<SEC-DOCUMENT>0001144204-15-028546.txt : 20150508
<SEC-HEADER>0001144204-15-028546.hdr.sgml : 20150508
<ACCEPTANCE-DATETIME>20150507184529
ACCESSION NUMBER:		0001144204-15-028546
CONFORMED SUBMISSION TYPE:	PRE 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20150507
FILED AS OF DATE:		20150508
DATE AS OF CHANGE:		20150507

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Net Element, Inc.
		CENTRAL INDEX KEY:			0001499961
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
		IRS NUMBER:				901025599
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PRE 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34887
		FILM NUMBER:		15843534

	BUSINESS ADDRESS:	
		STREET 1:		3363 NE 163RD STREET
		STREET 2:		SUITE 705
		CITY:			NORTH MIAMI BEACH
		STATE:			FL
		ZIP:			33160
		BUSINESS PHONE:		(305) 507-8808

	MAIL ADDRESS:	
		STREET 1:		3363 NE 163RD STREET
		STREET 2:		SUITE 705
		CITY:			NORTH MIAMI BEACH
		STATE:			FL
		ZIP:			33160

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Net Element International, Inc.
		DATE OF NAME CHANGE:	20121002

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Cazador Acquisition Corp Ltd.
		DATE OF NAME CHANGE:	20100825
</SEC-HEADER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>v409984_pre14a.htm
<DESCRIPTION>PRE 14A
<TEXT>
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<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">UNITED
STATES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">SECURITIES
AND EXCHANGE COMMISSION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-weight: normal">Washington,
D.C. 20549</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">SCHEDULE
14A INFORMATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Proxy Statement Pursuant to Section
14(a) of the Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by the Registrant <FONT STYLE="font-family: Wingdings">&#120;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by a Party other than the Registrant <FONT STYLE="font-family: Wingdings">&#120;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font-family: Wingdings">&#120;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Preliminary Proxy Statement</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Definitive Proxy Statement</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Definitive Additional Materials</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Soliciting Material Pursuant to &sect;240.14a-12</FONT></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Net Element, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<HR NOSHADE SIZE="1" STYLE="color: Black; width: 100%; margin-top: 3pt; margin-bottom: 3pt">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;(Name of Registrant as Specified
In Its Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<HR NOSHADE SIZE="1" STYLE="color: Black; width: 100%; margin-top: 3pt; margin-bottom: 3pt">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Payment of Filing Fee (Check the appropriate box):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#120;</FONT></td>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">No fee required.</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><FONT STYLE="font-size: 10pt">1)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Title of each class of securities to which transaction applies:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">2)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Aggregate number of securities to which transaction applies:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">3)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Per unit price or other underlying value of transaction computed pursuant to Exchange Act
    Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">4)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Proposed maximum aggregate value of transaction:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">5)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Total fee paid:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Fee paid previously with preliminary materials.</FONT></td></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Wingdings">&#168;</FONT></td>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Check box if any part of the fee is offset as provided by Exchange Act Rule
    0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
    statement number, or the Form or Schedule and the date of its filing.</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">1)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Amount Previously Paid:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">2)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Form, Schedule or Registration Statement No.:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><FONT STYLE="font-size: 10pt">3)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Filing Party:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD></td>
    <TD><FONT STYLE="font-size: 10pt">4)</FONT></td>
    <TD><FONT STYLE="font-size: 10pt">Date Filed:</FONT></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>3363 NE 163rd Street, Suite 705</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>North Miami Beach, Florida 33160</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notice of Annual Meeting of Shareholders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>to be held on [_________ __], 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To Our Shareholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2015 annual meeting
of shareholders of Net Element, Inc. (the &quot;Company&quot;) will be held on [______ __], 2015, 11:00 am, local time, at the
Company&rsquo;s offices located at 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160, for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify">To elect six directors of the Company, four of whom shall be independent directors as defined by
applicable rules, to serve for a one-year term expiring in 2016.<BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify">To approve an amendment to the Company&rsquo;s Amended and Restated Certificate of Incorporation
to increase authorized common stock to 300 million shares.<BR>
<BR>
</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">To approve the issuance by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and 5635(d),
of the Company&rsquo;s common stock, par value $0.0001 per share (&ldquo;Common Stock&rdquo;), issued and issuable pursuant to
the terms of the Certificate of Designations, Preferences and Rights (the &quot;Certificate of Designations&quot;) of the Company's
5,500 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the &ldquo;Preferred Stock&rdquo;) upon conversion,
amortization, payment of dividends, as part of the make-whole amount or otherwise of, or with respect to, the Preferred Stock,
which was issued pursuant to that certain securities purchase agreement dated April 30, 2015 (the &ldquo;Preferred Purchase Agreement&rdquo;)
by and among the Company, certain qualified institutional investors and certain institutional accredited investors, in each case,
without giving effect to the Exchange Cap (as defined below).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.</TD><TD STYLE="text-align: justify">To approve the issuance by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common
Stock issued and issuable (x) pursuant to the terms of the senior convertible notes of the Company in the aggregate principal amount
of up to $15,000,000 (the &ldquo;Notes&rdquo;) upon conversion, amortization, payment of interest, and as part of the make-whole
amount, or otherwise of, or with respect to, the Notes and (y) upon exercise of the accompanying warrants (the &ldquo;Warrants&rdquo;),
which were issued pursuant to the terms of that certain securities purchase agreement dated April 30, 2015 (the &ldquo;Note Purchase
Agreement&rdquo;) by and among the Company, certain qualified institutional investors and certain institutional accredited investors,
in each case, without giving effect to the Exchange Cap.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">5.</TD><TD STYLE="text-align: justify">To transact such other business as may properly come before the annual meeting or any postponement
or adjournment thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will not
issue shares of Common Stock pursuant to the terms of the Preferred Stock, Notes and Warrants if such transaction would result
in the issuance of more than 19.999% of the amount of Common Stock of the Company issued and outstanding (the &quot;Exchange Cap&quot;)
unless (i) our stockholders shall have approved the issuance of shares of common stock in excess of 20%, or (ii) The NASDAQ has
provided a waiver of Listing Rules that require stockholders' approval of the issuance of shares of common stock in excess of 20%.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
has fixed May 4, 2015 as the record date for the determination of shareholders entitled to vote at the annual meeting. Only shareholders
of record at the close of business on that date will be entitled to notice of, and to vote at, the annual meeting or any postponement
or adjournment thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you elected to receive
our annual report and proxy statement electronically over the Internet you will not receive a paper proxy card. The annual report
and proxy statement are available at <I>http://www.cstproxy.com/netelement/2015</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You are cordially invited
to attend the meeting in person. Whether or not you expect to attend the meeting in person, you are urged to vote by electronic
access, phone or mail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 50%">&nbsp;</td>
    <td style="width: 50%"><font style="font-size: 10pt">By Order of the Board of Directors.</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font-size: 10pt">Oleg Firer</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font-size: 10pt">Chief Executive Officer</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">North Miami Beach, Florida</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">[____________], 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>3363 NE 163rd Street, Suite 705</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>North Miami Beach, Florida 33160</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">PROXY STATEMENT</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INTRODUCTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-style: normal"><B>General</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net Element, Inc. (the
&quot;Company,&quot; &quot;we,&quot; &quot;us,&quot; or &quot;our&quot;) is a Delaware corporation with its principal executive
offices located at 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160. The Company's telephone number is (305) 507-8808.
This proxy statement, together with the accompanying proxy card, is first being mailed to our shareholders on or about [__________
___], 2015, and is being furnished in connection with the solicitation of proxies by our Board of Directors for use in voting at
our 2015 annual meeting of shareholders, including any adjournment or postponement of the annual meeting. The 2015 annual meeting
of shareholders will be held on [__________ ___], 2015, at 11:00 am, local time, at the Company&rsquo;s offices located at 3363
NE 163rd Street, Suite 705, North Miami Beach, Florida 33160.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are paying the cost
of this solicitation. In addition to solicitation by mail, proxies may be solicited in person or by telephone, e-mail, facsimile
or other means by our officers or regular employees, without paying them any additional compensation or remuneration. Arrangements
have also been made with brokers, dealers, banks, voting trustees and other custodians, nominees and fiduciaries to forward proxy
materials and annual reports to the beneficial owners of the shares held of record by such persons, and we will, upon request,
reimburse them for their reasonable expenses in so doing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of our annual
report for the fiscal year ended December 31, 2014 (which includes our audited financial statements for the two fiscal years ended
December 31, 2014) is being mailed, or a link to an Internet Web page containing such materials is being sent via email, to our
shareholders together with this proxy statement. Such annual report is not, however, incorporated into this proxy statement and
it is not to be deemed a part of the proxy soliciting material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shareholders may send
communications in care of our Secretary, 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160, fax number (305) 508-5497,
e-mail address investors@netelement.com. Please indicate whether your message is for the Board of Directors as a whole, a particular
committee, or an individual director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Purpose of the Annual Meeting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following matters
are being submitted for a vote at the annual meeting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify">To elect six directors of the Company, four of whom shall be independent directors as defined by
applicable rules, to serve for a one-year term expiring in 2016.

</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify">To approve an amendment to the Company&rsquo;s Amended and Restated Certificate of Incorporation
to increase authorized common stock to 300 million shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">To approve the issuance by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and 5635(d),
of the Company&rsquo;s common stock, par value $0.0001 per share (&ldquo;Common Stock&rdquo;), issued and issuable pursuant to
the terms of the Certificate of Designations, Preferences and Rights (the &quot;Certificate of Designations&quot;) of the Company's
5,500 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the &ldquo;Preferred Stock&rdquo;) upon conversion,
amortization, payment of dividends, as part of the make-whole amount or otherwise of, or with respect to, the Preferred Stock,
which was issued pursuant to that certain securities purchase agreement dated April 30, 2015 (the &ldquo;Preferred Purchase Agreement&rdquo;)
by and among the Company, certain qualified institutional investors and certain institutional accredited investors, in each case,
without giving effect to the Exchange Cap (as defined below).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.</TD><TD STYLE="text-align: justify">To approve the issuance by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common
Stock issued and issuable (x) pursuant to the terms of the senior convertible notes of the Company in the aggregate principal amount
of up to $15,000,000 (the &ldquo;Notes&rdquo;) upon conversion, amortization, payment of interest, and as part of the make-whole
amount, or otherwise of, or with respect to, the Notes and (y) upon exercise of the accompanying warrants (the &ldquo;Warrants&rdquo;),
which were issued pursuant to the terms of that certain securities purchase agreement dated April 30, 2015 (the &ldquo;Note Purchase
Agreement&rdquo;) by and among the Company, certain qualified institutional investors and certain institutional accredited investors,
in each case, without giving effect to the Exchange Cap.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">5.</TD><TD STYLE="text-align: justify">To transact such other business as may properly come before the annual meeting or any postponement
or adjournment thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting Procedures</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Proxies in the form
enclosed, if properly executed and received in time for voting and not revoked, will be voted as directed in accordance with the
instructions on the form. In voting by proxy with regard to the election of six directors to serve until the 2016 annual meeting
of shareholders, shareholders may vote in favor of all nominees or withhold their votes as to all or any specific nominees. In
voting by proxy in regard to (i) each of the Company's director nominees, (ii) the approval of an amendment to the Company&rsquo;s
Amended and Restated Certificate of Incorporation to increase authorized common stock to 300 million shares, (iii) the issuance
by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and 5635(d), of Common Stock issued and issuable pursuant to the
terms of the Certificate of Designations of the Preferred Stock upon conversion, amortization, payment of dividends, as part of
the make-whole amount or otherwise of, or with respect to, the Preferred Stock, in each case, without giving effect to the Exchange
Cap., and (iv) the issuance by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock issued and issuable
(x) pursuant to the terms of the Notes upon conversion, amortization, payment of interest, and as part of the make-whole amount,
or otherwise of, or with respect to, the Notes and (y) upon exercise of the accompanying Warrants, in each case, without giving
effect to the Exchange Cap, shareholders may vote for or against or abstain from voting. Any properly executed and timely received
proxy not so directing or instructing to the contrary will be voted (i) <B>FOR</B> each of the Company's director nominees, (ii)
<B>FOR</B> approval of an amendment to the Company&rsquo;s Amended and Restated Certificate of Incorporation to increase authorized
common stock to 300 million shares, (iii) <B>FOR </B>approval of the issuance by the Company, for purposes of the NASDAQ Listing
Rules 5635(a) and 5635(d), of Common Stock issued and issuable pursuant to the terms of the Certificate of Designations of the
Preferred Stock upon conversion, amortization, payment of dividends, as part of the make-whole amount or otherwise of, or with
respect to, the Preferred Stock, in each case, without giving effect to the Exchange Cap, and (iv) <B>FOR</B> approval of the issuance
by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock issued and issuable (x) pursuant to the terms of
the Notes upon conversion, amortization, payment of interest, and as part of the make-whole amount, or otherwise of, or with respect
to, the Notes and (y) upon exercise of the accompanying Warrants, in each case, without giving effect to the Exchange Cap. Please
see Proposals 1, 2, 3 and 4 set forth later in this proxy statement. Sending in a signed proxy will not affect a shareholder's
right to attend the meeting and vote in person, since the proxy is revocable. Any shareholder giving a proxy may revoke it at any
time before it is voted at the annual meeting by, among other methods, giving notice of such revocation to the Secretary of the
Company, attending the annual meeting and voting in person, or by duly executing and returning a proxy bearing a later date.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We know of no other
matters to be presented for action at the annual meeting other than as mentioned. However, if any other matters properly come before
the annual meeting in accordance with the bylaws of the Company, the holders of the proxies intend to vote in such manner as they
decide in their sole discretion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of Common Stock
are entitled to one vote per share. At the close of business on May 4, 2015, the record date for the determination of shareholders
entitled to receive notice of, and to vote at, the annual meeting, the Company's outstanding voting securities consisted of 47,460,032
shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the holders
of shares of Preferred Stock are entitled to the whole number of votes equal to the number of shares of Common Stock into which
such shares of Preferred Shares would be convertible on the record date for the vote or consent of the Company stockholders, but
in lieu of using the Conversion Price in effect as of the record date such votes are calculated based on the higher of (i) the
then existing conversion price per the terms of the Certificate of Designations and (ii) $1.16. As of May 4, 2015, the holders
of shares of Preferred Stock are entitled to the number of votes equal to 3,164,037 shares of Common Stock. The holders of shares
of Preferred Stock are not entitled to vote with respect to (i) approval of the issuance by the Company, for purposes of the NASDAQ
Listing Rules 5635(a) and 5635(d), of Common Stock issued and issuable pursuant to the terms of the Certificate of Designations
of the Preferred Stock upon conversion, amortization, payment of dividends, as part of the make-whole amount or otherwise of, or
with respect to, the Preferred Stock, in each case, without giving effect to the Exchange Cap, and (ii) approval of the issuance
by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock issued and issuable (x) pursuant to the terms of
the Notes upon conversion, amortization, payment of interest, and as part of the make-whole amount, or otherwise of, or with respect
to, the Notes and (y) upon exercise of the accompanying Warrants, in each case, without giving effect to the Exchange Cap.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>No Appraisal Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
stockholders do not have any &ldquo;appraisal&rdquo; or &ldquo;dissenters&rsquo;&rdquo; rights in connection with any proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CORPORATE GOVERNANCE</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Independence</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
currently includes four nonemployee, independent members &ndash; David P. Kelley II, William Healy, Drew Freeman and James Caan.
Each of Messrs. Kelley, Healy, Freeman and Caan is an &quot;independent director&quot; as defined under NASDAQ Listing Rule 5605(a)(2).
A majority of our Board members are independent directors, as four out of the six members of the Board qualify as independent
under the NASDAQ listing standards and the rules of the Securities and Exchange Commission (the &quot;Commission&quot;). No director
is considered independent unless the Board affirmatively determines that the director has no material relationship with us (directly,
or as a partner, shareholder or officer of an organization that has a relationship with us) that would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director. Also, all members of the Board's audit committee,
compensation committee and nominating and governance committee are independent directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Code of Ethics</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have adopted a Code
of Ethics and Business Conduct that applies to all of our directors, officers and employees, including our principal executive
officer and our principal financial and accounting officer. A copy of our Code of Ethics and Business Conduct has been posted to
the &quot;Investors&mdash;Corporate Governance&quot; section of our Internet website at http://www.netelement.com/. We will provide
a copy of our Code of Ethics and Business Conduct to any person without charge, upon written request to our Secretary, 3363 NE
163rd Street, Suite 705, North Miami Beach, Florida 33160, fax number (305) 508-5497, e-mail address investors@netelement.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BENEFICIAL OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">The table below contains information regarding
the beneficial ownership of our common stock as of May 6, 2015 by (i) each person who is known to us to beneficially own more than
5% of our common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and
named executive officers as a group. Except as otherwise noted below, each person or entity named in the following table has the
sole voting and investment power with respect to all shares of our common stock that he, she or it beneficially owns. Unless otherwise
indicated, the address of each beneficial owner listed below is c/o Net Element, Inc., 3363 NE 163rd Street, Suite 705, North Miami
Beach FL 33160.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold">Name and address of beneficial owner</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount and nature of beneficial ownership (number of shares of common stock beneficially owned)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent<BR> of class (1)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 58%; font-size: 10pt; text-align: left">Mike Zoi&nbsp;<BR> 4100 NE 2nd Ave, Suite 302,&nbsp;<BR> Miami, FL 33137</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; font-size: 10pt; text-align: right">6,437,663</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 3%; font-size: 10pt; text-align: center">(2)</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">13.56</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">MZ Capital, LLC (Delaware)&nbsp;<BR> 4100 NE 2nd Ave, Suite 302,&nbsp;<BR> Miami, FL 33137</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,102,029</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2.32</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">TGR Capital, LLC&nbsp;<BR> 4100 NE 2nd Ave, Suite 302,&nbsp;<BR> Miami, FL 33137</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,558,146</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7.50</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">MTZ Fund, LLC&nbsp;<BR> 4100 NE 2nd Ave, Suite 302,&nbsp;<BR> Miami, FL 33137</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,777,344</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.74</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Kenges Rakishev&nbsp;<BR> c/o SAT &amp; Company&nbsp;<BR> 241 Mukanova Street&nbsp;<BR> Almaty Kazakhstan 050008</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,677,835</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16.18</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Novatus Holding PTE. Ltd.&nbsp;<BR> 22B Duxton Hill&nbsp;<BR> Singapore 089605, Republic of Singapore</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,320,751</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15.43</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Oleg Firer&nbsp;<BR> c/o Net Element, Inc.&nbsp;<BR> 3363 NE 163rd Street, Suite 705,&nbsp;<BR> North Miami Beach, Florida 33160</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,380,655</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7.12</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Steven Wolberg&nbsp;<BR> c/o Net Element, Inc.&nbsp;<BR> 3363 NE 163rd Street, Suite 705,&nbsp;<BR> North Miami Beach, Florida 33160</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">892,862</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.88</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">James Caan&nbsp;<BR> 2791 Hutton Drive&nbsp;<BR> Beverly Hills, CA 90210</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">150,131</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.32</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Jonathan New&nbsp;<BR> c/o Net Element, Inc.&nbsp;<BR> 3363 NE 163rd Street, Suite 705,&nbsp;<BR> North Miami Beach, Florida 33160</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">266,137</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.56</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">David P. Kelley II&nbsp;<BR> 64 Horseshoe Road&nbsp;<BR> Darien, CT 06820</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">37,750</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(5)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.08</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">William Healy&nbsp;<BR> 16W281 83rd Street, Suite B&nbsp;<BR> Burr Ridge, IL 60527</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">75,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.16</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Drew Freeman&nbsp;<BR> 2542 Nassau Lane&nbsp;<BR> Fort Lauderdale. FL 33312</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.00</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Beno Distribution, Ltd.&nbsp;<BR> P.O. Box 146, Road Town,&nbsp;<BR> Tortola, British Virgin Islands VG 1110</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,538,737</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(6)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.56</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Cayman Invest S.A.&nbsp;<BR> A Little Denmark Complex&nbsp;<BR> 147 Main Street P.O. Box 4473&nbsp;<BR> Road Town, Tortola, D8 VG 1110</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,102,491</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(7)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.28</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Mayor Trans Ltd.&nbsp;<BR> 103 Sham Peng Tong Plaza, Victoria <BR>Mahe, Seychelles</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,018,688</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">(8)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8.47</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">All directors and executive officers as a group (8 persons)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,480,570</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26.30</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%; text-align: justify"><font style="font-size: 10pt">(1)</font></td>
    <td style="width: 96%"><font style="font-size: 10pt">Applicable percentage ownership is based on 47,460,032 shares of common stock outstanding as of May 6, 2015, together with securities exercisable or convertible into shares of common stock within 60 days of May 6, 2015 for each stockholder. Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with respect to securities. The shares issuable pursuant to the exercise or conversion of such securities are deemed outstanding for the purpose of computing the percentage of ownership of the security holder, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%; text-align: justify"><font style="font-size: 10pt">(2)</font></td>
    <td style="width: 96%"><font style="font-size: 10pt">All information regarding shares that may be beneficially owned by Mr. Zoi is based on information disclosed in Forms 3 and 4 filed by Mr. Zoi. Represents: (i) 144 shares of common stock held directly by Mr. Zoi; (ii) 1,102,029 shares of common stock held by MZ Capital, LLC (Delaware); (iii) 3,558,146 shares of common stock held by TGR Capital, LLC; and (iv) 1,777,344 shares of common stock held by MTZ Fund, LLC. Mr. Zoi shares with each of Enerfund, LLC, TGR Capital, LLC, MZ Capital LLC (Delaware) and MTZ Fund, LLC the power to vote or direct the vote, and to dispose or direct the disposition of, the respective shares of common stock beneficially owned by those entities.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%; text-align: justify"><font style="font-size: 10pt">(3)</font></td>
    <td style="width: 96%"><font style="font-size: 10pt">All information regarding shares that may be beneficially owned by Kenges Rakishev is based on information disclosed in a Schedule 13D/A filed jointly by Mr. Rakishev, Mark Global Corporation and Novatus Holding PTE. Ltd. with the Commission and on the information available to us. Mr. Rakishev may be deemed to have beneficial ownership of 7,677,835 shares of Common Stock consisting of (i) 357,084 shares of Common Stock held directly by Mr. Rakishev and (ii) 7,320,751 shares of common stock held directly by Novatus Holding PTE. Ltd. Mr. Rakishev has sole voting power and sole dispositive power over 357,084 shares of common stock and shared voting power and shared dispositive power over 7,320,751 shares of common stock.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%; text-align: justify"><font style="font-size: 10pt">(4)</font></td>
    <td style="width: 96%"><font style="font-size: 10pt">Includes 5,749 shares of Common Stock held by Mr. New&rsquo;s spouse and 10,749 shares of common stock held by Mr. New&rsquo;s son.</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font-size: 10pt">(5)</font></td>
    <td><font style="font-size: 10pt">Includes (a) 23,750 shares of common stock for serving as a director of the Company; and (b) 14,000 shares of common stock issuable upon exercise of warrants with an exercise price of $7.50 per share and an expiration date of October 2, 2017.</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font-size: 10pt">(6)</font></td>
    <td><font style="font-size: 10pt">Mr. Nurlan Abduov may be deemed to share beneficial ownership of the security held by Beno Distribution, Ltd. by virtue of his status as the sole shareholder of Beno Distribution, Ltd. All information regarding shares that may be beneficially owned by Mr. Abduov is based on information disclosed in Schedule 13D/A<b>&nbsp;</b>filed jointly by Mr. Abduov and Beno Distribution, Ltd.&nbsp;&nbsp; Mr. Abduov disclaimed beneficial ownership of such shares, except to the extent of his pecuniary interest therein.</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td>&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify"><font style="font-size: 10pt">(7)</font></td>
    <td><font style="font-size: 10pt">Mrs. Anashkhan Gabbazova may be deemed to share beneficial ownership of the security held by Cayman Invest S.A. by virtue of her status as the sole director and shareholder of Cayman Invest S.A.&nbsp;&nbsp;All information regarding shares that may be beneficially owned by Mrs. Anashkhan Gabbazova is based on information disclosed in Schedule 13D/A filed jointly by Mrs. Anashkhan Gabbazova and Cayman Invest S.A.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 4%"><font style="font-size: 10pt">(8)</font></td>
    <td style="width: 96%; text-align: justify"><font style="font-size: 10pt">Mr. Rufat Baratzada may be deemed to share beneficial ownership of the security held by Mayor Trans Ltd. by virtue of his status as the sole shareholder of Mayor Trans Ltd. All information regarding shares that may be beneficially owned by Mr. Baratzada is based on information disclosed in Schedule 13D filed jointly by Mr.Baratzada and Mayor Trans Ltd.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><B>DIRECTORS
AND EXECUTIVE OFFICERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The directors and executive
officers of the Company and their respective ages, and positions with the Company and certain business experience as of March 31,
2015 are set forth below. There are no family relationships among any of the directors or executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no material
legal proceedings to which any director or executive officer of the Company, or any associate of any director or executive officer
of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company
or any of its subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="width: 33%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>Name</b></font></td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 9%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>Age</b></font></td>
    <td style="width: 3%">&nbsp;</td>
    <td style="width: 52%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>Position</b></font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">Oleg Firer</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">37</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Chief Executive Officer &amp; Director</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">Steven Wolberg</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">55</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Chief Legal Officer &amp; Secretary</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">Jonathan New</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">54</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Chief Financial Officer</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">Kenges Rakishev</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">35</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Chairman</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">William Healy</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">50</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Director</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">Drew Freeman</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">57</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Director</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">David P. Kelley II</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">57</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Director</font></td></tr>
<tr>
    <td style="vertical-align: top"><font style="font-size: 10pt">James Caan</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">75</font></td>
    <td style="vertical-align: bottom">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">Director</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each of our directors
will hold office until our next annual meeting of stockholders at which directors are elected or until his successor is duly elected
and qualified. Executive officers serve at the discretion of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Oleg Firer, Chief
Executive Officer and Director.</B>&nbsp;Mr. Firer has served as Chief Executive Officer and a director of the Company since April
16, 2013. Previously, Mr. Firer served as Executive Chairman of Unified Payments, LLC from January 2011 until its acquisition by
the Company&rsquo;s subsidiary, TOT Group, Inc., on April 16, 2013. From July 2004 until December 2012, Mr. Firer served as President,
Chief Executive Officer and Secretary (and from May 2006 until December 2012 as Treasurer and from May 2008 until December 2012
as Chief Financial Officer) of Acies Corporation, a provider of payment processing solutions to small and medium size merchants
across the United States. Mr. Firer also served as a director of Acies Corporation from May 2005 until December 2012. Mr. Firer
served as the President of GM Merchant Solution, Inc. (from August 2002) and Managing Partner of GMS Worldwide, LLC (from August
2003) until their assets were acquired by Acies Corporation in June 2004. From November 2002 to December 2003, Mr. Firer served
as the Chief Operating Officer of Digital Wireless Universe, Inc. From December 2001 to November 2002, Mr. Firer served as the
Managing Partner of CELLCELLCELL, LLC. From March 1998 to December 2001, Mr. Firer served as Vice President of SpeedUS Corp. Mr.
Firer studied Computer Science at New York Technical College from 1993 to 1995. Mr. Firer currently serves as a member of Star
Capital Management, LLC and Star Equities, LLC, Florida-based investment group. In addition, Mr. Firer serves as a board member
of InList, RealConnex and several non-for-profit organizations. The Company believes that Mr. Firer&rsquo;s leadership roles in
various payment processing companies makes him qualified to serve as a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Steven Wolberg,
Chief Legal Officer and Secretary</B>. Mr. Wolberg has been Chief Legal Officer and Secretary of the Company since April 16, 2013.
Previously, Mr. Wolberg served in various capacities with Acies Corporation from approximately January 2009 until December 2012,
including as a consultant from approximately January 2009 until October 2009, as a director from October 30, 2009 until December
2012 and as Chief Strategy Officer from March 1, 2010 until December 2012. Mr. Wolberg currently operates a solo law practice in
Newton, Massachusetts, Attorney Steven Wolberg, which he has operated since January 1997. Mr. Wolberg served as Chief Counsel and
Vice President of Corporate Development for Mascot Networks in Cambridge, Massachusetts from January 2000 to September 2001. Since
September 1996, Mr. Wolberg has served as president of Oakland Properties, Inc., a real estate development company. From February
1993 to December 1994, Mr. Wolberg served as an attorney in the real estate and corporate divisions of Brown and Rudnick in Boston,
Massachusetts. From March 1988 to November 1991, Mr. Wolberg was a partner with the law firm of Jordaan and Wolberg in Johannesburg,
South Africa. From January 1986 to February 1988, Mr. Wolberg was employed as an attorney with Goodman and North in Johannesburg,
South Africa. Mr. Wolberg also currently owns and serves as the Managing Member of Prime Portfolios, LLC, which holds a private
investment portfolio of payment processing companies. Mr. Wolberg received his Bachelor of Arts from the University of Witwatersrand
in Johannesburg, South Africa, his Bachelors of Laws from the University of Witwatersrand, in Johannesburg, South Africa, and his
Juris Doctorate from the New England School of Law in Boston, Massachusetts. Mr. Wolberg is a member of the Massachusetts Bar Association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Jonathan New, Chief
Financial Officer</B>. Mr. New has been Chief Financial Officer of the Company since October 2, 2012. Mr. New was Chief Financial
Officer of the Company&rsquo;s predecessor, Net Element, from March 10, 2008 until October 2, 2012. From 2001 to 2003, Mr. New
was Chief Operating Officer of Ener1, Inc. From 2004 until it was sold in 2006, Mr. New owned and operated Wholesale Salon Furniture
Corp.com, which imported and distributed salon equipment. Thereafter, until joining Net Element, Mr. New provided services to public
companies on a variety of corporate accounting, reporting and audit related issues. Prior to joining Ener1, Inc. in 2001, Mr. New
held finance manager and chief financial officer positions with companies including H&auml;agen-Dazs, Virtacon (a web development
company), RAI Credit Corporation (private label credit card company) and Prudential of Florida. Mr. New obtained his BS in Accounting
from Florida State University and began his career with Accenture. He is a member of the Florida Institute of Certified Public
Accountants and the American Institute of Certified Public Accountants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Kenges Rakishev,
Chairman</B>. Mr. Rakishev has been a director of the Company and Chairman of the Company&rsquo;s Board of Directors since October
2, 2012. Mr. Rakishev served as a director of the Company&rsquo;s predecessor, Net Element, from April 23, 2012 until October 2,
2012. Mr. Rakishev is one of the Forbes Top 15 wealthiest, most influential and progressive business leaders of the Republic of
Kazakhstan with significant investments in banking, finance, insurance, information technology, oil &amp; gas, mining, manufacturing
and retail business sectors worldwide. Mr. Rakishev is a large shareholder and member of the board of the largest bank in Kazakhstan,
Kazkommertsbank (KASE:&nbsp;KKGB), with over US$250 billion in total assets, large shareholder and Chairman of&nbsp;<FONT STYLE="color: #1C1C1C">SAT
&amp; Company (KASE: SATC), a diversified industrial holding</FONT>, among his numerous other investments.<FONT STYLE="color: #1C1C1C">Throughout
his career, Kenges has served in several notable positions in the public sector including</FONT>&nbsp;Vice-President of the Union
of Chambers of Commerce of the Republic of Kazakhstan, Vice-President of The Boxing Association of Republic of Kazakhstan and Vice-President
of the Asian Boxing Confederation.&nbsp;Mr. Rakishev holds a B.A. (Law) from the Kazakh State Law Academy and a B.A. (International
Economics) from the Kazakh Economic University. Mr. Rakishev also has an AMP Diploma from Oxford University. We believe that Mr.
