Exhibit 4.1
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
a Delaware corporation
The undersigned, for the purpose of forming
a corporation pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby certify as follows:
ARTICLE I
The name of this corporation is Applied
DNA Sciences, Inc.
ARTICLE II
The address of its registered office in
the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware, 19808. The Corporation’s
registered agent at that address is Corporation Service Company.
ARTICLE III
The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware,
as amended (the “DGCL”). The corporation is being incorporated in connection with the conversion of a Nevada corporation
to a Delaware corporation (the “Conversion”), and this Certificate of Incorporation is being filed simultaneously with
the Certificate of Conversion from a Non-Delaware Corporation to a Delaware Corporation (the “Certificate of Conversion”)
pursuant to Section 265 of the General Corporation Law of the State of Delaware.
ARTICLE IV
This Corporation is authorized to issue
two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number
of shares of stock which the Corporation shall have the authority to issue is 420,000,000. The total number of shares of Common
Stock that the Corporation is authorized to issue is 410,000,000, with a par value of $0.001 per share. Each share of Common Stock
shall entitle the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders. The total
number of shares of Preferred Stock that the Corporation is authorized to issue is 10,000,000, with a par value of $0.001 per share.
The Board of Directors is further authorized,
subject to the limitations prescribed by law, to fix by resolution or resolutions the designations, powers, preferences and rights,
and the qualifications, limitations or restrictions thereof, of any wholly unissued series of Preferred Stock, including without
limitation, authority to fix by resolution or resolutions the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption price or prices, and liquidation preferences of
any such series, and the number of shares constituting any such series and the designation thereof, or any of the foregoing.
The Board of Directors is further authorized
to increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares
of any such series then outstanding) the number of shares of any series of Preferred Stock, the number of which is fixed by it,
subsequent to the issuance of shares then outstanding, subject to the powers, preferences and rights, and the qualifications, limitations
and restrictions thereof stated in this Certificate or the resolution of the Board of Directors originally fixing the number of
shares of such series. If the number of shares of any series is so decreased, then the shares constituting such decrease shall
resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
1. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred
upon them by statute or by this Certificate or the Bylaws of the Corporation, the directors are hereby empowered to exercise all
such powers and do all such acts and things as may be exercised or done by the Corporation.
2. In furtherance and not in limitation
of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend, alter or repeal the Bylaws
of the Corporation. The affirmative vote of at least a majority of the Board of Directors then in office shall be required in order
for the Board of Directors to adopt, amend, alter or repeal the Corporation’s Bylaws. The Corporation’s Bylaws may
also be adopted, amended, altered or repealed by the stockholders of the Corporation in accordance with the Bylaws. No Bylaw hereafter
legally amended, altered or repealed shall invalidate any prior act of the directors or officers of the Corporation that would
have been valid if such Bylaw had not been amended, altered or repealed.
3. Elections of directors need not be by
written ballot unless the Bylaws of the Corporation shall so provide.
4. No stockholder shall be permitted to
cumulate votes at any election of directors.
5. Any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the
Corporation and may not be effected by any action by written consent by such stockholders.
6. Subject to the rights of holders of any
series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the number of directors
that constitute the whole Board of Directors shall be fixed exclusively in the manner designated in the Bylaws of the Corporation.
ARTICLE VII
1. To the fullest extent permitted by the
DGCL as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation
shall be eliminated to the fullest extent permitted by the DGCL, as so amended.
2. The Corporation shall have the power
to indemnify, to the extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, any employee
or agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that
he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
3. Neither any amendment or repeal of any
Section of this Article VII, nor the adoption of any provision of this Certificate inconsistent with this Article VII,
shall eliminate or reduce the effect of this Article VII, in respect of any matter occurring, or any action or proceeding
accruing or arising or that, but for this Article VII, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
ARTICLE VIII
Any director may be removed from the Board
of Directors by the stockholders of the corporation only for cause, and in such case only by the affirmative vote of the holders
of at least a majority of the voting power of the issued and outstanding shares of capital stock of the corporation then entitled
to vote in the election of directors. Vacancies occurring on the Board of Directors for any reason and newly created directorships
resulting from an increase in the authorized number of directors may be filled only by a vote of a majority of the remaining members
of the Board of Directors, although less than a quorum, or by a sole remaining director, at any meeting of the Board of Directors.
A person so elected by the Board of Directors to fill a vacancy or newly created directorship shall hold office until the next
annual meeting of stockholders and until his or her successor shall be duly elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any incumbent director.
ARTICLE IX
The Corporation hereby elects not to be
governed by Section 203 of the DGCL as from time to time in effect or any successor provision thereto.
ARTICLE X
The Corporation reserves the right to amend
or repeal any provision contained in this Certificate in the manner prescribed by the laws of Delaware and all rights conferred
upon stockholders are granted subject to this reservation.
ARTICLE XI
The name and mailing address of the incorporator
is Kurt H. Jensen, 25 Health Sciences Drive, Suite 113, Stony Brook, NY 11790.
*****
The undersigned, being the incorporator
named, for the purpose of forming a corporation pursuant to the DGCL, does make this Certificate, hereby declaring and certifying
that this is his act and deed and the facts herein stated are true, and accordingly has hereunto set his hand this 16th
day of December. 2008.
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/s/ Kurt H. Jensen
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Kurt H. Jensen
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Incorporator
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
* * * * *
Applied DNA Sciences, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the State of Delaware (the “General Corporation
Law”), DOES HEREBY CERTIFY THAT:
FIRST: The first paragraph of Article IV of the
Certificate of Incorporation of the Corporation is hereby amended and replaced in its entirety to read as follows:
“This Corporation is authorized to issue two classes
of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares
of stock which the Corporation shall have the authority to issue is 810,000,000. The total number of shares of Common Stock that
the Corporation is authorized to issue is 800,000,000, with a par value of $0.001 per share. Each share of Common Stock shall entitle
the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders. The total number of
shares of Preferred Stock that the Corporation is authorized to issue is 10,000,000, with a par value of $0.001 per share.”
SECOND: That pursuant to resolution of the Board of Directors,
the proposed amendment was submitted to the stockholders of the Corporation for consideration at the annual meeting of stockholders
held on June 29, 2010 and was duly adopted by the stockholders of the Corporation in accordance with the applicable provisions
of Section 242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment of Certificate of Incorporation to be signed by its Chief Executive Officer, on June 29th,
2010.
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APPLIED DNA SCIENCES, INC.
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By:
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/s/ James A. Hayward
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Name:
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James A. Hayward
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Title:
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Chief Executive Officer
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
* * * * *
Applied DNA Sciences, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the State of Delaware (the “General Corporation
Law”), DOES HEREBY CERTIFY THAT:
FIRST: The first paragraph of Article IV of the
Certificate of Incorporation of the Corporation is hereby amended and replaced in its entirety to read as follows:
“This Corporation is authorized to issue two classes of
stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares
of stock which the Corporation shall have the authority to issue is 1,360,000,000. The total number of shares of Common Stock that
the Corporation is authorized to issue is 1,350,000,000, with a par value of $0.001 per share. Each share of Common Stock shall
entitle the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders. The total number
of shares of Preferred Stock that the Corporation is authorized to issue is 10,000,000, with a par value of $0.001 per share.”
SECOND: That pursuant to resolution of the Board of Directors,
the proposed amendment was submitted to the stockholders of the Corporation for consideration at the annual meeting of stockholders
held on January 27, 2012 and was duly adopted by the stockholders of the Corporation in accordance with the applicable provisions
of Section 242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment of Certificate of Incorporation to be signed by its Chief Executive Officer, on January 27th,
2012.
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APPLIED DNA SCIENCES, INC.
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By:
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/s/ James A. Hayward
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Name: James A. Hayward
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Title: Chief Executive Officer
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CERTIFICATE OF DESIGNATIONS OF THE
SERIES A CONVERTIBLE PREFERRED STOCK
OF
APPLIED DNA SCIENCES, INC.
