Document:

Exhibit 10.1

 

AGREEMENT
AND PLAN OF MERGER

 

This AGREEMENT AND
PLAN OF MERGER (this “Agreement”) is made and entered into as of March 26, 2012, by and among–

 

(i)      CEP,
INC., a Tennessee corporation (“CEP”);

 

(ii)     CEP
MERGER SUB, INC., a Tennessee corporation (“Merger Sub”); and

 

(iii)    FORTUNE
INDUSTRIES, INC., an Indiana corporation (the “Company”).

 

RECITALS:

 

A.     The respective
Boards of Directors of CEP, Merger Sub, and the Company have deemed it advisable and in the best interests of their respective
corporations and stockholders to consummate the Merger (as defined in Section 1.1), on the terms and subject to the conditions
set forth in this Agreement.

 

B.      The respective
Boards of Directors of CEP, Merger Sub, and the Company have approved and declared advisable this Agreement and the transactions
contemplated hereby, including the Merger.

 

C.     The Board of
Directors of the Company has resolved to recommend to its stockholders approval and adoption of this Agreement and approval of
the Merger.

 

D.     Concurrently
with the execution of this Agreement, and as a condition and inducement to the Company’s, Merger Sub’s, and CEP’s
respective willingness to enter into this Agreement, certain stockholders of the Company are entering into Stockholder Voting Agreements
in substantially the form attached hereto as Exhibit A (the “Stockholder Agreements”).

 

agreement:

 

NOW, THEREFORE, in
consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

article
1. 

THE MERGER

 

1.1      The
Merger. At the Effective Time (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement
and the applicable provisions of the Tennessee Business Corporation Act (“Tennessee Law”) and the Indiana Business
Corporation Law, Company shall be merged with and into Merger Sub (the “Merger”), the separate corporate existence
of Company shall cease and Merger Sub shall continue as the surviving corporation. Merger Sub, as the surviving corporation after
the Merger, is hereinafter sometimes referred to as the “Surviving Corporation.”

 

1.2      Effective
Time; Closing. Subject to the provisions of this Agreement, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State of Tennessee in accordance with the relevant provisions
of Tennessee Law (the “Certificate Of Merger”) (the time of such filing with the Secretary of State of the State of
Tennessee (or such later time as may be agreed in writing by the Company and CEP and specified in the Certificate of Merger) being
the “Effective Time”) as soon as practicable on the Closing Date (as defined below). The closing of the Merger (the
“Closing”) shall take place at the offices of Bone McAllester Norton PLLC, Nashville, Tennessee, at a time and date
to be specified by the parties, which shall be no later than the second business day after the satisfaction or waiver of the conditions
set forth in Article 6, or at such other time, date and location as the parties hereto agree in writing (the “Closing
Date”).

    	  

    	 

    
 

 

1.3      Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions
of Tennessee Law.

 

1.4      Charter
and Bylaws. At the Effective Time, the Charter of Merger Sub (as in effect immediately prior to the Effective Time) shall
be the Charter of the Surviving Corporation until thereafter amended in accordance with Tennessee Law and as provided in such Charter.
At the Effective Time, the Bylaws of Merger Sub (as in effect immediately prior to the Effective Time) shall be the Bylaws
of the Surviving Corporation until thereafter amended in accordance with Tennessee Law and as provided in such Bylaws.

 

1.5      Directors
and Officers. The initial directors of the Surviving Corporation shall be the directors of Merger Sub immediately prior
to the Effective Time, until their respective successors are duly elected or appointed and qualified. The initial officers of the
Surviving Corporation shall be the officers of Merger Sub immediately prior to the Effective Time, until their respective
successors are duly appointed.

 

1.6      Effect
on Capital Stock. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger and
without any action on the part of CEP, Merger Sub, the Company, or the holders of any shares of capital stock of the Company,
the following shall occur:

 

(a)      Company
Preferred Stock. Each single share of the Company’s Series C Preferred Stock, $0.10 par value (“Company Preferred
Stock) (other than shares of Company Preferred Stock to be canceled pursuant to Section 1.6(c), if any, will be canceled
and extinguished and automatically converted into 145.971 validly issued, fully paid and non-assessable shares, of common stock,
par value $0.00001 per share, of the Surviving Corporation.

 

(b)      Company
Common Stock.

 

(i)      As
to each record holder of the Company’s Common Stock, $0.10 par value (“Company Common Stock”) holding less than
five hundred one (501) shares thereof on the date of this Agreement and until immediately prior to the Effective Time (including
any heir or devisee of such record holder holding such shares pursuant to the laws of descent and distribution in that record holder’s
domicile), such record holder’s shares of Company Common Stock issued and outstanding immediately prior to the Effective
Time (other than any Dissenting Shares) will be canceled and extinguished and automatically converted into the right to receive
Sixty-One Hundredths Dollar ($0.61) per share (the “Per Share Amount”); and

 

(ii)      As
to each record holder of Company Common Stock that does not meet the conditions specified in Section 1.6(b)(i) above and as to
each record holder of Company Common Stock holding five hundred one (501) shares thereof or greater immediately prior to the Effective
Time, each such holder’s shares issued and outstanding immediately prior to the Effective Time shall be canceled and extinguished
and automatically converted into one validly issued, fully paid and non-assessable share of common stock, par value $0.00001 per
share, of the Surviving Corporation (the “Non-Cash Consideration”; the Per Share Amount, and the Non-Cash Consideration
are referred to herein collectively as the “Merger Consideration”).

 

(c)      Cancellation
of Treasury Stock. Each share of Company Common Stock or Company Preferred Stock held as treasury stock by the Company or any
direct or indirect wholly-owned Subsidiary of the Company immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.

 

(d)      Employee
Stock Options. Each Company Option or Other Option (both as defined in Section 2.2(b)) which is outstanding immediately
prior to the Effective Time, whether or not then exercisable or vested, shall by virtue of the Merger and without any action on
the part of the CEP, Merger Sub, the Company, or the holder thereof, be converted into and shall become a right to receive
an amount in cash, without interest, with respect to each share subject thereto, equal to the excess, if any, of the Per Share
Amount over the per share exercise or purchase price of such Company Option or such Other Option (such amount being hereinafter
referred to as the “Option Merger Consideration”), and each Company Option and Other Option shall be canceled at the
Effective Time. The payment of the Option Merger Consideration to the holder of a Company Option or Other Option shall be reduced
by any income or employment tax withholding required under the Code or any provision of state, local or foreign Tax (as defined
in Section 2.6) law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of such Company Option or Other Option. The Stock Option Plans (as defined
in Section 2.12(a)) shall terminate at the Effective Time.

    	2

    	 

    
 

 

(e)      Warrants.
All Warrants issued by the Company and outstanding immediately prior to the Effective Time shall be canceled and extinguished without
any conversion thereof and no compensation therefor.

 

(f)      Adjustments
to the Merger Consideration. The Merger Consideration shall be adjusted to reflect fully the appropriate effect of any stock
split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common
Stock or Company Preferred Stock), reorganization, recapitalization, reclassification or other like change with respect to Company
Common Stock or Company Preferred Stock having a record date on or after the date hereof and prior to the Effective Time.

 

1.7      Surrender
of Certificates.

 

(a)      Exchange
Agent. Prior to the Effective Time, CEP shall select a bank or trust company reasonably satisfactory to the Company to act
as the exchange agent (the “Exchange Agent”) in the Merger. Prior to the Effective Time, CEP shall enter into an agreement
with Exchange Agent, reasonably satisfactory to the Company.

 

(b)      CEP
to Provide Cash. At or promptly following the Effective Time (and in no event later than one (1) business day following the
Effective Time), CEP shall make available to the Exchange Agent for exchange in accordance with this Article 1, cash payable
to the stockholders of the Company pursuant to Section 1.6(b)(i) in exchange for outstanding shares of Company Preferred
Stock and Company Common Stock, respectively. Any funds deposited with the Exchange Agent shall hereinafter be referred to as the
“Exchange Fund.”

 

(c)      Exchange
Procedures. Promptly after the Effective Time (and in no event later than three (3) business days following the Effective Time),
CEP shall cause the Exchange Agent to mail to each holder of record (as of the Effective Time) of a certificate or certificates
(the “Certificates”) which immediately prior to the Effective Time represented outstanding shares of Company Common
Stock or Company Preferred Stock whose shares were converted into the right to receive cash pursuant to Section 1.6(b)(i):
(i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions
as CEP may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration to which the holder of such Certificate is entitled pursuant to Section 1.6(b) (without limiting the
effect of Section 1.7(e)). Upon surrender of Certificates for cancellation to the Exchange Agent, together with such letter
of transmittal, duly completed and validly executed in accordance with the instructions thereto and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificates shall be entitled to receive promptly (and in no
event later than three (3) business days after receipt thereof) in exchange therefor the Merger Consideration to which the holder
of such certificate is entitled pursuant to Section 1.6(a) or Section 1.6(b) (less any withholding amount with respect
to the shares of Company Common Stock or Company Preferred Stock held by such holder as provided by Section 1.7(e)), and
the Certificates so surrendered shall forthwith be canceled. No interest shall accrue or be paid on the amounts payable pursuant
to this Article 1 upon surrender of the Certificates.

 

(d)      Transfers
of Ownership. If the payment of the amounts payable pursuant to Section 1.6(a) or Section 1.6(b) is to be made
to a person other than the person in whose name the surrendered Certificate formerly evidencing shares of Company Common Stock
or Company Preferred Stock, as applicable, are registered, it will be a condition of payment that the Certificates so surrendered
will be properly endorsed and otherwise in proper form for transfer and that the Persons (as defined in Section 8.3(d))
requesting such payment will have paid to CEP or any agent designated by it any transfer or other Taxes (as defined in Section
2.6) required by reason of the payment of the amount specified in Section 1.6(a) or Section 1.6(b) to a Person
other than the registered holder of the Certificates surrendered, or established to the satisfaction of CEP or any agent designated
by it that such Tax has been paid or is not payable.

    	3

    	 

    
 

 

(e)      Required
Withholding. Each of the Exchange Agent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock or Company Preferred
Stock such amounts as may be required to be deducted or withheld therefrom under the Code or under any provision of state, local
or foreign Tax law or under any other applicable Legal Requirement (as defined in Section 2.2(d)). To the extent such amounts
are so deducted or withheld, the amount of such consideration shall be treated for all purposes under this Agreement as having
been paid to the Person to whom such consideration would otherwise have been paid.

 

(f)      No Liability.
Notwithstanding anything to the contrary in this Section 1.7, neither the Exchange Agent nor the Surviving Corporation nor
any party hereto shall be liable to a holder of shares of Company Common Stock or Company Preferred Stock for any amount properly
paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

 

(g)      Investment
of Exchange Fund. The Exchange Agent shall invest the Exchange Fund as directed by CEP on a daily basis; provided that
no such investment or loss thereon shall affect the amounts payable to Company stockholders pursuant to this Article 1.
Any interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess
of the amounts payable to Company stockholders pursuant to this Article 1 shall promptly be paid to CEP.

 

(h)      Termination
of Exchange Fund. Any portion of the Exchange Fund which remains undistributed to the holders of Certificates six (6) months
after the Effective Time shall, at the request of the Surviving Corporation, be delivered to the Surviving Corporation or otherwise
on the instruction of the Surviving Corporation, and any holders of the Certificates who have not surrendered such Certificates
in compliance with this Section 1.7 shall after such delivery to the Surviving Corporation look only to the Surviving Corporation
(subject to abandoned property, escheat and similar laws) for payment, as general creditors thereof, of their claim for the Merger
Consideration, without interest, to which such holders may be entitled pursuant to Section 1.6(a) or Section 1.6(b).
Any such portion of the Exchange Fund remaining unclaimed by holders of shares of Company Common Stock or Company Preferred Stock
immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Entity (as defined
in Section 2.3(c)) shall, to the extent permitted by law, become the property of CEP free and clear of any claims or interest
of any Person previously entitled thereto.

 

(i)      No Further
Ownership Rights in Company Common Stock or Company Preferred Stock. At the close of business on the day of the Effective Time,
there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock
or Company Preferred Stock. From and after the Effective Time, the holders of Company Common Stock or Company Preferred Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock or Company
Preferred Stock except as otherwise provided herein or by applicable law. If, after the Effective Time, Certificates are presented
to the Surviving Corporation or the Exchange Agent, they shall be canceled and exchanged for the Merger Consideration, as provided
in this Article 1, subject to applicable law in the case of Dissenting Shares. All cash paid upon surrender of Certificates
in accordance with the terms of this Article 1 shall be deemed to have been paid in full satisfaction of all rights
pertaining to the shares previously represented by such Certificates.

 

(j)      Lost,
Stolen or Destroyed Certificates. In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall pay in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder
thereof, the Merger Consideration to which the holder thereof is entitled pursuant to this Article 1; provided,
however, that CEP or the Surviving Corporation may, in their discretion and as a condition precedent to the payment thereof,
require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as they may reasonably direct as
indemnity against any claim that may be made against CEP, the Company, the Surviving Corporation or the Exchange Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.

 

(k)      Applicability
to Dissenting Shares. The provisions of this Section 1.7 shall also apply to Dissenting Shares that lose their status
as such, except that the obligations of the Exchange Agent under this Section 1.7 shall commence only on the date of such
loss of status.

    	4

    	 

    
 

 

1.8      Dissenting
Shares. With respect to the Company Common Stock, there are no dissenters rights applicable thereto, pursuant to Section IC
23-1-44-8(b) of the Indiana Business Corporation Law.

 

1.9      Further
Action. At and after the Effective Time, the officers and directors of CEP and the Surviving Corporation will be authorized
to execute and deliver, in the name and on behalf of Company and Merger Sub, any deeds, bills of sale, assignments or assurances
and to take and do, in the name and on behalf of Company and Merger Sub, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

 

article
2. 

REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

 

The Company represents
and warrants to CEP and Merger Sub, except as otherwise set forth in writing in appropriately corresponding sections of the
disclosure letter supplied by the Company to CEP dated as of the date hereof (the “Company Disclosure Letter”), as
follows:

 

2.1      Organization;
Power; Charter Documents; Subsidiaries.

 

(a)      Organization;
Standing And Power. The Company and each of its Subsidiaries (as defined below) is a corporation or other organization duly
organized and validly existing under the laws of the jurisdiction of its incorporation or organization, has the requisite corporate
power and authority to own, lease and operate its assets and properties and to carry on its business as now being conducted, except
where the failure of any Subsidiary of the Company to be so organized, existing and in good standing would not have, individually
or in the aggregate, a Material Adverse Effect (as defined in Section 8.3(c)) on the Company, and is duly qualified and
in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary other than in such jurisdictions where the failure to so qualify or to be in good standing would
not have, individually or in the aggregate, a Material Adverse Effect on the Company. For purposes of this Agreement, “Subsidiary,”
when used with respect to any party, shall mean any corporation or other organization, whether incorporated or unincorporated,
at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly
or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries.

 

(b)      Charter
Documents. The Company has delivered or made available to CEP: (i) a true and correct copy of the Articles of Incorporation
and Bylaws of the Company, each as amended to date (collectively, the “Company Charter Documents”) and (ii) the certificate
of incorporation and bylaws, or like organizational documents, each as amended to date (collectively, “Subsidiary Charter
Documents”) of each of its Subsidiaries, and each such instrument is in full force and effect. The Company is not in violation
of any of the provisions of the Company Charter Documents and each Subsidiary is not in violation of its respective Subsidiary
Charter Documents, except in the case of a Subsidiary, as would not be material to the Company.

 

(c)      Subsidiaries.
Section 2.1(c) of the Company Disclosure Letter includes all the Subsidiaries of the Company. All the outstanding shares of capital
stock of, or other equity or ownership interests in, each such Subsidiary have been validly issued and are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of all pledges, claims, liens, charges, preemptive rights,
mortgages, encumbrances, options and security interests of any kind or nature whatsoever (collectively, “Liens”), including
any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity or ownership interests, except
for restrictions imposed by applicable securities laws.

 

2.2      Capital
Structure.

 

(a)      Capital
Stock. The authorized capital stock of the Company consists of: (i) 150,000,000 shares of Company Common Stock, par value $0.10
per share; (ii) 3,000,000 shares of preferred stock, par value $0.10 per share, 1,000,000 of which have been designated as Series
A Preferred Stock, 1,000,000 of which have been designated as Series B Preferred Stock, and 1,000,000 of which have been designated
as Series C Preferred Stock. At the close of business on the date hereof: (i) 12,287,290 shares of Company Common Stock were issued
and outstanding (plus any shares of Company Common Stock issued since February 29, 2012, upon the exercise of Company Options or
Other Options (as defined in Section 2.2(b)), (ii) no shares of Company Common Stock were issued and held by the Company
in its treasury, (iii) 296,180 shares of Series C Preferred Stock were issued and outstanding; and no shares of Series A Preferred
Stock and Series B Preferred Stock were outstanding. All of the outstanding shares of capital stock of the Company are, and all
shares of capital stock of the Company which may be issued as contemplated or permitted by this Agreement will be, when issued,
duly authorized and validly issued, fully paid and non-assessable and not subject to any preemptive rights.

    	5

    	 

    
 

 

(b)      Stock
Options. As of the close of business on the date hereof: (i) 889,283 shares of Company Common Stock are subject to issuance
pursuant to outstanding options to purchase Company Common Stock under the Company Stock Option Plans (as defined in Section
2.12) (the “Company Options”); (ii) 110,717 shares of Company Common Stock are available for future issuance under
the Company Stock Option Plans, and (iii) no shares of Company Common Stock are subject to issuance pursuant to outstanding options,
rights or warrants to purchase Company Common Stock issued pursuant to the Contracts (as defined in Section 2.14) or instruments
listed on Section 2.2(b) of the Company Disclosure Letter (the “Other Options”). The Company has provided CEP information
describing option activity through the date of this Agreement. All shares of Company Common Stock subject to issuance under the
Company Stock Option Plans, the Company Purchase Plans and the Other Options, upon issuance on the terms and conditions specified
in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and non-assessable
and not subject to any preemptive rights. There are no commitments or agreements of any character to which the Company is bound
obligating the Company to accelerate the vesting of any Company Option as a result of the Merger (whether alone or upon the occurrence
of any additional or subsequent events). There are no outstanding or authorized stock appreciation, phantom stock, profit participation
or other similar rights with respect to the Company.

 

(c)      Voting
Debt. No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders may vote
(“Voting Debt”) of the Company is issued or outstanding as of the date hereof.

 

(d)      Other
Securities. Except as otherwise set forth in Section 2.2(d) of the Company Disclosure Letter or otherwise referred to in Sections
2.2(a), 2.2(b), and 2.2(c), there are no securities, options, warrants, calls, rights, commitments, Contracts, arrangements
or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating
the Company or any of its Subsidiaries to issue, deliver or sell, or redeem, repurchase, acquire or pay for or cause to be issued,
delivered or sold, or redeemed, repurchased, acquired or paid for additional shares of capital stock, Voting Debt, equity interests
or other voting securities of the Company or any of its Subsidiaries, or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right, commitment, Contract, arrangement or undertaking.
All outstanding shares of Company Common Stock and Company Preferred Stock, all outstanding Company Options and Other Options,
and all outstanding shares of capital stock of each Subsidiary of the Company have been issued and granted in compliance in all
material respects with (i) all applicable securities laws and all other applicable Legal Requirements (as defined below), (ii)
all requirements set forth in applicable material Contracts and (iii) Company Charter Documents or Subsidiary Charter Documents.
There are no voting trusts or other Contracts to which the Company or any of its Subsidiaries is a party with respect to the voting
of capital stock of the Company or any of its Subsidiaries. For purposes of this Agreement: (x) “Legal Requirements”
shall mean any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution,
ordinance, code, order, edict, decree, rule, regulation, ruling, judgment or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any Governmental Entity; and (y) “Contract” shall
mean any written, oral or other agreement, contract, subcontract, settlement agreement, lease, binding understanding, instrument,
indenture, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment
or undertaking of any nature, as in effect as of the date hereof or as may hereinafter be in effect.

    	6

    	 

    
 

 

2.3      Authority;
Non-Contravention; Necessary Consents.

 

(a)      Authority.
The Company has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby has been duly
authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement or to consummate the Merger and the other transactions
contemplated hereby (other than the approval and adoption of this Agreement and the approval of the Merger by the Company’s
stockholders and the filing of the Certificate of Merger pursuant to Tennessee Law). This Agreement has been duly executed and
delivered by the Company and, assuming due execution and delivery by CEP and Merger Sub, constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms.

 

(b)      Non-Contravention.
The execution and delivery of this Agreement by the Company does not, and performance of this Agreement by the Company will not:
(i) conflict with or violate the Company Charter Documents or any Subsidiary Charter Documents of any Subsidiary of the Company,
(ii) subject to obtaining the approval and adoption of this Agreement and the approval of the Merger by the Company’s stockholders
as contemplated in Section 5.2 and compliance with the requirements set forth in Section 2.3(c), conflict with or
violate any material Legal Requirement applicable to the Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries or any of their respective properties is bound or affected, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, or impair the Company’s rights or alter
the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a Lien on any of the material properties or assets of the Company or any of its Subsidiaries pursuant
to, any Company Material Contract (as defined in Section 2.14). Section 2.3(b) of the Company Disclosure Letter lists all
consents, waivers and approvals under any Company Material Contract required to be obtained in connection with the consummation
of the transactions contemplated hereby, which, if individually or in the aggregate are not obtained, would result in a Material
Adverse Effect on the Company or the Surviving Corporation.

 

(c)      Necessary
Consents. No consent, approval, order or authorization of, or registration, declaration or filing with any supranational, national,
state, municipal, local or foreign government, any instrumentality, subdivision, court, arbitral entity, administrative agency
or commission or other governmental authority or instrumentality, or any quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority (a “Governmental Entity”) is required to be
obtained or made by the Company in connection with the execution, performance and delivery of this Agreement or the consummation
of the transactions contemplated hereby, except for: (i) the filing of the Certificate of Merger with the Secretary of State of
the State of Tennessee and appropriate documents with the relevant authorities of other states in which the Company and/or CEP
are qualified to do business, (ii) such consents, approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal, foreign and state securities (or related) laws and the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the “HSR Act”) or any foreign laws regulating competition, antitrust, investment or exchange
controls, (iii) the consents listed on Section 2.3(c) of the Company Disclosure Letter; (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under applicable state securities or “blue sky”
laws and the securities laws of any foreign country, (v) such consents, approvals, orders, authorizations, registration, declaration
or filing as may be required by the rules and regulations of The New York Stock Exchange, Inc., and (vi) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would not be material to the Company or CEP or materially adversely
affect the ability of the parties hereto to consummate the Merger within the time frame in which the Merger would otherwise be
consummated in the absence of the need for such consent, approval, order, authorization, registration, declaration or filings.
The consents, approvals, orders, authorizations, registrations, declarations, waivers and filings set forth in (i), (ii) and (v)
are referred to collectively herein as the “Necessary Consents.”

 

2.4      SEC
Filings; Financial Statements.

 

(a)      SEC
Filings. The Company has filed all required registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated by reference) required to be filed by it with the Securities
and Exchange Commission (the “SEC”) since September 11, 2000. The Company has made available to CEP all such registration
statements, prospectuses, reports, schedules, forms, statements and other documents in the form filed with the SEC. All such required
registration statements, prospectuses, reports, schedules, forms, statements and other documents (including those that the Company
may file subsequent to the date hereof), as amended, are referred to herein as the “Company SEC Reports.” As of their
respective dates, the Company SEC Reports (i) were prepared in accordance and complied in all material respects with the requirements
of the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”),
or the Securities and Exchange Act of 1934, as amended (together with the rules and regulations thereunder, the “Exchange
Act”), as the case may be, applicable to such Company SEC Reports and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent corrected
prior to the date hereof by a subsequently filed Company SEC Report. None of the Company’s Subsidiaries is required to file
any forms, reports or other documents with the SEC.

    	7

    	 

    
 

 

(b)      Financial
Statements. Each of the consolidated financial statements (including, in each case, any related notes thereto) contained in
the Company SEC Reports (the “Company Financials”), including each Company SEC Report filed after the date hereof until
the Closing: (i) complied as to form in all material respects with the published rules and regulations of the SEC with respect
thereto, (ii) was prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied
on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited
interim financial statements, as may be permitted by the SEC on Form 10-Q, 8-K or any successor form under the Exchange Act), and
(iii) fairly presented in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries
as at the respective dates thereof and the consolidated results of Company’s operations and cash flows for the periods indicated.
The balance sheet of the Company contained in the Company SEC Reports as of February 29, 2012, is hereinafter referred to as the
“Company Balance Sheet.” Except as disclosed in the Company Financials, since the date of the Company Balance Sheet,
neither the Company nor any of its Subsidiaries has any liabilities required under GAAP to be set forth on a consolidated balance
sheet (absolute, accrued, contingent or otherwise) which, individually or in the aggregate, would have a Material Adverse Effect
on the Company, except for liabilities incurred since the date of the Company Balance Sheet in the ordinary course of business
consistent with past practice and liabilities incurred pursuant to this Agreement.