Rakishev&rsquo;s international business leadership and relationships, combined with his extensive knowledge and unique perspectives
of global business opportunities, qualifies him to serve as a Director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>William Healy, Director</B>.
Mr. Healy is an accomplished financial services industry veteran with more than 24 years of merchant financing and electronic payments
industry experience. Mr. Healy is currently the President of Funds4Growth, a leading investment firm focused on financing of payment
service providers in the United States. Since launching Funds4Growth, Mr. Healy has successfully structured and financed in excess
of $150 million in merchant base loans. Prior to his tenure at Funds4Growth, Mr. Healy founded MBF Leasing, LLC in November of
2003, where he was responsible for strategic planning along with the financial and operational management of MBF Leasing. Prior
to that, Mr. Healy spent 13 years with the CIT Group, Inc., where he was the President of CIT&rsquo;s Lease Finance Group out of
Chicago, Illinois, overseeing more than 150 employees involved in over 225,000 leasing transactions, and in excess of $125 million
in merchant base financings. Prior to joining CIT, Mr. Healy held several senior level positions with NewCourt Financial, including
Chief Operating Officer of the Specialty Finance Division. He is a graduate of the University of Notre Dame with a Bachelor&rsquo;s
degree in Accounting. We believe that Mr. Healy&rsquo;s extensive knowledge in the payments industry qualifies him to serve as
a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Drew J. Freeman,
Director.&nbsp;</B>Mr. Freeman is an accomplished industry veteran with more than 30 years of electronic payments industry experience.
Mr. Freeman is currently the President of Freeman Consulting, Inc., a payments consulting firm that works with private equity and
ISOs. Prior to that, Mr. Freeman served as President of Merchant Data Systems from 2009 to 2013, Group Executive at Chase Paymentech
from 2006 to 2007, and Executive Vice President at JP Morgan Chase-First Data JV (Chase Merchant Services) from 2000 to 2006. Mr.
Freeman earned a business degree from the University of Miami in 1980. We believe that Mr. Freeman&rsquo;s extensive knowledge
in the payments industry qualifies him to serve as a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>David P. Kelley
II, Director</B>. Mr. Kelley has served as a director of the Company since August 2010. Mr. Kelley is a partner of Zenith Capital
Partners, LLC, a private equity firm located in New York, where he has served since 2006, and a founding partner of Andover Partners
Strategic Security Solutions, LLC (AP-S3, LLC), a security and intelligence consulting firm, where he has served since December
2009. From 1985 to 1988, Mr. Kelley was a tax lawyer in the law firm of Brown and Wood located in New York. From 1988 to 1991,
Mr. Kelley worked at Merrill Lynch in New York, where he was promoted to a Director of the Global Swap Group. From 1991 to 1994,
Mr. Kelley was a Managing Director at UBS Securities in New York, in charge of the U.S. Structured Products Group. From 1994 to
1998, Mr. Kelley was a Managing Director and Head of the Global Structured Products Group at Deutsche Bank Securities in New York.
From 1998 to 2006, Mr. Kelley was a Managing Director of Integrated Capital Associates, a private equity firm located in New York.
Mr. Kelley is currently a Director of the Apex-Guotai Junan Greater China Fund, headquartered in Hong Kong. Mr. Kelley graduated
from Emory University with a BA degree in 1979. He graduated with a J.D. degree from Temple University School of Law in 1983, and
he received an L.L.M. in Taxation from New York University School of Law in 1985. We believe that Mr. Kelley&rsquo;s experience
as a consultant and member of multiple different oversight bodies, provides him with the necessary skills to be qualified to serve
as a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>James Caan, Director</B>.
Mr. Caan has been a director of the Company since October 2, 2012. Mr. Caan served as a director of the Company&rsquo;s predecessor,
Net Element, from January 1, 2011 until October 2, 2012. Mr. Caan also has been Chairman of the Advisory Board of Openfilm since
October 12, 2009. Pursuant to Mr. Caan&rsquo;s advisory agreement with Openfilm, Mr. Zoi and Mr. Kozko are obligated to vote their
shares in the Company in favor of Mr. Caan as a director of the Company until December 14, 2013. Mr. Caan is an actor and director,
having worked in the film and television industries for over 40 years, and he is one of the entertainment industry&rsquo;s most
renowned talents, having starred in over 80 films. We believe that Mr. Caan&rsquo;s position with Openfilm, as well as his tenure
working as an actor and director in the film and television industry, qualifies him to serve as a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Leadership Structure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="font-size: 10pt">While
the Board does not currently have a policy on whether or not the roles of Chairman of the Board and Chief Executive Officer should
be separate, two individuals currently separately serve as Chairman of the Board and Chief Executive Officer of the Company. The
Board believes that it should be free to decide from time to time in any manner that is in the best interests of the Company and
its shareholders</FONT> <FONT STYLE="font-size: 10pt">whether or not the roles of Chairman of the Board and Chief Executive Officer
should be separate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risk Oversight Functions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
Board, in fulfilling its oversight role, focuses on the adequacy of our enterprise-wide risk management policies and procedures.
The audit committee has been designated to take the lead in overseeing risk management at the Board level. The audit committee
is responsible for discussing guidelines and policies to govern the processes by which risk assessment and management is undertaken
and handled, and discussing with management the Company's major financial risk exposures and the steps management takes to monitor
and control such exposures.</FONT> <FONT STYLE="font-size: 10pt">Although the Board's primary risk oversight has been assigned
to the audit committee, the full Board also receives information about the most significant risks that the Company faces. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Meetings and Committees of the
Board </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
held 1 meeting and acted by unanimous written consent in lieu of a meeting 7 times during the fiscal year ended December 31, 2014.
All directors attended 75% or more of all of the meetings of the Board of Directors in 2014.<B> </B>The Board currently includes
four nonemployee, independent members &ndash; David P. Kelley II, William Healy, Drew Freeman, and James Caan. Each of Messrs.
Kelley, Healy, Freeman, and Caan is an &quot;independent director&quot; as defined under NASDAQ Listing Rule 5605(a)(2). A majority
of our Board members are independent directors, as four out of the six members of the Board qualify as independent under the NASDAQ
listing standards and the rules of the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 26, 2012,
the Board established its audit committee, compensation committee and nominating and governance committee, the composition and
responsibilities of which are described below. Each committee operates pursuant to a written charter, which is reviewed each year.
All committee charters are available in the &quot;Investors&mdash;Corporate Governance&quot; section of our Internet website at
http://www.netelement.com/. The audit committee held 6 meetings during the fiscal year ended December 31, 2014. The compensation
committee acted by unanimous written consent in lieu of a meeting 2 times during the fiscal year ended December 31, 2014. The nominating
and governance committee acted by unanimous written consent in lieu of a meeting 1 time during the fiscal year ended December 31,
2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board has a separately-designated
standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended
(the &quot;Exchange Act&quot;), which is currently comprised of David P. Kelley II (audit committee chairman), Drew Freeman, William
Healy, and James Caan. The audit committee's responsibilities and other matters related to the audit committee are discussed below
under &quot;Audit Committee Report.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Messrs. Kelley, Healy
and Caan serve on the compensation committee of the Board of Directors. The Board has adopted a written compensation committee
charter, which is reviewed each year. The compensation committee is responsible for determining, or recommending to the Board for
determination, the compensation of the executive officers and directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Messrs. Kelley, Healy
and Caan serve on the nominating and governance committee of the Board of Directors. The nominating and governance committee's
responsibilities and other matters related to the nominating and governance committee are discussed below under &quot;Director
Nominations.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Nominations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The nominating and
governance committee of the Board operates pursuant to a written charter, which is reviewed each year. The nominating and governance
committee is responsible for the identification of individuals qualified to become members of the Board, the selection or recommendation
of the director nominees for annual meetings of shareholders, the selection of director candidates to fill any vacancies on the
Board, recommendation of corporate governance principles and related responsibilities. Criteria considered by the nominating and
governance committee in identifying and evaluating director nominees include experience in corporate governance, experience in,
or relationships within, the Company's industries, academic or professional expertise, reputation for high moral and ethical standards,
business and professional standing that will add to the Board's stature, business experience, skills and time availability, and
the diversity of the skills, background and experience of Board members as a whole. In addition, it is a primary objective of the
nominating and governance committee to assure that the Board and its committees satisfy the independence requirements of NASDAQ
and any other applicable self-regulatory or regulatory requirements. The nominating and governance committee's policy with regard
to the consideration of diversity in identifying director nominees requires the committee to consider the diversity of the skills,
background and experience of Board members as a whole as one of many other criteria that may be considered in recommending candidates
for election or appointment to the Board; however, this policy does not require that the composition of the Board be diverse in
any manner or that persons identified as director nominees must promote or enhance the diversity of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The nominating and
governance committee will consider director candidates recommended by shareholders and will evaluate such candidates on the same
basis as candidates recommended by other sources. Shareholder recommendations must meet the requirements set forth in the Company's
bylaws, including providing all of the information specified in the bylaws. The notice must be submitted to the Secretary of the
Company, at the principal executive offices of the Company, 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160.
In order to ensure review and consideration of any shareholder's recommendation, the notice generally must be received not less
than 60 days nor more than 90 days prior to the first anniversary of this year's annual meeting. However, if next year's annual
meeting is to be held more than 30 days before or 60 days after the anniversary of this year's annual meeting, notice must be received
no later than the later of 70 days prior to the date of the meeting or the 10th day following the Company's public announcement
of next year's annual meeting date. The Secretary will present such recommendations to the nominating and governance committee.
The nominating and governance committee will identify potential candidates through recommendations from the Company's officers,
directors, shareholders and other appropriate third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2014, the Company
did not pay a fee to any third party to identify or evaluate or assist in identifying or evaluating potential nominees. Although
the Company is not currently paying a fee to any third party to identify or evaluate or assist in identifying or evaluating potential
nominees, the Company may engage a third-party search firm in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Executive Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table further summarizes the
compensation paid to the Company's directors for service as a director during 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid">Director Name</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fees earned or paid in cash ($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock awards ($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option awards ($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-equity incentive plan compensation ($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-qualified deferred compensation earnings&nbsp;($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All&nbsp;other <BR> compensation&nbsp;($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total&nbsp;($)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; font-size: 10pt; text-align: left">Kenges Rakishev</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">11,250</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">52,050</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right">63,300</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">David P. Kelley II</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">53,750</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">52,050</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">105,800</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">James Caan</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">7,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">52,050</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">59,550</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Felix Vulis (resigned May 21, 2014)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2,083</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">13,013</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">15,096</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">William Healy</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">5,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">26,025</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">31,025</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Drew J. Freeman</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2,917</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">30,363</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">33,280</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information for the fiscal years ended December 31, 2014 and 2013 with respect to all compensation paid to or earned
by our Chief Executive Officer and our two most highly compensated executive officers other than our Chief Executive Officer who
were serving as executive officers at the end of the last completed fiscal year. We refer to these individuals as the &ldquo;named
executive officers.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center">&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center">&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center">&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center"><font style="font-size: 10pt">Stock</font></td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center"><font style="font-size: 10pt">Option</font></td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center"><font style="font-size: 10pt">All Other</font> <BR>
Compensation</td>
    <TD NOWRAP>&nbsp;</td>
    <TD NOWRAP>&nbsp;</td>
    <td nowrap colspan="2" style="text-align: center">&nbsp;</td>
    <TD NOWRAP>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid"><font style="font-size: 10pt">Name and Principal Position</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Year</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Salary ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Bonus ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Awards ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Awards ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid"><font style="font-size: 10pt"> ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt">Total ($)</font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%"><font style="font-size: 10pt">Oleg Firer, Chief</font></td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">2014</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">300,000</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">300,000</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">2,175,970</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">29,722</font></td>
    <TD STYLE="width: 1%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 1%"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 6%; text-align: right"><font style="font-size: 10pt">2,805,692</font></td>
    <TD STYLE="width: 1%">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><font style="font-size: 10pt">Executive Officer of Net Element</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">2013</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">170,125</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">212,500</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">57,521</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">440,146</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><font style="font-size: 10pt">Steven Wolberg, General Counsel and</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">2014</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">200,000</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">222,026</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">11,722</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">433,748</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><font style="font-size: 10pt">Secretary of Net Element</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">2013</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">114,328</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">8,126</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">122,454</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD NOWRAP><font style="font-size: 10pt">Irina Bukhanova, Chief Financial Officer</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">2014</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">136,286</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">4,536</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">156,087</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">296,909</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><font style="font-size: 10pt">of Russia</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">2013</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">97,446</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">5,116</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">-</font></td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right"><font style="font-size: 10pt">102,562</font></td>
    <TD>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>Outstanding Equity Awards</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Outstanding equity
awards at December 31, 2014 consists of 1,563,509 shares of restricted stock granted to key executives for 2014 and 2015 base stock
awards. We will record a compensation charge of $3,739,159 throughout 2015 and 2016 as the 1,563,509 shares vest each quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Section 16(a) Beneficial Ownership Reporting
Compliance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section 16(a) of the
Securities Exchange Act of 1934 requires our directors and officers and persons who beneficially own more than ten percent of a
registered class of our equity securities to file with the Commission initial reports of ownership and reports of change in ownership
of common stock and other equity securities of the Company. Directors, officers and greater than ten percent stockholders are required
by Commission regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, the following persons
have failed to file on a timely basis the identified reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="vertical-align: bottom; width: 37%; border-bottom: black 1pt solid"><font style="font-size: 10pt">Name and Relationship</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 20%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt">Number </font><br>
<font style="font-size: 10pt">of late reports</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 20%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt">Transactions not </font><br>
<font style="font-size: 10pt">timely reported</font></td>
    <td style="vertical-align: top; width: 1%">&nbsp;</td>
    <td style="vertical-align: top; width: 20%; border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt">Known failures to</font><br>
<font style="font-size: 10pt">file a required form</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Mike Zoi, 10% owner</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">2</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">6</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Oleg Firer, Chief Executive Officer &amp; Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Steven Wolberg, Chief Legal Officer and Secretary</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">James Caan, Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Dmitry Kozko, former President &amp; former Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">2</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">William Healy, Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">David P. Kelley II, Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Felix Vulis, former Director</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">2</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">2</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom"><font style="font-size: 10pt">Kenges Rakishev, Director and 10% owner</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">1</font></td>
    <td>&nbsp;</td>
    <td style="vertical-align: top; text-align: center"><font style="font-size: 10pt">0</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Certain Relationships and Related Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 25, 2013,
the Company entered into a contribution agreement with T1T Lab and T1T Group, LLC, pursuant to which, on September 25, 2013, the
Company contributed to T1T Lab all of its membership and participation interests in its subsidiaries Openfilm, LLC, Motorsport,
LLC, Splinex, LLC, LegalGuru, LLC and MUSIC 1 LLC (aka OOO Music1) (collectively, the &ldquo;Disposed Subsidiaries&rdquo;). The
Disposed Subsidiaries constitute all of the Company&rsquo;s interests in online media businesses and operations (referred to herein
collectively as the Company&rsquo;s &ldquo;entertainment assets&rdquo;). Pursuant to the contribution agreement, the Company agreed
to make an initial capital contribution to T1T Lab in the amount of $1,259,000, payable in full or in installments when requested
by T1T Lab but in no event later than within the 12-month period after September 25, 2013 (unless such period is mutually extended
in writing by the Company and T1T Group, LLC). Subject to T1T Lab&rsquo;s prior written approval, a portion of the Company&rsquo;s
initial capital contribution could have been made in the form of future services provided by the Company, with the value of such
services to be agreed upon in writing between the Company and T1T Group, LLC prior to providing such services. The amount of the
Company&rsquo;s initial capital contribution is a negotiated amount required for T1T Lab to acquire the Disposed Subsidiaries.
In exchange for such contributions, the Company was issued a 10% membership interest in T1T Lab and T1T Lab assumed $2,162,158
in liabilities (including $2,000,000 owed by the Company to K 1 Holding Limited pursuant to a promissory note dated May 13, 2013)
related to the Disposed Subsidiaries. In addition, all intercompany loans payable by the Disposed Subsidiaries to the Company,
on the one hand, and by the Company to the Disposed Subsidiaries, on the other hand, were forgiven by the Company and by T1T Lab
(as applicable). Total intercompany loans forgiven by the Company (net of the total intercompany loans forgiven by the Disposed
Subsidiaries) was approximately $9,864,602. Such intercompany loans forgiveness did not have an impact of the profit and loss of
the Company. Further, pursuant to the contribution agreement, T1T Group, LLC agreed to contribute to T1T Lab from time to time
when requested by T1T Lab such services and/or cash as determined by T1T Group, LLC in its sole and absolute discretion in order
to manage and operate the Disposed Subsidiaries and their respective businesses. In exchange for such contributions, T1T Group,
LLC was issued a 90% membership interest in T1T Lab. From September 25, 2013 to February 11, 2014, the Company indirectly owned
a minority interest in the Disposed Subsidiaries through its 10% membership interest in T1T Lab, LLC. On February 11, 2014, the
Company executed an Assignment of Membership Interest in favor of T1T Group, LLC. Pursuant to such assignment, the Company transferred
to T1T Group, LLC all of the Company&rsquo;s Interests in T1T Lab in consideration for the Company being released from all of its
obligations to T1T Lab (including the obligations to make capital contributions to T1T Lab. Upon such assignment, the Company has
no further interests or obligations to T1T Lab, and T1T Group, LLC now owns a 100% membership interest in T1T Lab. Oleg Firer,
previously appointed as an &ldquo;Executive&rdquo; of T1T LAB, LLC, resigned his position with that entity effective February 11,
2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
Company&rsquo;s contribution of the Disposed Subsidiaries, the Company now has only one reportable business segment, consisting
of mobile commerce and payment processing. The Company disposed of its entertainment assets in order to focus its business operations
on mobile payments, transactional services and related technologies and to reduce the significant expenses associated with developing
and maintaining the entertainment assets. T1T Group, LLC is wholly-owned by Enerfund, LLC (which is wholly-owned by Mike Zoi, a
stockholder of the Company).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In September 2012,
TOT Money entered into a factoring agreement with Alfa-Bank. Pursuant to the agreement, as amended (as amended and supplemented
prior to the date hereof by supplement agreements, the &ldquo;Factoring Credit Facility&rdquo;), TOT Money assigned to Alfa-Bank
its accounts receivable as security for financing for up to 300 million Russian rubles (approximately $9.8 million in U.S. dollars
at time of signing). The amount loaned by Alfa-Bank pursuant to the Factoring Credit Facility with respect to any particular account
receivable is limited to 80% of the amount of the account receivable assigned to Alfa-Bank. Pursuant to the Factoring Credit Facility,
Alfa-Bank is required to track the status of TOT Money&rsquo;s accounts receivable, monitor timeliness of payment of such accounts
receivable and provide related services. Interest on the factoring arrangement ranged from 9.70% to 11.95% annually of the amounts
borrowed, with servicing fees ranging from 10 Russian rubles (approximately $0.33 in U.S. dollars) to 100 Russian rubles (approximately
$3.28 million in U.S. dollars) per account receivable. TOT Money&rsquo;s obligations under the Factoring Credit Facility also are
secured by a guarantee given by AO SAT &amp; Company. AO SAT &amp; Company is an affiliate of Kenges Rakishev, who is the Chairman
of the Board of Directors of the Company and a shareholder. The Factoring Credit Facility expired on April 20, 2014 and was repaid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 17, 2014,
TOT Money entered into the Supplement Agreement No. 14 and the Supplement Agreement No. 15 with Alfa-Bank (&ldquo;Amendment No.
15&rdquo;), which renewed and amended the Factoring Credit Facility. Pursuant to such amendments, the Factoring Credit Facility
was renewed and will expire on June 30, 2016, the maximum aggregate limit of financing (secured by TOT Money&rsquo;s accounts receivable)
to be provided by Alfa-Bank to TOT Money under the Factoring Credit Facility was increased to 415 million Russian rubles (approximately
US$ 10,814,614 based on the currency exchange rate on September 17, 2014), Alfa-Bank&rsquo;s compensation fees (commissions) for
providing financing to TOT Money was amended to be computed as a financing rate that ranges from 13.22% to 14.50% of the amounts
borrowed, depending upon the number of days in the period from the date financing is provided until the date the applicable account
receivable is paid, and the maximum amount of financing on account of the monetary claim assigned by TOT Money to debtor was increased
from 80% to 100% of the assigned amount of monetary claim against which the financing is affected. This financing is a factoring
facility in which TOT Money could assign to the bank certain (but not all) of its accounts receivable suitable to the lender under
such facility as security for financing. &nbsp;Accordingly, the amounts of our draws under such facility from time to time will
depend on the amounts of the accounts receivable suitable for such assignment as of the time we choose to draw under such facility.&nbsp;
We have not drawn any funds under such credit facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August 2012, TOT
Money entered into a Credit Agreement with Alfa-Bank. Pursuant to the Credit Agreement, Alfa-Bank agreed to provide a line of credit
to TOT Money with the credit line limit set at 300 million Russian rubles (approximately $9.8 million in U.S. dollars). The interest
rate on the initial amount borrowed of 53.9 million rubles (approximately $1.8 million in U.S. dollars) under the Credit Agreement
is 3.55% per annum. The loan was secured by 55.0 million rubles of restricted cash (approximately $1.8 million in U.S. dollars).
Alfa-Bank had the unilateral right to change the interest rate on amounts borrowed under the Credit Agreement from time to time
in the event of changes in certain market rates or in Alfa-Bank&rsquo;s reasonable discretion, provided that the interest rate
may not exceed 14% per annum. Interest must be repaid on a monthly basis on the 25th of each month. Amounts borrowed under the
Credit Agreement must be repaid within six months of the date borrowed. TOT Money&rsquo;s obligations under the Credit Agreement
are secured by a pledge of TOT Money&rsquo;s deposits in its deposit account with Alfa-Bank and by a guarantee given by AO SAT
&amp; Company. The line of credit expired on May 20, 2014 and we did not renew this Credit Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 24, 2014,
TOT Money entered into a financing agreement with Bank Otkritie, one of Russia&rsquo;s largest private listed banks. This financing
is complementary to the Company&rsquo;s Alfa-Bank factoring facility and provides additional flexibility and capacity to expand
our presence in Russia&rsquo;s transactional services market. In conjunction with the Alfa-Bank factoring agreement, TOT Money
will have approximately $15 million of available credit to help fund its growth. Per the three-year Agreement, TOT Money will assign
to Bank Otkritie its accounts receivable as security for financing in an aggregate amount of up to 200 million Russian rubles (approximately
USD $4.2 million based on the currency exchange rate as of the close of business November 17, 2014) provided by Bank Otkritie to
TOT Money. Included in this Agreement, Moscow-based Bank Otkritie will track the status of TOT Money&rsquo;s account receivables,
monitor timeliness of payment of such accounts receivable, and provide related services. Oleg Firer, our Chief Executive Officer,
has personally guaranteed our financing agreement with Bank Otkritie. This financing is a factoring facility in which TOT Money
could assign to the bank certain (but not all) of its accounts receivable suitable to the lender under such facility as security
for financing. &nbsp;Accordingly, the amounts of our draws under such facility from time to time will depend on the amounts of
the accounts receivable suitable for such assignment as of the time we choose to draw under such facility.&nbsp; We have not drawn
any funds under such credit facility. Oleg Firer, our Chief Executive Officer, has personally guaranteed this loan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In March of 2015, Star
Equities LLC, a company associated with our CEO, Oleg Firer, provided a loan to the Company in the amount of $125,000 to pay the
invoices from the Company&rsquo;s investor relations consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Audit Committee Report</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audit committee
of the Board consists of four non-employee directors, David P. Kelley II (audit committee chairman), Drew Freeman, William Healy
and James Caan. The audit committee operates under a written charter, which is reviewed each year and is available in the &quot;Investors&mdash;Corporate
Governance&quot; section of our Internet website at http://www.netelement.com/. The Board of Directors has determined that David
P. Kelley II is financially sophisticated as described in NASDAQ Listing Rule 5605(c)(2) and qualifies as an &quot;audit committee
financial expert&quot; as defined in Item 407(d)(5) of Regulation S-K. We believe that the audit committee's current member composition
satisfies the rules of NASDAQ that govern audit committee composition, including the requirement that audit committee members all
be &quot;independent directors&quot; as that term is defined by NASDAQ Listing Rule 5605(a)(2).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audit committee
monitors and oversees the Company's accounting and financial reporting process on behalf of the Board, reviews the independence
of its independent registered public accounting firm and is responsible for approving the engagement of its independent registered
public accounting firm for both audit services and permitted non-auditing services, the scope of audit and non-audit assignments
and fees related to all of the foregoing, and also is responsible for reviewing the accounting principles used in financial reporting,
internal financial auditing procedures, the adequacy of the internal control procedures and critical accounting policies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management is responsible
for the Company's financial statements, systems of internal control and the financial reporting process. The independent registered
public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements in
accordance with standards of the Public Company Accounting Oversight Board and issuing reports thereon. The audit committee's responsibility
is to monitor and oversee these processes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audit committee
has implemented procedures to ensure that during the course of each fiscal year it devotes the attention it deems necessary or
appropriate to fulfill its oversight responsibilities under the audit committee's charter. In this context, the audit committee
discussed with Daszkal Bolton LLP the results of its audit of the Company's financial statements for the year ended December 31,
2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Specifically, the audit
committee has reviewed and discussed with the Company's management the audited financial statements, management's assessment of
the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting.
In addition, the audit committee discussed with the independent registered public accounting firm the matters required to be discussed
by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the
Public Company Accounting Oversight Board in Rule 3200T, and any other matters required to be discussed under generally accepted
auditing standards. These discussions included the scope of the independent registered public accounting firm's responsibilities,
significant accounting adjustments, any disagreement with management and a discussion of the quality (not just the acceptability)
of accounting principles, reasonableness of significant judgments and the clarity of disclosures in the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The independent registered
public accounting firm provided the audit committee with the written disclosures and the letter required by applicable requirements
of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee
concerning independence, and the audit committee discussed with the independent registered public accounting firm that firm's independence.
