News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):
November 19, 2020

 

IIOT-OXYS, Inc.

(Exact name of registrant as specified in
its charter)

 

Nevada   000-50773   56-2415252
(State or Other Jurisdiction   (Commission File   (I.R.S. Employer
of Incorporation)   Number)   Identification Number)

 

705 Cambridge Street

Cambridge, MA 02141

(Address of principal executive offices, including zip code)

 

(401) 307-3092

(Registrant’s telephone number,

including area code)

 

Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
N/A N/A N/A

 

Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company

 

If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

Item 1.01 Entry Into A Material Definitive Agreement.

 

Preferred Equity Financing with GHS
Investments, LLC

 

On November 19, 2020, pursuant to the terms
of a Securities Purchase Agreement dated November 16, 2020 (the “SPA”), IIOT-OXYS, Inc., a Nevada corporation
(the “Company”), entered into a new preferred equity financing agreement with GHS Investments, LLC (“GHS”)
in the amount of up to $600,000. The SPA provides for GHS’s purchase, from time to time, of up to 600 shares of our newly-designated
Series B Convertible Preferred Stock (the “Preferred Stock”). The initial closing under the SPA consisted of
45 shares of Preferred Stock, stated value $1,200 per share, issued to GHS for an initial purchase price of $45,000, or $1,000
per share. At the Company’s option, and subject to the terms of the SPA and the Certificate of Designation for the Preferred
Stock (the “COD”), additional closings in the amount of 40 shares of Preferred Stock for a total purchase price
of $40,000 may take place at a rate of up to once every 30 days. In connection with the initial closing in the amount of 45 shares
of Preferred Stock, we issued an additional 25 shares of Preferred Stock to GHS as a commitment fee.

 

The Company’s ability to conduct
additional closings under the SPA is subject to certain conditions, including the following:

 

· The Company’s continued compliance with all covenants and agreements under the SPA and the
COD, with no uncured defaults under the Company’s agreements with GHS;

 

· The continued quotation of the Company’s common stock on the over-the-counter market or another
trading market or exchange;

 

· The average daily dollar trading volume for the Company’s common stock for the 30 trading
days preceding each additional closing must be at least $10,000 per day; and

 

· The closing market price for the Company’s common stock must be at least $0.01 for each of
the 30 trading days preceding each additional closing.

 

No additional closings may take place after
the two-year anniversary of the SPA, or once the entire $600,000 amount has been funded. If the average daily dollar trading volume
for the Company’s common stock for the 30 trading days preceding a particular additional closing is at least $50,000 per
day, the Company may, at its option, increase the amount of that additional closing to 75 shares of Preferred Stock ($75,000).

 

The material features of the Preferred
Stock, as set forth in the COD, include the following:

 

· The Preferred Stock is convertible to shares of the Company’s common stock at a price equal
to the lowest trading price for the Company’s common stock during the 25 trading days preceding any conversion;

 

· Conversions are limited so that no conversion may be made to the extent that, following a conversion,
the beneficial ownership of GHS and its affiliates would be more than 4.99% of the Company’s outstanding shares of common
stock;

 

· The Preferred Stock is entitled to receive dividends at an annual rate of 12% on the stated value
thereof, payable quarterly;

 

· At the Company’s option, dividend payments may be made in cash or by the issuance of additional
shares of Preferred Stock, valued at the stated value ($1,200 per share) thereof;

 

 

 

 

· The Preferred Stock may, at the Company’s option, be redeemed by the Company’s payment
of the stated value thereof with the following premiums based on the time of the redemption:

 

o 115% of the stated value if the redemption takes place within 90 days of issuance;

 

o 120% of the stated value if the redemption takes place after 90 days and within 120 days of issuance;

 

o 125% of the stated value if the redemption takes place after 120 days and within 180 days of issuance;
and

 

o each share of Preferred Stock is redeemed one year from the day of issuance.

 

· The Preferred Stock will vote together with the Company’s common stock on an as-converted
basis on all matters submitted to a vote of the Company’s shareholders, but not in excess of the 4.99% conversion limitation;

 

· Holders of the Preferred Stock are entitled to “piggy-back” registration rights, and
may, at their option, include the shares of common stock issuable upon conversion of the Preferred Stock in any future registration
statement to be filed by the Company;

 

· If the Company fails to timely deliver the required shares of common stock upon a conversion of
the Preferred Stock, or if the Company otherwise breaches the material covenants of the COD, the Company will incur significant
financial penalties, including, but not limited to, the payment of liquidated damages and the forced redemption of the Preferred
Stock at the sum of (a) the greater of (i) 135% of the stated value and (ii) the product of (y) the VWAP on the trading day immediately
preceding the date of the triggering event, multiplied by (z) the stated value divided by the then applicable conversion price
(b) all accrued but unpaid dividends and (c) all liquidated damages, late fees, and other costs and expenses due (the sum of (a),
(b), and (c), the “Triggering Redemption Amount”). The holder may also (i) redeem all of the Preferred Stock
through the issuance of shares of common stock equal to the quotient of (x) the Triggering Redemption Amount, divided by (y) the
lowest of (1) the conversion price, and (2) 75% of the average of the 10 VWAPs immediately prior to the date of election, and (ii)
increase the dividend rate on all of the outstanding Preferred Stock held by the holder retroactively to the initial closing date
to 18% per annum thereafter.

 

Under additional covenants set forth in
the COD, holders of the Preferred Stock enjoy certain other rights, including:

 

· The right to have the conversion price adjusted downward to match the conversion price of any newly-issued
variable price convertible security with a conversion price more favorable than that set forth in the COD;

 

· The right to participate in any future rights offerings; and

 

· The right to participate in any future financings the Company may conduct.

 

The foregoing description of the SPA and
the COD is not complete and is qualified in its entirety by reference to the full text of those documents. A copy of the COD is
filed as an exhibit to this Form 8-K and incorporated by reference herein.

 

 

 

 

Item 3.02 Unregistered Sales of Equity Securities.

 

Under the SPA, the Company has issued 70
shares of the Preferred Stock to GHS, and may conduct additional issuances upon the terms set forth in the SPA and the COD. This
issuance was exempt under Rule 506(b) under Regulation D. GHS is an “accredited investor” as defined in Rule 501 under
the Securities Act. The Company did not engage in any general solicitation or advertising in connection with the issuance of the
Preferred Stock. Selling commissions in the amount of $900 were paid to J.H. Darbie &
Co.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws.

 

In connection with the GHS financing, the
Company has designated a new class of Series B Convertible Preferred Stock consisting of 600 shares and having the rights and features
described above.

 

Item 9.01 Financial Statements and Exhibits.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

IIOT-OXYS, Inc.