 

2.5      Absence
of Certain Changes or Events. Since the date of the Company Balance Sheet (a) there has not been any Material Adverse Effect
on the Company, (b) and through the date hereof, the Company and its Subsidiaries have conducted in all material respects their
respective businesses only in the ordinary course consistent with past practice, except for the negotiation and execution of this
Agreement and (c) through the date hereof, there has not been: (i) any declaration, setting aside or payment of any dividend on,
or other distribution (whether in cash, stock or property) in respect of, any of the Company’s or any of its Subsidiaries’
capital stock, except for required dividend payments with respect to the Company’s Series C Preferred shares, or any purchase,
redemption or other acquisition by the Company or any of its Subsidiaries of any of the Company’s capital stock or any other
securities of the Company or its Subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities,
except repurchases of unvested shares at cost in connection with the termination of the Company’s or any of its Subsidiary’s
relationship with any Service Provider (as defined in the Company Option Plans) pursuant to stock option or purchase agreements
in effect on the date hereof or entered into in compliance with this Agreement, or (ii) any split, combination or reclassification
of any of the Company’s or any of its Subsidiaries’ capital stock.

 

2.6      Taxes.

 

(a)      For the
purposes of this Agreement, the term “Tax” or, collectively, “Taxes,” shall mean any and all federal, state,
local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed
with respect to such amounts, and any obligations with respect to such amounts arising as a result of being a member of an affiliated,
consolidated, combined or unitary group for any period or under any agreements or arrangements with any other Person and including
any liability for taxes of a predecessor entity. Notwithstanding the foregoing, for the purposes of this Section 2.6 and
Section 4.1(b)(xii), “Tax” and “Taxes” shall not include any Tax taken into account in determining
Assumed Customer Tax Obligation (as defined in Section 2.23(a)). The Company and each of its Subsidiaries have filed all
material federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (“Tax
Returns”) required to be filed by any of them and all such Tax Returns are true and correct in all material respects. The
Company and each of its Subsidiaries have timely paid, or have adequately reserved (in accordance with GAAP) for the payment of,
all Taxes required to be paid (whether or not shown on any Tax Returns), and the most recent financial statements contained in
the Company SEC Reports reflect an adequate reserve (in accordance with GAAP) for all Taxes payable by the Company and its Subsidiaries
through the date of such financial statements. No material deficiencies for any Taxes have been asserted or assessed, or, to the
Knowledge (as defined in Section 8.3(b)) of the Company, proposed, against the Company or any of its Subsidiaries that are
not subject to adequate reserves (in accordance with GAAP). No audit or other examination of any Tax Return of the Company or any
of its Subsidiaries is presently in progress, nor has the Company or any of its Subsidiaries been notified of any request for such
an audit or other examination.

    	8

    	 

    
 

 

(b)      There are
no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from the Company or any of its Subsidiaries for any taxable period and
no request for any such waiver or extension is currently pending. There are no Liens for Taxes upon the assets or properties of
the Company or any Subsidiary except for statutory Liens for current Taxes not yet due. Neither the Company nor any of its Subsidiaries
is a party to any agreement relating to the sharing, allocation or indemnification of Taxes, or any similar agreement, contract
or arrangement, (collectively, “Tax Sharing Agreements”) or has any liability for Taxes of any Person (other than members
of the affiliated group, within the meaning of Section 1504(a) of the Code, filing consolidated federal income tax returns of which
the Company is the common parent) under Treasury Regulation ss. 1.1502-6, Treasury Regulation ss. 1.1502-78 or similar provision
of state, local or foreign law, as a transferee or successor, by Contract, or otherwise. Neither the Company nor any of its Subsidiaries
has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of state, local
or foreign law. Neither the Company nor any of its Subsidiaries is subject to any private letter ruling of the Internal Revenue
Service (the “IRS”) or comparable ruling of any other Tax authority, and there is no currently pending private letter
ruling request to the IRS or comparable ruling request to any other Tax authority, relating to either the Company or any of its
Subsidiaries. The Company and its Subsidiaries have each withheld (or will withhold) from their respective employees, independent
contractors, creditors, stockholders and third parties and timely paid to the appropriate Tax authority proper and accurate amounts
in all material respects for all periods ending on or before the Closing Date in compliance with all Tax withholding and remitting
provisions of applicable laws. No claim in writing has been made by any Governmental Entity in a jurisdiction where neither the
Company nor any of its Subsidiaries files Tax Returns that it is or may be subject to taxation by that jurisdiction. The Company
and its Subsidiaries have given or otherwise made available to CEP true, correct and complete copies of all Tax Returns, examination
reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods
of limitations have not expired. The Company and its Subsidiaries have, in all material respects, charged their customers all sales,
goods and services, and other similar Taxes required to be charged under the laws and regulations of all applicable taxing jurisdictions.
All such Taxes have been collected and remitted to the appropriate Tax authority in a timely manner in all material respects.

 

2.7      Intellectual
Property.

 

(a)      No Infringement.
The products, services and operations of the Company do not infringe or misappropriate the Intellectual Property (as defined below)
of any third party where such infringement or misappropriation, individually or in the aggregate, would have a Material Adverse
Effect on the Company. “Intellectual Property” shall mean any or all of the following and all rights in, arising out
of, or associated therewith: (i) all United States, international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof, (ii) all inventions (whether patentable
or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and
customer lists, computer software programs and all documentation relating to any of the foregoing, (iii) all copyrights, copyrights
registrations and applications therefor, and all other rights corresponding thereto throughout the world, (iv) all industrial designs
and any registrations and applications therefor throughout the world, (v) all mask works and any registrations and applications
therefor throughout the world, (vi) all trade names, logos, URLs, common law trademarks and service marks, trademark and service
mark registrations and applications therefor throughout the world, (vii) all databases and data collections and all rights therein
throughout the world, (viii) all moral and economic rights of authors and inventors, however denominated, throughout the world,
and (ix) any similar or equivalent rights to any of the foregoing anywhere in the world. “Company Intellectual Property”
shall mean all Intellectual Property owned by the Company and/or used in its products, services and operations.

    	9

    	 

    
 

 

(b)      No Impairment.
The Merger (including the assignment by operation of law of any Contract to the Surviving Corporation) will not result in: (i)
CEP or any Subsidiary of CEP (other than the Company and its Subsidiaries, but only to the extent existing prior to the Merger)
being bound by any material non-compete or other material restriction on the operation of any business of CEP or its Subsidiaries,
(ii) CEP or any Subsidiary of CEP (other than the Company and its Subsidiaries, but only to the extent existing prior to the Merger)
granting any rights or licenses to any material Intellectual Property of CEP or any Subsidiary of CEP to any third party (including
a covenant not to sue with respect to any material Intellectual Property of CEP or any Subsidiary of CEP), or (iii) the termination
or breach of any Contract to which the Company is a party, which termination or breach would have, individually or in the aggregate,
a Material Adverse Effect on either the Surviving Corporation or CEP, or (iv) the termination or forfeiture of any Company Intellectual
Property.

 

(c)      Schedule.
Section 2.7(c) of the Company Disclosure Letter sets forth, as of the date hereof, a list of all material Company Intellectual
Property described in subsection (i), (iv), (v) and (vi) of Section 2.7(a) and all copyright registrations and applications
therefor.

 

(d)      Ownership
and Maintenance. The Company owns, or possesses licenses or other valid rights to use, all Company Intellectual Property which
is required or necessary to the conduct of the business of the Company, except where the lack thereof, individually or in the aggregate,
would not have a Material Adverse Effect on the Company. To the Knowledge of the Company, no Person is infringing upon or violating
any material Company Intellectual Property. The Company has taken reasonable steps to maintain the confidentiality of its trade
secrets.

 

(e)      Privacy.
The Company does not use or collect any of the information it collects from its web site visitors or other parties in an unlawful
manner, or in a manner that violates the Company’s privacy policy or the privacy rights of its customers. The Merger will
not violate the Company’s privacy policy or the privacy rights of its customers.

 

2.8      Compliance;
Permits.

 

(a)      Compliance.
Neither the Company nor any of its Subsidiaries is or has been in conflict with, or in default or in violation of any Legal Requirement
applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective
businesses or properties is bound, except, in each case, or in the aggregate, for conflicts, violations and defaults that would
not have a Material Adverse Effect on the Company. No material investigation or review by any Governmental Entity is pending or,
to the Knowledge of the Company, has been threatened in a writing delivered to the Company or any of its Subsidiaries, against
the Company or any of its Subsidiaries. There is no judgment, injunction, order or decree binding upon the Company or any of its
Subsidiaries which, individually or in the aggregate, has or could have a Material Adverse Effect on the Company.

 

(b)      Permits.
The Company and its Subsidiaries hold, to the extent legally required, all permits, licenses, authorizations, franchises, variances,
exemptions, orders and approvals from Governmental Entities (“Permits”) that are required for the operation of the
business of the Company and its Subsidiaries, as currently conducted, the failure to hold which, individually or in the aggregate,
would have a Material Adverse Effect on the Company (collectively, “Company Permits”). As of the date hereof, no suspension
or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened. The Company and its Subsidiaries
are in compliance in all material respects with the terms of the Company Permits.

 

2.9      Litigation.
Except as set forth in the Company SEC Reports filed prior to the date hereof, there are no claims, suits, actions or proceedings
pending or, to the Knowledge of the Company, threatened, nor, to the Knowledge of the Company, any investigation pending or threatened,
against the Company or any of its Subsidiaries, any present or former officer, director or employee of the Company or any of its
Subsidiaries or any other Person for whom the Company or any of its Subsidiaries may be liable or pursuant to which it may be obligated
to indemnify any such officer, director, employee of Person, before any Governmental Entity that seeks to restrain, delay, alter
or enjoin the consummation of the transactions contemplated hereby, seeks an award of damages in connection with this Agreement
or any transactions contemplated hereby or which could, either singularly or in the aggregate with all such claims, actions or
proceedings, be material to the Company. Neither the Company nor any of its Subsidiaries is subject to any judgment, decree, injunction,
rule or order of any Governmental Entity that has had or would have, individually or in the aggregate, a Material Adverse Effect
on the Company.

    	10

    	 

    
 

 

2.10      Brokers’
and Finders’ Fees. The Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement or any transaction
contemplated hereby.

 

2.11      Transactions
with Affiliates. Except as set forth in the Company SEC Reports, since the date of the Company’s last proxy statement
filed with the SEC, no event has occurred as of the date hereof that would be required to be reported by the Company pursuant to
Item 404 of Regulation S-K promulgated by the SEC. Section 2.11 of the Company Disclosure Letter identifies each Person who is
an “affiliate” (as that term is used in Rule 145 promulgated under the Securities Act) of the Company as of the date
hereof.

 

2.12      Employee
Benefit Plans.

 

(a)      The employee
compensation, severance, termination pay, deferred compensation, stock or stock-related awards, incentive, fringe, pension, profit-sharing,
savings, retirement, employment, consulting, bonus, change-in-control, retention, welfare, cafeteria, flexible or other benefit
plans, programs, policies, commitments, agreements or other arrangements (whether or not set forth in a written document and including,
without limitation, all “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) under which any employee, former employee, director or consultant of the
Company, any Subsidiary of the Company or any trade or business (whether or not incorporated) that is a member of a controlled
group or that is under common control with the Company within the meaning of Section 414 of the Code (each an “ERISA Affiliate”)
has any present or future right to benefits, or with respect to which the Company has or may in the future have direct or indirect
liability, whether contingent or otherwise, are referred to herein as the “Plans.” Section 2.12(a) of the Company Disclosure
Letter contains a complete and accurate list of each material Plan, including (i) all severance and employment agreements of the
Company with directors or executive officers, (ii) all severance programs and policies of each of the Company or its Subsidiaries,
(iii) all Plans pursuant to which benefits would, in any respect, vest or an amount would become payable by virtue of the transactions
contemplated hereby, and (iv) each stock option plan, stock purchase plan, equity based compensation plan, equity award to any
Person (whether payable in cash, shares or otherwise) (to the extent not issued pursuant to any of the foregoing plans) or other
plan or Contract of any nature with any Person (whether or not an employee) pursuant to which any stock, option, warrant or other
right to purchase or acquire capital stock of the Company or right to payment based on the value of the Company capital stock has
been granted or otherwise issued (collectively, “Company Stock Option Plans”). The Company has provided or made available
to CEP with respect to each Plan, a true, correct and complete copy thereof and to the extent applicable: (i) the most recent documents
(including all amendments and trusts or other funding instruments constituting each Plan; (ii) the three most recent annual reports
(Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA or the Code in connection
with each Plan; (iii) all IRS determination, opinion, notification and advisory letters relating to any Plan; (iv) if the Plan
is funded, the most recent periodic accounting of the Plan assets; (v) the most recent summary plan description, summary of material
modifications and any other written communication (or description of any oral communications) by the Company or any ERISA Affiliate
concerning the extent of benefits provided under a Plan; (vi) for the last three years all material correspondence with the IRS
and the Department of Labor (the “DOL”); and (vii) any other document reasonably requested by CEP.

 

(b)      Each Plan
has been maintained and administered in material compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations (foreign or domestic), including ERISA and the Code, that are applicable to such Plans.
No suit, action, Lien or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has
been brought, or to the Knowledge of the Company is threatened, against or with respect to any such Plan, except as would not result
in material liability to the Company. There are no audits, inquiries or proceedings pending by the IRS or the DOL with respect
to any Plans. Any Plan intended to be qualified under Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code (i) has either applied for or obtained a favorable determination, notification, advisory and/or opinion letter,
as applicable, as to its qualified status from the IRS or still has a remaining period of time under applicable Treasury Regulations
or IRS pronouncements in which to apply for such letter and to make any amendments necessary to obtain a favorable determination,
and (ii) incorporates or has been amended to incorporate all provisions required to comply with the Tax Reform Act of 1986 and
subsequent legislation, unless the Plan still has a remaining period of time under applicable Treasury Regulations or IRS pronouncements
in which to conform to such legislation, and to the Knowledge of the Company, there are no facts or circumstances that could reasonably
be expected to cause the loss of such qualification or the imposition of any material liability, penalty or tax under ERISA, the
Code or any other applicable laws, rules or regulations. With respect to each Plan: (i) all reports, returns, notices and other
documentation that are required to have been filed with or furnished to the IRS and the DOL, the SEC or any other Governmental
Entity, or to the participants or beneficiaries of such Plan have been filed or furnished on a timely basis, and (ii) no individual
who has performed services for the Company or its Subsidiaries has been improperly excluded from participation, except in each
case for violations which would not reasonably be expected to cause material harm to the Company. All contributions (including
all employer contributions and employee salary reduction contributions) or premium payments required to be made by the Company
or its Subsidiaries in respect of any Plan have been timely paid or accrued, except as would not result in material liability to
the Company. Neither the Company nor any ERISA Affiliate have any liability, whether contingent or otherwise, with respect to any
plan subject to Title IV of ERISA or Section 412 of the Code which remains unsatisfied.

    	11

    	 

    
 

 

(c)      Neither
the Company, its Subsidiaries nor, to the Knowledge of the Company, any other “party in interest” or “disqualified
person” with respect to any Plan has engaged in a non-exempt “prohibited transaction” within the meaning of Section
406 of ERISA or Section 4975 of the Code involving such Plan. To the Knowledge of the Company, no fiduciary has any material liability
for breach of fiduciary duty or any other failure to act or comply with the requirements of ERISA, the Code or any other applicable
laws in connection with the administration or investment of the assets of any Plan.

 

(d)      Neither
the Company nor any ERISA Affiliate has at any time ever maintained, established, sponsored, participated in, contributed to, been
requested to contribute to, or had any liability, whether contingent or otherwise, with respect to any “multiemployer plan,”
as such term is defined in Section 3(37)(A) of ERISA. Neither the Company nor any ERISA Affiliate have at any time ever maintained,
established, sponsored, participated in, contributed to, or had any liability, whether contingent or otherwise, with respect to,
(i) any multiple employer plan, or to any plan described in Section 413 of the Code, (ii) any “multiple-employer welfare
arrangement” as defined in Section 3(40) of ERISA, (iii) a Plan subject to Section 4063 or 4064 of ERISA, or (iv) a Plan
maintained outside of the jurisdiction of the United States. None of the Plans promises or provides retiree medical or other retiree
benefits to any person except as required by applicable law, including without limitation, coverage required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.

 

(e)      Neither
the Company nor any of its Subsidiaries is bound by or subject to (and none of its respective assets or properties is bound by
or subject to) any arrangement with any labor union. No employee of the Company or any of its Subsidiaries is represented by any
labor union or covered by any collective bargaining agreement and, to the Knowledge of the Company, no campaign to establish such
representation is in progress. There is no pending or, to the Knowledge of the Company, threatened labor dispute, strike or work
stoppage involving the Company or any of its Subsidiaries and any group of its employees. The Company is in compliance in all material
respects with all applicable foreign, federal, state and local laws, rules and regulations respecting employment, employment and
labor practices, terms and conditions of employment and wages and hours, in each case, with respect to its current or former employees,
except in each case for compliance violations which would not reasonably be expected to cause material harm to the Company. The
Company has not received written notice of any investigation, charge or complaint pending before the Equal Employment Opportunity
Commission or any other Governmental Entity regarding an unlawful unemployment practice. The Company (i) is not barred from any
governmental contract by the Office of Federal Contract Compliance Programs or comparable state agency (the “OFCCP”),
(ii) has not received a notice to show cause from the OFCCP, and (iii) does not have an action pending with the OFCCP.

 

(f)      Neither
any payment or benefit which will or may be made by the Company or its Subsidiaries, nor the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby (either alone or in combination of another event) shall (i) result
in the payment of any amount which could be characterized as a “parachute payment,” within the meaning of Code Section
280G(b)(2), (ii) result in any material payment becoming due, or materially increase the amount of any compensation due, to any
current or former employee of the Company or its Subsidiaries, (iii) materially increase any benefits otherwise payable under any
Plan, (iv) result in the acceleration of the time of payment or vesting of any such compensation or benefits, or (v) result in
the triggering or imposition of any restrictions or limitations on the rights of the Company or its Subsidiaries to amend or terminate
any Plan.

    	12

    	 

    
 

 

(g)      To the
Knowledge of the Company, neither the Company and its Subsidiaries nor any organization to which the Company or its Subsidiaries
is a successor or parent corporation, within the meaning of Section 4069(b) of ERISA, has engaged in any transaction described
in Sections 4069 or 4212(c) of ERISA.

 

(h)      Neither
the Company nor any of its Subsidiaries have incurred any material liability or material obligation under the Worker Adjustment
and Retraining Notification Act or any similar state or local law which remains unsatisfied.

 

(i)      Neither
the Company nor any of its Subsidiaries have direct or indirect liability with respect to any misclassification of any Person as
an independent contractor rather than as an employee, or with respect to any employee leased from another employer, except as would
not result in material harm to the Company.

 

(j)      Neither
the Company nor any of its Subsidiaries is a party to any Contract or other arrangement which could result in the payment of material
amounts that could be non-deductible by reason of Section 162(m) of the Code.

 

(k)      Each Plan
which is a “group health plan” within the meaning of Section 5000(b)(1) of the Code and Section 607(l) of ERISA has
been administered in material compliance with, and the Company and its Subsidiaries have otherwise complied with, (i) the requirements
of the Heath Insurance Portability and Accountability Act of 1996 and the regulations promulgated thereunder; (ii) the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder; and (iii) the Medicare Secondary
Payor Provisions of Section 1862 of the Social Security Act and the regulations promulgated thereunder, except, in each case, for
compliance violations which would not reasonably be expected to cause material harm to the Company.

 

(l)      No stock
or other security issued by the Company or its Subsidiaries forms or has formed a material part of the assets of any Plan.

 

(m)    Neither the Company nor any ERISA Affiliate has a contract or commitment, whether legally binding or not, to
create any additional employee benefit or compensation plans, policies or arrangements or, except as may be required by
applicable law, to modify any Plan.

 

(n)      No assets
of the Company or its Subsidiaries are allocated to or held in a “rabbi trust” or other funding vehicle in respect
of any Plan other than one qualified under Section 401(a) of the Code.

 

(o)      No “employee
welfare plan” within the meaning of Section 3(1) of ERISA (“Welfare Plan”) disclosed in Section 2.12(a) of the
Company Disclosure Letter is a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA or self-insured.

 

2.13      ENVIRONMENTAL
MATTERS.

 

(a)      Hazardous
Material. Except as would not, individually or in the aggregate, result in a Material Adverse Effect on the Company, no underground
storage tanks and no amount of any substance that has been designated by any Governmental Entity or by applicable Legal Requirement
to be radioactive, toxic, hazardous or otherwise a danger to health or the environment, including PCBs, asbestos, petroleum, urea-formaldehyde
and all substances listed as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, or defined as a hazardous waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws, but excluding office and janitorial supplies, (a “Hazardous
Material”) are present, as a result of the actions of the Company or any of its Subsidiaries or any affiliate of the Company,
or, to the Knowledge of the Company, as a result of any actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water thereof, that the Company or any of its Subsidiaries has
at any time owned, operated, occupied or leased.

    	13

    	 

    
 

 

(b)      Hazardous
Materials Activities. Except as would not, individually or in the aggregate, result in a Material Adverse Effect on the Company:
(i) neither the Company nor any of its Subsidiaries has transported, stored, used, manufactured, disposed of, released or exposed
its employees or others to Hazardous Materials in violation of or in a manner which would result in liability pursuant to, any
Legal Requirement in effect on or before the Closing Date and (ii) neither the Company nor any of its Subsidiaries has disposed
of, transported, sold, used, released, exposed its employees or others to or manufactured any product containing a Hazardous Material
(collectively, “Hazardous Materials Activities”) in violation of or in a manner which would result in liability pursuant
to any Legal Requirement.

 

2.14      CONTRACTS.

 

(a)      Material
Contracts. For purposes of this Agreement, “Company Material Contract” shall mean:

 

(i)      any
“material contracts” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the
Company and its Subsidiaries;

 

(ii)      any
Contract containing any covenant: (A) limiting the right of the Company or its Subsidiaries to engage in any material line of business,
make use of any material Intellectual Property or compete with any Person in any material line of business, or (B) otherwise having
an adverse effect on the right of the Company or any of its Subsidiaries to sell, distribute or manufacture any material products
or services;

 

(iii)      any
Contract, or group of Contracts with a Person (or group of affiliated Persons), the termination or breach of which would, individually
or in the aggregate, have a material adverse effect on any material division or business unit or other material operating group
of product or service offerings of the Company or otherwise have a Material Adverse Effect on the Company or any of its Subsidiaries
or otherwise have a Material Adverse Effect on the Company;

 

(iv)      indentures,
credit agreements, security agreements, mortgages, guarantees, promissory notes and Contract relating to or evidencing indebtedness
for borrowed money of the Company or any of its Subsidiaries (excluding any equipment leases involving aggregate annual payments
of less than Fifty Thousand Dollars ($50,000.00) per lease);

 

(v)      any
non-competition agreement or any other agreement or obligation which limits or purports to limit in any respect the manner in which,
or the localities in which, the business of the Company or any of its Subsidiaries may be conducted;

 

(vi)      any
legal entity in the nature of a partnership or joint venture, or a material strategic alliance (or any Contract substantially similar
to any of the foregoing);

 

(vii)      any
Contract which could prohibit or materially delay the consummation of the transactions contemplated by this Agreement;

 

(viii)      any
Contract that involves, or to the Knowledge of the Company is likely to involve, aggregate annual payments to or from the Company
or any of its Subsidiaries of Fifty Thousand Dollars ($50,000.00) (excluding any Contract with customers of the Company or its
Subsidiaries or any Contract governing an investment made in accordance with the Investment Policy (as defined in Section 4.1(b)(ix)));
or

    	14

    	 

    
 

 

(ix)      any
material Contract with any present director or executive officer of the Company or any of its Subsidiaries or any stockholder who
owns or controls ten percent (10%) or more of the Company’s voting stock.

 

(b)      Schedule.
Section 2.14(b) of the Company Disclosure Letter sets forth a list of all Company Material Contracts to which the Company or any
of its Subsidiaries is a party or by which any of them is bound by as of the date hereof.

 

(c)      No Breach.
All Company Material Contracts are valid and in full force and effect except to the extent they have previously expired in accordance
with their terms or if the failure to be in full force and effect, individually or in the aggregate, would not be material to the
Company. Neither the Company nor any of its Subsidiaries has violated any provision of, or committed or failed to perform any act
which, with or without notice, lapse of time or both would constitute a default under the provisions of, any Company Material Contract,
except in each case for those violations and defaults which, individually or in the aggregate, would not be material to the Company.
Neither the Company nor any of its Subsidiaries has received any written notice from any other party to any Company Material Contract
that it intends to terminate or not renew such Company Material Contract. To the Company’s Knowledge, no such other party
is in violation, breach or default of any Company Material Contract.

 

2.15      Disclosure.
The Proxy Statement (as defined in Section 5.1) shall not, at the date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to the stockholders of the Company, at the time of the Stockholders’ Meeting (as defined in Section
5.2) and as of the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies
for the Stockholders’ Meeting which shall have become false or misleading. The Proxy Statement will comply in all material
respects with the provisions of the Exchange Act and the rules and regulations promulgated by the SEC thereunder. Notwithstanding
the foregoing, no representation or warranty is made by the Company with respect to statements made or incorporated by reference
therein about CEP supplied by CEP or any of CEP’s representatives for inclusion or incorporation by reference in the Proxy
Statement.

 

2.16      Board
Approval. The Board of Directors of the Company has (i) at a meeting duly called and held on or prior to the date hereof determined
that this Agreement and the transactions contemplated hereby are advisable and fair to, and are in the best interest of the Company
and its stockholders and declared the Merger to be advisable, (ii) approved and adopted this Agreement and the transactions contemplated
hereby, including the Merger and the Stockholder Agreements and the transactions contemplated thereby, which approval constitutes
approval under Section IC 23-1-42-1 et seq. of the Indiana Business Corporation Law such that the Merger, this Agreement and the
other transactions contemplated hereby, are not and shall not be subject to any restriction pursuant to Section IC 23-1-43-1 et
seq. of the Indiana Business Corporation Law, (iii) resolved to make the Recommendation (as defined in Section 5.2(b)),
subject to the right of the Board of Directors of the Company to withhold, withdraw, amend, change or modify the Recommendation
in accordance with Section 5.3(d), and (iv) directed that this Agreement and the Merger be submitted to the stockholders
of the Company for approval.