I, James A. Hayward,
hereby certify that I am the Chief Executive Officer of Applied DNA Sciences, Inc. (the “Company”), a corporation
organized and existing under the Delaware General Corporation Law (the “DGCL”), and further do hereby certify:
That pursuant to the
authority expressly conferred upon the Board of Directors of the Company (the “Board”) by the Company’s
Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Board on November 29,
2012 adopted the following resolutions creating a series of 5,500 shares of Preferred Stock designated as Series A Convertible
Preferred Stock, 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 Certificate
of Incorporation as follows:
TERMS OF SERIES A CONVERTIBLE PREFERRED
STOCK
1. Designation and
Number of Shares; Defined Terms. There shall hereby be created and established a series of preferred stock of the Company designated
as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”). The authorized
number of shares of Series A Preferred stock shall be 5,500 shares. Each share of Series A Preferred Stock shall have
a par value of $0.001. Any capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in
Section 22 hereof, or if not so defined in Section 22 hereof, in the Securities Purchase Agreement (as defined in Section 22
hereof).
2. Ranking. Except
to the extent that the holders of at least a majority of the outstanding shares of Series A Preferred Stock (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 11, all shares of capital stock of the Company (including, without limitation, Common Stock)
shall be junior in rank to all shares of Series A Preferred Stock 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 shares of Series A Preferred Stock. 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 shares of Series A Preferred Stock 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 shares of Series A Preferred Stock in respect of the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding up of the Company (collectively, the “Parity Stock”)
or (iii) any Junior Stock having a maturity date (or any other date requiring redemption or repayment of such shares of Junior
Stock) that is prior to the date on which no shares of Series A Preferred Stock remain outstanding.
3. Dividends.
The Series A Preferred Stock shall not be entitled to any dividends, except as set forth in the next sentence below. From
and after the first date of issuance of any shares of Series A Preferred Stock (the “Initial Issuance Date”),
each holder of a share of Series A Preferred Stock (each, a “Holder” and collectively, the “Holders”)
shall be entitled to receive dividends (“Dividends”) per share equal to any dividends declared, set apart for
or paid upon any Junior Stock or Parity Stock.
4. Conversion.
Each share of Series A Preferred Stock 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 shares of Series A Preferred Stock 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 share
of Series A Preferred Stock 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 shares of Series A Preferred Stock. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock
up to the nearest whole share.
(c) Mechanics
of Conversion. The conversion of each share of Series A Preferred Stock shall be conducted in the following manner:
(i) Holder’s
Conversion. To convert a share of Series A Preferred Stock 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
Series A Preferred Stock 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 Series A Preferred Stock 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 Series A Preferred Stock (the
“Preferred Share Certificates”) so converted as aforesaid.
(ii) Company’s
Response. Not later than 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 Company’s transfer agent (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 The Depository Trust Company’s (“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 shares of Series A Preferred Stock represented by the Preferred
Share Certificate(s) submitted for conversion pursuant to Section 4(c)(vi) is greater than the number of shares
of Series A Preferred Stock 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 shares of Series A
Preferred Stock not converted. Notwithstanding anything to the contrary above or elsewhere in this instrument, the Company shall
cause its Transfer Agent to at all times participate in the DTC Fast Automated Securities Transfer Program and shall, in all cases,
cause the issuance and transfer of all shares of Common Stock to which any Holder or its designee is entitled under this instrument
to be transferred and issued by credit to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian System.
(iii) Record
Holder. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of shares of Series A
Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion
Date.
(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 shares of Series A Preferred Stock (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 shares of Series A Preferred Stock 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 Fixed Conversion Price of any shares of
Series A Preferred Stock returned or retained by such Holder for failure to timely convert shall be adjusted to the lesser
of (I) the Fixed 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.
(v) Pro
Rata Conversion; Disputes. In the event the Company receives a Conversion Notice from more than one Holder (if more than one
Holder exists) for the same Conversion Date and the Company can convert some, but not all, of such shares of Series A Preferred
Stock submitted for conversion, the Company shall convert from each Holder electing to have shares of Series A Preferred
Stock converted on such date a pro rata amount of such Holder’s shares of Series A Preferred Stock submitted for conversion
on such date based on the number of shares of Series A Preferred Stock submitted for conversion on such date by such Holder
relative to the aggregate number of shares of Series A Preferred Stock 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 shares of Series A
Preferred Stock, 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 20.
(vi) Book-Entry.
Notwithstanding anything to the contrary set forth in this Section 4, upon conversion of any shares of Series A Preferred
Stock in accordance with the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing
the shares of Series A Preferred Stock to the Company following conversion thereof unless (A) the full or remaining number
of shares of Series A Preferred Stock 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 shares of Series A Preferred
Stock upon physical surrender of any shares of Series A Preferred Stock. Each Holder and the Company shall maintain records
showing the number of shares of Series A Preferred Stock 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 shares of Series A Preferred Stock upon each such conversion. In the event of any dispute
or discrepancy, such records of such Holder establishing the number of shares of Series A Preferred Stock 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 shares of Series A Preferred Stock, the number of shares of Series A Preferred Stock represented by such certificate
may be less than the number of shares of Series A Preferred Stock stated on the face thereof. Each certificate for shares
of Series A Preferred Stock 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.
(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 shares of Series A Preferred Stock.
(e) Limitation
on Beneficial Ownership. Notwithstanding anything to the contrary contained in this Certificate of Designations, the shares
of Series A Preferred Stock held by a Holder shall not be convertible by such Holder, and the Company shall not effect any
conversion of any shares of Series A Preferred Stock held by such Holder (including, without limitation, pursuant to Section 4
hereof), to the extent (but only to the extent) that such Holder or any of its affiliates would beneficially own in excess of 9.9%
(the “Maximum Percentage”) of the Common Stock. To the extent the above limitation applies, the determination
of whether the shares of Series A Preferred Stock 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 with a similar limitation on conversion or
exercise or exchange or otherwise) and of which such securities shall be convertible, exercisable or exchangeable (as among all
such securities owned by such Holder and its affiliates with similar limitations on conversion or exercise or exchange or otherwise)
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 shares of Series A Preferred Stock, 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. For clarification, the foregoing calculation of beneficial
ownership takes into account all securities which give rise to beneficial ownership by Holder or its affiliates of such Common
Stock under such rules and regulations and not solely the Preferred Stock held by Holder or its affiliates. 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 shares of Series A Preferred Stock. 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.
(f) Company
Conversion Right. Provided that no Equity Condition Failure then exists, the Company shall have the right during the ten (10) Trading
Days immediately following the Second Closing to effectuate one or more conversions hereunder of all or any portion of the
then outstanding Series A Preferred Stock at the Non-Fixed Conversion Price. To the extent that the limitations set forth
in paragraph (e) above limit the number of shares of Series A Preferred Stock that may be so converted, the Company shall
have the right to so convert such number of shares of Series A Preferred Stock at such Non-Fixed Conversion Price as would
not give rise to a violation of the limitation set forth in paragraph (e) above and the ten (10) Trading Day period referred
to above shall be extended for such period of time as may be necessary to allow the Company to effectuate the conversion of all
then outstanding Series A Preferred Stock under this paragraph (f). The procedures and other provisions of this Series A
Preferred Stock as set forth with respect to a conversion at the election of the Holder shall otherwise apply to conversions under
this paragraph (f) as if conversions under this paragraph (f) were conversions by such Holder otherwise under this Series A
Preferred Stock. “Second Closing” shall mean the date on which the Series A Preferred Stock is issued to
the Holder.
(g) Automatic
Conversion. Provided that no Equity Condition Failure then exists, the entire then outstanding amount of this Series A
Preferred Stock shall automatically convert into shares of Common Stock at the then applicable Conversion Price on the first anniversary
of the Second Closing. To the extent that the limitations set forth in paragraph (e) above limit the number of shares of Series A
Preferred Stock that may be so converted, then from time to time thereafter the amount to be converted under this paragraph (g) shall
be limited at such time so as to comply with the limitations set forth in paragraph (e) above and from time to time thereafter
the remaining outstanding portion of this Series A Preferred Stock shall automatically convert into shares of Common Stock
at then applicable Conversion Price at the time of such subsequent conversion in compliance with the limitations set forth in paragraph
(e) above until remaining outstanding shares of this Series A Preferred Stock have been converted into Common Stock.
