Document:

EXHIBIT 4.2

 

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF THE

0% SERIES A CONVERTIBLE PREFERRED STOCK OF

MAJESCO ENTERTAINMENT COMPANY

 

I, Jesse Sutton, hereby
certify that I am the Chief Executive Officer of Majesco Entertainment Company (the “Company”), a corporation
organized and existing under the Delaware General Corporation Law (the “DGCL”), and further do hereby certify:

 

That pursuant to the
authority expressly conferred upon the Board of Directors of the Company (the “Board”) by the Company’s
Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Board on December 10, 2014
adopted the following resolutions creating a series of shares of Preferred Stock designated as 0% Series A Convertible Preferred
Stock, none of which shares have been issued:

 

RESOLVED, that the
Board designates the 0% Series A Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights,
powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Certificate of Incorporation
as follows:

 

TERMS OF SERIES A CONVERTIBLE PREFERRED STOCK

 

1.          Designation
and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated as
“0% Series A Convertible Preferred Stock” (the “Preferred Shares”). The authorized number of Preferred
Shares shall be 8,830,000 shares. Each Preferred Share shall have $0.001 par value. Capitalized terms not defined herein shall
have the meaning as set forth in Section 23 below.

 

2.          Ranking.
Except to the extent that the holders of at least a majority of the outstanding Preferred Shares (the “Required Holders”)
expressly consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below) in accordance
with Section 12, all shares of capital stock of the Company shall be junior in rank to all Preferred Shares with respect to the
preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company (such junior
stock is referred to herein collectively as “Junior Stock”). The rights of all such shares of capital stock
of the Company shall be subject to the rights, powers, preferences and privileges of the Preferred Shares. Without limiting any
other provision of this Certificate of Designations, without the prior express consent of the Required Holders, voting separately
as a single class, the Company shall not hereafter authorize or issue any additional or other shares of capital stock that is (i)
of senior rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company (collectively, the “Senior Preferred Stock”), (ii) of pari passu rank
to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution
and winding up of the Company (collectively, the “Parity Stock”) or (iii) any Junior Stock having a maturity
date (or any other date requiring redemption or repayment of such shares of Junior Stock) that is prior to the date no Preferred
Shares remain outstanding. In the event of the merger or consolidation of the Company with or into another corporation, the Preferred
Shares shall maintain their relative rights, powers, designations, privileges and preferences provided for herein and no such merger
or consolidation shall result inconsistent therewith.

 

    	 

    	 

    

 

3.          Dividends.
In addition to Sections 5(a) and 11 below, from and after the first date of issuance of any Preferred Shares (the “Initial
Issuance Date”), each holder of a Preferred Share (each, a “Holder” and collectively, the “Holders”)
shall be entitled to receive dividends (“Dividends”) when and as declared by the Board, from time to time, in
its sole discretion, which Dividends shall be paid by the Company out of funds legally available therefor, payable, subject to
the conditions and other terms hereof, in cash on the Stated Value of such Preferred Share.

 

4.          Conversion.
Each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock (as defined
below) on the terms and conditions set forth in this Section 4.

 

(a)          Holder’s
Conversion Right. Subject to the provisions of Section 4(e) and 4(f), at any time or times on or after the Initial Issuance
Date, each Holder shall be entitled to convert any whole number of Preferred Shares into validly issued, fully paid and non-assessable
shares of Common Stock in accordance with Section 4(c) at the Conversion Rate (as defined below).

 

(b)          Conversion
Rate. The number of validly issued, fully paid and non-assessable shares of Common Stock issuable upon conversion of each Preferred
Share pursuant to Section 4(a) shall be determined according to the following formula (the “Conversion Rate”):

 

Base Amount

Conversion Price

 

No fractional
shares of Common Stock are to be issued upon the conversion of any Preferred Shares. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole
share.

 

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

 

(i)         Holder’s
Conversion. To convert a Preferred Share into validly issued, fully paid and non-assessable shares of Common Stock on any date
(a “Conversion Date”), a Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior
to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion of the share(s) of Preferred Shares subject
to such conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company.
If required by Section 4(c)(vi), within five (5) Trading Days following a conversion of any such Preferred Shares as aforesaid,
such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Company the original certificates
representing the share(s) of Preferred Shares (the “Preferred Share Certificates”) so converted as aforesaid.

 

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(ii)         Company’s
Response. On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit II, of receipt
of such Conversion Notice to such Holder and the Transfer Agent, which confirmation shall constitute an instruction to the Transfer
Agent to process such Conversion Notice in accordance with the terms herein. On or before the second (2nd) Trading Day
following the date of receipt by the Company of such Conversion Notice, the Company shall (1) provided that the Transfer Agent
is participating in DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which
such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue
and deliver (via reputable overnight courier) to the address as specified in such Conversion Notice, a certificate, registered
in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. If
the number of Preferred Shares represented by the Preferred Share Certificate(s) submitted for conversion pursuant to Section 4(c)(vi)
is greater than the number of Preferred Shares being converted, then the Company shall if requested by such Holder, as soon as
practicable and in no event later than three (3) Trading Days after receipt of the Preferred Share Certificate(s) and at its own
expense, issue and deliver to such Holder (or its designee) a new Preferred Share Certificate representing the number of Preferred
Shares not converted.

 

(iii)         Record
Holder. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

 

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(iv)         Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to a Holder within three (3)
Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise) (the “Share
Delivery Deadline”), a certificate for the number of shares of Common Stock to which such Holder is entitled and register
such shares of Common Stock on the Company’s share register or to credit such Holder’s or its designee’s balance
account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion
of any Preferred Shares (as the case may be) (a “Conversion Failure”), then, in addition to all other remedies
available to such Holder, such Holder, upon written notice to the Company, (x) may void its Conversion Notice with respect to,
and retain or have returned (as the case may be) any Preferred Shares that have not been converted pursuant to such Holder’s
Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any
payments which have accrued prior to the date of such notice pursuant to the terms of this Certificate of Designations or otherwise
and (y) the Company shall pay in cash to such Holder on each day after such third (3rd) Trading Day that the issuance
of such shares of Common Stock is not timely effected an amount equal to 1.5% of the product of (A) the aggregate number of shares
of Common Stock not issued to such Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price
of the Common Stock on the Trading Day immediately preceding the last possible date on which the Company could have issued such
shares of Common Stock to the Holder without violating Section 4(c). In addition to the foregoing, if within three (3) Trading
Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise), the Company shall fail to issue
and deliver a certificate to such Holder and register such shares of Common Stock on the Company’s share register or credit
such Holder’s or its designee’s balance account with DTC for the number of shares of Common Stock to which such Holder
is entitled upon such Holder’s conversion hereunder (as the case may be), and if on or after such third (3rd)
Trading Day such Holder (or any other Person in respect, or on behalf, of such Holder) purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of all or any portion of the number of
shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of
Common Stock, issuable upon such conversion that such Holder so anticipated receiving from the Company, then, in addition to all
other remedies available to such Holder, the Company shall, within three (3) Business Days after such Holder’s request and
in such Holder’s discretion, either (i) pay cash to such Holder in an amount equal to such Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including,
without limitation, by any other Person in respect, or on behalf, of such Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate or credit such Holder’s balance account with
DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion hereunder (as
the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue
and deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s
balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion
hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any
Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance
and payment under this clause (ii).

 

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(v)          Pro
Rata Conversion; Disputes. In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion
Date and the Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert
from each Holder electing to have Preferred Shares converted on such date a pro rata amount of such Holder’s Preferred Shares
submitted for conversion on such date based on the number of Preferred Shares submitted for conversion on such date by such Holder
relative to the aggregate number of Preferred Shares submitted for conversion on such date. In the event of a dispute as to the
number of shares of Common Stock issuable to a Holder in connection with a conversion of Preferred Shares, the Company shall issue
to such Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 22.

 

(vi)          Book-Entry.
Notwithstanding anything to the contrary set forth in this Section 4, upon conversion of any Preferred Shares in accordance with
the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing the Preferred Shares
to the Company following conversion thereof unless (A) the full or remaining number of Preferred Shares represented by the certificate
are being converted (in which event such certificate(s) shall be delivered to the Company as contemplated by this Section 4(c)(vi))
or (B) such Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting
reissuance of Preferred Shares upon physical surrender of any Preferred Shares. Each Holder and the Company shall maintain records
showing the number of Preferred Shares so converted by such Holder and the dates of such conversions or shall use such other method,
reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of the certificate representing
the Preferred Shares upon each such conversion. In the event of any dispute or discrepancy, such records of such Company establishing
the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of
manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred Shares represented by
such certificate may be less than the number of Preferred Shares stated on the face thereof. Each certificate for Preferred Shares
shall bear the following legend:

 

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

 

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(d)          Taxes.
The Company shall pay any and all documentary, stamp, transfer (but only in respect of the registered holder thereof), issuance
and other similar taxes that may be payable with respect to the issuance and delivery of shares of Common Stock upon the conversion
of Preferred Shares.

 

(e)          Limitation
on Beneficial Ownership. Notwithstanding anything to the contrary set forth in this Certificate of Designation, at no time
may all or a portion of the Series A 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 1934 Act and the rules thereunder) more than 4.99% of all of the Common Stock outstanding at such time (the “4.99%
Beneficial Ownership Limitation”); provided, however, that upon the Holder providing the Corporation with sixty-one (61)
days’ advance notice (the “4.99% Waiver Notice”) that the Holder would like to waive this Section 4(e)
with regard to any or all shares of Common Stock issuable upon conversion of the Preferred Shares, this Section 4(e) will be of
no force or effect with regard to all or a portion of the Series A Preferred Stock referenced in the 4.99% Waiver Notice but shall
in no event waive the 9.99% Beneficial Ownership Limitation described below. Notwithstanding anything to the contrary set forth
in this Certificate of Designation, at no time may all or a portion of the Preferred Shares be converted if the number of shares
of Common Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common Stock owned by the Holder
at such time, would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the 1934 Act and
the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock outstanding at such time (the
“9.99% Beneficial Ownership Limitation” and the lower of the 9.99% Beneficial Ownership Limitation and the 4.99%
Beneficial Ownership Limitation then in effect, the “Maximum Percentage”)). By written notice to the Company,
a holder of Preferred Shares may from time to time decrease the Maximum Percentage to any other percentage specified in such notice.
For purposes hereof, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, 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
Company or (3) any other notice by the Company setting forth the number of shares of Common Stock outstanding. For any reason at
any time, upon the written or oral request of a holder of Preferred Shares, the Company shall within three (3) Business Days confirm
orally and in writing to such holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
the Preferred Shares, 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 Company’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 4(e) 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.

 

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(f)          Issuance
Restrictions. (i) If the Company has not obtained the approval of its shareholders in accordance with NASDAQ Listing Rule 5635(d),
then the Company may not issue upon conversion of the Preferred Shares a number of shares of Common Stock, which, when aggregated
with any shares of Common Stock (i) issued pursuant to the Subscription Agreement, (ii) underlying the Preferred Shares issued
pursuant to the Subscription Agreement; (iii) issuable upon prior exercise of any Warrants issued pursuant to the Subscription
Agreement and (iv) issuable pursuant to any warrants issued to any registered broker-dealer as a fee in connection with the issuance
of Securities pursuant to the Subscription Agreement, would exceed 19.99% of the shares of Common Stock issued and outstanding
as of the Subscription Date, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the date of the Subscription Agreement (such number of shares,
the “Issuable Maximum”). The Holder and the holders of the other Preferred Shares issued pursuant to the Subscription
Agreement shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the Holder’s
original Aggregate Purchase Price by (y) the aggregate original Aggregate Purchase Price of all holders pursuant to the Subscription
Agreement. In addition, the Holder may allocate its pro-rata portion of the Issuable Maximum among Preferred Shares held by it
in its sole discretion. Such portion shall be adjusted upward ratably in the event a Holder no longer holds any Preferred Shares
and the amount of shares issued to such Holder pursuant to its Preferred Shares was less than such Holder’s pro-rata share
of the Issuable Maximum. For avoidance of doubt, unless and until any required Shareholder Approval is obtained and effective,
warrants issued to any registered broker-dealer as a fee in connection with the Securities issued pursuant to the Subscription
Agreement as described in clause (iii) above shall provide that such warrants shall not be allocated any portion of the Issuable
Maximum and shall be unexercisable unless and until such Shareholder Approval is obtained and effective.