 

2.17      Fairness
Opinion. The Company’s Board of Directors intends to obtain an opinion dated as of the date of this Agreement, to the
effect that, as of such date, the Merger Consideration, including the Per Share Amount, is fair from a financial point of view
to the holders of outstanding shares of the Company Preferred Stock and the Company Common Stock.

 

2.18      Rights
Plan. The Company has no stockholder rights plan, rights agreement, or any other instrument in the nature of a “poison
pill” that would otherwise be triggered upon or applicable to the execution or delivery of this Agreement or the Stockholder
Agreements, the consummation of the Merger pursuant to this Agreement or the consummation of any other transactions contemplated
hereby.

 

2.19      Takeover
Statutes. In connection with CEP’s offer and acquisition statement delivered to the Company’s Board of Directors,
together with the Board’s approval and recommendation thereof to the Company’s shareholders, the Board of Directors
of the Company has taken all actions such that this Agreement and the transactions contemplated hereby and the Stockholder Agreements
and the transactions contemplated thereby, are not and will not be subject to any restrictions under Section IC 23-1-42-1 et seq.
of the Indiana Business Corporation Law. No other state takeover statute or similar statute or regulation applies to or purports
to apply to the Merger, the Stockholder Agreements or the transactions contemplated hereby or thereby.

    	15

    	 

    
 

 

2.20      Vote
Required. The only vote of the holders of any class or series of capital stock of the Company necessary to approve and adopt
this Agreement and approve the Merger is the affirmative vote of the holders of a majority of the outstanding shares of Company
Common Stock.

 

2.21      Real
Estate.

 

(a)      Ownership
of Premises. The Company does not own any real property.

 

(b)      Leased
Properties. Section 2.21(b) of the Company Disclosure Letter is a true, correct and complete schedule of all leases, subleases,
licenses and other agreements (collectively, the “Real Property Leases”) under which the Company uses or occupies or
has the right to use or occupy, now or in the future, any real property (the land, buildings and other improvements covered by
the Real Property Leases being herein called the “Leased Real Property”). The Company has heretofore delivered to CEP
true, correct and complete copies of all Real Property Leases (including all modifications, amendments and supplements). There
is no material uncured default by the Company as tenant under any of the Real Property Leases or, to the best of the Company’s
Knowledge, by the landlord thereunder. The Company holds the leasehold estate under and interest in each Real Property Lease free
and clear of all Liens, other than for Liens for taxes not yet due and payable. None of the Leased Real Property is subleased or
sublicensed to any other person or entity.

 

(c)      Entire
Premises. All of the material land, buildings, structures and other improvements used by the Company in the conduct of its
business are included in the Leased Real Property.

 

2.22      Customers.
Section 2.22 of the Company Disclosure Letter sets forth a list of (i) the top ten (10) customers of the Company and its Subsidiaries
(established using the projected annualized value per customer based on revenue for the three (3) month period ended February 29,
2012, (ii) for each such customer, the amount of the dollar volume established using the projected annualized value per customer
based on revenue for the three (3) month period ended February 29, 2012, and (iii) confirmation of whether a written agreement
(other than periodic purchase orders) exists between the Company or any of its Subsidiaries and each such customer and the effective
date of each such written agreement. To the Knowledge of the Company, as of the date hereof, no Person listed on Section 2.22 of
the Company Disclosure Letter within the last twelve months has canceled or otherwise terminated the relationship of such Person
with the Company or any of its Subsidiaries or has given written notice that it intends to cancel or otherwise terminate the relationship
of such Person with the Company or any of its Subsidiaries.

 

2.23      Trust
Funds.

 

(a)      Trust
Tax Funds. All Trust Tax Funds amounts have been recorded in the books and records maintained by the Company or its Subsidiaries
on behalf of their customers in a manner that allows the Company to separately account for each customer’s Trust Tax Funds
(the “Tax Accounts”). To the Knowledge of the Company, the Company and its Subsidiaries have paid in a timely manner
to the applicable Tax authorities all amounts that are required to be paid to such authorities on behalf of their customers in
respect of all taxable periods then ended, except in the event that any failure to pay such amount to such authorities was (i)
caused solely by the refusal or inability of the customer to pay such amount to the Company and its Subsidiaries, (ii) caused solely
by the failure of the customer to provide accurate data to the Company and its Subsidiaries or (iii) in the ordinary course of
business. To the Knowledge of the Company, the Company and its Subsidiaries have timely filed with the applicable Tax authorities
all Tax Returns that are required to be filed in connection with the Trust Tax Funds held in the Tax Accounts, except in the event
that any failure to timely file such Tax Returns with such authorities was (i) caused solely by the failure of the customer to
provide in a timely manner the information necessary to make such filings or (ii) in the ordinary course of business. The aggregate
Assumed Customer Tax Obligations are equal to the sum of (i) the aggregate amount of Trust Tax Funds held in the Tax Accounts plus
(ii) the relevant portion of Tax Account Receivables (as defined in Section 5.13), if any, with the exception of the realized
loss in value of a financial instrument described in Section 2.23 of the Company Disclosure Letter of which corporate funds will
ultimately be transferred into the Tax Account to remedy the differential. “Trust Tax Funds” shall mean, with respect
to any date, all federal and state payroll, social security, Medicare, unemployment and other trust Taxes held in Tax Accounts
that were (i) withheld by the Company or its Subsidiaries from the payroll of employees of, or otherwise collected from, the Company’s
or its Subsidiaries’ customers in connection with the payroll processing and tax filing services of the Company and its Subsidiaries
prior to such date and (ii) not yet remitted to the applicable Tax authorities as of such date. “Assumed Customer Tax Obligations”
shall mean with respect to any date, obligations of the Company and/or its Subsidiaries as of such date (i) to remit to the Tax
authorities on behalf of the Company’s or its Subsidiaries’ customers after such date all federal and state payroll,
social security, Medicare, unemployment and other trust Taxes that are required to be paid and (ii) to refund to the Company’s
or its Subsidiaries’ customers after such date any Trust Tax Funds over-impounded from such customers by the Company and/or
its Subsidiaries, in each case, in connection with the payroll processing and tax filing services performed by the Company and/or
its Subsidiaries prior to such date; provided that, for purposes hereof, the Company and/or its Subsidiaries shall
only be regarded as having such an obligation if, and to the extent that, a customer has paid, or Trust Tax Funds have been over-impounded
by, the Company and/or its Subsidiaries in respect thereof prior to such date. To the Company’s Knowledge, set forth on Section
2.23 of the Company Disclosure Letter, is a true and correct list as of December 31, 2011, of penalties and interest relating to
assessments with respect to payroll Tax Returns filed on behalf of the clients of the Company or its Subsidiaries which, at the
time the Company received notice of such assessments, were deemed individually to represent potential exposure to the Company and
it Subsidiaries, or their clients, in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).

    	16

    	 

    
 

 

(b)      Trust
Non-Tax Funds. All Trust Non-Tax Funds amounts have been held in segregated non-tax accounts maintained by the Company or its
Subsidiaries on behalf of their customers (the “Non-Tax Accounts”). Such amounts are not commingled with funds of the
Company or its Subsidiaries and no amounts have been paid out of such accounts other than (i) payments to the applicable regulatory
authorities of such withheld amounts on behalf of such customers or to authorized recipients or (ii) payments returning any such
amounts (or any portion of such amounts) to such customers. To the Knowledge of the Company, the Company and its Subsidiaries have
paid in a timely manner to the applicable regulatory authorities (or authorized recipients) all amounts that are required to be
paid to such authorities (or authorized recipients) on behalf of customers in respect of all payroll periods then ended, except
in the event that any failure to pay such amount to such authorities (or authorized recipients) was (i) caused solely by the refusal
or inability of the customer to pay such amount to the Company and its Subsidiaries, (ii) caused solely by the failure of the customer
to provide accurate data to the Company and its Subsidiaries or (iii) in the ordinary course of business. To the Knowledge of the
Company, the Company and its Subsidiaries have timely filed with the applicable regulatory authorities or authorized recipients
all filings, if any, that are required to be filed in connection with the Trust Non-Tax Funds held in the Non-Tax Accounts, except
in the event that any failure to timely file such filings with such authorities was (i) caused solely by the failure of the customer
to provide in a timely manner the information necessary to make such filings or (ii) in the ordinary course of business. The aggregate
Assumed Customer Non-Tax Obligations are equal to the sum of (i) the aggregate amount of Trust Non-Tax Funds held in the Non-Tax
Accounts plus (ii) the relevant portion of Trust Account Receivables, if any. “Trust Non-Tax Funds” shall mean, with
respect to any date, (a) all customers’ employees’ net pay (in connection with direct deposit services or check services)
and (b) all workers’ compensation or other insurance premiums or contributions (whether on behalf of the employer or employee)
to 401(k) or other similar investment plans that were withheld by the Company or its Subsidiaries from the payroll of employees
of, or otherwise collected from, the Company’s or its Subsidiaries’ customers in connection with the payroll processing
services of the Company and its Subsidiaries prior to such date, which in each case, were not yet remitted to the applicable regulatory
authorities or other authorized recipients as of such date and are held in Non-Tax Accounts. “Assumed Customer Non-Tax Obligations”
shall mean with respect to any date, obligations of the Company and/or its Subsidiaries as of such date (i) to remit to the applicable
regulatory authorities or other authorized recipients on behalf of the Company’s or its Subsidiaries’ customers after
such date all workers’ compensation or other insurance premiums or contributions (whether on behalf of employer or employee)
to 401(k) or other similar investment plans or customers’ employees’ net pay (in connection with direct deposit services
or check services) that are required to be paid and (ii) to refund to the Company’s or its Subsidiaries’ customers
after such date any Trust Non-Tax Funds over-impounded from such customers by the Company and/or its Subsidiaries, in each case,
in connection with the payroll processing services performed by the Company and/or its Subsidiaries prior to such date; provided
that, for purposes hereof, the Company and/or its Subsidiaries shall only be regarded as having such an obligation if, and
to the extent that, a customer has paid, or Trust Non-Tax Funds have been over-impounded by, the Company and/or its Subsidiaries
in respect thereof prior to such date.

    	17

    	 

    
 

 

2.24      Investment
Policy. The Company is, in all material respects, in compliance with the terms of the Investment Policy.

 

article
3. 

REPRESENTATIONS AND
WARRANTIES OF CEP AND MERGER SUB

 

CEP and Merger Sub
represent and warrant to the Company, except as otherwise set forth in writing in appropriately corresponding sections of the disclosure
letter supplied by CEP and Merger Sub to the Company dated as of the date hereof (the “CEP Disclosure Letter”),
as follows:

 

3.1      Organization;
Standing and Power; Charter Documents; Subsidiaries.

 

(a)      Organization;
Standing and Power. Each of CEP and Merger Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, has the requisite corporate power and authority to own,
lease and operate its assets and properties and to carry on its business as now being conducted, except where the failure to be
so organized, existing and in good standing would not have a Material Adverse Effect on CEP.

 

(b)      Charter
Documents. CEP has delivered or made available to the Company (i) a true and correct copy of the Charter and Bylaws of CEP
and of Merger Sub, each as amended to date (collectively, the “CEP and Merger Sub Charter Documents”). The
CEP and Merger Sub Charter Documents and are in full force and effect, neither CEP nor Merger Sub is in violation of
any of the provisions of the CEP and Merger Sub Charter Documents.

 

3.2      Authority;
Non-Contravention; Necessary Consents.

 

(a)      Authority.
Each of CEP and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby has been duly authorized by all necessary corporate action on the part of CEP and Merger Sub and no other corporate
proceedings on the part of CEP or Merger Sub are necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby, subject only, with respect to the Merger, to the filing of the Certificate of
Merger pursuant to Tennessee Law. This Agreement has been duly executed and delivered by CEP and Merger Sub and, assuming
due execution and delivery by the Company, constitutes the valid and binding obligation of CEP and Merger Sub, enforceable
against CEP and Merger Sub in accordance with its terms.

 

(b)      Non-Contravention.
The execution and delivery of this Agreement by CEP and Merger Sub does not, and performance of this Agreement by CEP and
Merger Sub will not: (i) conflict with or violate the CEP and Merger Sub Charter Documents, (ii) subject to compliance
with the requirements set forth in Section 3.2(c), conflict with or violate any material Legal Requirement applicable to
CEP or Merger Sub or by which CEP or Merger Sub or any of its properties is bound or affected, or (iii) result in any
material breach of or constitute a material default (or an event that with notice or lapse of time or both would become a material
default) under, or impair CEP’s rights or alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in the creation of a material Lien on any of the material
properties or assets of CEP or Merger Sub pursuant to, any material Contract to which CEP or Merger Sub is a party or
by which CEP or Merger Sub or any of its properties are bound or affected, in each case, except as would not individually
or in the aggregate, have a material adverse effect on the ability of CEP or Merger Sub to consummate the transactions contemplated
hereby.

 

(c)      Necessary
Consents. No consent, approval, order or authorization of, or registration, declaration or filing with any Governmental Entity
is required to be obtained or made by CEP in connection with the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, except for (i) the Necessary Consents and (ii) such other consents, authorizations, filings,
approvals and registrations which if not obtained or made would not be material to CEP, Merger Sub, or the Company or materially
adversely affect the ability of the parties hereto to consummate the transactions contemplated hereby within the time frame in
which such transactions would otherwise be consummated in the absence of the need for such consent, approval, order, authorization,
registration, declaration or filings.

    	18

    	 

    
 

 

3.3      Brokers’
and Finders’ Fees. CEP has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’
fees or agents’ commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

 

3.4      Disclosure.
None of the information supplied or to be supplied by or on behalf of CEP or Merger Sub for inclusion or incorporation by
reference in the Proxy Statement, will, at the time the Proxy Statement is first mailed to the stockholders of the Company, at
the time of the Stockholders’ Meeting or as of the Effective Time, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading or necessary to correct any statement in any earlier communication
with expect to the solicitation of proxies for the Stockholders’ Meeting which shall have become false or misleading.

 

3.5      Board
Approval. The Board of Directors of CEP has, by resolutions duly adopted by at a meeting of the CEP’s Directors duly
called and held and not subsequently rescinded or modified in any way (the “CEP Board Approval”) has duly approved
this Agreement.

 

3.6      Available
Funds. CEP has or will have available to it, and will make available to Merger Sub, all funds necessary to satisfy all
of CEP’s and Merger Sub’s obligations under this Agreement.

 

article
4. 

CONDUCT PRIOR TO
THE EFFECTIVE TIME

 

4.1      Conduct
of Business of the Company.

 

(a)      Ordinary
Course. During the period from the date hereof and continuing until the earlier of the termination of this Agreement pursuant
to its terms or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, (except (i) as permitted by
the terms of this Agreement, (ii) as disclosed in Section 4.1 of the Company Disclosure Letter, or (iii) to the extent that CEP
shall otherwise consent in writing (which consent shall not be unreasonably delayed), carry on the business of the Company and
its Subsidiaries, including but not limited to its Investment Policy in all material respects, in the ordinary course, consistent
with past practice, and shall use their commercially reasonable efforts to preserve intact their business, organization and relationships
with third parties and to keep available the services of their officers and employees.

 

(b)      Required
Consent. In addition, without limiting the generality of Section 4.1(a), except as permitted by the terms of this Agreement,
and except as provided in Section 4.1 of the Company Disclosure Letter, without the prior written consent of CEP (which consent
shall not be unreasonably delayed), during the period from the date hereof and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, the Company shall not do any of the following, and shall not permit
its Subsidiaries to do any of the following:

 

(i)      Enter
into any new line of business material to it and its Subsidiaries taken as a whole;

 

(ii)      Declare,
set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for any capital stock, other than, the declaration and payment of cash distributions
with respect to Company Preferred Stock payable to the holders of Company Preferred Stock in accordance with the requirements thereof
set forth in the Company Charter Documents;

 

(iii)      Purchase,
redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or the capital stock of its Subsidiaries,
except repurchases of unvested shares at cost in connection with the termination of the Company’s or any of its Subsidiary’s
relationship with any service provider (as referred to in the Company Option Plans) pursuant to stock option or purchase agreements
in effect on the date hereof or entered into in compliance with this Agreement;

 

(iv)      Issue,
deliver, sell, authorize, pledge or otherwise encumber any shares of capital stock, Voting Debt or any securities convertible into
shares of capital stock or Voting Debt, or subscriptions, rights, warrants or options to acquire any shares of capital stock or
Voting Debt or any securities convertible into shares of capital stock or Voting Debt, or enter into other agreements or commitments
of any character obligating it to issue any such securities or rights;

    	19

    	 

    
 

 

(v)      Cause,
permit or propose any amendments to the Company Charter Documents or any of the Subsidiary Charter Documents of its Subsidiaries;

 

(vi)      Acquire
or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or
by any other manner, any business or any Person or division thereof, or otherwise acquire or agree to acquire any assets which
are material, individually or in the aggregate, to its business;

 

(vii)      Enter
into any joint ventures, strategic partnerships or alliances that are material to any of its divisions or business units;

 

(viii)      Except
as previously disclosed in the Company SEC Reports prior to the date hereof, sell, lease, license, mortgage or otherwise encumber
or dispose of any properties or assets which are material, individually or in the aggregate, to its business, except in the ordinary
course of business consistent with past practice;

 

(ix)      Make
any loans, advances or capital contributions to, or investments in, any other Person, other than: (A) loans or investments by it
or a Subsidiary of it to or in it or any wholly-owned Subsidiary of it, (B) employee loans or advances made in the ordinary course
of business consistent with past practice and not to exceed Twenty Thousand Dollars ($20,000.00) in the aggregate, (C) investments
by it or a Subsidiary of it in any other Person (i) in the ordinary course of business consistent with past practice and not to
exceed Five Hundred Thousand Dollars ($500,000.00) in the aggregate (provided that none of such transactions referred
to in this clause (C)(i) presents a material risk of delaying the Merger or making it more difficult to obtain any Necessary Consent)
or (ii) pursuant to the terms of and in accordance with any investment policy adopted by the Company’s Board of Directors
(which, if any, shall be identified in Section 4.1(b)(ix) of the Company Disclosure Letter);

 

(x)      Except
as required by GAAP or the SEC as concurred in by its independent auditors, make any material change in its methods or principles
of accounting since the date of the Company Balance Sheet;

 

(xi)      Make
or change any material Tax election or adopt or change a Tax accounting method;

 

(xii)      Settle,
pay, discharge or satisfy any material claim (including any Tax claim), action, suit, investigation, audit or proceeding involving
money damages, except (A) in the ordinary course of business (B) to the extent subject to reserves existing as of the date hereof
in accordance with GAAP, (C) amounts outside the ordinary course of business not to exceed Three Hundred Fifty Thousand Dollars
($350,000.00) in the aggregate or (D) engaging in any such activities on behalf of customers of the Company or its Subsidiaries
that result in payments only by such customers, and, except as permitted by subsections (A), (B) or (C), do not result in any payment
obligation or other liability of the Company or any of its Subsidiaries;

 

(xiii)      Except
as required by Legal Requirements, this Agreement or Contracts currently binding on the Company or its Subsidiaries, adopt or amend
any Plan, Company Purchase Plans, Company Stock Option Plan or Other Options, or enter into any new, or amend any existing employment,
severance, consulting, salary continuation or other similar Contract or collective bargaining agreement (other than offer letters
and letter agreements entered into in the ordinary course of business with employees who are terminable “at will”),
pay any special bonus or special remuneration (cash, equity or otherwise) to any director or employee, or increase the salaries
or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants
except (x) payment of bonuses or increases in salaries or wage rates or fringe benefits to non-officer employees in the ordinary
course of business consistent with past practice or (y) payments made to Company employees pursuant to Company retention plans
in amounts not to exceed the amounts set forth in Section 4.1 of the Company Disclosure Letter;

 

(xiv)      Enter
into any Contract the effect of which would be to grant to a third party any actual or potential right of license to any material
Intellectual Property owned by CEP or any of its Subsidiaries;

    	20

    	 

    
 

 

(xv)      Incur
any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities
of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of another
Person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under its line of
credit for working capital purposes and the endorsement of checks in the normal course of business consistent with past practice
or make any loans, advances or capital contributions to, or investments in, any other Person, other than to the Company or any
direct or indirect wholly owned Subsidiary of the Company and other than travel and entertainment advances to employees in the
ordinary course of business consistent with past practice;

 

(xvi)      Adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization;

 

(xvii)      Engage
in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company’s
or its Subsidiaries’ affiliates, including, without limitation, any transactions, agreements, arrangements or understandings
with any affiliate or other Person covered under Item 404 of SEC Regulation S-K that would be required to be disclosed under such
Item 404;

 

(xviii)      Do
or permit any licensee or sublicensee thereof to do any act or knowingly omit to do any act whereby any Company Intellectual Property
may become invalidated, abandoned or dedicated to the public domain;

 

(xix)      Make
any commitment or enter into, or amend, modify, or terminate, or waive any rights under any Company Material Contract; or

 

(xx)      Agree
in writing or otherwise to take any of the actions described in (i) through (xix) above.

 

(c)      Taxes.
During the period from the date of this Agreement to the Effective Time, the Company and its Subsidiaries shall:

 

(i)      prepare,
in the ordinary course of business and consistent with past practice (except as otherwise required by law), and timely file all
Tax Returns required to be filed by it (or them) on or before the Closing Date (“Post Signing Returns”);

 

(ii)      deliver
to CEP drafts of the Company’s fiscal year ended June 30, 2012 Tax Return prior to the date (including extensions) on which
such Tax Return is required to be filed (if the Merger has not yet occurred by such date); and

    	21

    	 

    
 

 

(iii)      promptly
notify CEP of any material federal, state, local or foreign income or franchise and any other suit, claim, action, investigation,
proceeding or audit pending against or with respect to the Company or any of its Subsidiaries in respect of any Tax matter, including
(without limitation) Tax liabilities and refund claims.

 

article
5. 

ADDITIONAL AGREEMENTS

 

5.1      Proxy
Statement. Promptly after execution and delivery of this Agreement, the Company shall prepare and shall file with the SEC as
soon as is practicable a preliminary Proxy Statement, together with a form of proxy, with respect to the Stockholders’ Meeting
at which the stockholders of the Company will be asked to vote upon and approve this Agreement and the Merger and shall use reasonable
efforts to have the Proxy Statement and form of proxy cleared by the SEC as promptly as practicable, and promptly thereafter shall
mail the definitive Proxy Statement and form of proxy to stockholders of the Company. The term “Proxy Statement” shall
mean such proxy or information statement and all amendments or supplements thereto, if any, similarly filed and mailed. CEP will
provide the Company with any information that may be required in order to effectuate the preparation and filing of the Proxy Statement
pursuant to this Section 5.1. The Company will provide CEP and its counsel with a reasonable opportunity to review the Proxy
Statement prior to its filing. The Company will respond to, and provide CEP and its counsel with a reasonable opportunity to participate
in the response of the Company to, any comments from the SEC and will notify CEP promptly upon the receipt of any comments from
the SEC in connection with the filing of, or amendments or supplements to, the Proxy Statement. Whenever any event occurs which
is required to be set forth in an amendment or supplement to the Proxy Statement, the Company or CEP, as the case may be, will
promptly inform the other of such occurrence and cooperate in filing with the SEC and/or mailing to stockholders of the Company
such amendment or supplement. Each of CEP and the Company shall cooperate and the Company shall provide CEP (and its counsel) with
a reasonable opportunity to review and comment on the Proxy Statement and on any amendment or supplement to the Proxy Statement
prior to filing such with the SEC, and will provide CEP with a copy of all such filings made with the SEC. The information provided
and to be provided by CEP, Merger Sub, and the Company, respectively, for use in Proxy Statement shall, on the date the Proxy
Statement is first mailed to the Company’s stockholders, on the date of the Stockholders’ Meeting and as of the Effective
Time, not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make such information,
in light of the circumstances under which it was provided, not misleading, and the Company, CEP and Merger Sub each agree
to correct any information provided by it for use in the Proxy Statement which shall have become false or misleading in any material
respect. The Proxy Statement shall comply as to form in all material respects with all applicable requirements of federal securities
laws.

 

5.2      Meetings
of Stockholders; Board Recommendation.

 

(a)      Meeting
of Stockholders. Promptly after the execution of this Agreement, the Company will take all action necessary in accordance with
Tennessee Law and its Certificate of Incorporation and Bylaws to call, hold and convene a meeting of its stockholders to consider
the adoption and approval of this Agreement and approval of the Merger (the “Stockholders’ Meeting”) as soon
as practicable after the date hereof. Subject to Section 5.3(d), the Company will use reasonable efforts to solicit from
its stockholders proxies in favor of the adoption and approval of this Agreement and the approval of the Merger, and will take
all other action necessary or advisable to secure the vote or consent of its stockholders required by Tennessee Law to obtain such
approval. Notwithstanding anything to the contrary contained in this Agreement, the Company may adjourn or postpone its Stockholders’
Meeting to the extent necessary to ensure that any necessary supplement or amendment to the Proxy Statement is provided to its
stockholders in advance of a vote on the Merger and this Agreement or, if as of the time for which the Stockholders’ Meeting
is originally scheduled (as set forth in the Proxy Statement) there are insufficient shares of Company Common Stock or Company
Preferred Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such Stockholders’
Meeting.