The procedures and other provisions of this Series A Preferred Stock as set forth with respect to a conversion at the election
of the Holder shall otherwise apply to conversions under this paragraph (g) as if conversions under this paragraph (g) were
conversions by such Holder otherwise under this Series A Preferred Stock.
5. Rights Upon Issuance of
Purchase Rights and Other Corporate Events.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 6 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 shares of Series A Preferred Stock (without
taking into account any limitations or restrictions on the convertibility of the shares of Series A Preferred Stock) 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).
(b) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
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 shares of Series A Preferred
Stock held by such Holder in addition to the shares of Common Stock receivable upon such conversion (if all shares of Common Stock
were not converted into or exchanged for other shares, securities, assets (including, without limitation, cash), property or rights),
such shares, securities, assets (including, without limitation, cash), property and other rights 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 Series A Preferred Stock contained in this Certificate of Designations) The provisions of this paragraph
(b) 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 shares of Series A Preferred Stock contained in this Certificate of Designations. In the event
that the limitations set forth in Section 4(e) above would otherwise apply to limit shares of Common Stock or other securities
registered under the 1934 Act and as to which Section 13 thereof applies, then securities to be received under this paragraph
(b) shall continue to be subject to the limitations of Section 4(e) above as if such Section 4(e) were expressly applicable to
it and the right to receive securities under this paragraph (b) shall be stayed from time to time to the extent (but only to the
extent) necessary to comply with such limitations as if such limitations expressly applied thereto.
6. Rights Upon Issuance of Other Securities.
(a) Adjustment
of Fixed 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 6(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 Fixed Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such
Fixed 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 Fixed Conversion Price then in effect shall be reduced
to an amount equal to the “FCP1” below (provided, however, that the Fixed Conversion Price shall not be reduced as
set forth below with respect to any Holder that has participated in the Dilutive Issuance):
OB + (AC /FCP)
FCP1 = FCP x _________________
OA
FCP = the Fixed Conversion Price
in effect immediately prior to such Dilutive Issuance
OB = the number of shares of
Common Stock Deemed Outstanding (as defined below) immediately prior to such Dilutive Issuance
AC = the consideration, if any,
received by the Company upon such Dilutive Issuance
OA = the number of shares of
Common Stock Deemed Outstanding immediately after such Dilutive Issuance.
For all purposes
of the foregoing (including, without limitation, determining the adjusted Fixed Conversion Price and consideration per share under
this Section 6), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants or sells any Options (excluding any Excluded Securities) 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 6(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 Fixed
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 (excluding any Excluded
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 6(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 Fixed 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 Fixed
Conversion Price has been or is to be made pursuant to other provisions of this Section 6(a), except as contemplated below, no
further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.
(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 (in
all such cases, excluding any Excluded Securities), the Fixed Conversion Price in effect at the time of such increase or decrease
shall be adjusted to the Fixed 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 6(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 6(a) shall be made if such adjustment would result in an increase of the Fixed Conversion Price then in
effect.
(iv) Calculation
of Consideration Received. If any Option or Convertible Security 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) 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
by the Company minus (II) the Black Scholes Consideration Value of each such Option or Convertible Security (as applicable). 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 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.
(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 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 Fixed Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6(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 Fixed Conversion
Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section
6(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 Fixed Conversion Price in effect
immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 6(b) shall become
effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this
Section 6(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion
Price shall be adjusted appropriately to reflect such event.
(c) Other
Events. In the event that the Company 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 6 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine and implement
an appropriate adjustment in the Fixed Conversion Price so as to protect the rights of such Holder, provided that no such adjustment
pursuant to this Section 6(c) will increase the Fixed Conversion Price as otherwise determined pursuant to this Section 6, 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.
7. 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
150% of the Conversion Rate with respect to the Conversion Amount of each share of Series A Preferred Stock as of the Initial
Issuance Date. So long as any of the shares of Series A Preferred Stock 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 shares of Series A Preferred Stock, 200% of the number of shares of Common Stock as shall from time to time
be necessary to effect the conversion of all of the shares of Series A Preferred Stock then outstanding, 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 shares of Series A Preferred
Stock and each increase in the number of shares so reserved shall be allocated pro rata among the Holders based on the number
of shares of Series A Preferred Stock 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 shares of Series A Preferred Stock, 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 shares of
Series A Preferred Stock shall be allocated to the remaining Holders of shares of Series A Preferred Stock (if any), pro rata
based on the number of shares of Series A Preferred Stock then held by such Holders.
(b) Insufficient
Authorized Shares. If, notwithstanding Section 7(a) and not in limitation thereof, at any time while any of the shares of
Series A Preferred Stock 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 shares of Series A Preferred Stock
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 shares of Series A Preferred
Stock 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 sixty (60) 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.
8. Voting Rights.
Holders of shares of Series A Preferred Stock shall have no voting rights, except as required by law (including without limitation,
the DGCL) and as expressly provided in this Certificate of Designations. To the extent that under the DGCL the vote of the holders
of the Series A Preferred Stock, 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 Series A Preferred Stock, voting together
in the aggregate and not in separate series unless required under the DGCL, represented at a duly held meeting at which a quorum
is presented or by written consent of all of the shares of Series A Preferred Stock (except as otherwise may be required under
the DGCL), voting together in the aggregate and not in separate series unless required under the DGCL, 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 DGCL holders
of the Series A Preferred Stock are entitled to vote on a matter with holders of shares of Common Stock, voting together as one
class, each share of Series A Preferred Stock 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 Series A Preferred Stock 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 DGCL).
9. Liquidation, Dissolution,
Winding-Up. Without limiting any other provision of this Certificate of Designations, upon any Liquidation Event, each of the
Holders shall be entitled to receive in cash out of the assets of the Company available for distribution to its stockholders, whether
from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), after
and subject to the payment in full of all amounts required to be distributed to the holders of any Senior Preferred Stock upon
such Liquidation Event, but before any payment shall be made to the holders of Junior Stock, an amount in cash with respect to
each share of Series A Preferred Stock then held by such Holder equal to the amount per share such Holder would receive if such
Holder converted such share of Series A Preferred Stock into Common Stock immediately prior to such Liquidation Event. If upon
any such Liquidation Event, the remaining assets of the Company available for the distribution to its stockholders after payment
in full of amounts required to be paid or distributed to holders of Senior Preferred Stock shall be insufficient to pay each Holder
and each holder of shares of Parity Stock the full amount to which they shall be entitled, then the Holders and the holders of
shares of Parity Stock, shall share ratably in any distribution of the remaining assets of the Company in proportion to the respective
amounts which would otherwise be payable in respect to the shares held by them upon such distribution if all amounts payable on
or with respect to said shares were paid in full. All the preferential amounts to be paid to the Holders under this Section 9 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 9 applies.
10. Participation.
In addition to any adjustments pursuant to Section 6, the Holders shall, as holders of shares of Series A Preferred Stock, 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 share of Series A Preferred Stock 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).
11. Vote to Change
the Terms of or Issue Series A Preferred Stock. In addition to any other rights provided by law, except where the vote or written
consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation,
without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting
of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add
any provision to, its Certificate of Incorporation or bylaws, or file any certificate of designations or articles of amendment
of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights,
privileges or powers, or restrictions provided for the benefit, of the Series A Preferred Stock, regardless of whether any such
action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase
or decrease (other than by conversion) the authorized number of shares of Series A Preferred Stock; (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 Series A Preferred Stock 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 Series A Preferred Stock (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 Series A Preferred Stock; (f) issue any shares of Series A Preferred Stock other than pursuant to the Securities
Purchase Agreement; or (g) without limiting any provision of Section 14, whether or not prohibited by the terms of the Series A
Preferred Stock, circumvent a right of the Series A Preferred Stock.