During fiscal year 2014, the Company retained its former independent registered public accounting firm, Daszkal Bolton, LLP, for
the audit of the fiscal year 2014 financial statements and the reviews of the Company's 2014 quarterly reports on Form 10-Q.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on the reviews
and discussions referred to above, the audit committee recommended to the Board that the audited financial statements, together
with Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2014 for filing with the Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Submitted by the Audit
Committee of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 50%; text-align: justify">&nbsp;</td>
    <td style="width: 50%; text-align: justify"><font style="font-size: 10pt">David P. Kelley II, Chairman</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify"><font style="font-size: 10pt">Drew Freeman</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify"><font style="font-size: 10pt">William Healy</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: justify">&nbsp;</td>
    <td style="text-align: justify"><font style="font-size: 10pt">James Caan.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL 1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Six directors, which
will constitute the entire Board, are to be elected at the annual meeting to hold office until the annual meeting of shareholders
next succeeding their election and until their respective successors are elected and qualified or as otherwise provided in the
bylaws of the Company. The Board has designated the persons listed below to be nominees for election as directors. Each of the
nominees is currently serving as a director of the Company. Each of the nominees has consented to being named in the proxy statement
and to serve if elected. The Company has no reason to believe that any of the nominees will be unavailable for election. However,
should any nominee become unavailable, the Board may designate a substitute nominee or authorize a lower number of directors. Each
proxy will be voted for the election to the Board of all of the Board's nominees unless authority is withheld to vote for all or
any of those nominees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 63%; border-bottom: Black 1pt solid; padding-right: 0.8pt"><font style="font-size: 10pt"><b>Name</b></font></td>
    <TD STYLE="width: 3%; padding-right: 0.8pt">&nbsp;</td>
    <TD STYLE="width: 34%; border-bottom: Black 1pt solid; padding-right: 0.8pt"><font style="font-size: 10pt"><b>Director Since</b></font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><font style="font-size: 10pt">Oleg Firer</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">April 2013</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top"><font style="font-size: 10pt">Kenges Rakishev</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">October 2012</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><font style="font-size: 10pt">David P. Kelley II</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">August 2010</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top"><font style="font-size: 10pt">James Caan</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">October 2012</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><font style="font-size: 10pt">Drew Freeman</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">May 2014</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top"><font style="font-size: 10pt">William Healy</font></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</td>
    <td style="vertical-align: top"><font style="font-size: 10pt">June 2014</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">For biographical and other information (including
their principal occupation for at least the past five years) regarding the director nominees, see &quot;DIRECTORS AND EXECUTIVE
OFFICERS.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Required Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The nominees for director
will be elected by a plurality of the votes cast by the holders of shares present in person or represented by proxy at the annual
meeting and entitled to vote. Abstentions and broker non-votes are not counted in determining the number of shares voted for or
against any nominee for director. As a result, abstentions and broker non-votes have no effect on Proposal 1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>The Board recommends a vote FOR the election
of each of the nominees listed above.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL 2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APPROVAL OF AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK TO 300 MILLION SHARES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Board has recommended that the Company's
shareholders approve an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the number of
shares of authorized common stock to 300 million shares. A copy of the proposed Certificate of Amendment to the Company's Amended
and Restated Certificate of Incorporation is attached as Appendix &quot;A&quot; hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Reason for the Increase of Authorized
Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board believes
that an increase of the number of shares of authorized common stock is necessary in anticipation of future capital-raising transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Effect of the Increase of Authorized
Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The additional shares
of common stock will have the same rights as the presently authorized shares, including the right to cast one vote per share of
common stock. Although the authorization of additional shares will not, in itself, have any effect on the rights of any holder
of our common stock, the future issuance of additional shares of common stock (other than by way of a stock split or dividend)
would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per
share of existing stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At present, the Board
of Directors has no immediate plans to issue the additional shares of common stock to be authorized by Proposal 2. However, it
is possible that some of these additional shares could be used in the future for various other purposes without further stockholder
approval, except as such approval may be required in particular cases by our charter documents, applicable law or the rules of
any stock exchange or other market on which our securities may then be listed. These potential purposes may include: raising capital,
providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies, and
expanding the Company&rsquo;s business or product lines through the acquisition of other businesses or products. For such potential
purposes, the Company filed on October 16, 2014 a shelf registration statement (the &ldquo;Shelf Registration Statement&rdquo;)
with the SEC for an aggregate offering amount of the Company&rsquo;s securities with a value of up to $50,000,000, consisting of
a combination of the shares of the Company&rsquo;s common stock and preferred stock, the warrants to purchase shares of common
stock of the Company, the units comprised of one or more of the other classes of securities in any combination and the subscription
rights to purchase common stock, preferred stock or other securities in any combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We could also use the
additional shares of common stock that will become available to oppose a hostile takeover attempt or to delay or prevent changes
in control or management of the Company. Although the proposal to increase the authorized common stock has not been prompted by
the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at the Company), nevertheless,
stockholders should be aware that Proposal 2 could facilitate future efforts by us to deter or prevent changes in control of the
Company, including transactions in which stockholders of the Company might otherwise receive a premium for their shares over then
current market prices. However, the Board of Directors has a fiduciary duty to act in the best interests of the Company's stockholders
at all times.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Required Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proposal to approve
an amendment to the Company's Amended and Restated Certificate of Incorporation to increase the number of shares of authorized
common stock to 300 million shares will be approved if a majority of the outstanding shares entitled to vote on the proposal vote
for approval of Proposal 2. As a result, abstentions and broker non-votes will have the same effect as a vote against Proposal
2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Board recommends
a vote FOR the proposal to approve an amendment to the Company's Amended and Restated Certificate of Incorporation to increase
the number of shares of</B> <B>authorized common stock to 300 million shares.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL 3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>APPROVAL OF THE ISSUANCE BY THE COMPANY,
FOR PURPOSES OF THE NASDAQ LISTING RULES 5635(a) AND 5635(d), OF COMMON STOCK ISSUED AND ISSUABLE PURSUANT TO THE TERMS OF THE
CERTIFICATE OF DESIGNATIONS OF THE PREFERRED STOCK UPON CONVERSION, AMORTIZATION, PAYMENT OF DIVIDENDS, AS PART OF THE MAKE-WHOLE
AMOUNT OR OTHERWISE OF, OR WITH RESPECT TO, THE PREFERRED STOCK, IN EACH CASE, WITHOUT GIVING EFFECT TO THE EXCHANGE CAP</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Background and Reasons for the Transaction</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 30, 2015,
the Company entered into a Securities Purchase Agreement with certain qualified institutional investors and certain institutional
accredited investors (the &quot;Preferred Purchase Agreement&quot;), pursuant to which we issued to the Investors 5,500 shares
of Series A Convertible Preferred Stock, $0.01 par value per share (the &ldquo;Preferred Stock&rdquo;), for $1,000 per share, for
an aggregate consideration of $5,500,000 (the &ldquo;Transaction&rdquo;). The material terms of the Preferred Stock are described
below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revere Securities,
LLC (&ldquo;Revere&rdquo;) acted as placement agent in connection with the offer and sale of the Preferred Stock. The amount of
compensation paid to Revere with respect to this placement of Preferred Stock equaled to 5.00% of the gross proceeds from such
placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to use the
proceeds received by us in the Transaction for general corporate purposes, including working capital, sales and marketing activities,
general and administrative matters, repayment of indebtedness, and capital expenditures, to pay all legal and other fees, costs
and expenses related to and in connection with the transactions contemplated by the Preferred Purchase Agreement and other related
transaction documents (including the fees of Revere in an amount not exceeding $250,000), as well as for the cash portion of the
acquisition of the PayOnline group of companies (&ldquo;PayOnline&rdquo;), and for the purchase of residual distributions from
agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reason we entered
into the Transaction is to obtain funding for our general corporate purposes, as well as the acquisition of PayOnline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contemporaneously with
the Preferred Purchase Agreement, we also entered into a Voting Agreement, whereby certain stockholders of the Company, holding
in the aggregate 53.47% of the issued and outstanding shares of Common Stock as of April 30, 2015, agreed to vote to in favor of
the Transaction, including the issuance by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and (d), of Common Stock
issued and issuable pursuant to the terms of the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred
Stock (the &ldquo;Certificate of Designations&rdquo;) upon conversion, amortization, payment of dividends, as part of the Make-Whole
Amount or otherwise of, or with respect to, the Preferred Stock, in each case without giving effect to the Exchange Cap, and against
any action or agreement that would result in a breach of any covenant, representation, or warranty or any other obligation or agreement
of the Company under the Preferred Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Description of Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The rights, preferences,
and privileges of the Preferred Stock are set forth in the Certificate of Designations. The Certificate of Designations provides
for certain voting rights, conversion rights, and adjustments to the conversion price of the Preferred Stock based on stock dividends,
stock splits, and certain dilutive issuances. The Certificate of Designations also provides for certain dividend rights and redemption
obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Dividends</I>. Dividends
on the Preferred Stock will be 9% per annum (provided that upon the occurrence of a triggering event, the dividend rate shall be
increased to 18% per annum), payable monthly calculated on the basis of a 360-day year consisting of twelve 30-day months. Such
dividend is payable, subject to the satisfaction (or waiver) of certain equity conditions, in Common Stock, par value $0.0001 per
share (the &quot;Common Stock&quot;), or, at the Company&rsquo;s option, in cash or, provided that certain equity conditions are
satisfied or waived, in a combination of cash and shares of Common Stock, on May 29, 2015 and on the last trading day of each subsequent
month until April 2017. If the 30-day VWAP of the Common Stock falls below 50% of the Market Price or the Company fails to satisfy
certain other equity conditions, the dividend shall be payable in cash only unless waived by the holders of Preferred Stock. &ldquo;Market
Price<FONT STYLE="font-family: Times New Roman, Times, Serif">&rdquo; means </FONT>92% of the lowest of (i) the arithmetic average
of the three (3) lowest weighted average price of the Common Stock (&ldquo;VWAP&rdquo;) during the fifteen (15) consecutive trading
day period ending on the trading day immediately preceding the applicable date of determination, (ii) the VWAP on the trading day
immediately preceding the applicable date of determination and (iii) the VWAP on the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the Company elects
to pay such dividend in Common Stock, then the Company will deliver to the holders of Preferred Stock a number of shares of Common
Stock equal in value to the dividend payment amount, divided by the lowest of (i) 92% of the average of the arithmetic average
of the three lowest daily VWAP during the 15 trading days immediately prior to the payment date, (ii) 92% of the VWAP on the trading
day immediately prior to the payment date and (iii) 92% of the VWAP on the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Conversion</I>.
Each share of Preferred Stock is convertible at the option of the holder into 575 shares of Common Stock (which reflects an initial
conversion price of $1.74 per share of Common Stock (the &quot;Preferred Fixed Conversion Price&quot;) or, with respect to a Qualifying
Conversion, the lower of (i) the Preferred Fixed Conversion Price and (ii) the Market Price as in effect on the applicable date
of determination. &ldquo;Qualifying Conversion&rdquo; means conversion of the stated value of the Preferred Stock (i.e., $1,000
per share of Preferred Stock) plus accrued dividend not exceeding on any given trading day three (3) times the installment amount
due on the last trading day of each calendar month through maturity (with the first installment due date being May 29, 2015) immediately
following the applicable date of determination. Upon each conversion, redemption or monthly installment payment, an amount of
dividend with respect to the applicable shares of Preferred Stock will be payable through the Preferred Stock maturity date of
April 30, 2017, that but for such event would have accrued with respect to such shares of Preferred Stock if such shares had remained
outstanding for the period from such event through such maturity date. The Company will not effect the conversion of any portion
of a holder&rsquo;s Preferred Stock to the extent that after giving effect to such conversion, the holder would beneficially own
in excess of 4.99% (the &ldquo;Maximum Percentage&rdquo;) of the total outstanding Common Stock of the Company, unless the holder
provides 61 day prior written notice to the Company of an increase to such Maximum Percentage, in which case the number of shares
of Common Stock issuable upon conversion may increase, but may never increase to more than 9.99% of the total outstanding Common
Stock of the Company. In addition, the Company will not issue shares of Common Stock (pursuant to the terms of the Preferred Stock,
Notes and Warrants) if such transaction would result in the issuance of more than 19.999% of the amount of Common Stock of the
Company issued and outstanding (the &quot;Exchange Cap&quot;) unless (i) the Company&rsquo;s stockholders shall have approved
the issuance of shares of common stock in excess of 20%, or (ii) The NASDAQ has provided a waiver of Listing Rules that require
stockholders' approval of the issuance of shares of common stock in excess of 20%.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Convertible Preferred
Stock is convertible at the holder&rsquo;s option, in whole or in part, at any time. The conversion price will be subject to adjustment
for stock dividends, stock splits, dilutive securities issuances, and other customary adjustment events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Dividend Protection</I>.
The holders of the Preferred Stock shall be entitled to receive dividends on all shares of Common Stock underlying the Preferred
Stock on an as converted basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Anti-Dilution Protection</I>.
If the Company issues or sells any shares of Common Stock for a consideration per share less than the Preferred Fixed Conversion
Price for the Preferred Stock in effect immediately prior to such issuance or sale, then the Preferred Fixed Conversion Price then
in effect shall be reduced to an amount equal to the new issuance price. Such anti-dilution protection shall only be applicable
to third party financings, with carve outs for acquisitions, employee incentives, and other customary Company related stock transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Change of Control</I>.
Upon completion of a change of control, the holders of the Preferred Stock may require the Company to purchase any outstanding
Preferred Stock in cash at the sum of (I) the greater of (a) 120% of the stated value per share being redeemed, which is $1,000
plus accrued but unpaid dividends, if any (the &ldquo;Conversion Amount&rdquo;), or (b) the product of (1) the Conversion Amount
being redeemed and the quotient determined by dividing (A) the greatest closing sale price of the Common Stock during the period
commencing as of the trading day immediately prior to the public announcement of such change of control by (B) the lowest Preferred
Fixed Conversion Price, and (II) the amount of dividends per applicable Preferred Stock that would have accrued with respect to
such share if the shares had remained outstanding through the maturity date of April 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Voting</I>. Each
holder of Preferred Stock shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which
such holder&rsquo;s Preferred Stock would be convertible on the record date for the vote or consent of stockholders, but in lieu
of using the Conversion Price in effect as of such record date, such votes shall be calculated based on the higher of (i) the then
existing Conversion Price and (ii) $1.16 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction from and after April 30, 2015) and shall otherwise have voting rights and powers equal to the voting rights
and powers of the Common Stock. The holders of shares of Preferred Stock are not entitled to vote with respect to approval of the
issuance by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and 5635(d), of Common Stock issued and issuable pursuant
to the terms of the Certificate of Designations of the Preferred Stock upon conversion, amortization, payment of dividends, as
part of the make-whole amount or otherwise of, or with respect to, the Preferred Stock, in each case, without giving effect to
the Exchange Cap.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Liquidation Preference</I>.
In a liquidation, each holder of Preferred Stock shall be entitled to receive in cash out of the assets of the Company, whether
capital or surplus, before any amount is paid to the holder of any junior shares (including, without limitation, the Common Stock),
an amount equal to the sum of the Conversion Amount plus the amount necessary to make-whole for all dividends that would accrue
through the maturity date of April 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><I>Redemption Rights</I>.
Upon any of the following triggering events:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">while the Registration Statement is required to be maintained, the effectiveness of the Registration Statement lapses for any reason (including, without limitation, the issuance of a stop order) or is unavailable to the holders of Preferred Stock for the issuance and sale of the shares upon conversion of the Preferred Stock, and such lapse or unavailability continues for a period of five (5) consecutive trading days or for more than an aggregate of twenty (20) days in any 365-day period; &quot;Registration Statement&quot; means such registration statement, including all exhibits, financial schedules and all documents and information deemed to be part of the registration statement by incorporation by reference or otherwise, as amended from time to time, including the information (if any) contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) of the Securities Act and the published rules and regulations thereunder and deemed to be part thereof at the time of effectiveness pursuant to Rules 430A and 430B of the Securities Act and the published rules and regulations thereunder;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">(A) the suspension from trading for a period of five (5) consecutive trading days or for more than an aggregate of ten (10) trading days in any 365-day period or (B) the failure of the Common Stock to be listed on The Nasdaq Capital Market, The New York Stock Exchange, Inc., The NYSE MKT LLC, The NASDAQ Global Select Market or The NASDAQ Global Market;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">our (A) failure to cure Company&rsquo;s failure to credit a holder of Preferred Stock balance account with DTC on or prior to the applicable Share Delivery Date (a &ldquo;Conversion Failure&rdquo;) by delivery of the required number of shares of Common Stock within ten (10) business days after the applicable date of conversion, (B) the occurrence of two (2) or more Conversion Failures or (C) written notice to any Holder, including by way of public announcement, or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any shares of Preferred Stock into shares of Common Stock that is tendered in accordance with the provisions of the Certificate of Designations, other than pursuant to &ldquo;Limitation on Conversions;&rdquo;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">at any time following the tenth (10th) consecutive Business Day that a Holder's Authorized Share Allocation (as defined in &ldquo;Reservation of Shares&rdquo;) is less than the number of shares of Common Stock that a holder of Preferred Stock would be entitled to receive upon a conversion of the full Conversion Amount of the Preferred Shares (without regard to any limitations on conversion set forth in &ldquo;Limitations on Conversions&rdquo; or otherwise);</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">our failure to pay to a Holder any amounts when and as due pursuant to the Certificate of Designations or any other transaction document;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">any default under, redemption of or acceleration prior to maturity of any indebtedness of the Company or any of our subsidiaries</font></td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td style="text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td>&nbsp;</td>
    <td><font style="font: 10pt Symbol">&middot;</font></td>
    <td><font style="font-size: 10pt">we or any of our subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief of debtors (collectively, &quot;Bankruptcy Law&quot;), (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a receiver, trustee, assignee, liquidator or similar official (a &quot;Custodian&quot;), (d) makes a general assignment for the benefit of its creditors or (e) admits in writing that it is generally unable to pay its debts as they become due;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against the Company or any of our subsidiaries in an involuntary case, (b) appoints a Custodian of the Company or any of our subsidiaries or (c) orders the liquidation of the Company or any of our subsidiaries;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">a final judgment or judgments for the payment of money aggregating in excess of $350,000 are rendered against the Company or any of our subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $350,000 amount set forth above so long as the Company provides each holder of Preferred Stock a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to such holder of Preferred Stock) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">other than as specifically set forth in another clause of this section, the Company breaches any representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition of any Transaction Document which is curable, only if such breach continues for a period of at least ten (10) consecutive Business Days;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">any breach or failure in any respect to comply with &ldquo;Company Installment Conversion or Redemption&rdquo; of the Certificate of Designations;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td><font style="font-size: 10pt">we breach any representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant which is curable, only if such breach remains uncured for a period of at least five (5) Business Days;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td><font style="font-size: 10pt">a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that certain equity conditions are satisfied or that there has been no equity conditions failure or as to whether any event of default under the Preferred Purchase Agreement and related transaction documents has occurred; or</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">we fail to maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program or otherwise fail to credit or be unable to credit shares required to be delivered to a holder of Preferred Stock pursuant to the terms of the Certificate of Designations to such holder's account with the DTC Fast Automated Securities Transfer Program through its DWAC system; or</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font: 10pt Symbol">&middot;</font></td>
    <td style="text-align: justify"><font style="font-size: 10pt">any material damage to, or loss, theft or destruction of a material amount of property of the Company, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect (as defined in the Preferred Purchase Agreement).</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">then
each holder of Preferred Stock will have the right to require us to redeem all of the Preferred Stock then held by such holder
of Preferred Stock for a cash amount (the Redemption Amount) equal to the sum of (I) greater of (i) the Conversion Amount and (ii)
the product of (x) the Conversion Amount and (y) the quotient determined by dividing (1) the greatest closing sale price of the
Common Stock during the period beginning on the date immediately preceding the Triggering Event and ending on the date the holder
delivers the notice of redemption, by (2) the lowest fixed conversion price in effect during such period, and (II) the amount necessary
to make-whole for all dividends that would accrue through the maturity date of April 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information provided
herein contains summaries of the Preferred Purchase Agreement and the Certificate of Designations and is qualified in its entirety
by reference to the Preferred Purchase Agreement and the Certificate of Designations, each of which is attached to this proxy statement
as Appendix B and C, respectively, and each of which is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Why We Need Stockholder Approval</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because our Common
Stock is listed on The NASDAQ Capital Market, we are subject to NASDAQ's rules and regulations. NASDAQ Listing Rule 5635(a) requires
shareholder approval prior to the issuance of securities in connection with the acquisition of the stock of another company if,
as a result of that issuance of Common Stock or securities convertible into Common Stock, the Common Stock has or will have upon
issuance voting power equal to or in excess of 20% of the voting power outstanding before the issuance of stock or securities convertible
into or exercisable for common stock, or the number of shares of common stock to be issued is or will be equal to or in excess
of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, NASDAQ
Listing Rule 5635(d) requires shareholder approval prior to the issuance of securities in connection with a transaction other than
a public offering involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible
into or exercisable for common stock) at a price less than the greater of book or market value which equals 20% or more of common
stock or 20% or more of the voting power outstanding before the issuance; or the sale, issuance or potential issuance by the Company
of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the common stock or 20% or
more of the voting power outstanding before the issuance for less than the greater of book or market value of the stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The maximum number
of shares of Common Stock issuable upon conversion of the Preferred Stock is not determinable at this time since such number will
fluctuate based upon the Market Price. Any such issuances of Common Stock will result in dilution to existing stockholders. In
addition, the significant concentration of ownership in our Common Stock and the Preferred Stock may adversely affect the trading
price for our Common Stock because investors often perceive disadvantages in owning stock in companies with&nbsp;significant stockholders.
These stockholders, if they acted together, could significantly influence all matters requiring approval by our stockholders, including
the election of directors and the approval of mergers or other business combination transactions. These significant stockholders
may be able to determine all matters requiring stockholder approval. The interests of significant stockholders may not always coincide
with our interests or the interests of other stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Required Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of the issuance
by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and (d), of Common Stock issued and issuable pursuant to the terms
of the Certificate of Designations of the Preferred Stock upon conversion, amortization, payment of dividends, as part of the make-whole
amount or otherwise of, or with respect to, the Preferred Stock, in each case, without giving effect to the Exchange Cap, requires
the majority of shares present in person or represented by proxy at the annual meeting and entitled to vote on the proposal vote
for approval of Proposal 3. Abstentions and broker non-votes will be counted as entitled to vote and will, therefore, have the
same effect as a vote against Proposal 3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The holders of shares
of Preferred Stock are not entitled to vote with respect to approval of the issuance by the Company, for purposes of the NASDAQ
Listing Rules 5635(a) and 5635(d), of Common Stock issued and issuable pursuant to the terms of the Certificate of Designations
of the Preferred Stock upon conversion, amortization, payment of dividends, as part of the make-whole amount or otherwise of, or
with respect to, the Preferred Stock, in each case, without giving effect to the Exchange Cap.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Board recommends
a vote FOR the proposal to approve the issuance by the Company, for purposes of the NASDAQ Listing Rules 5635(a) and (d), of Common
Stock issued and issuable pursuant to the terms of the Certificate of Designations of the Preferred Stock upon conversion, amortization,
payment of dividends, as part of the make-whole amount or otherwise of, or with respect to, the Preferred Stock, in each case,
without giving effect to the Exchange Cap.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL 4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>APPROVAL OF THE ISSUANCE
BY THE COMPANY FOR PURPOSES OF THE NASDAQ LISTING RULE 5635(d), OF COMMON STOCK ISSUED AND ISSUABLE (X) PURSUANT TO THE TERMS OF
THE NOTES UPON CONVERSION, AMORTIZATION, PAYMENT OF INTEREST, AND AS PART OF THE MAKE-WHOLE AMOUNT, OR OTHERWISE OF, OR WITH RESPECT
TO, THE NOTES AND (Y) UPON EXERCISE OF THE ACCOMPANYING WARRANTS, IN EACH CASE, WITHOUT GIVING EFFECT TO THE EXCHANGE CAP.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Background and Reasons for the Transaction</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 30, 2015,
the Company entered into the Note Purchase Agreement with certain qualified institutional investors and certain institutional accredited
investors (collectively, the &ldquo;Note Investors&rdquo;), pursuant to which we issued (i) senior convertible notes of the Company
in the aggregate principal amount of $5,000,000 (the &ldquo;Initial Notes&rdquo;), pursuant to which shares of Common Stock are
issuable upon conversion, amortization, payment of interest, and as part of the make-whole amount, or otherwise and (ii) warrants
(the &ldquo;Warrants&rdquo;) exercisable to purchase such number of shares of Common Stock that equal 88% of the shares of Common
Stock underlying the Initial Notes (collectively, the &ldquo;Debt Transaction&rdquo;). The Initial Notes and the Warrants were
issued to the Note Investors in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities
Act of 1933, as amended (the &quot;1933 Act&quot;), and Rule 506(b) of Regulation D as promulgated by the Commission under the
1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Note Investors
each have the right, in their sole discretion, to elect to purchase additional senior convertible notes of the Company for up to
$10,000,000 along with related Warrants. Such additional senior convertible notes of the Company will have terms substantively
similar to the Initial Notes and Warrants issued on April 30, 2015, except that the conversion price and exercise price and the
term of such securities will be fixed at the time of such additional closing date. The Initial Notes and such additional senior
convertible notes of the Company in the combined aggregate principal amount of up to $15,000,000 are referred to as the &ldquo;Notes.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All $5 million of gross
proceeds of the Debt Transaction initial closing on April 30, 2015 were placed at closing into deposit accounts by the Note Investors.
We expect to receive $2.5 million of gross proceeds from the deposit accounts 30 days subsequent to receiving our stockholder approval
and the satisfaction of certain other equity conditions. We expect to receive the remaining balances subsequently thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The material terms
of the Notes and the Warrants are described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to use the
proceeds received by us in the Debt Transaction for general corporate purposes, including working capital, sales and marketing
activities, general and administrative matters, repayment of indebtedness, and capital expenditures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reason we are entering
into the Transaction is to obtain funding for our general corporate purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contemporaneously with
the Note Purchase Agreement, we also entered into a Voting Agreement, whereby certain stockholders of the Company, holding in the
aggregate 53.47% of the issued and outstanding shares of Common Stock as of April 30, 2015, agreed to vote to in favor of the Debt
Transaction, including the issuance by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock issued and
issuable (x) pursuant to the terms of the Notes upon conversion, amortization, payment of interest, and as part of the make-whole
amount, or otherwise of, or with respect to, the Notes and (y) upon exercise of the accompanying Warrants, in each case, without
giving effect to the Exchange Cap, and against any action or agreement that would result in a breach of any covenant, representation,
or warranty or any other obligation or agreement of the Company under the Note Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Description of Notes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Debt
Transaction, the Company is offering Notes up to an aggregate principal amount of $15,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Maturity</I>. The
Notes will have a maturity date of April 30, 2018, as may be extended as the option of the holder in an event of default and through
the date that is 10 business days after the consummation of a change of control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Interest</I>. The
Notes will accrue interest at the rate of 7% per annum (provided that upon the occurrence of an event of default, the interest
rate shall be increased to 18% per annum), payable in arrears monthly on the last trading day of each month, calculated on the
basis of a 360-day year consisting of twelve 30-day months. Interest shall be subject to a make-whole amount through the maturity
date upon any earlier conversion, redemption, or amortization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interest shall be payable
in Common Stock so long as certain equity conditions are satisfied (or waived); provided, that the Company may, at its option following
notice to each holder of Notes, pay Interest in cash or, provided certain equity conditions are satisfied (or waiver), in a combination
of cash and Common Stock. If the Company pays such Interest in Common Stock, then the Company will deliver to the holders of Notes
a number of shares of Common Stock equal in value to the interest payment amount, divided by the lower of 93% of the lowest of
(i) the arithmetic average of the 5 lowest weighted average prices of the Common Stock during the 20 consecutive trading day period
ending on the trading day immediately preceding the applicable date of determination, (ii) the weighted average price of the Common
Stock on the trading day immediately preceding the applicable date of determination and (iii) the weighted average price of the
Common Stock on the applicable date of determination (the &quot;Note Market Price&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon each conversion,
redemption or monthly payment (as described below), an amount of Interest will be payable through the Notes' maturity date of April
30, 2018, that but for such event would have accrued with respect to such Notes if the Notes had remained outstanding for the period
from such event through such maturity date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Principal Amortization</I>.
The Company shall repay the principal amount of the Notes in 5 installments with each installment payable once every month, with
the first payment due immediately following the earlier of (i) the date when the Notes have been registered pursuant to an effective
registration statement and (ii) the date that is six (6) months immediately following the issuance date of the Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the occurrence
of an event of default under the Notes, a holder of Notes may require the Company to redeem all or a portion of its Notes. The
portion of the Notes subject to such redemption must be redeemed by the Company, in cash, at a price equal to the sum of (x) the
greater of (1) 125% of the amount being redeemed, and (2) the market value of the underlying shares and (y) the make-whole interest
amount through the maturity date of the Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Conversion</I>.
The Notes issued on April 30, 2015 will initially be convertible at the option of the holder into shares of Common Stock at $1.624
per share (the &quot;Note Fixed Conversion Price&quot;); or, with respect to a Note Qualifying Conversion, the lower of (i) the
Note Fixed Conversion Price and (ii) the Note Market Price as in effect on the applicable date of determination. &ldquo;Note Qualifying
Conversion&rdquo; means conversion of the Note&rsquo;s principal to be converted, amortized, redeemed or otherwise with respect
to which this determination is being made, plus accrued and unpaid interest and late charges, if any, not exceeding on any given
trading day three (3) times the installment amount due on the last trading day of each installment due date immediately following
the applicable date of determination. Subject to certain limited exceptions, if the Company issues or sells shares of Common Stock,
rights to purchase shares of Common Stock, or securities convertible into shares of its Common Stock for a price per share that
is less than the Note Fixed Conversion Price then in effect, the Note Fixed Conversion Price then in effect will be decreased to
equal such lower price. The Note Fixed Conversion Price will be fixed at 140% of the lowest of (i) 93% of the arithmetic average
of the five (5) lowest weighted average prices of the Common Stock during the 20 consecutive trading day period ending on the trading
day immediately preceding the applicable date of determination, (ii) 93% of the weighted average price of the Common Stock on the
trading day immediately preceding the applicable date of determination and (iii) 93% of the weighted average price of the Common
Stock on the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Notes are convertible
at the holder&rsquo;s option, in whole or in part, at any time. The conversion price will be subject to adjustment for stock dividends,
stock splits, dilutive securities issuances, and other customary adjustment events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Ranking</I>. All
payments due under the Notes shall be senior to all other indebtedness of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Covenants</I>. While
the Notes are outstanding, the Company shall not create, authorize, or issue additional capital stock or convertible securities
other than pursuant to an equity incentive plan, incur or guarantee any indebtedness other than as permitted under the Note, declare
or pay any cash dividend, among other prohibited actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No holder of Notes
and/or Warrants has the right to convert the Note or exercise the Warrant to the extent that such conversion or exercise would
result in such holder to become the beneficial owner of more than 4.99% of the Company&rsquo;s Common Stock, unless the holder
provides 61-day prior written notice to the Company of an increase of such percentage, in which case the number of shares of Common
Stock issuable upon conversion or exercise may increase, but may never increase to more than 9.99% of the total outstanding Common
Stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Description of Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Warrant is exercisable
on or after the date of issuance and expire on the third (3rd) year anniversary of the date of issuance. The initial exercise price
of the Warrants is $1.74 per share. If the Company issues or sells shares of Common Stock, rights to purchase shares of its Common
Stock, or securities convertible into shares of its Common Stock for a price per share that is less than the exercise price then
in effect, the exercise price of the Warrant will be decreased to equal such lesser price. Upon each such adjustment, the number
of the shares of the Company&rsquo;s common stock issuable upon exercise of the Warrant will increase proportionately. The foregoing
adjustments to the exercise price for future stock issues will not apply to certain exempt issuances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the resale of the
shares of Common Stock issuable upon exercise of the Warrants is not covered by a registration statement under the 1933 Act, holders
of Warrants may, in its sole discretion, elect to exercise the Warrants through a cashless exercise, in which case the holder would
receive upon such exercise the &ldquo;net number&rdquo; of shares of Common Stock determined according to the formula set forth
in the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At any time after the
date that no Notes are outstanding, provided that certain equity conditions have been satisfied, the Company may force the exercise
of all or any part of the Warrants then remaining. The Warrants contain standard protections for dividends, purchase rights and
merger, consolidation or asset sale transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will not
effect the exercise of a Warrant to the extent that after giving effect to such conversion, the holder would beneficially own in
excess of 4.99% (the &ldquo;Maximum Percentage&rdquo;) of the total outstanding Common Stock of the Company, unless the holder
provides 61 day prior written notice to the Company of an increase to such Maximum Percentage, in which case the number of shares
of Common Stock issuable upon exercise may increase, but may never increase to more than 9.99% of the total outstanding Common
Stock of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The exercise price
and the number of shares of Common Stock issuable upon exercise of the Warrants shall be subject to adjustment for stock dividends,
stock splits, dilutive securities issuances, and other customary adjustment events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of
the Notes and the Warrants, the Company will not issue shares of Common Stock (pursuant to the terms of the Preferred Stock, Notes
and Warrants) if such transaction would result in the issuance in excess of the Exchange Cap unless (i) the Company&rsquo;s stockholders
shall have approved the issuance of shares of Common Stock in excess of 20% of the amount of Common Stock of the Company issued
and outstanding, or (ii) The NASDAQ has provided a waiver of Listing Rules that require stockholders' approval. Such limitation
will not apply if the Company&rsquo;s stockholders approve issuances above such limitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Note
Purchase Agreement, we entered on April 30, 2015 into a Registration Rights Agreement with the Note Investors. Pursuant this Registration
Rights Agreement, we agreed to register for resale the Common Stock issuable in connection with the conversion of the Notes and
the exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information provided
herein contains summaries of the Note Purchase Agreement and is qualified in its entirety by reference to the Note Purchase Agreement,
Form of Note and Form of Warrant which are attached to this proxy statement as Appendix D, Appendix E and Appendix F, respectively,
and each of which is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Why We Need Stockholder Approval</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because our Common
Stock is listed on The NASDAQ Capital Market, we are subject to NASDAQ's rules and regulations. NASDAQ Listing Rule 5635(d) requires
shareholder approval prior to the issuance of securities in connection with a transaction other than a public offering involving
the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable for common
stock) at a price less than the greater of book or market value which equals 20% or more of common stock or 20% or more of the
voting power outstanding before the issuance; or the sale, issuance or potential issuance by the Company of common stock (or securities
convertible into or exercisable common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding
before the issuance for less than the greater of book or market value of the stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The maximum number
of shares of Common Stock issuable upon conversion of the Notes is not determinable at this time since such number will fluctuate
based upon the market price. The maximum number of shares of Common Stock issuable upon exercise of the Warrants may be increased
due to the anti-dilution adjustments. Any such issuances of Common Stock will result in dilution to existing stockholders. In addition,
the significant concentration of ownership in our Common Stock may adversely affect the trading price for our Common Stock because
investors often perceive disadvantages in owning stock in companies with&nbsp;significant stockholders. These stockholders, if
they acted together, could significantly influence all matters requiring approval by our stockholders, including the election of
directors and the approval of mergers or other business combination transactions. These significant stockholders may be able to
determine all matters requiring stockholder approval. The interests of significant stockholders may not always coincide with our
interests or the interests of other stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Required Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of the issuance
by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock issued and issuable (x) pursuant to the terms of
the Notes upon conversion, amortization, payment of interest, and as part of the make-whole amount, or otherwise of, or with respect
to, the Notes and (y) upon exercise of the accompanying Warrants, in each case, without giving effect to the Exchange Cap, requires
the majority of shares present in person or represented by proxy at the annual meeting and entitled to vote on the proposal vote
for approval of Proposal 4. Abstentions and broker non-votes will be counted as entitled to vote and will, therefore, have the
same effect as a vote against Proposal 4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The holders of shares
of Preferred Stock are not entitled to vote with respect to approval of the issuance by the Company for purposes of the NASDAQ
Listing Rule 5635(d), of Common Stock issued and issuable (x) pursuant to the terms of the Notes upon conversion, amortization,
payment of interest, and as part of the make-whole amount, or otherwise of, or with respect to, the Notes and (y) upon exercise
of the accompanying Warrants, in each case, without giving effect to the Exchange Cap.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Board recommends
a vote FOR the proposal to approve the issuance by the Company for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock
issued and issuable (x) pursuant to the terms of the Notes upon conversion, amortization, payment of interest, and as part of the
make-whole amount, or otherwise of, or with respect to, the Notes and (y) upon exercise of the accompanying Warrants, in each case,
without giving effect to the Exchange Cap.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SHAREHOLDER PROPOSALS FOR 2016 ANNUAL
MEETING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Shareholder proposals
intended to be presented at the 2016 annual meeting of shareholders must be submitted to the Secretary of the Company, at the principal
executive offices of the Company, 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160, generally no later than [_______
___], 2016<B> </B>in order to receive consideration for inclusion in the Company's 2015 proxy materials. However, if next year's
annual meeting is to be held more than 30 days before or 30 days after the anniversary of this year's annual meeting, shareholder
proposals must be received a reasonable time before we begin to print and mail our 2016 proxy materials. Any such shareholder proposal
must comply with the requirements of Rule 14a-8 promulgated under the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notice of proposals
to be considered at next year's meeting but not included in the proxy statement must meet the requirements set forth in the Company's
bylaws, including providing all of the information specified in the bylaws. The notice must be submitted to the Secretary of the
Company, at the principal executive offices of the Company, 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160.