 

   
Date: November 24, 2020 By: /s/ Clifford L. Emmons
    Clifford L. Emmons, Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.1

 

 

Filed in the office of

Business Number

E0317582017-3

  /s/ Barbara K. Cegavske

Filing Number

20201046488

  Secretary of State

Filed On

11/16/2020 3:31:00 PM

  State of Nevada

Number of Pages

24

BARBARA K. CEGAVSKE

Secretary of State

202 North Carson Street

Carson City, Nevada 89701-4201

(775) 684-5708

Website: www.nvsos.gov

 

 

 

 
Certificate
of Designation for
 
(PURSUANT TO NRS 78.1955)  
   
   

 

 

USE BLACK INK ONLY – DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

 

1. Name of Corporation:

 

 

IIOT-OXYS, Inc.                                                             

 

2. By resolution of the board of directors pursuant to
a provision in the articles of incorporation this certificate establishes the following regarding the voting powers,
designations, preferences, limitations, restrictions and relative rights of the following class or series of stock.

 

A
series of Six Hundred (600) shares of Preferred Stock, $0.001 par value per share, designated as Series B Convertible
Preferred Stock. The relative preferences, rights and limitations of share of Series B Convertible Preferred Stock are set
forth on Exhibit A to this Certificate of Designation.

 

3. Effective date of filing: (optional)   _________________________
    (must not be later than 90 days after the certificate is filed)

 

4. Signature: (required)

 

 

/s/ Clifford L. Emmons    
Signature of Officer  

 

 

Filing Fee: $175.00

 

IMPORTANT: Failure to include any of the above
information and submit with the proper fees may cause this filing to be rejected.

 

 

 

 

IIOT-OXYS, INC.

 

CERTIFICATE OF
DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES B CONVERTIBLE
PREFERRED STOCK

 

The undersigned, Clifford L. Emmons.
does hereby certify that:

 

1.  
He is the Chief Executive Officer. of IIOT-OXYS, Inc. a Nevada corporation (the “Corporation” or the “Company“).

 

2.  
The Corporation is authorized to issue up to ten million (10,000,000) shares of preferred
stock, of which twenty-five thousand eight hundred and forty-five (25,845) have been issued.

 

3. 
 
The following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):

 

WHEREAS,
the Articles of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock,
consisting of ten million (10,000,000) shares, $0.001 par value per share, issuable from time to time in one
or more series;

 

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights
and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them: and

 

WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions
and other matters relating to Series B Preferred Stock, a series of the preferred stock, which shall consist of, except as otherwise
set forth in the Purchase Agreement, up to six hundred (600) shares of the preferred stock which the Corporation has the authority
to issue, as follows:

 

NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of Series B Preferred Stock, a series
of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences,
restrictions and other matters relating to such series of preferred stock as follows:

 

TERMS OF PREFERRED
STOCK

 

Section 1.
Definitions
. For the purposes hereof, the following terms shall have the following meanings:

 

Affiliate’‘ means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

 

Alternate
Consideration
” shall have the meaning set forth in Section
7(e).

 

 

 

 

Bankruptcy
Event
” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined
in Rule l-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt. relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to
the Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary
thereof any such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Corporation or any
Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such
case or proceeding is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian
or the like for it or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after
such appointment, (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors,
(f) the Corporation or any Significant Subsidiary thereof calls a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts, or (g) the Corporation or any Significant Subsidiary
thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing
or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

Beneficial
Ownership Limitation
” shall have the meaning set forth in Section 6(d).

 

Business
Day
” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

Buy-
In
” shall have the meaning set forth in Section 5(c)(iv).

 

Change
of Control Transaction
” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(l ) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 49% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock
and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other
Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders
of the Corporation immediately prior to such transaction own less than 33% of the aggregate voting power of the Corporation or
the successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to another
Person and the stockholders of the Corporation immediately prior to such transaction own less than 33% of the aggregate voting
power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a one year period of
more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are
members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board
of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of
Directors who are members on the Original Issue Date), or (e) the execution by the Corporation of an agreement to which the Corporation
is a party or by which it is bound, providing for any of the events set forth in clauses
(a) through (d) above.

 

Closing
means the closing of the purchase and sale of the Securities pursuant to Section 2.1
of the respective Purchase Agreements.

 

Closing
Date
” means the applicable Trading Day on which all of the Transaction Documents have been executed and delivered by
the applicable parties thereto and all conditions precedent to (i) each Holder’s obligations to pay the Subscription Amount for
a Closing and (ii) the Corporation’s obligations to deliver the Securities have been satisfied or waived.

 

Commission
or the “SEC” means the United States Securities and Exchange Commission.

 

Common
Stock
” means the Corporation’s common stock. par value $0.001 per share, and stock of any other class of securities in
to which such securities may hereafter be reclassified or changed.

 

 

 

 

Common
Stock Equivalents
” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock. rights, options, warrants
or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.

 

Conversion
Amount
” means the sum of the Stated Value at issue.

 

Conversion
Date
” shall have the meaning set forth in Section 5(a).

 

Conversion
Price
” shall have the meaning set forth in Section 5(b).

 

Conversion
Shares
” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof.

 

Corporation
Redemption
” has the meaning set forth in Section 8.

 

Corporation
Redemption Price
” has the meaning set forth in Section 8.

 

Corporation
Redemption Payment Date
” has the meaning set forth in Section 8.

 

Corporation
Redemption Notice
” has the meaning set forth in Section 8.

 

Designation.
Amount and Par Value
” The series of preferred stock shall be designated as Series B Convertible Preferred Stock and the
number of shares so designated shall be up to six hundred (600) (which shall not be subject to increase without the written consent
of all of the Holders of the Preferred Stock. Each share of Preferred Stock shall have a par value of $0.001 per share and a stated
value of $1,200, subject to increase set forth in Section 3 and/or elsewhere in this Certificate of Designation below.

 

DTC
means the Depository Trust Company.

 

DTC/FAST
Program
” means the DTC’s Fast Automated Securities Transfer Program.

 

Dividend
shall have the meaning set forth in Section 2.

 

DWAC
Eligible
” means that (a) the Common Stock is eligible at OTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Corporation has been approved (without revocation) by
the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares are otherwise eligible for delivery via DWAC, and the Transfer Agent does not
have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

 

Exchange
Act
” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

New
York Courts
” shall have the meaning set forth in Section 12(d).

 

 

 

 

Fundamental
Transaction
” shall have the meaning set forth in Section 7(e).

 

GAAP
means United States generally accepted accounting principles.

 

Holders
means Holders of the Preferred Stock.

 

Indemnified
Party
” shall have the meaning set forth in Section 11(f).

 

Indebtedness
means (a) any Liabilities for borrowed money or amounts owed in excess of $10,000 (other than trade accounts payable incurred
in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Corporation’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business, and (c) the present value of any lease payments in excess of $10,000 due under leases required to be capitalized in
accordance with GAAP.

 

Junior
Securities
” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities
which are explicitly senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.

 

Late
Fees
” shall have the meaning set forth in Section 2(d).

 

Liens
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

Liquidation
shall have the meaning set forth in Section 4.