 

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

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had
held the number of shares of Common Stock acquirable upon complete conversion of all the Preferred Shares (without taking into
account any limitations or restrictions on the convertibility of the Preferred Shares) held by such Holder immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that such Holder’s right to participate in any such Purchase Right would result in such Holder exceeding
the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent
shall be held in abeyance for such Holder until such time, if ever, as its right thereto would not result in such Holder exceeding
the Maximum Percentage).

 

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(b)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that each Holder will thereafter have the right to receive upon a conversion of all the Preferred Shares held by such
Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which
such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such
Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility
of the Preferred Shares contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise
receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection
with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Preferred
Shares held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares
of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provisions of this Section
5(b) shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on
the conversion of the Preferred Shares contained in this Certificate of Designations.

 

6.          Rights
Upon Fundamental Transactions.

 

(a)          Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing
all of the obligations of the Company under this Certificate of Designations and the other Transaction Documents in accordance
with the provisions of this Section 6 pursuant to written agreements in form and substance satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Preferred
Shares in exchange for such Preferred Shares a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Certificate of Designations, including, without limitation, having a stated value and dividend
rate equal to the stated value and dividend rate of the Preferred Shares held by the Holders and having similar ranking to the
Preferred Shares, and reasonably satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent
Entity) is a publicly traded corporation whose shares of common stock are quoted on or listed for trading on an Eligible Market.
Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from
and after the date of such Fundamental Transaction, the provisions of this Certificate of Designations and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Certificate of Designations and the other
Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein and therein. In addition
to the foregoing, upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to each Holder confirmation
that there shall be issued upon conversion of the Preferred Shares at any time after the consummation of such Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under
Sections 5 and 11, which shall continue to be receivable thereafter)) issuable upon the conversion of the Preferred Shares prior
to such Fundamental Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor Entity (including
its Parent Entity) which each Holder would have been entitled to receive upon the happening of such Fundamental Transaction had
all the Preferred Shares held by each Holder been converted immediately prior to such Fundamental Transaction (without regard to
any limitations on the conversion of the Preferred Shares contained in this Certificate of Designations), as adjusted in accordance
with the provisions of this Certificate of Designations. The provisions of this Section 6 shall apply similarly and equally to
successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion of the Preferred Shares.

 

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7.          Rights
Upon Issuance of Other Securities.

 

(a)          Adjustment
of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues or
sells, or in accordance with this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued
or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less
than a price equal to the Conversion Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such
Conversion Price then in effect is referred to as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then, immediately after such Dilutive Issuance the Conversion Price then in effect shall be reduced to the
New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price
and the New Issuance Price under this Section 7(a)), the following shall be applicable:

 

(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 7(a)(i), the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus
(2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the
actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual
issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

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(ii)          Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For purposes of this Section 7(a)(ii), the
“lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is
to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.

 

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(iii)          Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have
been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or
sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the
Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such
adjustment would result in an increase of the Conversion Price then in effect.

 

(iv)          Calculation
of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or sale or deemed
issuance or sale of any other securities of the Company (including, without limitation, any other Option or Convertible Security),
together comprising one integrated transaction, (x) such Option or Convertible Security (as applicable) will be deemed to have
been issued for consideration equal to the fair market value thereof as determined in good faith by the Company’s Board of
Directors and (y) the other securities issued or sold or deemed to have been issued or sold in such integrated transaction shall
be deemed to have been issued for consideration equal to the difference of (I) the aggregate consideration received by the Company
minus (II) the aggregate fair market value of all such Options and/or Convertible Securities (as applicable) so issued. If any
shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor will be deemed to be the net amount of consideration received by the Company therefor. If any shares
of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average
of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of
Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration other than cash or publicly traded securities will
be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration
will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be final
and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

 

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

 

(b)          Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Sections 5 and 11, if
the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision of Sections 5 and 11, if the Company
at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of
its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective immediately
after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b) occurs
during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted
appropriately to reflect such event.

 

(c)          Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect any Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting
of stock appreciation rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine
and implement an appropriate adjustment in the Conversion Price so as to protect the rights of such Holder, provided that no such
adjustment pursuant to this Section 7(c) will increase the Conversion Price as otherwise determined pursuant to this Section 7,
provided further that if such Holder does not accept such adjustments as appropriately protecting its interests hereunder against
such dilution, then the Board and such Holder shall agree, in good faith, upon an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall
be borne by the Company.

 

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(d)          Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest one-hundred thousandth of a cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue
or sale of Common Stock.

 

8.          Authorized
Shares.

 

(a)          Reservation.
The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock equal to
125% of the Conversion Rate with respect to the Base Amount of each Preferred Share as of the Initial Issuance Date (assuming for
purposes hereof, that all the Preferred Shares issuable pursuant to the Subscription Agreement have been issued, such Preferred
Shares are convertible at the Conversion Price and without taking into account any limitations on the conversion of such Preferred
Shares set forth in herein) issuable pursuant to the terms of this Certificate of Designations from the Initial Issuance Date through
the second anniversary of the Initial Issuance Date assuming (assuming for purposes hereof, that all the Preferred Shares issuable
pursuant to the Subscription Agreement have been issued and without taking into account any limitations on the issuance of securities
set forth herein). So long as any of the Preferred Shares are outstanding, the Company shall take all action necessary to reserve
and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion
of the Preferred Shares, as of any given date, 125% of the number of shares of Common Stock as shall from time to time be necessary
to effect the conversion of all of the Preferred Shares issued or issuable pursuant to the Subscription Agreement assuming for
purposes hereof, that all the Preferred Shares issuable pursuant to the Subscription Agreement have been issued and without taking
into account any limitations on the issuance of securities set forth herein), provided that at no time shall the number of shares
of Common Stock so available be less than the number of shares required to be reserved by the previous sentence (without regard
to any limitations on conversions contained in this Certificate of Designations) (the “Required Amount”). The
initial number of shares of Common Stock reserved for conversions of the Preferred Shares and each increase in the number of shares
so reserved shall be allocated pro rata among the Holders based on the number of Preferred Shares held by each Holder on the Initial
Issuance Date or increase in the number of reserved shares (as the case may be) (the “Authorized Share Allocation”).
In the event a Holder shall sell or otherwise transfer any of such Holder’s Preferred Shares, each transferee shall be allocated
a pro rata portion of such Holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any
Person which ceases to hold any Preferred Shares shall be allocated to the remaining Holders of Preferred Shares, pro rata based
on the number of Preferred Shares then held by such Holders.

 

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(b)          Insufficient
Authorized Shares. If, notwithstanding Section 8(a) and not in limitation thereof, at any time while any of the Preferred Shares
remain outstanding the Company does not have a sufficient number of authorized and unissued shares of Common Stock to satisfy its
obligation to have available for issuance upon conversion of the Preferred Shares at least a number of shares of Common Stock equal
to the Required Amount (an “Authorized Share Failure”), then the Company shall promptly take all action necessary
to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve and have
available the Required Amount for all of the Preferred Shares then outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety
(90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders or conduct
a consent solicitation for the approval of an increase in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its Board to recommend to the stockholders that they
approve such proposal. Nothing contained in this Section 8 shall limit any obligations of the Company under any provision of the
Subscription Agreement. In the event that the Company is prohibited from issuing shares of Common Stock upon a conversion of any
Preferred Share due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but
unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”),
in lieu of delivering such Authorization Failure Shares to such Holder of such Preferred Shares, the Company shall pay cash in
exchange for the cancellation of such Preferred Shares convertible into such Authorized Failure Shares at a price equal to the
sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the Closing Sale Price on the Trading Day immediately
preceding the date such Holder delivers the applicable Conversion Notice with respect to such Authorization Failure Shares to the
Company and (ii) to the extent such Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by such Holder of Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses,
if any, of such Holder incurred in connection therewith.

 

9.          Voting
Rights. Except as otherwise expressly required by law, each holder of Preferred Shares shall be entitled to vote on all matters
submitted to shareholders of the Company and shall be entitled to the number of votes for each Preferred Share 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 Preferred
Shares are convertible into (voting as a class with Common Stock) based on the Conversion Price in effect on such date, but in
no event shall the Conversion Price used for purposes of calculating voting rights pursuant to this Section 9 be less than $0.59
(the “Voting Floor”), representing the consolidated closing bid price of the Common Stock on The NASDAQ Stock
Market LLC on the date prior to the execution of the Subscription Agreement, but not in excess of the conversion limitations set
forth in Section 4(e) and/or 4(f) herein. The Voting Floor shall only be removed in accordance with NASDAQ Listing Rules. 
Except as otherwise required by law, the holders of Preferred Shares shall vote together with the holders of Common Stock on all
matters and shall not vote as a separate class. For the avoidance of doubt, the Voting Floor shall not prohibit any adjustment
to the Conversion Price below $0.59 with respect to any other section of this Certificate of Designations or any other rights of
the Holder hereunder.

 

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10.         Liquidation,
Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets
of the Company, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation
Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, an amount per Preferred Share
equal to the greater of (A) the Base Amount thereof on the date of such payment and (B) the amount per share such Holder would
receive if such Holder converted such Preferred Shares into Common Stock immediately prior to the date of such payment, provided
that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock,
then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of
Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their
respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all
holders of Preferred Shares and all holders of shares of Parity Stock. To the extent necessary, the Company shall cause such actions
to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation
Event to be distributed to the Holders in accordance with this Section 10. All the preferential amounts to be paid to the Holders
under this Section 10 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for,
or the distribution of any Liquidation Funds of the Company to the holders of shares of Junior Stock in connection with a Liquidation
Event as to which this Section 10 applies.

 

11.         Participation.
In addition to any adjustments pursuant to Section 7(b), the Holders shall, as holders of Preferred Shares, be entitled to receive
such dividends paid and distributions made to the holders of shares of Common Stock to the same extent as if such Holders had converted
each Preferred Share held by each of them into shares of Common Stock (without regard to any limitations on conversion herein or
elsewhere) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the
preceding sentence shall be made concurrently with the dividend or distribution to the holders of shares of Common Stock (provided,
however, to the extent that a Holder’s right to participate in any such dividend or distribution would result in such Holder
exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such dividend or distribution to such
extent (or the beneficial ownership of any such shares of Common Stock as a result of such dividend or distribution to such extent)
and such dividend or distribution to such extent shall be held in abeyance for the benefit of such Holder until such time, if ever,
as its right thereto would not result in such Holder exceeding the Maximum Percentage).

 

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12.        Vote
to Change the Terms of or Issue Preferred Shares. In addition to any other rights provided by law, except where the vote or
written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation,
without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting
of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add
any provision to, its Certificate of Incorporation or bylaws, or file any certificate of designations or articles of amendment
of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights,
privileges or powers, or restrictions provided for the benefit, of the Preferred Shares, regardless of whether any such action
shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease
(other than by conversion) the authorized number of Preferred Shares; (c) without limiting any provision of Section 2, create or
authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity with
the Preferred Shares with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up of the
Company; (d) purchase, repurchase or redeem any shares of capital stock of the Company junior in rank to the Preferred Shares (other
than pursuant to equity incentive agreements (that have in good faith been approved by the Board) with employees giving the Company
the right to repurchase shares upon the termination of services); (e) without limiting any provision of Section 2, pay dividends
or make any other distribution on any shares of any capital stock of the Company junior in rank to the Preferred Shares; (f) issue
any Preferred Shares other than pursuant to the Subscription Agreement; or (g) without limiting any provision of Section 16, whether
or not prohibited by the terms of the Preferred Shares, circumvent a right of the Preferred Shares.

 

13.        Covenants.

 

(a)          Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than Permitted Indebtedness).

 

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

 

(c)          Limitations
on Issuances and Financings. For as long as any Preferred Shares remain outstanding, the Company shall  not issue
any Common Stock or Convertible Securities (or modify any of the foregoing which may be outstanding) to any person or entity or
incur any financing debt, other than with regard to Excluded Securities, without the express written consent of the Lead Investor
(as defined in the Subscription Agreement).