 

(b)      Board
Recommendation. Except to the extent expressly permitted by Section 5.3(d): (i) the Board of Directors of the Company
shall recommend that its stockholders vote in favor of the adoption and approval of this Agreement and approval of the Merger (the
“Recommendation”), at the Stockholders’ Meetings, (ii) the Proxy Statement shall include a statement to the effect
that the Board of Directors of the Company has recommended that the Company’s stockholders vote in favor of adoption and
approval of this Agreement and approval of the Merger at the Stockholders’ Meeting, and (iii) neither the Board of Directors
of the Company nor any committee thereof shall withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to CEP, the Recommendation.

    	22

    	 

    
 

 

5.3      Acquisition
Proposals.

 

(a)      No Solicitation.
The Company agrees that neither it nor any of its Subsidiaries nor any of their respective officers, directors, agents and representatives
(including any investment banker, attorney or accountant retained by it or any of its Subsidiaries), and any party to a Stockholder
Agreement shall, and that the Company shall use reasonable efforts to cause its and its Subsidiaries’ other employees and
affiliates not to (and shall not authorize any of them to) directly or indirectly: (i) solicit, initiate, encourage, knowingly
facilitate or induce any inquiry with respect to, or the making, submission or announcement of, any Acquisition Proposal (as defined
in Section 5.3(f)) with respect to itself, (ii) participate or engage in any discussions or negotiations regarding, or furnish
to any Person any nonpublic information with respect to, or take any other action to facilitate any inquiries or the making of
any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal with respect to itself, (iii)
approve, endorse or recommend any Acquisition Proposal with respect to itself (except to the extent specifically permitted pursuant
to Section 5.3(d)), or (iv) enter into any letter of intent or similar document or any Contract or commitment contemplating
or otherwise relating to any Acquisition Proposal or transaction contemplated thereby with respect to itself. The Company and its
Subsidiaries and any of their respective officers, directors, agents and representatives (including any investment banker, attorney
or accountant retained by it or any of its Subsidiaries), and any party to a Stockholder Agreement will immediately cease, and
the Company shall use reasonable efforts to cause its and its Subsidiaries’ other employees and affiliates to cease, any
and all existing activities, discussions or negotiations with any third parties (other than CEP, Merger Sub, and their representatives)
conducted heretofore with respect to any Acquisition Proposal with respect to itself.

 

(b)      Notification
of Unsolicited Acquisition Proposals. As promptly as practicable and in any event within one (1) business day after receipt
of any Acquisition Proposal or any request for nonpublic information or inquiry which the Company reasonably believes would lead
to an Acquisition Proposal the Company shall provide CEP with oral and written notice of the material terms and conditions of such
Acquisition Proposal, request or inquiry, and the identity of the Person or group making any such Acquisition Proposal, request
or inquiry. The Company shall, upon receipt of an Acquisition Proposal, request or inquiry, provide CEP as promptly as practicable
oral and written notice setting forth the terms of any material amendments or proposed material amendments of any such Acquisition
Proposal, request or inquiry.

 

(c)      Superior
Offers. Notwithstanding anything to the contrary contained in Section 5.3(a), in the event that, prior to the adoption
and approval of this Agreement and the Merger by the required vote of the stockholders of the Company, the Company receives an
unsolicited, bona fide written Acquisition Proposal with respect to itself from a third party that its Board of Directors has in
good faith concluded (after consultation with its outside legal counsel and its financial advisor), is, or is reasonably likely
to result in, a Superior Offer (as defined in Section 5.3(f)) and the Company has complied in full with all its obligations
under Section 5.3(a) in connection with such Acquisition Proposal, it may then take the following actions:

 

(i)      Furnish
nonpublic information to the third party making such Acquisition Proposal, provided that (A) (1) concurrently with
furnishing any such nonpublic information to such party, it gives CEP written notice of its intention to furnish nonpublic information
and (2) it receives from the third party an executed confidentiality agreement in substantially the form of the Confidentiality
Agreement (as defined in Section 5.4) prior to taking any action under clause (1) above and (B) contemporaneously with furnishing
any such nonpublic information to such third party, it furnishes such nonpublic information to CEP (to the extent such nonpublic
information has not been previously so furnished);

 

(ii)      Engage
in negotiations with the third party with respect to the Acquisition Proposal, provided that concurrently with entering
into negotiations with such third party, it gives CEP oral and written notice of the its intention to enter into negotiations with
such third party; and

    	23

    	 

    
 

 

(iii)      Approve
or recommend, or propose to approve or recommend, any Superior Offer and enter into any agreement with respect thereto; provided,
in each such case, that the Company has terminated this Agreement pursuant to Section 7.1(g). Nothing in this Section
5.3(c) shall relieve the Company from its obligation to comply with Section 5.3(b).

 

(d)      Changes
of Recommendation. The Board of Directors of the Company may not withhold, withdraw, amend or modify the Recommendation (any
of the foregoing actions, whether by a Board of Directors or a committee thereof, a “Change of Recommendation”), unless,
prior to the adoption and approval of this Agreement and the Merger by the required vote of the stockholders of the Company, the
Board of Directors has concluded in good faith, after consultation with its outside legal counsel, that such Change of Recommendation
is required by its fiduciary obligations to its stockholders under Indiana Law.

 

(e)      Compliance
with Tender Offer Rules. Nothing contained in this Agreement shall prohibit either party or its respective Board of Directors
from taking and disclosing to its stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act.

 

(f)      Certain
Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

(i)      “Acquisition
Proposal,” with respect to a party, shall mean any offer or proposal or public announcement of a proposal or plan, relating
to any transaction or series of related transactions involving: (A) any purchase from such party or acquisition by any Person or
“group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than
a fifteen percent (15%) interest in the total outstanding voting securities of such party or any of its Subsidiaries, directly
or indirectly, or any tender offer or exchange offer that if consummated would result in any Person or group beneficially owning
fifteen percent (15%) or more of the total outstanding voting securities of such party or any of its Subsidiaries, directly or
indirectly, or any merger, consolidation, business combination or similar transaction involving such party or any of its Subsidiaries,
(B) any sale, lease (other than in the ordinary course of business), exchange, transfer, license (other than in the ordinary course
of business), acquisition or disposition of more than fifteen percent (15%) of the assets of such party (including its Subsidiaries
taken as a whole), directly or indirectly, or (C) any liquidation or dissolution of such party; and

 

(ii)      “Superior
Offer,” with respect to a party, shall mean an unsolicited, bona fide written offer made by a third party to acquire, directly
or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination, all or substantially
all of the assets of such party or a majority of the total outstanding voting securities of such party and as a result of which
the stockholders of such party immediately preceding such transaction would hold less than fifty percent (50%) of the equity interests
in the surviving or resulting entity of such transaction or any direct or indirect CEP or subsidiary thereof, on terms that the
Board of Directors of such party has in good faith concluded (after consultation with its outside legal counsel and its financial
adviser) (i) to be more favorable from a financial point of view, to such party’s stockholders (in their capacities as stockholders)
than the terms provided pursuant to this Agreement, (ii) the conditions to the consummation of which are reasonably capable of
being satisfied and (iii) financing for which, to the extent required, is then committed or in the good faith judgment of the Board
of Directors of the Company (after consultation with its independent financial advisors) reasonably available.

 

5.4      Confidentiality;
Access to Information.

 

(a)      Confidentiality.
The parties acknowledge that the Company and CEP have previously executed a Mutual Non-Disclosure Agreement dated January 19, 2012
(the “Confidentiality Agreement”), which Confidentiality Agreement will continue in full force and effect in accordance
with its terms and CEP will hold, and will cause its directors, officers, employees, agents and advisors (including attorneys,
accountants, consultants, bankers and financial advisors) to hold, any Evaluation Material (as defined in the Confidentiality Agreement)
confidential in accordance with the terms of the Confidentiality Agreement.

    	24

    	 

    
 

 

(b)      Access
to Information. The Company will afford CEP’s accountants, counsel and other representatives reasonable access during
normal business hours to its properties, books, records and personnel during the period prior to the Effective Time to obtain all
information concerning its business, including the status of product development efforts, properties, results of operations and
personnel, as CEP or its representatives may reasonably request, and, during such period, upon request by CEP, the Company shall,
and shall cause each of its Subsidiaries to, furnish promptly to CEP a copy of any report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of federal or state securities laws; provided,
however, that the Company may restrict the foregoing access to the extent that any law, treaty, rule or regulation of any
Governmental Entity applicable to the Company requires the Company or its Subsidiaries to restrict or prohibit access to any such
properties or information.

 

5.5      Public
Disclosure. Neither the Company, CEP nor any of their respective affiliates shall issue or cause the publication of any press
release or other public announcement with respect to the this Agreement or the other transactions contemplated hereby without the
prior written consent of the other party, except as may be required by law or by any listing agreement with, or the policies of,
a national securities exchange in which circumstance reasonable efforts to consult with the other party will still be required
to the extent practicable.

 

5.6      Regulatory
Filings; Reasonable Best Efforts.

 

(a)      Regulatory
Filings. Each of CEP, Merger Sub, and the Company shall coordinate and cooperate with one another and shall each use reasonable
best efforts to comply with, and shall each refrain from taking any action that would impede compliance with, all Legal Requirements,
and as promptly as practicable after the date hereof, each of CEP, Merger Sub, and the Company shall make all filings, notices,
petitions, statements, registrations, submissions of information, application or submission of other documents required by any
Governmental Entity in connection with the Merger and the other transactions contemplated hereby, including, without limitation:
(i) Notification and Report Forms with the United States Federal Trade Commission (the “FTC”) and the Antitrust Division
of the United States Department of Justice (“DOJ”) as required by the HSR Act, (ii) any other filing necessary to obtain
any Necessary Consent, (iii) filings under any other comparable pre-merger notification forms required by the merger notification
or control laws of any applicable jurisdiction, as agreed by the parties hereto, and (iv) any filings required under the Securities
Act, the Exchange Act, any applicable state or securities or “blue sky” laws and the securities laws of any foreign
country, or any other Legal Requirement relating to the Merger. Each of CEP, Merger Sub, and the Company shall comply as promptly
as practicable with any request for additional information, documents or other materials received by such party hereto or any of
its Subsidiaries or affiliates from any Governmental Entity. Each of CEP and the Company will cause all documents that it
is responsible for filing with any Governmental Entity under this Section 5.6(a) to comply in all material respects with
all applicable Legal Requirements.

 

(b)      Exchange
Of Information. CEP, Merger Sub, and the Company each shall promptly supply the other with any information which may be
required in order to effectuate any filings or application pursuant to Section 5.6(a). Except where prohibited by applicable
Legal Requirements, and subject to the Confidentiality Agreement, each of the Company and CEP shall consult with outside counsel
to the other prior to taking a position with respect to any such filing, shall permit outside counsel to the other to review and
discuss in advance, and consider in good faith the views of the other in connection with any analyses, appearances, presentations,
memoranda, briefs, white papers, arguments, opinions and proposals before making or submitting any of the foregoing to any Governmental
Entity by or on behalf of any party hereto in connection with any investigations or proceedings in connection with this Agreement,
the Merger or the other transactions contemplated hereby (including under any antitrust or fair trade Legal Requirement), coordinate
with outside counsel to the other in preparing and exchanging such information and promptly provide outside counsel to the other
with copies of all filings, presentations or submissions (and a summary of any oral presentations) made by such party to any Governmental
Entity in connection with this Agreement, the Merger or the other transactions contemplated hereby, provided that
with respect to any such filing, presentation or submission, each of CEP and the Company need not supply outside counsel to the
other with copies (or in case of oral presentations, a summary) to the extent that any law, treaty, rule or regulation of any Governmental
Entity applicable to such party requires such party or its Subsidiaries to restrict or prohibit access to any such properties or
information.

    	25

    	 

    
 

 

(c)      Notification.
Each of CEP, Merger Sub, and the Company will notify the other promptly upon the receipt of: (i) any comments from any officials
of any Governmental Entity in connection with any filings made pursuant hereto and (ii) any request by any officials of any Governmental
Entity for amendments or supplements to any filings made pursuant to, or information provided to comply in all material respects
with, any Legal Requirements. Whenever any event occurs that is required to be set forth in an amendment or supplement to any filing
made pursuant to Section 5.6(a), CEP, Merger Sub, or the Company, as the case may be, will promptly inform the other
of such occurrence and cooperate in filing with the applicable Governmental Entity such amendment or supplement.

 

(d)      Reasonable
Best Efforts. Subject to the express provisions of Section 5.2 and Section 5.3 hereof and upon the terms and
subject to the conditions set forth herein, each of the parties agrees to use reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated
by this Agreement, including using reasonable best efforts to accomplish the following: (i) the taking of all reasonable acts necessary
to cause the conditions precedent set forth in Article 6 to be satisfied, (ii) the obtaining of all necessary actions
or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or waivers from third parties, including all Necessary
Consents, (iv) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated or reversed, and (v) the execution or delivery of any
additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.
In connection with and without limiting the foregoing, the Company and its Board of Directors shall, if any takeover statute or
similar Legal Requirement is or becomes applicable to this Agreement or any of the transactions contemplated by this Agreement,
use reasonable best efforts to ensure that the transactions contemplated by this Agreement may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise to minimize the effect of such Legal Requirement on this Agreement and
the transactions contemplated hereby.

 

(e)      Limitation
On Divestiture. Notwithstanding anything in this Agreement to the contrary, nothing contained in this Agreement shall be deemed
to require CEP or the Company or any Subsidiary or affiliate thereof to take or agree to take any Action of Material Divestiture
(as defined below) which would be reasonably likely to materially adversely impact the benefits expected to be derived by CEP and
its Subsidiaries (on a combined basis with the Company and its Subsidiaries) as a result of the transactions contemplated hereby
or would be reasonably likely to materially adversely affect CEP and its Subsidiaries (on a combined basis with the Company and
its Subsidiaries) following the Merger. For purposes of this Agreement, an “Action Of Material Divestiture” shall mean
executing or carrying out agreements or submitting to Legal Requirements providing for a material license, material sale or other
material disposition of any assets or categories of assets that are material to the combined business of CEP’s employer services
business and the Company or the holding separate of Company capital stock or imposing or seeking to impose any material limitation
on the ability of CEP, the Company or any of their respective Subsidiaries to own such assets or to acquire, hold or exercise full
rights of ownership of the Company’s business or on the ability of CEP to conduct the combined business of CEP’s employer
services business and the Company.

 

5.7      Notification
of Certain Matters. The Company shall give prompt notice to CEP shall give prompt notice to the Company, of any representation
or warranty made by it contained in this Agreement becoming untrue or inaccurate or any failure of the Company, Merger Sub,
or CEP, as the case may be, to comply with or satisfy in any material respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement, such that, (A) in the case of the Company, the conditions set forth in Section
6.2(a) or Section 6.2(b) would not be satisfied or (B) in the case of CEP or Merger Sub, the conditions set forth
in Section 6.3(a) or Section 6.3(b) would not be satisfied; provided, however, that the delivery of
any notice pursuant to this Section 5.7 shall not limit or otherwise affect the remedies available hereunder to any of the
parties sending or receiving such notice.

    	26

    	 

    
 

 

5.8      Third-Party
Consents. As soon as practicable following the date hereof, CEP and the Company will each use reasonable efforts to obtain
(i) all Necessary Consents and (ii) all consents, waivers and approvals under any Company Material Contract as may be required
to be obtained in connection with the Merger.

 

5.9      [Reserved].

 

5.10      Indemnification.

 

(a)      Indemnity.
From and after the Effective Time, CEP will, and will cause the Surviving Corporation to, fulfill and honor in all respects the
obligations of the Company pursuant to any indemnification and exculpation provisions in favor of the current or former directors
or officers of the Company (the “Indemnified Parties”) under the Certificate of Incorporation or Bylaws of the Company
and any agreement between an Indemnified Party and the Company or a Subsidiary of the Company as in effect as of the date hereof
that is listed in Section 5.10(a) of the Company Disclosure Letter. The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain provisions with respect to exculpation and indemnification that are at least as favorable to the Indemnified
Parties as those contained in the Certificate of Incorporation and Bylaws of the Company as in effect on the date hereof, which
provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner
that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such modification is required by law.

 

(b)      Insurance.
For a period of three (3) years after the Effective Time, CEP will cause the Surviving Corporation to maintain in effect a policy
of directors’ and officers’ liability insurance substantially the same as such policy maintained by the Company covering
those persons (but only those persons) who are currently covered by such policies immediately prior to the Effective Time; provided,
however, that in no event will the Surviving Corporation be required to pay an annual premium on such insurance policy that
is greater than two hundred percent (200%) of the annual premium currently payable by the Company for such coverage and provided,
further, that notwithstanding the foregoing, in the event such coverage is no longer available (or is only available for
an amount in excess of two hundred percent (200%) of the annual premium currently paid by the Company for such coverage) CEP shall
nevertheless be obligated to provide such coverage as may be obtained for such two hundred percent (200%) amount. CEP may, however,
satisfy its obligations under the first sentence of this Section 5.10(b) by purchasing a “tail” policy under
the Company’s existing directors’ and officers’ insurance policy which (i) has an effective term of three (3)
years from the Effective Time, (ii) covers those persons (but only those persons) who are currently covered by the Company’s
directors’ and officers’ insurance policy in effect as of the date hereof, and (iii) contains terms and conditions
(including, coverage amounts) which are no less advantageous that those contained in the terms and conditions of the Company directors’
and officers’ insurance policies in effect as of the date hereof. The Company shall take all actions necessary or advisable
under its existing directors’ and officers’ insurance policy to permit CEP to satisfy its obligations hereunder, including
but not limited to triggering any “tail” policy.

 

(c)      Third-Party
Beneficiaries. This Section 5.10 is intended to be for the benefit of, and shall be enforceable by the Indemnified Parties
and their heirs and personal representatives and shall be binding on CEP and the Surviving Corporation and its successors and assigns.
In the event CEP or the Surviving Corporation or its successor or assign (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any Person, then, and in each case, proper provision shall be made so that the successor and
assign of CEP or the Surviving Corporation, as the case may be, honor the obligations set forth with respect to CEP or the Surviving
Corporation, as the case may be, in this Section 5.10.

 

5.11      Section
16 Matters. Prior to the Effective Time, CEP and the Company shall take all such steps as may be required (to the extent permitted
under applicable law) to cause any dispositions of Company Common Stock (including derivative securities with respect to Company
Common Stock) or acquisitions of CEP Common Stock (including derivative securities with respect to CEP Common Stock) resulting
from the transactions contemplated by Article 1 of this Agreement by each individual who is subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act.

    	27

    	 

    
 

 

5.12      Merger
Sub Compliance. CEP shall cause Merger Sub to comply with all of Merger Sub’s respective obligations under or relating
to this Agreement. Merger Sub shall not engage in any business which is not in connection with the Merger or other transactions
contemplated hereby.

 

5.13      Tax
Account And Non-Tax Account Reconciliation Report And Related Data. If and when requested by CEP, the Company shall deliver
to CEP, in a form reasonably acceptable to CEP, (A) (i) a Tax Account Reconciliation Report as of December 31, 2011 and (ii) a
statement of the Assumed Customer Tax Obligations, Tax Trust Funds, Tax Account Receivables (shown in aggregate, as well as by
aging category, e.g., 30 to 90 days, 91 to 180, 181 to 360, and one year or older) and the Tax Fund Investment Portfolio (showing
market value adjustments) balances, each as of December 31, 2011, for each customer of the Company or its Subsidiaries and (B)
a Non-Tax Bank Account Reconciliation Report as of December 31, 2011. “Tax Account Reconciliation Report” shall mean
a reconciliation report comparing the aggregate amounts of the Tax Trust Funds and Tax Account Receivables to the Assumed Customer
Tax Obligations for each customer. “Non-Tax Bank Account Reconciliation Report” shall mean a report demonstrating the
reconciliation of the cash disbursement ledger to the Company’s bank accounts, including the COBRA account(s), the flexible
spending account(s) (FSA), the health and welfare account(s) (H&W) and payroll check accounts. “Tax Account Receivables”
shall mean, with respect to any date, any amounts owed to the Company or its Subsidiaries by its customers as of such date relating
to previously assumed and fulfilled Assumed Customer Tax Obligations, including, but not limited to, (i) rejected Collection Items
in Transit, (ii) items payable to the Company or its Subsidiaries by its customers for reimbursement of overdeposits by Tax authorities
(for which the customer has received earlier credit or upon which it has relinquished any claim) or (iii) any other amounts owed
to the Company or its Subsidiaries by customers for the past funding of bona fide Assumed Customer Tax Obligations. A “Collection
Item In Transit” shall mean a pre-approved electronic impound from a customer’s bank account that was processed via
an automated clearing house network or reverse wire transfer initiated through the Company’s or its Subsidiaries’ banks
but that is not yet settled. “Tax Fund Investment Portfolio” shall mean that portion of the Tax Trust Funds invested
in bonds, securities, mutual funds, and other non-cash financial instruments.

 

article
6. 

CONDITIONS TO THE
MERGER

 

6.1      Conditions
to the Obligations of Each Party to Effect the Merger. The respective obligations of each party to this Agreement to effect
the Merger shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

 

(a)      Stockholder
Approval. This Agreement shall have been approved and adopted, and the Merger shall have been duly approved, by the requisite
vote under applicable law, by the stockholders of the Company.

 

(b)      No Order.
No Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Legal Requirement
(whether temporary, preliminary or permanent) which (i) is in effect and (ii) has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger; provided, however, that prior to invoking this condition, the party so invoking
this condition shall have complied with its obligations under Section 5.6.

 

(c)      Securities
Matters. All securities regulatory matters relating to the Company’s obligations under the Securities Exchange Act of
1934, as well as its obligations under the applicable listing requirements of the New York Stock Exchange/AMEX, relating to the
transactions contemplated hereby shall have been resolved.

 

(d)      Necessary
Consents. All Necessary Consents required to execute, deliver and perform this Agreement and to consummate the Merger shall
have been obtained or made.

 

6.2      Additional
Conditions to the Obligations of CEP and Merger Sub. The obligations of CEP and Merger Sub to consummate and effect
the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which
may be waived, in writing, exclusively by CEP:

    	28

    	 

    
 

 

(a)      Representations
and Warranties. The representations and warranties of the Company contained in Article 2 of the Agreement (A) that
are qualified by the phrase “Material Adverse Effect” shall each be true and correct in all respects and (B) that are
not so qualified shall be true and correct in all respects, in the case of (A) and (B) as of the date of this Agreement and as
of the Effective Time with the same force and effect as if made as of such date, except (i) with respect to (B) any such representations
and warranties in each case, or in the aggregate with other representations and warranties that are not qualified by the phrase
“Material Adverse Effect”, as does not constitute a Material Adverse Effect on the Company; (ii) for changes contemplated
by this Agreement; and (iii) for those representations and warranties which address matters only as of a particular date (which
representations shall have been true and correct (subject, if applicable, to the Material Adverse Effect on the Company limitation
set forth in the preceding clause (i)) as of such particular date) (it being understood that, for purposes of determining the accuracy
of the representations and warranties described in (B), all materiality qualifications and other qualifications based on the word
“material” contained in such representations and warranties shall be disregarded) CEP shall have received a certificate
to such effect signed on behalf of the Company by an authorized senior executive officer of the Company.

 

(b)      Agreements
and Covenants. The Company has performed or complied in all material respects with the covenants, obligations and agreements
required by this Agreement to be performed or complied with by it at or prior to the Closing Date. CEP and Merger Sub shall
have received a certificate with respect to the foregoing signed on behalf of the Company by an authorized senior executive officer
of the Company.

 

(c)      Litigation
Matters. There shall not have been any suit or proceeding by any Governmental Entity against CEP, the Company, Merger Sub,
or any of their respective Subsidiaries, that would result in CEP being required to take any action described in Section 5.6(e).

 

(d)      Funding.
The commitment to CEP and Merger Sub by a commercial lender (or any other source arranged by CEP) to provide certain funding in
connection with the Merger and in connection with certain transactions between CEP and Carter M. Fortune (which commitment was
obtained by CEP immediately prior to entering into this Agreement with the Company) shall continue to be in force and effect, and
lender shall be prepared, willing, and able to fully fund such transactions thereunder and hereunder contemporaneously with the
Closing Date.

 

(e)      Certain
Other Agreements with Carter M. Fortune. The other commitments and agreements between CEP and/or Merger Sub with Carter M.
Fortune (and/or his successors and assigns) and certain of his affiliates, which were entered into in connection with the Merger,
shall continue to be in force and effect.

 

(f)      Reduction
of Record Holders of Company Common Stock. There shall not have occurred such activity with respect to the record holders of
Company Common Stock that would cause Surviving Corporation to have greater than 300 record holders of the common stock of Surviving
Corporation or that would otherwise prevent Surviving Corporation from suspending its reporting obligations under the Securities
Exchange Act of 1934.

 

6.3      Additional
Conditions to the Obligations of the Company. The obligation of the Company to consummate and effect the Merger shall be subject
to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing,
exclusively by the Company:

 

(a)      Representations
and Warranties. The representations and warranties of CEP contained in Article 3 hereof (A) that are qualified
by the phrase “Material Adverse Effect” shall each be true and correct in all respects and (B) that are not so qualified
shall be true and correct in all respects, in the case of (A) and (B) as of the date of this Agreement and as of the Effective
Time with the same force and effect as if made as of such date, except (i) with respect to (B) any such representations and warranties
in each case, or in the aggregate with other representations and warranties that are not qualified by the phrase “Material
Adverse Effect”, as does not constitute a Material Adverse Effect on CEP; (ii) for changes contemplated by this Agreement;
and (iii) for those representations and warranties which address matters only as of a particular date (which representations shall
have been true and correct (subject, if applicable, to the Material Adverse Effect on CEP limitation set forth in the preceding
clause (i)) as of such particular date) (it being understood that, for purposes of determining the accuracy of the representations
and warranties described in (B), all materiality qualifications and other qualifications based on the word “material”
contained in such representations and warranties shall be disregarded). The Company shall have received a certificate with respect
to the foregoing signed on behalf of CEP, with respect to the representations and warranties of CEP, by an authorized senior executive
officer of CEP and a certificate with respect to the foregoing signed on behalf of Merger Sub, with respect to the representations
and warranties of Merger Sub, by an authorized officer of Merger Sub.