 

Losses
shall have the meaning set forth in Section 11(f).

 

Notice
of Conversion
” shall have the meaning set forth in Section 5.

 

Original
Issue Date
” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such
Preferred Stock.

 

Permitted
Governmental Indebtedness
” means Indebtedness for the purpose of supporting product sales by the Borrower.

 

Permitted
Indebtedness
” means (i) Indebtedness of the Corporation set forth
in Corporation’s most recent SEC report filed with the SEC by the Corporation on Form 10-Q or Form 10-K (the “SEC
Reports”)
provided none of such Indebtedness, has been increased, extended and/or otherwise changed), (ii)
Indebtedness secured by Permitted Liens described in clauses “(iii)” of the definition of Permitted Liens, and
(iv) Permitted Governmental Indebtedness.

 

 

 

 

Permitted
Liens
” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics ‘ liens and other similar liens. arising in the ordinary course of business with
respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings.
(iv) Liens (a) upon or in any equipment acquired or held by the Borrower or any of its Subsidiaries to secure the purchase price
of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment. and
(b) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment and (v) any Liens for Permitted Indebtedness set forth in (i) and
(ii) of the definition of Permitted Indebtedness provided as to “(ii)” of Permitted Indebtedness such
Liens were in existence and not amended, supplemented and/or modified since the original issuance date any such Indebtedness
was incurred.

 

Person
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

Piggy-Back
Registration
” shall have the meaning set forth in Section 11(a).

 

Preferred
Stock
” shall mean Series B Convertible Preferred Stock.

 

Premium
Rate
” shall have the meaning set forth in Section 8(a).

 

Purchase
Agreement
” means that certain Securities Purchase Agreement, dated on or about the first Original Issue Date, among the
Corporation and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

Registration
Statement
” shall have the meaning set forth in Section 11(a).

 

Securities
means the Preferred Stock and the Underlying Shares.

 

Securities
Act
” means the Securities Act of 1933 thereunder, as amended. and the rules and regulations promulgated thereunder.

 

Share
Delivery Date
” shall have the meaning set forth in Section 5(c)(i).

 

Stated
Value
” shall mean $1,200, subject to increase set forth in Section 3 and/or elsewhere in this Certificate of Designation.

 

Subscription
Amount
” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to
the Purchase Agreement as specified below such Holder’s name on the signature page of the Purchase Agreement and next to
the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

Subsidiary
means any subsidiary of the Corporation as set forth on Schedule 3.l(a) of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.

 

 

 

 

Successor
Entity
” shall have the meaning set forth in Section 3.

 

Trading
Day or Date
” means a day on which the principal Trading Market is open for business.

 

Trading
Market
” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any other
Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question: The NASDAQ
Global Market. The NASDAQ Global Select Market. The NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT,
or the OTCQX Marketplace, the OTCQB Marketplace, the OTC Pink Marketplace or any other tier operated by OTC Markets Group Inc.
(or any successor to any of the foregoing).

 

Transaction
Documents
” means this Certificate of Designation, the Purchase Agreement, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase Agreement.

 

Transfer
Agent
” means Issuer Direct, the current transfer agent of the Company, with a mailing address of 1981 East 4800 South, Suite
100, Salt Lake City, UT 84117 and an electronic mail address of julie.felix @ issuerdirect.com and any successor transfer agent
of the Company.

 

Triggering
Event
” shall have the meaning set forth in Section 10(a).

 

Triggering
Redemption Amount
” means, for each share of Preferred Stock, the sum of (a) the greater of (i) 135% of the Stated Value
and (ii) the product of (y) the VWAP on the Trading Day immediately preceding the date of the Triggering Event, multiplied by
(z) the Stated Value divided by the then applicable Conversion Price, (b) all accrued but unpaid dividends thereon and (c) all
liquidated damages, Late Fees and other costs, expenses or amounts due in respect of the Preferred Stock including, but not limited
to legal fees and expenses of legal counsel to the Holder in connection with, related to and/or arising out of a Triggering Event.

 

Triggering
Redemption Payment Date
” shall have the meaning set forth in Section 10(b).

 

Underlying
Shares
” means the shares of Common Stock issued and issuable upon conversion of the Preferred Stock and upon exercise
of the Warrants.

 

Section 2. Dividends.

 

(a)           
Dividends in Cash or in Kind. Each share of Preferred Stock shall be entitled to receive, and the Corporation shall
pay cumulative dividends of 12% per annum, payable quarterly, beginning on the Original Issuance Date and ending on the date that
such share of Preferred Share has been converted or redeemed (the “Dividend End Date“). Dividends may be paid
in cash or in shares of Preferred Stock.

 

(b)           
Participating Dividends on As-Converted Basis. From and after the initial Closing Date, in addition to the payment
of dividends pursuant to Section 2(a), each Holder shall be entitled to receive, and the Corporation shall pay, dividends on shares
of Preferred Stock equal to (on an as-if-converted-to-Common-Stock basis) and in the same form as dividends actually paid on shares
of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. The Corporation shall pay no dividends
on shares of the Common Stock unless it simultaneously complies with the previous sentence.

 

 

 

 

(c)            Dividend
Calculations
. Subject to Section 3(a), dividends on the Preferred Stock shall be calculated on the basis of a 360-day
year, consisting of twelve (12) thirty (30) calendar day periods, and shall accrue and compound daily commencing on the
Original Issue Date, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there
are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends shall
cease to accrue with respect to any Preferred Stock redeemed or converted, provided that the Corporation actually delivers the
Conversion Shares within the time period required by Section 6(c)(i) herein.

 

(d)           
Late Fees. Any dividends that are not paid a Dividend Payment Date shall continue to accrue and shall entail a late
fee (“Late Fees”), which must be paid in cash, at the rate of 18% per annum or the lesser rate permitted by applicable
law which shall accrue and compound daily from the Dividend Payment Date through and including the date of actual payment in full.

 

(e)           
Other Securities. So long as any Preferred Stock shall remain outstanding, neither the Corporation nor any Subsidiary
thereof shall redeem, purchase or otherwise acquire directly or indirectly any Junior Securities or pari passu securities other
than any Preferred Stock purchased to the terms of this Certificate of Designation. So long as any Preferred Stock shall remain
outstanding, neither the Corporation nor any Subsidiary thereof shall directly or indirectly pay or declare any dividend or make
any distribution upon (other than a dividend or distribution described in Section 2 or dividends due and paid in the ordinary
course on preferred stock of the Corporation at such times when the Corporation is in compliance with its payment and other obligations
hereunder), nor shall any distribution be made in respect of. any Junior Securities or pari passu securities as
long as any dividends due on the Preferred Stock remain unpaid, nor shall any monies be set aside for or applied to the purchase
or redemption (through a sinking fund or otherwise) of any Junior Securities or pari passu securities.

