Document:

Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of October 21, 2014, between Magnegas Corporation,
a Delaware corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser,
a “Purchaser” and, collectively, the “Purchasers”).

 

This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).

 

The Company and each
Purchaser hereby agrees as follows:

 

            1.                Definitions.

 

Capitalized terms
used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Advice”
shall have the meaning set forth in Section 6(d).

 

“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 60th calendar
day following the date hereof (or, in the event of a “full review” by the Commission, the 75th calendar
day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section
2(c) or Section 3(c), the 60th calendar day following the date on which an additional Registration Statement is required
to be filed hereunder; provided, however, that in the event the Company is notified by the Commission that one or
more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if
such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not
a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

 

“Effectiveness
Period” shall have the meaning set forth in Section 2(a).

 

“Event”
shall have the meaning set forth in Section 2(d).

 

“Event
Date” shall have the meaning set forth in Section 2(d).

 

    	 

    	 

    

 

“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 30th calendar day
following the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section
2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration
Statement related to the Registrable Securities.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

 

“Losses”
shall have the meaning set forth in Section 5(a).

 

“Plan
of Distribution” shall have the meaning set forth in Section 2(a).

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to
be incorporated by reference in such Prospectus.

 

“Registrable
Securities” means, as of any date of determination, (a) all of the shares of Common Stock then issued and issuable upon
conversion in full of the Series D-2 Preferred Stock (assuming on such date the shares of Series D-2 Preferred Stock are converted
in full without regard to any conversion limitations therein), (b) all Warrant Shares then issued and issuable upon exercise of
the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), (c)
any additional shares of Common Stock issued and issuable in connection with any anti-dilution provisions in the Series D-2 Preferred
Stock (without giving effect to any limitations on conversion set forth in the Series D-2 Certificate of Designation) and (d) any
securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities
(and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder
with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared
effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance
with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144,
or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information
pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer
Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange
of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the
Company, and all Warrants are exercised by “cashless exercise” as provided in Section 2(c) of each of the Warrants),
as reasonably determined by the Company, upon the advice of counsel to the Company.

 

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“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional
registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements
to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

 

“SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.

 

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2.
           Shelf Registration.

 

(a)          On
or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall
be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise
directed by at least 85% in interest of the Holders) substantially the “Plan of Distribution” attached hereto
as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement
filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act
as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use
its best efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities
covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume
or manner-of-sale restrictions pursuant to Rule 144 (assuming cashless exercise of the Warrants) and without the requirement for
the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to
the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected
Holders (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration
Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the Holders via facsimile or by e-mail
of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness
with the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by
9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with
the Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness
or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).

 

(b)          
Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file
amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities
permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities
as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form,
and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however,
that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for
the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance
and Disclosure Interpretation 612.09.

 

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(c)          Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission
or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by
a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement
will be reduced as follows:

 

		a.	First,
the Company shall reduce or eliminate any securities to be included by any Person other than a Holder;

 

		b.	Second,
the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders;
and

 

		c.	Third,
the Company shall reduce Registrable Securities represented by Conversion Shares underlying the Series D-2 Preferred Stock (applied,
in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered
Conversion Shares held by such Holders).

 

In the event of a cutback hereunder, the Company shall give
the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment.
In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its best
efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants
of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those
Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.

 

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(d)          If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the
Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request
for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities
Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission
that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to
the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing
to comments made by the Commission in respect of such Registration Statement within ten (10) calendar days after the receipt of
comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared
effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective
by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration
Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar
days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as
an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of
clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such
ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar
day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights
the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event
Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 2.0% multiplied by
the aggregate Exercise Price of the Warrants. If the Company fails to pay any partial liquidated damages pursuant to this Section
in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

 

(e)          If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared
effective by the Commission.

 

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3.             Registration Procedures.

 

In connection with
the Company’s registration obligations hereunder, the Company shall:

 

(a)          Not
less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated
or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review
of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation
within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Holders
advance copies of any universal shelf registration statement registering securities in addition to those required hereunder, or
any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of 67% of the Registrable Securities shall reasonably object in good faith, provided that,
the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished
copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus
or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached
to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on a date that is not less than
two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which
such Holder receives draft materials in accordance with this Section.

 

(b)          (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to
be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the
Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to
the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided
that, the Company shall excise any information contained therein which would constitute material non-public information regarding
the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during
the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders
thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

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(c)          If
during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.

 

(d)          Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing
on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same
has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission
or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose,
(v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be,
it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of
the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be
material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability
of a Registration Statement or Prospectus, provided, however, in no event shall any such notice contain any information
which would constitute material, non-public information regarding the Company or any of its Subsidiaries.

 

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(e)         Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

 

(f)          Furnish
to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

(g)         Subject
to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

 

(h)         The Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting
a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company
shall pay the filing fee required by such filing within two (2) Business Days of request therefor.

 

(i)          Prior
to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not
be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such
jurisdiction.

 

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(j)          If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Holder may request.

 

(k)          Upon
the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into
account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders
in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus, subject to the payment
of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which
need not be consecutive days) in any 12-month period.

 

 

(l)           Comply
with all applicable rules and regulations of the Commission.

 

(m)         The
Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration
of the resale of Registrable Securities.