    	29

    	 

    
 

 

(b)      Agreements
and Covenants. CEP and Merger Sub shall have performed or complied in all material respects with the covenants, obligations
and agreements required by this Agreement to be performed or complied with by them at or prior to the Closing Date. The Company
shall have received a certificate with respect to the foregoing signed on behalf of CEP, with respect to the covenants of CEP,
by an authorized senior executive officer of CEP and a certificate with respect to the foregoing signed on behalf of Merger Sub,
with respect to the covenants of Merger Sub, by an authorized officer of Merger Sub.

 

article
7. 

TERMINATION, AMENDMENT
AND WAIVER

 

7.1      Termination.
This Agreement may be terminated at any time prior to the Effective Time, by action taken or authorized by the Board of Directors
of the terminating party or parties, and except as provided below, whether before or after the requisite approval of the stockholders
of the Company:

 

(a)      by mutual
written consent duly authorized by the Boards of Directors of CEP and the Company;

 

(b)      by either
CEP or the Company, if the Merger shall not have been consummated on or before June 30, 2012 (which date shall be automatically
extended to December 31, 2012, in the event that Company and CEP shall not have obtained all regulatory consents by June 30, 2012)
(the “End Date”); provided, however, that the right to terminate this Agreement pursuant to this Section
7.1(b) shall not be available to any party whose action or failure to act has been the principal cause of or resulted in the
failure of the Merger to occur on or before the End Date, and such action or failure to act constitutes a material breach of this
Agreement;

 

(c)      (i) by
either the Company or CEP if any court of competent jurisdiction or other Government Entity shall have issued an order, decree,
or ruling enjoining or otherwise prohibiting the transaction contemplated by this Agreement and such order, decree or ruling shall
have become final and non-appealable (unless such order, decree, or ruling has been withdrawn, reversed, or otherwise made inapplicable);
or (ii) by the Company if any litigation or proceeding is pending before any court of competent jurisdiction or has been threatened
to be instituted by any Person or governmental body, which in the good faith judgment of the Board of Directors of the Company
is reasonably likely to result in an order, decree, or ruling enjoining, prohibiting, seeking substantial damages in respect of,
or impairing the benefits of the transactions contemplated by this Agreement;

 

(d)      by CEP
(at any time prior to the adoption and approval of this Agreement and the Merger by the required vote of the stockholders of the
Company) if a Triggering Event (as defined below in this Section 7.1) with respect to the Company shall have occurred;

 

(e)      by the
Company by written notice to CEP, upon a breach of any representation, warranty, covenant or agreement on the part of CEP or Merger Sub
set forth in this Agreement, or if any representation or warranty of CEP or Merger Sub shall have become untrue or inaccurate,
which untruths, inaccuracies or breach would give rise to the failure of a condition set forth in Section 6.3(a) or 6.3(b);
provided that if such untruth or inaccuracy in CEP’s or Merger Sub’s representations and warranties
or breach by CEP or Merger Sub is curable by CEP or Merger Sub prior to the End Date through the exercise of reasonable
efforts, then the Company may not terminate this Agreement under this Section 7.1(e) prior to such End Date, provided
that CEP continues to exercise reasonable efforts to cure such untruthfulness, inaccuracy or breach through the End Date
(it being understood that the Company may not terminate this Agreement pursuant to this paragraph (e) if it shall have materially
breached this Agreement or if such untruthfulness, inaccuracy or breach by CEP or Merger Sub is cured prior to the End Date);

    	30

    	 

    
 

 

(f)      by CEP
by written notice to the Company, upon a breach of any representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue or inaccurate, which
untruths, inaccuracies or breach would give rise to the failure of a condition set forth in Section 6.2(a) or 6.2(b)
provided that if such untruth or inaccuracy in the Company’s representations and warranties or breach by the
Company is curable by the Company prior to the End Date through the exercise of reasonable efforts, then CEP may not terminate
this Agreement under this Section 7.1(f) prior to the End Date, provided that the Company continues to exercise
reasonable efforts to cure such untruthfulness, inaccuracy or breach through the End Date (it being understood that CEP may not
terminate this Agreement pursuant to this paragraph (f) if it shall have materially breached this Agreement or if such untruthfulness,
inaccuracy or breach by the Company is cured prior to the End Date);

 

(g)      by the
Company, if the Company receives a Superior Offer; provided that, (i) the Company shall have notified CEP in writing
prior to terminating this Agreement pursuant to this Section 7.1(g) that the Company has received a Superior Offer and intends
to terminate this Agreement pursuant to this Section 7.1(g), attaching the most current version of such Superior Offer to
such notice, (ii) the Company shall have afforded CEP the reasonable opportunity to make a revised offer (including by negotiating
the terms of such offer with CEP) and CEP shall not have made, within three (3) business days after receipt of the Company’s
written notice of its intention to terminate this Agreement pursuant to this Section 7.1(g), an offer that the Board of
Directors of the Company determines in good faith to be more favorable to the Company’s stockholders than such Superior Offer
and (iii) the Company shall simultaneously with its termination hereunder make all payments required by Section 7.3(b);
and

 

(h)      by either
the Company or CEP if the required approval of the stockholders of the Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of the Company stockholders duly convened therefore
or at any adjournment thereof; provided, however, that the right to terminate this Agreement under this Section
7.1(h) shall not be available to the Company where the failure to obtain the Company stockholder approval shall have been caused
by the action or failure to act of the Company and such action or failure to act constitutes a material breach by the Company of
this Agreement.

 

For the purposes of
this Agreement, a “Triggering Event,” with respect to the Company, shall be deemed to have occurred if: (i) its Board
of Directors or any committee thereof shall for any reason have withdrawn or shall have amended or modified in a manner adverse
to CEP the Recommendation, (ii) it shall have failed to include the Recommendation in the Proxy Statement, (iii) its Board of Directors
or any committee thereof shall have approved or recommended any Acquisition Proposal, or (iv) a tender or exchange offer relating
to its securities shall have been commenced by a Person unaffiliated with the Company and it shall not have sent to its securityholders
pursuant to Rule 14e-2 promulgated under the Securities Act, within ten (10) business days after such tender or exchange offer
is first published, sent or given, a statement disclosing that the Board of Directors of the Company recommends rejection of such
tender or exchange offer.

 

7.2      Notice
of Termination; Effect of Termination. Except as otherwise set forth in Section 7.1(g), any termination of this Agreement
under Section 7.1 above will be effective immediately upon the delivery of a valid written notice of the terminating party
to the other party hereto. In the event of the termination of this Agreement as provided in Section 7.1, this Agreement
shall be of no further force or effect, except (i) as set forth in Section 5.4(a), this Section 7.2, Section 7.3
and Article 8, each of which shall survive the termination of this Agreement and (ii) nothing herein shall relieve
any party from liability for any willful breach of this Agreement. No termination of this Agreement shall affect the obligations
of the parties contained in the Confidentiality Agreement, all of which obligations shall survive termination of this Agreement
in accordance with their terms.

 

7.3      Fees
and Expenses.

 

(a)      General.
Except as set forth in this Section 7.3, all fees and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether or not the Merger is consummated.

    	31

    	 

    
 

 

(b)      Payments.

 

(i)      Payment
by the Company. In the event that this Agreement is terminated by CEP or the Company, as applicable, pursuant to Section
7.1(d) or (g) the Company shall promptly, but (except as set forth in Section 7.1(g)) in no event later than
(A) thirty (30) business days after the date of such termination, or (B) the date of closing by the Company of the transaction
that is the subject of the Triggering Event (if such closing occurs), whichever of (A) or (B) is earlier, pay CEP a fee equal to
Five Hundred Thousand and No/100 Dollars ($500,000.00) in immediately available funds.

 

(ii)      Interest
and Costs; Other Remedies. Each of CEP and the Company acknowledges that the agreements contained in this Section 7.3(b)
are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, CEP and the Company
would not enter into this Agreement; accordingly, if the Company fails to pay in a timely manner the amounts due pursuant to Section
7.3(b), and, in order to obtain such payment, CEP makes a claim that results in a judgment against the Company for the amounts
set forth in Section 7.3(b), the Company shall pay to CEP its reasonable costs and expenses (including reasonable attorneys’
fees and expenses) in connection with such suit, together with interest on the amounts set forth in Section 7.3(b), at the
prime rate of large U.S. Money Center Commercial Banks published in the WallStreet Journal, in effect on the date such payment
was required to be made. Payment of the fees described in this Section 7.3(b) shall not be in lieu of damages incurred in
the event of breach of this Agreement.

 

7.4      Amendment.
Subject to applicable law, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective
Boards of Directors, at any time before or after approval of the matters presented in connection with the Merger by the stockholders
of the Company, provided, after any such approval, no amendment shall be made which by law or in accordance with the rules
of any relevant stock exchange requires further approval by such stockholders without such further stockholder approval. This Agreement
may not be amended except by execution of an instrument in writing signed on behalf of each of CEP. Merger Sub, and the Company.

 

7.5      Extension;
Waiver. At any time prior to the Effective Time either party hereto, by action taken or authorized by their respective Board
of Directors, may, to the extent legally allowed: (i) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein
or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall
not constitute a waiver of such right.

 

article
8. 

GENERAL PROVISIONS

 

8.1      Non-Survival
of Representations and Warranties. The representations and warranties of the Company, CEP, and Merger Sub contained in
this Agreement, or any instrument delivered pursuant to this Agreement, shall terminate at the Effective Time, and only the covenants
or agreements that by their terms survive the Effective Time and this Article 8 shall survive the Effective Time.

 

8.2      Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, (ii) on the date of confirmation of receipt (or, the first business day following such receipt if the date
is not a business day) of transmission by telecopy or telefacsimile, or (iii) on the date of confirmation of receipt (or, the first
business day following such receipt if the date is not a business day) if delivered by a nationally recognized courier service.
All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice:

    	32

    	 

    

 

		(a)	If to CEP or Merger Sub, to:

CEP, Inc.

Attention:
Tena Mayberry, President

c/o Bone McAllester
Norton PLLC

511 Union Street,
Suite 1600

Nashville,
Tennessee     37219

Facsimile No.:
(615) 238-6301

 

with a copy to:

 

Bone McAllester Norton PLLC

Attention: Charles W. Bone, Esq.      

and Trace Blankenship,
Esq.

511 Union Street, Suite 1600

Nashville, Tennessee 37219

Facsimile No.: (615) 238-6301

 

		(b)	if to Company, to:

Fortune Industries, Inc.

Attention:
Corporate Secretary and General Counsel

6402 Corporate
Dr.

Indianapolis,
IN 46278

Facsimile No.:
(317) 532-1011

 

with a copy
to:

 

Bose McKinney & Evans LLP

Attention: Jeffrey B. Bailey,
Esq.

111 Monument Circle, Suite 2700

Indianapolis, IN 46204

Facsimile No.: (317) 684-5173

 

 

8.3      Interpretation;
Knowledge.

 

(a)      When a
reference is made in this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be to a section of this Agreement unless otherwise
indicated. For purposes of this Agreement, the words “include,” “includes” and “including,”
when used herein, shall be deemed in each case to be followed by the words “without limitation.” The table of contents
and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. When reference is made herein to “the business of” an entity, such reference shall be deemed to
include the business of all such entity and its Subsidiaries, taken as a whole.

 

(b)      For purposes
of this Agreement, the term “knowledge” means, with respect to a party hereto, with respect to any matter in question,
that any of the Chief Executive Officer, Chief Financial Officer, division and subsidiary executive officers, General Counsel,
and/or any member of the Board of Directors, has actual knowledge of such matter.

 

(c)      For purposes
of this Agreement, the term “material adverse effect,” when used in connection with an entity, means any change, event,
violation, inaccuracy, circumstance or effect (any such item, an “Effect”) that is materially adverse to the business,
properties, assets, financial condition or results of operations of such entity taken as a whole with its Subsidiaries (or, if
such entity is the Company, the Company taken as a whole with its Subsidiaries or CEP taken as a whole with its Subsidiaries);
provided, however, that, in no event shall any of the following be deemed to constitute, nor shall any of the following
be taken into account in determining whether there has been or will be, a Material Adverse Effect on any entity: (A) any Effect
resulting from compliance with the terms and conditions of this Agreement, (B) any Effect resulting from the announcement or pendency
of the Merger (including, without limitation, any (x) actions by clients or competitors, (y) loss of personnel or clients, or (z)
the delay or cancellation of orders for services and products), (C) any change in such entity’s stock price or trading volume,
(D) any failure by such entity to meet revenue or earnings projections, (E) any Effect that results from changes affecting any
of the industries in which such entity operates generally or the United States economy generally, (F) any Effect that results from
changes affecting general worldwide economic or capital market conditions, (G) in the case of the Company only, any Effect that
results from investments in any other Person made in accordance with the Company’s Investment Policy, (H) any Effect that
results from changes in laws after the date hereof, or (I) any Effect resulting from an outbreak or escalation of hostilities involving
the United States, the declaration by the United States of a national emergency or war, or the occurrence of any acts of terrorism.

    	33

    	 

    
 

 

(d)      For purposes
of this Agreement, the term “Person” shall mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

 

(e)      For the
purposes of this Agreement, the parties hereto acknowledge that the Company’s Chief Executive Officer and Chief Financial
Officer (neither of which are directors of the Company) are officers and directors of CEP and Merger Sub, and the parties
agree that, to the extent that either of such Chief Executive Officer or Chief Financial Officer has actual knowledge of any matter
that is the subject of the Company’s representations and warranties herein, neither of them shall use such actual knowledge
to the detriment of the Company with respect to the remedies of CEP and Merger Sub as to breaches of the Company’s representations
and warranties hereunder.

 

8.4      Counterparts.
This Agreement may be executed in two or more counterparts and multiple signature pages, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts (with multiple signature pages) have been signed by
each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart (or
signature page).

 

8.5      Entire
Agreement; Third-Party Beneficiaries. This Agreement and the documents and instruments and other agreements among the parties
hereto as contemplated by or referred to herein, including the Company Disclosure Letter and the CEP Disclosure Letter (i) constitute
the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter hereof, it being understood that the Confidentiality
Agreement shall continue in full force and effect until the Closing and shall survive any termination of this Agreement and (ii)
are not intended to confer upon any other Person any rights or remedies hereunder, except as specifically provided, following the
Effective Time, in Section 5.10.

 

8.6      Severability.
In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application
of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and other purposes of such void or unenforceable provision.

 

8.7      Other
Remedies; Specific Performance.

 

(a)      Other
Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by
a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached.

 

(b)      Specific
Performance. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

    	34

    	 

    
 

 

8.8      Governing
Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee,
regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. Each party hereby (a)
irrevocably and unconditionally submits to the exclusive jurisdiction of the state courts of the State of Tennessee or of the U.
S. District Court for the Middle District of Tennessee, with respect to all actions and proceedings arising out of or relating
to this Agreement and the transaction contemplated hereby, (b) agrees that all claims with respect to any such action or proceeding
shall be heard and determined in such courts and agrees not to commence an action or proceeding relating to this Agreement or the
transactions contemplated hereby except in such courts, (c) irrevocably and unconditionally waives any objection to the laying
of venue of any action or proceeding arising out of this Agreement or the transactions contemplated hereby and irrevocably and
unconditionally waives the defense of an inconvenient forum, (d) consents to service of process upon him, her or it by mailing
or delivering such service to the address set forth in Section 8.2 hereof, and (e) agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

8.9      Rules
of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the party drafting such agreement or document.

 

8.10      Assignment.
No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval
of the other parties; provided, however, that CEP and/or Merger Sub can assign any of their respective rights
and obligations to any direct or indirect wholly-owned Subsidiary of CEP, but no such assignment shall relieve CEP or Merger Sub,
as the case may be, of its obligations hereunder. Any purported assignment in violation of this Section 8.10 shall be void.
Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.

 

8.11      Waiver
of Jury Trial. EACH OF CEP, MERGER SUB, AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF CEP, MERGER SUB, OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

 

[Remainder of this
page is intentionally blank.

Signature page follows.]

 

    	35

    	 

    

[Signature Page of
Agreement and Plan of Merger]

 

 

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by their duly authorized respective officers as of the date first
written above.

 

		 	 	 
	 	CEP:
	 	 	 	 
	 	CEP, INC.
	 	 	 	 
	 	By:	/s/ Tena Mayberry	 
	 	 	Tena Mayberry, President	 
	 	 	 	 
	 	 	 	 
	 	MERGER SUB:
	 	 	 	 
	 	CEP MERGER SUB, INC.
	 	 	 	 
	 	By:	/s/ Tena Mayberry	 
	 	 	Tena Mayberry, President	 
	 	 	 	 
	 	 	 	 
	 	COMPANY:
	 	 	 	 
	 	FORTUNE INDUSTRIES, INC.
	 	 	 	 
	 	By:	/s/ Carter M. Fortune	 
	 	 	Carter M. Fortune, Chairman	 

 

 

 

 

 

 

    	 

    	 

    

EXHIBIT A

TO AGREEMENT AND PLAN OF MERGER

 

Shareholder Voting Agreement

[attached hereto]

 

 

 

    	 

    	 

    
 

 

 

EXHIBIT
A

TO AGREEMENT AND PLAN
OF MERGER

AMONG CEP, INC., CEP MERGER
SUB, INC., AND FORTUNE INDUSTRIES, INC.

 

 

SHAREHOLDER VOTING AGREEMENT

 

THIS SHAREHOLDER VOTING
AGREEMENT, dated as of March 26, 2012, is by and among—

 

(i)      CEP, Inc., a
Tennessee corporation (“CEP”), and

 

(ii)      the persons
and/or entities identified on Schedule A hereof (each, a “Shareholder” and, collectively, the “Shareholders”).

 

RECITALS:

 

A.      Each Shareholder
owns the number of shares of Common Stock, par value $0.10 per share (the “Common Stock”), of Fortune Industries, Inc.,
an Indiana corporation (the “Company”), set forth opposite such Shareholder’s name on Schedule A hereto
(such shares of Common Stock, together with any other shares of capital stock of the Company acquired by any Shareholder after
the date hereof and during the term of this Agreement (whether by purchase, assignment, conversion, or otherwise), being collectively
referred to herein as the “Subject Shares”);

 

B.      Concurrently
with the execution and delivery of this Agreement, CEP and the Company are entering into an Agreement and Plan of Merger (as the
same may from time to time be modified, supplemented or restated, the “Merger Agreement”) providing for the merger
of CEP with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth therein; and

 

C.      As a condition
and inducement to CEP’s willingness to enter into the Merger Agreement, the Shareholders desire to enter into this Agreement,
pursuant to which the Shareholders are agreeing, among other things, to vote the Subject Shares in favor of the adoption of the
Merger Agreement and to provide full cooperation to CEP and the Company in closing and completing the Merger.

 

AGREEMENTS:

 

NOW, THEREFORE, in
consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement,
and intending to be legally bound hereby, the parties agree as follows:

 

article
1. 

REPRESENTATIONS AND
WARRANTIES OF EACH SHAREHOLDER

 

Each Shareholder, severally
and not jointly, represents and warrants to CEP as follows:

 

Section 1.1      Authority.
Such Shareholder has all requisite power and authority or capacity, as the case may be, to enter into this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by such Shareholder and constitutes
a valid and binding obligation of such Shareholder enforceable in accordance with its terms. If such Shareholder is married and
the Subject Shares of such Shareholder constitute community property or otherwise need spousal or other approval for this Agreement
to be legal, valid and binding with respect to such Subject Shares, this Agreement has been duly executed and delivered by, and
constitutes a valid and binding agreement of, such Shareholder’s spouse, enforceable against such spouse in accordance with
its terms.

    	   

    	 

    
 

 

Section 1.2      No
Conflicts; Required Filings and Consents.

 

(a)      Except
as disclosed on Schedule 1.2(a) attached hereto and incorporated by reference herein, neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby and compliance with the terms hereof, will violate, conflict
with or result in a breach, or constitute a default (with or without due notice or lapse of time or both) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any
of the Subject Shares pursuant to any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to such Shareholder or to such Shareholder’s Subject Shares or other property or assets.

 

(b)      The execution
and delivery of this Agreement by such Shareholder do not, and the performance of this Agreement by such Shareholder will not,
require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Body (as defined
in the Merger Agreement), except where the failure to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, prevent or materially delay the performance by such Shareholder
of any of his obligations under this Agreement.

 

Section 1.3      The
Subject Shares. Except as disclosed on Schedule A hereto, such Shareholder is the record and beneficial owner of, and
has good and marketable title to, the Subject Shares set forth opposite such Shareholder’s name on Schedule A hereto,
free and clear of any mortgage, lien, pledge, charge, encumbrance, security interest or other adverse claim. Such Shareholder does
not own, of record or beneficially, any shares of capital stock of the Company other than the Subject Shares set forth opposite
such Shareholder’s name on Schedule A hereto. Except as disclosed on Schedule A hereto, such Shareholder
has the sole right to vote, or to dispose, of such Subject Shares, and none of such Subject Shares is subject to any agreement,
arrangement or restriction with respect to the voting of such Subject Shares, except as contemplated by this Agreement. There are
no agreements or arrangements of any kind, contingent or otherwise, obligating such Shareholder to sell, transfer, assign, grant
a participation interest in or option for, pledge, hypothecate or otherwise dispose or encumber (each, a “Transfer”),
or cause to be Transferred, any of the Subject Shares, and no Person (as defined in the Merger Agreement) has any contractual or
other right or obligation to purchase or otherwise acquire any of the Subject Shares. No Shareholder has appointed or granted any
proxy, which appointment or grant is still effective, with respect to the Subject Shares.

 

Section 1.4      Reliance
by CEP. Such Shareholder understands and acknowledges that CEP is entering into the Merger Agreement in reliance upon such
Shareholder’s execution and delivery of this Agreement and the representations, warranties, and agreements of such Shareholder
herein.

 

Section 1.5      Litigation.
There is no action, proceeding or investigation pending or threatened against such Shareholder that questions the validity of this
Agreement or any action taken or to be taken by such Shareholder in connection with this Agreement.

 

Section 1.6      Finder’s
Fees. No broker, investment bank, financial advisor or other person is entitled to any broker’s, finder’s, financial
adviser’s or similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made
by or on behalf of such Shareholder.

 

article
2. 

REPRESENTATIONS AND
WARRANTIES OF CEP

 

      CEP represents
and warrants to each of the Shareholders as follows:

 

Section 2.1      Authority.
CEP has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by CEP and constitutes a valid and binding obligation of CEP enforceable
in accordance with its terms.

    	A-2

    	 

    
 

 

Section 2.2      No
Conflicts; Required Filings and Consents.

 

(a)      Neither
the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby and compliance with
the terms hereof, will violate, conflict with or result in a breach, or constitute a default (with or without due notice or lapse
of time or both) under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to CEP or to CEP’s property or assets.

 

(b)      The execution
and delivery of this Agreement by CEP does not, and the performance of this Agreement by CEP will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental Body (as defined in the Merger Agreement), except
for the filing by CEP of a Form 13D and such forms (if any) as may be later necessary to obtain consent for Company to de-register
the Company as a reporting company to the U. S. Securities and Exchange Commission, except where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, prevent
or materially delay the performance by CEP of any of its obligations under this Agreement.

 

article
3. 

VOTING OF SUBJECT
SHARES

 

Section 3.1      Agreement
to Vote. From the date hereof, and until the termination of this Agreement in accordance with Article V, each Shareholder,
severally and not jointly, agrees as follows:

 

(a)      At any
meeting of shareholders of the Company called to vote upon the Merger and the Merger Agreement or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to the Merger
Agreement, the Merger and any other transaction contemplated thereby is sought, each Shareholder shall vote (or cause to be voted)
the Subject Shares in favor of the adoption by the Company of the Merger and the approval of the Merger Agreement and any actions
required in furtherance thereof and each of the transactions contemplated by the Merger Agreement.

 

(b)      At any
meeting of shareholders of the Company or at any adjournment thereof or in any other circumstances upon which a vote, consent or
other approval of all or some of the shareholders of the Company is sought, each Shareholder shall vote (or cause to be voted)
its Subject Shares against (i) any action or agreement that would reasonably be expected to result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which would reasonably
be expected to result in any of the conditions to the Merger Agreement not being fulfilled, (ii) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation, combination, sale or transfer of a material amount of assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company, and (iii) any amendment of the Company’s
certificate of incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner delay, impede, frustrate, prevent or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger Agreement or change in any manner the voting rights of the
Subject Shares other than in connection with the transactions contemplated by the Merger. Each Shareholder further agrees not to
commit or agree to take any action inconsistent with the foregoing.

 

(c)      In addition,
each Shareholder agrees that it will, upon request by CEP, furnish written confirmation, in form and substance reasonably acceptable
to CEP, of such Shareholder’s vote in favor of the Merger Agreement and the Merger.

 

(d)      The
parties acknowledge that, as of the date hereof, ___________ shares of the Subject Shares are pledged to and/or held by a commercial
bank as collateral security for the payment and performance of certain indebtedness incurred by one or more Shareholders, but that
Shareholders shall nonetheless be obligated to cause all such pledged shares to be in conformity, as of the Closing, with the agreements
and covenants set forth in this Agreement that apply to the Subject Shares.