 

Section
3. Voting Rights
. The Preferred Stock will vote together with the common stock on an as converted basis subject to the Beneficial
Ownership Limitations. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without
the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock directly and/or indirectly
(a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate
of Designation, (b) authorize or create any class of stock ranking as to redemption or distribution of assets upon a Liquidation
(as defined in Section 5) senior to, or otherwise
pari passu with, the Preferred Stock or, authorize or create any class of stock ranking as to dividends senior to, or otherwise
pari passu with, the Preferred Stock, (c) amend its Articles of Incorporation or other charter documents in
any manner that adversely affects any rights of the Holders, (d) increase the number of authorized shares of Preferred
Stock, or (e) enter into any agreement with respect to any of the foregoing.

 

Section
4. Liquidation
. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation“),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to
the Stated Value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon
under this Certificate of Designation, for each share of Preferred Stock before any distribution or payment shall be made to the
holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then
the entire assets to be distributed to the Holders shall be ratably distributed among the
Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid
in full. A Fundamental Transaction or Change of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail
written notice of any such Liquidation, not less than forty-five (45) days prior to the payment date stated therein, to each
Holder.

 

 

 

 

Section
5. Conversion
.

 

a)             
Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to
time from and after the Original Issue Date at the option of the Holder thereat into that number of shares of Common Stock (subject
to the limitations set forth in Section 5(d)) determined by dividing the Stated Value of such share of Preferred Stock by the
Conversion Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto
as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of
Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of
shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by facsimile or email such Notice of Conversion to the
Corporation (such date, the “Conversion Date“). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the date that such Notice or Conversion to the Corporation is deemed delivered hereunder. No ink-original
Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any
Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the
absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required
to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred
Stock represented thereby arc so converted, in which case such Holder shall deliver the certificate representing such shares of
Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed
in accordance with the terms hereof shall be
canceled and shall not be reissued.

 

b)             Conversion
Price.
The conversion price (the ”Conversion Price”) for the Preferred Stock shall be the amount equal to the
lowest traded price for the Company’s common stock for the fifteen (15) Trading Days immediately preceding the date of such conversion.
All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein
shall limit a Holder’s right to pursue actual damages including, but not limited to, as a result of a Triggering Event pursuant
to Section 10 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall
not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Following
an “Event of Default,” as defined in the Purchase Agreement, the Conversion price shall equal the lower of: (a) the
then applicable Conversion Price; or (b) a price per share equaling 80% of the lowest traded price for the Company’s common
stock during the ten (10) trading days preceding the relevant Conversion.

 

c)             Mechanics of Conversion

 

i.  
Delivery of Conversion Shares Upon Conversion. Not later than three (3) Trading Days after each Conversion Date
(the “Share Delivery Date“), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A)
the number of Conversion Shares being acquired upon the conversion of the Preferred Stock, which Conversion Shares shall be free
of restrictive legends and trading restrictions, and (8) a bank check in the amount of accrued and unpaid dividends (if the Corporation
has elected or is required to pay accrued dividends in cash). The Corporation shall deliver the Conversion Shares electronically
through the Depository Trust Company or another established clearing corporation performing similar functions.

 

ii. 
Failure to Deliver Conversion Shares. If, in the
case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share
Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt
of such Conversion Shares, to rescind such Conversion, in which event the Corporation shall promptly return to the Holder any
original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation the
Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.

 

 

 

 

iii. 
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion
Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim. recoupment limitation or termination.
or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged
violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against
such Holder. In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation
may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been
engaged in any violation of law, agreement or for any other reason,
unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or pan of the Preferred
Stock of such Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder
in the amount of 150% of the Stated Value of Preferred Stock which is subject to the injunction. which bond shall remain in effect
until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such
Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and,
if applicable. cash. upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares
pursuant to Section 5 on the second Trading Day after the Share Delivery Date applicable to such conversion, the Corporation shall
pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $5,000 of Stated Value of Preferred Stock being
converted, $100 per Trading Day (increasing to $150 per Trading Day on the third Trading Day and increasing to $200 per Trading
Day on the sixth Trading Day after such damages begin to accrue) for each Trading Day after such second Trading Day after the
Share Delivery Date until such Conversion Shares arc delivered or Holder rescinds such conversion. All liquidated damages shall
be paid to the Holder not later than the fifth (5th) Trading Day after notice
is provided to the Company by the Holder stating that any such liquidated damages are due pursuant to this Section 5. Nothing
herein shall limit a Holder’s right to pursue actual damages or declare a Triggering Event pursuant to Section 10 hereof for the
Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law.

 

iv.  Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion
. In addition to any other rights available to
the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share
Delivery Date pursuant to Section 5, and if after such Share Delivery Date such Holder is required by its brokerage firm to
purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive
upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in
cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if any, by which
(x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y)
the product of (I) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the
conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation
was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the
shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such
conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have been
issued if the Corporation had timely complied with its delivery requirements under Section 5. For example, if a Holder
purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any
brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Corporation shall be required to pay such Holder $1,000. The payment of all amounts due by the
Company to the Holder shall be paid in cash no later than the fifth (5th) Business
Day after notice is provided by a Holder to the
Company requesting the payment of any such liquidated damages. The Holder shall provide the Corporation written notice
indicating the amounts payable to such Holder in respect of the Buy-In and, upon request of the Corporation. evidence of the
amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the
Corporation’s failure to timely deliver the Conversion Shares upon conversion of the shares of Preferred Stock as required
pursuant to the terms hereof.

 

 

 

 

v.  
Reservation of Shares Issuable Upon Conversion. The Company covenants that, at the time of the First Closing (as
defined in the Purchase Agreement) it will reserve and keep available 10,500,000 shares of Common Stock out of its authorized
and unissued shares of Common Stock and, one hundred and twenty days from the First Closing and at all times thereafter, as long
as the Preferred Stock is outstanding, it will reserve and keep available out of its authorized and unissued shares of Common
Stock a number of shares of Common Stock at least equal to 250% of the Required Minimum for the sole purpose of issuance upon
conversion of the Preferred Stock and payment of dividends of the Preferred Stock, all as herein provided, free from preemptive
rights or any other actual contingent purchase rights of Persons other than the Purchasers, not less than such aggregate number
of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Section 7, but ignoring any Beneficial Ownership Limitations or other
restrictions and/or limitations on conversions set forth herein or elsewhere ) upon the conversion of the then outstanding shares
of the Preferred Stock and payment of dividends hereunder. The Company covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and, at such times as a registration
statement covering such shares is then effective under the Securities Act, will be registered for public resale in accordance
with such registration statement. For purposes of this Certification of Designation, the term ” Required Minimum
shall be defined as the product of (i) 250%, multiplied by (ii) the quotient of (A)(x) all outstanding Stated Value of all issued
and outstanding shares of the Preferred Stock, (y) all unpaid dividends thereon (whether accrued or not), and (z) all fees and/or
any costs and expenses relating to the Transaction Documents including, but not limited to Late Fees and liquidation damages,
divided by (13) the Conversion Price on the date of Closing. Beginning one hundred and twenty (120) days from the First Closing,
the Company shall be required to calculate the Required Minimum on the first trading day of each month that any shares of Preferred
Stock are outstanding and provide such calculation to the Holder and the transfer agent promptly. For purposes of calculating
the Required Minimum, Company shall assume that all Preferred Stock will remain outstanding for eighteen (18) months and all accrued
but unpaid dividends thereon accrues at the rate of 12% per annum, is paid on the date 18 months from the Closing.