Each proposal submitted must be a proper subject for shareholder action at the meeting. The notice generally must be received not
less than 60 days nor more than 90 days prior to the first anniversary of this year's annual meeting. However, if next year's annual
meeting is to be held more than 30 days before or 60 days after the anniversary of this year's annual meeting, notice must be received
no later than the later of 70 days prior to the date of the meeting or the 10th day following the Company's public announcement
of next year's annual meeting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">EACH PERSON SOLICITED
MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITH EXHIBITS) FOR THE COMPANY'S FISCAL YEAR ENDED
DECEMBER 31, 2014, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY SENDING A WRITTEN REQUEST TO THE ATTENTION OF THE SECRETARY
OF THE COMPANY, AT THE COMPANY'S EXECUTIVE OFFICES LOCATED AT 3363 NE 163RD STREET, SUITE 705, NORTH MIAMI BEACH, FLORIDA 33160.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &quot;A&quot;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTIFICATE OF AMENDMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO THE AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION TO INCREASE AUTHORIZED COMMON STOCK TO 300 MILLION SHARES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Net Element, Inc. (the &quot;Corporation&quot;),
a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on
October 2, 2012 (the &quot;Original Certificate&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Corporation amended and restated the Original Certificate by filing the Corporation's Amended and Restated Certificate
of Incorporation with the Secretary of State of the State of Delaware on October 2, 2012 (the &quot;Amended and Restated Certificate&quot;).<BR>
<BR>
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Corporation amended the Amended and Restated Certificate by filing an amendment thereto with the Secretary of State
of the State of Delaware on December 5, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Corporation amended the Amended and Restated Certificate by filing an amendment thereto with the Secretary of State
of the State of Delaware on December 16, 2014 (together with the Amended and Restated Certificate, as amended, the &ldquo;Certificate.&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">5.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>This Certificate of Amendment amends the provisions of the Certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">6.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Article IV Section A of the Certificate is hereby amended and restated in its entirety to be and read as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&quot;<B><U>ARTICLE IV</U>: </B>A. The total number
of shares of all classes of stock which the Corporation shall have authority to issue is 301,000,000 shares consisting of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in">1. 300,000,000 shares of Common
Stock, with a par value of $0.0001 per share (the &ldquo;Common Stock&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in">2. 1,000,000 shares of Preferred
Stock, with a par value of $0.01 per share (the &ldquo;Preferred Stock&rdquo;).<B> </B>&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">7.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Pursuant to resolution of the Board of Directors of the Corporation setting forth this proposed amendment of the Certificate,
declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration and approval,
among other agenda items, of this proposed amendment, an annual meeting of the stockholders of said corporation was duly called
and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares as required by statute were voted in favor of the amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">8.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>This amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">9.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>All other provisions of the Certificate shall remain in full force and effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Amendment to be signed this ____ day of __________, 20___.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD COLSPAN="3"><font style="font-size: 10pt">NET ELEMENT, INC., a Delaware corporation</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD COLSPAN="3">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD COLSPAN="3">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</td>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="width: 32%; border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD COLSPAN="3"><font style="font-size: 10pt">Name:</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD COLSPAN="3"><font style="font-size: 10pt">Title:</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4in"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &quot;B&quot;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PREFERRED PURCHASE AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SECURITIES PURCHASE AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>SECURITIES PURCHASE
AGREEMENT</B> (the &quot;<B>Agreement</B>&quot;), dated as of April&nbsp;30, 2015, by and among Net Element, Inc., a Delaware corporation,
with headquarters located at 3363 NE 163rd Street, Suite 705, North Miami Beach, FL 33160 (the&nbsp;&quot;<B>Company</B>&quot;),
and the investors listed on the Schedule of Buyers attached hereto (individually, a &quot;<B>Buyer</B>&quot; and collectively,
the &quot;<B>Buyers</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and the Buyers desire to enter into this transaction to purchase the Preferred Shares (as defined below) pursuant to the
Registration Statement (as defined below) which is currently effective, has up to $50,000,000 of initial offering price of unallocated
securities available for sale as of the date hereof (but which is currently subject to the limitation set forth in General Instruction
I.B.6 of Form S-3) and has been declared effective in accordance with the Securities Act of 1933, as amended (the &quot;<B>1933
Act</B>&quot;), by the United States Securities and Exchange Commission (the &quot;<B>SEC</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has authorized a new series of convertible preferred stock of the Company designated as Series A Convertible Preferred
Stock, par value $0.01 per share, the terms of which are set forth in the certificate of designations for such series of preferred
stock (the &quot;<B>Certificate of Designations</B>&quot;) in the form attached hereto as <U>Exhibit A</U> (together with any convertible
preferred shares issued in replacement thereof in accordance with the terms thereof, the &quot;<B>Preferred Shares</B>&quot;),
which Preferred Shares shall be convertible or redeemable into the Company's common stock, par value $0.0001 per share (the&nbsp;&quot;<B>Common
Stock</B>&quot;) in accordance with the terms of the Certificate of Designations (as converted or redeemed, collectively, the &quot;<B>Conversion
Shares</B>&quot;). The Conversion Shares shall be issued pursuant to the Registration Statement, or, if such Registration Statement
is not available at the time of issuance of such Conversion Shares, as securities exempt from registration pursuant to Section
3(a)(9) of the 1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, at the Closing
(as defined below) that aggregate number of Preferred Shares set forth opposite such Buyer's name in column (3) on the Schedule
of Buyers attached hereto (which aggregate amount for all Buyers shall be 5,500).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Preferred Shares shall be entitled to Dividends and to certain Make-Whole Amounts (each, as defined in the Certificate of Designations),
which may be paid in shares of Common Stock that have been registered for resale (the &quot;<B>Additional Shares</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Preferred Shares, the Conversion Shares and the Additional Shares collectively are referred to herein as the &quot;<B>Securities</B>&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>NOW, THEREFORE</B>,
the Company and each Buyer hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>PURCHASE
AND SALE OF Preferred Shares</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;<U>Closing</U>.
Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell
to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below),
the number of Preferred Shares in an aggregate amount as is set forth opposite such Buyer's name in column (3) on the Schedule
of Buyers (the &quot;<B>Closing</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;<U>Purchase
Price</U>. The aggregate purchase price for the Preferred Shares to be purchased by each such Buyer at the Closing (the &quot;<B>Purchase
Price</B>&quot;) shall be the amount set forth opposite each Buyer's name in column (4) on the Schedule of Buyers (less, in the
case of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] (the &quot;<B>Lead Investor</B>&quot;), any amounts withheld pursuant to
Section 4(f)). Each Buyer shall pay $1,000 per each Preferred Share to be purchased by each Buyer at the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;<U>Closing
Date</U>. The date and time of the Closing (the &quot;<B>Closing Date</B>&quot;) shall be 10:00 a.m., New York City time, on the
date hereof (or such later date as is mutually agreed to by the Company and each Buyer) after notification of satisfaction (or
waiver) of the conditions to the Closing set forth in Sections 6 and 7 below at the offices of Schulte Roth &amp; Zabel LLP, 919
Third Avenue, New York, New York 10022, subject to notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;<U>Form
of Payment</U>. On the Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Preferred Shares to be
issued and sold to such Buyer at the Closing (less, in the case of the Lead Investor, any amounts withheld pursuant to Section
4(f)) by wire transfer of immediately available funds in accordance with the Company's written wire instructions and (ii)&nbsp;the
Company shall deliver to each Buyer the Preferred Shares (allocated in the amounts as such Buyer shall request) which such Buyer
is then purchasing hereunder, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>BUYER'S
REPRESENTATIONS AND WARRANTIES</U>. <FONT STYLE="text-transform: none">Each Buyer, severally and not jointly, represents and warrants
with respect to only itself that, as of the date hereof and as of the Closing Date:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;<U>Organization;
Authority</U>. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by such Buyer of the transactions
contemplated by this Agreement has been duly authorized by all necessary action on the part of such Buyer. This Agreement has been
duly executed by such Buyer, and when delivered by such Buyer in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Buyer, enforceable against it in accordance with its terms, except as such enforceability may
be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;<U>No
Conflicts</U>. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such
Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, in the aggregate, reasonably be expected to have a material adverse effect on the ability
of such Buyer to perform its obligations hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;<U>Qualified
Institutional Investor and Accredited Investor Status</U>.&nbsp;&nbsp;Such Buyer is a &quot;qualified institutional buyer&quot;
(&quot;<B>QIB</B>&quot;) as such term is defined in Rule 144A under the 1933 Act and/or an &quot;accredited investor&quot; as that
term is defined in Rule 501(a) of Regulation D, as indicated on the signature page of such Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>REPRESENTATIONS
AND WARRANTIES OF THE COMPANY</U>. <FONT STYLE="text-transform: none">The Company represents and warrants to each of the Buyers
that, as of the date hereof and as of the Closing Date:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;<U>Shelf
Registration Statement</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has prepared and filed in conformity with the requirements of the 1933 Act and the published rules and regulations
thereunder (the &quot;<B>Rules and Regulations</B>&quot;) adopted by the SEC a &quot;shelf&quot; registration statement on
Form&nbsp;S-3 (No. 333-199432), which became effective on December 10, 2014, including a base prospectus, (the &quot;<B>Base
Prospectus</B>&quot;) relating to Common Stock, preferred stock, warrants, subscription rights or units of
the Company that may be sold from time to time by the Company, in accordance with Rule&nbsp;415 of the 1933 Act, and such
amendments thereof as may have been required to the date of this Agreement. The Company was at the time of the filing of the
Registration Statement eligible to use Form S-3. The term &quot;<B>Registration Statement</B>&quot; as used in this Agreement
means such registration statement, including all exhibits, financial schedules and all documents and information deemed to be
part of the Registration Statement by incorporation by reference or otherwise, as amended from time to time, including the
information (if any) contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be part thereof at the time of effectiveness pursuant to Rules 430A and 430B of the Rules and
Regulations. The term &quot;<B>Preliminary Prospectus</B>&quot; means the Base Prospectus, together with any preliminary
prospectus supplement used or filed with the SEC pursuant to Rule&nbsp;424 of the Rules and Regulations. The term
&quot;<B>Prospectus</B>&quot; means the Base Prospectus, any Preliminary Prospectus and any amendments or further
supplements to such prospectus filed with the SEC, and including, without limitation, the final prospectus supplement (the
&quot;<B>Prospectus Supplement</B>&quot;), filed pursuant to and within the limits described in Rule 424(b) with the SEC in
connection with the proposed sale of the Securities contemplated by this Agreement through the date of such prospectus
supplement. Unless otherwise stated herein, any reference herein to the Registration Statement, any Preliminary Prospectus,
the Statutory Prospectus (as hereinafter defined) and the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, including pursuant to Item&nbsp;12 of Form S-3 under the 1933 Act, which were filed under
the Securities Exchange Act of 1934, as amended (the &quot;<B>1934 Act</B>&quot;), on or before the date hereof or are so
filed hereafter. Any reference herein to the terms &quot;amend,&quot; &quot;amendment&quot; or &quot;supplement&quot; with
respect to the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus or the Prospectus shall be deemed
to refer to and include any such document filed or to be filed under the 1934 Act after the date of the Registration
Statement, any such Preliminary Prospectus, Statutory Prospectus or Prospectus, as the case may be, and deemed to be
incorporated therein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company was at the time of the filing of the Registration Statement eligible to use Form S-3. As of the date of this Agreement,
the Company is eligible to use Form S-3 under the 1933 Act and it meets the transaction requirements with respect to the aggregate
market value of securities being sold pursuant to this offering and during the twelve (12) months prior to this offering, in accordance
with General Instruction I.B.6 of Form S-3. The Company filed with the SEC the Registration Statement on such Form S-3, including
a Base Prospectus, for registration under the 1933 Act of the offering and sale of the Securities, and the Company has prepared
and used a Preliminary Prospectus in connection with the offer and sale of the Securities. When the Registration Statement or any
amendment thereof or supplement thereto was or is declared effective and as of the date of the most recent amendment to the Registration
Statement, it (i) complied or will comply, in all material respects, with the requirements of the 1933 Act and the Rules and Regulations
and the 1934 Act and the rules and regulations of the SEC thereunder and (ii)&nbsp;did not or will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein not misleading. When any Preliminary Prospectus or Prospectus was first filed with the SEC (whether filed as part of the
Registration Statement or any amendment thereto or pursuant to Rule 424 of the Rules) and when any amendment thereof or supplement
thereto was first filed with the SEC, such Preliminary Prospectus or Prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the 1933 Act and the Rules and Regulations and did not or will not, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein not misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;<U>Prospectus</U>.
As of the Applicable Time (as defined below) and as of the Closing Date, neither (x) the General Use Free Writing Prospectus(es)
(as defined below) issued at or prior to the Applicable Time, the Statutory Prospectus (as defined below), all considered together
(collectively, the &quot;<B>General Disclosure Package</B>&quot;), nor (y) any individual Limited Use Free Writing Prospectus (as
defined below), when considered together with the General Disclosure Package, included, includes or will include any untrue statement
of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; <U>provided</U>, <U>however</U>, that the Company makes
no representations or warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, in reliance
upon, and in conformity with, written information furnished to the Company by or on behalf of the Buyers, specifically for use
therein. As used in this subsection and elsewhere in this Agreement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Applicable
Time</B>&quot; means 5:30 p.m. (New York time) on the date of this Agreement or such other time as agreed to by the Company and
the Buyers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Statutory
Prospectus</B>&quot; as of any time means the Preliminary Prospectus included in the Registration Statement immediately prior to
that time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Issuer
Free Writing Prospectus</B>&quot; means any &quot;issuer free writing prospectus,&quot; as defined in Rule 433 under the 1933 Act,
relating to the Securities in the form filed or required to be filed with the SEC or, if not required to be filed, in the form
retained in the Company's records pursuant to Rule 433(g) under the 1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>General
Use Free Writing Prospectus</B>&quot; means any Issuer Free Writing Prospectus that is identified on Schedule I to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Limited
Use Free Writing Prospectus</B>&quot; means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;<U>Organization</U>.
Each of the Company and its &quot;<B>Subsidiaries</B>&quot; (which, for the purposes of this Agreement means any entity or joint
venture which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest) are entities
duly organized and validly existing in good standing under the laws of the jurisdiction in which they are formed, and have requisite
power and authorization to own or lease their properties and conduct their business as now being conducted and as described in
the Registration Statement, the General Disclosure Package and the Prospectus. The Company has no significant Subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X promulgated by the SEC) other than as listed in Exhibit 21.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the &quot;<B>Annual Report</B>&quot;). The Subsidiaries
are the only subsidiaries, direct or indirect, of the Company. The Company and each of the Subsidiaries are duly qualified as a
foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of
the conduct of their business makes such qualification necessary, except to the extent that the failure to be so qualified or be
in good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, &quot;<B>Material
Adverse Effect</B>&quot; means any material adverse effect on (i) the business, properties, assets, operations, results of operations,
condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions contemplated
hereby or on the other Transaction Documents, or (iii) the authority or the ability of the Company to perform its obligations under
the Transaction Documents or consummate any transactions contemplated by this Agreement or the other Transaction Documents. The
outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company or another Subsidiary free and clear of all liens, encumbrances and equities and claims,
except as described in the Registration Statement and the Annual Report; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests
in the Subsidiaries are outstanding.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;<U>Authorization;
Enforcement; Validity</U>. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Certificate of Designations, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)),
the Lock-Up Agreements (as defined in Section 3(yy)), the Voting Agreement (as defined in Section 4(n)) and each of the other agreements
entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the &quot;<B>Transaction
Documents</B>&quot;) and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of
the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Preferred Shares, the reservation for issuance and the issuance of the Conversion
Shares and the Additional Shares pursuant to the terms of the Certificate of Designations have been duly authorized by the Company's
Board of Directors, and, other than NASDAQ's Listing of Additional Shares notification in connection with the transactions contemplated
hereby, no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This
Agreement and the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.
The Certificate of Designations in the form attached hereto as <U>Exhibit A</U> has been filed with the Secretary of State of the
State of Delaware and is in full force and effect, enforceable against the Company in accordance with its terms and has not been
amended.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;<U>Issuance
of Securities</U>. The outstanding shares of Common Stock of the Company have been duly authorized and validly issued and are fully
paid and non-assessable; the Securities to be issued and sold by the Company have been duly authorized and when issued and paid
for as contemplated herein in accordance with the terms of the Transaction Documents will be free from all taxes, liens and charges
with respect to the issue thereof, validly issued, fully paid and non-assessable; and no preemptive rights of stockholders exist
with respect to any of the Securities or the issue and sale thereof. As of the Closing, a number of shares of Common Stock shall
have been duly authorized and reserved for issuance which equals or exceeds (the &quot;<B>Required Reserve Amount</B>&quot;) the
maximum number of shares of Common Stock issued and issuable pursuant to the terms of the Preferred Shares, which amount initially
reserved is 9,501,850 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date hereof) to issue the shares of Common Stock pursuant to the terms of the Certificate
of Designations (without taking into account any limitations on the conversion of the Preferred Shares set forth in the Certificate
of Designations). As of the date hereof, there are 152,539,968 shares of Common Stock authorized and unissued. Neither the offering
nor sale of the Securities as contemplated by this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common Stock. Upon issuance pursuant to the Certificate of Designations,
the Conversion Shares and the Additional Shares will be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded
to a holder of Common Stock. Except as set forth in the Registration Statement and the Prospectus, there are no securities or instruments
issued by the Company containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;<U>Equity
Capitalization</U>. The Company has or will have, as the case may be, an authorized, issued and outstanding capitalization as is
set forth in the Registration Statement and the Prospectus (subject, in each case, to the issuance of shares of Common Stock upon
exercise of stock options and warrants disclosed as outstanding in the Registration Statement and the Prospectus and the grant
or issuance of options or shares under existing equity compensation plans or stock purchase plans described in the Registration
Statement or the Prospectus), and such authorized capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus. Except as disclosed in the Registration Statement and the Prospectus (i) none of the Company's capital
stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company;
(ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company
or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii) there are
no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness (as defined in the Certificate of Designations) of the Company or any of its Subsidiaries or by which the Company
or any of its Subsidiaries is or may become bound; (iv) other than the financing statements perfecting the lien on the Company's
Subsidiaries processing portfolios income stream in connection with the credit facility from RBL Capital Group, LLC, there are
no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with
the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act; (vi) there are no outstanding securities or instruments
of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the
Company or any of its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or &quot;phantom
stock&quot; plans or agreements or any similar plan or agreement; and (ix) the Company and its Subsidiaries have no liabilities
or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred
in the ordinary course of the Company's or any of its Subsidiary's' respective businesses and which, in the aggregate, do not or
would not have a Material Adverse Effect. The Company has furnished or made available to the Buyers true, correct and complete
copies of the Company's Amended and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the
&quot;<B>Certificate of Incorporation</B>&quot;), and the Company's Bylaws, as amended and as in effect on the date hereof (the
&quot;<B>Bylaws</B>&quot;), and the terms of all securities convertible into, or exercisable or exchangeable for shares of Common
Stock and the material rights of the holders thereof in respect thereto. All of the Securities conform to the description thereof
contained in the Registration Statement and the Prospectus. The form of certificates for the Securities will conform to the corporate
law of the jurisdiction of the Company's incorporation.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;<U>Disclosure</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
SEC has not issued an order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus
or the Prospectus relating to the proposed offering of the Securities, and no proceeding for that purpose or pursuant to Section
8A of the 1933 Act has been instituted or, to the Company's knowledge, threatened by the SEC. The Registration Statement conforms,
and the Prospectus and any amendments or supplements thereto will conform to the requirements of the 1933 Act and the Rules and
Regulations. The documents incorporated, or to be incorporated, by reference in the Prospectus, at the time filed with the SEC
conformed in all material respects, or will conform in all respects, to the requirements of the 1934 Act, or the 1933 Act, as applicable,
and the Rules and Regulations. The Registration Statement and any amendments and supplements thereto do not contain, and on the
Closing Date will not contain, any untrue statement of a material fact and do not omit, and on the Closing Date will not omit,
to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus
and any amendments and supplements thereto do not contain, and on the Closing Date will not contain, any untrue statement of a
material fact; and do not omit, and on the Closing Date will not omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and
sale of the Securities or until any earlier date that the Company notified or notifies the Buyers as described in the next sentence,
did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement or the Prospectus, including any document incorporated by reference therein that has not been superseded
or modified. If at any time following issuance of an Issuer Free Writing Prospectus, there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances, not misleading,
the Company has notified or will notify promptly the Buyers so that any use of such Issuer Free Writing Prospectus may cease until
it is amended or supplemented.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company
understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities
of the Company. All disclosure provided to the Buyers regarding the Company, or any of its Subsidiaries, their business and the
transactions contemplated hereby furnished by or on behalf of the Company is true and correct and does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during
the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or information exists
with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2. For purposes
of this Agreement, &quot;<B>Person</B>&quot; means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;<U>Offering
Materials</U>. The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection
with the offering and sale of the Securities other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
and other materials, if any, permitted under the 1933 Act. The Company will file with the SEC all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the 1933 Act. The Company has satisfied or will satisfy the conditions in Rule 433
under the 1933 Act to avoid a requirement to file with the SEC any electronic road show.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;<U>Ineligible
Issuer Status</U>. At the time of filing the Registration Statement and (ii) as of the date hereof (with such date being used as
the determination date for purposes of this clause (ii)), the Company was not and is not an &quot;ineligible issuer&quot; (as defined
in Rule 405 under the 1933 Act, without taking into account any determination by the SEC pursuant to Rule 405 under the 1933 Act
that it is not necessary that the Company be considered an ineligible issuer), including, without limitation, for purposes of Rules
164 and 433 under the 1933 Act with respect to the offering of the Securities as contemplated by the Registration Statement.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;<U>Financial
Statements</U>. The consolidated financial statements of the Company and the Subsidiaries, together with related notes and schedules
as set forth or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, present
fairly in all material respects the financial position of the Company and the consolidated Subsidiaries and the results of operations
and cash flows of the Company and the consolidated Subsidiaries, at the indicated dates and for the indicated periods. Such consolidated
financial statements and related schedules have been prepared in accordance with United States generally accepted accounting principles,
consistently applied throughout the periods involved (&quot;<B>GAAP</B>&quot;), except as disclosed therein, and all adjustments
necessary for a fair presentation of results for such periods have been made. The summary and selected consolidated financial and
statistical data included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus
presents fairly in all material respects the information shown therein, at the indicated dates and for the indicated periods, and
such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of
the Company. All disclosures, if any, contained in the Registration Statement, the General Disclosure Package and the Prospectus
regarding &quot;non-GAAP financial measures&quot; (as such term is defined by the Rules and Regulations) comply in all material
respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K under the 1933 Act, to the extent applicable. The Company
and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations or any &quot;variable interest entities&quot; within the meaning of Financial Accounting Standards Board Interpretation
No. 46), not disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. There are no financial
statements (historical or pro forma) that are required to be included in the Registration Statement, the General Disclosure Package
or the Prospectus that are not included as required. No other information provided by or on behalf of the Company to the Buyers
which is not included in the SEC Documents (as defined below) contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were
made, not misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;<U>Accountants</U>.
Daszkal Bolton LLP, who have certified certain of the financial statements filed with the SEC as part of, or incorporated by reference
in, the Registration Statement, the General Disclosure Package and the Prospectus, has represented to the Company that it is an
independent registered public accounting firm with respect to the Company and the Subsidiaries within the meaning of the 1933
Act and the applicable Rules and Regulations and the Public Company Accounting Oversight Board (United States).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;<U>Weaknesses
or Changes in Internal Accounting Controls</U>. Except as described in Item 9A of the Company's Form 10-K for the period ended
December 31, 2014, neither the Company nor any of the Subsidiaries has during the twelve months prior to the date hereof (i) received
any notice or correspondence from any accountant relating to any material weakness in any part of the system of internal accounting
controls of the Company or any of its Subsidiaries (ii) become aware of any material weakness in its internal control over financial
reporting or change in internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;<U>Sarbanes-Oxley</U>.
The principal executive officer and principal financial officer of the Company have made all certifications required by Sections
302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the
&quot;<B>Sarbanes-Oxley Act</B>&quot;) with respect to all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC, and the statements contained in any such certification are complete and correct. The Company and all
of the Company's directors and officers are in compliance in all respects with all applicable effective provisions of the Sarbanes-Oxley
Act.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;<U>Absence
of Litigation</U>. There is no action, suit, proceeding, inquiry or investigation before or by The NASDAQ Capital Market (the &quot;<B>Principal
Market</B>&quot;), any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company's
Subsidiaries or any of the Company's or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise,
in their capacities as such, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus.
The matters set forth in the Registration Statement, the General Disclosure Package and the Prospectus, in the aggregate, do not
or would not reasonably be expected to have a Material Adverse Effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;<U>Title</U>.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free
and clear of all liens, encumbrances and defects except for Permitted Liens which do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any
real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases conforming in all material respects to the description thereof set forth in the Registration Statement,
the General Disclosure Package and the Prospectus.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;<U>Taxes</U>.
The Company and each of its Subsidiaries (i) has made or filed all U.S. federal, state and foreign income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;<U>Absence
of Certain Changes</U>. Since the respective dates as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, as each may be amended or supplemented, there has been no material adverse change and no
material adverse development in the business, assets, properties, operations, condition (financial or otherwise), results of operations
or prospects of the Company or its Subsidiaries and there has not been any material transaction entered into by the Company or
the Subsidiaries (including, without limitation, (i) declaration or payment of any dividends, (ii) sale of any assets, in the aggregate,
in excess of $100,000 or (iii) any capital expenditures, in the aggregate, in excess of $100,000), other than transactions in the
ordinary course of business and transactions described in the Registration Statement, the General Disclosure Package and the Prospectus,
as each may be amended or supplemented. The Company and the Subsidiaries have no material contingent obligations which are not
disclosed in the Company's consolidated financial statements which are included in the Registration Statement, the General Disclosure
Package and the Prospectus. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to
any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor to do so. The Company, individually,
and the Company and its Subsidiaries, on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions
contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Agreement, &quot;<B>Insolvent</B>&quot;
means, with respect to any Person, (i) the present fair saleable value of such Person's assets is less than the amount required
to pay such Person's total Indebtedness, (ii) such Person is unable to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(r)&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Conflicts</U>. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares
and reservation for issuance and issuance of the Conversion Shares and the Additional Shares) will not (i) result in a violation
of its Certificate of Incorporation or Bylaws, any memorandum of association, articles of incorporation, certificate of formation,
bylaws, any certificate of designations or other constituent documents of the Company or any of its Subsidiaries, any capital
stock of the Company or any of its Subsidiaries or the articles of association or bylaws of the Company or any of its Subsidiaries
or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries
or any of their respective properties is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including other foreign, federal and state securities laws and regulations and the rules and regulations of the Principal
Market and including all applicable laws of the State of Delaware and any foreign, federal and state laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(s)&nbsp;&nbsp;&nbsp;<U>Contracts</U>.
There is no document, contract or other agreement required to be described in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement which is not described or filed as required by the 1933 Act or the Rules and
Regulations. Each description of a contract, document or other agreement in the Registration Statement and the Prospectus accurately
reflects in all material respects the terms of the underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement and Prospectus or listed in the exhibits to the Registration Statement
or incorporated by reference is in full force and effect and is valid and enforceable by and against the Company in accordance
with its terms (except as rights to indemnity and contribution thereunder may be limited by federal or state securities laws and
matter of public policy and except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principle). Neither the
Company nor any of its Subsidiaries nor, to the Company's knowledge, any other party is in default in the observance or performance
of any term or obligation to be performed by it under any such agreement or any other agreement or instrument to which the Company
or its Subsidiaries is a party or by which the Company or its Subsidiaries or their respective properties or businesses may be
bound, and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case in
which the default or event, in the aggregate, would have a Material Adverse Effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(t)&nbsp;&nbsp;&nbsp;&nbsp;<U>Regulatory
Approvals</U>. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative
or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation
of the transactions herein contemplated (except such additional steps as may be required by the SEC, the Financial Industry Regulatory
Authority, Inc. (the &quot;<B>FINRA</B>&quot;), the Principal Market or such additional steps as may be required under state securities
or Blue Sky laws) has been obtained or made and is in full force and effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(u)&nbsp;&nbsp;&nbsp;<U>Conduct
of Business</U>. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under any certificate
of designations of any outstanding series of preferred stock of the Company (if any), its Certificate of Incorporation or Bylaws
or their organizational charter or memorandum of association or articles of incorporation or articles of association or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except for possible violations which would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;<U>Intellectual
Property</U>. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (&quot;<B>Intellectual Property Rights</B>&quot;) necessary to conduct their respective businesses as now
conducted. Each of patents owned by the Company or any of its Subsidiaries is listed in the Registration Statement and the Prospectus.