 

14.        Lost
or Stolen Certificates. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificates representing Preferred Shares (as to which a written certification and the indemnification
contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of an indemnification undertaking
by the applicable Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation
of the certificate(s), the Company shall execute and deliver new certificate(s) of like tenor and date.

 

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15.         Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations
shall be cumulative and in addition to all other remedies available under this Certificate of Designations and any of the other
Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no
remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy. Nothing herein shall
limit any Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms
of this Certificate of Designations. The Company covenants to each Holder that there shall be no characterization concerning this
instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion
and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may
be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, each Holder shall be entitled,
in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without
the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information
and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Company’s compliance
with the terms and conditions of this Certificate of Designations.

 

16.         Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of
Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all
action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision
of this Certificate of Designations, the Company (i) shall not increase the par value of any shares of Common Stock receivable
upon the conversion of any Preferred Shares above the Conversion Price then in effect, (ii) shall take all such actions as
may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon the conversion of Preferred Shares and (iii) shall, so long as any Preferred Shares are outstanding, take all
action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose
of effecting the conversion of the Preferred Shares, the maximum number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of the Preferred Shares then outstanding (without regard to any limitations on conversion contained
herein).

 

17.         Failure
or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted
by the Company and all Holders and shall not be construed against any Person as the drafter hereof.

 

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18.        Notices.
The Company shall provide each Holder of Preferred Shares with prompt written notice of all actions taken pursuant to the terms
of this Certificate of Designations, including in reasonable detail a description of such action and the reason therefor. Whenever
notice is required to be given under this Certificate of Designations, unless otherwise provided herein, such notice must be in
writing and shall be given in accordance with the Subscription Agreement. Without limiting the generality of the foregoing, the
Company shall give written notice to each Holder (i) promptly following any adjustment of the Conversion Price, setting forth in
reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on
which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B)
with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to all holders of shares of Common Stock as a class or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided, in each case, that such information shall be made known to the public
prior to, or simultaneously with, such notice being provided to any Holder.

 

19.        Transfer
of Preferred Shares. Subject to the restrictions set forth in Subscription Agreement, a Holder may transfer some or all of
its Preferred Shares without the consent of the Company.

 

20.        Preferred
Shares Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company
as it may designate by notice to the Holders), a register for the Preferred Shares, in which the Company shall record the name,
address and facsimile number of the Persons in whose name the Preferred Shares have been issued, as well as the name and address
of each transferee. The Company may treat the Person in whose name any Preferred Shares is registered on the register as the owner
and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made
transfers.

 

21.        Stockholder
Matters; Amendment.

 

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

 

(b)          Amendment.
This Certificate of Designations or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called
for such purpose, or written consent without a meeting in accordance with the DGCL, of the Required Holders, voting separate as
a single class, and with such other stockholder approval, if any, as may then be required pursuant to the DGCL and the Certificate
of Incorporation.

 

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22.         Dispute
Resolution.

 

(a)          Disputes
Over Closing Bid Price, Closing Sale Price, Conversion Price, VWAP or Fair Market Value.

 

(i) In the
case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, a VWAP or fair market value (as the
case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or such
applicable Holder (as the case may be) shall submit the dispute via facsimile (I) within two (2) Business Days after delivery of
the applicable notice giving rise to such dispute to the Company or such Holder (as the case may be) or (II) if no notice gave
rise to such dispute, at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and
the Company are unable to resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price,
such VWAP or such fair market value (as the case may be) by 5:00 p.m. (New York time) on the third (3rd) Business Day
following such delivery by the Company or such Holder (as the case may be) of such dispute to the Company or such Holder (as the
case may be), then such Holder shall select an independent, reputable investment bank to resolve such dispute.

 

(ii) Such
Holder and the Company shall each deliver to such investment bank (x) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 22(a) and (y) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which such Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (x) and (y) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either such Holder or the Company fails to so deliver all of
the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required
Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation
or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based
solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline).
Unless otherwise agreed to in writing by both the Company and such Holder or otherwise requested by such investment bank, neither
the Company nor such Holder shall be entitled to deliver or submit any written documentation or other support to such investment
bank in connection with such dispute (other than the Required Dispute Documentation).

 

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

 

(b)          Disputes
Over Arithmetic Calculation of the Conversion Rate.

 

(i) In the
case of a dispute as to the arithmetic calculation of a Conversion Rate, the Company or such Holder (as the case may be) shall
submit the disputed arithmetic calculation via facsimile (i) within two (2) Business Days after delivery of the applicable notice
giving rise to such dispute to the Company or such Holder (as the case may be) or (ii) if no notice gave rise to such dispute,
at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Company are unable
to resolve such disputed arithmetic calculation of such Conversion Rate by 5:00 p.m. (New York time) on the third (3rd)
Business Day following such delivery by the Company or such Holder (as the case may be) of such disputed arithmetic calculation,
then such Holder shall select an independent, reputable accountant or accounting firm to perform such disputed arithmetic calculation.

 

(ii) Such
Holder and the Company shall each deliver to such accountant or accounting firm (as the case may be) (x) a copy of the initial
dispute submission so delivered in accordance with the first sentence of this Section 22(a) and (y) written documentation supporting
its position with respect to such disputed arithmetic calculation, in each case, no later than 5:00 p.m. (New York time) by the
fifth (5th) Business Day immediately following the date on which such Holder selected such accountant or accounting
firm (as the case may be) (the “Submission Deadline”) (the documents referred to in the immediately preceding
clauses (x) and (y) are collectively referred to herein as the “Required Documentation”) (it being understood
and agreed that if either such Holder or the Company fails to so deliver all of the Required Documentation by the Submission Deadline,
then the party who fails to so submit all of the Required Documentation shall no longer be entitled to (and hereby waives its right
to) deliver or submit any written documentation or other support to such accountant or accounting firm (as the case may be) with
respect to such disputed arithmetic calculation and such accountant or accounting firm (as the case may be) shall perform such
disputed arithmetic calculation based solely on the Required Documentation that was delivered to such accountant or accounting
firm (as the case may be) prior to the Submission Deadline). Unless otherwise agreed to in writing by both the Company and such
Holder or otherwise requested by such accountant or accounting firm (as the case may be), neither the Company nor such Holder shall
be entitled to deliver or submit any written documentation or other support to such accountant or accounting firm (as the case
may be) in connection with such disputed arithmetic calculation of the Conversion Rate (other than the Required Documentation).

 

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(iii) The
Company and such Holder shall cause such accountant or accounting firm (as the case may be) to perform such disputed arithmetic
calculation and notify the Company and such Holder of the results no later than ten (10) Business Days immediately following the
Submission Deadline. The fees and expenses of such accountant or accounting firm (as the case may be) shall be borne solely by
the Company, and such accountant’s or accounting firm’s (as the case may be) arithmetic calculation shall be final
and binding upon all parties absent manifest error.

 

(c)          Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 22 constitutes an agreement to arbitrate between the Company
and such Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and Rules
(“CPLR”) and that each party shall be entitled to compel arbitration pursuant to CPLR § 7503(a) in order
to compel compliance with this Section 22, (ii) a dispute relating to a Conversion Price includes, without limitation, disputes
as to (1) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 7(a), (2) the consideration
per share at which an issuance or deemed issuance of Common Stock occurred, (3) whether any issuance or sale or deemed issuance
or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities, (4) whether an agreement, instrument,
security or the like constitutes and Option or Convertible Security and (5) whether a Dilutive Issuance occurred, (iii) the terms
of this Certificate of Designations and each other applicable Transaction Document shall serve as the basis for the selected investment
bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized)
to make all findings, determinations and the like that such investment bank determines are required to be made by such investment
bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings,
determinations and the like to the terms of this Certificate of Designations and any other applicable Transaction Documents, (iv)
the terms of this Certificate of Designations and each other applicable Transaction Document shall serve as the basis for the selected
accountant’s or accounting firm’s performance of the applicable arithmetic calculation, (v) for clarification purposes
and without implication that the contrary would otherwise be true, disputes relating to matters described in Section 22(a) shall
be governed by Section 22(a) and not by Section 22(b), (vi) such Holder (and only such Holder), in its sole discretion, shall have
the right to submit any dispute described in this Section 22 to any state or federal court sitting in The City of New York, Borough
of Manhattan in lieu of utilizing the procedures set forth in this Section 22 and (vii) nothing in this Section 22 shall limit
such Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any
matters described in Section 22(a) or Section 22(b)).

 

    	21

    	 

    

 

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

 

(a)          “1934
Act” means the Securities Exchange Act of 1934, as amended.

 

(b)          “Affiliate”
as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling”, “controlled by” and “under common control with”), as applied
to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or by contract or otherwise. For purposes of this definition,
a Person shall be deemed to be “controlled by” a Person if such latter Person possesses, directly or indirectly,
power to vote 10% or more of the securities having ordinary voting power for the election of directors of such former Person.

 

(c)          “Approved
Stock Plan” means any benefit or incentive plan which has been approved by the board of directors of the Company prior
to or subsequent to the date hereof pursuant to which shares of Common Stock and options or equivalent Common Stock linked interests
may be issued to any employee, officer, director or consultant for services provided to the Company.

 

(d)          “Base
Amount” means, with respect to each Preferred Share, as of the applicable date of determination, the sum of (1) the Stated
Value thereof, plus (2) the Unpaid Dividend Amount thereon as of such date of determination.

 

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

 

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

 

(g)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by
the Company and the applicable Holder. If the Company and such Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 22. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

    	22

    	 

    

 

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

 

(i)          “Conversion
Price” means, with respect to each Preferred Share, as of any Conversion Date or other applicable date of determination,
$0.68, subject to adjustment as provided herein.

 

(j)          
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder
thereof to acquire, any shares of Common Stock.

 

(k)          “Eligible
Market” means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market, the
NASDAQ Capital Market, the OTCBB, the OTCQX, the OTCQB or the Principal Market (or any successor thereto).

 

(l)          “Excluded
Securities” means any (i) shares of Common Stock or options to purchase Common Stock issued to directors, officers, employees
or consultants of the Company pursuant to any Approved Stock Plan adopted on or following the Initial Issuance Date, provided that
(A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after the Initial
Issuance Date pursuant to this clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding
at the time of such issuance and (B) the exercise price of any such options is not lowered after issuance by subsequent amendment
thereof, none of such options are amended subsequent to issuance to increase the number of shares issuable thereunder and none
of the terms or conditions of any such options are subsequent to issuance otherwise materially changed in any manner that adversely
affects any of the Holders; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities or contractual
agreements (other than options to purchase Common Stock or other equity incentive awards issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion price of any such Convertible
Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) is not lowered by subsequent amendment, none of such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are subsequently amended to increase the
number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than options
to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially
changed in any manner that adversely affects any of the Holders; and (iii) the shares of Common Stock issuable upon conversion
of the Preferred Shares and Warrants.

 

    	23

    	 

    

 

(m)          “Fundamental
Transaction” “ means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more
related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving
corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company
(not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination),
or (5) reorganize, recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these
terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is
or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50%
of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

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

 

(o)          “Liquidation
Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution
or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially all of the assets of the
business of the Company and its Subsidiaries, taken as a whole.

 

    	24

    	 

    

 

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

 

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

 

(r)          
“Permitted Indebtedness” means Indebtedness described in Schedule 4(o) of the Subscription Agreement as
in effect as of the Initial Issuance Date; provided, that the principal amount of such Indebtedness is not increased,
the terms of such Indebtedness are not modified to impose more burdensome terms upon the Company or any of its Subsidiaries and
the terms of such Indebtedness are not materially changed in any manner that adversely affects any Holder.

 

(s)          “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company’s business,
not interfering in any material respect with the business of the Company and its Subsidiaries taken as a whole and (v) Liens in
favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the
importation of goods.

 

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

 

(u)          
“Principal Market” means The NASDAQ Capital Market.

 

(v)         
“SEC” means the Securities and Exchange Commission or the successor thereto.

 

(w)          “Securities”
means, collectively, the Preferred Shares and the shares of Common Stock issuable upon conversion of (or otherwise in accordance
with) the Preferred Shares.