    	A-3

    	 

    
 

 

Section 3.2      Irrevocable
Proxy. Each Shareholder hereby constitutes and appoints CEP with full power of substitution, as the proxy pursuant to the provisions
of Section 48-17-203 of the Tennessee Business Corporation Act and attorney of such Shareholder, and hereby authorizes and empowers
CEP to represent, vote and otherwise act (by voting at any meeting of the shareholders of the Company, by written consent in lieu
thereof or otherwise) with respect to the Shares owned or held by such Shareholder regarding the matters referred to in Sections
3.1(a) and (b) until the termination of this Agreement, to the same extent and with the same effect as such Shareholder might or
could do under applicable law, rules and regulations in the event that such Shareholder fails to satisfy its obligations under
Sections 3.1(a) and (b). The proxy granted pursuant to the immediately preceding sentence is coupled with an interest, shall be
irrevocable and shall survive death, disability, bankruptcy, or any other impediment of Shareholder. Each Shareholder hereby revokes
any and all previous proxies or powers of attorney granted with respect to any of the Shares owned or held by such Shareholder
regarding the matters referred to in Sections 3.1(a) and (b).

 

article
4. 

ADDITIONAL AGREEMENTS

 

Section 4.1      No
Disposition or Encumbrance of Subject Shares. Except as provided in the next to the last sentence of this Section 4.1, each
Shareholder agrees not to, directly or indirectly, (i) Transfer or enter into any agreement, option or other arrangement (including
any profit sharing arrangement) with respect to the Transfer of, any Subject Shares to any Person, other than in accordance with
the Merger Agreement or (ii) grant any proxies, deposit any Subject Shares into any voting trust or enter into any voting arrangement,
whether by proxy, voting agreement or otherwise, with respect to the Subject Shares, other than pursuant to this Agreement. Subject
to the next to the last sentence of this Section 4.1, each Shareholder further agrees not to commit or agree to take any of the
foregoing actions. Notwithstanding the foregoing, each Shareholder shall have the right to Transfer its Subject Shares to a Permitted
Transferee (as defined in this Section 4.1) of such Shareholder if and only if such Permitted Transferee shall have agreed in writing,
in a manner reasonably acceptable in form and substance to CEP, (i) to accept such Subject Shares subject to the terms and conditions
of this Agreement and (ii) to be bound by this Agreement and to agree and acknowledge that such Person shall constitute a Shareholder
for all purposes of this Agreement. “Permitted Transferee” means, with respect to any Shareholder, (A) any other Shareholder,
(B) a spouse or lineal descendant (whether natural or adopted), sibling, parent, heir, executor, administrator, testamentary trustee,
lifetime trustee or legatee of such Shareholder, (C) any trust, the trustees of which include only the Persons named in clause
(A) or (B) and the beneficiaries of which include only the Persons named in clause (A) or (B), or (D) any corporation, limited
liability company or partnership, the shareholders, members or general or limited partners of which include only the Persons named
in clause (A) or (B).

 

Section 4.2      Disclosure.
Each of the Shareholders hereby permits CEP to publish and disclose in all documents and schedules filed with or furnished to the
SEC in connection with the Merger, such Shareholder’s identity and ownership of the Subject Shares and the nature of such
Shareholder’s commitments, arrangements and understandings under this Agreement.

 

Section 4.3      Reasonable
Efforts. Each Shareholder shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by the Merger
Agreement, and to carry out the intent and purposes of this Agreement.

 

article
5. 

TERMINATION

 

This Agreement shall
terminate upon the earlier of (x) the Effective Time (as defined in the Merger Agreement) and (y) the termination of the Merger
Agreement in accordance with its terms, except that a termination of this Agreement shall not relieve any party from liability
for any breach hereof.

    	A-4

    	 

    
 

 

article
6. 

MISCELLANEOUS

 

Section 6.1      Additional
Shares. In the event any Shareholder becomes the legal or beneficial owner of any additional shares or other securities of
the Company (the “Additional Securities”), any securities into which such shares or securities may be converted or
exchanged and any securities issued in replacement of, or as a dividend or distribution on, or otherwise in respect of, such shares
or securities, then the terms of this Agreement shall apply to such securities. Each Shareholder agrees not to purchase or in any
other manner acquire any Additional Securities, except for the purchase or other acquisition pursuant to Section 4.1 of Common
Stock that is held by another Shareholder as of the date hereof.

 

Section 6.2      Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee, without giving
effect to its principles or rules of conflicts of laws to the extent that such principles or rules would require or permit the
application of the law of another jurisdiction except that the laws of the State of Indiana shall govern the enforceability and
interpretation of Sections 3.1 and 3.2.

 

Section 6.3      Jurisdiction.
Each of the parties hereto irrevocably and unconditionally (i) agrees that any legal suit, action or proceeding brought by any
party hereto arising out of or based upon this Agreement or the transactions contemplated hereby may be brought in the Courts of
the State of Tennessee or the United States District Court located within the Middle District of Tennessee (each, a “Tennessee
Court”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in any Tennessee Court, and any claim that any such action or proceeding brought
in any Tennessee Court has been brought in an inconvenient forum, and (iii) submits to the non-exclusive jurisdiction of Tennessee
Courts in any suit, action or proceeding. Each of the parties agrees that a judgment in any suit, action or proceeding brought
in an Tennessee Court shall be conclusive and binding upon it and may be enforced in any other courts to whose jurisdiction it
is or may be subject, by suit upon such judgment.

 

Section 6.4      WAIVER
OF JURY TRIAL. EACH OF THE PARTIES AGREES AND ACKNOWLEDGES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT.

 

Section 6.5      Specific
Performance. Each Shareholder acknowledges and agrees that (i) the obligations and agreements of such Shareholder contained
in this Agreement relate to special, unique and extraordinary matters, (ii) CEP is and will be relying on such covenants in connection
with entering into the Merger Agreement and the performance of its obligations under the Merger Agreement, and (iii) a violation
of any of the terms of such Shareholder’s obligations or agreements will cause CEP irreparable injury for which adequate
remedies are not available at law. Therefore, each Shareholder agrees that CEP shall be entitled to an injunction, restraining
order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary
or appropriate to restrain such Shareholder from committing any violation of such covenants, obligations or agreements. These injunctive
remedies are cumulative and in addition to any other rights and remedies CEP may have.

 

Section 6.6      Amendment,
Waivers, etc. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in
writing signed by CEP and the Shareholders. No provision of this Agreement may be waived, discharged or terminated other than by
an instrument in writing signed by the party against whom the enforcement of such waiver, discharge or termination is sought.

 

Section 6.7      Assignment;
No Third Party Beneficiaries. This Agreement shall not be assignable or otherwise transferable by a party without the prior
consent of the other parties, and any attempt to so assign or otherwise transfer this Agreement without such consent shall be void
and of no effect; provided that (i) any Permitted Transferee acquiring any Subject Shares in accordance with Section 4.1 shall,
on the terms provided in Section 4.1, become a “Shareholder”, and (ii) CEP may, in its sole discretion, assign or transfer
all or any of its rights, interests and obligations under this Agreement to any direct or indirect wholly-owned subsidiary of CEP.
This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the parties
hereto. Nothing in this Agreement shall be construed as giving any Person, other than the parties hereto and their heirs, successors,
legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision
hereof.

    	A-5

    	 

    
 

 

Section 6.8      Expenses.
Except as otherwise provided herein, all costs and expenses incurred in connection with the transactions contemplated by this Agreement
shall be paid by the party incurring such costs and expenses.

 

Section 6.9      Notices.
All notices, consents, requests, instructions, approvals and other communications provided for in this Agreement shall be in writing
and shall be deemed validly given upon personal delivery or one (1) Business Day after being sent by overnight courier service
or received by telecopy at the following address or telecopy number, or at such other address or telecopy number as a party may
designate to the other parties:

 

		(a)	if to CEP to:

 

CEP, Inc.

Attention:
Tena Mayberry, President

c/o Bone McAllester
Norton PLLC

511 Union Street,
Suite 1600

Nashville,
Tennessee 37219

Facsimile No.:
(615) 238-6331

 

with a copy to:

 

Bone McAllester Norton PLLC

Attention: Charles W. Bone, Esq.
and Trace Blankenship, Esq.

511 Union Street, Suite 1600

Nashville, Tennessee 37219

Facsimile No.: (615) 238-6301

 

		(b)	if to the Shareholders, to their respective addresses shown on Schedule A.

 

with a copy
to:

 

Bose McKinney & Evans LLP

Attention: Jeffrey B. Bailey,
Esq.

111 Monument Circle, Suite 2700

Indianapolis, Indiana 46204

Facsimile No.: (317) 684-5173

 

Section 6.10      Remedies.
No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided
by law.

 

Section 6.11      Severability.
If any term or provision of this Agreement is held to be invalid, illegal, incapable of being enforced by any rule of law, or public
policy, or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of
the parties hereto to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement
in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable
manner in order that the terms of this Agreement remain as originally contemplated to the fullest extent possible.

    	A-6

    	 

    
 

 

Section 6.12      Integration.
This Agreement, including all exhibits and schedules attached hereto, constitutes the full and entire understanding and agreement
of the parties with respect to the subject matter hereof and thereof and supersedes any and all prior understandings or agreements
relating to the subject matter hereof and thereof.

 

Section 6.13      Section
Headings. The article and section headings of this Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.

 

Section 6.14      Further
Assurances. From time to time at the request of CEP, and without further consideration, each Shareholder shall execute and
deliver or cause to be executed and delivered such additional documents and instruments and take all such further action as may
be reasonably necessary or desirable to effect the matters contemplated by this Agreement.

 

Section 6.15      Stop
Transfer. Each of the Shareholders agrees that such Shareholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any Subject Shares, unless such transfer is made in compliance
with this Agreement.

 

Section 6.16      Public
Announcements. No Shareholder shall issue or make any press release or other public announcements or statements with respect
to the transactions contemplated by this Agreement.

 

Section 6.17      Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

 

 

[Remainder of this page is intentionally
left blank.

Signature pages follow.]

 

    	A-7

    	 

    

[Signature Page to
Shareholder Voting Agreement]

 

IN WITNESS WHEREOF,
the parties hereto have executed this Voting Agreement as of the day and date first above written.

 

	 	CEP, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Tena Mayberry	 
	 	 	Tena Mayberry, President	 

 

 

 

 

    	 

    	 

    

[Signature Page to
Shareholder Voting Agreement]

 

IN WITNESS WHEREOF,
the parties hereto have executed this Shareholder Voting Agreement as of the day and date first above written.

 

 

 

	 	/s/ Carter M. Fortune	 
	 	Carter M. Fortune, an individual residing in the
	 	State of Florida	 

 

 

 

 

    	 

    	 

    

[Signature Page to
Shareholder Voting Agreement]

 

IN WITNESS WHEREOF,
the parties hereto have executed this Shareholder Voting Agreement as of the day and date first above written.

 

 

	 	14 WEST, LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Carter M. Fortune	 
	 	 	Carter M. Fortune, Managing Member	 

 

 

 

 

 

 

    	 

    	 

    

[Signature Page to
Shareholder Voting Agreement]

 

IN WITNESS WHEREOF,
the parties hereto have executed this Shareholder Voting Agreement as of the day and date first above written.

 

 

	 	CARTER M. FORTUNE LIVING TRUST
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Carter M. Fortune	 
	 	 	Carter M. Fortune, Trustee	 

 

 

 

    	 

    	 

    

SCHEDULE A

TO SHAREHOLDER VOTING AGREEMENT

 

 

 

SHAREHOLDERS

 

 

 

	Name	Number of Common Shares
	Carter M. Fortune	354,342
	 	 
	Carter M. Fortune Living Trust	5,730,511
	 	 
	14 West, LLC	1,259,834
	 	 
	                Total	7,344,687

 

 

 

 

Notice Address:

 

 

Carter M. Fortune

Carter M. Fortune Living Trust

14 West, LLC

c/o Fortune Industries, Inc.

6402 Corporate Drive

Indianapolis, Indiana 46278

 

 

 

 

    	 

    	 

    

SCHEDULE 1.2(a)

TO SHAREHOLDER VOTING AGREEMENT

 

 

 

REQUIRED FILINGS AND CONSENTS

 

 

The 354,342 common
shares shown as held or beneficially owned by Carter M. Fortune are pledged to a commercial lender for the benefit of Mr. Fortune
and, as such, may be held of record in such lender’s name. However, Mr. Fortune has agreed to cause such shares to be voted
in accordance with his obligations under this Agreement.Exhibit 4.1

 

 

FORM OF AMENDED & RESTATED

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF THE

SERIES A CONVERTIBLE PREFERRED STOCK OF

CHINA SHEN ZHOU MINING & RESOURCES, INC.

 

I, Xiaojing Yu, hereby
certify that I am the Chairman of the Board and Chief Executive Officer of China Shen Zhou Mining & Resources, Inc. (the “Company”),
a corporation incorporated and existing under Chapter 78 of the Nevada Revised Statues (the “Nevada General Company Law”
or the “NGCL”) and further do hereby certify:

 

That pursuant to the
authority expressly conferred upon the Board of Directors of the Company (the “Board”) by the Company’s
Articles of Incorporation, as amended (the “Articles of Incorporation”), the Board on March 23, 2012 adopted
the following resolutions amending and restating in their entirety the terms of a series of 10,000 shares of Preferred Stock designated
as Series A Convertible Preferred Stock, which were originally created on March 21, 2012, none of which shares have been issued:

 

RESOLVED, that the
Board designates the 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 Articles 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 “Series A Convertible Preferred Stock” (the “Preferred Shares”). The authorized
number of Preferred Shares shall be 10,000 shares. Each Preferred Share shall have a par value of $0.001.
Capitalized terms not defined herein shall have the meaning as set forth in Section 27 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 17, 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 separate as a single class, the Company shall not hereafter authorize or issue any additional or other shares of capital
stock that is (i) of senior rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments
upon the liquidation, dissolution and winding up of the Company (collectively, the “Senior Preferred Stock”),
(ii) of pari passu rank to the Preferred Shares in respect of the preferences as to dividends, distributions and payments upon
the liquidation, dissolution and winding up of the Company (collectively, the “Parity Stock”) or (iii) any
Junior Stock having a maturity date (or any other date requiring redemption or repayment of such shares of Junior Stock) that
is prior to the Maturity Date. In the event of the merger or consolidation of the Company with or into another corporation, the
Preferred Shares shall maintain their relative rights, powers, designations, privileges and preferences provided for herein and
no such merger or consolidation shall result inconsistent therewith.

 

    	

    	 

    
 

3.     
Dividends.

 

(a)     From and after 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”), which Dividends shall be paid by the Company out of funds legally available
therefor, payable, subject to the conditions and other terms hereof, in shares of Common Stock or cash on the Stated Value (as
defined below) of such Preferred Share, which Dividends for the avoidance of doubt shall be calculated on such Preferred Shares
without giving effect to any reduction for the payment of any Installment Amount payable on such date, at the Dividend Rate (as
defined below), which shall be cumulative and shall continue to accrue and compound monthly whether or not declared and whether
or not in any fiscal year there shall be net profits or surplus available for the payment of dividends in such fiscal year. Dividends
on the Preferred Shares shall commence accumulating on the Initial Issuance Date and shall be computed on the basis of a 365-day
year and actual days elapsed. Dividends shall be payable quarterly in arrears on the first day of the
applicable quarter (each, a “Dividend Date”) with the first Dividend Date being July 1, 2012, and the
last Dividend Date being the Maturity Date. If a Dividend Date is not a Business Day (as defined below), then the Dividend shall
be due and payable on the Business Day immediately following such Dividend Date. 

 

(b)     Dividends
shall be payable on each Dividend Date, to the record holders of the Preferred Shares on the applicable Dividend Date, in shares
of Common Stock (“Dividend Shares”) so long as there has been no Equity Conditions Failure and so long as the
delivery of Dividend Shares would not violate the provisions of Section 4(e); provided, however, that the Company may,
at its option, pay Dividends on any Dividend Date in cash (“Cash Dividends”) or in a combination of Cash Dividends
and, so long as there has been no Equity Conditions Failure, Dividend Shares. The Company shall deliver a written notice (each,
a “Dividend Election Notice”) to each Holder on the Dividend Notice Due Date (the date such notice is delivered
to all of the Holders, the “Dividend Notice Date”) which notice (1) either (A) confirms that Dividends to be
paid on such Dividend Date shall be paid entirely in Dividend Shares or (B) elects to pay Dividends as Cash Dividends or a combination
of Cash Dividends and Dividend Shares and specifies the amount of Dividends that shall be paid as Cash Dividends and the amount
of Dividends, if any, that shall be paid in Dividend Shares and (2) certifies that there has been no Equity Conditions Failure
as of such time, if any portion of the Dividends shall be paid in Dividend Shares. Notwithstanding anything herein to the contrary,
if no Equity Conditions Failure has occurred as of the Dividend Notice Date but an Equity Conditions Failure occurs at any time
prior to the Dividend Date, (A) the Company shall provide each Holder a subsequent notice to that effect and (B) unless such Holder
waives the Equity Conditions Failure, the Dividend payable to such Holder on such Dividend Date shall be paid in cash. Dividends
to be paid to each Holder on a Dividend Date in Dividend Shares shall be paid in a number of fully paid and non-assessable shares
(rounded to the nearest whole share) of Common Stock equal to the quotient of (1) the amount of Dividends payable to such Holder
on such Dividend Date less any Cash Interest paid and (2) the Dividend Conversion Price in effect on the applicable Dividend Date.

 

    	2

    	 

    
 

(c)     When
any Dividend Shares are to be paid on an Dividend Date to any Holder, the Company shall (i) (A) provided that the Company’s
transfer agent (the “Transfer Agent”) is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of Dividend Shares 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
(B) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver on the
applicable Dividend Date, to the address set forth in the register maintained by the Company for such purpose pursuant to the
Securities Purchase Agreement or to such address as specified by such Holder in writing to the Company at least two (2) Business
Days prior to the applicable Dividend Date, a certificate, registered in the name of such Holder or its designee, for the number
of Dividend Shares to which such Holder shall be entitled and (ii) with respect to each Dividend Date, pay to such Holder, in
cash by wire transfer of immediately available funds, the amount of any Cash Dividend. The Company shall pay any and all taxes
that may be payable with respect to the issuance and delivery of Dividend Shares.

 

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), 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”):

 

Conversion 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.

 

    	3

    	 

    

 

(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.

 

(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.

 

    	4

    	 

    

 

(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), 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, 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. 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). Immediately
following the voiding of a Conversion Notice as aforesaid, the Conversion Price of any Preferred Shares returned or retained by
such Holder for failure to timely convert shall be adjusted to the lesser of (I) the Conversion Price relating to the voided Conversion
Notice and (II) the lowest Closing Bid Price of the Common Stock during the period beginning on the Conversion Date and ending
on the date such Holder voided the Conversion Notice, subject to further adjustment as provided in this Certificate of Designations.

 

    	5

    	 

    
 

(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 26

 

.

(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 Holder establishing
the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of
manifest error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of any Preferred Shares, the number of Preferred Shares represented
by such certificate may be less than the number of Preferred Shares stated on the face thereof. Each 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.

 

    	6

    	 

    
 

(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.

 

(i)
Notwithstanding anything to the contrary contained in this Certificate of Designations, the Preferred Shares held by a Holder
shall not be convertible by such Holder, and the Company shall not effect any conversion of any Preferred Shares held by such
Holder (including, without limitation, pursuant to Section 8 hereof), to the extent (but only to the extent) that such Holder
or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the
Common Stock. To the extent the above limitation applies, the determination of whether the Preferred Shares held by such
Holder shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by such Holder
or any of its affiliates) and of which such securities shall be convertible, exercisable or exchangeable (as among all such
securities owned by such Holder and its affiliates) shall, subject to such Maximum Percentage limitation, be determined on
the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior
inability of a Holder to convert Preferred Shares, or of the Company to issue shares of Common Stock to such Holder, pursuant
to this Section 4(e) shall have any effect on the applicability of the provisions of this Section 4(e) with respect to
any subsequent determination of convertibility or issuance (as the case may be). For purposes of this Section 4(e),
beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of
percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations
promulgated thereunder. The provisions of this Section 4(e) shall be implemented in a manner otherwise than in strict
conformity with the terms of this Section 4(e) to correct this Section 4(e) (or any portion hereof) which may be defective or
inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained
in this Section 4(e) shall apply to a successor holder of Preferred Shares. The holders of Common Stock shall be third party
beneficiaries of this Section 4(e) and the Company may not waive this Section 4(e) without the consent of holders of a
majority of its Common Stock. For any reason at any time, upon the written or oral request of a Holder, the Company shall
within one (1) Business Day confirm orally and in writing to such Holder the number of shares of Common Stock then
outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common
Stock, including, without limitation, pursuant to this Certificate of Designations or securities issued pursuant to the other
Transaction Documents. By written notice to the Company, any Holder may increase or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective
until the 61st day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to
such Holder sending such notice and not to any other Holder.

 

    	7

    	 

    
 

(ii)
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of any Preferred Shares,
or otherwise pursuant to this Certificate of Designations, if the issuance of such shares of Common Stock would exceed the aggregate
number of shares of Common Stock which the Company may issue upon conversion or exercise (as the case may be) of the Preferred
Shares or the Warrants or otherwise pursuant to the Certificate of Designations without breaching the Company’s obligations
under the rules or regulations of the Principal Market (the number of shares which may be issued without violating such rules
and regulations, the “Exchange Cap”), except that such limitation shall not apply in the event that the Company
(A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares
of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval
is not required, which opinion shall be reasonably satisfactory to the Required Holder. Until such approval or such written opinion
is obtained, no Holder shall be issued in the aggregate, upon exercise or conversion (as the case may be) of any Warrants or any
of the Preferred Shares or otherwise pursuant to this Certificate of Designations, shares of Common Stock in an amount greater
than the product of (i) the Exchange Cap multiplied by (ii) the quotient of (1) the aggregate number of Preferred Shares issued
or issuable to such Buyer (as defined in the Securities Purchase Agreement) pursuant to the Securities Purchase Agreement on any
Closing Date (as defined in the Securities Purchase Agreement) divided by (2) the aggregate number of all Preferred Shares issued
or issuable to the Buyers pursuant to the Securities Purchase Agreement on any Closing Date (with respect to each Buyer, the “Exchange
Cap Allocation”). In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s Preferred Shares,
the transferee shall be allocated a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such portion
of such Preferred Shares so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect
to the portion of the Exchange Cap Allocation so allocated to such transferee. Upon exercise and conversion in full of a holder’s
Warrants and Preferred Shares or other issuance pursuant to this Certificate of Designations, the difference (if any) between
such holder’s Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder upon such
holder’s exercise in full of such Warrants and such holder’s conversion in full of such Preferred Shares shall be
allocated to the respective Exchange Cap Allocations of the remaining holders of Warrants and Preferred Shares on a pro rata basis
in proportion to the shares of Common Stock underlying the Warrants and Preferred Shares then held by each such holder. In the
event that the Company is prohibited from issuing all or any part of the shares of Common Stock issuable upon conversion of any
Preferred Shares (collectively, the “Exchange Cap Blocked Shares”) for which an Conversion Notice has been
received as a result of the operation of this Section 4(e)(ii), the Company shall pay cash to the holder of such Preferred Shares
in exchange for such Exchange Cap Blocked Shares on or prior to the applicable Share Delivery Deadline, at a price per Exchange
Cap Blocked Share equal to the difference between the Closing Sale Price of the Common Stock for the Trading Day immediately preceding
the date of the attempted conversion and the Conversion Price as of such date of attempted conversion.

 

    	8

    	 

    
 

(f)     Mandatory
Conversion.

 

(i)     General.
At any time after the Initial Issuance Date the VWAP of the Common Stock listed on the Principal
Market exceeds $3.57 (as adjusted for stock splits, stock dividends, recapitalizations and similar events) for twenty (20)
consecutive Trading Days and there has been no Equity Conditions Failure (a “Mandatory Conversion
Eligibility Date”), the Company shall have the right to require each of the Holders to convert the Conversion Amount
of the Preferred Shares then outstanding into fully paid, validly issued and nonassessable shares of Common Stock in accordance
with Section 4(c) hereof at the Conversion Rate as of the Mandatory Conversion Date (as defined below) (a “Mandatory
Conversion”). The Company may exercise its right to require conversion under this Section 4(f)
by delivering a written notice thereof on such Mandatory Conversion Eligibility Date by facsimile and overnight courier
to all, but not less than all, of the Holders and the Transfer Agent (the “Mandatory Conversion Notice” and
the date all of the Holders received such notice by facsimile is referred to as the “Mandatory Conversion Notice Date”).
The Mandatory Conversion Notice shall be irrevocable. The Mandatory Conversion Notice shall state (i) the Trading Day selected
for the Mandatory Conversion in accordance with this Section 4(f), which Trading Day shall be
no earlier than ten (10) Trading Days and no later than twenty (20) Trading Days following the Mandatory Conversion Notice Date
(the “Mandatory Conversion Date”), (ii) the aggregate Conversion Amount of the Preferred Shares subject
to mandatory conversion from the Holders, in the aggregate, and each individual Holder pursuant to this Section 4(f),
(iii) the number of shares of Common Stock to be issued to each Holder on the Mandatory Conversion Date and (iv) that there
has been no Equity Conditions Failure; provided, however, that the Company may not effect a Mandatory Conversion under this Section
4(f) in excess of the Holder Pro Rata Amount of the applicable Mandatory Conversion Volume Limitation.
Notwithstanding the foregoing, the Company may effect only one (1) Mandatory Conversion during any twenty (20) consecutive
Trading Days.