Except as set forth in the Registration Statement and the Prospectus, none of the Company's Intellectual Property Rights have expired
or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three (3) years
from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries
of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of
the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual
Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might give rise to
any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights. There are no outstanding
options, licenses or agreements of any kind relating to the Intellectual Property Rights of the Company that are required to be
described in the Registration Statement, the General Disclosure Package and the Prospectus and are not described therein in all
material respects. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are required to be set forth in the Prospectus and are not described therein
in all material respects. None of the technology employed by the Company and material to the Company's business has been obtained
or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company's knowledge,
any of its officers, directors or employees or, to the Company's knowledge, otherwise in violation of the rights of any persons;
the Company has not received any written or oral communications alleging that the Company has violated, infringed or conflicted
with, or, by conducting its business as set forth in the Registration Statement, the General Disclosure Package and the Prospectus,
would violate, infringe or conflict with, any of the Intellectual Property Rights of any other person or entity. The Company knows
of no infringement by others of Intellectual Property Rights owned by or licensed to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(w)&nbsp;&nbsp;<U>Manipulation
of Prices</U>. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) other than the Agent,
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) other than the
Agent, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(x)&nbsp;&nbsp;&nbsp;<U>Investment
Company Act</U>. Neither the Company nor any Subsidiary is, and upon consummation of the sale of the Securities, and for so long
any Buyer holds any Securities, will be, an &quot;investment company,&quot; a company controlled by an &quot;investment company&quot;
or an &quot;affiliated person&quot; of, or &quot;promoter&quot; or &quot;principal underwriter&quot; for, an &quot;investment company&quot;
as such terms are defined in the Investment Company Act of 1940, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(y)&nbsp;&nbsp;&nbsp;<U>Internal
Accounting Controls</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described in Item 9A of the Company&rsquo;s Form 10-K for the period ended December 31, 2014, the Company and each of its Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as described in Item 9A of the Company&rsquo;s Form 10-K for the period ended December 31, 2014, the Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company's management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(z)&nbsp;&nbsp;&nbsp;<U>Industry
and Market Data</U>. The statistical, industry-related and market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes
are reliable and accurate, and such data agree in all material respects with the sources from which they are derived.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(aa)&nbsp;&nbsp;<U>Money
Laundering Laws</U>. The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the &quot;<B>Money
Laundering Laws</B>&quot;), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any or its Subsidiaries with respect to the Money Laundering Laws is pending or, to
the Company's knowledge, threatened.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 1in">(bb)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT><U>Office
of Foreign Assets Control</U>.&nbsp; Neither the Company nor any director, officer, agent, employee or affiliate of the Company
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(&quot;<B>OFAC</B>&quot;).&nbsp; Neither the Company nor any subsidiary or affiliate (a) will directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity currently subject to any U.S. sanctions administered by OFAC; (b) is knowingly engaged in, or will knowingly
engage in, any dealings or transactions or be otherwise associated with such persons or entities described in clause (a) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(cc)&nbsp;&nbsp;<U>Insurance</U>.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that, in the aggregate, do not or would not have a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(dd)&nbsp;&nbsp;<U>Employee
Benefits</U>. The Company and each Subsidiary is in compliance in all material respects with all presently applicable provisions
of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder
(&quot;<B>ERISA</B>&quot;); no &quot;reportable event&quot; (as defined in ERISA) has occurred with respect to any &quot;pension
plan&quot; (as defined in ERISA) for which the Company and each Subsidiary would have any material liability; the Company and each
Subsidiary has not incurred and does not expect to incur material liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any &quot;pension plan&quot; or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended
(the &quot;<B>Code</B>&quot;); and each &quot;pension plan&quot; for which the Company or any Subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such qualification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ee)&nbsp;&nbsp;<U>Employee
Relations</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that its relations with its employees are good. No executive officer of the Company or any
of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such officer
intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the Company or any such
Subsidiary. No executive officer of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters, except where such
violation would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ff)&nbsp;&nbsp;<U>Transactions
with Affiliates</U>. To the Company's knowledge, there are no affiliations or associations between any member of the FINRA and
any of the Company's officers, directors or 5% or greater securityholders, except as set forth in the Registration Statement. There
are no relationships or related-party transactions involving the Company or any of the Subsidiaries or, to the knowledge of the
Company, any other person required to be described in the Prospectus which have not been described as required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(gg)&nbsp;&nbsp;<U>Environmental
Laws.</U> The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where,
in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect. The term &quot;<B>Environmental Laws</B>&quot; means all federal, state, local
or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, &quot;<B>Hazardous Materials</B>&quot;)<B> </B>into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations
issued, entered, promulgated or approved thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(hh)&nbsp;&nbsp;<U>Listing;
1934 Act Registration</U>. The Common Stock is listed for trading on the Principal Market. The Company has taken no action designed
to, or likely to have the effect of, terminating the registration of the Common Stock under the 1934 Act or the quotation of the
Common Stock on the Principal Market, nor has the Company received any notification that the SEC or the Principal Market is contemplating
terminating such registration or quotation. Without limiting the generality of the foregoing, the Company is not in violation of
any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. During the two
(2) years prior to the date hereof, the Common Stock has been designated for quotation on the Principal Market. During the two
(2) years prior to the date hereof, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and
(ii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension
or delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess such certificates, authorizations or permits would not have, in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 1in">(ii)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
</FONT><U>Contributions; Foreign Corrupt Practices</U>. Neither the Company, nor any of its Subsidiaries, nor any director, officer,
agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for,
or on behalf of, the Company or any of its Subsidiaries (i) used any funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended (&quot;<B>FCPA</B>&quot;); or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government official or employee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(jj)&nbsp;&nbsp;<U>No
Integrated Offering</U>. The Company has not sold or issued any securities that would be integrated with the offering of the Securities
contemplated by this Agreement pursuant to the 1933 Act, the Rules and Regulations or the interpretations thereof by the SEC. None
of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to require approval of stockholders of the Company for purposes of any applicable stockholder approval provisions,
including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any Person acting
on their behalf will take any action or steps referred to in the preceding sentence that would cause the offering of the Securities
to be integrated with other offerings for purposes of any such applicable stockholder approval provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(kk)&nbsp;&nbsp;<U>Brokerage
Fees; Commissions</U>. Except as set forth in any of the Transaction Documents, the Registration Statement and the Prospectus,
neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Buyers for a brokerage commission, finder's fee or like payment (other than
any payment to the Agent (as defined below)) in connection with the offering and sale of the Securities. The Company shall pay,
and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorneys' fees and out-of-pocket
expenses) arising in connection with any such claim. The Company acknowledges that it has engaged Revere Securities LLC as placement
agent (the &quot;<B>Agent</B>&quot;) in connection with the sale of the Securities. Other than the Agent, neither the Company nor
any of its Subsidiaries has engaged any placement agent or other agent in connection with the sale of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ll)&nbsp;&nbsp;<U>Consents</U>.
Other than the Nasdaq's Listing of Additional Shares notification in connection with the transactions contemplated hereby, the
filing of the Certificate of Designations with the Secretary of State of the State of Delaware, and filing of the Prospectus Supplement
and Current Report on Form 8-K with the SEC with respect to the transactions contemplated hereby and the other Transaction Documents,
neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing
or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for
it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any of its
Subsidiaries is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing
Date, and the Company and its Subsidiaries are unaware of any facts or circumstances that might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts that would reasonably
lead to delisting or suspension of the Common Stock in the foreseeable future. The issuance by the Company of the Securities shall
not have the effect of delisting or suspending the Common Stock from the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(mm)&nbsp;&nbsp;<U>Acknowledgment
Regarding Buyer's Purchase of Securities</U>. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and
that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an &quot;affiliate&quot; of the Company
or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of the Company, a &quot;beneficial owner&quot; of
more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges
that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer
or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Buyer's purchase of the Securities. The Company further represents to each Buyer that the
Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and
its representatives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(nn)&nbsp;&nbsp;<U>Dilutive
Effect</U>. The Company understands and acknowledges that the number of Conversion Shares and Additional Shares issuable pursuant
to the terms of the Certificate of Designations will increase in certain circumstances. The Company further acknowledges that its
obligation to issue Conversion Shares and Additional Shares pursuant to the terms of the Certificate of Designations is absolute
and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(oo)&nbsp;&nbsp;<U>Application
of Takeover Protections; Rights Agreement</U>. The Company and its board of directors have taken all necessary action, if any,
in order to exempt the Company's issuance of the Securities and any Buyer's ownership of the Securities from the provisions of
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Certificate of Incorporation of the Company or the laws of the state of its incorporation
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without
limitation, the Company's issuance of Securities and each Buyer's ownership of the Securities. Except as set forth in the Registration
Statement and the Prospectus, the Company does not have any stockholder rights plan or similar arrangement relating to accumulations
of beneficial ownership of Common Stock or a change in control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(pp)&nbsp;&nbsp;<U>Subsidiary
Rights</U>. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(qq)&nbsp;&nbsp;<U>Off
Balance Sheet Arrangements</U>. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed
or that otherwise would be reasonably likely to have a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(rr)&nbsp;&nbsp;<U>Transfer
Taxes</U>. On the Closing Date, all stock transfer or other similar taxes (other than income or similar taxes) which are required
to be paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ss)&nbsp;&nbsp;<U>[Intentionally
omitted]</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(tt)&nbsp;&nbsp;&nbsp;<U>U.S.
Real Property Holding Corporation</U>. The Company is not, has never been, and so long as any Securities remain outstanding, shall
not become, a U.S. real property holding corporation within the meaning of Section 897 of the Code and the Company shall so certify
upon any Buyer's request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(uu)&nbsp;&nbsp;<U>Shell
Company Status</U>. The Company is not, and has not been since October 5, 2012, an issuer identified in Rule 144(i)(1) of the 1933
Act. On October 5, 2012, the Company filed a Current Report on Form 8-K (as amended by a Current Report on Form 8-K/A filed by
the Company with the SEC on November 19, 2012) containing current &quot;Form 10 information&quot; (as defined in Rule 144 (i)(3))
with the SEC reflecting its status as an entity that was no longer an issuer described in Rule 144(i)(1)(i).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(vv)&nbsp;&nbsp;<U>Bank
Holding Company</U>. Neither the Company nor any of its Subsidiaries or affiliates is subject to the Bank Holding Company Act of
1956, as amended (the &quot;<B>BHCA</B>&quot;) and to regulation by the Board of Governors of the Federal Reserve System (the &quot;<B>Federal
Reserve</B>&quot;). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ww)&nbsp;&nbsp;<U>SEC
Documents; Financial Statements</U>. During the two (2) years prior to the date hereof, the Company has timely (other than certain
Current Reports on Form 8-K) filed all reports, schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof, and all exhibits
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the &quot;<B>SEC Documents</B>&quot;). The Company has delivered to the Buyers or their respective representatives
true, correct and complete copies of the SEC Documents not available on the EDGAR system. As of their respective filing dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their
respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein,
in the light of the circumstance under which they are or were made, not misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(xx)&nbsp;&nbsp;<U>Placement
Agent Agreement</U>. The Company has entered into an Equity Distribution Agreement, dated as of January 15, 2015, with the Agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(yy)&nbsp;&nbsp;<U>Lock-Up
Agreements</U>. The Company and each of the parties set forth on <U>Exhibit B</U> hereto has executed and delivered to the Company
a lock-up agreement in the form attached hereto as <U>Exhibit C</U> (collectively, the &quot;<B>Lock-Up Agreements</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(zz)&nbsp;&nbsp;<U>No
Undisclosed Events, Liabilities, Developments or Circumstances</U>. No event, liability, development or circumstance has occurred
or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities
laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(aaa)&nbsp;<U>Stock
Option Plans</U>. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock
option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the
date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's
stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice
of the Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with,
the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial
results or prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(bbb)&nbsp;<U>Indebtedness
and Other Contracts</U>. Neither the Company nor any of its Subsidiaries, except as disclosed in the Registration Statement and
the Prospectus, (i) has any outstanding Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of
which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to
result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, in the aggregate, in a Material Adverse
Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in
the judgment of the Company's officers, has or is expected to have a Material Adverse Effect. The Registration Statement and the
Prospectus provide a detailed description of the material terms of any such outstanding Indebtedness. The Company hereby represents
that loans of up to an aggregate principal amount of $6,035,000 remain available to the Company pursuant that certain Loan and
Security Agreement, dated June 30, 2014, among RBL Capital Group, LLC, as lender, and TOT Group, Inc., TOT Payments, LLC, TOT BPS,
LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC, as co-borrowers subject only to the satisfaction or waiver
of the conditions precedents to each subsequent funding specified in Section 5.01(e) thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ccc)&nbsp;<U>No
Additional Agreements</U>. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Buyer with
respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(ddd)&nbsp;<U>No
Disagreements with Accountants and Lawyers</U>. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof,
the Company had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions,
the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>COVENANTS.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;<U>Best
Efforts</U>. Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be satisfied by
it as provided in Sections 6 and 7 of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;<U>Maintenance
of Registration Statement</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
so long as any of the Securities remain outstanding or are potentially issuable under the Certificate of Designations, the Company
shall use its reasonable best efforts to maintain the effectiveness of the Registration Statement for the issuance thereunder of
the Registrable Securities (as defined below); provided that, if at any time while the Preferred Shares are outstanding, (x) the
Company shall be ineligible to utilize Form S-3 (or any successor form) for the purpose of issuance of all of the Registrable Securities
or (y) the Registration Statement does not, at any time, cover a sufficient number of shares of Common Stock for issuances pursuant
to the terms of the Certificate of Designations, in each case, without any regard to any limitation or restriction on issuances
of shares set forth in the Certificate of Designations, the Company shall promptly amend or supplement the Registration Statement
or, if necessary, file a new registration statement in order to register such number of Registrable Securities not covered by the
Registration Statement or to maintain the effectiveness of the Registration Statement or such other registration statement for
this purpose. For the purpose of this Agreement, &quot;<B>Registrable Securities</B>&quot; means (i)&nbsp;the Conversion Shares
and the Additional Shares issued or issuable pursuant to the terms of the Preferred Shares and (ii) any shares of capital stock
of the Company issued or issuable with respect to the Preferred Shares, the Conversion Shares and/or the Additional Shares as a
result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, in each case, without regard
to any limitations on issuance or conversion thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, on
any day after the Closing Date, issuances of all of the Registrable Securities cannot be made pursuant to the terms of the Certificate
of Designations pursuant to the Registration Statement (including, without limitation, because of a failure to keep the Registration
Statement effective, failure to file or cause to become effective any supplements or amendments thereto or other public filings
necessary, failure to disclose such information as is necessary for sales to be made pursuant to the Registration Statement, a
suspension or delisting of the Common Stock on its principal trading market or exchange, failure to register or list a sufficient
number of shares of Common Stock) (a &quot;<B>Maintenance Failure</B>&quot;) then, as partial relief for the damages to any Buyer
by reason of any such delay in or reduction of its ability to receive Registrable Securities pursuant to the terms of the Certificate
of Designations (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay
to each Buyer an amount in cash equal to one and one-half percent (1.5%) of the aggregate Purchase Price of such Buyer's Preferred
Shares paid by such Buyer on each of the following dates: (i) the initial day of a Maintenance Failure; and (ii) on every thirtieth
(30th) day (pro-rated for periods totaling less than thirty (30) days) after the initial day after a Maintenance Failure until
such Maintenance Failure is cured. The Company shall also pay the reasonable fees of legal counsel of such Investor to enforce
the provisions hereof. The payments to which an Investor shall be entitled pursuant to this Section 4(b) are referred to herein
as &quot;<B>Registration Delay Payments</B>.&quot; Registration Delay Payments shall be paid on the initial day of a Maintenance
Failure, as applicable, and thereafter on the earlier of (I) the thirtieth (30th) day after the event or failure giving rise to
the Registration Delay Payments has occurred and (II) the third (3rd) Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments when due in a timely manner,
such unpaid portion of the Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per month
(prorated for partial months) until paid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;<U>Prospectus
Supplement and Blue Sky</U>. In the manner required by law, the Company shall have delivered to the Buyers, and as soon as practicable
after the Closing, the Company shall file, the Prospectus Supplement with respect to the Securities as required under and in conformity
with the 1933 Act, including Rule 424(b) thereunder. If required, the Company, on or before the Closing Date, shall take such action
as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale
to the Buyers at the Closing pursuant to this Agreement under applicable securities or &quot;Blue Sky&quot; laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of
the Securities required under applicable securities or &quot;Blue Sky&quot; laws of the states of the United States following the
Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;<U>Use
of Proceeds</U>. The Company will use the proceeds from the sale of the Securities solely as set forth on <U>Schedule 4(d)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;<U>Listing</U>.
The Company shall promptly secure the listing of all of the Conversion Shares and Additional Shares upon each securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed, including the Principal Market (subject to
official notice of issuance) and shall use its reasonable best efforts to maintain, in accordance with the Transaction Documents,
such listing of all Conversion Shares and Additional Shares from time to time issuable under the terms of the Transaction Documents.
The Company shall maintain the authorization for quotation of the Common Stocks on the Principal Market or if such authorization
is not able to be maintained, on another Eligible Market (as defined in the Certificate of Designations). Neither the Company nor
any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the
Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(e).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;<U>Fees</U>.
The Company shall reimburse the Lead Investor (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any
Buyer or its counsel prior to the date of this Agreement) for all costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including all legal fees and disbursements in connection therewith, documentation and
implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith) in an amount
not to exceed, without the prior approval of the Company, $65,000 (the &quot;<B>Legal Fee Cap</B>&quot;), which amount, at the
option of the Buyer, may be withheld by such Buyer from its Purchase Price at the Closing to the extent not previously reimbursed
by the Company. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, or broker's
commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees or commissions payable to the Agent and all fees payable to the Bank in connection with the Deposit
Account Control Agreement. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any claim relating to any
such payment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;<U>Pledge
of Securities</U>. The Company acknowledges and agrees that the Securities may be pledged by any holder of Securities (an &quot;<B>Investor</B>&quot;)
in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a
pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company
pursuant to this Agreement or any other Transaction Document. The Company hereby agrees, subject to applicable securities laws,
to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of
the Securities to such pledgee by an Investor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;<U>Disclosure
of Transactions and Other Material Information</U>. On or before 8:30 a.m., New York City time, on the first Business Day after
this Agreement has been executed, the Company shall issue a press release reasonably acceptable to the Buyers and file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement, the Certificate of Designations,
the form of Lock-Up Agreement and the Voting Agreement) as exhibits to such filing (including all attachments), the &quot;<B>8-K
Filing</B>&quot;). As of immediately following the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any
material, nonpublic information received from the Company, any of its Subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that is not disclosed in the 8-K Filing or in prior filings with the SEC. In addition, effective
upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand,
shall terminate. The Company understands and confirms that each of the Buyers will rely on the foregoing in effecting transactions
in securities of the Company. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees, affiliates and agents, not to, provide any Buyer with any material, nonpublic information regarding
the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express prior written
consent of such Buyer. If a Buyer has, or believes it has, received any such material, nonpublic information regarding the Company
or any of its Subsidiaries from the Company, any of its Subsidiaries or any of their respective officers, directors, employees,
affiliates or agents, it may provide the Company with written notice thereof in which case the Company shall, within two (2) Trading
Days (as defined in the Certificate of Designations) of receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees, affiliates and agents, in addition to any other remedy provided herein or in the Transaction
Documents, a Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, affiliates or agents. No Buyer shall have any liability to the Company, its Subsidiaries, or any
of its or their respective officers, directors, employees, affiliates or agents for any such disclosure. To the extent the Company
or any of its or their respective officers, directors, employees, affiliates or agents delivers any material, non-public information
to a Buyer without such Buyer's consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or
agents not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its
Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated
hereby; <U>provided</U>, <U>however</U>, that the Company shall be entitled, without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law, regulation or any Eligible Market on which the Company's
securities are then listed or quoted (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection
with any such press release or other public disclosure prior to its release). Without the prior written consent of any applicable
Buyer, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise <FONT STYLE="font-weight: normal">other than in connection with the Registration Statement unless such disclosure
is required by law, regulation or any Eligible Market on which the Company's securities are then listed or quoted</FONT>.<B> </B>As
used herein, &quot;<B>Business Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks in
The City of New York are authorized or required by law to remain closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;<U>Additional
Preferred Shares; Variable Securities</U>. So long as any Buyer beneficially owns any Securities, the Company will not issue any
Preferred Shares other than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would
cause a breach or default under the Certificate of Designations. Other than in connection with the acquisition of the PayOnline
group of companies, and except for any issuances of securities to any of the Buyers, for so long as any Preferred Shares remain
outstanding or potentially may be issued hereunder, the Company shall not, in any manner, issue or sell any rights, warrants or
options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way of one or more reset(s)
to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less than the then applicable
Conversion Price (as defined in the Certificate of Designations) with respect to the Common Stock into which any of Preferred Shares
are convertible or redeemable, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;<U>Corporate
Existence</U>. So long as any Buyer beneficially owns any Securities, the Company shall (i) maintain its corporate existence and
(ii) not be party to any Fundamental Transaction (as defined in Certificate of Designations) unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Designations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;<U>Reservation
of Shares</U>. So long as any Buyer owns any Securities, the Company shall take all action necessary to at all times have authorized,
and reserved for the Required Reserve Amount. If at any time the number of shares of Common Stock authorized and reserved for issuance
is not sufficient to meet the Required Reserve Amount or the number of shares of Common Stock issued and issuable pursuant to the
terms of the Preferred Shares at any time exceeds the Required Reserve Amount initially reserved by the Company and the Company
is able under applicable securities laws to issue more shares pursuant to the Registration Statement or other registration statement,
the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company's obligations
under Section 3(e) and this Section 3(k), and, in the case of an insufficient number of authorized shares, obtain stockholder approval
of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in
the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve
Amount. The initial number of shares of Common Stock reserved for conversions of the Preferred Shares and each increase in the
number of shares so reserved shall be allocated pro rata among the Buyers based on the number of Preferred Shares held by each
Buyer at the time of issuance of the Preferred Shares or increase in the number of reserved shares, as the case may be. In the
event a Buyer shall sell or otherwise transfer any of such Buyer's Preferred Shares, each transferee shall be allocated a pro rata
portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and
allocated to any Person which ceases to hold any Preferred Shares (other than pursuant to a transfer of Preferred Shares in accordance
with the immediately preceding sentence) shall be allocated to the remaining Investors, pro rata based on the number of Preferred
Shares then held by such Investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 1in">(l)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
</FONT><U>Conduct of Business</U>. The business of the Company and its Subsidiaries shall not be conducted in violation of any
law, ordinance or regulation of any governmental entity, including, without limitation, FCPA, OFAC regulations and Money Laundering
Laws, except where such violations would not result, in the aggregate, in a Material Adverse Effect.&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;<U>Lock-Up</U>.
The Company shall not amend or waive any provision of the Lock-Up Agreements except to extend the term of the lock-up period contained
therein and shall enforce the provisions of the Lock-Up Agreements in accordance with their terms. If any party to a Lock-Up Agreement
breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to seek specific performance of
the terms of such Lock-Up Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;<U>Voting
Agreement</U>. The Company shall use its reasonable best efforts to effectuate the transactions contemplated by the Voting Agreement
substantially in the form attached hereto as <U>Exhibit D</U> (the &quot;<B>Voting Agreement</B>&quot;), executed on or prior to
the Closing by the Company and each of Kenges Rakishev, Novatus Holding PTE. Ltd., a company organized under the laws of the British
Virgin Islands, Oleg Firer, Steven Wolberg, James Caan, Jonathan New, David P. Kelley II, William Healy, Beno Distribution, Ltd.,
a company organized under the laws of the British Virgin Islands, Cayman Invest S.A., a company organized under the laws of the
British Virgin Islands, and Mayor Trans Ltd., a company incorporated in the Republic of Seychelles holding, immediately prior to
the date hereof, no less than 50% of the issued and outstanding Common Stock (collectively, the &quot;<B>Principal Stockholders</B>&quot;).&nbsp;
The Company shall not amend or waive any provision of the Voting Agreement and shall enforce the provisions of the Voting Agreement
in accordance with its terms. If any of the Principal Stockholders breaches any provision of the Voting Agreement, the Company
shall promptly use its best efforts to seek specific performance of the terms of such Voting Agreement in accordance with the terms
thereof.&nbsp; In addition, if the Company receives any notice from any of the Principal Stockholders pursuant to the Voting Agreement,
the Company shall promptly, but in no event later than two (2) Business Days, deliver a copy of such notice to each Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;<U>Additional
Issuances of Securities</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Section 4(o), the following definitions shall apply.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares
of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Common
Stock Equivalents</B>&quot; means, collectively, Options and Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From the
date hereof until the date no Preferred Shares are outstanding (the &quot;<B>Trigger Date</B>&quot;), the Company shall not, (x)
(i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant
or any option to purchase or other disposition of) any of its or its Subsidiaries' equity or equity equivalent securities, including
without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a &quot;<B>Subsequent Placement</B>&quot;), or (ii) be party
to any solicitations, negotiations or discussions with regard to the foregoing or (y) directly or indirectly, (i) file any registration
statement with the SEC or file any amendment or supplement thereto, (ii) cause any registration statement to be declared effective
by the SEC or (iii) grant any registration rights to any Person that can be exercised prior to such date as set forth above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
the Trigger Date until the one (1) year anniversary of the Trigger Date, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this Section 4(o)(iii).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall deliver to each Buyer an irrevocable written notice (the&nbsp;&quot;<B>Offer Notice</B>&quot;) of any proposed or
intended issuance or sale or exchange (the&nbsp;&quot;<B>Offer</B>&quot;) of the securities being offered (the &quot;<B>Offered
Securities</B>&quot;) in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x)&nbsp;describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities
to be issued, sold or exchanged, (y)&nbsp;identify the persons or entities (if known) to which or with which the Offered Securities
are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers at least fifty percent
(50%) of the Offered Securities, allocated among such Buyers (a) based on such Buyer's pro rata portion of the aggregate number
of Preferred Shares purchased hereunder (the &quot;<B>Basic Amount</B>&quot;) and (b) with respect to each Buyer that elects to
purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as
such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the
&quot;<B>Undersubscription Amount</B>&quot;), which process shall be repeated until the Buyers shall have an opportunity to subscribe
for any remaining Undersubscription Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the tenth (10<SUP>th</SUP>)
Business Day after such Buyer's receipt of the Offer Notice (the &quot;<B>Offer Period</B>&quot;), setting forth the portion of
such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the &quot;<B>Notice of Acceptance</B>&quot;).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; <U>provided</U>, <U>however</U>, that if the Undersubscription
Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the
&quot;<B>Available Undersubscription Amount</B>&quot;), each Buyer who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the
total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the
extent its deems reasonably necessary. <FONT STYLE="font-weight: normal">Notwithstanding anything to the contrary contained herein,
if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the
Company may deliver to the Buyers a new Offer Notice and the Offer Period shall expire on the</FONT> tenth (10<SUP>th</SUP>) Business
Day <FONT STYLE="font-weight: normal">after such Buyer's receipt of such new Offer Notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have five (5) Business Days from the expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the &quot;<B>Refused Securities</B>&quot;)
pursuant to a definitive agreement (the &quot;<B>Subsequent Placement Agreement&quot;</B>), but only to the offerees described
in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set
forth in the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement and (b) either
(x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
and any documents contemplated therein filed as exhibits thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(o)(iii)(3) above), then each Buyer may, at its sole option and in its sole discretion, reduce the
number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(iii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue,
sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(o)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer
so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section 4(o)(iii)(1) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from
the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(o)(iii)(4) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery
by the Company and the Buyers of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance
to the Buyers and their respective counsel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
Offered Securities not acquired by the Buyers or other persons in accordance with Section 4(o)(iii)(3) above may not be issued,
sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and the Buyers agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement with respect
to such Offer nor any other transaction documents related thereto (collectively, the &quot;<B>Subsequent Placement Documents</B>&quot;)
shall include any term or provisions whereby any Buyer shall be required to agree to any restrictions in trading as to any securities
of the Company owned by such Buyer prior to such Subsequent Placement and (y) the Buyers shall be entitled to the same registration
rights provided to the other investors in the Subsequent Placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by the Buyers, the Company shall either confirm in
writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case in such a manner such that the Buyers will not be in possession of
material non-public information, by the fifteenth (15<SUP>th</SUP>) Business Day following delivery of the Offer Notice. If by
the fifteenth (15<SUP>th</SUP>) Business Day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyers, such transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be in possession of
any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect
to the Offered Securities, the Company shall provide each Buyer with another Offer Notice and each Buyer will again have the right
of participation set forth in this Section 4(o)(iii). The Company shall not be permitted to deliver more than one such Offer Notice
to the Buyers in any 60 day period (other than the Offer Notices contemplated by the last sentence of Section 4(o)(iii)(2) of this
Agreement).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall not apply in connection with the issuance of any
Excluded Securities (as defined in the Certificate of Designations).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;<U>Stockholder
Approval</U>. The Company shall file with the SEC and provide each stockholder of the Company with an information statement complying
with the requirements of the 1934 Act and substantially in the form that has been previously reviewed and approved by the Buyers
and Schulte Roth &amp; Zabel LLP informing such stockholders of the actions taken in accordance with the Resolutions and of the
Stockholder Approval (each, as defined below). In addition to the foregoing, if required by any governmental or regulatory agency,
the Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the
&quot;<B>Stockholder Meeting</B>&quot;), which shall be called at or prior to the Company's next annual meeting of stockholders,
but in no event later than the Stockholder Meeting Deadline (as defined below), a proxy statement (the &quot;<B>Proxy Statement</B>&quot;),
in a form reasonably acceptable to the Buyers after review by Schulte Roth &amp; Zabel LLP, soliciting each such stockholder's
affirmative vote at the Stockholder Meeting for approval of resolutions (the &quot;<B>Resolutions</B>&quot;) providing for the
issuance of all of the Securities as described in the Transaction Documents in accordance with applicable law, the provisions of
the Certificate of Incorporation and the rules and regulations of the Principal Market (such affirmative approval being referred
to herein as the &quot;<B>Stockholder Approval</B>&quot;), and the Company shall use its reasonable best efforts to solicit its
stockholders' approval of such Resolutions and to cause the Board of Directors of the Company to recommend to the stockholders
that they approve the Resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder
Meeting Deadline. If, despite the Company's reasonable best efforts, the Stockholder Approval is not obtained at the Stockholder
Meeting, the Company shall cause an additional Stockholder Meeting to be held each calendar quarter thereafter until Stockholder
Approval is obtained. In connection with the stockholders' meeting contemplated by this Section 4(p), the Company shall (i) use
its best efforts to solicit its stockholders' approval of the Resolutions and (ii) cause at least a majority of the Board of Directors
of the Company to recommend to the stockholders that they approve the Resolutions. As used herein, &quot;<B>Stockholder Meeting
Deadline</B>&quot; means (i) the date that is sixty (60) days after the Closing Date in the event the Proxy Statement is subject
to review by the SEC and (ii) the date that is thirty (30) days after the Closing Date in the event the Proxy Statement is not
subject to review by the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;<U>Conversion
Share Characteristics</U>. If Conversion Shares and/or Additional Shares are issued pursuant to the terms of the Certificate of
Designations, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the 1933 Act, the Conversion Shares
and/or the Additional Shares, as applicable, shall take on the registered characteristics of the Preferred Shares with respect
to which such Conversion Shares and/or Additional Shares are being issued, and the holding period of such Preferred Shares may
be tacked on to the holding period of the Conversion Shares and/or Additional Shares, respectively.&nbsp; The Company agrees not
to take any position contrary to this Section 4(q).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(r)&nbsp;&nbsp;&nbsp;<U>Reporting
Status</U>. Until the date on which the Buyers shall have sold all of the Conversion Shares and Additional Shares<B> </B>and none
of the Preferred Shares are outstanding (the &quot;<B>Reporting Period</B>&quot;), the Company shall timely file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file
reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit
such termination, and the Company shall take all actions necessary to maintain its eligibility to issue Securities to the Buyers
on Form S-3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(s)&nbsp;&nbsp;&nbsp;&nbsp;<U>Financial
Information</U>. The Company agrees to send the following to each Buyer during the Reporting Period, unless the following are filed
with the SEC through EDGAR and are available to the public through the EDGAR system (i) within one (1) Business Day after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current Reports on Form
8-K (or any analogous reports under the 1934 Act) and any registration statements (other than on Form S-8) or amendments filed
pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile or e-mailed copies of all press releases issued
by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(t)&nbsp;&nbsp;&nbsp;<U>Public
Information</U>. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities, may
be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the
failure to satisfy the current public information requirement under Rule 144(c) or (ii) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a &quot;<B>Public Information Failure</B>&quot;) then, as partial relief for the damages to any Buyer
by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such Buyer an amount in cash equal to one and one-half percent
(1.5%) of the aggregate Purchase Price of such Buyer's Securities on the day of a Public Information Failure and on every thirtieth
day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information
Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144. The Company shall
also pay the reasonable fees of legal counsel of such Investor to enforce the provisions hereof. The payments to which a holder
shall be entitled pursuant to this Section 4(t) are referred to herein as &quot;<B>Public Information Failure Payments</B>.&quot;
Public Information Failure<B> </B>Payments shall be paid on the earlier of (I) the last day of the calendar month during which
such Public Information Failure<B> </B>Payments are incurred and (II) the third Business Day after the event or failure giving
rise to the Public Information Failure<B> </B>Payments is cured. In the event the Company fails to make Public Information Failure<B>
</B>Payments to such Buyer when due in a timely manner, such unpaid portion of the Public Information Failure<B> </B>Payment(s)
shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(u)&nbsp;&nbsp;&nbsp;<U>FATCA</U>.