 

(x)          “Stated
Value” shall mean $0.68 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations,
reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to
the Preferred Shares.

 

    	25

    	 

    

 

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

 

(z)          “Subscription
Date” means the Closing Date (as defined in the Subscription Agreement).

 

(aa)         “Subsidiaries”
shall have the meaning as set forth in the Subscription Agreement.

 

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

 

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

 

(dd)         “Transaction
Documents” shall have the meaning ascribed to it in the Subscription Agreement.

 

(bb)         
“Unpaid Dividend Amount” means, as of the applicable date of determination, with respect to each Preferred Share,
all accrued and unpaid Dividends on such Preferred Share.

 

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

 

    	26

    	 

    

 

(gg)         “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its “HP” function set to “weighted average” or, if
the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such
hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security
as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value
as mutually determined by the Company and such Holder. If the Company and such Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved in accordance with the procedures in Section 22. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.

 

24.         Disclosure.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall simultaneously with any such receipt or delivery publicly
disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall
indicate to each Holder contemporaneously with delivery of such notice, and in the absence of any such indication, each Holder
shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating
to the Company or its Subsidiaries. Nothing contained in this Section 24 shall limit any obligations of the Company, or any rights
of any Holder, under the Subscription Agreement.

 

* * * * *

 

    	27

    	 

    

 

IN WITNESS
WHEREOF, the Corporation has caused this Certificate of Designations of 0% Series A Convertible Preferred Stock of Majesco
Entertainment Company to be signed by its Chief Executive Officer on this 17th day of December, 2014.

 

	 	MAJESCO ENTERTAINMENT COMPANY  
	 	 	 	 
	 	By:  	/s/ Jesse Sutton  
	 	 	Name:  	Jesse Sutton  
	 	 	Title:  	Chief Executive Officer  

 

    	28

    	 

    

 

EXHIBIT I

 

MAJESCO ENTERTAINMENT COMPANY

CONVERSION NOTICE

 

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

 

Date of Conversion:_________________________________________________________________________

 

Number of Preferred Shares to be converted:______________________________________________________

 

Share certificate no(s). of Preferred Shares
to be converted:__________________________________________

 

Tax ID Number (If applicable): ________________________________________________________________

 

Conversion Price:____________________________________________________________

 

Number of shares of Common Stock to be
issued:__________________________________________________

 

Please issue the shares of Common Stock
into which the Preferred Shares are being converted in the following name and to the following address:

 

Issue to:___________________________________________

               ___________________________________________

 

Address: _________________________________________

 

Telephone Number: ________________________________

 

Facsimile Number:____________________________________

 

Holder:_____________________________________________

 

By:______________________________________

 

Title:_____________________________________

 

Dated:____________________________________

 

Account Number (if electronic book entry
transfer):________________________________________________

 

Transaction Code Number (if electronic
book entry transfer):_________________________________________

 

    	29

    	 

    

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Conversion Notice and hereby directs __________________ to issue the above indicated number of shares of Common
Stock in accordance with the Irrevocable Transfer Agent Instructions dated __________, 2014 from the Company and acknowledged and
agreed to by _______________.

 

	 	MAJESCO ENTERTAINMENT COMPANY
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:EXHIBIT
10.1

 

SUBSCRIPTION
AGREEMENT

 

This Subscription Agreement
(this “Agreement”) is being delivered to the purchaser identified on the signature page to this Agreement (the
“Subscriber”) in connection with its investment in the securities of Majesco Entertainment Company, a Delaware
corporation (the “Company”). The Company is conducting a private placement (the “Offering”)
of Six Million Dollars ($6,000,000) of units (the “Units”) at a purchase price of $0.68 per Unit (the “Purchase
Price”) with each Unit consisting of (i) one share (the “Shares”) of the Company’s Series A
Convertible Preferred Stock, par value $0.001 per share, which is convertible into shares of the Company’s common stock $0.001
par value per share (the “Common Stock”), with such rights and designations as set forth in the form of Certificate
of Designations, Preferences and Rights of the 0% Series A Convertible Preferred Stock, attached hereto as Exhibit A, (the
“Series A Certificate of Designation”) and (ii) a five year warrant, in the form attached hereto as Exhibit
B (the “Warrant”) to purchase one (1) share of Common Stock (the “Warrant Shares”) at
an exercise price of $0.68 per share. For purposes of this Agreement, the term “Securities” shall refer to the
Shares, the Common Stock into which the Shares are convertible, the Warrants and the Warrant Shares.

 

IMPORTANT INVESTOR NOTICES

 

NO OFFERING LITERATURE OR ADVERTISEMENT
IN ANY FORM MAY BE RELIED UPON IN THE OFFERING OF THESE SECURITIES EXCEPT FOR THIS SUBSCRIPTION AGREEMENT AND ANY SUPPLEMENTS HERETO,
AND NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS EXCEPT THOSE CONTAINED HEREIN.

 

UNTIL SUCH TIME AS A FORM 8-K IS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION DISCLOSING THE TRANSACTIONS CONTEMPLATED HEREBY, THIS AGREEMENT IS CONFIDENTIAL AND
THE CONTENTS HEREOF MAY NOT BE REPRODUCED, DISTRIBUTED OR DIVULGED BY OR TO ANY PERSONS OTHER THAN THE RECIPIENT OR ITS REPRESENTATIVE,
ACCOUNTANT OR LEGAL COUNSEL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT,
ACKNOWLEDGES AND AGREES TO THE FOREGOING RESTRICTIONS.

 

THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER
OR SOLICITATION OF AN OFFER TO ANY PERSON OR IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION IS UNLAWFUL OR NOT AUTHORIZED.
EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT AGREES TO RETURN IT AND ALL RELATED DOCUMENTS IF SUCH PERSON DOES NOT PURCHASE
ANY OF THE SECURITIES DESCRIBED HEREIN.

 

NO REPRESENTATIONS, WARRANTIES OR ASSURANCES
OF ANY KIND ARE MADE OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN, IF ANY, THAT MAY ACCRUE TO AN INVESTOR IN THE COMPANY.

 

THE COMPANY RESERVES THE RIGHT, IN ITS
SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART FOR ANY REASON OR FOR NO REASON PRIOR TO ITS COUNTER-EXECUTION
OF ANY SUBSCRIPTION AGREEMENT DELIVERED TO IT BY ANY POTENTIAL SUBSCRIBER. THE COMPANY IS NOT OBLIGATED TO NOTIFY RECIPIENTS OF
THIS AGREEMENT WHETHER ALL OF THE SECURITIES OFFERED HEREBY HAVE BEEN SOLD.

 

FOR RESIDENTS OF ALL STATES

 

THIS OFFERING IS BEING MADE SOLELY TO “ACCREDITED
INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND WILL BE OFFERED
AND SOLD IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(a)(2) THEREUNDER AND REGULATION D (RULE 506) OF
THE SECURITIES ACT AND CORRESPONDING PROVISIONS OF STATE SECURITIES LAWS.

 

    	 

    	 

    

 

THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY
OR ADEQUACY OF THIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE
THE CONTENTS OF THIS AGREEMENT AS INVESTMENT, LEGAL, BUSINESS, OR TAX ADVICE. EACH INVESTOR SHOULD CONTACT HIS, HER OR ITS OWN
ADVISORS REGARDING THE APPROPRIATENESS OF THIS INVESTMENT AND THE TAX CONSEQUENCES THEREOF, WHICH MAY DIFFER DEPENDING ON AN INVESTOR’S
PARTICULAR FINANCIAL SITUATION. IN NO EVENT SHOULD THIS AGREEMENT BE DEEMED OR CONSIDERED TO BE TAX ADVICE PROVIDED BY THE COMPANY.

 

FOR FLORIDA RESIDENTS ONLY

 

THE SECURITIES REFERRED TO HEREIN WILL
BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER § 517.061 OF THE FLORIDA SECURITIES ACT. THE SECURITIES
HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF
VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH SUBSCRIBER TO THE COMPANY, AN
AGENT OF THE COMPANY, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
SUBSCRIBER, WHICHEVER OCCURS LATER.

 

1.           SUBSCRIPTION
AND PURCHASE PRICE

 

(a)          Subscription.
Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees to purchase the number
of Units indicated on page 24 hereof on the terms and conditions described herein.

 

(b)          Purchase
of Units. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in exchange for
the Units shall be set at $0.68 per Unit, for an aggregate purchase price as set forth on page 24 hereof (the “Aggregate
Purchase Price”), which shall be equivalent to $0.68 per Share, exclusive of the value of the Warrants. The Subscriber’s
delivery of this Agreement to the Company shall be accompanied by payment for the Units subscribed for hereunder, payable in United
States Dollars, by wire transfer of immediately available funds delivered to Signature Bank, as escrow agent (the “Escrow
Agent”) pursuant to the terms of the escrow agreement(the “Escrow Agreement”) in accordance with the
wire instructions set forth on Exhibit C attached hereto. Additionally, the Company shall deposit certificates evidencing
the Shares and Warrants so subscribed for with the Company’s corporate secretary, as escrow agent for the Securities (the
“Securities Escrow Agent”). The Subscriber understands and agrees that, subject to Section 2 and applicable
laws, by executing this Agreement, it is entering into a binding agreement. Notwithstanding anything to the contrary herein, the
Securities shall be held by the Securities Escrow Agent and the Aggregate Purchase Price shall be held by the Escrow Agent in accordance
with Section 5(k) herein and the terms of the Escrow Agreement. The Company and the Subscriber acknowledge that the Offering, the
issuance of the Securities and the Listing of Additional Shares Application covering the listing of the Common Stock underlying
the Shares and the Warrant Shares shall be subject to certain required approvals by The NASDAQ Capital Market (“NASDAQ”),
including approval of the Offering, the issuance of the Securities and any potential change of control resulting from the consummation
of the Offering (if required), by the Company’s stockholders, if required (such approval, “NASDAQ Approval”).
The Company agrees that it will inform the Subscriber of any requirements of NASDAQ for NASDAQ Approval of the Offering and the
Subscriber shall, within twenty-four hours of such notification have the right to request a return of such Subscriber’s subscription.

 

    	- 2 -

    	 

    

 

 

2.           Acceptance,
Offering Term and Closing Procedures

 

(a)          Offering
of Securities. The Company hereby agrees to sell, and subject to full, faithful and punctual performance and discharge by the
Company of all of its duties, obligations and responsibilities as set forth in this Agreement, the Escrow Agreement, the Series
A Certificate of Designation, the Warrant and any other agreement entered into between the Subscriber and the Company relating
to this subscription (collectively, the "Transaction Documents"), the Subscriber hereby agrees to purchase the
Units pursuant to the terms and conditions set forth in this Agreement. For the avoidance of doubt, upon the occurrence of the
failure by the Company to fully, faithfully and punctually perform and discharge any of its duties, obligations and responsibilities
as set forth in any of the Transaction Documents, which shall have been performed or otherwise discharged prior to the Closing
(as defined below), the Subscriber may, on or prior to the Closing, at its sole and absolute discretion, elect not to purchase
the Units and, to the extent the Subscriber has delivered all or any part of the Aggregate Purchase Price to the Company or an
escrow account at the direction of the Company, receive the full and immediate refund of the Aggregate Purchase Price. In the event
the Closing does not take place because of (i) the election not to purchase the Units by the Subscriber or (ii) the failure to
effectuate the Closing on or prior to December 31, 2014 (unless extended by agreement of the parties hereto) for any reason or
no reason, this Agreement and any other Transaction Documents shall thereafter be terminated and have no force or effect, and the
parties shall take all steps, including the execution of instructions to the Company, to ensure that the Aggregate Purchase Price
shall promptly be returned or caused to be returned to the Subscriber without interest thereon or deduction therefrom.

 

(b)          Closing.
The closing of the purchase and sale of the Units hereunder (the “Closing”) shall take place at such time and
place as determined by the parties hereto. The Closing shall take place on a Business Day promptly following the satisfaction of
the conditions set forth in Section 7 below, as determined by the Company (the “Closing Date”). “Business
Day” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New York are authorized or required to be closed. The Shares and the
Warrants purchased by the Subscriber will be delivered by the Company promptly following the Closing Date of the Offering.