 

(n)          The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration
of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

 

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4.           Registration
Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made
with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications
or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing,
with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable
Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities
Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall
be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions
of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

 

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5.             Indemnification.

 

(a)          Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal
as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and
any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material
fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance
of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this
purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated
in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise
to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of
any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.
Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person
and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(h).

 

    	12

    	 

    

 

(b)          Indemnification
by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or
(y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the
extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company
expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such
information relates to such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent, related to the use by such
Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement
or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder under this
Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that
it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

    	13

    	 

    

 

An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the
named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more
than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to
the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

(d)          Contribution.
If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement
or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party in accordance with its terms.

 

    	14

    	 

    

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute
pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

 

The indemnity
and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.

 

6.            Miscellaneous.

 

(a)          Remedies.
In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company
and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

 

(b)          No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities
are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b)
shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.

 

(c)          Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

    	15

    	 

    

 

(d)          Discontinued
Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company
will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees
and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities
hereunder shall be subject to the provisions of Section 2(d).

 

(e)          Piggy-Back
Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection
with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written
notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current
public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then
effective Registration Statement.

 

(f)          Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed
by the Company and the Holders of 67% or more of the then outstanding Registrable Securities (for purposes of clarification, this
includes any Registrable Securities issuable upon exercise of any Security). If a Registration Statement does not register all
of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number
of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have
the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights
of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such
Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of
the first sentence of this Section 6(f). No consideration shall be offered or paid to any Person to amend or consent to a waiver
or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this
Agreement.

 

    	16

    	 

    

 

(g)          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.

 

(h)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.

 

(i)           No
Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied
in full.

 

(j)           Execution
and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together 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, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature 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 facsimile or “.pdf” signature page were an original thereof.

 

(k)           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.

 

(l)           Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

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

 

    	17

    	 

    

 

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

 

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

 

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

 

(Signature
Pages Follow)

 

    	18

    	 

    

 

IN WITNESS WHEREOF,
the parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	magnegas corporation
	 	 
	 	By:	 
	 	 	 Name:
	 	 	 Title:
	 	 	 

  

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

    	 

    	 

    

 

[SIGNATURE
PAGE OF HOLDERS TO MNGA RRA]

  

	Name of Holder:	 	 

 

	Signature of Authorized Signatory of Holder:	 	 

 

	Name of Authorized Signatory:	 	 
	 	 	 
	Title of Authorized Signatory:	 	 

 

[SIGNATURE PAGES CONTINUE]

 

    	 

    	 

    

 

Annex A

 

Plan of Distribution

 

Each Selling Stockholder
(the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their securities covered hereby on the Nasdaq Capital Market or any other stock exchange,
market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

 

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

 

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

 

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

 

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

 

		·	privately negotiated transactions;

 

		·	settlement of short sales;

 

		·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities
at a stipulated price per security;

 

		·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

		·	a combination of any such methods of sale; or

 

		·	any other method permitted pursuant to applicable law.

 

The Selling Stockholders
may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.

 

Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.

 

    	 

    	 

    

 

In connection with
the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).

 

The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.

 

The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

 

Because Selling Stockholders
may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.
The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed
sale of the resale securities by the Selling Stockholders.

 

We agreed to keep this
prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

 

    	2

    	 

    

 

Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of securities of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser
at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

    	3

    	 

    

 

Annex B

 

mAGNEGAS
CORPORATION

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial
owner of common stock (the “Registrable Securities”) of Magnegas Corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with
the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.
All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

Certain legal consequences
arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial
owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement.

 

    	 

    	 

    

 

The undersigned hereby provides the following
information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

		1.	Name.

 

		(a)	Full Legal Name of Selling Stockholder

 

	
         

	 

 

		(b)	Full Legal Name of Registered Holder (if not the same
as (a) above) through which Registrable Securities are held:

	
         

	 

 

		(c)	Full Legal Name of Natural Control Person (which means
a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this
Questionnaire):

	 
	 

 

2. Address for Notices to Selling
Stockholder:

  

	 
	 
	 

	Telephone:	 

	Fax:	 

	Contact Person:	 

 

3. Broker-Dealer Status:

 

		(a)	Are you a broker-dealer?

Yes  ̈               No
 ̈

 

		(b)	If “yes” to Section 3(a), did you receive
your Registrable Securities as compensation for investment banking services to the Company?

 

Yes  ̈               No
 ̈

 

		Note:	If “no” to Section 3(b), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

    	2

    	 

    

 

		(c)	Are you an affiliate of a broker-dealer?

 

Yes  ̈               No
 ̈

 

		(d)	If you are an affiliate of a broker-dealer, do you
certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute
the Registrable Securities?

 

Yes  ̈               No
 ̈

 

		Note:	If “no” to Section 3(d), the Commission’s
staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

4. Beneficial Ownership of Securities
of the Company Owned by the Selling Stockholder.

 

Except as set forth below
in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.

 

		(a)	Type and Amount of other securities beneficially owned
by the Selling Stockholder:

	
         

        

	 
	 

    	3

    	 

    

 

5. Relationships with the Company:

 

Except as set forth below,
neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

 

			State any exceptions here:

	
          

	 

 

The undersigned agrees
to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.

