Series C Preferred
Stock”), which Series C Preferred Stock shall be convertible into shares of Common Stock (such shares of Common Stock
issuable pursuant to the terms of the Certificate of Designations, including, without limitation, upon conversion or otherwise,
collectively, the “Conversion Shares”), in accordance with the terms of the Certificate of Designations.

 

C.           Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) the aggregate
number of shares of Series C Preferred Stock set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
(the “Initial Preferred Shares”, as converted, the “Initial Conversion Shares”), (ii) a warrant
to initially acquire up to that aggregate number of additional shares of Series C Preferred Stock set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers, substantially in the form attached hereto as Exhibit B (the “Preferred
Warrants”) (as exercised, collectively, the “Additional Preferred Shares”, and together with the Initial
Preferred Shares, the “Preferred Shares”), and (iii) a warrant to initially acquire up to that aggregate number
of additional shares of Common Stock set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers, substantially
in the form attached hereto as Exhibit C (the “Warrants”) (as exercised, collectively, the “Warrant
Shares”).

 

D.           At
the Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
D (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain
registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933
Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

E.           The
Preferred Shares, the Conversion Shares, the Preferred Warrants, the Warrants and the Warrant Shares are collectively referred
to herein as the “Securities.”

 

     

     

    

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the recitals above incorporated herein by this reference and the mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

 

1.           PURCHASE
AND SALE OF PREFERRED SHARES, PREFERRED WARRANTS AND WARRANTS.

 

(a)          Purchase
of Preferred Shares, the Preferred Warrants and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth
in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to
purchase from the Company on the Closing Date (as defined below) (A) the aggregate number of Initial Preferred Shares as is set
forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, (B) Preferred Warrants to initially acquire up
to that aggregate number of Additional Preferred Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule
of Buyers and (C) Warrants to initially acquire up to that aggregate number of Warrant Shares as is set forth opposite such Buyer’s
name in column (5) on the Schedule of Buyers.

 

(b)          Closing.
The closing (the “Closing”) of the purchase of the Preferred Shares, the Preferred Warrants and the Warrants
by the Buyers shall occur at the offices of Kelley Drye & Warren LLP, 101 Park Avenue, New York, NY 10178. The date and time
of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on
which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually
agreed to by the Company and each Buyer). As used herein “Business Day” means any day other than a Saturday,
Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

 

(c)          Purchase
Price. The aggregate purchase price for the Preferred Shares, the Preferred Warrants and the Warrants to be purchased by each
Buyer (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (6) on
the Schedule of Buyers.

 

(d)          Form
of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the
amounts withheld pursuant to Section 4(g)) to the Company for the Preferred Shares, the Preferred Warrants and the Warrants
to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Flow
of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer (A) the aggregate number of Initial Preferred
Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, (B) Preferred Warrants to initially
acquire up to that aggregate number of Additional Preferred Shares as is set forth opposite such Buyer’s name in column
(4) on the Schedule of Buyers and (C) Warrants to initially acquire up to that aggregate number of Warrant Shares as is set forth
opposite such Buyer’s name in column (5) on the Schedule of Buyers, in each case, duly executed on behalf of the Company
and registered in the name of such Buyer or its designee.

 

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		2.	BUYER’S REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally and
not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing
Date:

 

(a)          Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

(b)          No
Public Sale or Distribution. Such Buyer (i) is acquiring its Preferred Shares, Preferred Warrants and Warrants, (ii) upon
conversion of its Preferred Shares will acquire the Conversion Shares issuable upon conversion thereof, (iii) upon exercise of
its Preferred Warrants will acquire the Additional Preferred Shares issuable upon exercise thereof and (iv) upon exercise
of its Warrants (other than pursuant to a Cashless Exercise (as defined in the Warrants)) will acquire the Warrant Shares issuable
upon exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public
sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under
the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation or
warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such
Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the
Securities in violation of applicable securities laws. For purposes of this Agreement, “Person” means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other
entity and any Governmental Entity or any department or agency thereof.

 

(c)          Accredited
Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

(d)          Reliance
on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of such Buyer to acquire the Securities.

 

(e)          Information.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

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(f)          No
Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(g)          Transfer
or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h) hereof: (i)
the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to
the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such
registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company
nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. 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 and such pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge
of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section
2(g).

 

(h)          Validity;
Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer
in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies.

 

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(i)          No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

 

(j)          Residency.
Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

 

		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:

 

(a)          Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company
and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse
Effect (as defined below). As used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or
in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or
therewith or (iii) the authority or ability of the Company to perform any of its obligations under any of the Transaction Documents
(as defined below). Other than the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries.
“Subsidiaries” means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding
capital stock or holds any equity or similar interest of such Person or (II) controls or operates all or any part of the business,
operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

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(b)          Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares and the
reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Preferred Shares, the issuance
of the Preferred Warrants and the reservation for issuance and issuance of the Additional Preferred Shares issuable upon exercise
of the Preferred Warrants and the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares
issuable upon exercise of the Warrants) have been duly authorized by the Company’s board of directors and (other than the
filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement,
a Form D with the SEC and any other filings as may be required by any state securities agencies) no further filing, consent or
authorization is required by the Company, its Subsidiaries, their respective boards of directors or their stockholders or other
governing body. This Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Closing,
duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law. The Certificate of Designations in the form attached hereto as Exhibit
A will be filed with the Delaware Secretary of State and will be in full force and effect as of the Closing, enforceable
against the Company in accordance with its terms and will not have been amended as of the Closing. “Transaction Documents”
means, collectively, this Agreement, the Preferred Shares, the Warrants, the Preferred Warrants, the Certificate of Designations,
the Registration Rights Agreement, the Voting Agreement (as defined below), the Irrevocable Transfer Agent Instructions (as defined
below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with
the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c)          Issuance
of Securities. The issuance of the Preferred Shares, the Preferred Warrants and the Warrants are duly authorized and upon
issuance in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and
free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal,
encumbrances, security interests and other encumbrances (collectively “Liens”) with respect to the issuance
thereof. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum of (i)
200% of the maximum number of Conversion Shares issuable upon conversion of the Preferred Shares (assuming for purposes hereof
that (x) the Preferred Warrants have been exercised in full, (y) the Preferred Shares are convertible at a conversion price equal
to the Alternate Conversion Price (as defined in the Certificate of Designations) assuming an Alternate Conversion Date (as defined
in the Certificate of Designations) as of the date hereof, and (z) any such conversion shall not take into account any limitations
on the conversion of the Preferred Shares set forth in the Certificate of Designations), (ii) 100% of the maximum number of Additional
Preferred Shares initially issuable upon exercise of the Preferred Warrants and (iii) 200% of the maximum number of Warrant Shares
initially issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants
set forth therein). Upon issuance or conversion in accordance with the Preferred Shares or exercise in accordance with the Warrants
(as the case may be), the Conversion Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully paid
and non-assessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock. Upon issuance or exercise in accordance with the Preferred
Warrants (as the case may be), the Additional Preferred Shares, when issued, will be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Series C Preferred Stock. Subject to the accuracy of the representations and warranties of
the Buyers in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933
Act.

 

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(d)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares,
the Preferred Warrants, the Warrants, the Conversion Shares and the Warrant Shares and the reservation for issuance of the Conversion
Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including,
without limitation, any certificate of designation contained therein), By-Laws (as defined below), certificate of formation, memorandum
of association, articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or
any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including,
without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Nasdaq Capital
Market (the “Principal Market”) and including all applicable foreign, federal and state laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected.

 

(e)          Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any state securities agencies),
any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case,
in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company
or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior
to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent
the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated
by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge
of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.
“Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction
of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of
any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national
organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise
owned or controlled by a government or a public international organization or any of the foregoing.

 

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(f)          Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, 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 “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor
or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents
in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such
Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company, each
Subsidiary and their respective representatives.

 

(g)          No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer
or its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation,
placement agent fees payable to Maxim Group, as placement agent (the “Placement Agent”) in connection with
the sale of the Securities. The fees and expenses of the Placement Agent to be paid by the Company or any of its Subsidiaries
are as set forth on Schedule 3(g) attached hereto. The Company shall pay, and hold each Buyer harmless against, any liability,
loss or expense (including, without limitation, attorney's fees and out-of-pocket expenses) arising in connection with any such
claim. The Company acknowledges that it has engaged the Placement Agent in connection with the sale of the Securities. Other than
the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection
with the offer or sale of the Securities except as set forth on Schedule 3(g) attached hereto.

 

(h)          No
Integrated Offering. Except as set forth on Schedule 3(h), none of the Company, its Subsidiaries or any of their affiliates,
nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would require registration of the issuance of any of the Securities under the 1933
Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval
of stockholders of the Company for purposes of the 1933 Act or under any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities
of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person
acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities
under the 1933 Act or cause the offering of any of the Securities to be integrated with other offerings of securities of the Company.

 

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(i)          Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares and Warrant Shares will increase in
certain circumstances. The Company further acknowledges that its obligation to issue the Initial Preferred Shares in accordance
with this Agreement, the Conversion Shares pursuant to the terms of the Certificate of Designations in accordance with this Agreement
and the Preferred Warrants and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement, the Preferred
Shares, the Preferred Warrants and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of the Company.

 

(j)          Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision
under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation
or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.
The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder
rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in
control of the Company or any of its Subsidiaries.

 

(k)          SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein
and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred
to as the “SEC Documents”). The Company has delivered or has made available to the Buyers or their respective
representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their
respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in
all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted
accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in
the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based
upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to
be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided
for by the Company in its financial statements or otherwise. No other information provided by or on behalf of the Company to any
of the Buyers which is not included in the SEC Documents (including, without limitation, information referred to in Section 2(e)
of this Agreement or in the disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance
under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements
(including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included
in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances
which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent
accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for
the Company to amend or restate any of the Financial Statements.

 

    	 	9	 

     

    

 

(l)          Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries.
Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor
any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside
of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary
course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law
or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or
any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent”
means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the
Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’
total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend
to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s
(as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such
Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to
incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the
Company nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business
or in any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small
capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

 

    	 	10	 

     

    

 

(m)          No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise),
that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form
S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced,
(ii) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse Effect.