 

(c)          Extraordinary
Events Regarding Common Stock. In the event that prior to the Closing the Company shall (a) issue additional shares of
Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in
each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then
Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior
to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event,
and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or events described herein. The number of Units that the
Subscriber shall thereafter be entitled to receive (including number of shares of Common Stock or Warrant Shares the Subscriber
may thereafter be entitled to receive upon conversion of the Shares or exercise of the Warrants, as the case may be) shall be adjusted
to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this
Section) be issuable on such conversion or exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise
(but for the provisions of this Section) be in effect, and (b) the denominator is the Purchase Price then in effect.

 

(d)          Certificate
as to Adjustments. In each case of any adjustment or readjustment in (i) the Shares (ii) the number of Warrant Shares issuable
upon the exercise of the Warrants, (iii) the exercise price of the Warrants and/or (iv) the conversion price or conversion ratio
of the Shares, the Company, at its expense, will promptly cause its Chief Financial Officer or other appropriate designee to compute
such adjustment or readjustment in accordance with the terms hereof and of the Series A Certificate of Designation or the Warrant,
as applicable, and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company will forthwith mail a copy of each such certificate to the Subscriber. To
the extent any such certificate contains material non-public information, the Company shall, no later than the first Business Day
after the date of delivery of such certificate to the Subscriber, include such material non-public information in a Current Report
on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”). From and after the
filing of such Form 8-K, the Company shall have disclosed all material non-public information (if any) delivered to the Subscriber
by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with
the transactions described in such certificate.

 

    	- 3 -

    	 

    

 

 

3.           THE
SUBSCRIBER’s Representations, Warranties AND cOVENANTS

 

Each Subscriber, severally
and not jointly, hereby acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:

 

(a)            The
Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized,
if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement
of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or law).

 

(b)            The
Subscriber acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) of the Securities
Act and the provisions of Regulation D promulgated thereunder (“Regulation D”). In furtherance thereof, the
Subscriber represents and warrants to the Company and its affiliates as follows:

 

(i)          The
Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in the future,
or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.

 

(ii)         The
Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to a registration statement
or sales that are exempted under the Securities Act.

 

(iii)        The
Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment purposes, and not
with a view towards, or resale in connection with, any distribution of the Securities.

 

(iv)        The
Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.

 

(v)         The
Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of a prospective investment in the Securities. If other than an individual, the Subscriber also represents
it has not been organized solely for the purpose of acquiring the Securities.

 

(vi)        The
Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, and has carefully
reviewed them and understands the information contained therein, prior to the execution of this Agreement.

 

(c)            The
Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax,
economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with,
only its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Agreement)
the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the
Company or any affiliate or sub-agent thereof.

 

    	- 4 -

    	 

    

 

 

(d)            The
Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully understands
that the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s entire investment.
Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk Factors”
in the Company’s SEC Filings (as defined below) and any additional disclosures in the nature of Risk Factors described herein.

 

(e)            The
Subscriber will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption therefrom,
and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other reasons,
the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot
be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under
the applicable securities laws of such states, or an exemption from such registration is available. In particular, the Subscriber
is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the
Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule
144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities on behalf of the
Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable
state securities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.

 

(f)            No
oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, if any,
by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with the
Offering, other than any representations of the Company contained herein, and in subscribing for the Units the Subscriber is not
relying upon any representations other than those contained herein.

 

(g)            The
Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s
net worth, and an investment in the Securities will not cause such overall commitment to become excessive.

 

(h)            The
Subscriber understands and agrees that the certificates for the Securities shall bear substantially the following legend:

 

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

 

    	- 5 -

    	 

    

 

 

(i)            Certificates
evidencing Securities shall not be required to contain the legend set forth in Section 3(h) above or any other legend (i)
while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following any
sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 (provided that the Subscriber provides the Company with reasonable
assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not include an opinion
of the Subscriber’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144), provided
that the Subscriber provides the Company with an opinion of counsel to the Subscriber, in a generally acceptable form, to the effect
that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of
the Securities Act or (v) if such legend is not required under applicable requirements of the Securities Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to
the foregoing, the Company shall no later than three (3) business days following the delivery by the Subscriber to the Company
or the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from the Subscriber as may be required above in this Section 3(i), as directed by the Subscriber,
either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program
and such Securities are shares of Common Stock issuable upon conversion of the Shares, credit the aggregate number of shares of
Common Stock to which the Subscriber shall be entitled to the Subscriber’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the Subscriber, a certificate
representing such Securities that is free from all restrictive and other legends, registered in the name of the Subscriber or its
designee. The Company shall be responsible for any transfer agent fees, fees of legal counsel to the Company or DTC fees with respect
to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.

 

(j)            Neither
the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering.
There is no government or other insurance covering any of the Securities.

 

(k)           The
Subscriber and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations and
prospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors,
if any.

 

(l)            (i)          In
making the decision to invest in the Securities the Subscriber has relied solely upon the information provided by the Company
in the Transaction Documents. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the
Securities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity
in the course of Subscriber’s consideration of an investment in the Securities other than the Transaction Documents. 

 

(ii)         The
Subscriber represents and warrants that: (i) the Subscriber was contacted regarding the sale of the Securities by the Company (or
an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii)
no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection
therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in
a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available;
or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general
advertising; or (C) observe any website or filing of the Company with the SEC in which any offering of securities by the Company
was described and as a result learned of any offering of securities by the Company.

 

(m)          The
Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or
the like relating to this Agreement or the transactions contemplated hereby.

 

(n)           The
Subscriber is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the Subscriber has relied on the advice of, or has consulted
with, only its own Advisors.

 

(o)           The Subscriber
acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Subscriber were prepared
by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements
cannot be guaranteed by the Company or its management and should not be relied upon.

 

(p)           No
oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors, if
any, in connection with the Offering that are in any way inconsistent with the information contained herein.

 

    	- 6 -

    	 

    

 

(q)          (For
ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed
of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision
to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment
decision; and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation
of the Company or any of its affiliates.

 

(r)           The
Subscriber is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited
Investor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of
$1,000,000 (excluding such person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.

 

(s)           The
Subscriber, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the Offering, and has so evaluated the merits and risks
of such investment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that term
is defined in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering. The
Subscriber is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete
loss of such investment.

 

(t)           The
Subscriber has reviewed, or had the opportunity to review, all of the SEC Filings (as defined below) and all “Risk Factors”
and “Forward Looking Statements” disclaimers contained therein. In addition, the Subscriber has reviewed and acknowledges
it has such knowledge, sophistication and experience in securities matters.

 

(u)           The
foregoing representations and warranties shall survive the Closing.

 

4.          THE
COMPANY’S Representations, Warranties and Covenants

 

The Company hereby
acknowledges, agrees with and represents, warrants and covenants to each Subscriber as of the date hereof and as of the Closing
Date, except as set forth in the disclosure schedule attached hereto (the “Company Disclosure Schedule”, which
Company Disclosure Schedules shall be deemed a part hereof and shall qualify any representation made herein only to the extent
of the disclosure contained in the corresponding section of the Disclosure Schedules, as follows:

 

(a) Organization
and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of its
state of incorporation. The Company is duly qualified to do business, and is in good standing in the states required due to (a)
the ownership or lease of real or personal property for use in the operation of the Company's business or (b) the nature of the
business conducted by the Company, except where the failure to so qualify would not, individually or in the aggregate, have a Material
Adverse Effect. The Company has all requisite power, right and authority to own, operate and lease its properties and assets, to
carry on its business as now conducted, to execute, deliver and perform its obligations under this Agreement and the other Transaction
Documents to which it is a party, and to carry out the transactions contemplated hereby and thereby, subject to the Required Approvals.
All actions on the part of the Company and its officers and directors necessary for the authorization, execution, delivery and
performance of this Agreement and the other Transaction Documents, the consummation of the transactions contemplated hereby and
thereby, and the performance of all of the Company's obligations under this Agreement and the other Transaction Documents have
been taken or will be taken prior to the Closing. This Agreement has been, and the other Transaction Documents to which the Company
is a party on the Closing will be, duly executed and delivered by the Company, and this Agreement is, and each of the other Transaction
Documents to which it is a party on the Closing will be, a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar
laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability of the
obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or law).

 

    	- 7 -

    	 

    

 

(b)          Issuance
of Securities. The Shares and Warrants to be issued to the Subscriber pursuant to this Agreement and the applicable Transaction
Documents, when issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued and will be
fully paid and non-assessable and the Warrant Shares and the Common Stock issuable upon conversion of the Shares, when issued and
delivered in accordance with Warrant and the Series A Certificate of Designation, as applicable, and assuming proper payment (with
respect to the Warrant Shares) and exercise in accordance with the provisions of such documents, will be duly and validly issued
and will be fully paid and non-assessable.

 

(c)           Authorization;
Enforcement. Except as set forth in Schedule 4(c), the execution, delivery and performance of this Agreement and the other
Transaction Documents by the Company, and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute
a violation (with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree,
order, regulation or rule of any court, agency or other governmental authority applicable to the Company, (b) except as set forth
in Section 4(d) below, require any consent, approval or authorization of, or declaration, filing or registration with, any person,
(c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of,
or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction,
encumbrance, obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company
are subject, (d) result in the creation of any lien or encumbrance upon the assets of the Company, or upon any shares of Common
Stock, preferred stock or other securities of the Company, (e) conflict with or result in a breach of or constitute a default under
any provision of the certificate of incorporation or bylaws of the Company, or (f) invalidate or adversely affect any permit, license,
authorization or status used in the conduct of the business of the Company.

 

(d)           Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
NASDAQ Approval, and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).

 

(e)           SEC
Filings. The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to each Subscriber through
the EDGAR system true and complete copies of the Company’s filings for the prior two full fiscal years plus any interim period
(collectively, the “SEC Filings”), and all such SEC Filings are incorporated herein by reference. The SEC Filings,
when they were filed with the SEC (or, if any amendment with respect to any such document was filed, when such amendment was filed),
complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder
and did not, as of such date, contain an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. All reports and statements required to be filed by the Company under the Exchange Act have been filed, together with
all exhibits required to be filed therewith. The Company and each of its direct and indirect subsidiaries, if any (collectively,
the “Subsidiaries”), are engaged in all material respects only in the business described in the SEC Filings,
and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and the
Subsidiaries.

 

(f)            No
Financial Advisor. The Company acknowledges and agrees that each Subscriber is acting solely in the capacity of an arm’s
length purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges that
Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and any advice given by any Subscriber or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely incidental to such Subscriber’s purchase of the Securities.
The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

    	- 8 -

    	 

    

 

(g)          Indemnification.
The Company will indemnify and hold harmless each Subscriber and, where applicable, its directors, officers, employees, agents,
advisors and shareholders (each, an “Indemnitee”, from and against any and all loss, liability, claim, damage
and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating,
preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened)
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary in any of the Transaction Documents,
(ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained in any of the Transaction Documents
or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for
these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee
that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents,
(B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of
the Securities, or (C) the status of such Subscriber or holder of the Securities either as an investor in the Company pursuant
to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as
a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

 

(h)           Capitalization
and Additional Issuances.         The capitalization of the Company is as set
forth in Schedule 4 (h). Except as set forth in Schedule 4 (h), the Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as disclosed on Schedule 4 (h), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for,
or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock equivalents. Except as set forth on Schedule 4 (h), the issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other than the Subscribers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for NASDAQ Approval, no
further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of
the Securities. Other than the Voting Agreements (as defined below), there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders .

 

(i)            Private
Placements. Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section 3, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers as contemplated
hereby.

 

(j)            Investment
Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Units will not be
or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

(k)           Reporting
Company/Shell Company Status. The Company is a publicly-held company subject to reporting obligations pursuant to Sections
12(g) and 13 of the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company has timely filed all reports and
other materials required to be filed by the Company thereunder with the SEC during the preceding twelve months. The Company, as
of the Closing Date, is not a “shell company”, as that term is employed in Rule 144 under the Securities Act. Except
as set forth on Schedule 4(k), the Company is in full compliance with the continued listing standards of The NASDAQ Capital Market,
and has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and
maintenance requirements.