 

By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through
5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements
thereto. The undersigned understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements
thereto.

 

IN WITNESS WHEREOF
the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person
or by its duly authorized agent.

  

	Date:	 	 	Beneficial Owner:	 

 

	 	 	 	By:	 
	 	 	 	 	Name:
	 	 	 	 	Title:

 

PLEASE FAX A COPY (OR EMAIL A .PDF COPY)
OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

    	4Exhibit 10.1

 

 

 

CAPITAL MARKETS AND ADVISORY AGREEMENT

 

This Advisory and Consulting Agreement (“Agreement”)
is made and entered into on this 7th day of October, 2014 (the “Effective Date”) between IntelliCell BioSciences,
Inc. (the “Company”), and Dawson James Securities, Inc. a FINRA licensed U.S. broker dealer, One North Federal
Highway, Ste. 500, Boca Raton, FL 33432 (the “Advisor”).

 

In consideration of and for the mutual promises and covenants contained
herein, and for other good and valuable consideration (the receipt of which is hereby acknowledged) the parties hereto mutually
agree and intend to be legally bound to the terms of this Agreement as follows:

 

1.Purpose.  The Company hereby retains the Advisor
during the term specified to render consulting advice to the Company relating to capital markets and business advisory services
as set forth in Section 3 below, as well as certain investment banking services, including but not limited to services as a placement
agent and merger/acquisition matters, upon the terms and conditions as set forth herein. The Company and the Advisor agree that
nothing herein shall be construed as a firm commitment or guarantee of any Transaction. The lead representative for the Advisor
will be R. Douglas Armstrong, Ph.D.

 

 2.                 Terms
and Consideration. 

 

(a)               
Term:The term of this Agreement shall be for the sooner of a period of twenty-four (24) months commencing from the Effective
Date of this Agreement (the “Engagement Period”), unless extended by mutual written agreement of the Company and the
Advisor. 

 

(b)              
Advisory Fees: The Company shall pay Advisor (due upon execution of this Agreement) a nonrefundable fee paid as a Preferred
Stock that provides for a future conversion to the number of shares of Company common stock equivalent to ten percent (10%) of
the then fully diluted stock of the Company (“Advisor Fee”) at the time of the conversion. The conversion trigger will
be the Company’s completion of a minimum of $15 million of new investor financing, or the acquisition of the Company.

 

(c)               
Finder Fee: In the event any transaction, including any private or public sale transaction, debt, equity, convertible securities,
options, warrants or other financing or securities arrangement or other transaction involving any business combination, sale of
assets, merger, joint venture or consolidation, is consummated in whole or part during the Term with an Investor introduced hereunder
to the Company by Advisor, the Company shall compensate Advisor. Specifically, the Company shall pay to Advisor a cash placement
fee (the “Finder’s Closing Fee”) equal to 8% of the aggregate purchase price paid by each purchaser, identified
by Dawson James (a “DJ Purchaser”), of Securities that are placed in the Offering. The Finder’s Closing Fee shall
be paid at the closing of the Offering (the “Closing”) from the gross proceeds of the Securities sold to a DJ Purchaser.
As additional compensation for the Services, the Company shall issue to Dawson or its designees at the Closing, warrants (the “Dawson
Warrants”) to purchase that number of shares of common stock of the Company (“Shares”) equal to 8% of the aggregate
number of Shares placed in the Offering to a DJ Purchaser, plus any Shares underlying any convertible Securities placed in the
Offering to such purchasers. The Dawson Warrants shall have the same terms, including exercise price and registration rights, as
the warrants issued to investors (“Investors”) in the Offering. If no warrants are issued to Investors, the Dawson
Warrants shall have an exercise price equal to 110% of the price at which equity Securities are issued to Investors, or, if no
equity Securities are issued, 110% of the current market price of the Shares at Closing, an exercise period of five years and registration
rights for the Shares underlying the Dawson Warrants equivalent to those granted with respect to the Securities.

    	1

    	 

    

 

(d)              
Notwithstanding anything to the contrary herein, all warrants, common stock or other securities issuable to the Advisor
hereunder shall be due and earned in full as of the date of this Agreement regardless of the issuance date that may otherwise appear
on any securities certificate.

 

3.                 Financial
Advisory Services of Advisor.  Advisor will assist the Company by performing the capital markets and business advisory
services that are listed below.  In connection with Advisor providing such capital markets and business advisory services
to the Company, the Company shall provide Advisor with any information reasonably available to the Company that Advisor deems
appropriate.  The Company hereby acknowledges that Advisor will be using and relying on said information without independent
verification and that Advisor assumes no responsibility for the accuracy and completeness of any information provided to it by
the Company.  In performance of these duties, the Advisor shall provide the Company with the benefits of its best judgment
and efforts.  It is understood and acknowledged by the parties that the value of the Advisor’s advice is not measurable
in any quantitative manner, and that the Advisor shall not be obligated to spend any specific amount of time performing its duties
hereunder.

 

(a)               
Advising the Company on the development of its business strategy and plan.

 

(b)              
Advising the Company about its financial structure and that of its divisions or subsidiaries or any of its projects, as
such relate to the public market for the Company’s equity securities.