 

vi. 
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion
of the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Conversion Price or round up to the next whole share.

 

vii.  
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made
without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of
the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares
unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax has been paid. In the event that the Holder requests
same-day processing for a Notice of Conversion, such Holder shall pay all Transfer Agent fees required for such same-day processing
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Conversion Shares.

 

 

 

 

d)             Beneficial
Ownership Limitation
. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have
the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth
on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a
group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon
conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of
shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock
beneficially owned by such Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the
limitation contained herein (including, without limitation, the Preferred Stock or the Warrants) beneficially owned by such
Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the
Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates) and of
how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a
Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be
converted (in relation to other securities owned by such Holder together with any Affiliates) and how many shares of the
Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this
restriction, the Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such
Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no
obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
stated in the most recent of the following : (i) the Corporation’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written
notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the
written or oral request of a Holder, the Corporation shall within two (2) Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the
Preferred Stock, by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common
Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of Preferred Stock held by the applicable Holder.

 

Section 6. Intentionally Omitted.

 

Section 7. Certain Adjustments.

 

a)            
Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or distributions that is payable in shares of Common Stock on shares of
Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock
issued by the Corporation upon conversion of, or payment of a dividend on, the Preferred Stock), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock,
any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before
such event, and of which the denominator shall be die number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.

 

 

 

 

b)            
Most Favored Nation Provision. From the date hereof until the date when the Holder no longer holds any shares of
Series B Preferred Stock. upon any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), the Holder
may elect, in its sole discretion, to exchange (in lieu of conversion), if applicable, all or some of the shares of Series B Preferred
Stock then held for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis. The Company shall provide the Holder with notice of any such Subsequent Financing in the manner set forth below
Additionally, if in such Subsequent Financing there are any contractual provisions or side letters that provide terms more favorable
to the investors than the terms provided for hereunder, then the Company shall specifically notify the Holder of such additional
or more favorable terms and such terms, at Holder’s option, shall become a part of the transaction documents with the Holder.
The types of terms contained in another security that may be more favorable to the holder of such security include, but are not
limited to, terms addressing stock sale price, private placement price per share, and warrant coverage. For purposes of illustration.
if a Subsequent Financing were to occur whereby the Company sells and issues a convertible note with a conversion price that includes
a discount to the market price of its Common Stock, the Holder will be entitled to receive the same convertible note on the exact
same terms on a dollar for dollar basis via the exchange of the Series B Preferred Stock the Holder holds on the date of the sale
and issuance of the convertible note.

 

c)            
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants. securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s
Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
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 shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the 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 the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d)             Pro
Rata Distributions
. During such time as this Preferred Stock is outstanding, if the Corporation shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Preferred Stock, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete exercise of this Preferred Stock (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
of which a record is taken for such Distribution, or if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the
Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

 

 

 

 

 

e)              Fundamental Transaction.

 

1)             General.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity (as defined below) assumes
in writing all of the obligations of the Company under this Certificate of Designation in accordance with the provisions of this
Section 7e) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to
such Fundamental Transaction, including agreements to deliver to the Holder in exchange for shares of Preferred Stock a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Preferred Stock,
including, without limitation, which is convertible into a corresponding number of shares of capital stock equivalent to the shares
of Common Stock acquirable and receivable upon conversion of the Preferred Stock (without regard to any limitations on the conversion
of the Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price
hereunder to such shares of capital stock (but caking into account the relative value of the shares of Common Stock pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital
stock and such conversion price being for the purpose of protecting the economic value of the Preferred Stock immediately prior
to the consummation of such Fundamental Transaction) and (ii) if the Fundamental Transaction occurs within six (6) months of the
Closing Date, the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction. the provisions
of this Certificate of Designation referring to the “Company” shall refer instead to the Successor Entity ), and may
exercise every right and power of the Company and shall assume all of the obligations of the Company under this Certificate of
Designation with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental
Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion of the Preferred
Stock at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or
other securities, cash, assets or other property) issuable upon the conversion of the Preferred Stock prior to the applicable
Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including
its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction
bad the Preferred Stock been converted immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the conversion of the Preferred Stock), as adjusted in accordance
with the provisions of this Certificate of Designation. Notwithstanding the foregoing, and without limiting Section 5 hereof,
the Holder may elect, at its sole option. by delivery of written notice to the Company to waive this Section 7.e) to permit the
Fundamental Transaction without the assumption of the Preferred Stock. In addition to and not in substitution on for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of the Preferred Stock at any time after
the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common
Stock (or other securities, cash, assets or other property) issuable upon the conversion of the Preferred Stock prior to such
Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Note been exercised immediately prior to the applicable Fundamental Transaction (without
regard to any limitations on the conversion of the Preferred Stock). Provision made pursuant to the preceding sentence shall be
in a form and substance reasonably satisfactory to the Holder.

 

2)             
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 5 above, at the request of the Holder
delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the
consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the
date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant
to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase the
Preferred Stock from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes
Value.

 

 

 

 

3)             Fundamental
Transaction
. If, at any time while any Preferred Stock is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions. (iii) any, direct or indirect. purchase offer,
tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or
property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation. a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more
than 50 % of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”). then. upon any subsequent
conversion of the Preferred Stock. the Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, at the option of the
Holder (without regard to any limitation in Section 6 on the conversion of the Preferred Stock), the number of shares of
Common Stock of the successor or acquiring corporation or of the Company if it is the surviving corporation, and any
additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock into which each share of Preferred Stock, is convertible
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6 on the conversion of the
Preferred Stock). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one
share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction. then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction, the Company or any Successor Entity shall, at the Holder’s option, exercisable at any time
concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase the shares of Preferred
Stock from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unconverted
shares of Preferred Stock on the date of the consummation of such Fundamental Transaction. “Black Scholes
Value”
means the value of the unconverted shares of Preferred Stock remaining on the date of the Holder’s request
pursuant to Section 7(e){2) which value is calculated using the Black Scholes Option Pricing Model for a “call” or
“put” option, as elected by the Holder, as obtained from the “OV” function on Bloomberg utilizing (i) an
underlying price per share equal to the greater of ( 1) the highest Closing Sale Price
of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable
Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the
Trading Day of the Holder’s request pursuant to Section 7(e)(2) and (2) the sum of the price per share being offered in cash in the
applicable Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable
Fundamental Transaction (if any), (ii) a strike price equal to the Conversion Price in effect on the date of the Holder’s
request pursuant to Section 7(e)(2), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate as of the date
of the Holder’s request pursuant to Section 7(e)(2) if such request is prior to the date of the consummation of the
applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100
%
and the 30 day volatility obtained from the “HVT” function on
Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to
occur of (A) the public disclosure of the applicable Fundamental Transaction, (B) the consummation of the applicable
Fundamental Transaction and (C) the date on which the Holder first became aware of the
applicable Fundamental Transaction. The Company shall cause any successor entity in a
Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of the Company under this Certificate of Designation and the other Transaction Documents in
accordance with the provisions of this Section 7(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the Holder, deliver co the Holder in exchange for the Preferred Stock a security of the Successor
Entity evidenced by a written instrument substantially similar in form and
substance to the Preferred Stock which is convertible into a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of
the Preferred Stock (without regard to any limitations on the conversion of the Preferred Stock) prior to such Fundamental
Transaction, and with a conversion price which app lies the Conversion Price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock. such number of shares of capital stock and such conversion price being for the purpose of
protecting the economic value of the Preferred Stock immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity). and may exercise every right and power of the Company and shall assume all of
the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.