 

    	- 9 -

    	 

    

 

(l)            Litigation.
Except as set forth on Schedule 4 (l), there is no action, suit, proceeding, inquiry or investigation before or by the Trading
Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s
or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or individually or in the
aggregate material to the Company or any of its Subsidiaries.  No director, officer or employee of the Company or any of its
Subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. 
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries.  The SEC has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Securities Act or the Exchange Act. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing. “Trading Market” means any of the
following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT,
The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock Exchange, OTCQB, OTCQX
or the OTC Bulletin Board (or any successors to any of the foregoing).

 

(m)          Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union.  The Company believes that its and its Subsidiaries’ relations with their respective employees are
good.  The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except
as disclosed in Schedule 4(m) or where failure to be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect
on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in
any of the other Transaction Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any
of their respective obligations under any of the Transaction Documents. 

 

(n)           Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. 
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim.  The Company is not operated in such a manner as
to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

 

(o)           Indebtedness
and Other Contracts. Except as set forth on Schedule 4(o) annexed hereto, neither the Company nor any of its Subsidiaries,
(i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected
to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in
a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.  For purposes
of this Agreement:  (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including,
without limitation, “capital leases” in accordance with generally accepted accounting principles) (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters
of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller
or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, claim, lien, tax, right of first refusal, pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property
has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole
or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity
or any department or agency thereof.

 

    	- 10 -

    	 

    

  

(p)          No
Undisclosed Events, Liabilities, Developments or Circumstances. Since the date of the latest audited financial statements included
within the SEC Filings, except as specifically disclosed in a subsequent SEC Filing: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) except as set forth
on Schedule 4(h), the Company has not issued any equity securities to any officer, director or Affiliate. The Company does not
have pending before the SEC any request for confidential treatment of information. Except for the issuance of the Securities contemplated
by this Agreement or as set forth on Schedule 4 (p), no event, liability, fact, circumstance, occurrence or development
has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective
businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least
two Trading Days prior to the date that this representation is made.

 

(q)          No
Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Subscriber
with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identical
to the Transaction Documents.

 

(r)          No
Disqualification Events. To the Company’s knowledge, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter
(as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each,
an “Issuer Covered Person”) is subject to any of the "Bad Actor" disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event.

 

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

 

(t)          Compliance.
To the Company’s knowledge, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor
matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

    	- 11 -

    	 

    

  

(u)          Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Filings,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.

 

(v)         Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property (if any) owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all liens, except for (i) liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with
GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
the Subsidiaries are in compliance.

 

(w)          Intellectual
Property.

 

1.            The
term “Intellectual Property Rights” includes:

 

(a)           the
name of the Company and each Subsidiary, all fictional business names, trading names, registered and unregistered trademarks, service
marks, and applications of the Company and each Subsidiary (collectively, “Marks'');

 

(b)           all
patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents'');

 

(c)           all
copyrights in both published works and published works of the Company and each Subsidiary (collectively, “Copyrights”);

 

(d)           all
rights in mask works of the Company and each Subsidiary (collectively, “Rights in Mask Works''); and

 

(e)           all
know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, “Trade Secrets''); owned, used, or licensed by the Company and each Subsidiary
as licensee or licensor.

 

2.            Know-How
Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the Company’s
businesses as it is currently conducted or as represented, in writing, to the Subscriber to be conducted. The Company is the owner
of all right, title, and interest in and to each of the Intellectual Property Rights, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, and has the right to use all of the Intellectual Property Rights. To
the Company’s knowledge, no employee of the Company has entered into any contract that restricts or limits in any way the
scope or type of work in which the employee may be engaged or requires the employee to transfer, assign, or disclose information
concerning his work to anyone other than of the Company.

 

3.          Patents.
The Company is the owner of all right, title and interest in and to each of the Patents, free and clear of all liens and other
adverse claims, purchase price payments, or license agreements now or hereafter existing). 

 

    	- 12 -

    	 

    

 

4.          Trademarks.
The Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all liens and other adverse
claims. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance with
all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety
days after the Closing Date. 

 

5.          Copyrights.
The Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all liens and other
adverse claims. All the Copyrights have been registered and are currently in compliance with formal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of the
Closing

 

6.          Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its Trade
Secrets. The Company has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The Trade Secrets
are not part of the public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged, or appropriated
either for the benefit of any Person (other the Company) or to the detriment of the Company. No Trade Secret is subject to any
adverse claim or has been challenged or threatened in any way.

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

 

(y)          Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“OFAC”).

 

(z)          Listing
and Maintenance Requirements.  The Common Stock is quoted on the NASDAQ Capital Market under the symbol COOL. Except as
set forth on Schedule 4(z), the Company has not, in the twenty-four (24) months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market.

 

(aa)         Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company.

 

(bb)         Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in all
material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively,
the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened

 

    	- 13 -

    	 

    

 

(cc)         Acknowledgment
Regarding Subscriber’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding, it is understood and acknowledged by the Company that: (i) none of the Subscribers has been asked by the Company
to agree, nor has any Subscriber agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the Securities for any specified term,
(ii) past or future open market or other transactions by any Subscriber, specifically including, without limitation, Short Sales
or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities, (iii) any Subscriber, and counter-parties in “derivative”
transactions to which any such Subscriber is a party, directly or indirectly, may presently have a “short” position
in the Common Stock and (iv) each Subscriber shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y)
one or more Subscribers may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests
in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents. There are no disagreements of
any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and
lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

(dd)         Acknowledgment
Regarding Subscribers’ Purchase of Securities. The Company acknowledges and agrees that each of the Subscribers is acting
solely in the capacity of an arm’s length Subscriber with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Subscriber is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Subscriber or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Subscribers’ purchase of the Securities. The Company further represents
to each Subscriber that the Company’s decision to enter into this Agreement and the other Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(ee)         No
Integrated Offering. Assuming the accuracy of the Subscribers’ representations and warranties set forth in Section 3,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of: (i) the Securities Act which would require
the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated.

 

(ff)          Application
of Takeover Protections. The Company and the Board of Directors will have taken as of the Closing Date all necessary action,
if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Subscribers as a result
of the Subscribers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Subscribers’ ownership of the Securities.

 

(gg)         Registration
Rights. No Person other than the Subscribers herein has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.

 

(hh)         Certain
Fees. Except as disclosed on Schedule 4(hh), no brokerage, finder’s fees, commissions or due diligence fees are
or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Subscribers shall
have no obligation with respect to any such fees or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this Section 4(hh) that may be due in connection with the transactions contemplated by the Transaction Documents.

 

    	- 14 -

    	 

    

 

(ii)           Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth on Schedule
4(ii), the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the SEC Filings, the Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

(jj)           Transactions
With Affiliates and Employees. Except as set forth on Schedule 4(jj), none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $50,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company except as disclosed on Schedule 4(jj).

 

(kk)         Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.

 

(ll)           Survival.
The foregoing representations and warranties shall survive the Closing.

 

5.            OTHER
AGREEMENTS OF THE PARTIES

 

(a)           Furnishing
of Information. As long as any Subscriber owns Securities, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant
to the Exchange Act. As long as any Subscriber owns Securities, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Subscribers and make publicly available in accordance with Rule 144(c) under the
Securities Act such information as is required for the Subscribers to sell the Securities under Rule 144. The Company further covenants
that it will take such further action as any holder of Securities may reasonably request, at the sole cost and expense of the Company
including transfer agent and legal opinion fees and expenses, all to the extent required from time to time to enable such person
to sell such Securities without registration under the Securities Act within the limitation of the exemptions proved by Rule 144
under the Securities Act.

 

(b)           Shareholder
Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other person that any
Subscriber is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter
adopted by the Company, or that any Subscriber could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Subscribers.

 

    	- 15 -

    	 

    

 

(c)           Securities
Laws Disclosure; Publicity. The Company shall by 8:30 a.m. (New York City time) (a) on the first Business Day after this Agreement
has been executed, issue a press release disclosing the material terms of the transactions contemplated hereby and (b) within
four (4) Business Days after this Agreement has been executed, file a Current Report on Form 8-K with the SEC, including the Transaction
Documents as exhibits thereto. From and after the issuance of such press release and the filing of the Current Report on Form
8-K, the Company shall have publicly disclosed all material, non-public information delivered to any of the Subscribers by the
Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. The Company and each
Subscriber shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and
no Subscriber shall issue any such press release or otherwise make any such public statement without the prior consent of the
Company, which consent shall not unreasonably be withheld. Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Subscriber, or include the name of any Subscriber in any filing with the SEC or any regulatory agency, without
the prior written consent of such Subscriber, except to the extent such disclosure is required by law in which case the Company
shall provide the Subscribers with prior notice of such disclosure. The Company understands that any such disclosure shall cause
irreparable harm and each Subscriber shall be entitled to injunctive relief and liquidated damages in connection therewith.

 

(d)           Integration.
The Company shall not, and shall use its best efforts to ensure that no affiliate of the Company shall, after the date hereof,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with the
offer or sale of the Units in a manner that would require the registration under the Securities Act of the sale of the Units to
the Subscribers.

 

(e)           Reservation
of Securities. 

 

(i)            The
Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents
in such amount as may then be required to fulfill its obligations in full under the Transaction Documents, but not less than 125%
of the maximum number of shares of Common Stock issuable pursuant to the Transaction Documents (the “Required Minimum”).

 

(ii)                        If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall amend the Company’s certificate or articles of incorporation to increase
the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible
and in any event not later than the 60th day after such date.

 

(iii)                     The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing
or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Subscribers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on
such date on such Trading Market or another Trading Market. The Company will then take all commercially reasonable action necessary
to continue the listing or quotation and trading of its Common Stock on a Trading Market for as long as any Subscriber holds Securities,
and will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Trading Market at least until five years after the Closing Date. In the event the aforedescribed listing is not continuously
maintained for five years after the Closing Date (a “Listing Default”), then in addition to any other rights
the Subscribers may have hereunder or under applicable law, on the first day of a Listing Default and on each monthly anniversary
of each such Listing Default date (if the applicable Listing Default shall not have been cured by such date) until the applicable
Listing Default is cured, the Company shall pay to each Subscriber an amount in cash, as partial liquidated damages and not as
a penalty, equal to 1% of the aggregate Subscription Amount and purchase price of Warrant Shares held by such Subscriber on the
day of a Listing Default and on every thirtieth day (pro-rated for periods less than thirty days) thereafter until the date such
Listing Default is cured. If the Company fails to pay any liquidated damages pursuant to this Section in a timely manner, the Company
will pay interest thereon at a rate of 1.5% per month (pro-rated for partial months) to the Subscriber, up to a maximum of sixteen
(16%) percent for such interest and liquidated damages amounts, collectively.

 

    	- 16 -

    	 

    

 

 

(f)          Use
of Proceeds. The Company anticipates using the gross proceeds from the Offering for general working capital purposes or for
such other purposes as may be approved in writing by the Lead Investor.

 

(g)          
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Subscriber
or its agents or counsel with any information that the Company believes constitutes or could constitute material non-public information,
and each Subscriber agrees, and shall direct its agents and counsel not to, request any material non-public information from the
Company or any Person acting on its behalf, unless prior thereto such Subscriber shall have executed a written agreement with the
Company regarding the willingness to accept receipt of such material non-public information and acknowledges the confidentiality
and use of such information and the Company’s covenant to file a further SEC filing or report and the period in which such
information shall remain confidential or be required to not be disclosed. The Company understands and confirms that each Subscriber
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. In addition, effective upon
the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company and any of its Subsidiaries or any of their respective officers, directors,
affiliates, employees or agents, on the one hand, and the Subscriber or any of its affiliates on the other hand, shall terminate.

 

(j)          Right
of Participation. The Company acknowledges and agrees that the right set forth in this Section 5(j) is a right granted
by the Company, separately, to each Subscriber.