 

(c)               
Advising the Company on the development of its capital markets strategy, including:

 

		a.	Advising on the public market for Company’s securities and the options for timing and structure of any future public
offering or private placement of its equity securities

 

		b.	Advising on the requirements and processes for an uplisting to a national exchange

 

(d)              
Assisting the Company for exposure to the investment community at large with the prior written approval of the company.

 

(e)               
Assisting in the Company’s financial public relations, by participating in discussions with the Company and the financial
community with the company’s approval.

 

Should the Company desire Advisor to provide any financial advisory
service(s) not listed above, including but not limited to providing placement agent or underwriting services, the Company and Advisor
shall enter into an additional engagement letter to be executed by the parties hereto at the commencement of the additional financial
advisory service(s) to be rendered by Advisor. Such engagement letter if executed would replace the fee designated in Section 2c
of this agreement.

 

    	2

    	 

    

 

4.                 
Covenants of the Company.

		a.	The Company hereby agrees to at all times have authorized underlying shares of common stock to enable
the conversion of the preferred shares noted in Section 2b of this Agreement.

		b.	The Company hereby agrees to retain, and Advisor hereby agrees to act, as the Company’s lead
underwriter for the Company of registered securities (the “Securities”) to be issued by the Company, including
shares, and if applicable, warrants to purchase shares of the Company’s common stock (the “Shares” or
“Common Stock”), in connection with a “best efforts” or “firm commitment” offering to
be made pursuant to an effective registration statement to be filed by the Company under the Securities Act of 1933 (the “Underwriting”),
with said Underwriting being completed concurrent with the listing of the Company’s stock on a national exchange. Dawson
and Company agree to separately negotiate in good faith, provisions for industry typical fees for the Underwriting transaction.

5.                 
Advisor’s Relationships with Others. The Company acknowledges that the Advisor or its affiliates is in the business
of providing financial, investment banking and merger/acquisition services and consulting advice (of all types contemplated by
this Agreement) to others. 

 

6.                 
Confidential Information.  In connection with the rendering of services hereunder, Advisor has been or will be
furnished with confidential information concerning the Company including, but not limited to, financial statements and information,
cost and expense data, production data, trade secrets, marketing and customer data, and such other information not generally obtained
from public or published information or trade sources.  Such information shall be deemed “Confidential Material”
and, except as specifically provided herein, shall not be disclosed by Advisor without prior written consent of the Company. 
In the event Advisor is required by applicable law or legal process to disclose any of the Confidential Material, it is agreed
that Advisor will deliver to the Company prompt notice of such requirement prior to disclosure of same to permit the Company to
seek an appropriate protective order and/or waive compliance of this provision.  If, in the absence of a protective order
or receipt of written waiver, Advisor is nonetheless, in the written opinion of counsel, compelled to disclose any Confidential
Material, Advisor may do so without liability hereunder provided that notice of such prospective disclosure is delivered to the
Company prior to actual disclosure.  Following the termination of this Agreement and a written request by the Company, Advisor
shall deliver to the Company all Confidential Material. This provision shall survive the termination of this Agreement for any
reason.

 

7.                  Advisor’s
Liability & Indemnification of Advisor by Company.  In the event that the Advisor or any of its officers, directors,
partners, employees, agents, representatives or stockholders (together, the “Indemnified Parties”, and individually,
the “Indemnified Party”) becomes involved in any capacity in any claim, action, proceeding or investigation brought
by or against any person in connection with any matter referred to herein or relating to the services provided under this Agreement,
the Advisor shall provide the Company with written notice thereof as soon as reasonably possible and in any event within thirty
(30) days of the Advisor's notification or other knowledge of the same and the Company shall be obligated to: (a) reimburse
the Indemnified Party for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection
therewith; and (b) shall be obligated to indemnify the Indemnified Party against any losses, claims, damages, liabilities,
alleged damages or alleged liabilities, to which the Indemnified Party may become subject in connection with any matter referred
to in this letter, except to the extent that any such legal or other expense, loss, claim, damage, liability, alleged damage or
alleged liability results from the recklessness or bad faith of the Advisor in performing the services which are the subject of
this letter; provided, however, that the Company shall have the right, at its own expense, to undertake the defense of any such
action, claim or demand, utilizing counsel selected by the Advisor; and provided further, that the Company
shall have notified the Advisor in writing of its intention to undertake such defense within thirty (30) days of receiving the
Advisor's notice required herein. In the absence of recklessness or willful misconduct on the part of Advisor or Advisor’s
material breach of this Agreement, no Indemnified Party shall be liable to the Company or to any officer, director, control person,
affiliate, employee, agent, representative, stockholder or creditor of the Company for any action or omission of Advisor or any
of its officers, directors, employees, agents, representatives or stockholders in the course of, or in connection with, rendering
or performing any services hereunder.  

    	3

    	 

    

 

8.                  Termination.
This Agreement may be terminated at any time during the Engagement Period by Advisor upon five (5) days prior written notice to
the Company, in the event that Advisor becomes aware of: (i) any change in the business or operations of the Company which Advisor
reasonably believes may adversely affect Advisor’s ability to render the services contemplated hereunder, (ii) any material
misrepresentation by the Company with respect to the business operations, assets, condition (financial or otherwise), results
of operations or prospects of the Company, or (iii) any breach by the Company of its obligations under this Agreement, which remain
uncured for a period of fifteen days after written notice of the breach is provided to the Company.