Notwithstanding anything to contrary contained herein and other Transaction Documents, if a payment made to a Buyer under any
Preferred Shares or Conversion Shares would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Buyer shall deliver to Company at the time or times prescribed by law and at such time or times
reasonably requested by the Company such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i)
of the Code) and such additional documentation reasonably requested by the Company as may be necessary for the Company to comply
with its obligations under FATCA and to determine that such Buyer has complied with such Buyer&rsquo;s obligations under FATCA
or to determine the amount to deduct and withhold from such payment under FATCA. For purposes of this Section 4(u), &quot;<B>FATCA</B>&quot;
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;<U>Closing
Documents</U>. On or prior to thirty (30) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer and Schulte Roth &amp; Zabel LLP a complete closing set of the executed Transaction Documents, Securities and any
other documents required to be delivered to any party pursuant to Section 7 hereof or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>REGISTER;
TRANSFER AGENT INSTRUCTIONS.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;<U>Register</U>.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Preferred Shares in which the Company shall record the name and address
of the Person in whose name the Preferred Shares have been issued (including the name and address of each transferee), the number
of Preferred Shares held by such Person, the number of Conversion Shares and Additional Shares issued and issuable pursuant to
the terms of the Preferred Shares. The Company shall keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;<U>Transfer
Agent Instructions</U>. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent,
in the form of <U>Exhibit E</U> attached hereto (the &quot;<B>Irrevocable Transfer Agent Instructions</B>&quot;) to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s),
for the Conversion Shares and the Additional Shares issuable pursuant to the terms of the Transaction Documents in such amounts
as specified from time to time by each Buyer to the Company upon conversion or redemption of the Preferred Shares or as payment
of Dividends with respect to the Preferred Shares. The Company warrants that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 5(b) will be given by the Company to its transfer agent, and any subsequent transfer
agent, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to each Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 5 will be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Section 5, that each Buyer shall be entitled, in addition to all other available remedies, to an order
and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic
loss and without any bond or other security being required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The obligation of the Company
hereunder to issue and sell the Preferred Shares to each Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;Such
Buyer shall have executed this Agreement and delivered the same to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;Such
Buyer shall have delivered its Purchase Price to the Company (less, in the case of the Lead Investor, the amounts withheld pursuant
to Section 4(f)) for the Preferred Shares being purchased by such Buyer at the Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;The
representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality, which are accurate in all respects) as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct in all material respects (except for those representations and warranties that are qualified by materiality, which
are accurate in all respects) as of such specified date), and such Buyer shall have performed, satisfied and complied in all respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer
at or prior to the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE.</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The obligation of each Buyer
hereunder to purchase the Preferred Shares<B> </B>at the Closing is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such
Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following to which it is
a party each of the Transaction Documents, (ii) the Preferred Shares (allocated in such amounts as such Buyer shall request), being
purchased by such Buyer at the Closing pursuant to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;Such
Buyer shall have received the opinion of Snell &amp; Wilmer L.L.P., the Company's outside counsel, dated as of the Closing Date,
in substantially the form of <U>Exhibit F</U> attached hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of <U>Exhibit E</U>
attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its U.S. Subsidiaries in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within 10 Business Days of the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the Company's and each of its U.S. Subsidiaries' qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which
the Company and its Subsidiaries conduct business or a bring down of such good standing from Incorporating Services, Ltd., as of
a date within ten (10) days of the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation of the Company and each of its
U.S. Subsidiaries (other than the Subsidiaries formed in the State of Florida) as certified by the Secretary of State (or comparable
office) of the jurisdiction of formation of the Company and each of its Subsidiaries or a bring down of such good standing from
Incorporating Services, Ltd. within ten (10) days of the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(d) as adopted by the Company's Board of Directors in a form reasonably
acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and (iii) the Bylaws of the Company, each as in
effect at the Closing, in the form attached hereto as <U>Exhibit G</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;The
representations and warranties of the Company shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of the date
when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a
specific date, which shall be true and correct in all material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of such specified date) and the Company
shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received
a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and
as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as <U>Exhibit H</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock issued and outstanding as of a date within five (5) days of the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;The
Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as
of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market, nor shall suspension by the SEC or
the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market or
(B) by falling below the minimum listing maintenance requirements of the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;The
Registration Statement shall be effective and available for the issuance and sale of the Securities hereunder and the Company shall
have delivered to such Buyer the Prospectus and the Prospectus Supplement as required thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to each Buyer a Lock-Up Agreement in the form attached hereto as <U>Exhibit C</U> executed and delivered
by each of the Persons listed on <U>Exhibit B</U> hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;The
Voting Agreement in the form attached hereto as <U>Exhibit D</U> shall have been executed and delivered to such Buyer by the Company
and each of the Principal Stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;The
Certificate of Designations in the form attached hereto as <U>Exhibit A</U> shall have been filed with the Secretary of State of
the State of Delaware and shall be in full force and effect, enforceable against the Company in accordance with its terms and shall
not have been amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;The
Company shall have submitted to the Principal Market a Listing of Additional Shares notification in connection with the transactions
contemplated hereby and the Principal Market shall have approved, orally or in writing, the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(r)&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>TERMINATION</U>.
<FONT STYLE="text-transform: none">In the event that the Closing shall not have occurred with respect to a Buyer on or before five
(5) Business Days from the date hereof due to the Company's or such Buyer's failure to satisfy the conditions set forth in Sections
6 and 7 above (and the nonbreaching party's failure to waive such unsatisfied condition(s)), the nonbreaching party shall have
the option to terminate this Agreement with respect to such breaching party at the close of business on such date by delivering
a written notice to that effect to each other party to this Agreement and without liability of any party to any other party;</FONT>
<FONT STYLE="text-transform: none"><U>provided</U></FONT>, <FONT STYLE="text-transform: none"><U>however</U>, that if this Agreement
is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the Lead Investor or its designee(s),
as applicable, for the expenses described in Section 4(f) above without giving effect to the Legal Fee Cap</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: none">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>MISCELLANEOUS.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;<U>Governing
Law; Jurisdiction; Jury Trial</U>. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. 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 to such party at the address for such notices to it under this Agreement 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 manner permitted by law. <B>EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;<U>Counterparts</U>.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;<U>Headings</U>.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;<U>Severability</U>.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;<U>Entire
Agreement; Amendments</U>. This Agreement and the other Transaction Documents supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein
contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of at least sixty-five percent (65%) of the aggregate number of Registrable Securities
issued or issuable under the Transaction Documents as of the date hereof and shall include the Lead Investor so long as the
Lead Investor or any of its affiliates holds any Registrable Securities (the &quot;<B>Required Holders</B>&quot;).
Any amendment or waiver effected in accordance with, and any amendment to this Agreement made in conformity with the
provisions of this Section 9(e) shall be binding on each Buyer and holders of Securities of the Company as applicable. No
such amendment shall be effective to the extent that it applies to less than all of the Buyers of Securities. No
consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration (other than the reimbursement of legal fees) also is offered to
all of the parties to the Transaction Documents or the holders of Preferred Shares, as the case may be. The Company has not,
directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing,
the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any
other obligation to provide any financing to the Company or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;<U>Notices</U>.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses, facsimile numbers and e-mail address for such communications shall be:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">If to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Net Element, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">363 NE 163rd Street, Suite 705</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">North Miami Beach, FL 33160</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Telephone:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-weight: normal">(786)
923-0515</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif">Facsimile:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(786)
272-0696<BR>
E-mail:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;swolberg@netelement.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief
Legal Officer</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">with
a copy (for informational purposes only) to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Snell
&amp; Wilmer L.L.P.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">600
Anton Boulevard, 14th Floor</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Costa
Mesa, CA 92626</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Telephone: 714-427-7442</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Facsimile:
714-427-7799</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">E-mail:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;spavluk@swlaw.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Attention:
Serge V. Pavluk</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
to the Transfer Agent:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Continental
Stock Transfer &amp; Trust Company</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">17
Battery Place, 8<SUP>th</SUP> Floor</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">New
York, NY 10004</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">Telephone:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(212)
845-3217</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">Email:
mmullings@continentalstock.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-weight: normal">Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michael
G. Mullings</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
to a Buyer, to its address, facsimile number and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">with
a copy (for informational purposes only) to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Schulte
Roth &amp; Zabel LLP<BR>
919 Third Avenue<BR>
New York, New York 10022<BR>
Telephone:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(212) 756-2000<BR>
Facsimile:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(212) 593-5955<BR>
Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eleazer N. Klein, Esq.<BR>
E-mail:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;eleazer.klein@srz.com</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">or to such other address, facsimile number
and/or email-address and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile
machine or e-mail containing the time, date, recipient facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;<U>Successors
and Assigns</U>. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Preferred Shares. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Required Holders, including by way of a Fundamental Transaction (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Designations).
A Buyer may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be
deemed to be a Buyer hereunder with respect to such assigned rights</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;<U>No
Third Party Beneficiaries</U>. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that
each Indemnitee shall have the right to enforce the obligations of the Company with respect to Section 9(k).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;<U>Survival</U>.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall
be responsible only for its own representations, warranties, agreements and covenants hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;<U>Further
Assurances</U>. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.
(i)&nbsp;&nbsp;&nbsp; In consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each other holder of the Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the &quot;<B>Indemnitees</B>&quot;)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements (the &quot;<B>Indemnified Liabilities</B>&quot;),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby
or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made
against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and
arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant
to Section 4(h) or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions
contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
that is permissible under applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; <U>provided</U>, <U>however</U>, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by the
indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be
selected by the Investors holding at least a majority of the Registrable Securities. The Indemnitee shall cooperate fully with
the indemnifying party in connection with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee that relates to such action
or Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, <U>provided</U>, <U>however</U>, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the Indemnitee under this Section 9(k), except to
the extent that the indemnifying party is prejudiced in its ability to defend such action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except where
the following damages have been awarded to a third party and a party hereto has a duty of indemnification with respect to such
third party claim, in no event shall any claim for incidental, special, punitive or consequential damages of any nature whatsoever
be made by any party to the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;<U>No
Strict Construction</U>. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;<U>Remedies</U>.
Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or
other security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;<U>Rescission
and Withdrawal Right</U>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or
in part without prejudice to its future actions and rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;<U>Payment
Set Aside</U>. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;<U>Independent
Nature of Buyers' Obligations and Rights</U>. The obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group, and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges, and each Buyer confirms,
that the Buyers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. The Company acknowledges that it has independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[Signature Page Follows]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>COMPANY:</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>NET ELEMENT, INC.</B></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Name:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Title:&nbsp;</P></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><I>[Signature Page to Securities </I><BR>
<I>Purchase Agreement]</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: left">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 10%"><B>BUYERS:</B></TD>
    <TD STYLE="width: 50%"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>[BUYER]</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Check as appropriate:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 25%">Accredited Investor</TD>
    <TD STYLE="width: 35%"><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>QIB</TD>
    <TD><FONT STYLE="font: 10pt Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SCHEDULE OF BUYERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(1)</FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(2)</FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(3)</FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(4)</FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(5)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Buyer</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Address, E-mail and</B></FONT><BR>
<FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Facsimile Number</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Number of Preferred</B></FONT><BR>
<FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Shares</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Purchase Price</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Legal Representative's Address</B></FONT><BR>
<FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>and Facsimile Number</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>

</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EXHIBITS</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 17%">Exhibit A</TD>
    <TD STYLE="width: 83%">Form of Certificate of Designations</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit B</TD>
    <TD>Parties to Lock-Up Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit C</TD>
    <TD>Form of Lock-Up Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit D</TD>
    <TD>Form of Voting Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit E</TD>
    <TD>Form of Irrevocable Transfer Agent Instructions</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit F</TD>
    <TD>Form of Opinion of Company's Outside Counsel</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit G</TD>
    <TD>Form of Secretary's Certificate</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Exhibit H</TD>
    <TD>Form of Officers Certificate</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULES&nbsp;</U></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 83%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Schedule I</TD>
    <TD>List of General Use Free Writing Prospectus</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Schedule 4(d)</TD>
    <TD>Use of Proceeds</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE I</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>SCHEDULE 4(d)</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Proceeds from the sale of the Preferred Stock
will be used (i) to pay all legal and other fees, costs and expenses related to and in connection with the transactions contemplated
by the Transaction Documents, but not to pay the fees and expenses of the Agent in an amount exceeding $250,000; (ii) for general
corporate purposes, including working capital, sales and marketing activities, general and administrative matters, repayment of
indebtedness, and capital expenditures; (iii) to pay the cash portion of the acquisition of PayOnline group of companies; and (iv)
for the purchase of residual distributions from agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &ldquo;C&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTIFICATE OF DESIGNATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>CERTIFICATE OF DESIGNATIONS, PREFERENCES</B><BR>
<B>AND RIGHTS OF SERIES A CONVERTIBLE PREFERRED STOCK</B><BR>
<B>OF</B><BR>
<B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Net Element, Inc. (the &quot;<B>Company</B>&quot;),
a corporation organized and existing under the General Corporation Law of the State of Delaware (the &quot;<B>DGCL</B>&quot;),
does hereby certify that, pursuant to authority conferred upon the Board of Directors of the Company by the Amended and Restated
Certificate of Incorporation, as further amended (the &quot;<B>Certificate of Designations</B>&quot;), of the Company, and pursuant
to the provisions of the DGCL, the Board of Directors of the Company adopted resolutions (i) designating a series of the Company's
previously authorized preferred stock, par value $0.01 per share, and (ii) providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of five thousand five hundred
(5,500) shares of Series A Convertible Preferred Stock of the Company, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">RESOLVED, that the Company
is authorized to issue five thousand five hundred (5,500) shares of Series A Convertible Preferred Stock, par value $0.01 per share
(the &quot;<B>Preferred Shares</B>&quot;), which shall have the following powers, designations, preferences and other special rights:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(1)&#9;</B></FONT><U>Dividends</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Cumulative
Dividends</U>. The holders of Preferred Shares (each, a &quot;<B>Holder</B>&quot; and collectively, the &quot;<B>Holders</B>&quot;),
shall be entitled to receive dividends (&quot;<B>Dividends</B>&quot;) payable, subject to the conditions and other terms hereof,
in shares of Common Stock or cash on the Stated Value of such Preferred Share, which Dividends, for the avoidance of doubt, shall
be calculated on such Preferred Shares without giving effect to any reduction for the payment of any Installment Amount payable
on such date, at the Dividend Rate, which shall be cumulative and shall continue to accrue whether or not declared and whether
or not in any fiscal year there shall be net profits or surplus available for the payment of Dividends in such fiscal year, so
that if in any fiscal year or years, Dividends in whole or in part are not paid in cash upon the Preferred Shares, unpaid Dividends
shall accumulate as against the holders of Common Stock or any other stock ranking on liquidation junior to the Preferred Shares
(such stock being referred to hereinafter collectively as &quot;<B>Junior Shares</B>&quot;). Dividends on the Preferred Shares
shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividends
shall be payable in arrears for each month on the last Trading Day of each month (each, a &quot;<B>Dividend Date</B>&quot;) with
the first Dividend Date being May 29, 2015. Prior to the payment of Dividends on a Dividend Date, Dividends shall accrue at the
Dividend Rate and be payable by way of inclusion of the Dividends in the Conversion Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9;<U>Dividend
Shares and Cash Dividends</U>. Dividends shall be payable on each Dividend Date, to the record holders of the Preferred Shares
on the applicable Dividend Date, in shares of Common Stock (&quot;<B>Dividend Shares</B>&quot;) so long as there has been no Equity
Conditions Failure; <U>provided</U>, <U>however</U>, that the Company may, at its option following notice to each Holder, pay Dividends
on any Dividend Date in cash (&quot;<B>Cash Dividends</B>&quot;) or, so long as there has been no Equity Conditions Failure, in
a combination of Cash Dividends and Dividend Shares. The Company shall deliver a written notice (each, a &quot;<B>Dividend Election
Notice</B>&quot;) to each Holder on or prior to the applicable Dividend Notice Due Date (the date such notice is delivered to all
of the Holders, the &quot;<B>Dividend Notice Date</B>&quot;) which notice (1) either (A) confirms that Dividends to be paid on
such Dividend Date shall be paid entirely in Dividend Shares or (B) elects to pay Dividends as Cash Dividends or a combination
of Cash Dividends and Dividend Shares and specifies the amount of Dividends that shall be paid as Cash Dividends and the amount
of Dividends, if any, that shall be paid in Dividend Shares, (2) unless the Company has elected to pay Dividends solely as Cash
Dividends, certifies that there has been no Equity Conditions Failure as of such Dividend Notice Date and (3) states the number
of issued and outstanding shares of Common Stock as of such Dividend Notice Date. If there is an Equity Conditions Failure as of
the Dividend Notice Date, then unless the Company has elected to pay such Dividends as Cash Dividends, the Dividend Election Notice
shall indicate that unless such Holder waives the Equity Conditions Failure, the Dividends shall be paid as Cash Dividends. If
the Company confirmed the payment of the applicable Dividends in Dividend Shares, in whole or in part, and if there was no Equity
Conditions Failure as of the applicable Dividend Notice Date but an Equity Conditions Failure occurred between the applicable Dividend
Notice Date and any time prior to the applicable Dividend Date (an &quot;<B>Interim Dividend Period</B>&quot;), the Company shall
provide the Holders a subsequent notice to that effect indicating that unless such Holder waives the Equity Conditions Failure,
the Dividends shall be paid as Cash Dividends. If there occurs an Equity Conditions Failure (which is not waived in writing by
a Holder) during such Interim Dividend Period, then at the option of such Holder, such Holder may require the Company to pay the
amount of Dividends (including any portion of the Pre-Dividend Shares (as defined below)) payable on the applicable Dividend Date
as a Cash Dividend. If any portion of Dividends for a particular Dividend Date shall be paid in Dividend Shares, then (I) on the
applicable Dividend Pre-Payment Date, the Company shall issue to each Holder, in accordance with Section 1(c), a number of shares
of Common Stock equal to (x) the amount of Dividends payable on the applicable Dividend Date in Dividend Shares divided by (y)
the applicable Initial Dividend Conversion Price (the &quot;<B>Pre-Dividend Shares</B>&quot;) and (II) on the applicable Dividend
Date, the Company shall deliver a notice setting forth the calculation of the Dividend Balance Shares (and the calculation of the
component parts of such calculation) and issue to each Holder, in accordance with Section 1(c), a number of shares of Common Stock
equal to any Dividend Balance Shares. All Pre-Dividend Shares and Dividend Shares shall be fully paid and nonassessable shares
of Common Stock (rounded up to the nearest whole share).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&#9;<U>Payment
of Dividends</U>. When any Pre-Dividend Shares and Dividend Shares are to be paid on a Dividend Pre-Payment Date or a Dividend
Date, as applicable, then the Company shall (i) credit such aggregate number of Dividend Shares to which such Holder shall be entitled
to each Holder's or its designee's balance account with the Depository Trust Company (&quot;<B>DTC</B>&quot;) through its Deposit/Withdrawal
At Custodian (&quot;<B>DWAC</B>&quot;) system and (ii) with respect to each Dividend Date, pay to each Holder, in cash by wire
transfer of immediately available funds, the amount of any Cash Dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&#9;<U>Participation</U>.
In addition to the Dividends referred to in Section 1(a), subject to the rights of the holders, if any, of the Pari Passu Shares
(as defined in Section 9(b)), the Holders shall, as holders of Preferred Stock, be entitled to such dividends paid and distributions
made to the holders of Common Stock to the same extent as if such Holders had converted the Preferred Shares into Common Stock
(without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date
for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution
to the holders of Common Stock. The Company shall not declare or pay any dividends on any other Junior Shares or any Pari Passu
Shares unless the holders of Preferred Shares then outstanding shall simultaneously receive a dividend on a pro rata basis as if
the Preferred Shares had been converted into shares of Common Stock pursuant to Section 2 immediately prior to the record date
for determining the stockholders eligible to receive such dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(e)&#9;<U>Maximum
Percentage</U>. Notwithstanding the foregoing, to the extent that a Holder's right to participate in any such dividend or distribution
pursuant to this Section 1 would result in such Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable,
then such Holder shall not be entitled to participate in such dividend or distribution to such extent (and shall not be entitled
to beneficial ownership of such shares of Common Stock as a result of such dividend or distribution to such extent) and the portion
of such dividend or distribution shall be held in abeyance for such Holder until such time or times as its right thereto would
not result in such Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, at which time or times
such Holder shall be granted such rights (and any rights under this Section 1 on such initial rights or on any subsequent such
rights to be held similarly in abeyance) to the same extent as if there had been no such limitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(2)&#9;</B></FONT><U>Conversion
of Preferred Shares</U>. Preferred Shares shall be convertible into shares of the Common Stock on the terms and conditions set
forth in this Section 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Holder's
Conversion Right</U>. Subject to the provisions of Section 8, at any time or times on or after the Issuance Date any Holder shall
be entitled to convert any whole number of Preferred Shares, plus the amount of any accrued but unpaid Dividends per Preferred
Share then remaining, into fully paid and nonassessable shares of Common Stock in accordance with Section 2(b) at the Conversion
Rate (as defined below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9;<U>Conversion</U>.
The number of shares of Common Stock issuable upon conversion of each Preferred Share pursuant to Section 2(a) shall be determined
according to the following formula (the &quot;<B>Conversion Rate</B>&quot;):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Conversion Amount<BR>
</U>Conversion Price</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify">No fractional shares of Common Stock
are to be issued upon the conversion of any Preferred Share, but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp and similar taxes that may be payable
with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&#9;<U>Mechanics
of Conversion</U>. The conversion of Preferred Shares shall be conducted in the following manner:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) &nbsp;&nbsp;&#9;<U>Holder's
Delivery Requirements</U>. To convert Preferred Shares into shares of Common Stock on any date (a &quot;<B>Conversion Date</B>&quot;),
a Holder shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 11:59 p.m., New
York City Time, on such date, a copy of a properly completed notice of conversion executed by the registered Holder of the Preferred
Shares subject to such conversion in the form attached hereto as <U>Exhibit I</U> (the &quot;<B>Conversion Notice</B>&quot;) to
the Company and the Company's transfer agent (the &quot;<B>Transfer Agent</B>&quot;) and (B) if required by Section 2(c)(viii),
but without delaying the Company's requirement to deliver shares of Common Stock on the applicable Share Delivery Date (as defined
below), surrender to a common carrier for delivery to the Company as soon as practicable on or following such date the original
certificates representing the Preferred Shares being converted (or compliance with the procedures set forth in Section 13) (the
&quot;<B>Preferred Stock Certificates</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) &nbsp;&nbsp;&#9;<U>Company's
Response</U>. Upon receipt by the Company of copy of a Conversion Notice, the Company shall (I) as soon as practicable, but in
any event within one (1) Trading Day, send, via facsimile or electronic mail, a confirmation of receipt of such Conversion Notice
to such Holder and the Transfer Agent, which confirmation shall constitute an instruction to the Transfer Agent to process such
Conversion Notice in accordance with the terms herein and (II) on or before the third (3<SUP>rd</SUP>) Trading Day following the
date of receipt by the Company of such Conversion Notice (the &quot;<B>Share Delivery Date</B>&quot;), credit such aggregate number
of shares of Common Stock to which such Holder shall be entitled to such Holder's or its designee's balance account with DTC through
its DWAC system. In the event that a Holder converts less than all of such Holder's remaining Preferred Shares pursuant hereto,
the Stated Value converted shall be deducted from the Installment Amounts applying such reduction to the Installment Dates in reverse
order first to the last Installment Date on which Installment Amounts are then scheduled to be paid to such Holder, unless such
Holder shall otherwise specify in the Conversion Notice or other applicable notice. If the number of Preferred Shares represented
by the Preferred Stock Certificate(s) submitted for conversion, as may be required pursuant to Section 2(c)(viii), is greater than
the number of Preferred Shares being converted, then the Company shall, as soon as practicable and in no event later than three
(3) Business Days after receipt of the Preferred Stock Certificate(s) (the &quot;<B>Preferred Stock Delivery Date</B>&quot;) and
at its own expense, issue and deliver to such Holder a new Preferred Stock Certificate representing the number of Preferred Shares
not converted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii)&nbsp;&nbsp; <U>Additional
Conversion Shares</U>. In addition to the foregoing, on each Share Delivery Date, the applicable Make-Whole Amount (the &quot;<B>Additional
Conversion Obligations</B>&quot;) on the Conversion Amount being converted shall be paid to such Holder in shares of Common Stock
(&quot;<B>Additional Conversion Shares</B>&quot;) so long as there has been no Equity Conditions Failure; <U>provided</U>, <U>however</U>,
that the Company may pay such Additional Conversion Obligations on any Share Delivery Date in cash by wire transfer of immediately
available funds (&quot;<B>Cash Additional Conversion Payment</B>&quot;) or, provided that there is no Equity Conditions Failure,
in a combination of a Cash Additional Conversion Payment and Additional Conversion Shares pursuant to the immediately following
sentence. The Company shall pay the Additional Conversion Obligations in the same manner and proportion as the Company indicated
in the most recent Dividend Election Notice prior to the applicable date of determination, or, in the case of any conversion occurring
prior to the delivery of the first (1<SUP>st</SUP>) Dividend Election Notice hereunder, the Company hereby elects to pay any Make-Whole
Amounts in Additional Conversion Shares. If the Company is required pursuant to this Section 2(c)(iii) to pay the Additional Conversion
Obligations on a Share Delivery Date, in whole or in part, in Additional Conversion Shares, then on the applicable Share Delivery
Date, the Company shall, or shall direct the Transfer Agent to, credit each Holder's account with the DTC Fast Automated Securities
Transfer Program through its DWAC system with a number of shares of Common Stock (rounded to the nearest whole share in accordance
with Section 2(b)) equal to the quotient of (a) the portion of the then applicable Additional Conversion Obligations the Company
is required pursuant to this Section 2(c)(iii) to pay in Additional Conversion Shares, divided by (b) the Make-Whole Price in effect
as of the applicable Conversion Date. If the Company has subsequently notified each Holder with respect to a Dividend Date on or
prior to the applicable Conversion Date that there is an Equity Conditions Failure and the Company is required to pay such Additional
Conversion Obligations in Additional Conversion Shares, then, unless a Holder waives the Equity Conditions Failure, the Additional
Conversion Obligations shall be paid as Cash Additional Conversion Payment. If the Company is deemed to have elected to pay such
Additional Conversion Obligations in Additional Conversion Shares, in whole or in part, and if there was no Equity Conditions Failure
as of the applicable Conversion Date but an Equity Conditions Failure occurred between the applicable Conversion Date and any time
prior to the applicable Share Delivery Date, the Company shall provide each Holder a notice to that effect indicating that unless
such Holder waives the Equity Conditions Failure, the Additional Conversion Obligations shall be paid as a Cash Additional Conversion
Payment. If an Equity Conditions Failure occurs (that is not waived in writing by a Holder) during such period, then at the option
of such Holder, such Holder may require the Company to pay the amount of Additional Conversion Obligations payable on the applicable
Share Delivery Date as a Cash Additional Conversion Payment. All Additional Conversion Shares shall be fully paid and nonassessable
shares of Common Stock (rounded to the nearest whole share). The Company shall pay any and all taxes that may be payable with respect
to the issuance and delivery of Additional Conversion Shares.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iv)&nbsp;&nbsp; &#9;<U>Dispute
Resolution</U>. In the case of a dispute as to the determination of the Closing Sale Price, Closing Bid Price, Weighted Average
Price or the arithmetic calculation of the Conversion Rate, the Company shall instruct the Transfer Agent to issue to the Holders
the number of shares of Common Stock that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic
calculations to the Holders disputing such determination or arithmetic calculation via facsimile or electronic mail within one
(1) Business Day of receipt of such Holders' Conversion Notice or other date of determination. If such Holders and the Company
are unable to agree upon the determination of the Closing Sale Price, Closing Bid Price or Weighted Average Price or arithmetic
calculation of the Conversion Rate within two (2) Business Days of such disputed determination or arithmetic calculation being
transmitted to such Holders, then the Company shall within one (1) Business Day after approval of the investment bank or outside
accountant by the Required Holders submit via facsimile or electronic mail (A) the disputed determination of the Closing Sale Price,
Closing Bid Price or Weighted Average Price, as applicable, to an independent, reputable investment bank selected by the Required
Holders and approved by the Company, such approval not to be unreasonably withheld, delayed or conditioned or (B) the disputed
arithmetic calculation of the Conversion Rate to the Company's independent, outside accountant. The Company shall cause, at the
Company's expense, the investment bank or the accountant, as the case may be, to perform the determinations or calculations and
notify the Company and the Holders of the results no later than two (2) Business Days from the time it receives the disputed determinations
or calculations; <U>provided</U>, <U>however</U> that in the event the determination or calculation of the investment bank or the
accountant, as the case may be, is identical to the determination or calculation of the Company, the expenses of such investment
bank or accountant, as the case may be, shall be borne equally among the holders of the Holders who disputed the determination
or calculation of the Company. Such investment bank's or accountant's determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error. Such investment bank's or accountant's determination or calculation, as the
case may be, shall be binding upon all parties absent manifest error.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(v) &nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Record
Holder</U>. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date, irrespective
of the date such Conversion Shares are credited to such Holder's account with DTC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp; &#9;<U>Company's
Failure to Timely Convert</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(A)&#9;<U>Cash
Damages</U>. If the Company shall fail to credit a Holder's balance account with DTC on or prior to the applicable Share Delivery
Date (a &quot;<B>Conversion Failure</B>&quot;), then in addition to all other available remedies which such Holder may pursue hereunder
and under the Securities Purchase Agreement, the Company shall pay additional damages to such Holder for each day after the Share
Delivery Date that such conversion is not timely effected in an amount equal to one and one half percent (1.5%) of the product
of (I)&nbsp;the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and
to which such Holder is entitled as set forth in the applicable Conversion Notice and the terms of this Certificate of Designations
and (II) any trading price of the Common Stock selected by such Holder in writing as in effect at any time during the period beginning
on the applicable Conversion Date and ending on the applicable Share Delivery Date. In addition to the foregoing, if the Company
shall fail on or prior to the applicable Share Delivery Date to credit such Holder's balance account with DTC for the number of
shares of Common Stock to which such Holder is entitled upon such Holder's conversion or the Company's Conversion, as applicable,
of Preferred Shares or on any date of the Company's obligation to deliver shares of Common Stock as contemplated pursuant to clause
(y) below, and if on or after such Trading Day a Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such Holder of the shares of Common Stock issuable upon such conversion that such
Holder anticipated receiving from the Company (a &quot;<B>Buy-In</B>&quot;), then the Company shall, within three (3) Trading Days
after such Holder's request and in such Holder's discretion, either (i) pay cash to such Holder in an amount equal to such Holder's
total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (the &quot;<B>Buy-In Price</B>&quot;), at which point the Company's obligation to credit such Holder's balance account
with DTC for the shares of Common Stock to which such Holder is entitled upon such Holder's conversion of the applicable Conversion
Amount shall terminate, or (ii) promptly honor its obligation to credit such Holder's balance account with DTC for the shares of
Common Stock to which such Holder is entitled upon such Holder's conversion of the applicable Conversion Amount representing such
Common Stock and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock, times (B) any trading price of the Common Stock selected by such Holder in writing as in
effect at any time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Date.