 

(n)          Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series
of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation,
memorandum of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively.
Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule
or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or
in the aggregate, have a Material Adverse Effect. Except as otherwise disclosed in the SEC Documents, without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. During the two years prior to the date hereof, (i) the Common Stock has been listed
or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended or delisted by the
SEC or the Principal Market and (iii) except as otherwise disclosed in the SEC Documents, the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal
Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company
nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or
any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected
to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any
acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries
as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably
be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.

 

    	 	11	 

     

    

 

(o)          Foreign
Corrupt Practices. Neither the Company, the Company’s subsidiary or any director, officer, agent, employee, nor any other
person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given,
promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official
capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually
and collectively, a “Government Official”) or to any person under circumstances where such Company Affiliate
knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised,
directly or indirectly, to any Government Official, for the purpose of:

 

(i)          (A)
influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official
to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government
Official to influence or affect any act or decision of any Governmental Entity, or

 

(ii)         assisting
the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.

 

(p)          Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with, or is exempt from, any and all applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.

 

(q)          Transactions
With Affiliates. Except as set forth on Schedule 3(q) attached hereto, no current or former employee, partner, director,
officer or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the
Company, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing,
is presently, or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement
or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring
payments to, any such director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for
ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or
indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier or
customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common
stock of a company whose securities are traded on or quoted through an Eligible Market), nor does any such Person receive income
from any source other than the Company or its Subsidiaries which relates to the business of the Company or its Subsidiaries or
should properly accrue to the Company or its Subsidiaries. No employee, officer, stockholder or director of the Company or any
of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be,
nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them,
other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the
Company, and (iii) for other standard employee benefits made generally available to all employees or executives (including stock
option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).

 

    	 	12	 

     

    

 

		(r)	Equity Capitalization.

 

		(i)	Definitions:

 

(A)         “Common
Stock” means (x) the Company’s shares of common stock, $0.001 par value per share, and (y) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(B)         “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.001 par value per share, the terms of which may
be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such
preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).

 

(ii)         Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 90,000,000
shares of Common Stock, of which, 5,989,801 are issued and outstanding and 84,000 shares are reserved for issuance pursuant to
Convertible Securities (as defined below) (other than the Preferred Shares, the Preferred Warrants and the Warrants) exercisable
or exchangeable for, or convertible into, shares of Common Stock and (B) 10,000,000 shares of preferred stock, 1,000,000 of which
are designated as Series A Preferred Stock and are issued and outstanding and 2,700 of which are designated as Series B Convertible
Preferred Stock 1,500 of which are issued and outstanding. 2,500,000 shares of Common Stock are held in the treasury of the Company.

 

    	 	13	 

     

    

 

(iii)        Valid
Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and non-assessable. Schedule 3(r)(iii) sets forth the number of shares of Common
Stock that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Preferred Shares,
the Preferred Warrants and the Warrants) and (B) that are, as of the date hereof, owned by Persons who are “affiliates”
(as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at
least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that any such
Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the
Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated
based on the assumption that all Convertible Securities (as defined below), whether or not presently exercisable or convertible,
have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion
(including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder for purposes
of federal securities laws).

 

(iv)        Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by
the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of
the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or
capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or
any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the
Registration Rights Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance
of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement.

 

(v)         Organizational
Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and
the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of
all Convertible Securities and the material rights of the holders thereof in respect thereto.

 

    	 	14	 

     

    

 

(s)          Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(r),
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect,
(iii) has any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(iv) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness,
except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or
(v) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment
of the Company’s officers, has or is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents,
other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any
Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness,
and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person
if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

    	 	15	 

     

    

 

(t)          Litigation.
There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any court, public
board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors , whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in
Schedule 3(t). No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C.
§1519 or engaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not
been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company,
any of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the
1933 Act or the 1934 Act. After reasonable inquiry of its employees, the Company is not aware of any fact which might result in
or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Neither the Company nor
any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of any Governmental
Entity.

 

(u)          Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.

 

(v)         Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key employee
of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement
or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may
be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

    	 	16	 

     

    

 

(w)          Title.

 

(i)          Real
Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a)
Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated
use of the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

(ii)         Fixtures
and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in,
the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used
by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient
for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior
to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except
for (a) liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto.

 

(x)          Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade
names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses
as now conducted and presently proposed to be conducted. Each of patents owned by the Company or any of its Subsidiaries is listed
on Schedule 3(x)(i). Except as set forth in Schedule 3(x)(ii), none of the Company's Intellectual Property Rights have expired
or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three years
from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries
of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge
of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual
Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might give rise
to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights

 

    	 	17	 

     

    

 

(y)          Environmental
Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as
defined below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal,
state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans
or regulations issued, entered, promulgated or approved thereunder.

 

(ii)         No
Hazardous Materials:

 

(A)         have
been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or

 

(B)         are
present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation
of any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates
any Environmental Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.

 

(iii)        Neither
the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of
or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.

 

(iv)        No
Real Property is on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related
Liens.

 

(z)          Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.

 

(aa)         Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”).
The net operating loss carryforwards (“NOLs”) for United States federal income tax purposes of the consolidated
group of which the Company is the common parent, if any, shall not be adversely effected by the transactions contemplated hereby.
The transactions contemplated hereby do not constitute an “ownership change” within the meaning of Section 382 of
the Code, thereby preserving the Company’s ability to utilize such NOLs.

 

    	 	18	 

     

    

 

(bb)         Internal
Accounting and Disclosure Controls. Except as otherwise disclosed on Schedule 3(bb), the Company and each of its Subsidiaries
maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals
and appropriate action is taken with respect to any difference. Except as otherwise disclosed on Schedule 3(bb), the Company
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective
in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act
is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including,
without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including
its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. Neither the Company nor any of its Subsidiaries has received any notice or correspondence from
any accountant, Governmental Entity or other Person relating to any potential material weakness or significant deficiency in any
part of the internal controls over financial reporting of the Company or any of its Subsidiaries.

 

(cc)         Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

(dd)         Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.

 

    	 	19	 

     

    

 

(ee)         Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; and (iii)
each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated
by the Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers may engage in hedging and/or
trading activities at various times during the period that the Securities are outstanding, including, without limitation, during
the periods that the value and/or number of the Warrant Shares or Conversion Shares, as applicable, deliverable with respect to
the Securities are being determined and such hedging and/or trading activities, if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company
acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Preferred
Shares, the Preferred Warrants, the Warrants or any other Transaction Document or any of the documents executed in connection
herewith or therewith.

 

(ff)         Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement
Agent), (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of
the Company or any of its Subsidiaries or (iv) paid or agreed to pay any Person for research services with respect to any securities
of the Company or any of its Subsidiaries.

 

(gg)         U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. Real Property Holding Corporation within the meaning of
Section 897 of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.

 

(hh)         Registration
Eligibility. The Company is eligible to register the Registrable Securities (as defined in the Registration Rights Agreement)
for issuance by the Company using Form S-3 promulgated under the 1933 Act.

 

(ii)         Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will
have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

    	 	20	 

     

    

 

(jj)         Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.

 

(kk)         Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or
bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public
office except for personal political contributions not involving the direct or indirect use of funds of the Company or any of
its Subsidiaries.

 

(ll)         Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation,
the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations
contained in 31 CFR, Subtitle B, Chapter V.

 

(mm)         Management.
Except as set forth in Schedule 3(mm) hereto, during the past five year period, no current or former officer or director
or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries
has been the subject of:

 

(i)          a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

    	 	21	 

     

    

 

(ii)         a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);

 

(iii)        any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1)         acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)         engaging
in any particular type of business practice; or

 

(3)         engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv)        any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v)         a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)        a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(nn)         Stock
Option Plans. Each stock option granted by the
Company was granted (i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise
price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under
GAAP and applicable law. No stock option granted under the Company's stock option plan has been backdated. The Company has not
knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to,
or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial results or prospects.

 

    	 	22	 

     

    

 

(oo)         No
Disagreements with Accountants and Lawyers. There
are no material disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company
and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees
owed to its accountants and lawyers which could affect the Company's ability to perform any of its obligations under any of the
Transaction Documents. In addition, on or prior to the date hereof, the Company had discussions with its accountants about its
financial statements previously filed with the SEC. Based on those discussions, the Company has no reason to believe that it will
need to restate any such financial statements or any part thereof.

 

(pp)         No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the
1933 Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter
(as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each,
an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided
thereunder.

 

(qq)         Other
Covered Persons. The Company is not aware of any
Person (other than the Placement Agent) that has been or will be paid (directly or indirectly) remuneration for solicitation of
Buyers or potential purchasers in connection with the sale of any Regulation D Securities.

 

(rr)         No
Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(ss)         Public
Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

(tt)         Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility” under
the Federal Power Act, as amended.

 

    	 	23	 

     

    

 

(uu)         Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company
or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents,
taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and
will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company
or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance
has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties,
liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has
not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company
or any of its Subsidiaries and made available to you have been prepared in good faith based upon reasonable assumptions and represented,
at the time each such financial projection or forecast was delivered to each Buyer, the Company’s best estimate of future
financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts and that
the actual results during the period or periods covered by any such financial projections or forecasts may differ from the projected
or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

 

		4.	COVENANTS.

 

(a)          Best
Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants
hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b)          Form
D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale
to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the
Company shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable
securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky”
laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and
the like relating to the offering and sale of the Securities to the Buyers.

 

    	 	24	 

     

    

 

(c)          Reporting
Status. Until the later of (x) the date on which the Buyers shall have sold all of the Conversion Shares and Warrant Shares
and (y) the date no Preferred Shares or Preferred Warrants remain outstanding (the “Reporting Period”), the
Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate
its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would no longer require or otherwise permit such termination.

 

(d)          Use
of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement
of any outstanding litigation.