 

This Agreement may be terminated by Company
only in the event of a material breach by Advisor of its obligations hereunder, which breach remains uncured for a period of fifteen
days after written notice of the breach and opportunity to cure is provided to Advisor.

 

In the event of termination (i) this Agreement
shall become void, without liability on the part of either party or their affiliates, directors, officers or stockholders except
as set forth in Section 7(a) above, and (ii) Advisor shall be entitled to expenses it has incurred pursuant to this Agreement up
to the date of such termination; and (iii) all provisions contained in section 6 above survive the termination.

 

9.                  Expenses. 
The Company shall reimburse the Advisor and/or any other party retained by the Advisor, for any and all reasonable out-of-pocket
expenses incurred in connection with Advisory services provided to the Company including but not limited to legal, travel, lodging
and meals, entertainment, postage, photocopying and long distance telephone expenses, with said expenses to not exceed $5,000
without the prior approval of the Company. The Company shall reimburse the Advisor within 15 days of demand of reimbursement by
the Company. The Company will be required to pay for all expenses in excess of $500 in advance by either providing for direct
billing to the Company or Company’s credit card. Any expenses incurred by Advisor on behalf of the Company, related to this
engagement will be invoiced and due upon receipt. Unpaid or remaining expenses due Advisor will be deducted from the proceeds
of a Close and are subject to applicable late charges.

 

    	4

    	 

    

 

10.                Other
terms and conditions of this Agreement are:

 

(a)               
Indemnification

In consideration of the services to be provided
by the Agent under this Agreement, the Company agrees to Indemnify and hold harmless the Agent and all of its directors, officers,
employees, consultants or agents (each individually an “Indemnified Person”) from and against any losses, claims, damages
or liabilities to which such Indemnified Person may become subject arising out of or in connection with the rendering of services
by the Agent hereunder, except to the extent that such losses, claims, damages or liabilities are determined in judicial rulings
to have primarily resulted from the negligence or willful misconduct of such Indemnified Person and reimburse such Indemnified
Person for reasonable legal and other expenses as they are incurred, that arise in connection with investigating, preparing to
defend or defending any lawsuit, claim or proceeding and any appeals therefrom arising in any manner out of or in connection with
the rendering of services by the Agent, provided, however that in the event a final judicial determination is made to the effect
specified above, such Indemnified Person will promptly remit to the Company any amounts reimbursed under the section.

 

The Company and the Agent agree that (i) the indemnification
and reimbursement commitments set forth above shall apply whether or not such Indemnified Person is a named party to any such lawsuit,
claim or other proceeding; and (ii) promptly upon receipt by the Company, the Company will immediately disclose to the Agent, in
writing, any new facts as they may arise that may adversely affect the Transaction.

 

The provisions of this Section shall survive termination
of this Agreement and shall be binding upon any successor or assign of the Company.

 

(b)              
Governing Law and Jurisdiction

This agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida applicable to agreements made in such State.

 

(c)               
Representations and Warranties

Agent makes no representations, expressed or implied
that a Transaction with the Partner will occur as a result of the services furnished under this Agreement. The duties of Agent
shall not include the provision of legal, tax or accounting services or advice, which services and advice shall be procured by
the Company at its own expense. The Company acknowledges that in connection with the performance of its services hereunder, Agent
may, at its sole cost and expense, use the services of companies with which it has an affiliation. The Company shall furnish to
Agent and such affiliated company complete and accurate current and historical business information and shall promptly inform Agent
of any changes that may materially affect its business or Agent’ services under this Agreement.

 

(d)              
Arbitration

Any claim or controversy arising out of or relating
to this agreement, or the interpretation thereof, or any issue as to whether or not this Agreement is subject to arbitration, shall
be settled by arbitration and shall be conducted in Los Angeles, California. Judgment based upon decision of the arbitrators may
be entered in any court having jurisdiction hereof. Both parties agree to accept telephonic testimony in lieu of personal appearances.
The prevailing party shall be entitled to recovery of costs, fees (including attorneys’ fees) and taxes paid or incurred
in obtaining the award. Further, any costs, fees or taxes incurred in enforcing the award shall be fully assessed against and paid
by the party against whom the reward is to be enforced. Both parties agree to limit their respective testimony during the arbitration
session to three hours each.

    	5

    	 

    

 

(e)               
Waiver and Amendment

No waiver, amendment or modification of any provision
of this Agreement shall be effective unless consent by both parties in writing. No failure or delay by either party in exercising
any rights, power or remedy under this Agreement shall operate as a waiver of such right, power or remedy. Any terms and/or conditions
of this Agreement may be waived at any time, pursuant to this section, but a waiver in one instance shall not be deemed to constitute
a waiver in any other instance.

 

(f)               
Severability

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

 

This Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to its subject matter and there are no agreements or understandings with respect to the
subject matter hereof which are not contained in this Agreement. This Agreement may be modified only in writing signed by the party
to be charged hereunder.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date hereof.

 

 

Intellicell BioSciences, Inc.

 

By: /s/ Steven A. Victor

Name: Steven A. Victor, M.D.

Title: Chairman and Chief Executive Officer

 

 

Dawson James Securities, Inc.

 

 By: /s/ R. Douglas Armstrong

Name: R. Douglas Armstrong, Ph.D.