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 Company's failure to timely deliver
certificates representing shares of Common Stock upon conversion of the Preferred Shares as required pursuant to the terms hereof.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(B)&#9;<U>Void
Conversion Notice; Adjustment of Conversion Price</U>. If for any reason a Holder has not received all of the shares of Common
Stock to which such Holder is entitled prior to the fifth (5<SUP>th</SUP>) Trading Day after the applicable Share Delivery Date
with respect to a conversion of Preferred Shares, then such Holder, upon written notice to the Company, with a copy to the Transfer
Agent, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any Preferred Shares that
have not been converted pursuant to such Holder's Conversion Notice; provided that the voiding of a Holder's Conversion Notice
shall not affect the Company's obligations to make any payments which have accrued prior to the date of such notice pursuant to
Section 2(c)(vi)(A) or otherwise. Thereafter, the Conversion Price of any Preferred Shares returned or retained by a Holder for
failure to timely convert shall be adjusted to the lesser of (I) the Conversion Price relating to the voided Conversion Notice
and (II) the lowest Weighted Average Price of the Common Stock during the period beginning on the Conversion Date and ending on
the date such Holder voided the Conversion Notice, subject to further adjustment as provided in this Certificate of Designations.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(vii) &#9;<U>Pro
Rata Conversion; Disputes</U>. In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion
Date and the Company can convert some, but not all, of such Preferred Shares, the Company shall convert from each Holder electing
to have Preferred Shares converted at such time a pro rata amount of such Holder's Preferred Shares submitted for conversion based
on the number of Preferred Shares submitted for conversion on such date by such Holder relative to the number of Preferred Shares
submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to a Holder
in connection with a conversion of Preferred Shares, the Company shall issue to such Holder the number of shares of Common Stock
not in dispute and resolve such dispute in accordance with Section 2(c)(iv). For the avoidance of doubt, if the Company fails on
or prior to an applicable Share Delivery Date to deliver to a Holder shares of Common Stock upon conversion because the Company
disputes the delivery of such shares and such dispute has subsequently been resolved pursuant to Section 2(c)(iv) for the benefit
of such Holder, the Company shall be deemed not to have timely delivered shares upon conversion and such Holder shall be entitled
to the remedies set forth in Section 2(c)(vi).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(viii) <U>Book-Entry</U>.
Notwithstanding anything to the contrary set forth herein, upon conversion of Preferred Shares in accordance with the terms hereof,
no Holder thereof shall be required to physically surrender the certificate representing the Preferred Shares to the Company unless
(A) the full or remaining number of Preferred Shares represented by the certificate are being converted or (B) a Holder has provided
the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of Preferred
Shares upon physical surrender of any Preferred Shares. Each Holder and the Company shall maintain records showing the number of
Preferred Shares so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to such
Holder and the Company, so as not to require physical surrender of the certificate representing the Preferred Shares upon each
such conversion. In the event of any dispute or discrepancy, such records of the Company establishing the number of Preferred Shares
to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. Notwithstanding
the foregoing, if Preferred Shares represented by a certificate are converted as aforesaid, a Holder may not transfer the certificate
representing the Preferred Shares unless such Holder first physically surrenders the certificate representing the Preferred Shares
to the Company, whereupon the Company will forthwith issue and deliver upon the order of such Holder a new certificate of like
tenor, registered as such Holder may request, representing in the aggregate the remaining number of Preferred Shares represented
by such certificate. <FONT STYLE="text-transform: uppercase">A</FONT> Holder and any assignee, by acceptance of a certificate,
acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Preferred Shares, the number
of Preferred Shares represented by such certificate may be less than the number of Preferred Shares stated on the face thereof.
Each certificate for Preferred Shares shall bear the following legend:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify">ANY TRANSFEREE OF THIS CERTIFICATE
SHOULD CAREFULLY REVIEW THE TERMS OF THE COMPANY'S CERTIFICATE OF DESIGNATIONS RELATING TO THE PREFERRED SHARES REPRESENTED BY
THIS CERTIFICATE, INCLUDING SECTION 2(c)(viii) THEREOF. THE NUMBER OF PREFERRED SHARES REPRESENTED BY THIS CERTIFICATE MAY BE LESS
THAN THE NUMBER OF PREFERRED SHARES STATED ON THE FACE HEREOF PURSUANT TO SECTION 2(c)(viii) OF THE CERTIFICATE OF DESIGNATIONS
RELATING TO THE PREFERRED SHARES REPRESENTED BY THIS CERTIFICATE AND ANY REMAINING INSTALLMENT AMOUNTS MAY HAVE BEEN REDUCED IN
CONNECTION WITH CERTAIN PAYMENTS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&#9;<U>Taxes</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) Any and all
payments made by the Company hereunder, including any amounts received on a conversion or redemption of the Preferred Shares and
any amounts on account of dividends or deemed dividends, must be made by it without any Tax Deduction, unless a Tax Deduction is
required by law. If the Company is aware that it must make a Tax Deduction (or that there is a change in the rate or the basis
of a Tax Deduction), it must notify the affected Holders promptly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) If a Tax
Deduction is required by law to be made by the Company, subject to Section 2(d)(i) above, the amount of the payment due from the
Company will be increased to an amount which (after making the Tax Deduction, including a Tax Deduction applicable to additional
sums payable pursuant to this Section 2(d)) leaves an amount equal to the payment which would have been due if no Tax Deduction
had been required. For the avoidance of doubt, the Company shall deliver to each Holder the same number of Dividend Shares and/or
amount of Cash Dividends that such Holder would have received but for the Tax Deduction. If the Company is required to make a Tax
Deduction, it must make the minimum Tax Deduction allowed by law and must make any payment required in connection with that Tax
Deduction within the time allowed by law. The Company hereby agrees to indemnify each Holder from and against any Taxes required
to be withheld from any payments made hereunder, regardless of whether such Taxes were withheld.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii) As soon
as practicable after making a Tax Deduction or a payment required in connection with a Tax Deduction, the Company must deliver
to each Holder any official receipt or form, if any, provided by or required by the taxing authority to whom the Tax Deduction
was paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iv) In addition,
the Company agrees to pay in accordance with applicable law, and to indemnify and hold each Holder harmless from and against, any
present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any
payment made hereunder (but excluding any income, capital gains or similar taxes) or in connection with the execution, delivery,
registration or performance of, or otherwise with respect to, the Preferred Shares (&quot;<B>Other Taxes</B>&quot;). As soon as
practicable after making a payment of Other Taxes, the Company must deliver to such Holder any official receipt or form, if any,
provided by or required by the taxing authority to whom the Tax Deduction was paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(v) Notwithstanding
anything to the contrary in this Section 2(d), the Company shall not be required to make any payment to any holder under Section
2(d)(ii) in respect of a Tax Deduction to the extent that such Tax Deduction resulted from the failure of such holder comply with
Section 4(u) of the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(vi) The obligations
of the Company under this Section 2(d) shall survive the Maturity Date of the Preferred Shares and the payment for the Preferred
Shares and all other amounts payable hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(e)&#9;<U>Adjustments
to Fixed Conversion Price</U>. The Fixed Conversion Price will be subject to adjustment from time to time as provided in this Section
2(e).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) <U>Adjustment
of Fixed Conversion Price upon Issuance of Common Stock</U>. If and whenever on or after the Subscription Date, the Company issues
or sells, or in accordance with this Section 2(e)(i) is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities)
for a consideration per share (the &quot;<B>New Issuance Price</B>&quot;) less than a price (the &quot;<B>Applicable Price</B>&quot;)
equal to the Fixed Conversion Price in effect immediately prior to such issuance or sale (a &quot;<B>Dilutive Issuance</B>&quot;),
then immediately after such Dilutive Issuance, the Fixed Conversion Price then in effect shall be reduced to an amount equal to
the New Issuance Price. For purposes of determining the adjusted Fixed Conversion Price under this Section 2(e)(i), the following
shall be applicable:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(A)&#9;<U>Issuance
of Options</U>. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option is less than the Applicable Price, then each such share of Common Stock underlying such Option
shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
for such price per share. For purposes of this Section 2(e)(i)(A), the &quot;lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option&quot; shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of
the Option and upon conversion or exchange or exercise of any Convertible Security issuable upon exercise of such Option less any
consideration paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option,
upon exercise of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such
Option. No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such share of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion
or exchange or exercise of such Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(B)&#9;<U>Issuance
of Convertible Securities</U>. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable
Price, then each such share of Common Stock underlying such Convertible Securities shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this Section 2(e)(i)(B), the &quot;lowest price per share for which one share of Common Stock is issuable upon
such conversion or exchange or exercise&quot; shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security
and upon the conversion or exchange or exercise of such Convertible Security less any consideration paid or payable by the Company
with respect to such one share of Common Stock upon the issuance or sale of such Convertible Security and upon conversion, exercise
or exchange of such Convertible Security. No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance
of such share of Common Stock upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Fixed Conversion Price had
been or are to be made pursuant to other provisions of this Section 2(e)(i), no further adjustment of the Fixed Conversion Price
shall be made by reason of such issue or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(C)&#9;<U>Change
in Option Price or Rate of Conversion</U>. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Fixed Conversion Price
in effect at the time of such change shall be adjusted to the Fixed Conversion Price which would have been in effect at such time
had such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(e)(i)(C), if the terms
of any Option or Convertible Security that was outstanding as of the Subscription Date are changed in the manner described in the
immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment shall be made if such adjustment
would result in an increase of the Fixed Conversion Price then in effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(D)&#9;<U>Calculation
of Consideration Received</U>. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value and (y)
the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I)
the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value. If any Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the consideration received or receivable therefor will be deemed
to be the net amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the
Company will be the Closing Sale Price of such securities on the date of receipt of such publicly traded securities. If any Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in
which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the &quot;<B>Valuation Event</B>&quot;), the fair value of such consideration will be determined
within five (5) Business Days after the tenth (10<SUP>th</SUP>) day following the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding
upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company; <U>provided</U>,
<U>however</U>, that in the event the determination of such appraiser is identical to the fair value of such consideration as determined
by the Company, the fees and expenses of such appraiser shall be borne equally among the Holders who disputed the valuation of
the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in; text-align: justify; text-indent: 0.5in">(E)&#9;<U>Record
Date</U>. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (I) to receive a dividend
or other distribution payable in Common Stock, Options or in Convertible Securities or (II) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares
of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) <U>Adjustment
of Fixed Conversion Price upon Subdivision of Common Stock</U>. If the Company at any time after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number
of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii) <U>Other
Events</U>. If any event occurs of the type contemplated by the provisions of this Section 2(e) but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Fixed Conversion Price
so as to protect the rights of the Holders; provided that no such adjustment will increase the Fixed Conversion Price as otherwise
determined pursuant to this Section 2(e).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iv) <U>Voluntary
Adjustment By Company</U>. The Company may at any time, with the prior written consent of the Required Holders, reduce the then
current Fixed Conversion Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(f)&#9;<U>Notices</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) Immediately
upon any adjustment of the Fixed Conversion Price pursuant to Section 2(e), the Company will give written notice thereof to each
Holder, setting forth in reasonable detail, and certifying, the calculation of such adjustment. In the case of a dispute as to
the determination of such adjustment, then such dispute shall be resolved in accordance with the procedures set forth in Section
2(c)(iv).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) The Company
will give written notice to each Holder at least ten (10) Business Days prior to the date on which the Company closes its books
or takes a record (I) with respect to any dividend or distribution upon the Common Stock, (II) with respect to any pro rata subscription
offer to holders of Common Stock or (III) for determining rights to vote with respect to any Fundamental Transaction or Liquidation
Event, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided
to such Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii) The Company
will also give written notice to each Holder at least ten (10) Business Days prior to the date on which any Fundamental Transaction
or Liquidation Event will take place, provided that such information shall be made known to the public prior to or in conjunction
with such notice being provided to such Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(3)&#9;</B></FONT><U>Redemption
at Option of Holders</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Triggering
Event</U>. A &quot;<B>Triggering Event</B>&quot; shall be deemed to have occurred at such time as any of the following events:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) while the
Registration Statement is required to be maintained, the effectiveness of the Registration Statement lapses for any reason (including,
without limitation, the issuance of a stop order) or is unavailable to the Holders for the issuance and sale of the shares upon
conversion of the Preferred Shares, and such lapse or unavailability continues for a period of five (5) consecutive Trading Days
or for more than an aggregate of twenty (20) days in any 365-day period;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) (A) the
suspension from trading for a period of five (5) consecutive Trading Days or for more than an aggregate of ten (10) Trading Days
in any 365-day period or (B) the failure of the Common Stock to be listed on an Eligible Market;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii) the Company's
(A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within ten (10) Business
Days after the applicable Conversion Date, (B) the occurrence of two (2) or more Conversion Failures or (C) written notice to any
Holder, including by way of public announcement, or through any of its agents, at any time, of its intention not to comply, as
required, with a request for conversion of any Preferred Shares into shares of Common Stock that is tendered in accordance with
the provisions of this Certificate of Designations, other than pursuant to Section 8;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iv) at any time
following the tenth (10<SUP>th</SUP>) consecutive Business Day that a Holder's Authorized Share Allocation (as defined in Section
6(a)) is less than the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion of the
full Conversion Amount of the Preferred Shares (without regard to any limitations on conversion set forth in Section 8 or otherwise);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(v) the Company's
failure to pay to a Holder any amounts when and as due pursuant to this Certificate of Designations or any other Transaction Document;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(vi) any default
under, redemption of or acceleration prior to maturity of any Indebtedness of the Company or any of its Subsidiaries;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(vii) the Company
or any of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state
law for the relief of debtors (collectively, &quot;<B>Bankruptcy Law</B>&quot;), (a) commences a voluntary case, (b) consents to
the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a receiver, trustee, assignee,
liquidator or similar official (a &quot;<B>Custodian</B>&quot;), (d) makes a general assignment for the benefit of its creditors
or (e) admits in writing that it is generally unable to pay its debts as they become due;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(viii) a court
of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against the Company or any
of its Subsidiaries in an involuntary case, (b) appoints a Custodian of the Company or any of its Subsidiaries or (c) orders the
liquidation of the Company or any of its Subsidiaries;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ix) a final
judgment or judgments for the payment of money aggregating in excess of $350,000 are rendered against the Company or any of its
Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $350,000 amount set
forth above so long as the Company provides each Holder a written statement from such insurer or indemnity provider (which written
statement shall be reasonably satisfactory to such Holder) to the effect that such judgment is covered by insurance or an indemnity
and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(x) other than
as specifically set forth in another clause of this Section 3(a), the Company breaches any representation, warranty, covenant or
other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition of
any Transaction Document which is curable, only if such breach continues for a period of at least ten (10) consecutive Business
Days;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(xi) any breach
or failure in any respect to comply with Section 4 of this Certificate of Designations;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(xii) the Company
breaches any representation, warranty, covenant or other term or condition of any Transaction Document, except, in the case of
a breach of a covenant which is curable, only if such breach remains uncured for a period of at least five (5) Business Days;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(xiii) a false
or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions are
satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred; or</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(xiv) the Company
shall fail to maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program or otherwise fail
to credit or be unable to credit shares required to be delivered to a Holder pursuant to the terms of this Certificate of Designations
to such Holder's account with the DTC Fast Automated Securities Transfer Program through its DWAC system; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(xv) any material
damage to, or loss, theft or destruction of a material amount of property of the Company, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the Company
or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect (as defined
in the Securities Purchase Agreement).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9;<U>Redemption
Option Upon Triggering Event</U>. In addition to all other rights of the Holders contained herein, after a Triggering Event, each
Holder shall have the right, at such Holder's option, to require the Company to redeem (a &quot;<B>Triggering Event Redemption</B>&quot;)
all or a portion of such Holder's Preferred Shares at a price per Preferred Share equal to the sum of (i) the greater of (A) 120%
of the Conversion Amount and (B) the product of (1) the Conversion Amount subject to the Notice of Redemption at Option of Holder
(as defined below) and (2) the quotient determined by dividing (x) the greatest Closing Sale Price of the Common Stock during the
period beginning on the date immediately preceding such Triggering Event and ending on the date such Holder delivers the Notice
of Redemption at Option of Holder, by (y) the lowest Fixed Conversion Price in effect during such period and (ii) the Make-Whole
Amount per Preferred Share being redeemed (the sum of the foregoing clauses (i) and (ii), the &quot;<B>Triggering Event</B> <B>Redemption
Price</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&#9;<U>Mechanics
of Redemption at Option of Buyer</U>. Within one (1) Business Day after the occurrence of a Triggering Event, the Company shall
deliver written notice thereof via facsimile or electronic mail and overnight courier (&quot;<B>Notice of Triggering Event</B>&quot;)
to each Holder. At any time after the earlier of a Holder's receipt of a Notice of Triggering Event and such Holder becoming aware
of a Triggering Event, any Holder may require the Company to redeem up to all of such Holder's Preferred Shares by delivering written
notice thereof via facsimile or electronic mail and overnight courier (&quot;<B>Notice of Redemption at Option of Holder</B>&quot;)
to the Company, which Notice of Redemption at Option of Holder shall indicate the number of Preferred Shares that such Holder is
electing to redeem.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&#9;<U>Payment
of Redemption Price</U>. Upon the Company's receipt of a Notice(s) of Redemption at Option of Buyer from any Holder, the Company
shall within one (1) Business Day of such receipt notify each other Holder by facsimile or electronic mail of the Company's receipt
of such notice(s). The Company shall deliver on the fifth (5<SUP>th</SUP>) Business Day after the Company's receipt of the first
Notice of Redemption at Option of Holder (the &quot;<B>Triggering Event Redemption Date</B>&quot;) by wire transfer of immediately
available funds, an amount in cash equal to the applicable Triggering Event Redemption Price to all Holders that deliver a Notice
of Redemption at Option of Holder prior to the fifth (5<SUP>th</SUP>) Business Day after the Company's receipt of the first Notice
of Redemption at Option of Holder. To the extent redemptions required by this Section 3 are deemed or determined by a court of
competent jurisdiction to be prepayments of the Preferred Shares by the Company, such redemptions shall be deemed to be voluntary
prepayments. If the Company is unable to redeem all of the Preferred Shares submitted for redemption, the Company shall redeem
a pro rata amount from each Holder based on the number of Preferred Shares submitted for redemption by such Holder relative to
the total number of Preferred Shares submitted for redemption by all Holders. In the event less than all of a Holder's remaining
Preferred Shares are redeemed pursuant hereto, the Stated Value redeemed shall be deducted from the Installment Amounts applying
such reduction to the Installment Dates in reverse order first to the last Installment Date on which Installment Amounts are then
scheduled to be paid to such Holder, unless such Holder shall otherwise specify in the Notice of Redemption at Option of Holder
or other applicable notice. The Holders and Company agree that in the event of the Company's redemption of any Preferred Shares
under this Section 3, the Holders' damages would be uncertain and difficult to estimate because of the parties' inability to predict
future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holders.
Accordingly, any redemption premium due under this Section 3 is intended by the parties to be, and shall be deemed, a reasonable
estimate of the Holders' actual loss of its investment opportunity and not as a penalty.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(e)&#9;<U>Void
Redemption</U>. In the event that the Company does not pay a Redemption Price within the applicable time period, at any time thereafter
and until the Company pays such unpaid applicable Redemption Price in full, a Holder shall have the option to, in lieu of redemption,
require the Company to promptly return to such Holder any or all of the Preferred Shares that were submitted for redemption by
such Holder and for which the applicable Redemption Price has not been paid, by sending written notice thereof to the Company via
facsimile or electronic mail (the &quot;<B>Void Optional Redemption Notice</B>&quot;). Upon the Company's receipt of such Void
Optional Redemption Notice, (i) the Redemption Notice of Holder shall be null and void with respect to those Preferred Shares subject
to the Void Optional Redemption Notice, (ii) the Company shall immediately return any Preferred Shares subject to the Void Optional
Redemption Notice, and (iii) the Conversion Price of such returned Preferred Shares shall be adjusted to the lesser of (A) the
Conversion Price as in effect on the date on which the Void Optional Redemption Notice is delivered to the Company and (B) the
lowest Weighted Average Price of the Common Stock during the period beginning on the date on which the Redemption Notice is delivered
to the Company and ending on the date on which the Void Optional Redemption Notice is delivered to the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(f)&#9;<U>Disputes;
Miscellaneous</U>. In the event of a dispute as to the determination of the arithmetic calculation of any Redemption Price, such
dispute shall be resolved pursuant to Section 2(c)(iv) above with the term &quot;Redemption Price&quot; being substituted for the
term &quot;Conversion Rate&quot;. A Holder's delivery of a Void Optional Redemption Notice and exercise of its rights following
such notice shall not affect the Company's obligations to make any payments which have accrued prior to the date of such notice.
In the event of a redemption pursuant to this Certificate of Designations of less than all of the Preferred Shares represented
by a particular Preferred Stock Certificate, the Company shall promptly cause to be issued and delivered to such Holder of such
Preferred Shares a Preferred Stock Certificate representing the remaining Preferred Shares which have not been redeemed, if necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(4)&#9;</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>Redemption
by the Company</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Company
Installment Conversion or Redemption</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(i) <U>General</U>.
On each applicable Installment Date, provided there has been no Equity Conditions Failure as of the applicable notice or payment
dates, the Company shall convert from each Holder of the Preferred Shares its Pro Rata Portion of the Installment Amount due on
such date by converting all or some of such Installment Amount into Common Stock, in accordance with this Section 4(a) (a &quot;<B>Company
Conversion</B>&quot;); provided, however, that the Company may, at its option following notice to the Holders, pay the Installment
Amount by redeeming such Installment Amount in cash (a &quot;<B>Company Redemption</B>&quot;) or, provided that there has been
no Equity Conditions Failure, by any combination of a Company Conversion and a Company Redemption so long as all of the outstanding
applicable Installment Amount due on any Installment Date shall be converted and/or redeemed by the Company on the applicable Installment
Date, subject to the provisions of this Section 4. On or prior to the date which is the eighteenth (18th) Trading Day prior to
each Installment Date (each, an &quot;<B>Installment Notice Due Date</B>&quot;), the Company shall deliver written notice (each,
a &quot;<B>Company Installment Notice</B>&quot; and the date all of the Holders receive such notice is referred to as the &quot;<B>Company
Installment Notice Date</B>&quot;), to each Holder which Company Installment Notice shall (i) either (A) confirm that the applicable
Installment Amount of the Preferred Shares shall be converted into Common Stock in whole or in part pursuant to a Company Conversion
(such amount to be converted, including any accrued Additional Amount related to the applicable Preferred Shares, the &quot;<B>Company
Conversion Amount</B>&quot;), (B) state that the Company elects to redeem for cash, or is required to redeem for cash in accordance
with the provisions of this Certificate of Designations, in whole or in part, the applicable Installment Amount pursuant to a Company
Redemption (such amount to be redeemed, including any accrued Additional Amount related to the applicable Preferred Shares, the
&quot;<B>Company Redemption Amount</B>&quot;) and the portion, if any, that the Company elects to convert pursuant to a Company
Conversion which amounts when added together, must at least equal the applicable Installment Amount, (ii) if the Installment Amount
is to be paid, in whole or in part, in Common Stock pursuant to a Company Conversion, certify that the Equity Conditions have been
satisfied as of the applicable Company Installment Notice Date and (iii) states the number of issued and outstanding shares of
Common Stock as of such Company Installment Notice Date. Each Company Installment Notice shall be irrevocable. If the Company does
not timely deliver a Company Installment Notice in accordance with this Section 4(a)(i), then the Company shall be deemed to have
delivered an irrevocable Company Installment Notice confirming a Company Conversion and shall be deemed to have certified that
the Equity Conditions in connection with any such conversion on the applicable Company Installment Notice Date and Installment
Date have been satisfied. Except as expressly provided in this Section 4(a)(i), the Company shall convert and/or redeem the applicable
Installment Amount of the Preferred Shares pursuant to this Section 4(a) pro rata among the Preferred Holders. The Company Conversion
Amount (whether set forth in the Company Installment Notice or by operation of this Section 4(a)) shall be converted in accordance
with Section 4(a)(ii) and the Company Redemption Amount shall be redeemed in accordance with Section 4(a)(iii). Notwithstanding
anything herein to the contrary, in the event of any partial conversion or redemption of any Preferred Share Certificate, the Principal
amount converted or redeemed shall be deducted in reverse order starting from the final Installment Amount to be paid hereunder
on the final Installment Date, unless a Holder otherwise indicates and allocates among any Installment Dates hereunder in the applicable
Conversion Notice or Redemption Notice, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(ii) <U>Mechanics
of Company Conversion</U>. (1) If the Company delivers a Company Installment Notice and confirms, or is deemed to have confirmed,
in whole or in part, a Company Conversion in accordance with Section 4(a), then on the date which is the fifteenth (15th) Trading
Day prior to each Installment Date (each, a &quot;<B>Installment Pre-Payment Date</B>&quot;), the Company shall, or shall direct
the Transfer Agent to credit each Holder's account with DTC for a number of shares of Common Stock equal to each Holder's quotient
of (A) such Company Conversion Amount for such Holder divided by (B) the Initial Company Conversion Price (the &quot;<B>Pre-Installment
Conversion Shares</B>&quot;). On the applicable Installment Date, the Company shall deliver a notice setting forth the calculation
of the Installment Balance Conversion Shares (and the calculation of the component parts of such calculation) to each Holder and
shall, or shall direct the Transfer Agent to, credit such Holder's account with DTC for a number of additional shares of Common
Stock, if any, equal to each Holder's Installment Balance Conversion Shares. In accordance with Section 3(b), if a Triggering Event
occurs during the period from any Company Installment Notice Date through the Installment Date a Holder may elect a Triggering
Event Redemption in accordance with Section 3(b).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iii) <U>Further
Company Conversion Mechanics</U>. All Pre-Installment Conversion Shares and Installment Balance Conversion Shares shall be fully
paid and nonassessable shares of Common Stock (rounded to the nearest whole share). If the Equity Conditions are not satisfied
as of the Company Installment Notice Date, then unless the Company has elected to redeem such Installment Amount in cash, the Company
Installment Notice shall indicate that unless a Holder waives the Equity Conditions, the Installment Amount shall be redeemed in
cash.<B> </B>If the Company confirmed (or is deemed to have confirmed by operation of Section 4(a)) the conversion of the applicable
Company Conversion Amount, in whole or in part, and there was no Equity Conditions Failure as of the applicable Company Installment
Notice Date (or is deemed to have certified that the Equity Conditions in connection with any such conversion have been satisfied
by operation of Section 4(a)) but an Equity Conditions Failure occurred between the applicable Company Installment Notice Date
and any time through the applicable Installment Date, the Company shall provide each Holder a subsequent notice to that effect.