12. 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 shares of Series A Preferred Stock (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.
13. 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 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 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 6).
14. Non-circumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of
Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all
action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision
of this Certificate of Designations, the Company (i) shall not increase the par value of any shares of Common Stock receivable
upon the conversion of any shares of Series A Preferred Stock 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 shares of Series A Preferred Stock and (iii) shall, so long as any shares of Series
A Preferred Stock 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 shares of Series A Preferred Stock, the maximum number
of shares of Common Stock as shall from time to time be necessary to effect the conversion of the shares of Series A Preferred
Stock then outstanding (without regard to any limitations on conversion contained herein).
15. 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.
16. Notices. The
Company shall provide each Holder of Series A Preferred Stock 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 9(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 Fixed 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, and, in each case, provided that such information shall be made known
to the public prior to, or simultaneously with, such notice being provided to any Holder and such time period shall be shall be
shortened under this clause (ii) to equal the notice or disclosure given to the public or the holders of Common Stock if such disclosure
or notice is less than ten (10) days.
17. Transfer of Series
A Preferred Stock. A Holder may transfer some or all of its shares of Series A Preferred Stock without the consent of the Company.
18. Series A Preferred
Stock 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 Series A Preferred Stock, in which the Company shall record the
name, address and facsimile number of the Persons in whose name the shares of Series A Preferred Stock have been issued, as well
as the name and address of each transferee. The Company may treat the Person in whose name any Series A Preferred Stock 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.
19. Stockholder Matters;
Amendment.
(a) Stockholder
Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the DGCL,
the Certificate of Incorporation, this Certificate of Designations or otherwise with respect to the Series A Preferred Stock may
be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders,
all in accordance with the applicable rules and regulations of the DGCL. This provision is intended to comply with the applicable
sections of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.
(b) Amendment.
This Certificate of Designations or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called
for such purpose, or written consent without a meeting in accordance with the DGCL, of the Required Holders, voting separate as
a single class, and with such other stockholder approval, if any, as may then be required and in the manner required pursuant to
the DGCL and the Certificate of Incorporation.
20. Dispute Resolution.
In the case of a dispute as to the determination of the Conversion 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, or other applicable matter, 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 or resolution within two (2) Business Days of such disputed determination or arithmetic
calculation or other dispute (as the case may be) being submitted to the Company or such Holder (as the case may be), then, if
elected by Holder, the Company shall, within two (2) Business Days, submit via facsimile (a) the disputed determination of the
Conversion 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) or (c) such other dispute to
a reputable independent professional selected by Holder. The Company shall cause at its expense the investment bank or the accountant
or such other professional (as the case may be) to perform the determinations or calculations or resolve the dispute in question
(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 or other dispute (as the case may be). Such investment bank’s or accountant’s
or other professional’s determination or calculation or resolution (as the case may be) shall be binding upon all parties
absent demonstrable error or fraud.
21. No Redemption
Right. The shares of Series A Preferred Stock shall not be redeemable either at the Company’s option or at the option
of any of the Holders at any time.
22. 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) “Black
Scholes Consideration Value” means the value of the applicable Option or Convertible Security (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
or Convertible Security (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 or Convertible Security (as the case may be) as of the date of issuance of such Option
or Convertible Security (as the case may be) and (iii) 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 or Convertible Security (as the case may be).
(c) “Bloomberg”
means Bloomberg, L.P.
(d) “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.
(e) “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 average of the bid
prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by
Pink OTC Markets Inc. (formerly Pinks 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 20. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.
(f) “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.
(g) “Common
Stock Deemed Outstanding” means, as of the particular time of determination, the number of shares of Common Stock actually
issued and outstanding at such time (but excluding any issued and outstanding shares of Common Stock owned or held by or for the
account of the Company).
(h) “Conversion
Amount” means, with respect to each share of Series A Preferred Stock, as of the applicable date of determination, the
Stated Value.
(i) “Conversion
Price” means, with respect to each share of Series A Preferred Stock, as of any Conversion Date or other applicable date
of determination, the lesser of (i) $0.186, subject to adjustment as provided herein, (the “Fixed Conversion Price”)
and (2) the Market Price (as herein defined) (the “Non-Fixed Conversion Price”).
(j) “Conversion
Share Ratio” means as to any applicable Automatic Conversion Date, the quotient of (i) the number of Pre-Automatic Conversion
Shares delivered in connection with such Automatic Conversion divided by (ii) the number of Post-Automatic Conversion Shares applicable
to such Automatic Conversion Date.
(k) “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.
(l) “Eligible
Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market or the Principal Market.
(m) “Equity
Conditions” shall have the meaning set forth in the Warrants.
(n) “Equity
Conditions Failure” shall have the meaning set forth in the Warrants.
(o) “Excluded
Securities” shall have the meaning set forth in the Securities Purchase Agreement.
(p) “Liquidation
Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution
or winding up of the Company.
(q) “Market
Price” means, as of any particular time of determination, the Closing Bid Price as of the then last completed Trading
Day.
(r) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(s) “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.
(t) “Principal
Market” means the OTC Bulletin Board.
(u) “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 shares of Series A Preferred Stock held by such Holder as of such date of determination
and (ii) the denominator of which is the aggregate number of shares of Series A Preferred Stock outstanding as of such date of
determination.
(v) “SEC”
means the Securities and Exchange Commission or the successor thereto.
(w) “Securities
Purchase Agreement” means that certain securities purchase agreement by and among the Company and the initial holders
of Series A Preferred Stock, dated as of the Subscription Date, as may be amended from time to time in accordance with the terms
thereof.
(x) “Series
A Warrants” means, collectively, all of the Series A Warrants to purchase Common Stock issued 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.
(y) “Series
B Warrants” means, collectively, all of the Series B Warrants to purchase Common Stock issued 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.
(z) “Series
C Warrants” means, collectively, all of the Series C Warrants to purchase Common Stock issued 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.
(aa) “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 Series A Preferred Stock.
(bb) “Subscription
Date” means November 28, 2012.
(cc) “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.
(dd) “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.
(ee) “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).
(ff) “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 Pink OTC Markets Inc. (formerly Pinks Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the 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 20. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(gg) “Warrants”
means, collectively, the Series A Warrants, the Series B Warrants and the Series C Warrants, as may be amended from time to time
in accordance with the terms thereof, and all warrants issued in exchange therefor or replacement thereof.
23. 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, 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, 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. Nothing contained in this Section 23 shall limit
any obligations of the Company, or any rights of any Holder, under Section 4(j) of the Securities Purchase Agreement.
* * * * *
EXHIBIT I
APPLIED DNA SCIENCES, INC.
CONVERSION NOTICE
Reference is made to
the Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock of Applied DNA Sciences, 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
“Series A Preferred Stock”), of Applied DNA Sciences, Inc., a Delaware 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 shares of Series A Preferred Stock to be
converted:_________________________________
Share certificate no(s). of Series A Preferred Stock
to be converted:_____________________________
Tax ID Number (If applicable): _________________________________________________________
Applicable Conversion Price:
Fill in one of the following:
Fixed Conversion Price: $_______
Non-Fixed Conversion Prices: $_______
Number of shares of Common Stock to be issued:___________________________________________
Please issue the shares of Common Stock into which the shares
of Series A Preferred Stock 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):_____________________________________
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 [_________ __, 20__] from the Company and acknowledged
and agreed to by [______________].
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APPLIED DNA SCIENCES, INC.
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By:
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Name:
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Title:
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* * * * * *
The undersigned declares
under penalty of perjury under the laws of the State of Delaware that the matters set forth in this Certificate of Designations
of are true and correct of his own knowledge.
The undersigned has
executed this certificate on November 29, 2012.
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/s/ James A. Hayward
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Name:
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James A. Hayward
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Title:
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Chief Executive Officer
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[Signature Page to Certificate of Designations
of Applied DNA Sciences, Inc.]
CERTIFICATE OF DESIGNATIONS OF THE
SERIES B CONVERTIBLE PREFERRED STOCK
OF
APPLIED DNA SCIENCES, INC.