Title: Chief
Business Officer

 

    	6

    	 

    

 

Exhibit

 

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES __ CONVERTIBLE PREFERRED STOCK

OF

INTELLICELL BIOSCIENCES, INC.

 

The undersigned, Chief
Executive Officer of Intellicell Biosciences, Inc., a Nevada corporation (the “Corporation”), DOES HEREBY CERTIFY
that the following resolutions were duly adopted by the Board of Directors of the Corporation by unanimous written consent on [__],
2014:

 

WHEREAS, the Board of Directors
is authorized within the limitations and restrictions stated in the Articles of Incorporation of the Corporation, as amended, to
provide by resolution or resolutions for the issuance of one million (1,000,000) shares of preferred stock of the Corporation,
in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications,
limitations or restrictions as the Corporation’s Board of Directors shall fix by resolution or resolutions providing for
the issuance thereof duly adopted by the Board of Directors; and

 

WHEREAS, it is the desire
of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of a series of Preferred Stock
and the number of shares constituting such series.

 

NOW, THEREFORE, BE IT RESOLVED:

 

Section 1. Designation
and Authorized Shares.  The Corporation shall be authorized to issue [______] ([_______]) shares of Series __ Preferred
Stock, par value $[0.01] per share (the “Series - Preferred Stock”).

 

Section 2. Stated
Value.  Each share of Series __ Preferred Stock shall have a stated value of $0.01 per share (the “Stated
Value”).

 

Section 3. Liquidation.

 

(a) Upon
the liquidation, dissolution or winding up of the business of the Corporation, whether voluntary or involuntary, the holder of
Series __ Preferred Stock shall be entitled to receive, for each share thereof, out of assets of the Corporation legally available
therefor, an amount in cash equal to the greater of (i) the Stated Value or (ii) the amount the holder would receive as a holder
of the Corporation’s common stock, par value $[0.001] per share (the “Common Stock”), if the holder had
converted the Series __ Preferred Stock immediately prior to such liquidation, dissolution or winding up (without regard to any
limitations on conversion or beneficial ownership herein or elsewhere) following a Trigger Financing.  All amounts to
be paid to the holder of Series __ Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid
following the payment or setting apart for payment of any amount for, or the distribution of any assets of the Corporation to the
holders of any other class or series of capital stock whose terms expressly provide that such class or series of capital stock
are senior to Series __ Preferred Stock in dividend rights or liquidation preference (to the extent of such preference).  If
upon any such distribution the assets of the Corporation shall be insufficient to pay the holder of the outstanding shares of Series
__ Preferred Stock (or the holders of any class or series of capital stock ranking on a parity with the  Series __ Preferred
Stock as to distributions in the event of a liquidation, dissolution or winding up of the Corporation) the full amounts to which
they shall be entitled, the holders shall share ratably in any distribution of assets in accordance with the sums which would be
payable on such distribution if all sums payable thereon were paid in full.

 

(b) Any
distribution in connection with the liquidation, dissolution or winding up of the Corporation, or any bankruptcy or insolvency
proceeding, shall be made in cash to the extent possible.  Whenever any such distribution shall be paid in property other
than cash, the value of such distribution shall be the fair market value of such property as determined in good faith by the Board
of Directors of the Corporation.

 

    	7

    	 

    

 

 
Section 4. Voting.  Prior to a Trigger Financing, shares
of Series __ Preferred Stock shall not be entitled to vote on matters submitted for shareholder vote, except as otherwise required
or permitted by law. On or after the occurrence of a Trigger Financing, except as otherwise expressly required by law, the holder
of Series __ Preferred Stock shall be entitled to vote on all matters submitted to shareholders of the Corporation and shall be
entitled to the number of votes for the shares of Series __ Preferred Stock owned at the record date for the determination of shareholders
entitled to vote on such matter or, if no such record date is established, at the date such vote is taken or any written consent
of shareholders is solicited, equal to the number of shares of Common Stock such shares of Series __ Preferred Stock are convertible
into at such time, taking into account the Beneficial Ownership Limitations set forth in Section 5 herein.  Except as
otherwise required by law, the holder of shares of Series __ Preferred Stock shall vote together with the holders of Common Stock
on all matters and shall not vote as a separate class.

 

Section 5. Conversion.

 

(a) Conversion
Right. At any time upon the closing of a Trigger Financing (as defined herein), the shares of Series __ Preferred Stock
may convert, at the option of the holder, collectively into such number of fully paid and non-assessable shares of Common Stock
as shall equal 9.99% of the Corporation’s issued and outstanding Common Stock, calculated immediately after giving effect
to the issuance of the Corporation’s securities in connection with the Trigger Financing (which for the avoidance of doubt,
shall be on an “as converted” basis with respect to the securities issued if such securities are convertible securities)
and after giving effect to the conversion of the shares of Series __ Preferred Stock hereunder, subject to the limitations set
forth in this Section 5. For purposes of this Agreement, “Trigger Financing” means completion of capital raises
of a minimum of Fifteen ($15,000,000) million of either new equity financing (excluding any refinancing of notes or other convertible
structures), or any sale, merger, acquisition, joint venture or similar material corporate event involving the Company or its assets.