 

 

 

 

f)
      Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued
and outstanding.

 

g)      Notice to the Holders.

 

i.   
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section
7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.

 

ii.  
Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants
to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of
the Corporation shall be required in connection with any reclassification of the Common Stock. any consolidation or merger to
which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory
share exchange whereby the Common Stock is converted into other securities, cash or property (E) the Corporation shall authorize
the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation (F) the Corporation shall
take any action to effectuate an Corporation Redemption. or (G) a Triggering Event shall have occurred, then. in each case. the
Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock,
and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified (unless a greater or
lesser time period is expressly required elsewhere in this Certificate of Designation), a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions. redemption,
rights or warrants are to be determined or (y) the date on which such reclassification. consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common
Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or
any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth in this Certificate of Designation.

 

(h)     Participation
in Subsequent Financing
.

 

(i)           
Upon a Subsequent Financing, a Holder of at least one hundred (100) shares of Series B Preferred Stock (each such Holder,
a “Significant Purchaser” ) shall have the right to participate in up to an amount of the Subsequent Financing
equal to 100% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided
for in the Subsequent Financing.

 

 

 

 

(ii)           
At least live (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Significant
Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notices shall
ask such Significant Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent
Financing Notice”)
. Upon the request of a Significant Purchaser, and only upon a request by such Significant Purchaser, for
a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a
Subsequent Financing Notice to such Significant Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons
through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating
thereto as an attachment.

 

(iii)          
Any Significant Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company
by not later than 5:30 p.m. (New York City time) on the fifth (5th)
Trading Day after all of the Significant Purchasers have received the Pre-Notice that such Significant Purchaser is willing to
participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and warranting that such
Significant Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no such notice from a Significant Purchaser as of such fifth (5′h) Trading Day, such
Significant Purchaser shall be deemed to have notified the Company that it does not elect to participate.

 

(iv)           If by 5:30 p.m. (New York City time)
on the fifth (5th Trading Day after all of the Significant
Purchasers have received the Pre-Notice, notifications by the Significant Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent
Financing, then the Company may effect the remaining portion of such Subsequent financing on the terms and with the Persons
set forth in the Subsequent Financing Notice.

 

(v)          
If by 5:30 p.m. (New York City time) on the fifth (5′h) Trading Day after all of the Purchasers have received
the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Significant Purchasers seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Significant Purchaser shall have the right to purchase
its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x)
the Subscription Amount of Securities purchased on the Closing Date by a Significant Purchaser participating under this Section
7(h) and (y) the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by all Significant Purchasers
participating under this Section 7(h).

 

(vi)          
The Company must provide the Significant Purchasers with a second Subsequent Financing Notice, and the Significant Purchasers
will again have the right of participation set forth above in this Section 7(h). if the Subsequent Financing subject to the initial
Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within
thirty (30) Trading Days after the date of the initial Subsequent Financing Notice.

 

(vii)        
The Company and each Significant Purchaser agree that if any Significant Purchaser elects to participate in the Subsequent
Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby such
Significant Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder
or be required to consent to any amendment to or termination of, or grant any waiver, re lease or the like under or in connection
with, this Agreement, without the prior written consent of such Significant Purchaser. In addition, the Company and each Significant
Purchaser agree that, in connection with a Subsequent Financing, the transaction documents related to the Subsequent financing
shall include a requirement for the Company to issue a widely disseminated press release by 9:30 am (New York City time) on the
Trading Day of execution of the transaction documents in such Subsequent Financing (or, if the date of execution is not a Trading
Day, on the immediately following Trading Day) that discloses the material terms of the transactions contemplated by the transaction
documents in such Subsequent Financing.

 

 

 

 

(viii)        
Notwithstanding anything to the contrary in this Section
7(h) and unless otherwise agreed to by such Significant Purchaser, the Company shall either confirm in writing to such Significant
Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention
to issue the securities in the Subsequent financing, in either case in such a manner such that such Significant Purchaser will
not be in possession of any material, non-public information, by the tenth (10th)
Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no
public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the
abandonment of such transaction has been received by such Significant Purchaser, such transaction shall be deemed to have been
abandoned and such Significant Purchaser shall not be deemed to be in possession of any material, non-public information with
respect to the Company or any of its Subsidiaries.

 

(ix)           Notwithstanding the foregoing, this
Section 7(h) shall not apply in respect of an Exempt Issuance.

 

Section 8. Corporation Redemption.

 

(a)     The
Corporation shall have the right to redeem (a “Corporation Redemption“), all (but not less than all), shares
of the Preferred Stock issued and outstanding at any time after the Original Issue Date, upon three (3) business days’ notice,
at a redemption price per Preferred Stock then issued and outstanding (the “Corporation Redemption Price“), equal
to the product of (i) the Premium Rate multiplied by (ii) the sum of (x) the Stated Value, (y) all accrued but unpaid dividends,
and (z) all other amount due to the Holder pursuant to this Certificate of Designation and/or any Transaction Document including,
but not limited to Late Fees, liquidated damages and the legal fees and expenses of the Holder’s counsel relating to this Certification
of Designation, any other Transaction Document and/or the transactions contemplated thereunder and/or hereunder. “Premium
Rate” means (a) 1.15 if all of the Preferred Stock is redeemed within ninety (90) calendar days from the issuance date thereof;
(b) 1.2 if all of the Preferred Stock is redeemed after ninety (90) calendar days and within
one hundred twenty (120) calendar days from the issuance date thereof; (c) 1.25 if all of
the Preferred Stock is redeemed after one hundred twenty (120) calendar days and within one hundred eighty (180) calendar days
from the issuance date thereof; and (iv) each share of Preferred Stock shall be redeemed on the Date that is one (1) calendar
year from the date of its issuance.