I, James A. Hayward, hereby certify that
I am the Chief Executive Officer of Applied DNA Sciences, Inc. (the “Company”), a corporation organized and
existing under the Delaware General Corporation Law (the “DGCL”), and further do hereby certify:
That pursuant to the authority expressly
conferred upon the Board of Directors of the Company (the “Board”) by the Company’s Certificate of Incorporation,
as amended (the “Certificate of Incorporation”), the Board on July 19, 2013 adopted the following resolutions
creating a series of 5,500 shares of Preferred Stock designated as Series B Convertible Preferred Stock, none of which shares have
been issued:
RESOLVED, that the Board designates the
Series B Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, powers, preferences,
privileges and restrictions relating to such series in addition to any set forth in the Certificate of Incorporation as follows:
TERMS OF SERIES B CONVERTIBLE PREFERRED STOCK
1. Designation and Number of Shares; Defined
Terms. There shall hereby be created and established a series of preferred stock of the Company designated as “Series
B Convertible Preferred Stock” (the “Series B Preferred Stock”). The authorized number of shares of Series
B Preferred stock shall be 5,500 shares. Each share of Series B Preferred Stock shall have a par value of $0.001. Any capitalized
terms used herein and not otherwise defined herein shall have the meanings set forth in Section 22 hereof, or if not so defined
in Section 22 hereof, in the Securities Purchase Agreement (as defined in Section 22 hereof).
2. Ranking. Except to the extent that
the holders of at least a majority of the outstanding shares of Series B Preferred Stock (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 11, all shares of capital stock of the Company (including, without limitation, Common Stock) shall be junior in rank
to all shares of Series B Preferred Stock 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 shares of Series B Preferred Stock. 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 shares of Series B Preferred Stock 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 shares of Series
B Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and
winding up of the Company (collectively, the “Parity Stock”) or (iii) any Junior Stock having a maturity date
(or any other date requiring redemption or repayment of such shares of Junior Stock) that is prior to the date on which no shares
of Series B Preferred Stock remain outstanding.
3. Dividends. The Series B Preferred
Stock shall not be entitled to any dividends, except as set forth in the next sentence below. From and after the first date of
issuance of any shares of Series B Preferred Stock (the “Initial Issuance Date”), each holder of a share of
Series B Preferred Stock (each, a “Holder” and collectively, the “Holders”) shall be entitled
to receive dividends (“Dividends”) per share equal to any dividends declared, set apart for or paid upon any
Junior Stock or Parity Stock.
4. Conversion. Each share of Series
B Preferred Stock 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 shares of Series B Preferred Stock 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 share of Series
B Preferred Stock 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 shares of Series B Preferred Stock. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole
share.
(c) Mechanics of Conversion.
The conversion of each share of Series B Preferred Stock shall be conducted in the following manner:
(i) Holder’s Conversion.
To convert a share of Series B Preferred Stock 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 Series B Preferred Stock
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 Series B Preferred
Stock 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 Series B Preferred Stock (the “Preferred Share Certificates”)
so converted as aforesaid.
(ii) Company’s Response.
Not later than 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 Company’s transfer agent (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 The Depository Trust Company’s (“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 shares of Series B Preferred Stock
represented by the Preferred Share Certificate(s) submitted for conversion pursuant to Section 4(c)(vi) is greater than the number
of shares of Series B Preferred Stock 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 shares of Series B Preferred
Stock not converted. Notwithstanding anything to the contrary above or elsewhere in this instrument, the Company shall cause its
Transfer Agent to at all times participate in the DTC Fast Automated Securities Transfer Program and shall, in all cases, cause
the issuance and transfer of all shares of Common Stock to which any Holder or its designee is entitled under this instrument to
be transferred and issued by credit to such Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian System.
(iii) Record Holder. The
Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of shares of Series B Preferred Stock
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.
(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 shares of Series B Preferred Stock (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 shares of Series B Preferred Stock 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 Fixed Conversion
Price of any shares of Series B Preferred Stock returned or retained by such Holder for failure to timely convert shall be adjusted
to the lesser of (I) the Fixed 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.
(v) Pro Rata Conversion; Disputes.
In the event the Company receives a Conversion Notice from more than one Holder (if more than one Holder exists) for the same Conversion
Date and the Company can convert some, but not all, of such shares of Series B Preferred Stock submitted for conversion, the Company
shall convert from each Holder electing to have shares of Series B Preferred Stock converted on such date a pro rata amount of
such Holder’s shares of Series B Preferred Stock submitted for conversion on such date based on the number of shares of Series
B Preferred Stock submitted for conversion on such date by such Holder relative to the aggregate number of shares of Series B Preferred
Stock 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 shares of Series B Preferred Stock, 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 20.
(vi) Book-Entry. Notwithstanding
anything to the contrary set forth in this Section 4, upon conversion of any shares of Series B Preferred Stock in accordance with
the terms hereof, no Holder thereof shall be required to physically surrender the certificate representing the shares of Series
B Preferred Stock to the Company following conversion thereof unless (A) the full or remaining number of shares of Series B Preferred
Stock 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 shares of Series B Preferred Stock upon physical surrender of any
shares of Series B Preferred Stock. Each Holder and the Company shall maintain records showing the number of shares of Series B
Preferred Stock 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 shares of Series B
Preferred Stock upon each such conversion. In the event of any dispute or discrepancy, such records of such Holder establishing
the number of shares of Series B Preferred Stock 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 shares of Series B Preferred Stock, the number
of shares of Series B Preferred Stock represented by such certificate may be less than the number of shares of Series B Preferred
Stock stated on the face thereof. Each certificate for shares of Series B Preferred Stock 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 B PREFERRED
STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(vi) THEREOF. THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK REPRESENTED
BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION
4(c)(vi) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES B PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.
(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 shares of
Series B Preferred Stock.
(e) Limitation on Beneficial
Ownership. Notwithstanding anything to the contrary contained in this Certificate of Designations, the shares of Series B Preferred
Stock held by a Holder shall not be convertible by such Holder, and the Company shall not effect any conversion of any shares of
Series B Preferred Stock held by such Holder (including, without limitation, pursuant to Section 4 hereof), to the extent (but
only to the extent) that such Holder or any of its affiliates would beneficially own in excess of 9.9% (the “Maximum Percentage”)
of the Common Stock. To the extent the above limitation applies, the determination of whether the shares of Series B Preferred
Stock 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 with a similar limitation on conversion or exercise or exchange or otherwise) and of which
such securities shall be convertible, exercisable or exchangeable (as among all such securities owned by such Holder and its affiliates
with similar limitations on conversion or exercise or exchange or otherwise) 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 shares of Series B Preferred Stock, 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.
For clarification, the foregoing calculation of beneficial ownership takes into account all securities which give rise to beneficial
ownership by Holder or its affiliates of such Common Stock under such rules and regulations and not solely the Preferred Stock
held by Holder or its affiliates. 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 shares of Series B Preferred Stock. 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.
(f) Company Conversion Right.
Provided that no Equity Condition Failure then exists, the Company shall have the right during the ten (10) Trading Days immediately
following the Second Closing to effectuate one or more conversions hereunder of all or any portion of the then outstanding Series
B Preferred Stock at the Non-Fixed Conversion Price. To the extent that the limitations set forth in paragraph (e) above limit
the number of shares of Series B Preferred Stock that may be so converted, the Company shall have the right to so convert such
number of shares of Series B Preferred Stock at such Non-Fixed Conversion Price as would not give rise to a violation of the limitation
set forth in paragraph (e) above and the ten (10) Trading Day period referred to above shall be extended for such period of time
as may be necessary to allow the Company to effectuate the conversion of all then outstanding Series B Preferred Stock under this
paragraph (f). The procedures and other provisions of this Series B Preferred Stock as set forth with respect to a conversion at
the election of the Holder shall otherwise apply to conversions under this paragraph (f) as if conversions under this paragraph
(f) were conversions by such Holder otherwise under this Series B Preferred Stock. “Second Closing” shall mean
the date on which the Series B Preferred Stock is issued to the Holder.