 

(e)          Financial
Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with
the SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the
same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii)
unless the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given
to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.
In addition to the foregoing, the Company shall file with the SEC through EDGAR a Current Report on Form 8-K setting forth the
aggregate number of shares of Common Stock then outstanding (the “Current Outstanding Shares”) no later than
the first (1st) Business Day after such date that the Current Outstanding Shares has increased by more than 20% from
the aggregate number of outstanding shares of Common Stock set forth in the latest of the Company’s Current Report on Form
8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as applicable, filed with the SEC through EDGAR prior to such
date of determination.

 

    	 	25	 

     

    

 

(f)          Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Conversion Shares
and Warrant Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock
is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such
listing or designation for quotation (as the case may be) of all Conversion Shares and Warrant Shares from time to time issuable
under the terms of the Transaction Documents on such national securities exchange or automated quotation system. The Company shall
maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The New
York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market (each,
an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall take any action which could be
reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this Section 4(f).

 

(g)          Fees.
The Company shall reimburse the lead Buyer for all costs and expenses incurred by it or its affiliates in connection with the
structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents (including,
without limitation, as applicable, all reasonable legal fees of outside counsel and disbursements of Kelley Drye & Warren
LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation, negotiation
and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection
therewith) in an amount not to exceed $100,000 in the aggregate, less $65,000 previously paid by the Company to the lead Buyer
(such net amount, the “Transaction Expenses”) and such Transaction Expenses shall be withheld by the lead Buyer
from its Purchase Price at the Closing; provided, that the Company shall promptly reimburse Kelley Drye & Warren LLP on demand
for any Transaction Expenses not so withheld by the lead Buyer at the Closing. The Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s
commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including,
without limitation, any fees or commissions payable to the Placement Agent, who is the Company’s sole placement agent in
connection with the transactions contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against,
any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising
in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party
to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.

 

(h)          Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation,
Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section
2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.

 

    	 	26	 

     

    

 

(i)          Disclosure
of Transactions and Other Material Information.

 

(i)          Disclosure
of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the first (1st) Business Day after
the date of this Agreement, issue a press release (the “Press Release”) reasonably acceptable to the Buyers
disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or before 9:30 a.m., New York
time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Current Report on Form
8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules
to this Agreement), the form of Certificate of Designations, the form of Preferred Warrants, the form of the Warrants, the form
of Voting Agreement and the form of the Registration Rights Agreement) (including all attachments, the “8-K Filing”).
From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided
to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the 8-K
Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether
written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees
or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.

 

(ii)         Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the Company
or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may be
granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, including,
without limitation, Section 4(o) of this Agreement, or any of the covenants or agreements contained in any other Transaction
Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents
(as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or in the
Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement
or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval by the Company,
any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability
to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, affiliates, stockholders
or agents, for any such disclosure. To the extent that the Company delivers any material, non-public information to a Buyer without
such Buyer's consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect
to, or a duty not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company,
its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated
hereby; provided, however, the Company shall be entitled, without the prior approval of any Buyer, to make the Press Release and
any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing
and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause
(i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to
its release). Without the prior written consent of the applicable Buyer (which may be granted or withheld in such Buyer’s
sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such
Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and
without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall
have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement executed
by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)),
any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding
the Company or any of its Subsidiaries.

 

    	 	27	 

     

    

 

(iii)        Other
Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this Section
4(i), and without limiting anything set forth in any other Transaction Document, at any time after the Closing Date if the Company,
any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Buyer with material
non-public information relating to the Company or any of its Subsidiaries (each, the “Confidential Information”),
the Company shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential
Information on a Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure,
the Company shall have disclosed all Confidential Information provided to such Buyer by the Company or any of its Subsidiaries
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or
similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates,
on the other hand, shall terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required Disclosure
Date and such Buyer provides the Company written notice of its belief it is in possession of Confidential Information and after
providing written notice to the Company of such and thereafter shall have possessed Confidential Information for at least ten (10)
consecutive Trading Days (each, a “Disclosure Failure”), then, as partial relief for the damages to such Buyer
by reason of any such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure
Date (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Buyer
an amount in cash equal to the greater of (I) one percent (1%) of the aggregate Purchase Price or (II) the applicable Disclosure
Restitution Amount (defined below), on each of the following dates (each, a “Disclosure Delay Payment Date”):
(i) on the date of such Disclosure Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier
of (x) the date such Disclosure Failure is cured and (y) such time as all such non-public information provided to such Buyer shall
cease to be Confidential Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the
foregoing effect) (such earlier date, as applicable, a “Disclosure Cure Date”). Following the initial Disclosure
Delay Payment for any particular Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to
any thirty (30) day anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month)
shall be made on the third (3rd) Business Day after such Disclosure Cure Date. The payments to which an Investor shall be entitled
pursuant to this Section 4(l)(iii) are referred to herein as “Disclosure Delay Payments.” In the event the Company
fails to make Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure Delay Payments shall
bear interest at the rate of two percent (2%) per month (prorated for partial months) until paid in full.

 

    	 	28	 

     

    

 

(iv)        For
the purpose of this Agreement the following definitions shall apply:

 

(1)         
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the
quotient of (I) the sum of the five (5) highest VWAPs (as defined in the Warrants) of the Common Stock during the applicable Disclosure
Restitution Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”).
All such determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or
similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.

 

(2)         “Disclosure
Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure
Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to
such Buyer pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading
volume (as reported on Bloomberg (as defined in the Warrants)) of the Common Stock on the Principal Market for each Trading Day
(as defined in the Warrants) either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing
on the applicable Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay
Payment Date or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding
Disclosure Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment
Date (such applicable period, the “Disclosure Restitution Period”).

 

(3)         “Required
Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either (I) if the
Company and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential
Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer first
received any Confidential Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the
first (1st) Business Day after such Buyer’s receipt of such Confidential Information.

 

    	 	29	 

     

    

 

(j)          Additional
Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration Statement
is not effective or the prospectus contained therein is not available for use or any Current Public Information Failure (as defined
in the Registration Rights Agreement) exists, the Company shall not file a registration statement or an offering statement under
the 1933 Act relating to securities that are not Securities (other than a registration statement on Form S-8 or such supplements
or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof
(solely to the extent necessary to keep such registration statements effective and available and not with respect to any Subsequent
Placement)). “Applicable Date” means the first date on which all of the Initial Conversion Shares and Warrant
Shares (assuming a cashless exercise of the Warrants) are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current
Public Information Failure has occurred and is continuing, such later date after which the Company has cured such Current Public
Information Failure).

 

(k)          Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written
consent of the Required Holders (as defined below), issue any shares of Series C Convertible Preferred Stock (other than to the
Buyers as contemplated hereby) and the Company shall not issue any other securities that would cause a breach or default under
the Certificate of Designations, the Preferred Warrants or the Warrants. The Company agrees that for the period commencing on
the date hereof and ending on the date immediately following the 90th Trading Day after the Applicable Date (provided
that such period shall be extended by the number of calendar days during such period and any extension thereof contemplated by
this provision on which any Registration Statement is not effective or any prospectus contained therein is not available for use
or any Current Public Information Failure exists) (the “Restricted Period”), neither the Company nor
any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose
of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security
or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined
under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred stock or
any purchase rights (any such issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted
Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing,
this Section 4(k) shall not apply in respect of the issuance of (i) shares of Common Stock or standard options to Purchase Common
Stock to third party service providers in lieu of or in addition to cash for services rendered; provided that (1) all such issuances
(taking into account the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this
clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding immediately prior to the
date hereof and (2) the exercise price of any such options is not lowered, none of such options are amended to increase the number
of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any
manner that adversely affects any of the Buyers; (ii) shares of Common Stock or standard options to purchase Common Stock to directors,
officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided
that (1) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after the
date hereof pursuant to this clause (ii) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding
immediately prior to the date hereof and (2) the exercise price of any such options is not lowered, none of such options are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially
changed in any manner that adversely affects any of the Buyers; (iii) shares of Common Stock issued upon the conversion or exercise
of Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (ii) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance
(as the case may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other method of issuance
(as the case may be) provisions of such Convertible Security that were in effect on the date immediately prior to the date of
this Agreement, the conversion, exercise or issuance price of any such Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (ii) above) is not lowered other than
as may be required by the terms of such Convertible Securities in effect as of the date hereof, none of such Convertible Securities
(other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (ii)
above) are amended to increase the number of shares issuable thereunder other than as may be required by the terms of such Convertible
Securities in effect as of the date hereof and none of the terms or conditions of any such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (ii) above) are
otherwise materially changed in any manner that adversely affects any of the Buyers; (iv) the Conversion Shares, (v) the Additional
Preferred Shares, and (vi) the Warrant Shares (each of the foregoing in clauses (i) through (vi), collectively the “Excluded
Securities”) and (vii) a bone fide public offering of securities of the Company, which (A) would not reasonably be expected
to result in the occurrence of a Triggering Event (as defined in the Certificate of Designations), (B) results in gross proceeds
in an amount not less than $2 million and not greater than $3 million, (C) consists of a single offering with only one closing
(subject to any subsequent closing of an overallotment option granted to the underwriters) and (D) is consummated pursuant to
a registration statement on Form S-3. “Approved Stock Plan” means any employee benefit plan which has been
approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common
Stock and standard options to purchase Common Stock may be issued to any employee, officer or director for services provided to
the Company in their capacity as such. “Convertible Securities” means any capital stock or other security of
the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into,
exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security
of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

 

    	 	30	 

     

    

 

(l)          Reservation
of Shares. So long as any of the Preferred Shares, Preferred Warrants or Warrants remain outstanding, the Company shall take
all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than the sum of (i) 200%
of the maximum number of shares of Common Stock issuable upon conversion of all the Preferred Shares then outstanding (assuming
for purposes hereof that (x) the Preferred Warrants have been exercised in full, (y) the Preferred Shares are convertible at a
conversion price equal to the Alternate Conversion Price assuming an Alternate Conversion Date as of the applicable date of determination,
and (z) any such conversion shall not take into account any limitations on the conversion of the Preferred Shares set forth in
the Certificate of Designations), (ii) 100% of the maximum number of Additional Preferred Shares initially issuable upon exercise
of the Preferred Warrants and (iii) 200% of the maximum number of Warrant Shares issuable upon exercise of all the Warrants then
outstanding (without regard to any limitations on the exercise of the Warrants set forth therein) (collectively, the “Required
Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section
4(l) be reduced other than proportionally in connection with any conversion, exercise and/or redemption, as applicable of Preferred
Shares and Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient
to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a
sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company's obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized
shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the
Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient
to meet the Required Reserve Amount.