 

(i)                      At
least five (5) trading days prior to any proposed or intended sale by the Company of its Common Stock or other securities or equity
linked debt obligations (each, a “Subsequent Placement”), the Company shall deliver to each Subscriber a written
notice of its proposal or intention to effect a Subsequent Placement (each such notice, a “Pre-Notice”), which
Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A)
a statement that the Company proposes or intends to effect a Subsequent Placement, (B) a statement that the statement in clause
(A) above does not constitute material, non-public information and (C) a statement informing such Subscriber that it is entitled
to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written
request of a Subscriber within five (5) business days after the Company’s delivery to such Subscriber of such Pre-Notice,
and only upon a written request by such Subscriber, the Company shall promptly, but no later than one (1) business day after such
request, deliver to such Subscriber an irrevocable written notice (the “Offer Notice”) of any proposed or intended
issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”)
in a Subsequent Placement, which Offer Notice shall (I) identify and describe the Offered Securities, (II) describe the price and
other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (III) identify the persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (IV) offer to issue and sell to or exchange with such Subscriber in accordance with the terms of the Offer
such Subscriber’s pro rata portion of 100% of the Offered Securities, provided that the number of Offered Securities which
such Subscriber shall have the right to subscribe for under this Section 5(j) shall be (x) based on such Subscriber’s pro
rata portion of the aggregate original amount of the Units purchased hereunder by all Subscribers (the “Basic Amount”),
and (y) with respect to each Subscriber that elects to purchase its Basic Amount, any additional portion of the Offered Securities
attributable to the Basic Amounts of other Subscribers as such Subscribers shall indicate it will purchase or acquire should the
other Subscribers subscribe for less than their Basic Amounts (the “Undersubscription Amount”).

 

(ii)                      To
accept an Offer, in whole or in part, such Subscriber must deliver a written notice to the Company prior to the end of the fifth
(5th) Business Day after such Subscriber’s receipt of the Offer Notice (the “Offer Period”),
setting forth the portion of such Subscriber’s Basic Amount that such Subscriber elects to purchase and, if such Subscriber
shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Subscriber elects to purchase
(in either case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Subscribers are less
than the total of all of the Basic Amounts, then such Subscriber who has set forth an Undersubscription Amount in its Notice of
Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has
subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all
the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), such Subscriber
who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription
Amount as the Basic Amount of such Subscriber bears to the total Basic Amounts of all Subscribers that have subscribed for Undersubscription
Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the
Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company
may deliver to each Subscriber a new Offer Notice and the Offer Period shall expire on the fifth(5th) Business Day after
such Subscriber’s receipt of such new Offer Notice.

 

    	- 17 -

    	 

    

 

 

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

 

(iv)                     In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 5(j)(iii) above), then such Subscriber may, at its sole option and in its sole discretion, reduce
the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the
number or amount of the Offered Securities that such Subscriber elected to purchase pursuant to Section 5(j)(ii)1(a)(ii) above
multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes
to issue, sell or exchange (including Offered Securities to be issued or sold to Subscribers pursuant to this Section 5(j) prior
to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any
Subscriber so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may
not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have
again been offered to the Subscribers in accordance with Section 5(j)(i) above.

 

(v)                      Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Subscriber shall acquire
from the Company, and the Company shall issue to such Subscriber, the number or amount of Offered Securities specified in its Notice
of Acceptance. The purchase by such Subscriber of any Offered Securities is subject in all cases to the preparation, execution
and delivery by the Company and such Subscriber of a separate purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to such Subscriber and its counsel.

 

(vi)                    Any
Offered Securities not acquired by a Subscriber or other persons in accordance with this Section  5(j) may not be issued,
sold or exchanged until they are again offered to such Subscriber under the procedures specified in this Agreement.

 

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

 

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

 

    	- 18 -

    	 

    

 

 

 

The Right of Participation
set forth in this Section 5(j) shall terminate on the twenty four month anniversary of the Closing Date.

 

(k)            Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without 10 days prior written notice to the Subscribers, unless such reverse split is made
in conjunction with the listing of the Common Stock on a national securities exchange or maintaining compliance with such listing.

 

(l)            DTC
Program. At all times that any Subscriber holds Securities, the Company shall use its best efforts to employ as the transfer
agent for the Common Stock and Warrant Shares a participant in the Depository Trust Company Automated Securities Transfer Program
(FAST) and cause the Common Stock to be transferable pursuant to such program.

 

(j)            Equity
Incentive Plan. Within thirty (30) days of the Closing Date, the Company’s Board of Directors will approve the Equity
Incentive Plan (the “Plan”), substantially in the form attached hereto as Exhibit E, and the reservation
of 2.25 million shares of Common Stock thereunder. The Company will use its reasonable best efforts to cause its stockholders
to ratify the adoption of the Plan within one (1) year of the Closing Date and shall submit such Plan for shareholder approval
as a proposal with the next proxy filed by the Company for approval of the Securities.

 

(k)            Investor
Relations. For so long as any Subscriber holds Securities, the Company shall engage an investor relations firm and public relations
firm, acceptable to the investor set forth on Exhibit F (the “Lead Investor”).

 

(l)            Board
Rights. Within three (3) days from the Closing Date, the Board of Directors shall appoint two (2) designees of the Lead Investor
to the Board of Directors and present such appointment to the Company’s stockholders for ratification at the Company’s
next special or annual meeting of its stockholders.

 

(j)            Limitations
on Issuances and Financings. For as long as any Subscriber holds Securities, the Company shall  not issue any Common
Stock or securities convertible into or exercisable for shares of Common Stock (or modify any of the foregoing which may be outstanding)
to any person or entity or incur any financing debt, other than with regard to Excluded Securities (as defined in the Series A
Certificate of Designation), without the express written consent of the Lead Investor.

 

(k)            Escrow
Release. The Aggregate Purchase Price shall be held by the Escrow Agent and shall be released as follows:

 

(i)           On
the Closing Date: One Million Dollars ($1,000,000) shall be released by the Escrow Agent and One Million Dollars ($1,000,000) of
Units shall be released by the Securities Escrow Agent on a pro rata basis based on the Subscriber’s subscription amount,
in accordance with the written instructions of the Company and the Lead Investor provided that the Lead Investor and the Company
certify that all conditions and obligations of the Company for such release set forth in Section 7 herein have been satisfied (the
“Initial Escrow Release”).

 

(ii)            Subsequent
to the Closing Date, in one or multiple tranches (each, a “Subsequent Escrow Release”), all or part of Five
Million Dollars ($5,000,000) of cash shall be released by the Escrow Agent and Five Million Dollars ($5,000,000) of Units shall
be released by the Securities Escrow Agent on a pro rata basis based on the Subscriber’s subscription amount, in accordance
with the written instructions of the Company and the Lead Investor provided that the Lead Investor and the Company certify that
the below conditions and obligations of the Company for such release set forth below have been satisfied (the “Release
Conditions”):

 

    	- 19 -

    	 

    

 

		(A)	The NASDAQ Approval has been obtained and; and

 

		(B)	either

 

		a.	The Lead Investor has approved the Subsequent Escrow Release in writing; or

 

		b.	Requisite Approval of the Subscribers has been obtained; or

 

		c.	The Company has executed definitive binding documents for a Qualified Transaction and the Qualified
Transaction shall close contemporaneously with the Subsequent Escrow Release following approval of the Company’s stockholders
as required by NASDAQ, which Qualified Transaction requires the filing by the Company of a Current Report on Form 8-K with the
inclusion of audited financial statements of the target. For purposes hereof, a “Qualified Transaction” shall mean
one or more acquisitions by the Company of any business, assets, stock, licenses, interests or properties (including, without limitation,
intellectual property rights) approved by the stockholders of the Company or any acquisition involving assets, shares of capital
stock, any purchase, merger, consolidation, recapitalization, or reorganization or involving any licensing, royalties, sharing
arrangement or otherwise, which value of such Qualified Transaction is in excess of $25,000,000 for the Company’s interest
therein.  For purposes hereof, the value of a Qualified Transaction shall take into account all cash, stock, present value
of all royalties, settlement amounts, future payments, license fees received or owed, and all other consideration associated with
such acquisition of any kind whatsoever; or

 

		d.	The following conditions are present: (i) nine (9) months has elapsed from the Closing Date; (ii)
the Subsequent Escrow Release has not been consummated pursuant to Sections (a)-(c) above; (iii) the Subsequent Escrow Release
does not release in excess of One Million Dollars ($1,000,000) and (iv) the two (2) directors appointed on the Closing Date have
approved the One Million Dollar ($1,000,000) Subsequent Escrow Release in Writing

 

(iii)           If prior to the twelve
(12) month anniversary of the Closing Date, unless extended by the Lead Investor or by Requisite Approval, none of the Release
Conditions have been satisfied, Escrow Agent shall return Five Million Dollars ($5,000,000) to the Subscribers, without interest
or deduction, and the Securities Escrow Agent shall return the Units held to the Company for cancellation. Notwithstanding anything
herein to the contrary until cancelled, the Units (Series A Preferred Stock and Warrants) shall be issued and outstanding securities
of the Company for all purposes.

 

(l)           The Company shall use
its reasonable best efforts to obtain all approvals required by The NASDAQ Market as soon as possible but in no event later than
four (4) months from the Closing Date.

 

		6.	REGISTRATION RIGHTS.

 

(a)           The
Company shall file a “resale” registration statement with the SEC covering the shares of Common Stock issuable upon
conversion of the Series A Preferred Stock and the Warrant Shares, so that such shares of Common Stock will be registered under
the Securities Act. The Company will maintain the effectiveness of the “resale” registration statement from the effective
date of the registration statement until all Registrable Securities (as defined in the Registration Rights Agreement) covered by
such registration statement have been sold, or may be sold without the requirement to be in compliance with Rule 144(c)(1) and
otherwise without restriction or limitation pursuant to Rule 144. The Company will use its reasonable best efforts to have such
“resale” registration statement filed by the Filing Date (as defined in the Registration Rights Agreement) and declared
effective by the SEC as soon as possible and, in any event, by the Effectiveness Date (as defined in the Registration Rights Agreement),
unless extended by Subscribers in the Offering holding 60% of the Units issued in the Offering which shall include the approval
of the Lead Investor (“Requisite Approval”).

 

The Company is obligated
to pay to the Subscribers a fee of 1% per month of the investors’ investment, payable in cash, up to a maximum of twelve
(12%) percent, on the Filing Date and the Effectiveness Date if the registration obligations set forth herein have not been met,
and pro- rata for each month, or partial month, in excess of the Filing Date and/or the Effectiveness Date that the registration
statement has not been declared effective; provided, however, that the Company shall not be obligated to pay any such liquidated
damages if the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases
issued or actions taken by the SEC pursuant to its authority with respect to “Rule 415”, provided the Company registers
at such time the maximum number of shares of Common Stock permissible upon consultation with the staff of the SEC.

 

    	- 20 -

    	 

    

 

The description of registration
rights is qualified in its entirety by reference to Registration Rights Agreement annexed hereto as Exhibit D.

 

		7.	CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION

 

(a)           The Closing of
the sale of the Shares is conditioned upon satisfaction of the following conditions precedent on or before the Closing Date:

 

(i)            As
of the Closing, no legal action, suit or proceeding shall be pending against the Company that seeks to restrain or prohibit the
transactions contemplated by this Agreement.

 

(ii)            The
representations and warranties of the Company and the Subscribers contained in this Agreement shall have been true and correct
in all material respects on the date of this Agreement (except whether such representations are qualified by material or material
adverse effect, which shall be true and correct in all respects) and shall be true and correct as of the Closing as if made on
the Closing Date and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and
conditions required to be performed, satisfied or complied with by the Company in connection with the consummation of the transactions
contemplated by the Transaction Documents at or prior to the Closing Date and the Company shall deliver a certificate, executed
by its Chief Executive Officer, dated as of the Closing Date, certifying that the foregoing is true.

 

(iii)           The
Company shall deliver to the Subscribers, a certificate from the Company, signed by its Secretary or Assistant Secretary, including
incumbency specimen signatures of any signatory of any Transaction Document of the Company and certifying that the attached copies
of the Company’s Certificate of Incorporation, as amended and Bylaws, as amended, and resolutions of the Board of Directors
of the Company approving this the Offering, are all true, complete and correct and remain in full force and effect.

 

(iv)          On
the Closing Date, the Company shall only possess such residual business assets of the reduced workforce activities of the historical
operations of the Company and its interest in Majesco Europe Limited. The Company shall deliver to the Subscribers on the Closing
Date, evidence of a minimum of $750,000 in positive working capital, inclusive of cash and marketable securities, giving effect
to all claims and liabilities, but excluding any liability associated with outstanding litigation as disclosed in the SEC Filings,
including any change of control or severance requirements on a pro forma basis.