 

(b) Conversion
Procedure. In order to exercise the conversion privilege under this Section 5, the holder of shares of Series __ Preferred
Stock to be converted shall give written notice to the Corporation at its principal office that the holder elects to convert such
shares of Series __ Preferred Stock or a specified portion thereof into shares of Common Stock as set forth in such notice (the
“Conversion Notice”, and such date of delivery of the Conversion Notice to the Corporation, the “Conversion
Notice Delivery Date”).  The holder shall not be required to deliver the original certificate representing
the Series __ Preferred Stock (the “Series __ Certificate”) in order to effect a conversion hereunder. Execution
and delivery of the Conversion Notice with respect to less than all of the shares of Common Stock issuable upon conversion of the
Series __ Preferred Stock shall have the same effect as cancellation of the original Series __ Certificate and issuance of a new
Series __ Certificate evidencing the ownership of the remaining number of Series __ Preferred Stock. On or before the first (1st)
Trading Day following the date on which the Corporation has received a Conversion Notice, the Corporation shall transmit by facsimile
an acknowledgment of confirmation of receipt of such Conversion Notice to the holder and the Corporation’s transfer agent
(the "Transfer Agent"). On or before the third (3rd) Trading Day following the date on which the Corporation
has received such Conversion Notice (the “Share Delivery Date”), the Corporation shall, (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
upon the request of the holder, credit such aggregate number of shares of Common Stock to which the holder is entitled pursuant
to such conversion to the holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch
by overnight courier to the address as specified in the Conversion Notice, a certificate, registered in the Corporation’s
share register in the name of the holder or its designee, for the number of shares of Common Stock to which the holder is entitled
pursuant to such conversion. Upon delivery of the Conversion Notice, the holder shall be deemed for all corporate purposes to have
become the holder of record of the shares of Common Stock with respect to which the shares of Series __ Preferred Stock have been
converted, irrespective of the date such shares of Common Stock are credited to the holder’s DTC account or the date of delivery
of the certificates evidencing such shares of Common Stock, as the case may be. If a Series __ Certificate is submitted in connection
with any conversion and the number of shares of Series __ Preferred Stock represented by such certificate submitted for conversion
is greater than the number of shares of Series __ Preferred Stock being converted, then the Corporation shall as soon as practicable
and in no event by no later than three (3) Trading Days after any conversion and at its own expense, issue a new Series __ Certificate
representing the number of shares of Series __ Preferred Stock held by the holder immediately prior to submitting the Conversion
Notice, less the number of shares of Series __ Preferred Stock being converted.. The Corporation shall pay any and all transfer
taxes which may be payable with respect to the issuance and delivery of shares of Common Stock upon conversion of the Series __
Preferred Stock.  For purposes of this Certificate of Designation, (i) a “Trading Day” means (A) a
day on which the Common Stock is traded on a Trading Market (as defined below), or (B) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded on the over the counter market, as reported by the OTC Bulletin Board (the “Bulletin
Board”), or (C) if the Common Stock is not quoted on the Bulletin Board, a day on which prices for the Common Stock are
reported on the OTCQB published by OTC Market Group, LLC (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not listed, quoted or reported as set forth in (A), (B)
and (C) hereof, then Trading Day shall mean a business day and (ii) “Trading Market” means the following markets
or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NASDAQ Global Select Market,
the NASDAQ Global Market, the NASDAQ Capital Market, the New York Stock Exchange or the NYSE MKT, LLC.

 

    	8

    	 

    

 

(c)           Maximum
Conversion.

 

	(i) 	Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time may all or a portion of shares of Series __ Preferred Stock be converted if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by the holder at such time, the number of shares of Common Stock which would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules thereunder) more than 9.99% of all of the Common Stock outstanding at such time (the “9.99% Beneficial Ownership Limitation”).
	 	 
	(ii)  	By written notice to the Corporation, a holder of Series __ Preferred Stock may from time to time decrease the 9.99% Beneficial Ownership Limitation to any other percentage specified in such notice.
	 	 
	 (iii)  	For purposes of this Section 5, in determining the number of outstanding shares of Common Stock, the holder of Series __ Preferred Stock may rely on the number of outstanding shares of Common Stock as reflected in (1) the Corporation’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,  Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Corporation or (3) any other notice by the Corporation setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written or oral request of the holder of Series __ Preferred Stock, the Corporation shall within one (1) business day confirm orally and in writing to the holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including shares of Series __ Preferred Stock, held by the holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported, which in any event are convertible or exercisable, as the case may be, into shares of the Corporation’s Common Stock within 60 days’ of such calculation and which are not subject to a limitation on conversion or exercise analogous to the limitation contained herein.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 5 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

 

(d) Buy-In.  If,
by the Share Delivery Date, the Corporation fails for any reason to deliver the shares of Common Stock issuable upon conversion
of the Series __ Preferred Stock, as set forth in the Conversion Notice, and after such Share Delivery Date, the converting holder
purchases, in an arm’s length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”)
in order to make delivery in satisfaction of a sale of Common Stock by the converting holder (the “Sold Shares”),
which delivery such converting holder reasonably anticipated to make using the shares to be issued upon such conversion (a “Buy-In”),
the converting holder shall have the right to require the Corporation to pay to the converting holder the Buy-In Adjustment Amount.  The
Corporation shall pay the Buy-In Adjustment Amount to the converting holder in immediately available funds immediately upon demand
by the converting holder. For purposes of this Certificate of Designation, the term “Buy-In Adjustment Amount”
means the amount equal to the excess, if any, of (i) the converting holder’s total purchase price (including brokerage
commissions, if any) for the Covering Shares associated with a Buy-In, over (ii) the net proceeds (after brokerage commissions,
if any) received by the converting holder from the sale of the Sold Shares.  By way of illustration and not in limitation
of the foregoing, if the converting holder purchases shares of Common Stock having a total purchase price (including brokerage
commissions) of $11,000 to cover a Buy-In, with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In
Adjustment Amount which the Corporation will be required to pay to the converting holder will be $1,000.