(g) Automatic Conversion.
Provided that no Equity Condition Failure then exists, the entire then outstanding amount of this Series B Preferred Stock shall
automatically convert into shares of Common Stock at the then applicable Conversion Price on the first anniversary of the Second
Closing. To the extent that the limitations set forth in paragraph (e) above limit the number of shares of Series B Preferred Stock
that may be so converted, then from time to time thereafter the amount to be converted under this paragraph (g) shall be limited
at such time so as to comply with the limitations set forth in paragraph (e) above and from time to time thereafter the remaining
outstanding portion of this Series B Preferred Stock shall automatically convert into shares of Common Stock at then applicable
Conversion Price at the time of such subsequent conversion in compliance with the limitations set forth in paragraph (e) above
until remaining outstanding shares of this Series B Preferred Stock have been converted into Common Stock. The procedures and other
provisions of this Series B Preferred Stock as set forth with respect to a conversion at the election of the Holder shall otherwise
apply to conversions under this paragraph (g) as if conversions under this paragraph (g) were conversions by such Holder otherwise
under this Series B Preferred Stock.
5. Rights Upon Issuance of Purchase
Rights and Other Corporate Events.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 6 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 shares of Series B Preferred
Stock (without taking into account any limitations or restrictions on the convertibility of the shares of Series B Preferred
Stock) 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).
(b) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
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
shares of Series B Preferred Stock held by such Holder in addition to the shares of Common Stock receivable upon such
conversion (if all shares of Common Stock were not converted into or exchanged for other shares, securities, assets
(including, without limitation, cash), property or rights), such shares, securities, assets (including, without limitation,
cash), property and other rights 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 Series B Preferred Stock
contained in this Certificate of Designations). The provisions of this paragraph (b) 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
shares of Series B Preferred Stock contained in this Certificate of Designations. In the event that the limitations set
forth in Section 4(e) above would otherwise apply to limit shares of Common Stock or other securities registered
under the 1934 Act and as to which Section 13 thereof applies, then securities to be received under this paragraph
(b) shall continue to be subject to the limitations of Section 4(e) above as if such
Section 4(e) were expressly applicable to it and the right to receive securities under this paragraph
(b) shall be stayed from time to time to the extent (but only to the extent) necessary to comply with such limitations
as if such limitations expressly applied thereto.
6. Rights Upon Issuance of Other Securities.
(a) Adjustment
of Fixed 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 6(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 Fixed Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale
(such Fixed 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 Fixed Conversion Price then in effect
shall be reduced to an amount equal to the “FCP1” below (provided, however, that the Fixed Conversion Price shall not
be reduced as set forth below with respect to any Holder that has participated in the Dilutive Issuance):
OB + (AC /FCP)
FCP1
= FCP x _________________
OA
FCP = the Fixed Conversion Price
in effect immediately prior to such Dilutive Issuance
OB = the number of shares of
Common Stock Deemed Outstanding (as defined below) immediately prior to such Dilutive Issuance
AC = the consideration, if any,
received by the Company upon such Dilutive Issuance
OA = the number of shares of
Common Stock Deemed Outstanding immediately after such Dilutive Issuance.
For all purposes
of the foregoing (including, without limitation, determining the adjusted Fixed Conversion Price and consideration per share under
this Section 6), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants or sells any Options (excluding any Excluded Securities) 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 6(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 Fixed 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 (excluding any Excluded
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 6(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 Fixed
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 Fixed Conversion Price has been or is to be made pursuant to other provisions of this Section 6(a),
except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.
(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 (in
all such cases, excluding any Excluded Securities), the Fixed Conversion Price in effect at the time of such increase or decrease
shall be adjusted to the Fixed 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 6(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 6(a) shall be made if such adjustment would result in an increase of the Fixed
Conversion Price then in effect.
(iv) Calculation
of Consideration Received. If any Option or Convertible Security 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) 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 by the Company minus (II) the Black Scholes Consideration Value of each such Option or Convertible Security (as applicable).
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 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.
(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 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 Fixed Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6(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 Fixed Conversion
Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 6(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 Fixed Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 6(b) shall become
effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this
Section 6(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion
Price shall be adjusted appropriately to reflect such event.
(c) Other
Events. In the event that the Company 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 6 but not expressly provided for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine and
implement an appropriate adjustment in the Fixed Conversion Price so as to protect the rights of such Holder, provided that no
such adjustment pursuant to this Section 6(c) will increase the Fixed Conversion Price as otherwise determined pursuant
to this Section 6, 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.
7. 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
150% of the Conversion Rate with respect to the Conversion Amount of each share of Series B Preferred Stock as of the Initial
Issuance Date. So long as any of the shares of Series B Preferred Stock 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 shares of Series B Preferred Stock, 200% of the number of shares of Common Stock as shall from time
to time be necessary to effect the conversion of all of the shares of Series B Preferred Stock then outstanding, 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 shares of Series B
Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among the Holders based on the
number of shares of Series B Preferred Stock 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 shares of Series B Preferred Stock, 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 shares of Series B Preferred Stock shall be allocated to the remaining Holders of shares of Series B
Preferred Stock (if any), pro rata based on the number of shares of Series B Preferred Stock then held by such Holders.
(b) Insufficient
Authorized Shares. If, notwithstanding Section 7(a) and not in limitation thereof, at any time while any of the
shares of Series B Preferred Stock 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 shares of
Series B Preferred Stock 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 shares of Series B Preferred Stock 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 sixty (60) 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.
8. Voting Rights.
Holders of shares of Series B Preferred Stock shall have no voting rights, except as required by law (including without limitation,
the DGCL) and as expressly provided in this Certificate of Designations. To the extent that under the DGCL the vote of the holders
of the Series B Preferred Stock, 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 Series B Preferred Stock, voting
together in the aggregate and not in separate series unless required under the DGCL, represented at a duly held meeting at which
a quorum is presented or by written consent of all of the shares of Series B Preferred Stock (except as otherwise may be required
under the DGCL), voting together in the aggregate and not in separate series unless required under the DGCL, 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 DGCL holders of the Series B Preferred Stock are entitled to vote on a matter with holders of shares of Common Stock,
voting together as one class, each share of Series B Preferred Stock 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 Series B Preferred Stock
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 DGCL).
9. Liquidation, Dissolution,
Winding-Up. Without limiting any other provision of this Certificate of Designations, upon any Liquidation Event, each of the
Holders shall be entitled to receive in cash out of the assets of the Company available for distribution to its stockholders, whether
from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), after
and subject to the payment in full of all amounts required to be distributed to the holders of any Senior Preferred Stock upon
such Liquidation Event, but before any payment shall be made to the holders of Junior Stock, an amount in cash with respect to
each share of Series B Preferred Stock then held by such Holder equal to the amount per share such Holder would receive if
such Holder converted such share of Series B Preferred Stock into Common Stock immediately prior to such Liquidation Event.
If upon any such Liquidation Event, the remaining assets of the Company available for the distribution to its stockholders after
payment in full of amounts required to be paid or distributed to holders of Senior Preferred Stock shall be insufficient to pay
each Holder and each holder of shares of Parity Stock the full amount to which they shall be entitled, then the Holders and the
holders of shares of Parity Stock, shall share ratably in any distribution of the remaining assets of the Company in proportion
to the respective amounts which would otherwise be payable in respect to the shares held by them upon such distribution if all
amounts payable on or with respect to said shares were paid in full. All the preferential amounts to be paid to the Holders under
this Section 9 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 9 applies.
10. Participation.
In addition to any adjustments pursuant to Section 6, the Holders shall, as holders of shares of Series B Preferred Stock,
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 share of Series B Preferred Stock 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).