 

(b)    
The Corporation may not deliver to a holder a Corporation Redemption Notice unless on or prior to the date of delivery of
such Corporation Redemption Notice, the Corporation shall have segregated on the books and records of the Corporation an amount
of cash sufficient to pay the Corporation Redemption Price for each share of Preferred Stock then issued and duly. Any Corporation
Redemption Notice delivered shall be irrevocable and shall be accompanied by a statement executed by Corporation duly authorized
officer of the Corporation.

 

(c)    
The Corporation Redemption Price required to be paid by the Corporation to each Holder shall be paid in the cash to each
Holder of shares of Preferred Stock no later than five (5) calendar days from the date of mailing of the Corporation Redemption
Notice (the “Corporation Redemption Payment Date“).

 

(d)     Notwithstanding
the delivery of a Corporation Redemption Notice, a Holder may convert some or all of its shares of Preferred Stock until the
date it receives in full Corporation Redemption Price, provided, however. that notwithstanding anything to the
contrary provided herein or elsewhere (i) in the event a Holder would be precluded from converting any shares of Preferred
Stock, due to the limitation contained in Section 5, the Corporation Redemption Payment Date, for such Holder only, shall
automatically be extended by one hundred twenty (120) days (or such shorter period as so provided to the Corporation by the
Holder at any time and (ii) if a Mandatory Conversion has occurred prior to the Corporation Redemption Payment Date and for
whatever reason including, but not limited to. the Beneficial Ownership Limitation, a Holder still owns Preferred Stock, any
such Holder may elect to extend the Corporation Redemption Payment Date as to any or all of such Holder’s Preferred Stock
for up to one hundred twenty (120) days following the Corporation Redemption Payment Date to allow such Holder to convert
its remaining Preferred Stock into Conversion Shares.

 

 

 

 

Section·9.
Negative Covenants
. from the date hereof until the date no shares of Preferred Stock are issued and outstanding unless Holders
of at least 75% in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given prior written consent,
the Corporation shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

(a)    
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now
owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(b)  
  other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect
to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

  

 

(c)   
 
amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder;

 

(d)    
repay, repurchase or offer to repay, repurchase or otherwise acquire of any shares of its Common Stock, Common Stock Equivalents
or Junior Securities, other than as to the Conversion Shares as permitted or required under the Transaction Documents.

 

(e)     pay cash dividends or distributions on Junior Securities of the Corporation;

 

(f)
    
enter into any transaction with any Affiliate of the Corporation which would be required to be disclosed in any public filing
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested
directors of the Corporation (even if less than a quorum otherwise required for board approval); or

 

(g)    enter into any agreement with respect to any
of the foregoing.

 

Section 10. Redemption Upon Triggering Events.

 

(a)     ‘Triggering
Event”
means, wherever used herein any of the following events (whatever the reason for such event and whether such event
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or
any order, rule or regulation of any administrative or governmental body):

 

i.  
the Corporation shall fail to deliver Conversion Shares issuable upon a conversion hereunder that comply with the provisions
hereof prior to the fifth Trading Day after such shares are required to be delivered hereunder, or the Corporation shall provide
written notice to any Holder, including by way of public announcement, at any time, of its intention not to comply with requests
for conversion of any shares of Preferred Stock in accordance with
the terms hereof;

 

ii. 
the Corporation shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In within five (5) Trading
Days after notice therefor is delivered hereunder.

 

 

 

 

iii. 
the Corporation shall fail to have available a sufficient number of authorized and unreserved shares of Common Stock to
issue to such Holder upon a conversion hereunder;

 

iv.  
unless specifically addressed elsewhere in this Certificate of Designation as a Triggering Event, the Corporation shall
fail to observe or perform any other covenant. agreement or warranty contained in, or otherwise commit any breach of the Transaction
Documents, and such failure or breach shall not, if subject to the possibility of a cure by the Corporation, have been cured within
5 calendar days after the date on which written notice of such failure or breach shall have been delivered;

 

v.
the Corporation shall redeem Junior Securities or pari passu securities:

 

vi. the Corporation shall be party to a Change of Control Transaction:

 

vii. there shall have occurred a Bankruptcy Event;

 

viii.
any monetary judgment, writ or similar final process shall be entered or filed against the Corporation, any subsidiary or
any of their respective property or other assets for more than $50,000 (provided that amounts covered by the Corporation’s insurance
policies are not counted toward this $50,000 threshold), and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of thirty (30) Trading Days;

 

ix. 
the electronic transfer by the Corporation of shares of Common Stock through the Depository Trust Company or another established
clearing corporation once established subsequent to the date of this Certificate of Designation is no longer available or is subject
to a ‘freeze” and/or “chill”; or

 

x. any “Event of Default.” as defined in the Purchase Agreement.

 

b) Upon the occurrence
of a Triggering Event, each Holder shall (in addition to all other rights it may have hereunder or under applicable law) have
the right, exercisable at the sole option of such Holder, to require the Corporation to (A) redeem all of the Preferred Stock
then held by such Holder for a redemption price, in cash. equal to the Triggering Redemption Amount, or (B) at the option of each
Holder either (i) redeem all of the Preferred Stock then held by such Holder though the issuance to such Holder of such number
of shares of Common Stock equal to the quotient of (x) the Triggering Redemption Amount, divided by (y) the lowest of (1) the
Conversion Price, and (2) 75% of the average of the 10
VWAPs immediately prior to the date of election hereunder, and (ii) increase the dividend rate on all of the outstanding
Preferred Stock held by such Holder retroactively to the initial Closing Date to 18% per annum thereafter. The Triggering Redemption
Amount, whether payable in cash or in shares, shall be due and payable or issuable, as the case may be, within five (5) Trading
Days of the date on which the notice for the payment therefor is provided by a Holder (the “Triggering Redemption Payment
Date
“). If the Corporation fails to pay in full the Triggering Redemption Amount hereunder on the date such amount is
due in accordance with this Section (whether in cash or shares of Common Stock), the Corporation will pay interest thereon at
a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing and compounding daily from
such date until the Triggering Redemption Amount, plus all such interest thereon, is paid in full.

 

 

 

 

Section 11. Registration Rights.

 

a)  
If at any time on or after the issuance date of the Preferred Stock, the Company proposes to file any Registration Statement
with respect to any offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible
into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or by the Company
and by shareholders of the Company), other than a Registration Statement in connection with a merger or acquisition, then the
Company shall (x) give written notice of such proposed filing to the Holders as soon as practicable but in no event less than
ten (10) days before the anticipated filing date of the Registration Statement, which notice shall describe the amount and type
of securities to be included in such Registration Statement, the intended method(s) of distribution, and the name of the proposed
managing underwriter or underwriters, if any, of the offering, and (y) offer to the Holders the opportunity to register the sale
of such number of Preferred Stock as such Holders may request in writing within five (5) days following receipt of such notice
(a “Piggy-Back Registration“). The Company shall cause such Preferred Stock to be included in such registration
and shall cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Preferred Stock requested
to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit
the sale or other disposition of such Preferred Stock in accordance with the intended method(s) of distribution thereof. All Holders
proposing to distribute their Preferred Stock through a Piggy-Back Registration that involves an underwriter or underwriters shall
enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such Piggy-Back Registration.