 

(v)            The
Company shall deliver to the Subscribers a file stamped copy of the filed Series A Certificate of Designation, filed with the Secretary
of State of the State of Delaware, which shall not have been amended, waived, modified or revoked by the Company.

 

(vi)           The
Company shall deliver to the Subscribers an opinion of its legal counsel substantially in the form attached hereto as Exhibit
G.

 

(vii)          The
Company shall deliver voting agreements (the “Voting Agreements”), in the form attached hereto as Exhibit
H, executed by all officers, directors holders of at least 5% of the Company’s issued and outstanding Common Stock.

 

		8.	MISCELLANEOUS PROVISIONS

 

(a)            All
parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of
the fact that such party’s counsel was or was not the principal draftsman of this Agreement.

 

(b)            Each
of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the preparation
and review of this Agreement and related documentation.

 

    	- 21 -

    	 

    

  

(c)            Neither
this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or termination is sought.

 

(d)           The
representations, warranties and agreement of each Subscriber and the Company made in this Agreement shall survive the Closing Date.

 

(e)            Any
party may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address set forth on
the signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier, messenger
service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed
to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to
which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written
notice in the manner herein set forth.

 

(f)            Except
as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement
and their heirs, executors, administrators, successors, legal representatives and assigns. If any Subscriber is more than one person
or entity, the obligation of any Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs, executors, administrators,
successors, legal representatives and assigns. This Agreement and the other Transaction Documents sets forth the entire agreement
and understanding between the parties as to the Offering contemplated hereby and merges and supersedes all prior discussions, agreements
and understandings of any and every nature among them.

 

(g)            The
Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Subscriber,
including, without limitation, by way of a Fundamental Transaction (as defined in the Series A Certificate of Designations) (unless
the Company is in compliance with the applicable provisions governing such Fundamental Transaction set forth in the Series A Certificate
of Designations). The Subscriber may assign some or all of its rights hereunder in connection with any transfer of any of its Securities
without the consent of the Company, in which event such assignee shall be deemed to be the Subscriber hereunder with respect to
such assigned rights.

 

(h)            The
Company hereby represents and warrants as of the date hereof and as of the Closing Date that none of the terms offered to any Person
with respect to any offer, sale or subscription of Securities (each a "Subscription Document"), is or will be
more favorable to such Person than those of the Subscriber and this Agreement shall be, unless waived by the Subscriber, without
any further action by the Subscriber or the Company, deemed amended and modified in an economically and legally equivalent manner
such that the Subscriber shall receive the benefit of the more favorable terms contained in such Subscription Document. Notwithstanding
the foregoing, the Company agrees, at its expense, to take such other actions (such as entering into amendments to the Transaction
Documents) as the Subscriber may reasonably request to further effectuate the foregoing.

 

(i)            The
obligations of each Subscriber under any Transaction Document are several and not joint with the obligations of any other Subscriber,
and no Subscriber shall be responsible in any way for the performance or non-performance of the obligations of any other Subscriber
under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Subscriber
pursuant hereto or thereto, shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by the Transaction Documents. Each Subscriber shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such
purpose. Each Subscriber has been represented by its own separate legal counsel in its review and negotiation of the Transaction
Documents. The Company has elected to provide all Subscribers with the same terms and Transaction Documents for the convenience
of the Company and not because it was required or requested to do so by any of the Subscribers. It is expressly understood and
agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Subscriber,
solely, and not between the Company and the Subscribers collectively and not between and among the Subscribers. The Company acknowledges
that any actions of Subscribers now, and in the future, in which (A) any review or approval is sought by the Company, including,
without limitation, review, approval or acceptance of any reportable event required to be reported in any SEC filing or report
by the Company; or (B) any amendment, waiver, right of first refusal, participation right, acquisition or financing, including
any acquisition or financing is proposed, introduced, offered or arranged by any one or more Subscribers or their affiliates or
sought by the Company, shall not be claimed by the Company or any person seeking to assert such a claim on behalf of the Company,
to constitute the forming of any “Group” as such term is defined under Section 13(d) or Section 16 of the Exchange
Act, nor shall any activity permit the Company or any third party holder of securities of the Company to assert any claim that
any beneficial ownership limitations or conversion limitations of the Series A Certificate of Designation or Warrants have been
exceeded and such Subscriber, alone or in conjunction with others, constitutes a “Group” for purposes of the Exchange
Act as a result thereof.

 

    	- 22 -

    	 

    

 

(j)            Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except in writing signed by both (a) the
Company and (b) Subscribers in the Offering holding 60% of the Units issued in the Offering then held by the original Subscribers.
The Company shall be prohibited from offering any additional consideration to any Subscriber in this Offering (or such original
Subscriber’s transferee) for the purposes of inducing such person to change, modify, waive or amend any term of this Agreement
or any other Transaction Document without making the same offer on a pro-rata basis to all other Subscribers (and those transferees)
in this Offering allocable to the securities acquired by such transferee(s).

 

(k)            This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts
of law principles.

 

(l)            The
Company and each Subscriber hereby agree that any dispute that may arise between them arising out of or in connection with this
Agreement shall be adjudicated before a court located in the City of New York, Borough of Manhattan, and they hereby submit to
the exclusive jurisdiction of the federal and state courts of the State of New York located in the City of New York, Borough of
Manhattan with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or
hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such
court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale of the
securities hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified
mail, return receipt requested, postage prepaid, in care of the address set forth herein or such other address as either party
shall furnish in writing to the other.

 

(m)           WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

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

 

[Signature Pages Follow]

 

    	- 23 -

    	 

    

 

ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE

 

IN WITNESS WHEREOF,
the Subscriber has executed this Agreement on the ____ day of _____, 2014.

 

	 	 x  $0.68  for per Unit      =	 
	Units subscribed for	 	      Aggregate Purchase Price

 

Manner in which Title is to be held (Please Check One):

 

	1.	 ̈	Individual	7.	 ̈	
        Trust/Estate/Pension or Profit sharing Plan

        Date Opened:______________

	2.	 ̈	Joint Tenants with Right of Survivorship	8.	 ̈	
        As a Custodian for

        ________________________________

        Under the Uniform Gift to Minors Act of the State of

        ________________________________

	3.	 ̈	Community Property	9.	 ̈	Married with Separate Property
	4.	 ̈	Tenants in Common	10.	 ̈	Keogh
	5.	 ̈	Corporation/Partnership/ Limited Liability Company	11.	 ̈	Tenants by the Entirety
	6.	 ̈	IRA	 	 	 

 

ALTERNATIVE DISTRIBUTION INFORMATION

 

To direct distribution
to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT.

 

Name of Firm (Bank, Brokerage, Custodian):

 

Account Name:

 

Account Number:

 

Representative Name:

 

Representative Phone Number:

 

Address:

 

City, State, Zip:

 

    	- 24 -

    	 

    

 

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER
MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE 25.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 26.

 

EXECUTION
BY NATURAL PERSONS

 

	 	 	 
	 	Exact Name in Which Title is to be Held	 

 

	 	 	 
	Name (Please Print)	 	Name of Additional Purchaser
	 	 	 
	 	 	 
	Residence: Number and Street	 	Address of Additional Purchaser
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Social Security Number	 	Social Security Number
	 	 	 
	 	 	 
	Telephone Number	 	Telephone Number
	 	 	 
	 	 	 
	Fax Number (if available)	 	Fax Number (if available)
	 	 	 
	 	 	 
	E-Mail (if available)	 	E-Mail (if available)
	 	 	 
	 	 	 
	(Signature)	 	(Signature of Additional Purchaser)

 

ACCEPTED this ___ day of _________ 2014, on behalf of the Company.

 

	 	By:	 
	 	 	Name: 
	 	 	
        Title: 

 

[SIGNATURE PAGE FOR SUBSCRIPTION AGREEMENT]

 

    	- 25 -

    	 

    

 

EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

(Corporation, Partnership, LLC, Trust, Etc.)

 

	 	 	 
	 	Name of Entity (Please Print)	 

 

	Date of Incorporation or Organization:	 	 
	 	 	 
	State of Principal Office:	 	 
	 	 	 
	Federal Taxpayer Identification Number:	 	 
	 	 	 
	 	 	 
	Office Address	 	 
	 	 	 
	 	 	 
	City, State and Zip Code	 	 
	 	 	 
	 	 	 
	Telephone Number	 	 
	 	 	 
	 	 	 
	Fax Number (if available)	 	 
	 	 	 
	 	 	 
	E-Mail (if available)	 	 

  

	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:

 

	[seal]	 	 
	 	 	 
	Attest:	 	 	 
	 	(If Entity is a Corporation)	 	 
	 	 	 
	 	 	 
	 	 	Address

 

ACCEPTED this ____ day of __________ 2014, on behalf of the
Company.

 

	 	 	By:	 
	 	 	 	Name:
	 	 	 	Title:

 

[SIGNATURE PAGE FOR SUBSCRIPTION AGREEMENT]

 

    	- 26 -

    	 

    

 

INVESTOR QUESTIONNAIRE

 

Instructions: Check all boxes below
which correctly describe you.

 

		 ̈	You are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), (ii) a savings and loan association or other institution, as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, (iii) a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (iv)
an insurance company as defined in Section 2(13) of the Securities Act, (v) an investment company registered under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), (vi) a business development company as
defined in Section 2(a)(48) of the Investment Company Act, (vii) a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (viii)
a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or (ix) an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (1)
the decision that you shall subscribe for and purchase shares of common stock or preferred stock, is made by a plan fiduciary,
as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment
adviser, or (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Units
is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the
Securities Act (“Regulation D”) or (3) you are a self-directed plan and the decision that you shall subscribe
for and purchase the Securities is made solely by persons or entities that are accredited investors.

 

		 ̈	You are a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940, as amended.

 

		 ̈	You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”), a corporation, Massachusetts or similar business trust or a partnership, in each case
not formed for the specific purpose of making an investment in the Securities and its underlying securities in excess of $5,000,000.

 

		 ̈	You are a director or executive officer of the Company.

 

		 ̈	You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds
$1,000,000 (excluding residence) at the time of your subscription for and purchase of the Securities.

 

		 ̈	You are a natural person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable
expectation of reaching the same income level in the current year.

 

		 ̈	You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the Securities and whose subscription for and purchase of the Securities is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) of Regulation D.

 

		 ̈	You are an entity in which all of the equity owners are persons or entities described in one of
the preceding paragraphs.

 

    	- 27 -

    	 

    

 

Check all boxes below which correctly describe you.

 

With respect to this investment in the Securities, your:

 

	Investment Objectives: 	 ̈ Aggressive Growth	 ̈ Speculation	 
	 	 	 	 
	Risk Tolerance:	 ̈ Low Risk	 ̈ Moderate Risk	  ̈ High Risk

 

Are you associated with a FINRA Member Firm?    ̈
Yes    ̈ No

 

Your initials (purchaser
and co-purchaser, if applicable) are required for each item below:

 

	 ̈	 ̈	I/We understand that this investment is not guaranteed.
	 	 	 
	 ̈	 ̈	I/We are aware that this investment is not liquid.
	 	 	 
	 ̈	 ̈	I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this offering.
	 	 	 
	 ̈	 ̈	I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the inherent risks including lack of liquidity and lack of diversification.  Success or failure of private placements such as this is dependent on the corporate issuer of these securities and is outside the control of the investors. While potential loss is limited to the amount invested, such loss is possible.)

 

The Subscriber hereby
represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution of the
Subscription Agreement pursuant to which it purchased the Securities.

 

	 	 	 
	Name of Purchaser [please print]	 	Name of Co-Purchaser [please print]
	 	 	 
	 	 	 
	Signature of Purchaser (Entities please provide signature of Purchaser’s duly authorized signatory.)	 	Signature of Co-Purchaser
	 	 	 
	 	 	 
	Name of Signatory (Entities only)	 	 
	 	 	 
	 	 	 
	Title of Signatory (Entities only)	 	 

 

[SIGNATURE PAGE FOR INVESTOR QUESTIONNAIRE]

 

    	- 28 -

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