 

    	9

    	 

    
 

(ii)     Pro
Rata Conversion Requirement. If the Company elects to cause a conversion of any Conversion Amount of Preferred Shares pursuant
to this Section 4(f), then it must simultaneously take the same action in the same proportion with respect to all Holders of Preferred
Shares. If the Company elects a Mandatory Conversion with respect to less than all of the Conversion Amounts of the Preferred
Shares then outstanding, then the Company shall require conversion of a Conversion Amount from each of the Holders of Preferred
Shares equal to the product of (i) the aggregate Conversion Amount of the Preferred Shares which the Company has elected
to cause to be converted pursuant to this Section 4(f), multiplied by (ii) the Holder Pro Rata Amount (such fraction with respect
to each Holder is referred to as its “Conversion Allocation Percentage”, and such amount with respect to each
Holder is referred to as its “Pro Rata Conversion Amount”); provided, however, that in the event that any Holder’s
Pro Rata Conversion Amount exceeds the outstanding Conversion Amount of such Holder’s Preferred Shares then outstanding,
then such excess Pro Rata Conversion Amount shall be allocated amongst the remaining Holders of Preferred Shares in accordance
with the foregoing formula. In the event that an initial Holder of any Preferred Shares shall sell or otherwise transfer any of
such Holder’s Preferred Shares, the transferee shall be allocated a pro rata portion of such holder’s Conversion Allocation
Percentage and the Pro Rata Conversion Amount.

 

5.             Holder Optional Redemption after Maturity Date. From and after the Maturity Date, any Holder may require the Company
to redeem (a “Maturity Redemption”) all or any number of Preferred Shares held by such Holder at a purchase
price equal to 100% of the Conversion Amount of such Preferred Shares (the “Maturity Redemption Price”) by
delivery of written notice thereof (the “Maturity Redemption Notice”) to the Company. The Maturity Redemption
Notice shall state the date the Company is required to pay to such Holder such Maturity Redemption Price (the “Mandatory
Redemption Date”), which date shall be no earlier than ten (10) Business Days following the date of delivery of such
Mandatory Redemption Notice. Redemptions required by this Section 5 shall be made in accordance with the provisions of Section
7.

 

6.              Triggering
Event Redemptions.

 

(a)           Triggering
Event. A “Triggering Event” shall be deemed to have occurred at such time as any of the following events:

 

(i) any
of the Securities are not freely tradable without restriction by any of the Holders;

 

    	10

    	 

    
 

(ii) the
suspension from trading or failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period
of five (5) consecutive days or for more than an aggregate of ten (10) days in any 365-day period;

 

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

 

(iv) at
any time following the tenth (10th) consecutive day (or, to the extent the Company has not breached any provision of
Section 12 hereof, the 120th consecutive day) that any Holder’s Authorized Share Allocation is less than the
number of shares of Common Stock that such Holder would be entitled to receive upon a conversion of all Preferred Shares held
by such Holder (without regard to any limitations on conversion set forth in Section 4(e) or otherwise);

 

(v) the
Company’s Board of Directors fails to declare any Dividend to be paid on the applicable Dividend Date in accordance with
Section 3;

 

(vi) the
Company’s failure to pay to any Holder any Dividend on any Dividend Date (whether or not declared by the Board of Directors)
or any other amount when and as due under this Certificate of Designations (including, without limitation, the Company’s
failure to pay any redemption payments or amounts hereunder), the Securities Purchase Agreement or any other Transaction Document
(in each case, whether or not permitted pursuant to Section 78.288 of the NGCL or otherwise pursuant to the NGCL), except in the
case of a failure to pay Dividends on any Dividend Date, in which case only if such failure remains uncured for a period of at
least five (5) days;

 

(vii) the
Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to any Holder upon conversion
or exercise (as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by any Holder as
and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited by applicable state
or federal securities laws, and any such failure remains uncured for at least ten (10) days;

 

(viii) the
occurrence of any default under, redemption of or acceleration prior to maturity of an aggregate amount of Indebtedness in excess
of $500,000 of the Company or any of its Subsidiaries;

 

    	11

    	 

    
 

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

 

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

 

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

 

(xii) a
final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment
which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $500,000 amount
set forth above so long as the Company provides each Holder a written statement from such insurer or indemnity provider (which
written statement shall be reasonably satisfactory to the Required Holders) to the effect that such judgment is covered by insurance
or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity
within thirty (30) days of the issuance of such judgment;

 

    	12

    	 

    
 

(xiii) the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $500,000 due to any third party (other than, with respect to
unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper
proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or
is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $500,000, which breach
or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer
to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default
or Triggering Event under any agreement binding the Company or any Subsidiary, which default or Triggering Event would or is likely
to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition
(including financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;

 

(xiv) a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied, that there has been no Equity Conditions Failure or as to whether or not a Triggering Event has occurred;

 

(xv) any breach
or failure in any respect by the Company or any Subsidiary to company with any provision of Section 13 hereof; or

 

(xvi) other
than as specifically set forth in another clause of this Section 5(a), the Company breaches
any representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach
of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of three (3) Trading
Days.

 

    	13

    	 

    
 

(b)     Notice
of Triggering Event; Redemption Option Upon Triggering Event. Within two (2) Business Days after the Company becomes
aware that a Triggering Event has occurred, the Company shall deliver written notice thereof via facsimile and overnight
courier (with next day delivery specified) (“Notice of Triggering Event”) to each Holder. At any time
after the earlier of a Holder’s receipt of a Notice of Triggering Event and such Holder becoming aware of a Triggering
Event, such Holder shall have the right, at such Holder’s option, to require the Company to redeem up to all of such
Holder’s Preferred Shares by delivering written notice thereof via facsimile and overnight courier (with next day
delivery specified) (“Triggering Event Redemption Notice”) to the Company, which Triggering Event
Redemption Notice shall indicate the number of Preferred Shares that such Holder is electing to redeem. In addition to all
other rights of such Holder contained herein, each Preferred Share subject to redemption by the Company pursuant to this
Section 5(b) shall be redeemed by the Company at a price per Preferred Share equal to the greater of (i) the product of (A)
the Conversion Amount thereof multiplied by (B) the Triggering Event Redemption Premium and (ii) the product of (X) the
Conversion Rate then in effect with respect to the Conversion Amount thereof multiplied by (Y) the product of (1) the Equity
Value Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the
period commencing on the date immediately preceding such Triggering Event and ending on the date the Company makes the entire
payment required to be made under this Section 5(b) (the “Triggering Event Redemption Price”).

 

(c)     Payment
of Redemption Price. Upon the Company’s receipt of the first Triggering Event Redemption Notice from any Holder, the Company
shall immediately notify each other Holder by facsimile of the Company’s receipt of such notice. The Company shall deliver
on the second (2nd) Business Day after the Company’s receipt of the first Triggering Event Redemption Notice
the applicable Triggering Event Redemption Price to all Holders that deliver a Triggering Event Redemption Notice prior to the
second (2nd) Business Day after the Company’s receipt of the first Triggering Event Redemption Notice (the “Initial
Triggering Event Redemption Date”). The Company shall deliver on the third (3rd) Business Day after the Company’s
receipt of a Triggering Event Redemption Notice the applicable Triggering Event Redemption Price to a Holder who delivers a Triggering
Event Redemption Notice at any time on or following the fourth (4th) Business Day after the Company’s receipt of the first
Triggering Event Redemption Notice (each, a “Subsequent Triggering Event Redemption Date”, and together
with the Initial Triggering Event Redemption Date, the “Triggering Event Redemption Dates”). To the extent
redemptions required by this Section 5 are deemed or determined by a court of competent jurisdiction to be prepayments of the
Preferred Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. Redemptions required by this Section
6 shall be made in accordance with the provisions of Section 7.

 

7.     
Redemptions. 

 

(a)     General.
The Company shall deliver, as applicable, to each applicable Holder in cash (i) the applicable Maturity Redemption on the applicable
Maturity Redemption Date, (ii) the Company Redemption Amount on the applicable Installment Date, (iii) if such Holder has submitted
a Fundamental Transaction Redemption Notice in accordance with Section 9(b), the applicable Fundamental Transaction Redemption
Price on the Fundamental Transaction Redemption Date and (iii) if such Holder has submitted a Triggering Event Redemption Notice
in accordance with Section 6(b), the applicable Triggering Event Redemption Price to a Holder in cash on the applicable Triggering
Event Redemption Date. In the event that the Company does not pay the applicable Redemption Price to a Holder within the time
period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, such Holder shall have
the option, in lieu of redemption, to require the Company to promptly return to such Holder all or any portion of the Preferred
Shares representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price has
not been paid. 

 

    	14

    	 

    
 

(b)     Pro
Rata Redemptions. If the Company is unable to redeem all of the Preferred Shares submitted in a redemption hereunder, the Company
shall (i) redeem a pro rata amount from each Holder based on the number of Preferred Shares submitted for redemption by such Holder
relative to the total number of Preferred Shares submitted for redemption by all Holders and (ii) in addition to any remedy any
Holder may have under this Certificate of Designations and/or any of the other Transaction Documents, pay to each Holder interest
at the rate of 2% per month (prorated for partial months) in respect of each unredeemed Preferred Share until paid in full. In
the event of the Company’s redemption of any Preferred Shares hereunder, a Holder’s damages would be uncertain and
difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability
of a suitable substitute investment opportunity for such Holder. Accordingly, any redemption premium due hereunder is intended
by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity
and not as a penalty.

 

(c)     Void
Redemption. In the event that the Company does not pay to a Holder the applicable Redemption Price within the time period
set forth in Section 7(a) for any reason (including, without limitation, to the extent such payment is prohibited pursuant to
Section 78.288 of the NGCL or otherwise pursuant to the NGCL), at any time thereafter and until the Company pays such unpaid
applicable Redemption Price in full, such Holder shall have the option to, in lieu of redemption, require the Company to
promptly return to such Holder any or all of the Preferred Shares that were submitted for redemption by such Holder under
this Section 5 and for which the applicable Redemption Price (together with any interest thereon) has not been paid, by
sending written notice thereof to the Company (whether via facsimile or otherwise) (the “Void Optional Redemption
Notice”). Upon the Company’s receipt of such Holder’s Void Optional Redemption Notice, (i) such
Holder’s Redemption Notice shall be null and void with respect to those Preferred Shares subject to such Void Optional
Redemption Notice, (ii) the Company shall immediately return to such Holder any Preferred Shares subject to such Void
Optional Redemption Notice and (iii) the Conversion Price with respect to each conversion effected thereafter by each Holder
shall be equal to the lowest of (A) the Conversion Price in effect on the applicable Conversion Date, (B) the Conversion
Price in effect on the date of the first Void Optional Redemption Notice, (C) 75% of the lowest Closing Bid Price of the
Common Stock during the period beginning on and including the date the first Redemption Notice is delivered to the Company
and ending on and including the date on the first Void Optional Redemption Notice and (D) 75% of the VWAP of the Common Stock
for the five (5) Trading Day period immediately preceding the Conversion Date of the applicable conversion.

 

    	15

    	 

    
 

(d)     Disputes;
Miscellaneous. In the event of a dispute as to the determination of the arithmetic calculation of any Redemption Price,
such dispute shall be resolved pursuant to Section 26 with the term “Redemption Price” being substituted for the
term “Conversion Price.” A Holder’s delivery of a Void Optional Redemption Notice and exercise of its
rights following such notice shall not effect the Company’s obligations to make any payments which have accrued prior
to the date of such notice. In the event of a redemption hereunder of less than all of the Preferred Shares represented by a
particular Preferred Share Certificate, the Company shall promptly cause to be issued and delivered to such Holder of such
Preferred Shares a Preferred Share Certificate representing the remaining Preferred Shares which have not been redeemed, if
necessary.

 

8.     
Company Conversion or Company Redemption.

 

(a)     General. On each applicable Installment Date, each Holder’s Installment Amount applicable to such Installment
Date shall be automatically converted in accordance with this Section 8 into shares of validly issued, fully paid and non-assessable
shares of Common Stock (a “Company Conversion”), provided that the Company may, at its option as described
below, in lieu of such Company Conversion redeem such Holder’s Installment Amount in cash (a “Company Redemption”)
subject to the provisions of this Section 8, provided further that, unless waived by the Required Holders, a Company Conversion
shall not occur with respect to such Holder’s Installment Amount and the Company shall instead be required to elect and
to redeem such Holder’s entire Installment Amount in cash pursuant to a Company Redemption if on the applicable Company
Installment Notice Due Date or on the applicable Installment Date (as the case may be) there is an Equity Conditions Failure.
On or prior to the date which is the twenty-first (23rd) Trading Day prior to each Installment Date (each, an “Company
Installment Notice Due Date”), the Company shall deliver written notice (each, an “Company Installment Notice”
and the date all of the Holders receive such notice is referred to as to the “Company Installment Notice Date”),
to each Holder of Preferred Shares and such Company Installment Notice shall (i) either (A) confirm that such Holder’s Installment
Amount shall be automatically converted in whole pursuant to a Company Conversion or (B) state that the Company elects to redeem,
or is required to elect and redeem in accordance with the provisions of this Certificate of Designations, such Holder’s
Installment Amount in whole pursuant to a Company Redemption and (ii) if such Holder’s Installment Amount is to be converted
pursuant to a Company Conversion, certify that there is no Equity Conditions Failure as of the date of the Company Installment
Notice. Each Company Installment Notice shall be irrevocable by the Company and may not be revoked by the Company. If the Company
does not timely deliver a Company Installment Notice in accordance with this Section 8(a) with respect to a particular Installment
Date, then the Company shall be deemed to have delivered an irrevocable Company Installment Notice confirming a Company Conversion
and shall be deemed to have certified that there is no Equity Conditions Failure on the applicable Company Installment Notice
Due Date and the applicable Installment Date. No later than two (2) Trading Days after delivery or deemed delivery (as applicable)
of the applicable Company Installment Notice confirming a Company Conversion, the Company shall deliver to such Holder’s
account with DTC such number of shares of Common Stock (the “Pre-Company Installment Shares”) equal to the
quotient of (x) the aggregate Stated Value of such Holder’s Installment Amount divided by (y) the Pre-Company Installment
Price, and as to which such Holder shall be the owner thereof as of such time of delivery or deemed delivery (as the case may
be) of such Company Installment Notice. If the Company elects a Company Redemption with respect to any Holder for an Installment
Date, then the Company must elect a Company Redemption with respect to all Holders for such Installment Date. A Company Conversion
(whether set forth in the Company Installment Notice or by operation of this Section 8(a)) shall be converted in accordance with
Section 8(b) and a Company Redemption shall be redeemed in accordance with Section 8(c).

 

    	16

    	 

    
 

(b)     Mechanics
of Company Conversion. Subject to Section 8(a), if the Company delivers a Company Installment Notice and confirms, or is deemed
to have delivered a Company Installment Notice and is deemed to have confirmed, a Company Conversion in accordance with Section
8(a), then the remainder of this Section 8(b) shall apply. With respect to each Holder, the aggregate Stated Value of such Holder’s
Installment Amount shall be automatically converted as of the applicable Installment Date on such Installment Date at the Company
Installment Price, and the Company shall, on the applicable Installment Date, deliver to such Holder’s account with DTC
such shares of Common Stock issued upon such Company Conversion (subject to the reduction contemplated by the immediately following
sentence and, if applicable, the last sentence of this Section 8(b)), provided that there is no Equity Conditions Failure as of
such Installment Date and a Company Conversion is not otherwise prohibited under any other provision of this Certificate of Designations.
The number of shares of Common Stock to be delivered upon such Company Conversion shall be reduced by the amount of any Pre-Company
Installment Shares delivered to such Holder in connection with such Installment Date. If a Triggering Event occurs during any
applicable Company Conversion Measuring Period, then either (i) such Holder shall return any Pre-Company Installment Shares delivered
in connection with the applicable Installment Date or (ii) the Stated Value used to calculate the applicable Triggering Event
Redemption Price shall be reduced by the product of (x) the aggregate Stated Value of such Holder’s Installment Amount with
respect to such Installment Date multiplied by (y) the Conversion Share Ratio. If there is an Equity Conditions Failure as of
such Installment Date or a Company Conversion is not otherwise permitted under any other provision of this Certificate of Designations,
then, at the option of such Holder designated in writing to the Company, such Holder may require the Company to do any one or
more of the following: (i) the Company shall redeem all or any part designated by such Holder of the unconverted Installment Amount
(such designated amount is referred to as the “Designated Redemption Amount”) and the Company shall pay to
such Holder within three (3) days of such Installment Date, by wire transfer of immediately available funds, an amount in cash
equal to 125% of such Designated Redemption Amount, and/or (ii) the applicable Company Conversion shall be null and void with
respect to all or any part designated by such Holder of the unconverted Installment Amount and such Holder shall be entitled to
all the rights of a holder of Preferred Shares with respect to such part of such with respect to such designated portion of the
Installment Amount; provided, however, the Conversion Price for such designated part of such unconverted Installment Amount shall
thereafter be adjusted to equal the lesser of (A) the Company Installment Price in effect on the date on which such Holder voided
the Company Conversion and (B) the Company Installment Price that would be in effect on the date on which such Holder delivers
a Conversion Notice relating thereto as if such date was an Installment Date. In addition, if there is an Equity Conditions Failure
as of such Installment Date or a Company Conversion is not otherwise permitted under any other provision of this Certificate of
Designations, then, at such Holder’s option, either (I) such Holder shall return any Pre-Company Installment Shares delivered
in connection with the applicable Installment Date or (II) the applicable Designated Redemption Amount shall be reduced by the
product of (X) the Installment Amount applicable to such automatic Conversion Date multiplied by (Y) the Conversion Share Ratio.
If the Company fails to redeem any Designated Redemption Amount by the third (3rd) day following the applicable Installment
Date by payment of such amount on the applicable Installment Date for any reason (including, without limitation, to the extent
such payment is prohibited pursuant to Section 78.288 of the NGCL or otherwise pursuant to the NGCL), then such Holder shall have
the rights set forth in Section 7 as if the Company failed to pay the applicable Company Redemption Price and all other rights
under this Certificate of Designations (including, without limitation, such failure constituting a Triggering Event). Notwithstanding
anything to the contrary in this Section 8(b), but subject to 4(e), until the Company delivers Common Stock representing all of
such Holder’s Installment Amount to such Holder pursuant to a Company Conversion, such Holder’s Installment Amount
may be converted by such Holder into Common Stock pursuant to Section 4. In the event that a Holder elects to convert such Holder’s
Installment Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence, the Installment
Amount so converted shall be deducted from the Installment Amount(s) relating to the applicable Installment Date(s) as set forth
in the applicable Conversion Notice. If, with respect to an Installment Date, the number of Pre-Company Installment Shares delivered
to a Holder exceeds the number of Post-Company Installment Shares with respect to such Installment Date, then the number of shares
of Common Stock equal to such excess shall constitute a credit against the number of shares of Common Stock to be issued to such
Holder pursuant to Sections 4 and 8(b) hereof and shall reduce the number of shares of Common Stock required to be actually issued
by the Company to such Holder under such sections on a share-for-share basis until such time as the number of shares that would
have been issued by the Company to such Holder (not taking account of such credit) equals the amount of such excess.

 

    	17

    	 

    
 

(c)     Mechanics
of Company Redemption. If the Company elects, or is required to elect, a Company Redemption in accordance with Section 8(a),
then each Holder’s Installment Amount shall be redeemed by the Company on the applicable Installment Date in an amount of
cash, and the Company shall pay to each such Holder on such Installment Date, by wire transfer of immediately available funds,
an amount equal to 100% of the aggregate Stated Value of such Holder’s Installment Amount (the “Company Redemption
Price”). If the Company fails to redeem a Holder’s Installment Amount on the applicable Installment Date by payment
of the Company Redemption Price on such date for any reason (including, without limitation, to the extent such payment is prohibited
pursuant to Section 78.288 of the NGCL or otherwise pursuant to the NGCL), then, at the option of such Holder designated in writing
to the Company (any such designation shall be a “Conversion Notice” for purposes of this Certificate of Designations),
such Holder may require the Company to convert all or any part of such Holder’s Installment Amount at the Company Installment
Price (determined as of the date of such designation as if such date were an Installment Date). Conversions required by this Section
8(c) shall be made in accordance with the provisions of Section 4(c). Notwithstanding anything to the contrary in this Section
8(c), but subject to Section 4(e), until the Company Redemption Price is paid in full, such Holder’s Installment Amount
may be converted, in whole or in part, by such Holder into Common Stock pursuant to Section 4. In the event that a Holder elects
to convert such Holder’s Installment Amount prior to the applicable Installment Date as set forth in the immediately preceding
sentence, the Installment Amount so converted shall be deducted from the Installment Amount(s) relating to the applicable Installment
Date(s) as set forth in the applicable Conversion Notice. Redemptions required by this Section 8(c) shall be made in accordance
with the provisions of Section 7

.

    	18

    	 

    
 

(d)     Deferred
Installments. Notwithstanding any provision of this Section 8 to the contrary, any Holder may, at its option and in its sole discretion,
deliver a written notice to the Company prior to the applicable Installment Date (the “Amortization Notification Deadline
Date”) electing to have the payment of all or any portion of the Installment Amount to be converted or redeemed on such
Installment Date deferred (such amount deferred, the “Deferral Amount”) until any
subsequent Installment Date selected by such Holder, in its sole discretion, in which case, the Deferral Amount shall be added
to, and become part of, such subsequent Installment Amount and such Deferral Amount shall continue to accrue Dividends hereunder.
Any notice delivered by such Holder pursuant to this Section 8(d)shall set forth (x) the Deferral Amount and (y) the date that
such Deferral Amount shall then be payable.

 

9.     
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 9(a) pursuant to written agreements in form and substance satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements to
deliver to each holder of Preferred Shares in exchange for such Preferred Shares a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Certificate of Designations, including, without
limitation, having a stated value and dividend rate equal to the stated value and dividend rate of the Preferred Shares held
by the Holders and having similar ranking to the Preferred Shares, and 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 or redemption of the Preferred Shares at any time after the consummation of such Fundamental
Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 10(a) and 16, which shall continue to be receivable thereafter)) issuable upon the
conversion or redemption of the Preferred Shares prior to such Fundamental Transaction, such shares of 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 10 shall apply similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations on the conversion or redemption of the Preferred Shares.

 

    	19

    	 

    
 

(b)     Fundamental Transaction Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading
Days prior to the consummation of a Fundamental Transaction, but not prior to the public announcement of such Fundamental Transaction,
the Company shall deliver written notice thereof via facsimile and overnight courier to each Holder (a “Fundamental Transaction
Notice”). At any time during the period beginning after a Holder’s receipt of a Fundamental Transaction Notice
or such Holder becoming aware of a Fundamental Transaction if a Fundamental Transaction Notice is not delivered to such Holder
in accordance with the immediately preceding sentence (as applicable) and ending on the later of twenty (20) Trading Days after
(A) consummation of such Fundamental Transaction or (B) the date of receipt of such Fundamental Transaction Notice, such Holder
may require the Company to redeem all or any portion of such Holder’s Preferred Shares by delivering written notice thereof
(“Fundamental Transaction Redemption Notice”) to the Company, which Fundamental Transaction Redemption Notice
shall indicate the number of Preferred Shares such Holder is electing to have the Company redeem. Each Preferred Share subject
to redemption pursuant to this Section 9(b) shall be redeemed by the Company in cash at a price equal to the greater of (i) the
product of the Fundamental Transaction Redemption Premium multiplied by the Conversion Amount thereof, (ii) the product of (X)
the Conversion Rate then in effect with respect to the Conversion Amount thereof multiplied by (Y) the product of (1) the Equity
Value Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period
commencing on the date immediately preceding such Fundamental Transaction and ending on the date the Company makes the entire
payment required to be made under this Section 9(b) and (iii) the product of (x) the Equity Value Redemption Premium and (y) the
product of (A) the Conversion Amount thereof multiplied by (B) the quotient determined by dividing (I) the aggregate cash consideration
and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of
Common Stock upon consummation of such Fundamental Transaction (any such non-cash consideration constituting publicly-traded securities
shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation
of such Fundamental Transaction, the Closing Sale Price of such securities on the Trading Day immediately following the public
announcement of such proposed Fundamental Transaction and the Closing Sale Price of such securities on the Trading Day immediately
prior to the public announcement of such proposed Fundamental Transaction) by (II) the Conversion Price then in effect (the “Fundamental
Transaction Redemption Price”). Redemptions required by this Section 9(b) shall have priority to payments to all other
stockholders of the Company in connection with such Fundamental Transaction. To the extent redemptions required by this Section
9(b) are deemed or determined by a court of competent jurisdiction to be prepayments of the Preferred Shares by the Company, such
redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 9(b), but subject
to Section 4(e), until the applicable Fundamental Transaction Redemption Price is paid in full to the applicable Holder, the Preferred
Shares submitted by such Holder for redemption under this Section 9(b) may be converted, in whole or in part, by such Holder into
Common Stock pursuant to Section 4 or in the event the Conversion Date is after the consummation of such Fundamental Transaction,
stock or equity interests of the Successor Entity substantially equivalent to the Company’s shares of Common Stock pursuant
to Section 4. In the event of the Company’s redemption of any portion of the Preferred Shares under this Section 9(b), such
Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for a Holder. Accordingly,
any redemption premium due under this Section 9(b) is intended by the parties to be, and shall be deemed, a reasonable estimate
of such Holder’s actual loss of its investment opportunity and not as a penalty. The Company shall make payment of the applicable
Fundamental Transaction Redemption Price concurrently with the consummation of such Fundamental Transaction if a Fundamental Transaction
Redemption Notice is received prior to the consummation of such Fundamental Transaction and within two (2) Trading Days after
the Company’s receipt of such notice otherwise (the “Fundamental Transaction Redemption Date”). Redemptions
required by this Section 9 shall be made in accordance with the provisions of Section 7.