 

(m)          Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.

 

(n)          Other
Preferred Shares; Variable Securities. So long as any Preferred Warrants or Preferred Shares remain outstanding, the Company
and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving
a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company or any Subsidiary
(i) issues or sells any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance
of such Convertible Securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such Convertible Securities or upon the occurrence of specified or contingent events directly
or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant to a customary “weighted
average” anti-dilution provision or (ii) enters into any agreement (including, without limitation, an equity line of credit
or an “at-the-market” offering) whereby the Company or any Subsidiary may sell securities at a future determined price
(other than standard and customary “preemptive” or “participation” rights). Each Buyer shall be entitled
to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition
to any right to collect damages.

 

(o)          Participation
Right. So long as any Warrants remain outstanding, neither the Company nor any of its Subsidiaries shall, directly or indirectly,
effect any Subsequent Placement unless the Company shall have first complied with this Section 4(o). The Company acknowledges
and agrees that the right set forth in this Section 4(o) is a right granted by the Company, separately, to each Buyer.

 

    	 	31	 

     

    

 

(i)          At
least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a
written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including,
without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes
or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public
information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement
that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does
not constitute material, non-public information and (z) a statement informing such Buyer that it is entitled to receive an Offer
Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Buyer
within three (3) Trading Days after the Company’s delivery to such Buyer of such Pre-Notice, and only upon a written request
by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to such Buyer an irrevocable
written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall
(A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the Persons (if
known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell
to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s pro rata portion of 50% of the Offered
Securities, provided that the number of Offered Securities which such Buyer shall have the right to subscribe for under this Section
4(o) shall be (x) based on such Buyer’s pro rata portion of the aggregate original principal amount of the Preferred Shares
purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that elects to purchase
its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer
shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount.

 

(ii)         To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day (or first (1st) Business Day, if such Subsequent Placement is a registered public offering of securities of the Company)
after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such
Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire
on the third (3rd) Business Day (or first (1st) Business Day, if such Subsequent Placement is a registered public offering
of securities of the Company) after such Buyer’s receipt of such new Offer Notice.

 

    	 	32	 

     

    

 

(iii)        The
Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused
Securities”) pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only
to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer Notice and (B) to, as applicable, either (x) notify each Buyer in writing that such
Subsequent Placement has been abandoned or (y) publicly announce the execution of such Subsequent Placement Agreement , which shall
be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein
filed as exhibits thereto.

 

(iv)        In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(o)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw
its Notice of Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount
that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii)
above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o)
prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event
that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company
may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities
have again been offered to the Buyers in accordance with Section 4(o)(i) above.

 

    	 	33	 

     

    

 

(v)         Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance,
as reduced pursuant to Section 4(o)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the
Offer. The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery
by the Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form
and substance to such Buyer and its counsel.

 

(vi)        Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or
exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.

 

(vii)       The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on
trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver,
release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received
from the Company, and (y) any registration rights set forth in such Subsequent Placement Documents shall be similar in all material
respects to the registration rights contained in the Registration Rights Agreement.

 

(viii)      Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following the expiration of the Offer Period.
If by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities
has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall
be deemed to have been abandoned and such Buyer shall not be in possession of any material, non-public information with respect
to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities
at any time after the fifth (5th) Business Day following the expiration of the Offer Period, the Company shall provide
such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(o).
The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except
as expressly contemplated by the last sentence of Section 4(o)(ii).

 

(ix)         Notwithstanding
anything to the contrary in this Section 4(o), the Company shall not be obligated to comply with the terms and conditions of this
Section 4(o) (solely with respect to such applicable Subsequent Placement and not with respect to any future Subsequent Placement)
in the event the Investor notifies the Company that it does not consent to receive material non-public information as provided
in the Pre-Notice delivered by the Company to the Investor pursuant to Section 4(o)(i)(A).

 

    	 	34	 

     

    

 

(x)          The
restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities (for purposes
of this Section 4(o)(x), without giving effect to the percentage limitations set forth in clauses (i) and (ii) of the definition
of “Excluded Securities”). The Company shall not circumvent the provisions of this Section 4(o) by providing terms
or conditions to one Buyer that are not provided to all.

 

(p)          Dilutive
Issuances. For so long as any Preferred Shares, Preferred Warrants or Warrants remain outstanding, the Company after the date
hereof shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Certificate of Designations) if
the effect of such Dilutive Issuance is to cause the Company to be required to issue upon conversion of any Preferred Shares or
exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue
upon conversion of the Preferred Shares and exercise of the Warrants without breaching the Company’s obligations under the
rules or regulations of the Principal Market.

 

(q)          Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a Passive Foreign Investment Company
within the meaning of Section 1297 of the Code.

 

(r)          Restriction
on Redemption and Cash Dividends. So long as any Preferred Shares are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written
consent of the Buyers.

 

(s)          Corporate
Existence. So long as any Buyer beneficially owns any Preferred Shares or Warrants, the Company shall not be party to any
Fundamental Transaction (as defined in the Certificate of Designations) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Certificate of Designations, the Preferred Warrants and the Warrants.

 

(t)          Stock
Splits. Until the Preferred Shares and the Preferred Warrants are no longer outstanding, the Company shall not effect any
stock combination, reverse stock split or other similar transaction (or make any public announcement or disclosure with respect
to any of the foregoing) without the prior written consent of the Required Holders (as defined below), unless the sole purpose
of such transaction is to maintain the Company’s listing on the Principal Market.

 

(u)          Conversion
and Exercise Procedures. Each of (i) the form of Exercise Notice (as defined in the Warrants) included in the Warrants, (ii)
the form of Exercise Notice included in the Preferred Warrants and (iii) the form of Conversion Notice (as defined in the Certificate
of Designations) included in the Certificate of Designations, as applicable, set forth the totality of the procedures required
of the Buyers in order to exercise the Warrants, exercise the Preferred Warrants or convert the Preferred Shares, respectively.
Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required of the Buyers
to exercise their Warrants, exercise their Preferred Warrants or convert their Preferred Shares, respectively. The Company shall
honor exercises of the Warrants, exercises of the Preferred Warrants and conversions of the Preferred Shares and shall deliver
the Conversion Shares, Additional Preferred Shares and Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Certificate of Designations, the Preferred Warrants and Warrants, respectively.

 

    	 	35	 

     

    

 

(v)         Regulation
M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.

 

(w)          General
Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting
on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form
of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(x)          Integration.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the
Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration
of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and
the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be
integrated for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities
contemplated hereby.

 

(y)          Notice
of Disqualification Events. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(z)          Stockholder
Approval. The Company shall prepare and file with the SEC, as promptly as practicable after the date hereof, but in no event
later than the forty-fifth (45th) calendar day after the Closing Date, an information statement (the “Information
Statement”), substantially in a form reasonably acceptable to the Buyers and Kelley Drye & Warren LLP, at the expense
of the Company, with the Company obligated to reimburse the expenses of Kelley Drye & Warren LLP incurred in connection therewith,
informing the stockholders of the Company of the receipt of the consents, in form and substance reasonably acceptable to the Buyers,
of the requisite stockholders (the “Stockholder Consent” or “Stockholder Approval” and the
date such Stockholder Consent is effective pursuant to applicable law and regulation, the “Stockholder Approval Date”)
including resolutions (the “Stockholder Resolutions”) approving the Company's issuance of all of the Securities
as described in the Transaction Documents in accordance with applicable law and the rules and regulations of the Principal Market.
The Definitive Information Statement shall have been mailed to the stockholders no later than three (3) Business Days after (i)
the expiration of the ten (10) calendar day waiting period required by Rule 14a-6 or (ii) in the event the Company receives comments
from the SEC to the Information Statement, the date the Company is notified (orally or in writing) by the SEC that such Information
Statement will not be subject to further review.

 

    	 	36	 

     

    

 

(aa)         No
Waiver of Voting Agreements. The Company shall not amend, waive or modify any provision of any of the Voting Agreements (as
defined below).

 

(bb)         Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be
delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities
and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.

 

		5.	REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a)          Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Preferred Shares, the Preferred Warrants and the Warrants in which
the Company shall record the name and address of the Person in whose name the Preferred Shares, the Preferred Warrants and the
Warrants have been issued (including the name and address of each transferee), the aggregate number of the Preferred Shares held
by such Person, the number of Additional Preferred Shares issuable pursuant to the terms of the Preferred Warrants held by such
Person, the number of Conversion Shares issuable pursuant to the terms of the Certificate of Designations and the number of Warrant
Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available at all
times during business hours for inspection of any Buyer or its legal representatives.

 

(b)          Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
(as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository
Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion
Shares and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the
Preferred Shares or the exercise of the Warrants (as the case may be). The Company represents and warrants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to
give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that
the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent provided
in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in
accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one
or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified
by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion
Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule
144, the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive
legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order
and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred
to in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent on each Effective Date (as defined in
the Registration Rights Agreement). Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated
with the issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.

 

    	 	37	 

     

    

 

(c)          Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares, the Warrant
Preferred Shares and the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable
state securities laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky”
laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against
transfer of such stock certificates):

 

[NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE 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.

 

    	 	38	 

     

    

 

(d)          Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c)
above or any other legend (i) while a registration statement (including a Registration Statement) covering the issuance or resale
of such Securities is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming
the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred
under Rule 144 (provided that a Buyer provides the Company with reasonable assurances that such Securities are eligible for sale,
assignment or transfer under Rule 144 which shall not include an opinion of Buyer’s counsel), (iv) in connection with a
sale, assignment or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion
of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under
applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements
issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than three (3) Trading Days
(or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a
trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the Company) following
the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate representing
such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this
Section 5(d), as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in
the DTC Fast Automated Securities Transfer Program and such Securities are Conversion Shares or Warrant Shares, credit the aggregate
number of shares of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating
in the DTC Fast Automated Securities Transfer Program, or such Securities are Warrant Preferred Shares issue and deliver (via
reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and other
legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the
balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered
to such Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date
such shares of Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with
DTC, as applicable, the “Share Delivery Date”). The Company shall be responsible for any transfer agent fees
or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance
herewith.