    	9

    	 

    

  

Section 6. Other
Provisions.

 

(a) Reservation
of Common Stock.  The Corporation shall at all times [use its best efforts to] reserve from its authorized Common
Stock a sufficient number of shares of Common Stock to provide for conversion of all Series __ Preferred Stock from time to time
outstanding.

 

(b) Record
Holders.  The Corporation and its transfer agent, if any, for the Series __ Preferred Stock may deem and treat the
record holder of any shares of Series __ Preferred Stock as reflected on the books and records of the Corporation as the sole true
and lawful owner thereof for all purposes, and neither the Corporation nor any such transfer agent shall be affected by any notice
to the contrary.  Upon request, the Corporation will provide the total number of issued and outstanding shares of Series
__ Preferred Stock to any holder thereof.

 

Section 7. Restriction
and Limitations.  Except as expressly provided herein or as required by law so long as any shares of Series __ Preferred
Stock remain outstanding, the Corporation shall not, without the vote or written consent of the holders of at least a majority
of the then outstanding shares of the Series __ Preferred Stock, take any action which would adversely and materially affect any
of the preferences, limitations or relative rights of the Series __ Preferred Stock.

 

Section 8. Certain
Adjustments.

 

(a) Stock
Dividends and Stock Splits.  If the Corporation, at any time while the Series __ Preferred Stock is outstanding:
(A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares
of Common Stock issued by the Corporation pursuant to the Series __ Preferred Stock), (B) subdivide outstanding shares of Common
Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of
the Corporation, each share of Series __ Preferred Stock shall receive such consideration as if such number of shares of Series
__ Preferred had been, immediately prior to such foregoing dividend, distribution, subdivision, combination or reclassification,
the holder of the number of shares of Common Stock into which it could convert at such time; provided, however, to
the extent that a holder’s right to participate in any such dividend, distribution, subdivision, combination
or reclassification would result in the holder exceeding the Maximum Percentage, if applicable, then the holder shall not be entitled
to participate in such dividend, distribution, subdivision, combination or reclassification to such extent (or in the beneficial
ownership of any shares of Common Stock as a result of such dividend, distribution, subdivision, combination or reclassification
to such extent) and the portion of such dividend, distribution, subdivision, combination or reclassification shall be held in abeyance
for the benefit of the holder until such time, if ever, as its right thereto would not result in the holder exceeding the Maximum
Percentage, at which time the holder shall be delivered such dividend, distribution, subdivision, combination or reclassification  to
the extent as if there had been no such limitation).  Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(b) Fundamental
Transaction. If, at any time while the Series __ Preferred Stock is outstanding, (A) the Corporation effects any merger or
consolidation of the Corporation with or into another association, corporation, individual, partnership, limited liability
company, trust or any other entity or organization (each, a “Person”),
(B) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions,
(C) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Corporation consummates
a transaction pursuant to which another Person becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of the aggregate ordinary voting power represented by all of
the Common Stock outstanding at such time, or (E) the Corporation effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property, (in any such case, a “Fundamental Transaction”), then, upon any subsequent
conversion of this Series __ Preferred Stock, each holder of Series __ Preferred Stock shall have the right to receive, for each
share of Common Stock that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental
Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of such shares of
Common Stock (without regard to any limitations on conversion herein or elsewhere);
provided, however, to the extent that a holder’s right to receive securities of the Successor Entity
would result in the holder exceeding the Maximum Percentage, if applicable, then the holder shall not be entitled to receive such
shares to such extent (or to beneficially own any shares of common stock (or their equivalent) of the Successor Entity as a result
of such consideration to such extent) and the portion of such shares shall be held in abeyance for the benefit of the holder until
such time, if ever, as its right thereto would not result in the holder exceeding the Maximum Percentage, at which time the holder
shall be delivered such shares to the extent as if there had been no such limitation).  The provisions of this Section
8(b) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations
on the conversion of the Series __ Preferred Stock.

 

    	10

    	 

    

 

For purposes of this Certificate
of Designation, “Successor Entity” means the Person, which may be the Corporation, formed by, resulting from
or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been made, provided that
if such Person is not a publicly traded entity whose common stock or equivalent equity security is quoted or listed for trading
on the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the New York Stock Exchange, the NYSE
MKT, LLC, the OTCBB or the OTCQB (each, an “Eligible Market”), Successor Entity shall mean such entity that,
directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed
on the Eligible Market, or, if there is more than one such Person, the Person with the largest public market capitalization as
of the date of consummation of the Fundamental Transaction.

 

IN WITNESS WHEREOF, the
undersigned has executed this Certificate this [__] day of [___], 2014.

	 	
	 	 
	 	 By:	
	 	 	Name:

Title:

 

 

11

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