11. Vote to Change
the Terms of or Issue Series B Preferred Stock. In addition to any other rights provided by law, except where the vote
or written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of
Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without
a meeting of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision
of, or add any provision to, its Certificate of Incorporation or bylaws, or file any certificate of designations or articles of
amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences,
rights, privileges or powers, or restrictions provided for the benefit, of the Series B Preferred Stock, regardless of whether
any such action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase
or decrease (other than by conversion) the authorized number of shares of Series B Preferred Stock; (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 Series B Preferred Stock 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 Series B Preferred Stock (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 Series B Preferred Stock; (f) issue any shares of Series B
Preferred Stock other than pursuant to the Securities Purchase Agreement; or (g) without limiting any provision of Section 14,
whether or not prohibited by the terms of the Series B Preferred Stock, circumvent a right of the Series B Preferred
Stock.
12. 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 shares of Series B Preferred Stock (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.
13. 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 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 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 6).
14. Non-circumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of
Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations and take all
action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other
provision of this Certificate of Designations, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the conversion of any shares of Series B Preferred Stock 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 shares of Series B Preferred Stock and (iii) shall, so
long as any shares of Series B Preferred Stock 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 shares of Series B
Preferred Stock, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion
of the shares of Series B Preferred Stock then outstanding (without regard to any limitations on conversion contained herein).
15. 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.
16. Notices. The
Company shall provide each Holder of Series B Preferred Stock 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 9(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 Fixed 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, and, in each
case, provided that such information shall be made known to the public prior to, or simultaneously with, such notice being provided
to any Holder and such time period shall be shall be shortened under this clause (ii) to equal the notice or disclosure given
to the public or the holders of Common Stock if such disclosure or notice is less than ten (10) days.
17. Transfer of Series B
Preferred Stock. A Holder may transfer some or all of its shares of Series B Preferred Stock without the consent of the
Company.
18. Series B
Preferred Stock 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 Series B Preferred Stock, in which the Company
shall record the name, address and facsimile number of the Persons in whose name the shares of Series B Preferred Stock have
been issued, as well as the name and address of each transferee. The Company may treat the Person in whose name any Series B
Preferred Stock 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.
19. Stockholder Matters;
Amendment.
(a) Stockholder
Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the DGCL,
the Certificate of Incorporation, this Certificate of Designations or otherwise with respect to the Series B Preferred Stock
may be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders,
all in accordance with the applicable rules and regulations of the DGCL. This provision is intended to comply with the applicable
sections of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.
(b) Amendment.
This Certificate of Designations or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called
for such purpose, or written consent without a meeting in accordance with the DGCL, of the Required Holders, voting separate as
a single class, and with such other stockholder approval, if any, as may then be required and in the manner required pursuant to
the DGCL and the Certificate of Incorporation.
20. Dispute Resolution.
In the case of a dispute as to the determination of the Conversion 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, or other applicable matter, 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 or resolution within two (2) Business Days of such disputed determination
or arithmetic calculation or other dispute (as the case may be) being submitted to the Company or such Holder (as the case may
be), then, if elected by Holder, the Company shall, within two (2) Business Days, submit via facsimile (a) the disputed
determination of the Conversion 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)
or (c) such other dispute to a reputable independent professional selected by Holder. The Company shall cause at its expense
the investment bank or the accountant or such other professional (as the case may be) to perform the determinations or calculations
or resolve the dispute in question (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 or other dispute (as the case may
be). Such investment bank’s or accountant’s or other professional’s determination or calculation or resolution
(as the case may be) shall be binding upon all parties absent demonstrable error or fraud.
21. No Redemption
Right. The shares of Series B Preferred Stock shall not be redeemable either at the Company’s option or at the option
of any of the Holders at any time.
22. 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) “Black
Scholes Consideration Value” means the value of the applicable Option or Convertible Security (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 or Convertible Security (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 or Convertible Security (as the case may be) as of the date of issuance
of such Option or Convertible Security (as the case may be) and (iii) 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 or Convertible Security (as the case may be).
(c) “Bloomberg”
means Bloomberg, L.P.
(d) “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.
(e) “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 average of the bid
prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by
Pink OTC Markets Inc. (formerly Pinks 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 20. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.
(f) “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.
(g) “Common
Stock Deemed Outstanding” means, as of the particular time of determination, the number of shares of Common Stock actually
issued and outstanding at such time (but excluding any issued and outstanding shares of Common Stock owned or held by or for the
account of the Company).
(h) “Conversion
Amount” means, with respect to each share of Series B Preferred Stock, as of the applicable date of determination,
the Stated Value.
(i) “Conversion
Price” means, with respect to each share of Series B Preferred Stock, as of any Conversion Date or other applicable
date of determination, the lesser of (i) $0.187 subject to adjustment as provided herein, (the “Fixed Conversion
Price”) and (2) the Market Price (as herein defined) (the “Non-Fixed Conversion Price”).
(j) “Conversion
Share Ratio” means as to any applicable Automatic Conversion Date, the quotient of (i) the number of Pre-Automatic
Conversion Shares delivered in connection with such Automatic Conversion divided by (ii) the number of Post-Automatic Conversion
Shares applicable to such Automatic Conversion Date.
(k) “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.
(l) “Eligible
Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market or the Principal Market.
(m) “Equity
Conditions” shall have the meaning set forth in the Warrants.
(n) “Equity
Conditions Failure” shall have the meaning set forth in the Warrants.
(o) “Excluded
Securities” shall have the meaning set forth in the Securities Purchase Agreement.
(p) “Liquidation
Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution
or winding up of the Company.
(q) “Market
Price” means, as of any particular time of determination, the Closing Bid Price as of the then last completed Trading
Day.
(r) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(s) “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.
(t) “Principal
Market” means the OTC Bulletin Board.
(u) “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 shares of Series B Preferred Stock held by such Holder as of such date of determination
and (ii) the denominator of which is the aggregate number of shares of Series B Preferred Stock outstanding as of such
date of determination.
(v) “SEC”
means the Securities and Exchange Commission or the successor thereto.
(w) “Securities
Purchase Agreement” means that certain securities purchase agreement by and among the Company and the initial holders
of Series B Preferred Stock, dated as of the Subscription Date, as may be amended from time to time in accordance with the
terms thereof.
(x) “Series A
Warrants” means, collectively, all of the Series A Warrants to purchase Common Stock issued 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.
(y) “Series B
Warrants” means, collectively, all of the Series B Warrants to purchase Common Stock issued 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.
(z) “Series C
Warrants” means, collectively, all of the Series C Warrants to purchase Common Stock issued 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.
(aa) “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 Series B Preferred Stock.
(bb) “Subscription
Date” means July 19, 2013.
(cc) “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.
(dd) “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.
(ee) “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).
(ff) “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 Pink OTC Markets Inc. (formerly Pinks Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the 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 20. All such determinations shall
be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(gg) “Warrants”
means, collectively, the Series A Warrants, the Series B Warrants and the Series C Warrants, as may be amended from
time to time in accordance with the terms thereof, and all warrants issued in exchange therefor or replacement thereof.
23. 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, 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, 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. Nothing contained in this Section 23 shall
limit any obligations of the Company, or any rights of any Holder, under Section 4(j) of the Securities Purchase Agreement.
* * * * *
EXHIBIT I
APPLIED DNA SCIENCES, INC.
CONVERSION NOTICE
Reference is made to
the Certificate of Designations, Preferences and Rights of the Series B Convertible Preferred Stock of Applied DNA Sciences, 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 B Convertible Preferred Stock, $0.001 par value per share
(the “Series B Preferred Stock”), of Applied DNA Sciences, Inc., a Delaware 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 shares of Series B Preferred Stock
to be converted:_________________________________
Share certificate no(s). of Series B Preferred
Stock to be converted:_____________________________
Tax ID Number (If applicable): _________________________________________________________
Applicable Conversion Price:
Fill in one of the following:
Fixed Conversion Price: $_______
Non-Fixed Conversion Prices: $_______
Number of shares of Common Stock to be issued:___________________________________________
Please issue the shares of Common Stock into which the shares
of Series B Preferred Stock 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):_____________________________________
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 [_________ __, 20__] from the Company and acknowledged
and agreed to by [______________].
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APPLIED DNA SCIENCES, INC.