 

    	 	39	 

     

    

 

(e)          Failure
to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause to be delivered)
to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program or such Securities are Warrant Preferred Shares, a certificate for the number of Warrant
Preferred Shares, Conversion Shares or Warrant Shares (as the case may be) to which such Buyer is entitled and register such Warrant
Preferred Shares, Conversion Shares or Warrant Shares (as the case may be) on the Company’s share register or, if the Transfer
Agent is participating in the DTC Fast Automated Securities Transfer Program or such Securities are not Warrant Preferred Shares,
to credit the balance account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or Warrant
Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above or (II) if the Registration
Statement covering the issuance or resale of the Conversion Shares or Warrant Shares (as the case may be) submitted for legend
removal by such Buyer pursuant to Section 5(d) above (the “Unavailable Shares”) is not available for the issuance
or resale of such Unavailable Shares and the Company fails to promptly, but in no event later than as required pursuant to the
Registration Rights Agreement (x) so notify such Buyer and (y) deliver the Conversion Shares or Warrant Shares, as applicable,
electronically without any restrictive legend by crediting such aggregate number of Conversion Shares or Warrant Shares (as the
case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above to such Buyer’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing
clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause (I)
above, a “Delivery Failure”), then, in addition to all other remedies available to such Buyer, the Company
shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery Failure an amount equal to
2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior to the Required
Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer in writing
as in effect at any time during the period beginning on the date of the delivery by such Buyer to the Company of the applicable
Conversion Shares or Warrant Shares (as the case may be) and ending on the applicable Share Delivery Date. In addition to the
foregoing, if on or prior to the Required Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to a Buyer and register such
shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number of shares of
Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii) below or (II)
a Notice Failure occurs, and if on or after such Trading Day such Buyer purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted for legend removal
by such Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”),
then the Company shall, within three (3) Trading Days after such Buyer’s request and in such Buyer’s discretion, either
(i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at
which point the Company’s obligation to so deliver such certificate or credit such Buyer’s balance account shall terminate
and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or certificates
or credit the balance account of such Buyer or such Buyer’s designee with DTC representing such number of shares of Common
Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Buyer
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares
or Warrant Shares (as the case may be) that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied
by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as the case may
be) and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit such Buyer’s right to
pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares
of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding
anything herein to the contrary, with respect to any given Notice Failure and/or Delivery Failure, this Section 5(e) shall not
apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect to such
Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous sections of the Certificate of Designations,
Preferred Warrant or Warrant, as applicable, held by such Buyer.

 

    	 	40	 

     

    

 

(f)          FAST
Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in the DTC
Fast Automated Securities Transfer Program.

 

		6.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

(a)          The
obligation of the Company hereunder to issue and sell the Initial Preferred Shares, the Preferred Warrants and the related
Warrants to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions,
provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole
discretion by providing each Buyer with prior written notice thereof:

 

(i)          Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

 

(ii)         Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(g)) for the Preferred Shares, the Preferred Warrants and the Warrants being purchased by such
Buyer at the Closing by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.

 

(iii)        The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specific date, and except for representations and warranties that are qualified
by materiality, in which case such representations and warranties shall be true and correct in all respects), and such Buyer shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

 

		7.	CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

(a)          The
obligation of each Buyer hereunder to purchase its Initial Preferred Shares, its Preferred Warrants and its Warrants at
the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing
the Company with prior written notice thereof:

 

(i)          The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to such Buyer (A) the aggregate number of Initial Preferred Shares as is set forth opposite
such Buyer’s name in column (3) on the Schedule of Buyers, (B) Preferred Warrants to initially acquire up to that aggregate
number of Additional Preferred Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers
and (C) Warrants to initially acquire up to that aggregate number of Warrant Shares as is set forth opposite such Buyer’s
name in column (5) on the Schedule of Buyers, in each case, as being purchased by such Buyer at the Closing pursuant to this Agreement.

 

    	 	41	 

     

    

 

(ii)         Such
Buyer shall have received the opinion of Goodwin Procter LLP, the Company’s counsel, dated as of the Closing Date, in form
and substance reasonably acceptable to such Buyer.

 

(iii)        The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in form and substance reasonably
acceptable to such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer
agent.

 

(iv)        The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date
within ten (10) days of the Closing Date.

 

(v)         The
Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation
and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within ten (10) days of the Closing Date.

 

(vi)        The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation (including the Certificate of Designations)
as certified by the Delaware Secretary of State within ten (10) days of the Closing Date.

 

(vii)       The
Company shall have delivered to such Buyer a certificate, in form and substance reasonably acceptable to such Buyer, executed by
the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted
by the Company’s board of directors in form and substance reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation
of the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.

 

(viii)      Each
and every representation and warranty of the Company shall be true and correct as of the date when made and true and correct in
all material respects as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date, and except for representations and
warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all
respects) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions
required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received
a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by such Buyer in form and substance reasonably acceptable to such Buyer.

 

    	 	42	 

     

    

 

(ix)         The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding on the Closing Date immediately prior to the Closing.

 

(x)          The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal
Market or (II) by falling below the minimum maintenance requirements of the Principal Market, in each case other than such notifications
received from the Principal Market and disclosed by the Company in the SEC Documents.

 

(xi)         The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.

 

(xii)        No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(xiii)       Since
the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.

 

(xiv)      The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares and the Warrant Shares.

 

(xv)       Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).

 

(xvi)      The
Company shall have duly executed and delivered to such Buyer a voting agreement in the form of Exhibit E hereof (the
“Voting Agreement”), duly executed and delivered to such Buyer by the holder of the Company’s Series A
Preferred Stock (the “Principal Stockholder”), representing at least 51% of the outstanding voting securities
of the Company as of the date hereof. The Company shall have delivered to such Buyer the Stockholder Consent executed by the Principal
Stockholder, in form and substance reasonably satisfactory to such Buyer.

 

(xvii)     The
Company shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated
by this Agreement as such Buyer or its counsel may reasonably request.

 

    	 	43	 

     

    

 

		8.	TERMINATION.

 

In the event that the Closing
shall not have occurred with respect to a Buyer within five (5) Business Days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on
such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under
this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have
been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale
and purchase of the Preferred Shares, the Preferred Warrants and the Warrants shall be applicable only to such Buyer providing
such written notice, provided further that no such termination shall affect any obligation of the Company under this Agreement
to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be
deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement or the other Transaction Documents.

 

    	 	44	 

     

    

 

		9.	MISCELLANEOUS.

 

(a)          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. The Company hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby,
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. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to such Buyer or to enforce a judgment
or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

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

 

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

 

    	 	45	 

     

    

 

(d)          Severability;
Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so
modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof
and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s). Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without
implication that the following is required or applicable), it is the intention of the parties that in no event shall amounts and
value paid by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers,
under the Transaction Documents (including without limitation, any amounts that would be characterized as I” under applicable
law) exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection
by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary,
by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful
amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the
Transaction Documents or related thereto are held to be within the meaning of “interest” or another applicable term
to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

    	 	46	 

     

    

 

(e)          Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers,
the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions
by any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement,
the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein
and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein. Except
as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of
this Agreement may be amended or waived other than by an instrument in writing signed by the Company and the Required Holders
(as defined below), and any amendment or waiver to any provision of this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable. The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents
except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth
in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company,
any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges
and agrees that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its
representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception
to any of, the Company’s representations and warranties contained in this Agreement or any other Transaction Document and
(y) unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as
disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect such Buyer’s right to
rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties
contained in this Agreement or any other Transaction Document. “Required Holders” means (I) prior to the Closing
Date, each Buyer entitled to purchase Preferred Shares at the Closing and (II) on or after the Closing Date, holders of sixty-five
(65%) of the Securities (on an as-converted and as-exercised basis (assuming the exercise, in full, of the Preferred Warrants),
without regard to any limitations on conversion or exercise thereof and using the conversion price or exercise price, as applicable,
then in effect) as of such time (excluding any Securities held by the Company or any of its Subsidiaries as of such time) issued
or issuable hereunder or pursuant to the Preferred Shares and/or the Warrants (or the Buyers, with respect to any waiver or amendment
of Section 4(o)); provided, that such sixty-five (65%) must include Alto Opportunity Master Fund, SPC - Segregated Master Portfolio
B as long as it beneficially owns (or has the right to acquire upon exercise of any Preferred Warrants) any Preferred Shares.

 

(f)          Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail; or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses
for such communications shall be:

 

If to the Company:

 

MagneGas Corporation

11885 44th St. N.

Clearwater, FL 33762

Telephone: (727) 934-3448

Facsimile: (727) 290-4941

Attention: Chief Financial Officer

E-Mail: scottmahoney@magnegas.com

 

    	 	47	 

     

    

 

If to the Transfer Agent:

 

Corporate Stock Transfer, Inc.

3200 Cherry Creek Drive South, #430

Denver, CO 80209

Telephone: (303) 282-4800

Facsimile: (303) 282-5800

Attention: Karen Naughton

E-Mail: knaughton@corporatestock.com

 

If to a Buyer, to its address, e-mail address
and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers,

 

with a copy (for informational purposes only) to:

 

Kelley Drye & Warren LLP

101 Park Avenue

New York, NY 10178

Telephone: (212) 808-7540

Facsimile: (212) 808-7897

Attention: Michael A. Adelstein, Esq.

E-mail: madelstein@kelleydrye.com

 

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

 

(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Preferred Shares, Preferred Warrants and Warrants. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders, including, without
limitation, by way of a Fundamental Transaction (as defined in the Preferred Warrants) (unless the Company is in compliance with
the applicable provisions governing Fundamental Transactions set forth in the Preferred Warrants) or), a Fundamental Transaction
(as defined in the Certificate of Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Warrants) or a Fundamental Transaction (as defined in the Certificate of Designations) (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Designations).
A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent
of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

 

    	 	48	 

     

    

 

(h)          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 9(k).