 

b) 
Any Holder may elect to withdraw such Holder’s request for inclusion of Preferred Stock in any Piggy-Back Registration by
giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The
Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual
obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement. Notwithstanding
any such withdrawal, the Company shall pay all expenses incurred by the Holders in connection with such Piggy-Back Registration
(including but not limited to any legal fees).

 

c) 
The Company shall notify the Holders at any time when a prospectus relating to such Holder’s Securities is required to
be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus
included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances
then existing. At the request of such Holder, the Company shall also prepare, file and furnish to such Holder a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers
of the Preferred Stock, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.
The Holders shall not offer or sell any Preferred Stock covered by the Registration Statement after receipt of such notification
until the receipt of such supplement or amendment.

 

d) 
the Company may request a Holder to furnish the Company such information with respect to such Holder and such Holder’s proposed
distribution of the Preferred Stock pursuant to the Registration Statement as the Company may from time to time reasonably request
in writing or as shall be required by law or by the Commission in connection therewith, and such Holders shall furnish the Company
with such information.

 

e)  All
fees and expenses incident to the performance of or compliance with this Section 11 by the Company shall be borne by the
Company whether or not any Preferred Stock are sold pursuant to a Registration Statement. The fees and expenses referred to
in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including. without
limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to
filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common
Stock are then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by
the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions) and (D) with respect to any filing that may be required to be made by any broker
through which a Holder intends to make sales of Preferred Stock with FINRA, (ii) printing expenses, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other persons or entities retained by
the Company in connection with the consummation of the transactions contemplated by this Section 11.

 

 

 

 

f) The Company and
its successors and assigns shall indemnify and hold harmless each purchaser, each Holder, the officers, directors, members, partners,
agents and employees (and any other individuals or entities with a functionally equivalent role of a person holding such titles,
notwithstanding a lack of such title or any other title) of each of them, each individual or entity who controls each purchaser
or any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, partners, agents and employees (and any other individuals or entities with a functionally equivalent
role of a person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling individual
or entity (each, an “Indemnified Party“), to
the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to (1) any untrue or alleged untrue statement of a material fact contained
in a Registration Statement, any related prospectus or any form of prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the case of any such prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in collection
with the performance of its obligations under this Section 11, except to the extent, but only to the extent, that such untrue
statements or omissions are based upon information regarding a purchaser or such Holder furnished to the Company by such party
for use therein. The Company shall notify each purchaser and each Holder promptly of the institution, threat or assertion of any
proceeding arising from or in connection with the transactions contemplated by this Section 11 of which the Company is aware.
If the indemnification hereunder is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then the Company shall contribute to the amount paid or payable by such Indemnified Party, in such proportion
as is appropriate to reflect the relative fault of the Company and Indemnified Party in connection with the actions, statements
or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the Company
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by,
or relates to information supplied by. the Company or the Indemnified Party, and the parties· relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by
a party as a result of any Losses shall be deemed to include any reasonable attorneys’ or other fees or expenses incurred by such
party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the
indemnification provided for herein was available to such party in accordance with its terms. It is agreed that it would not be
just and equitable if contribution pursuant to this Section 11(f) were determined by pro
rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to
in the immediately preceding sentence. Notwithstanding the provisions of this Section 11(f), neither the purchaser nor any Holder
shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such party from the sale of all of their Registrable Securities pursuant to such Registration Statement or related prospectus
exceeds the amount of any damages that such party has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

 

Section 12. Miscellaneous.

 

a)   
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally or sent by a nationally recognized overnight
courier service and by facsimile or e-mail, addressed to the Corporation, at 705 Cambridge St., Cambridge, MA 02141; Attention:
Clifford L. Emmons, e-mail cliff.emmons@oxyscorp.com, or such other e-mail or address as the Corporation may specify for such
purposes by prior written notice to the Holders delivered in accordance with this Section 12. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally by facsimile, or sent by
a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing
on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal
place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission. if such notice or communication is delivered via facsimile at the facsimile number
set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day.
(iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to be given.

 

 

 

 

 

 

b) 
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter
or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends
and accrued interest, as applicable. on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency,
herein prescribed.

 

c) 
Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of
a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the
shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

 

d) 
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate
of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without
regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, stockholders, employees or agents) shall be commenced in the state and
federal courts sitting in the Borough of Manhattan, New York, New York, (the “New York Courts“)]. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party
shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.

 

e)  
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation
shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision
of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon
strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive
that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this
Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

 

f)  
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance
of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance,
it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

g) 
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day.

 

h)  
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of
Designation and shall not be deemed to limit or affect any of the provisions hereof.

 

i)
Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to a Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no longer be designated as Series B Convertible Preferred Stock.

 

 

 

 

 

RESOLVED, FURTHER, That
the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they
hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in
accordance with the foregoing resolution and the provisions of Nevada law.

 

IN WITNESS WHEREOF, the
undersigned have executed this Certificate this 16th day of
November, 2020.

 

/s/Clifford L. Emmons  
Name: Clifford L. Emmons  
Title: CEO  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEX A

 

NOTICE OF CONVERSION

 

(TO BE EXECUTED BY THE
REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

 

The
undersigned hereby elects to convert the number of shares of Series B Convertible Preferred Stock indicated below into shares
of common stock, par value $0.001 per share (the “Common Stock“), of IIOT-OXYS,
Inc., a Nevada corporation (the “Corporation“), according to the conditions hereof, as of the date written below.
If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation
in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for
any such transfer taxes.

 

Conversion calculations:

 

 

Date to Effect Conversion:______________________________________________________________________________________

 

Number
of shares of Preferred Stock owned prior to Conversion:________________________________________________________

 

Number
of shares of Preferred Stock to be Converted:________________________________________________________________

 

Stated Value of shares
of Preferred Stock to be Converted:_____________________________________________________________

 

Dollar
amount of Interest to be Converted:_________________________________________________________________________

 

Other amounts owed to the Undersigned by the

Corporation under the
Certificate of Designation and/or

any other Transaction Document to be Converted:___________________________________________________________________

 

Number
of shares of Common Stock to be Issued:___________________________________________________________________

 

Applicable
Conversion Price:___________________________________________________________________________________

 

Number
of shares of Preferred Stock subsequent to Conversion: ________________________________________________________

 

Address
for Delivery: _______________________________

 

or

DWAC Instructions:

 

Broker
no: ___________________

 

Account
no: _________________

 

 

Name of Entity Holder_________________(Please Print)

 

By:________________________________________________

Name:

Title:

 

Name of Individual Holder _____________(Please Print)

 

____________________(Signature
of Individual Holder)

 

 

 



Source Google News