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By:
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Name:
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Title:
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* * * * * *
The undersigned declares
under penalty of perjury under the laws of the State of Delaware that the matters set forth in this Certificate of Designations
of are true and correct of his own knowledge.
The undersigned has
executed this certificate on July 19, 2013.
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/s/ James A. Hayward
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Name:
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James A. Hayward
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Title:
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Chief Executive Officer
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[Signature Page to Certificate of Designations
of Applied DNA Sciences, Inc.]
THIRD CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
* * * * *
Applied DNA Sciences, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the State of Delaware (the “General Corporation
Law”), DOES HEREBY CERTIFY THAT:
FIRST: The first paragraph of Article IV of the
Certificate of Incorporation, as amended (the “Certificate of Incorporation”), of the Corporation is hereby
amended and replaced in its entirety to read as follows:
“This Corporation is authorized
to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The
total number of shares of stock which the Corporation shall have the authority to issue is 510,000,000. The total number of shares
of Common Stock that the Corporation is authorized to issue is 500,000,000, with a par value of $0.001 per share. Each share of
Common Stock shall entitle the holder thereof to one (1) vote on each matter submitted to a vote at any meeting of stockholders.
The total number of shares of Preferred Stock that the Corporation is authorized to issue is 10,000,000, with a par value of $0.001
per share.”
SECOND: Article IV of the Certificate of Incorporation
is hereby further amended by adding the following paragraph at the end thereof:
“Upon the filing and effectiveness
(the “Effective Time”) pursuant to the General Corporation Law of the State of Delaware (the “DGCL”) of
this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each sixty (60) shares of the Corporation’s
Common Stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time, shall automatically be
reclassified, combined, and converted into one (1) validly issued, fully paid, and non-assessable share of Common Stock, par
value $0.001 per share, of the Corporation, without any action by any holder thereof; provided that no fractional share interests
shall be issued as a result of the foregoing reclassification, combination, and conversion:
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(i)
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to any stockholder that holds, of record, fewer than sixty (60) shares of Common Stock immediately prior to the Effective Time, and, in lieu of such fractional share interests, any such stockholder shall be entitled, upon the Effective Time, to receive a cash payment equal to the Share Value (as defined below) of each share of Common Stock held by such stockholder immediately prior to the Effective Time; or
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(ii)
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any stockholder that holds, of record, more than sixty (60) shares of Common Stock immediately prior to the Effective Time and would otherwise be entitled to fractional share interests pursuant to the provisions of this Article, and, in lieu of such fractional share interests, any such stockholder shall be entitled, upon the Effective Time, to receive one whole share of Common Stock in lieu of such fractional share interests.
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As used herein, “Share
Value” shall mean the average closing price of the Common Stock on the OTC Market’s electronic interdealer quotation
QB system (“OTCQB”) for the ten (10) consecutive trading days ending on the last trading day prior to the date
of the Effective Time.
From and after the Effective
Time, (i) certificates that, immediately prior to the Effective Time, represent shares of Common Stock that are held by any
stockholder that holds more than sixty (60) shares of Common Stock immediately prior to the Effective Time shall thereafter represent
the number of shares of Common Stock into which such shares shall have been reclassified, combined, and converted at the Effective
Time pursuant to this Certificate of Amendment, and (ii) certificates that, immediately prior to the Effective Time, represent
shares of Common Stock that are held by any stockholder that holds fewer than sixty (60) shares of Common Stock immediately prior
to the Effective Time shall thereafter represent only the right to receive a payment in cash equal to the Share Value for each
share of Common Stock previously represented by such certificate.”
THIRD: This Certificate of Amendment shall become effective
on October 29, 2014, at 12:01 a.m.
FOURTH: That pursuant to resolution of the Board of Directors,
the proposed amendment was submitted to the stockholders of the Corporation for consideration at the annual meeting of stockholders
held on August 28, 2014 and was duly adopted by the stockholders of the Corporation in accordance with the applicable provisions
of Section 242 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Third Certificate
of Amendment of Certificate of Incorporation to be signed by its Chief Executive Officer, on October 24, 2014.
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APPLIED DNA SCIENCES, INC.
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By:
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/s/ James A. Hayward
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Name: James A. Hayward
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Title: Chief Executive Officer
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FOURTH CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
Applied DNA Sciences, Inc. (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY THAT:
FIRST: Article IV of the Certificate of Incorporation,
as amended (the “Certificate of Incorporation”), of the Corporation is hereby amended by adding the following
paragraph at the end thereof:
“Upon the filing and effectiveness (the “Reverse
Split Effective Time”) pursuant to the DGCL of this Certificate of Amendment to the Certificate of Incorporation of the
Corporation, each forty (40) shares of the Corporation’s Common Stock, par value $0.001 per share, issued and outstanding
immediately prior to the Reverse Split Effective Time, shall automatically be reclassified, combined, and converted into one (1) validly
issued, fully paid, and non-assessable share of Common Stock, par value $0.001 per share, of the Corporation, without any action
by any holder thereof; provided that no fractional share interests shall be issued as a result of the foregoing reclassification,
combination, and conversion. Any stockholder of record of Common Stock immediately prior to the Reverse Split Effective Time that
would otherwise be entitled to fractional share interests pursuant to the provisions of this Article, shall be entitled, upon the
Reverse Split Effective Time, to receive one whole share of Common Stock in lieu of such fractional share interests.
From and after the Reverse Split Effective Time,
certificates that, immediately prior to the Reverse Split Effective Time, represent shares of Common Stock that are held by any
stockholder shall thereafter represent the number of shares of Common Stock into which such shares shall have been reclassified,
combined, and converted at the Reverse Split Effective Time pursuant to this Certificate of Amendment.”
SECOND: This Certificate of Amendment shall become effective
on Friday, November 1, 2019, at 12:01 a.m.
THIRD: That pursuant to resolution of the Board of Directors,
the proposed amendment was submitted to the stockholders of the Corporation for consideration at the special meeting of stockholders
held on October 31, 2019 and was duly adopted by the stockholders of the Corporation in accordance with the applicable provisions
of Section 242 of the General Corporation Law of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF, the Corporation
has caused this Fourth Certificate of Amendment of Certificate of Incorporation to be signed by its Chairman, President and Chief
Executive Officer as of Thursday, October 31, 2019.
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APPLIED DNA SCIENCES, INC.
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By:
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/s/ James A. Hayward
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Name:
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James A. Hayward
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Title:
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Chairman, President and Chief Executive Officer
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FIFTH CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
APPLIED DNA SCIENCES, INC.
Applied DNA Sciences, Inc.
(the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY THAT:
FIRST: The first paragraph of Article IV
of the Certificate of Incorporation, as amended (the “Certificate of Incorporation”), of the Corporation is
hereby amended and replaced in its entirety to read as follows:
“This Corporation is authorized
to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The
total number of shares of stock which the Corporation shall have the authority to issue is 210,000,000. The total number of shares
of Common Stock that the Corporation is authorized to issue is 200,000,000, with a par value of $0.001 per share. Each share of
Common Stock shall entitle the holder thereof to one (1) vote on each matter submitted to a vote of any meeting of stockholders.
The total number of shares of Preferred Stock that the Corporation is authorized to issue is 10,000,000, with a par value of $0.001
per share.”
SECOND: This Certificate of Amendment
shall become effective on Thursday, September 17, 2020, at 12:01 a.m.
THIRD: That pursuant to resolution
of the Board of Directors, the proposed amendment was submitted to the stockholders of the Corporation for consideration at the
annual meeting of stockholders held on September 16, 2020 and was duly adopted by the stockholders of the Corporation in accordance
with the applicable provisions of Section 242 of the General Corporation Law of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Corporation has caused this Fifth Certificate of Amendment of Certificate of Incorporation to be signed by its Chairman, President
and Chief Executive Officer as of Wednesday, September 16, 2020.
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APPLIED DNA SCIENCES, INC.
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By:
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/s/ James A. Hayward
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Name: James A. Hayward
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Title: Chairman, President and Chief Executive Officer
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[Signature
Page to Certificate of Amendment]