 

(i)          Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for
its own representations, warranties, agreements and covenants hereunder.

 

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

 

(k)          Indemnification.
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i)
any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents, (ii)
any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents or (iii) any
cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes
a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises
out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C)
any disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the status of such Buyer or holder of the Securities
either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this
Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other
equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations
under this Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.

 

    	 	49	 

     

    

 

(l)          Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits,
stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock
after the date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing
contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing
of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such
Buyer (or its broker or other financial representative) to effect short sales or similar transactions in the future.

 

(m)          Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having
any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all
of its obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyers. The Company therefore
agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and
without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be
cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other injunctive relief).

 

(n)          Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights.

 

    	 	50	 

     

    

 

(o)          Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any
of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement
and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under
this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies
(if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation.
“Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant
to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

(p)          Judgment
Currency.

 

(i)          If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in U.S. Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

 

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

 

(2)         the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment
Conversion Date”).

 

(ii)         If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of U.S. Dollars which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment
Conversion Date.

 

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

 

    	 	51	 

     

    

 

(q)          Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several
and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges
that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or
create a presumption that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert
any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters,
and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company shall not assert any such
claim, with respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer
to purchase Securities pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each
Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder
and that no other Buyer will be acting as agent of such Buyer in connection with monitoring such Buyer’s investment in the
Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently
participated with the Company in the negotiation of the transaction contemplated hereby with the advice of its own counsel and
advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to
be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase
and sale of the Securities contemplated hereby was solely in the control of the Company, not the action or decision of any Buyer,
and was done solely for the convenience of the Company and not because it was required or requested to do so by any Buyer. It
is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company and a Buyer, solely, and not between the Company and the Buyers collectively and not between and among the Buyers.

 

[signature pages follow]

 

    	 	52	 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	MAGNEGAS CORPORATION
	 	 	 
	 	By:	/s/ Ermanno Santilli
	 	 	Name: Ermanno Santilli
	 	 	Title: Chief Executive Officer

 

     

     

    

 

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

 

	 	BUYER:
	 	 
	 	ALTO OPPORTUNITY MASTER FUND, SPC - 

SEGREGATED MASTER PORTFOLIO B
	 	 	 
	 	By:	/s/ Waqas Khatri

	 	 	Name: Waqas Khatri

	 	 	Title: Director

 

     

     

    

 

SCHEDULE OF
BUYERS

 

	(1)	 	(2)	 	(3)	 	 	(4)	 	 	(5)	 	 	(6)	 	 	(9)
	Buyer	 	Address and Facsimile Number	 	Aggregate
 Number of
  Initial

 Preferred 

Shares	 	 	Aggregate
 Number of
  Additional 

Preferred 

Shares	 	 	Aggregate
 Number of
 Warrant

 Shares	 	 	Purchase

 Price	 	 	Legal Representative’s
 Address and Facsimile 

Number
	Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B	 	c/o Ayrton Capital LLC 
1180 Avenue of Americas
 Suite 842 
New York, NY 10036 
Attention Waqas Khatri
 E-mail: wk@ayrtonllc.com
 Residence Cayman Islands	 	 	75	 	 	 	24,925	 	 	 	2,916,667	 	 	$	75,000	 	 	Kelley Drye & Warren LLP 
101 Park Avenue 
New York, NY 10178 
Telephone: (212) 808-7540 
Facsimile: (212) 808-7897 
Attention: Michael A. Adelstein, Esq.
 E-Mail:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL	 	 	 	 	75	 	 	 	24,925	 	 	 	2,916,667	 	 	$	75,000Exhibit 10.2 

 

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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE 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. THE NUMBER OF PREFERRED SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a)
OF THIS WARRANT.

 

MagneGas Corporation

 

Warrant to Purchase

Series C Convertible Preferred Stock

 

Preferred Warrant No.: C-1

 

Date of Issuance: June [____], 2017 (“Issuance
Date”)

 

MagneGas Corporation, a
Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [_____________], the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Series
C Convertible Preferred Stock (including any Warrants to Purchase Series C Convertible Preferred Stock issued in exchange, transfer
or replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59
p.m., New York time, on the Expiration Date (as defined below), [________] (subject to adjustment as provided herein) fully paid
and non-assessable shares of Series C Convertible Preferred Stock (the “Warrant Preferred Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant
is one of the Warrants (as defined in the Securities Purchase Agreement (as defined below)) to Purchase Series C Convertible Preferred
Stock (the “SPA Preferred Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement,
dated as of June 12, 2017 (the “Subscription Date”), by and among the Company and the investors (the “Buyers”)
referred to therein, as amended from time to time (the “Securities Purchase Agreement”)

 

     

     

    

 

		1.	EXERCISE OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Issuance Date (an “Exercise Date”), in whole or in part, by delivery (whether via facsimile or otherwise)
of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid,
the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise
multiplied by the number of Warrant Preferred Shares as to which this Warrant was so exercised (the “Aggregate Exercise
Price”) in cash or via wire transfer of immediately available funds. The Holder shall not be required to deliver the
original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to
less than all of the Warrant Preferred Shares shall have the same effect as cancellation of the original of this Warrant and issuance
of a new Warrant evidencing the right to purchase the remaining number of Warrant Preferred Shares. Execution and delivery of an
Exercise Notice for all of the then-remaining Warrant Preferred Shares shall have the same effect as cancellation of the original
of this Warrant after delivery of the Warrant Preferred Shares in accordance with the terms hereof. On or before the third (3rd)
Trading Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant
to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Preferred Shares initiated
on the applicable Exercise Date), the Company shall issue and deliver (via reputable overnight courier) to the address as specified
in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of Warrant Preferred
Shares to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice and the release, at
the direction of the Holder, of a wire of the Aggregate Exercise Price to the Company (the “Exercise Conditions”),
the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Preferred Shares with
respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant
Preferred Shares (as the case may be). If a certificate with respect to this Warrant is delivered to the Company in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Preferred Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Preferred Shares being acquired upon an exercise, then, at the request of the
Holder, the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its
own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 6(d)) representing
the right to purchase the number of Warrant Preferred Shares purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Preferred Shares with respect to which this Warrant is exercised. No fractional Warrant Preferred Shares
are to be issued upon the exercise of this Warrant, but rather the number of Warrant Preferred Shares to be issued shall be rounded
up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses
that may be payable with respect to the issuance and delivery of Warrant Preferred Shares upon exercise of this Warrant. Notwithstanding
the foregoing, the Company’s failure to deliver Warrant Preferred Shares to the Holder on or prior to the later of ((i) three
(3) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the 1934 Act or
other applicable law, rule or regulation for the settlement of a trade of such Warrant Preferred Shares initiated on the applicable
Exercise Date) and (ii) two (2) Trading Day after the Company’s receipt of the Aggregate Exercise Price (such later date,
the “Share Delivery Deadline”) shall not be deemed to be a breach of this Warrant. For the avoidance of doubt,
the Holder may convert the Warrant Preferred Shares into shares of Common Stock in accordance with the terms of the Certificate
of Designations at any time, at the option of the Holder, following its satisfaction of the applicable Exercise Conditions (whether
or not a certificate with respect to such Warrant Preferred Shares has been delivered to the Holder on or prior to such time of
conversion).

 

    	 	2	 

     

    

 

(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $900, subject to adjustment as provided herein.

 

(c)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Preferred
Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Preferred
Shares that are not disputed and resolve such dispute in accordance with Section 12.

 

(d)          Forced
Exercise.

 

(i)          General.
During the period (the “Forced Exercise Eligibility Period” and each Trading Day in such period, a “Forced
Exercise Eligibility Date”) commencing on the date a Forced Exercise Registration Statement (as defined in the definition
of “Equity Conditions” below) is initially declared effective by the SEC through, and including, the Expiration Date
(the “Eligibility Date”), so long as (I) no Equity Conditions Failure then exists (unless waived in writing
by the Holder), (II) no Forced Exercise (as defined below) has occurred in the twenty (20) Trading Day period immediately prior
to the applicable date of determination, and (III) at any time prior to such date of determination the Holder shall not have exercised
this Warrant into, in the aggregate, at least the Aggregate Eligible Forced Exercise Amount (as defined in Schedule I attached
hereto) applicable to such date of determination (and, in such case, the difference between such applicable Aggregate Eligible
Forced Exercise Amount and the actual aggregate number of Warrant Preferred Shares that have been issued prior to such date of
determination, the “Available Forced Exercise Amount”), the Company shall have the right to require the Holder
to exercise this Warrant into up to such aggregate number of fully paid, validly issued and non-assessable Warrant Preferred Shares
equal to the lesser of (x) 1,000 and (y) the then Available Forced Exercise Amount of Warrant Preferred Shares, as designated in
the applicable Forced Exercise Notice (as defined below), to be issued and delivered in accordance with Section 1(a) hereof
(each, a “Forced Exercise”). The Company may exercise its right to require a Forced Exercise under this Section
1(d) by delivering a written notice thereof, at one, or more times, by facsimile or electronic mail to all, but not less than all,
of the holders of SPA Preferred Warrants (each, a “Forced Exercise Notice”, and the date thereof, each a “Forced
Exercise Notice Date”). For purposes of Section 1(a) hereof, “Forced Exercise Notice” shall be deemed
to replace “Exercise Notice” for all purposes thereunder as if the Holder delivered an Exercise Notice to the Company
on the Forced Exercise Notice Date, mutatis mutandis. Each Forced Exercise Notice shall be irrevocable. Each Forced Exercise
Notice shall state (i) the Trading Day selected for the Forced Exercise in accordance with this Section 1(d), which Trading
Day shall be the third (3rd) Trading Day following the applicable Forced Exercise Eligibility Date (each, a “Forced Exercise
Date”), (ii) the aggregate portion of this Warrant and the SPA Preferred Warrants subject to forced exercise from the
Holder and all of the holders of the SPA Preferred Warrants pursuant to this Section 1(d) (and analogous provisions under
the SPA Preferred Warrants), (iii) the Available Forced Exercise Amount applicable to the Holder (including calculations and any
other documents reasonably requested by the Holder with respect thereto) and (iv) that there has been no Equity Conditions Failure
(or specifying any such Equity Conditions Failure that then exists, with an acknowledgement that unless such Equity Conditions
are waived, in whole or in part, such Forced Exercise Notice will be invalid). Notwithstanding anything herein to the contrary,
if an Equity Conditions Failure occurs at any time after a Forced Exercise Notice Date and prior to the related Forced Exercise
Date, (A) the Company shall provide the Holder a subsequent notice to that effect and (B) unless the Holder waives the applicable
Equity Conditions Failure, the Forced Exercise shall be cancelled and the applicable Forced Exercise Notice shall be null and void.
For the avoidance of doubt, if any Triggering Event has occurred and continuing, unless such Triggering Event (as defined in the
Certificate of Designations) has been waived, in whole or in part, in writing by the Holder, Company shall have no right to effect
a Forced Exercise; provided, that such Triggering Event shall have no effect upon the Holder’s right to exercise this Warrant
in its discretion.