 

    	20

    	 

    
 

10.             
Rights Upon Issuance of Purchase Rights and Other Corporate Events.

 

(a)     Purchase
Rights. In addition to any adjustments pursuant to Section 11 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).

 

    	21

    	 

    
 

(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 10 shall apply similarly and equally to
successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of the
Preferred Shares contained in this Certificate of Designations.

 

11.             
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 11(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 issue or sale or deemed issuance or sale (such
Conversion Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to
an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted
Conversion Price and consideration per share under this Section 11(a)), the following
shall be applicable:

 

    	22

    	 

    
 

(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 11(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.

 

(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 11(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 11(a), except as contemplated below, no further adjustment
of the Conversion Price shall be made by reason of such issue or sale.

 

    	23

    	 

    
 

(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 11(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
11(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 or Adjustment Right is issued or deemed
issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company, together comprising
one integrated transaction, (x) such Option or Convertible Security (as applicable) or Adjustment Right will be deemed to have
been issued for consideration equal to the Black Scholes Consideration Value thereof 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 or receivable by the Company minus (II) the Black Scholes Consideration
Value of each such Option or Convertible Security (as applicable) or Adjustment Right. 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 average VWAP of such security for the five
(5) Trading Day period 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.

 

    	24

    	 

    
 

(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 Section 9 or Section 11(a),
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 Section 9 or
Section 11(a), 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 11(b) shall become
effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under
this Section 11(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.

 

    	25

    	 

    
 

(c)     Holder’s
Right of Alternative Conversion Price Following Issuance of Certain Options or Convertible Securities. In addition to and not
in limitation of the other provisions of this Section 11(c), if the Company in any manner issues or sells any Options or Convertible
Securities (any such securities, “Variable Price Securities”) after the Subscription Date that are convertible
into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the
shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting
customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each
of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company
shall provide written notice thereof via facsimile and overnight courier to each Holder on the date of issuance of such Convertible
Securities or Options. From and after the date the Company issues any such Convertible Securities or Options with a Variable Price,
each Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion
Price upon conversion of the Preferred Shares by designating in the Conversion Notice delivered upon any conversion of Preferred
Shares that solely for purposes of such conversion such Holder is relying on the Variable Price rather than the Conversion Price
then in effect. A Holder’s election to rely on a Variable Price for a particular conversion of Preferred Shares shall not
obligate such Holder to rely on a Variable Price for any future conversions of Preferred Shares.

 

(d)     Stock
Combination Event Adjustment. If at any time and from time to time on or after
the Issuance Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar
transaction involving the Common Stock (each, a “Stock Combination Event”) and the product of (i)
the quotient determined by dividing (x) the Conversion Price in effect immediately prior to the Stock Combination Event by
(y) the quotient determined by dividing (A) the sum of the VWAP of the Common Stock on each day of the fifteen (15) Trading
Day period immediately prior to the Stock Combination Event, divided by (B) fifteen (15); and (ii) the quotient determined by
dividing (x) the sum of the VWAP of the Common Stock on each day of the fifteen (15) Trading Day period immediately following
the date of such Stock Combination Event, divided by (y) fifteen (15) (each, an “Event Market Price”) is
less than the Conversion Price then in effect (after giving effect to the adjustment in Section 11(b) above), then on
the sixteenth (16th) Trading Day immediately following such Stock Combination Event, the Conversion Price then in effect on
such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 11(b)
above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment
in the immediately preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment
shall be made.

 

(e)     Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect any Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 11but 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 11(c) will increase the Conversion Price as otherwise determined pursuant
to this Section 11, 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.

 

    	26

    	 

    
 

(f)     Calculations. All calculations under this Section 11shall
be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common Stock.

 

12.             
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 the sum of (i) 125% of the Conversion Rate with respect to the Conversion Amount of each Preferred Share
as of the Initial Issuance Date (assuming for purposes hereof, that all the Preferred Shares issuable pursuant to the Securities
Purchase 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) and (ii) the maximum number of Dividend Shares
issuable pursuant to the terms of this Certificate of Designations from the Initial Issuance Date through the Maturity Date (assuming
for purposes hereof, that all the Preferred Shares issuable pursuant to the Securities Purchase 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, the sum of (i) 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 Securities Purchase Agreement and (ii) the maximum number of Dividend Shares issuable pursuant to the
terms of this Certificate of Designations from such date through the Maturity Date assuming for purposes hereof, that all the Preferred
Shares issuable pursuant to the Securities Purchase 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 for issuance as Dividend 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.

 

    	27

    	 

    
 

(b)               Insufficient
Authorized Shares. If, notwithstanding Section 12(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 immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve 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 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 12 shall limit any obligations of the Company under any provision of the Securities Purchase
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.

 

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.

 

    	28

    	 

    
 

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

 

(d)              
Restriction on Redemption and Cash Dividends. Except with respect
to the payment of Dividends hereunder, the Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.

 

(e)               
Restriction on Transfer of Assets. The Company shall not, and the
Company shall cause each of its Subsidiaries to not, directly or indirectly, sell, lease, license, assign, transfer, spin-off,
split-off, close, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned or hereafter acquired
whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers,
conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries that, in the aggregate, do not
have a fair market value in excess of $2,000,000 in any twelve (12) month period and (ii) sales of inventory in the ordinary course
of business.

 

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

 

(g)              
Change in Nature of Business. The Company shall not, and the Company
shall cause each of its Subsidiaries to not, directly or indirectly, engage in any material line of business substantially different
from those lines of business conducted by the Company and each of its Subsidiaries on the Initial Issuance Date or any business
substantially related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, modify its or their corporate structure or purpose. For the purposes of this section, but without limiting
what is construed as the nature of the Company’s business, if the Company engages in other types of mining of processing
related thereto or industries downstream from the materials that the Company mines or produces shall not be considered a change
in the nature of the business of the Company.

 

    	29

    	 

    
 

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

 

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

 

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

 

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

 

    	30

    	 

    
 

15.             
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 sum of (i) the Black Scholes Value (as defined in the Warrants) with respect to the
outstanding portion of all Warrants held by such Holder (without regard to any limitations on the exercise thereof) as of the
date of such event and (ii) the greater of (A) 120% of the Conversion 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 15. All the preferential amounts
to be paid to the Holders under this Section 15 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 15 applies. Upon payment in full of the Black-Scholes Price of
such Warrants pursuant to this Section 15, such Warrants shall be deemed repurchased by the Company and no longer exercisable.

 

16.             
Participation. In addition to any adjustments pursuant to Section 11, 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).

 

    	31

    	 

    
 

17.             
Vote to Change the Terms of or Issue Preferred Shares. In addition to any other rights provided by law, except where
the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Articles
of Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent
without a meeting of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision
of, or add any provision to, its Articles of Incorporation or bylaws, or file any certificate of designations or articles of amendment
of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights,
privileges or powers, or restrictions provided for the benefit, of the Preferred Shares, regardless of whether any such action
shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease
(other than by conversion) the authorized number of Preferred Shares; (c) without limiting any provision of Section 2, create
or authorize (by reclassification or otherwise) any new class or series of 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 Securities Purchase Agreement; or (g) without limiting any provision
of Section 20, whether or not prohibited by the terms of the Preferred Shares, circumvent a right of the Preferred Shares.

 

18.             
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.

 

19.             
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate
of Designations shall be cumulative and in addition to all other remedies available under this Certificate of Designations and
any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive
relief), and 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 (including, without limitation, compliance with Section
11(a)).

 

    	32

    	 

    
 

20.             
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles
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).

 

21.             
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.

 

22.             
Notices. The Company shall provide each Holder of Preferred Shares with prompt written notice of all actions taken
pursuant to the terms of this Certificate of Designations, including in reasonable detail a description of such action and the
reason therefor. Whenever notice is required to be given under this Certificate of Designations, unless otherwise provided herein,
such notice must be in writing and shall be given in accordance with Section 8(f) of the Securities Purchase 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
ten (10) 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.

 

23.             
Transfer of Preferred Shares. A Holder may transfer some or all of its Preferred Shares without the consent of the
Company.

 

    	33

    	 

    
 

24.             
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.

 

25.             
Stockholder Matters; Amendment.

 

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

 

26.             
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, any Redemption Price,
the Closing Bid Price, the Closing Sale Price or fair market value (as the case may be) or the arithmetic calculation of the Conversion
Rate, the Company or the applicable Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations
(as the case may be) via facsimile (i) within five (5) Business Days after receipt 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 (including, without limitation, as to whether any issuance or sale
or deemed issuance or sale was an issuance or sale or deemed issuance or sale of Excluded Securities). If such Holder and the Company
are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic
calculation (as the case may be) being submitted to the Company or such Holder (as the case may be), then the Company shall, within
two (2) Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, such Redemption Price the Closing
Bid Price, the Closing Sale Price or fair market value (as the case may be) to an independent, reputable investment bank selected
by such Holder or (b) the disputed arithmetic calculation of the Conversion Rate to an independent, outside accountant selected
by such Holder (other than the Company’s independent, outside accountant). The Company shall cause at its expense the investment
bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company
and such Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error or fraud.

 

    	34

    	 

    
 

27.             
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)              
“Additional Amount” means, as of the applicable date of determination, with respect to each Preferred
Share, all declared and unpaid Dividends on such Preferred Share.

 

(c)                “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any
issuance or sale (or deemed issuance or sale in accordance with Section 11(a)) of shares of Common Stock (other than rights
of the type described in Section 10(a) hereof) that could result in a decrease in the net consideration received by the
Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement
rights, cash adjustment or other similar rights).

 

(d)              
“Aggregate Installment Amount” means (i) with respect to each Installment Date (other than the
final Installment Date), the lesser of (I) 1,667 Preferred Shares (as adjusted for stock splits, combinations and other similar
transaction occurring after the Initial Issuance Date) and (II) all Preferred Shares outstanding as of the applicable Installment
Date (other than the final Installment Date) or (ii) with respect to the final Installment Date, all Preferred Shares outstanding
as of the final Installment Date.

 

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

 

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

 

    	35

    	 

    
 

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

 

(h)              
“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.

 

(i)                
“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 26. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.

 

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

 

(k)              
“Company Installment Price” means, with respect to the applicable date of determination, the lower of
(i) the Conversion Price then in effect and (ii) the price which is equal to the product of (x) 90% multiplied by (y) the quotient
of (A) the sum of each of the ten (10) lowest Closing Bid Prices of the Common Stock during the twenty (20) consecutive Trading
Day period immediately preceding the applicable Installment Date (each such period, a “Company Conversion Measuring Period”)
divided by (B) ten (10). All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination
or other similar transaction during any such Company Conversion Measuring Period.

 

    	36

    	 

    
 

(l)                
“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.

 

(m)            
“Conversion 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 Additional Amount thereon as of such date of determination.

 

(n)              
“Conversion Price” means, with respect to each Preferred Share, as of any Conversion Date or other applicable
date of determination, $2.04, subject to adjustment as provided herein.

 

(o)              
“Conversion Share Ratio” means as to any applicable Installment Date, the quotient of (i) the number
of Pre-Company Installment Shares delivered in connection with such Installment Date divided by (ii) the number of Post-Company
Installment Shares applicable to such Installment Date.

 

(p)              
“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.

 

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

 

(r)                
“Dividend Conversion Price” means with respect to any Dividend Date that price
which shall be the lower of (i) the applicable Conversion Price and (ii) 90% of the Market Price.

 

(s)               
“Dividend Rate” means (A) five percent (5.0%) per annum and (B) for the period from and after the occurrence
of a Triggering Event through such time that such Triggering Event is cured, eighteen percent (18%) per annum.

 

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

 

    	37

    	 

    
 

(u)               “Equity
Conditions” means: (i) with respect to the applicable date of determination either (x) a registration statement is
effective, and the prospectus contained therein is available, for the issuance by the Company to all of the Holders of all of
the shares of Common Stock issuable upon conversion of all of the Preferred Shares (which, solely for clarification purposes,
includes, without limitation, all shares of Common Stock issuable under Sections 3, 4 and 8) and upon exercise of
the Warrants (in each case, without regard to any limitations on conversion or exercise set forth therein) or (y) all of the
shares of Common Stock issuable upon conversion of all of the Preferred Shares and exercise of the Warrants (assuming a
cashless exercise to the extent permitted therein) are otherwise freely tradable without the need for registration under any
applicable federal or state securities laws (in each case, disregarding any limitation on conversion contained herein); (ii)
on each day during the period beginning one month prior to the applicable date of determination and ending on and including
the applicable date of determination (the “Equity Conditions Measuring Period”), the Common Stock
(including all of the shares of Common Stock issuable upon conversion of all of the Preferred Shares and upon exercise of the
Warrants) is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from
trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable
date of determination due to business announcements by the Company); (iii) on each day during the Equity Conditions Measuring
Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of Preferred Shares and upon
exercise of the Warrants on a timely basis as set forth in Section 4 hereof and as set forth in the Warrants, respectively,
and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other
Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination may
be issued in full without violating Section 4(e) hereof (each Holder acknowledges that the Company shall be entitled to
assume that this condition has been met for all purposes hereunder absent written notice from such Holder); (v) any shares of
Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the
rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as
applicable); (vi) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or
intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the
Company shall have no knowledge of any fact that would reasonably be expected to cause any of the shares of Common Stock
issuable upon conversion of any Preferred Shares or upon exercise of the Warrants to not be freely tradable without the need
for registration under any applicable state securities laws (disregarding any limitation on conversion contained herein);
(viii) no Holder shall be in possession of any material, non-public information provided to any of them by the Company, any
of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on
each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in material compliance with
each, and shall not have breached any, provision, covenant, representation or warranty of any Transaction Document; (x) on
each day during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure;
and (xi) on each day during the Equity Conditions Measuring Period, there shall not have occurred an Triggering Event or an
event that with the passage of time or giving of notice would constitute an Triggering Event.

 

    	38

    	 

    
 

(v)              
“Equity Conditions Failure” means (i) solely with respect to the first Company Installment Notice Due
Date, that on any day during the period commencing one (1) Trading Day immediately prior to the first Company Installment Notice
Due Date, the Equity Conditions have not been satisfied (or waived in writing by the Required Holders) or (ii) with respect to
any other applicable date of determination, that on any day during the period commencing twenty (20) Trading Days immediately prior
to such date of determination, the Equity Conditions have not been satisfied (or waived in writing by the Required Holders).

 

(w)            
“Equity Value Redemption Premium” means 125%.

 

(x)              
“Excluded Securities” means, collectively, (i) shares of Common Stock or standard options to purchase
Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Share Plan; (ii)
shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase
Common Stock issued pursuant to an Approved Share Plan that are covered by clause (i) above) issued prior to the Subscription Date,
provided that the conversion or exercise price of any such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Share Plan that are covered by clause (i) above) is not lowered, none of such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Share Plan that are covered by
clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Share Plan that are
covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Holders; (iii) the
shares of Common Stock issuable upon conversion of all of the Preferred Shares or otherwise pursuant to this Certificate of Designations;
(iv) the Warrant Shares; (v) shares of Common Stock or Convertible Securities issued or issuable in connection with strategic or
commercial alliances, acquisitions, mergers, and strategic partnerships, provided, that (x) the primary purpose of such issuance
is not to raise capital as determined in good faith by the board of directors of the Company, (y) the purchaser or acquirer of
the securities in such issuance solely consists of either (I) the actual participants in such strategic or commercial alliance
or strategic or commercial partnership, (II) the actual owners of such assets or securities acquired in such acquisition or merger
or (III) the stockholders, partners or members of the foregoing Persons and (z) the number or amount of securities issued to such
Person by the Company shall not be disproportionate to such Person’s actual participation in such strategic or commercial
alliance or strategic or commercial partnership or ownership of such assets or securities to be acquired by the Company, as applicable
and (vi) shares of Common Stock or Convertible Securities issued or issuable in connection with pursuant to a bona fide retail
firm commitment underwritten public offering with a nationally recognized underwriter which generates gross proceeds to the Company
in excess of $30,000,000 (other than an “at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act, “equity
lines”, “confidential market public offerings”, “unregistered direct offerings”, “wall-crossed
offerings”, “pre-marketed offerings” and such other public offerings that are announced after confidential marketing
to investors).

 

    	39

    	 

    
 

(y)              
“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) (I) reorganize, recapitalize or reclassify the Common Stock, (II) effect or consummate a stock combination, reverse stock
split or other similar transaction involving the Common Stock or (III) make any public announcement or disclosure with respect
to any stock combination, reverse stock split or other similar transaction involving the Common Stock (including, without limitation,
any public announcement or disclosure of (x) any potential, possible or actual stock combination, reverse stock split or other
similar transaction involving the Common Stock or (y) board or stockholder approval thereof, or the intention of the Company to
seek board or stockholder approval of any stock combination, reverse stock split or other similar transaction involving 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.

 

(z)               “Fundamental Transaction Redemption Premium” means 125%.

 

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

 

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

 

    	40

    	 

    
 

(cc)           
“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 Triggering Event 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,
lien, 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.

 

(dd)         
“Installment Date” means each of the following dates: (i) June 1, 2012, (ii) August 1, 2012, (iii) October
1, 2012, (iv) December 1, 2012, (v) February 1, 2013 and (vi) the Maturity Date.

 

(ee)           
“Installment Amount” means, as of the applicable date of determination, with respect to a particular
Holder, a number of Preferred Shares equal to (i) the product of (1) the Aggregate Installment Amount multiplied by (2) such Holder’s
Pro Rata Amount (rounded to the nearest whole number) or (ii) all Preferred Shares then held by such Holder only if such number
of Preferred Shares then held by such Holder is less than the amount determined under the immediately preceding clause (i).

 

(ff)            
“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.

 

(gg)          
“Mandatory Conversion Volume Limitation” means 15% of the aggregate dollar trading volume (as reported
on Bloomberg) of the Common Stock on the Principal Market over the twenty (20) consecutive Trading Day period immediately prior
to the applicable Mandatory Conversion Notice Date.

 

(hh)          
 “Maturity Date” means the thirteen month anniversary of the Initial Issuance Date.

 

(ii)              
“Market Price” means, for any given date, the quotient of (I) the sum of the VWAP of the Common Stock
on each of the ten (10) consecutive Trading Days ending and including the Trading Day immediately prior to such given date, divided
by (II) ten (10) (such period, the “Market Price Measuring Period”). All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during such Market Price
Measuring Period.

 

    	41

    	 

    
 

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

 

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

 

(ll)             
“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.

 

(mm)      
  “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.

 

(nn)          
“Permitted Indebtedness” means (i) Indebtedness described in Schedule 3(s) of the Securities Purchase
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
and (ii) Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced
by this Certificate of Designations, as reflected in a written agreement acceptable to the Holder and approved by the Holder in
writing, and which Indebtedness does not provide at any time for (1) the payment, prepayment, repayment, repurchase or defeasance,
directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after the Maturity Date or later
and (2) total interest and fees at a rate in excess of five percent (5%) per annum (collectively, the "Subordinated Indebtedness"),
provided, however, that the aggregate outstanding amount of such Subordinated Indebtedness does not at any time exceed
$10,000,000.

 

(oo)           “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, (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, (vi) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Triggering Event under Section 6(a)(xii) and (vii) the Liens described on
Schedule 3(r)(i) of the Securities Purchase Agreement.

 

    	42

    	 

    
 

(pp)           “Post-Company
Installment Shares” means that number of shares of Common Stock that would be required to be delivered pursuant to
Section 8 on the applicable Installment Date without taking into account the delivery of any Pre-Company Installment
Shares.

 

(qq)          
“Pre-Company Installment Price” means, with respect to the applicable date of determination, the lower
of (i) the Conversion Price then in effect and (ii) the price which is equal to the product of (x) 90% multiplied by (y) the quotient
of (A) the sum of each of the ten (10) lowest Closing Bid Prices of the Common Stock during the twenty (20) consecutive Trading
Day period immediately preceding the delivery or deemed delivery of the applicable Company Installment Notice divided by (B) ten
(10). All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar
transaction during any such twenty (20) Trading Day period.

 

(rr)             
“Price Failure” means, with respect to a particular date of determination, that (i) the quotient of (I)
the sum of the VWAP of the Common Stock for each Trading Day in the thirty (30) consecutive Trading Day period ending and including
the Trading Day immediately preceding such date of determination, divided by (II) thirty (30) is less than $1.00 (as adjusted for
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions) or (ii) the quotient of (I)
the sum of the VWAP of the Common Stock for each Trading Day in the five (5) consecutive Trading Day period ending and including
the Trading Day immediately preceding such date of determination, divided by (II) five (5) is less than $0.70 (as adjusted for
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions).

 

(ss)            
“Principal Market” means the NYSE Amex.

 

(tt)             
“Pro Rata Amount” means, as of the applicable date of determination, with respect to a particular Holder,
a fraction (i) the numerator of which is the aggregate number of Preferred Shares held by such Holder as of such date of determination
and (ii) the denominator of which is the aggregate number of Preferred Shares outstanding as of such date of determination.

 

(uu)          
“Redemption Notices” means, collectively, the Triggering Event Redemption Notices, the Company Installment
Notices with respect to any Company Redemption, the Maturity Redemption Notice and the Change of Control Redemption Notices, and
each of the foregoing, individually, a “Redemption Notice.”

 

    	43

    	 

    
 

(vv)          
“Redemption Prices” means, collectively, Triggering Event Redemption Prices, the Change of Control Redemption
Prices, the Maturity Redemption Price and the Company Installment Redemption Prices, and each of the foregoing, individually, a
“Redemption Price.”

 

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

 

(xx)          
“Securities” means, collectively, the Preferred Shares, the shares of Common
Stock issuable upon conversion of the Preferred Shares, the Warrants and the Warrant Shares.

 

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

 

(zz)         
“Stated Value” shall mean $1,000 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.

 

(aaa)        
“Stockholder Approval” means, for the purposes of this Certificate of Designations and any other Transaction
Document, the affirmative approval of the stockholders of the Company providing for (x) the Company’s issuance of all of
the Securities as described in the Transaction Documents in accordance with applicable law and the rules and regulations of the
Principal Market and (y) the increase of the authorized shares of Common Stock of the Company from 50,000,000 to at least 100,000,000
shares of Common Stock.

 

(bbb)       
“Subscription Date” means March 21, 2012.

 

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

 

(ddd)     
  “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.

 

(eee)        
“Trading Day” means 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.

 

    	44

    	 

    
 

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

 

(ggg)      
“Triggering Event Redemption Premium” means (i) in the case of the Triggering Events described
in Section 6(a) (other than Sections 6(a)(viii) through 6(a)(xi)), 125% or (ii) in the case of the Events of Default described
in Sections 6(a)(viii) through 6(a)(xi), 100%.

 

(hhh)      
“Volume Failure” means, with respect to a particular date of determination, that (x) solely with
respect to any Company Conversion or Dividend Election Notice hereunder, the quotient of (I) the sum of the aggregate
daily trading volume (as reported on Bloomberg) of the Common Stock on the Eligible Market on which the Common Stock is listed
or designated for quotation on each Trading Day of the thirty (30) consecutive Trading Day period ending on the Trading Day
immediately preceding such date of determination, divided by (II) thirty (30) is less than 150,000 (as adjusted for any
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions) or (y) otherwise (including,
without limitation, for the determination as to whether the conditions in Section 1(b)(iii) of the Securities Purchase Agreement
to the Additional Closing have been satisfied), the aggregate daily trading volume (as reported on Bloomberg) of the Common
Stock on the Eligible Market on which the Common Stock is listed or designated for quotation of any of the twenty
five (25) Trading Days with the highest such aggregate daily trading volume during the thirty (30) consecutive Trading Day
period ending on the Trading Day immediately preceding such date of determination is less than 150,000  (as adjusted
for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions).

 

(iii)            
“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).

 

    	45

    	 

    
 

(jjj)            
“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 “Volume at Price” function
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
26. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

 

(kkk)      
“Warrants” means, collectively, all of the Warrants to purchase Common Stock issued or issuable by the
Company pursuant to the terms of the Securities Purchase Agreement, as may be amended from time in accordance with the terms thereof,
and all warrants issued in exchange therefor or replacement thereof.

 

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

 

28.              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 28 shall limit any obligations of the Company, or any rights of any Holder, under Section 4(j) of the Securities
Purchase Agreement.

 

 

* * * * *

 

 

 

    	46

    	 

    
 

EXHIBIT I

 

CHINA SHEN ZHOU MINING & RESOURCES,
INC.

CONVERSION NOTICE

 

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

 

	Date of Conversion:	 

 

	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 credited:	1

 

	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):

 

	Account Number (if electronic book entry transfer):	 

 

	Transaction Code Number (if electronic book entry transfer):	 

 

 

1
Only applicable if a credit exists under Section 6(b).

 

 

    	47

    	 

    

 

	Installment Amount(s) to be reduced (and corresponding Installment Date(s)) and amount of reduction:	

 

 

 

 

    	48

    	 

    
 

 

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
__________, 2012 from the Company and acknowledged and agreed to by [                              ].

 

 

	 	CHINA SHEN ZHOU MINING & RESOURCES, INC.
	 	 
	 	By: 	 
	 	Name: 	
	 	Title: 	 

 

 

 

    	49

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]