 

    	 	3	 

     

    

 

(ii)         Pro
Rata Exercise Requirement. If the Company elects to cause a Forced Exercise of this Warrant pursuant to this Section 1(d),
then it must simultaneously take the same action in the same proportion with respect to all of the SPA Preferred Warrants.

 

(e)          Reservation
of Shares. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of Preferred Shares at least equal to 100% of the maximum number of Preferred Shares as shall be necessary to
satisfy the Company’s obligation to issue Preferred Shares under the SPA Preferred Warrants then outstanding (without regard
to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of
Preferred Shares reserved pursuant to this Section 1(e) be reduced other than proportionally in connection with any exercise or
redemption of SPA Preferred Warrants or such other event covered by Section 2(a) below. The Required Reserve Amount (including,
without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the SPA
Preferred Warrants based on number of Preferred Shares issuable upon exercise of SPA Preferred Warrants held by each holder on
the Closing Date (without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may
be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such
holder’s SPA Preferred Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized
Share Allocation. Any Preferred Shares reserved and allocated to any Person which ceases to hold any SPA Preferred Warrants shall
be allocated to the remaining holders of SPA Preferred Warrants, pro rata based on the number of Warrant Preferred Shares issuable
upon exercise of the SPA Preferred Warrants then held by such holders (without regard to any limitations on exercise). If, notwithstanding
the foregoing, and not in limitation thereof, at any time while any of the SPA Preferred Warrants remain outstanding, the Company
does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the
Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action
necessary to increase the Company’s authorized Preferred Shares to an amount sufficient to allow the Company to reserve the
Required Reserve Amount for all the SPA Preferred Warrants then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than forty-five (45)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized Preferred Shares. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized
Preferred Shares and to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

    	 	4	 

     

    

 

2.          ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT PREFERRED SHARES. The Exercise Price and number of Warrant Preferred Shares
issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)          Stock
Dividends and Splits. If the Company, at any time on or after the Subscription Date, (i) pays a stock dividend on one or more
classes of its then outstanding Warrant Preferred Shares or otherwise makes a distribution on any class of capital stock that is
payable in Warrant Preferred Shares, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its then outstanding Warrant Preferred Shares into a larger number of shares or (iii) combines (by combination,
reverse stock split or otherwise) one or more classes of its then outstanding Warrant Preferred Shares into a smaller number of
shares then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of
Warrant Preferred Shares outstanding immediately before such event and of which the denominator shall be the number of Warrant
Preferred Shares outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date
of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an
Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

 

(b)          Number
of Warrant Preferred Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, the
number of Warrant Preferred Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Preferred Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations
on exercise contained herein).

 

(c)          Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders (as defined in the Securities Purchase Agreement), reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the board of directors of the Company.

 

    	 	5	 

     

    

 

		3.	FUNDAMENTAL TRANSACTIONS.

 

(a)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i)  the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in
the Securities Purchase Agreement) in accordance with the provisions of this Section 3(a) pursuant to written agreements in
form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements
to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Series C Convertible Preferred Stock acquirable and receivable upon exercise
of this Warrant prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to
such shares of capital stock (but taking into account the relative value of the shares of Series C Convertible Preferred Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares
of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior
to the consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly
traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant 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 Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been
named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction, in lieu of the shares of Series C Convertible Preferred Stock (or other securities, cash, assets or other property)
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been completely exercised (and the underlying Warrant
Preferred Shares completely converted) immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the conversion of the Warrant Preferred Shares), as adjusted in accordance with the provisions of this Warrant. Notwithstanding
the foregoing, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 3(a)
to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant and conversion of the underlying Warrant Preferred Shares at any time after the consummation of
the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property) issuable upon the exercise of the Warrant and conversion of the underlying Warrant Preferred Shares
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the
applicable Fundamental Transaction had this Warrant been exercised and converted into Warrant Preferred Shares immediately prior
to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Provision made pursuant
to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.

 

    	 	6	 

     

    

 

(b)          Application.
The provisions of this Section 3 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of
this Warrant (or any such other warrant)).

 

4.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined
in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any Warrant Preferred Shares
receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Preferred
Shares upon the exercise of this Warrant.

 

5.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Preferred Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, except for Forced Exercise, described under Section
1(d) herein, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5,
the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the stockholders.

 

    	 	7	 

     

    

 

6.          REISSUANCE
OF WARRANTS.

 

(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Preferred Shares being transferred by the Holder
and, if less than the total number of Warrant Preferred Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 6(d)) to the Holder representing the right to purchase the number of Warrant Preferred Shares
not being transferred.

 

(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 6(d)) representing the right to
purchase the Warrant Preferred Shares then underlying this Warrant.

 

(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 6(d)) representing in the aggregate the right to purchase
the number of Warrant Preferred Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Preferred Shares as is designated by the Holder at the time of such surrender; provided, however,
no warrants for fractional Warrant Preferred Shares shall be given.

 

(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Preferred Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a)
or Section 6(c), the Warrant Preferred Shares designated by the Holder which, when added to the number of Warrant Preferred Shares
underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Preferred Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

    	 	8	 

     

    

 

7.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant (other than the issuance of Warrant Preferred Shares upon exercise in accordance with the
terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price
and the number of Warrant Preferred Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s),
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder, (iii) at least ten (10) Trading
Days prior to the consummation of any Fundamental Transaction and (iv) within one (1) Business Day of the occurrence of a Triggering
Event (as defined in the Certificate of Designations), setting forth in reasonable detail any material events with respect to such
Triggering Event and any efforts by the Company to cure such Triggering Event. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall
simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on
Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not simultaneously
filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company
hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing
not to trade on the basis of, such material non-public information. It is expressly understood and agreed that the time of execution
specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

8.          AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders (as defined in the Securities Purchase Agreement).

 

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

 

    	 	9	 

     

    

 

10.         GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant 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. The Company 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 the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction
Documents unless otherwise consented to in writing by the Holder.

 

		12.	DISPUTE RESOLUTION.

 

(a)          Submission
to Dispute Resolution.

 

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

 

    	 	10	 

     

    

 

(ii)         The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 12 and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required
Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver
all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the
Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither
the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).

 

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

 

(iv)        Any
reasonable costs and/or fees, including all reasonable attorneys’ fees of all parties and/or the reasonable fees of the investment
bank, shall be paid at the resolution of the dispute by the losing party.

 

(b)          Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New
York Civil Practice Law and Rules (“CPLR”) and that the Holder or the Company is authorized to apply for an
order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 12, (ii) the terms
of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s
resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings,
determinations and the like that such investment bank determines are required to be made by such investment bank in connection
with its resolution of such dispute, in its sole discretion, shall have the right to submit any dispute described in this Section
12 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set
forth in this Section 12 and (iii) nothing in this Section 12 shall limit the Holder from obtaining any injunctive relief or other
equitable remedies (including, without limitation, with respect to any matters described in this Section 12).

 

    	 	11	 

     

    

 

13.           REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and 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 right of the Holder to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. 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, exercises 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 of this Warrant shall be entitled, in addition to all other available
remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court
of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other
security. The Company shall provide all information and documentation to 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 Warrant (including, without limitation,
compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise
of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

14.           PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of
an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes
action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy,
reorganization, receivership of the company or other proceedings affecting company creditors’ rights and involving a claim
under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’
fees and disbursements. 

 

15.           TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise
be required by Section 2(g) of the Securities Purchase Agreement.

 

    	 	12	 

     

    

 

		16.	CERTAIN DEFINITIONS. For purposes of this Warrant,
the following terms shall have the following meanings:

 

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

 

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

 

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

 

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

 

(e)          “Bloomberg”
means Bloomberg, L.P.

 

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

 

(g)          “Certificate
of Designations” means that certain Certificate of Designation for the Series C Convertible Preferred Stock of the Company,
dated as of June [____], 2017, as amended from time to time.

 

(h)          
“Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of
such common stock.

 

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

 

    	 	13	 

     

    

 

(j)          “Equity
Conditions” means, with respect to an given date of determination: (i) on such applicable date of determination one or
more Registration Statements filed pursuant to the Registration Rights Agreement shall be effective and the prospectus contained
therein shall be available on such applicable date of determination (with, for the avoidance of doubt, any Warrant Preferred Shares
previously issued pursuant to such prospectus deemed unavailable) for at least (x) the issuance to the Holder of all Warrant Preferred
Shares issuable upon exercise of this Warrant in connection with the event requiring such determination (each, the “Forced
Exercise Registration Statement”); (ii) on each day during the period beginning thirty calendar days prior to the applicable
date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring
Period”), the Common Stock (including all shares of Common Stock issuable upon conversion of the Preferred Shares then
outstanding and the Warrant Preferred Shares to be issued in the event requiring this determination) is listed or designated for
quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than
suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements
by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting
occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or
pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance
requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable) other
than as disclosed in the SEC Documents (as defined in the Securities Purchase Agreement) prior to the Issuance Date; (iii) during
the Equity Conditions Measuring Period, the Company shall have delivered all Warrant Preferred Shares issuable upon exercise of
this Warrant on a timely basis as set forth in Section 1 hereof and all other shares of capital stock required to be delivered
by the Company on a timely basis as set forth in the other Transaction Documents; (iv) any Warrant Preferred Shares to be issued
in connection with the event requiring determination may be issued in full without violating the rules or regulations of the Eligible
Market on which the Common Stock is then listed or designated for quotation (as applicable); (v) on each day during the Equity
Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred
which has not been abandoned, terminated or consummated; (vi) the Company shall have no knowledge of any fact that would reasonably
be expected to cause the applicable Forced Exercise Registration Statement to not be effective or the prospectus contained therein
to not be available for at least the issuance of all Warrant Preferred Shares issuable upon exercise of this Warrant in connection
with the event requiring such determination in accordance with the terms of the Registration Rights Agreement and no Current Information
Failure exists or is continuing; (vii) the Holder shall not be in possession of any material, non-public information provided to
any of them by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives,
agents or the like; (viii) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in
compliance with each, and shall not have breached any representation or warranty in any material respect (other than representations
or warranties subject to material adverse effect or materiality, which may not be breached in any respect) or any covenant or other
term or condition of any Transaction Document, including, without limitation, the Company shall not have failed to timely make
any payment pursuant to any Transaction Document; (ix) there shall not have occurred any Volume Failure or Price Failure as of
such applicable date of determination; (x) on the applicable date of determination (A) no Authorized Share Failure shall exist
or be continuing and (x) all of the Preferred Shares issued pursuant to the Securities Purchase Agreement and issuable upon exercise
of the SPA Preferred Warrants and (y) all shares of Common Stock issuable upon conversion of such Warrant Preferred Shares and
Warrant Preferred Shares are available under the certificate of incorporation of the Company and reserved by the Company to be
issued pursuant to the terms of the Certificate of Designations and (B) all Warrant Preferred Shares to be issued in connection
with the event requiring this determination may be issued in full without resulting in an Authorized Share Failure; (xi) on each
day during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist a Triggering Event or
an event that with the passage of time or giving of notice would constitute a Triggering Event; (xii) the issuance of the shares
of Common Stock issuable upon conversion of such Warrant Preferred Shares and the Preferred Shares then outstanding (assuming,
for such purpose, that all the Preferred Shares then outstanding and such Warrant Preferred Shares are converted at the Alternate
Conversion Price (as defined in the Certificate of Designations) then in effect and without regard to any limitations on conversion
set forth in the Certificate of Designations) will not result in an Authorized Share Failure (as defined in the Certificate of
Designations); (xiii) the shares of Common Stock issuable upon conversion of all of the Preferred Shares issued pursuant to the
Securities Purchase Agreement and issuable upon exercise of the SPA Preferred Warrants are duly authorized and listed and eligible
for trading without restriction on an Eligible Market; and (xiv) the Company shall have obtained the Stockholder Approval (as defined
in the Securities Purchase Agreement), which shall remain in full force and effect as of such date of determination.

 

    	 	14	 

     

    

 

(k)          “Equity
Conditions Failure” means that on each day during the period commencing twenty (20) Trading Days prior to the applicable
Forced Exercise Notice Date through and including the applicable Forced Exercise Date, the Equity Conditions have not been satisfied
(or waived in writing by the Holder).

 

(l)          
“Expiration Date” means the date that is the third anniversary of the Issuance Date (or such later date as extended
by written consent of the Company and the Holder) or, if such date falls on a day other than a Trading Day or on which trading
does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.

 

    	 	15	 

     

    

 

(m)          
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company
to be subject to or have its Voting Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (w) 35% of the outstanding shares of Series A Preferred Stock
of the Company, (x) 50% of the outstanding shares of Voting Stock, (y) 50% of the outstanding shares of Voting Stock calculated
as if any shares of Voting Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making
or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Voting Stock such that
all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange
offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Voting Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all
such Subject Entities, individually or in the aggregate, acquire, either (w) at least 35% of the outstanding shares of Voting Stock
of the Company, (x) at least 50% of the outstanding shares of Voting Stock, (y) at least 50% of the outstanding shares of Voting
Stock calculated as if any shares of Voting Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Voting Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Voting Stock, or (v) reorganize, recapitalize or reclassify its Voting
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more
related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Voting Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (w) at least 35% of the outstanding shares of Voting Stock of the Company, (x) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Voting Stock, (y) at least 50% of the aggregate ordinary
voting power represented by issued and outstanding Voting Stock not held by all such Subject Entities as of the date of the Preferred
Shares calculated as if any shares of Voting Stock held by all such Subject Entities were not outstanding, or (z) a percentage
of the aggregate ordinary voting power represented by issued and outstanding shares of Voting Stock or other equity securities
of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other shareholders of the Company to surrender their shares of Voting Stock without approval of the shareholders of the Company
or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the
issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.

 

    	 	16	 

     

    

 

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

 

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

 

    	 	17	 

     

    

 

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

 

(q)          “Preferred
Shares” means the Series C Convertible Preferred Stock.

 

(r)          “Price
Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during
any Trading Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination
fails to exceed $0.88 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
occurring after the Subscription Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions during any such measuring period.

 

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

 

(t)          “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company
and the initial holders of the Preferred Shares relating to, among other things, the registration of the issuance of the Registrable
Securities (as defined in the Registration Rights Agreement), as may be amended from time to time.

 

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

 

(v)         “Series
C Convertible Preferred Stock” means (i) the Company's Series C Convertible Preferred Stock, $0.001 par value per share,
issued and issuable pursuant to the Series C Certificate of Designations and (ii) any capital stock into which such Series C Convertible
Preferred Stock shall have been changed or any share capital resulting from a reclassification of such Series C Convertible Preferred
Stock.

 

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

 

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

 

(y)          “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock,
any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market
for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on
such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange
or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day
in writing by the Holder or (y) with respect to all determinations other than price or trading volume determinations relating to
the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

 

    	 	18	 

     

    

 

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

 

(aa)         
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading
volume (as reported on Bloomberg) of the Common Stock on the Principal Market on at least five (5) Trading Days during the twenty
(20) Trading Day period ending on the Trading Day immediately preceding such date of determination (such period, the “Volume
Failure Measuring Period”), is less than, as applicable, (x) if on or prior to the sixty (60) calendar day anniversary
of the Closing Date, $150,000, (y) if after the sixty (60) calendar day anniversary of the Closing Date, but on or prior to the
one hundred and twenty (120) calendar day anniversary of the Closing Date, $175,000 or (z) if after the one hundred and twenty
(120) calendar day anniversary of the Closing Date, $200,000, (in each case, as adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions occurring after the Subscription Date). All such determinations
to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
during such Volume Failure Measuring Period.

 

(a)          
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal
securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New
York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending
at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If
the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 12.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.

 

[signature page follows]

 

    	 	19	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Series C Convertible Preferred Stock to be duly executed as of the Issuance Date
set out above.

 

	 	MagneGas Corporation 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE SERIES C CONVERTIBLE PREFERRED STOCK

 

MAGNEGAS
CORPORATION

 

The undersigned holder
hereby elects to exercise the Warrant to Purchase Series C Convertible Preferred Stock, No. C-1 (the “Warrant”)
of MagneGas Corporation, a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.          Payment
of Exercise Price. The Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

2.          Delivery
of Warrant Preferred Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares
of Series C Convertible Preferred Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its
benefit, as a certificate to the following name and to the following address:

 

	Issue to:	 
	 	 
	 	 
	 	 
	 	 

 

Date: _____________ __, _____

 

	 	 
	Name of Registered Holder	 

 

	By:	 	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Tax ID:	 	 
	 	 	 	 
	 	Facsimile:	 	 
	 	 	 	 
	 	E-mail Address:	 	 

 

     

     

    

 

Schedule I

 

Aggregate Eligible Forced Exercise Amount

 

The “Aggregate Eligible Forced Exercise
Amount” of the Investor as of any date of determination shall equal the lesser of (a) the aggregate number of Warrant
Preferred Shares initial issuable hereunder (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations
and similar events) and (b) the Holder’s Holder Pro Rata Amount (as defined in the Certificate of Designations) of such Aggregate
Eligible Forced Exercise Amount in the table below across from the applicable period in which such date of determination occurs:

 

	Applicable Period	 	Eligible Forced 

Exercise Amount	 	Aggregate 

Eligible 

Forced 

Exercise 

Amount
	The initial Installment Date (as defined in the Certificate of Designations) through the calendar day immediately prior to second Installment Date 	 	250	 	250
	The second Installment Date through the calendar day immediately prior to the third Installment Date	 	250	 	 500 
	The third Installment Date through the calendar day immediately prior to the fourth Installment Date	 	250	 	 750 
	The fourth Installment Date through the calendar day immediately prior to the fifth Installment Date	 	250	 	 1,000  
	The fifth Installment Date through the calendar day immediately prior to the sixth Installment Date	 	 500 	 	 1,500 
	The sixth Installment Date through the calendar day immediately prior to the seventh Installment Date	 	 500 	 	 2,000  
	The seventh Installment Date through the calendar day immediately prior to the eighth Installment Date	 	 500 	 	 2,500 
	The eighth Installment Date through the calendar day immediately prior to the ninth Installment Date	 	 667 	 	 3,167 
	The ninth Installment Date through the calendar day immediately prior to the tenth Installment Date	 	 667 	 	 3,834 
	The tenth Installment Date through the calendar day immediately prior to the eleventh Installment Date	 	 667 	 	 4,501 
	The eleventh Installment Date through the calendar day immediately prior to the twelfth Installment Date	 	 667 	 	 5,168 
	The twelfth Installment Date through the calendar day immediately prior to the thirteenth Installment Date	 	 667 	 	 5,835 
	The thirteenth Installment Date through the calendar day immediately prior to the fourteenth Installment Date	 	 667 	 	 6,502 
	The fourteenth Installment Date through the Maturity Date	 	1,000 on each subsequent

Installment Date	 	**

 

** The sum of 6,502 plus 1,000 for each subsequent Installment Date
that has occurred both (x) in this Applicable Period and (y) prior to such date of determination.

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