If the Equity Conditions are not satisfied (or waived in writing by a Holder) during such period, then at the option of any Holder
designated in writing to the Company, such Holder may require the Company to do either one or both of the following: (i) the Company
shall redeem all or any part designated by a Holder of the Company Conversion Amount (including at the election of such Holder,
such amount converted to Pre-Installment Conversion Shares in which case such Holder shall return such Pre-Installment Conversion
Shares, which such Holder has not otherwise sold, transferred or disposed of, to the Company) (such designated amount is referred
to as the &quot;<B>First Redemption Amount</B>&quot;) on such Installment Date and the Company shall pay to each Holder on such
Installment Date, by wire transfer of immediately available funds, an amount in cash equal to 125% of such First Redemption Amount,
and/or (ii) the Company Conversion shall be null and void with respect to all or any part designated by a Holder of the unconverted
Company Conversion Amount and such Holder shall be entitled to all the rights of a holder of Preferred Shares with respect to such
amount of the Company Conversion Amount; <U>provided</U>, <U>however</U>, that the Conversion Price for such unconverted Company
Conversion Amount shall thereafter be adjusted to equal the lowest of (a) the then applicable Conversion Price, (b) the Company
Conversion Price as in effect on the date on which such Holder voided the Company Conversion and (c) the Company Conversion Price
as in effect on the date on which such Holder delivers a Conversion Notice relating thereto. If the Company fails to redeem any
First Redemption Amount on or before the applicable Installment Date, by payment of such amount on the applicable Installment Date,
then such Holder shall have the rights set forth in Section 3(a)(v) as if the Company failed to pay the applicable Company Installment
Redemption Price (as defined below) and all other rights as a holder of Preferred Shares (including, without limitation, such failure
constituting a Triggering Event described in Section 3(a)(v)). Notwithstanding anything to the contrary in this Section 4(b), but
subject to Section 8, until the Company credit such Holder's account with DTC for the shares of Common Stock representing the Company
Conversion Amount to such Holder, the Company Conversion Amount may be converted by such Holder into Common Stock pursuant to Section
2. In the event that a Holder elects to convert the Company Conversion Amount prior to the applicable Installment Date as set forth
in the immediately preceding sentence, the Company Conversion Amount so converted shall be deducted in reverse order starting from
the final Installment Amount to be paid hereunder on the final Installment Date, unless such Holder otherwise indicates and allocates
among any Installment Dates hereunder in the applicable Conversion Notice or other applicable notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(iv) <U>Mechanics
of Company Redemption</U>. If the Company elects a Company Redemption in accordance with Section 4(a)(i), then the Company Redemption
Amount which is to be paid to each Holder on the applicable Installment Date shall be redeemed by the Company, and the Company
shall pay to each Holder on such Installment Date, by wire transfer of immediately available funds, an amount in cash (the &quot;<B>Company
Installment Redemption Price</B>&quot;) equal to 100% of the Company Redemption Amount. If the Company fails to redeem the Company
Redemption Amount on the applicable Installment Date by payment of the Company Installment Redemption Price on such date, then
(i) each Holder shall have the rights set forth in Section 3(a)(v) as if the Company failed to pay the applicable Company Installment
Redemption Price and all other rights as a Holder of Preferred Shares (including, without limitation, such failure constituting
a Triggering Event described in Section 3(a)(v)) and (ii) at the option of such Holder designated in writing to the Company (any
such designation shall be deemed a &quot;<B>Conversion Notice</B>&quot; pursuant to Section 2(c)), such Holder may require the
Company to convert all or any part of the Company Redemption Amount at the Company Conversion Price as in effect on the applicable
Installment Date. Conversions required by this Section 4(a)(iv) shall be made in accordance with the provisions of Section 2. Notwithstanding
anything to the contrary in this Section 4(a)(iv), but subject to Section 8, until the Company Installment Redemption Price (together
with any interest thereon) is paid in full, the Company Redemption Amount (together with any interest thereon) may be converted,
in whole or in part, by such Holder into Common Stock pursuant to Section 2. In the event that a Holder elects to convert the Company
Redemption Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence, the Company Redemption
Amount so converted shall be deducted in reverse order starting from the final Installment Amount to be paid hereunder on the final
Installment Date, unless such Holder otherwise indicates and allocates among any Installment Dates hereunder in the applicable
Conversion Notice or other applicable notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 117pt; text-align: justify; text-indent: 0.5in">(v) <U>Deferred
Installment Amount</U>. Notwithstanding any provision of this Section 8 to the contrary, each Holder may, at its option and in
its sole discretion, deliver a written notice to the Company no later than the Business Day immediately prior to the applicable
Installment Date electing to have the payment of all or any portion of an Installment Amount payable on such Installment Date deferred
(such amount(s) deferred, the &quot;<B>Deferral Amount</B>&quot;) until any subsequent Installment Date selected by such Holder,
in its sole discretion, in which case, the Deferral Amount shall be added to, and become part of, the Installment Amount to be
paid on such subsequent Installment Date and such Deferral Amount shall continue to accrue Dividends hereunder. Any notice delivered
by a Holder pursuant to this Section 4(a)(v) shall set forth (i) the Deferral Amount and (ii) the date that such Deferral Amount
shall now be payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;Other than
as specifically permitted by this Certificate of Designations, the Company may not redeem any of the outstanding Preferred Shares
and any unpaid Dividends thereon.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(5)&#9;</B></FONT><U>Other
Rights of Holders</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Assumption</U>.
The Company shall not enter into or be party to a Fundamental Transaction unless (i)&nbsp; the Successor Entity assumes in writing
all of the obligations of the Company under this Certificate of Designations and the other Transaction Documents in accordance
with the provisions of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction, including agreements, if so requested by any Holder,
to deliver to each Holder in exchange for such Holder's Preferred Shares a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to the Preferred Shares, including, without limitation, having a stated
value and dividend rate equal to the Stated Value and the Dividend Rate of the Preferred Shares, having similar conversion rights
and having similar ranking to the Preferred Shares, and satisfactory to the Required Holders and (ii) 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.
No later than (i) thirty (30) days prior to the occurrence or consummation of any Fundamental Transaction or (ii) if later, the
first Trading Day following the date the Company first becomes aware of the occurrence or potential occurrence of a Fundamental
Transaction, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to each Holder.
Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the occurrence or consummation
of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally, shall succeed
to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally succeed to, and be added to
the term &quot;Company&quot; under this Certificate of Designations (so that from and after the date of such Fundamental Transaction,
each and every provision of this Certificate of Designations referring to the &quot;Company&quot; shall refer instead to each of
the Company and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or
Successor Entities, jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all
of the obligations of the Company prior thereto under this Certificate of Designations with the same effect as if the Company and
such Successor Entity or Successor Entities, jointly and severally, had been named as the Company in this Certificate of Designations,
and, solely at the request of a Holder, if the Successor Entity and/or Successor Entities is a publicly traded corporation whose
common stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition to and without limiting any right
under this Certificate of Designations) to such Holder in exchange for such Holder's Preferred Shares a security of the Successor
Entity and/or Successor Entities evidenced by a written instrument substantially similar in form and substance to the Preferred
Shares and convertible for a corresponding number of shares of capital stock of the Successor Entity and/or Successor Entities
(the &quot;<B>Successor Capital Stock</B>&quot;) equivalent (as set forth below) to the shares of Common Stock acquirable and receivable
upon conversion of such Holder's Preferred Shares (without regard to any limitations on the conversion of the Preferred Shares
set forth in this Certificate of Designations) prior to such Fundamental Transaction (such corresponding number of shares of Successor
Capital Stock to be delivered to Holder shall equal the greater of (A) the quotient of (i) the aggregate dollar value of all consideration
(including cash consideration and any consideration other than cash (&quot;<B>Non-Cash Consideration</B>&quot;), in such Fundamental
Transaction, as such values are set forth in any definitive agreement for the Fundamental Transaction that has been executed at
the time of the first public announcement of the Fundamental Transaction or, if no such value is determinable from such definitive
agreement, as determined in accordance with Section 3(c)(iii) with the term &quot;Non-Cash Consideration&quot; being substituted
for the term &quot;Conversion Rate&quot;) that such Holder would have been entitled to receive upon the happening of such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction, had
such Holder's Preferred Shares been converted immediately prior to such Fundamental Transaction or the record, eligibility or other
determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the conversion
of the Preferred Shares set forth in this Certificate of Designations) (the &quot;<B>Aggregate Consideration</B>&quot;) divided
by (ii) the per share Closing Sale Price of such corresponding Successor Capital Stock on the Trading Day immediately prior to
the consummation or occurrence of the Fundamental Transaction) and (B) the product of (A) the Aggregate Consideration and (B) the
highest exchange ratio pursuant to which any stockholder of the Company may exchange Common Stock for Successor Capital Stock)
(provided, however, to the extent that the Holder's right to receive any such shares of publicly traded common stock (or their
equivalent) of the Successor Entity would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage,
if applicable, then the Holder shall not be entitled to receive such shares to such extent (and shall not be entitled to beneficial
ownership of such shares of publicly traded common stock (or their equivalent) of the Successor Entity as a result of such consideration
to such extent) and the portion of such shares shall be held in abeyance for the Holder until such time or times, as its right
thereto would not result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be delivered such shares to the extent as if there had been no such limitation), and) and, such security shall
be satisfactory to such Holder, and with an identical conversion price to the Conversion Price hereunder (such adjustments to the
conversion price being for the purpose of protecting after the consummation or occurrence of such Fundamental Transaction the economic
value of the Preferred Shares that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction,
as elected by such Holder solely at its option). Upon occurrence or consummation of the Fundamental Transaction, and it shall be
a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity
or Successor Entities shall deliver to each Holder confirmation that there shall be issued upon conversion of the Preferred Shares
at any time after the occurrence or consummation of the Fundamental Transaction, as elected by such Holder solely at its option,
shares of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other
securities, cash, assets or other property purchasable upon the conversion of the Preferred Shares 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 for purposes of clarification may continue to be shares of Common Stock, if any, that such Holder would have been
entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for
the event resulting in such Fundamental Transaction, had the Preferred Shares been converted immediately prior to such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without
regard to any limitations on the conversion of the Preferred Shares set forth in this Certificate of Designations), as adjusted
in accordance with the provisions of this Certificate of Designations. The provisions of this Section 5(a) shall apply similarly
and equally to successive Fundamental Transactions.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9;<U>Purchase
Rights</U>. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the &quot;<B>Purchase Rights</B>&quot;),
then the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion
of the Preferred Shares (without taking into account any limitations or restrictions on the convertibility of the Preferred Shares)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights (<U>provided</U>, <U>however</U>, that to the extent that a Holder's right to participate in any such Purchase
Right would result in such Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, then such
Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for such Holder until such time or times as its right thereto would not result in
such Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times such Holder shall be granted
such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to
be held similarly in abeyance) to the same extent as if there had been no such limitation).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c) <U>Other Corporate
Events</U>. In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or
other property with respect to or in exchange for shares of Common Stock (a &quot;<B>Corporate Event</B>&quot;), the Company shall
make appropriate provision to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it
shall be a required condition to the occurrence or consummation of such Corporate Event that, each Holder will thereafter have
the right to receive upon conversion of such Holder's Preferred Shares at any time after the occurrence or consummation of the
Corporate Event, shares of Common Stock or Successor Capital Stock or, if so elected by a Holder, in lieu of the shares of Common
Stock (or other securities, cash, assets or other property) purchasable upon the conversion of such Holder's Preferred Shares prior
to such Corporate Event (but not in lieu of such items still issuable under Sections 1(d) and 5(b), which shall continue to be
receivable on the Common Stock or on such shares of stock, securities, cash, assets or any other property otherwise receivable
with respect to or in exchange for shares of Common Stock), such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights and any shares of Common Stock) which such Holder would
have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record, eligibility or other determination
date for the event resulting in such Corporate Event, had such Holder's Preferred Shares been converted immediately prior to such
Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event (without
regard to any limitations on conversion of the Preferred Shares). Provision made pursuant to the preceding sentence shall be in
a form and substance reasonably satisfactory to the Required Holders. The provisions of this Section 6 shall apply similarly and
equally to successive Corporate Events.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><U>Reservation
of Shares</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company
shall initially reserve 9,501,850 (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar
transaction occurring after the Subscription Date) shares of Common Stock for issuances upon conversion of the Preferred Shares
and shall thereafter have sufficient authorized and unissued shares of Common Stock to effect the conversion of the Preferred Shares
at the Conversion Rate (without regard to any limitations or restrictions herein on any such conversion) with respect to the Conversion
Amount of each such Preferred Share (the &quot;<B>Required Reserve Amount</B>&quot;). The Company shall, so long as any of the
Preferred Shares are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common
Stock, solely for the purpose of effecting the conversions of the Preferred Shares, such number of shares of Common Stock as shall
from time to time be necessary to effect the conversion of all of the Preferred Shares then outstanding; provided that at no time
shall the number of shares of Common Stock so reserved be less than the Required Reserve Amount; <U>provided</U>, <U>however</U>,
that any Pre-Dividend Shares and Dividend Shares issued by the Company shall not be issued from any Common Stock so reserved. The
initial number of shares of Common Stock reserved for conversions of the Preferred Shares and each increase in the number of shares
so reserved shall be allocated pro rata among the Holders based on the number of Preferred Shares held by each Holder at the time
of issuance of the Preferred Shares or increase in the number of reserved shares, as the case may be (the &quot;<B>Authorized Share
Allocation</B>&quot;). In the event a Holder shall sell or otherwise transfer any of such Holder's Preferred Shares, each transferee
shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares
of Common Stock reserved and allocated to any Person which ceases to hold any Preferred Shares (other than pursuant to a transfer
of Preferred Shares in accordance with the immediately preceding sentence) shall be allocated to the remaining Holders, pro rata
based on the number of Preferred Shares then held by such Holders.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Insufficient
Authorized Shares</U>. If at any time while any of the Preferred Shares remain outstanding the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of
the Preferred Shares at least a number of shares of Common Stock equal to the Required Reserve Amount (an &quot;<B>Authorized Share
Failure</B>&quot;), then the Company shall immediately take all action necessary to increase the Company's authorized shares of
Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Preferred Shares then
outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence
of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure,
the Company shall either (x) obtain the written consent of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock and provide each stockholder with an information statement with respect thereto or (y) hold a meeting of
its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval
of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal. Notwithstanding the foregoing, if at such time of an Authorized Share Failure, the Company is able
to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in
the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting
for filing with the SEC an Information Statement on Schedule 14C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(7)&#9;</B></FONT><U>Voting
Rights</U>. Each Holder shall be entitled to the whole number of votes equal to the number of shares of Common Stock into which
such Holder's Preferred Shares would be convertible on the record date for the vote or consent of stockholders, but in lieu of
using the Conversion Price in effect as of such record date, such votes shall be calculated based on the higher of (i) the then
existing Conversion Price and (ii) $1.16 (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction from and after the Subscription Date), and shall otherwise have voting rights and powers equal to the voting
rights and powers of the Common Stock. Each Holder shall be entitled to receive the same prior notice of any stockholders' meeting
as is provided to the holders of Common Stock in accordance with the bylaws of the Company, as well as prior notice of all stockholder
actions to be taken by legally available means in lieu of a meeting, and shall vote as a class with the holders of Common Stock
as if they were a single class of securities upon any matter submitted to a vote of stockholders, except those matters required
by law or by the terms hereof to be submitted to a class vote of the Holders, in which case the Holders only shall vote as a separate
class.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(8)&#9;</B></FONT><U>Limitation
on Conversions</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">(a)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Beneficial
Ownership</U>. The Company shall not effect the conversion of any portion of a Holder's Preferred Shares, and such Holder shall
not have the right to convert any portion of such Holder's Preferred Shares, to the extent that after giving effect to such conversion,
such Holder together with such Holder's other Attribution Parties collectively would beneficially own in excess of 4.99% (the &quot;<B>Maximum
Percentage</B>&quot;) of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes
of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by a Holder and such Holder's other
Attribution Parties shall include the number of shares of Common Stock held by such Holder and all such Holder's other Attribution
Parties plus the number of shares of Common Stock issuable upon conversion of such Holder's Preferred Shares with respect to which
the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) conversion
of the remaining, nonconverted portion of Preferred Shares beneficially owned by such Holder or any of such Holder's other Attribution
Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by such Holder or any
of such Holder's other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 8(a). For purposes of this Section 8(a), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act. For purposes of determining the number of outstanding shares of Common Stock a Holder may acquire upon the
conversion of such Holder's Preferred Shares without exceeding the Maximum Percentage, such Holder may rely on the number of outstanding
shares of Common Stock as reflected in (i) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other public filing with the SEC, as the case may be, (ii) a more recent public announcement by the
Company or (iii) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding (the &quot;<B>Reported Outstanding Share Number</B>&quot;). If the Company receives a Conversion Notice from a Holder
at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the
Company shall notify such Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such
Conversion Notice would otherwise cause such Holder's beneficial ownership, as determined pursuant to this Section 8(a), to exceed
the Maximum Percentage, such Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant
to such Conversion Notice. For any reason at any time, upon the written or oral request of a Holder, the Company shall within one
(1) Trading Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including the Preferred Shares, by a Holder and any other Attribution Party of such Holder since the date as of
which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to a Holder
upon conversion of such Holder's Preferred Shares results in such Holder and such Holder's other Attribution Parties being deemed
to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as
determined under Section 13(d) of the Exchange Act), the number of shares so issued by which such Holder's and such Holder's other
Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the &quot;<B>Excess Shares</B>&quot;) shall
be deemed null and void and shall be cancelled ab initio, and such Holder shall not have the power to vote or to transfer the Excess
Shares. Upon delivery of a written notice to the Company, a Holder may from time to time increase (with such increase not effective
until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not
in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to such Holder and such Holder's other Attribution Parties and not to any other Holder that is not an Attribution Party of
such Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Certificate of Designations
in excess of the Maximum Percentage shall not be deemed to be beneficially owned by a Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. The provisions of this paragraph shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this Section 8(a) to the extent necessary to correct this paragraph
(or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained
in this Section 8(a) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation
contained in this paragraph may not be waived and shall apply to a successor Holder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">(b)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Principal
Market Regulation</U>. The Company shall not be obligated to issue any shares of Common Stock pursuant to the terms of this Certificate
of Designations, and the Holders shall not have the right to receive any shares of Common Stock pursuant to the terms of this Certificate
of Designations, if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which
the Company may issue pursuant to this Certificate of Designations or otherwise without breaching the Company's obligations under
the rules or regulations of the Principal Market (the &quot;<B>Exchange Cap</B>&quot;) except that such limitation shall not apply
in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Principal
Market for issuances of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company
that such approval is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval
or written opinion is obtained, no Holder shall be issued in the aggregate, pursuant to the terms of this Certificate of Designations,
shares of Common Stock in an amount greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which
is the number of Preferred Shares issued to such Holder pursuant to the Securities Purchase Agreement on the Issuance Date and
the denominator of which is the aggregate number of all Preferred Shares issued to the Holders pursuant to the Securities Purchase
Agreement on the Issuance Date (with respect to each such Holder, the &quot;<B>Exchange Cap Allocation</B>&quot;). In the event
that any Holder shall sell or otherwise transfer any of such Holder's Preferred Shares, the transferee shall be allocated a pro
rata portion of such Holder's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee
with respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any Holder shall convert
all of such Holder's Preferred Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's
Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares of Common Stock
actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining Holders on a pro
rata basis in proportion to the shares of Common Stock underlying the Preferred Shares then held by each such Holder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">(c)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Baby
Shelf Rules</U>. The Company shall not be obligated to issue any shares of Common Stock pursuant to the terms of this Certificate
of Designations, and the Holders shall not have the right to receive any shares of Common Stock pursuant to the terms of this Certificate
of Designations, if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which
the Holders may receive pursuant to this Certificate of Designations without exceeding any applicable limitations pursuant to applicable
securities laws (the &quot;<B>Baby Shelf Cap</B>&quot;). No Holder shall be issued in the aggregate, pursuant to the terms of this
Certificate of Designations, shares of Common Stock in an amount greater than the product of the Baby Shelf Cap multiplied by a
fraction, the numerator of which is the number of Preferred Shares issued to such Holder pursuant to the Securities Purchase Agreement
on the Issuance Date and the denominator of which is the aggregate number of all Preferred Shares issued to the Holders pursuant
to the Securities Purchase Agreement on the Issuance Date (with respect to each such Holder, the &quot;<B>Baby Shelf Cap Allocation</B>&quot;).
In the event that any Holder shall sell or otherwise transfer any of such Holder's Preferred Shares, the transferee shall be allocated
a pro rata portion of such Holder's Baby Shelf Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee
with respect to the portion of the Baby Shelf Cap Allocation allocated to such transferee. In the event that any Holder shall convert
all of such Holder's Preferred Shares into a number of shares of Common Stock which, in the aggregate, is less than such holder's
Baby Shelf Cap Allocation, then the difference between such holder's Baby Shelf Cap Allocation and the number of shares of Common
Stock actually issued to such holder shall be allocated to the respective Baby Shelf Cap Allocations of the remaining Holders on
a pro rata basis in proportion to the shares of Common Stock underlying the Preferred Shares then held by each such Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(9)&#9;</B></FONT><U>Change
of Control Redemption Right; Dissolution, Winding-Up</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;<U>Change
of Control</U>. No sooner than fifteen (15) days nor later than ten (10) days prior to the consummation of a Change of Control,
but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile
or electronic mail and overnight courier to each Holder (a &quot;<B>Change of Control</B> <B>Notice</B>&quot;) setting forth a
description of such transaction in reasonable detail and the anticipated Change of Control Redemption Date (as defined below) if
then known. At any time during the period (the &quot;<B>Change of Control Period</B>&quot;) beginning after a Holder's receipt
of a Change of Control Notice and ending on the date that is twenty (20) Trading Days after the consummation of such Change of
Control, such Holder may require the Company to redeem (a &quot;<B>Change of Control Redemption</B>&quot;) all or any portion of
such Holder's Preferred Shares by delivering written notice thereof (&quot;<B>Change of Control Redemption Notice</B>&quot;) to
the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount such Holder is electing to redeem.
Any Preferred Shares subject to redemption pursuant to this Section 9(a) shall be redeemed by the Company in cash at a price equal
to the sum of (I) the greater of (i) 125% of the Conversion Amount being redeemed and (ii) the product of (A) the Conversion Amount
being redeemed and (B) the quotient determined by dividing (1) the greatest Closing Sale Price of the Common Stock during the period
commencing as of the Trading Day immediately prior to the public announcement of such proposed Change of Control and ending as
of the Trading Day immediately prior to the consummation of such Change of Control by (2) the lowest Fixed Conversion Price in
effect during such period and (II) the applicable Make-Whole Amount for the Preferred Shares being redeemed (the &quot;<B>Change
of Control Redemption Price</B>&quot;). The Company shall make payment of the Change of Control Redemption Price concurrently with
the consummation of such Change of Control if such a Change of Control Redemption Notice is received prior to the consummation
of such Change of Control and within five (5) Trading Days after the Company's receipt of such notice otherwise (the &quot;<B>Change
of Control Redemption Date</B>&quot;). To the extent redemptions required by this Section 9(a) are deemed or determined by a court
of competent jurisdiction to be prepayments of the Preferred Shares by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 9(a), until the Change of Control Redemption Price (together
with any interest thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 9(a) may be converted,
in whole or in part, by any Holder into shares of Common Stock, or in the event the Conversion Date is after the consummation of
the Change of Control, shares or equity interests of the Successor Entity substantially equivalent to the Company's Common Stock
pursuant to Section 2(c). In the event of a partial redemption of the Preferred Shares pursuant hereto, the Stated Value redeemed
shall be deducted from the Installment Amounts applying such reduction to the Installment Dates in reverse order first to the last
Installment Date on which Installment Amounts are then scheduled to be paid to such Holder, unless such Holder shall otherwise
specify in the Change of Control Redemption Notice or other applicable notice. The parties hereto agree that in the event of the
Company's redemption of any portion of the Preferred Shares under this Section 9(a), the Holders' damages would be uncertain and
difficult to estimate because of the parties' inability to predict future interest rates and the uncertainty of the availability
of a suitable substitute investment opportunity for the Holders. Accordingly, any redemption premium due under this Section 9(a)
is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holders' actual loss of its investment opportunity
and not as a penalty. In the event that the Company does not pay the Change of Control Redemption Price on the Change of Control
Redemption Date, then each Holder shall have the right to void the redemption pursuant to Section 3(e).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9; <U>Liquidation</U>.
In the event of a Liquidation Event, each Holder shall be entitled to receive in cash out of the assets of the Company, whether
from capital or from earnings available for distribution to its stockholders (the &quot;<B>Liquidation Funds</B>&quot;), before
any amount shall be paid to the holders of any of the Junior Shares, an amount per Preferred Share equal to the sum of the Conversion
Amount plus the Make-Whole Amount; provided that, if the Liquidation Funds are insufficient to pay the full amount due to the Holders
and holders of shares of other classes or series of preferred stock of the Company that are of equal rank with the Preferred Shares
as to payments of Liquidation Funds (the &quot;<B>Pari Passu Shares</B>&quot;), if any, then each Holder and each holder of any
such Pari Passu Shares shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable
to such Holder as a liquidation preference, in accordance with their respective Certificate of Designations, Preferences and Rights,
as a percentage of the full amount of Liquidation Funds payable to all Holders and Pari Passu Shares. After the foregoing distributions,
the Holders shall be entitled, on a <I>pari passu</I> basis with the holders of Common Stock and treating for the purpose thereof
all of the Preferred Shares as having been converted into Common Stock pursuant to Section 2, to participate in the distribution
of any remaining assets of the Company to the holders of the outstanding Common Stock. To the extent necessary, the Company shall
cause such actions to be taken by any of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds
of a Liquidation Event to be distributed to the Holders in accordance with this Section. All the preferential amounts to be paid
to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any
amount for, or the distribution of any Liquidation Funds of the Company to the holders of, shares of other classes or series of
preferred stock of the Company junior in rank to the Preferred Shares in connection with a Liquidation Event as to which this Section
applies. The purchase or redemption by the Company of stock of any class, in any manner permitted by law, shall not, for the purposes
hereof, be regarded as a Liquidation Event.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(10)&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Insufficient
Assets</U>. If upon a Redemption Date, the assets of the Company are insufficient to pay the applicable Redemption Price, the Company
shall (i) take all appropriate action reasonably within its means to maximize the assets available for paying the applicable Redemption
Price, (ii) redeem out of all such assets available therefor on the applicable Redemption Date the maximum possible Conversion
Amount that it can redeem on such date, pro rata among the holders of the Preferred Shares to be redeemed in proportion to the
aggregate number of Preferred Shares outstanding on the applicable Redemption Date and (iii) following the applicable Redemption
Date, at any time and from time to time when additional assets of the Company become available to redeem the remaining Conversion
Amount of the Preferred Shares, the Company shall use such assets, at the end of the then current calendar month, to redeem the
balance of such Conversion Amount of the Preferred Shares, or such portion thereof for which assets are then available, on the
basis set forth above at the applicable Redemption Price, and such assets will not be used prior to the end of such calendar month
for any other purpose. Dividends on the Preferred Shares that have not been redeemed shall continue to accrue until such time as
the Company redeems the Preferred Shares. The Company shall pay to each Holder the applicable Redemption Price without regard to
the legal availability of funds unless expressly prohibited by applicable law or unless the payment of the applicable Redemption
Price could reasonably be expected to result in personal liability to the directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(11)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Ranking</U>.
All shares of Common Stock shall be of junior rank to all Preferred Shares with respect to the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding up of the Company. The rights of the shares of Common Stock shall be
subject to the preferences and relative rights of the Preferred Shares. Without the prior express written consent of the Required
Holders, the Company shall not hereafter authorize or issue additional or other Capital Stock that is of senior or pari-passu rank
to the Preferred Shares in respect of the preferences as to distributions and payments upon a Liquidation Event. The Company shall
be permitted to issue preferred stock that is junior in rank to the Preferred Shares in respect of the preferences as to dividends
and other distributions, amortization and redemption payments and payments upon the liquidation, dissolution and winding up of
the Company, <U>provided</U>, that the maturity date (or any other date requiring redemption, repayment or any other payment, including,
without limitation, dividends in respect of any such preferred shares) of any such junior preferred shares is not on or before
91 days after the Maturity Date. In the event of the merger or consolidation of the Company with or into another corporation, the
Preferred Shares shall maintain their relative powers, designations and preferences provided for herein (except that the Preferred
Shares may not be <I>pari passu</I> with, or junior to, any Capital Stock of the successor entity) and no merger shall result inconsistent
therewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(12)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Vote
to Change the Terms of or Issue Preferred Shares.</U> In addition to any other rights provided by law, except where the vote or
written consent of the holders of a greater number of shares is required by law or by another provision of the Certificate of Incorporation,
the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the Required Holders,
voting together as a single class, shall be required before the Company may:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&#9;amend or
repeal any provision of, or add any provision to, the Certificate of Incorporation or bylaws, or file any articles of amendment,
certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would
adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Preferred
Shares, regardless of whether any such action shall be by means of amendment to the Certificate of Incorporation or by merger,
consolidation or otherwise;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&#9;increase
or decrease (other than by conversion) the authorized number of shares of Preferred Shares;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&#9;amend any
provision of the Certificate of Designation with respect to the Preferred Shares; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&#9;whether
or not prohibited by the terms of the Preferred Shares, circumvent a right of the Preferred Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Any Preferred Shares which
are converted, repurchased or redeemed shall be automatically and immediately cancelled and shall not be reissued, sold or transferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(13)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><U>Lost
or Stolen Certificates</U>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Preferred Stock Certificates representing the Preferred Shares, and, in the case of loss, theft
or destruction, of an indemnification undertaking by such Holder to the Company in customary form and, in the case of mutilation,
upon surrender and cancellation of the Preferred Stock Certificate(s), the Company shall execute and deliver new preferred stock
certificate(s) of like tenor and date; <U>provided</U>, <U>however</U>, the Company shall not be obligated to re-issue preferred
stock certificates if such Holder contemporaneously requests the Company to convert such Preferred Shares into Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(14)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief</U>. The remedies provided in this Certificate of Designations
shall be cumulative and in addition to all other remedies available under this Certificate of Designations, at law or in equity
(including a decree of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed a waiver
of compliance with the provisions giving rise to such remedy. Nothing herein shall limit a Holder's right to pursue actual damages
for any failure by the Company to comply with the terms of this Certificate of Designations. The Company covenants to each Holder
that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or
provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be
received by such Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holders and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holders shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><U>Construction</U>.
This Certificate of Designations shall be deemed to be jointly drafted by the Company and all initial Holders and shall not be
construed against any person as the drafter hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(16)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Failure
or Indulgence Not Waiver</U>. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(17)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Notice</U>.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Certificate of
Designations must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on
file by the sending party), or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in
each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications
shall be:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">(a) if to the Company, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Net Element, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">3363 NE 163rd Street, Suite 705</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">North Miami Beach, FL 33160</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Attention: Chief Legal Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Facsimile: (786) 272-0696</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Telephone: (786) 923-0515</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">E-mail: swolberg@netelement.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">with a copy to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Snell &amp; Wilmer L.L.P.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">600 Anton Boulevard, 14<SUP>th</SUP> Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Costa Mesa, CA 92626</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Attention: Serge V. Pavluk</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Facsimile: 714-427-7799</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">Telephone: 714-427-7442</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">E-mail: spavluk@swlaw.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">(b) if to a Holder, at such address, e-mail
address or facsimile numbers as may have been furnished to the Company in writing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">or to such other address, facsimile number
and/or email-address and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile
machine or e-mail containing the time, date, recipient facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company shall provide each Holder with
prompt written notice of all actions taken pursuant to this Certificate of Designation, including in reasonable detail a description
of such action. The Company may update its notice information by written notice to the Holders in accordance herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(18)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Transfer
of Preferred Shares</U>. A Holder may assign some or all of the Preferred Shares and the accompanying rights hereunder held by
such Holder without the consent of the Company; <U>provided</U> that such assignment is in compliance with applicable securities
laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(19)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Preferred
Share Register</U>. The Company shall maintain at its principal executive offices (or such other office or agency of the Company
as it may designate by notice to the Holders), a register for the Preferred Shares, in which the Company shall record the name
and address of the persons in whose name the Preferred Shares have been issued, as well as the name and address of each transferee.
The Company may treat the person in whose name any Preferred Share is registered on the register as the owner and holder thereof
for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made transfers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(20)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Stockholder
Matters</U>. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the rules
and regulations of the Principal Market, the DGCL, this Certificate of Designations or otherwise with respect to the issuance of
the Preferred Shares or the Common Stock issuable upon conversion thereof may be effected by written consent of the Company's stockholders
or at a duly called meeting of the Company's stockholders, all in accordance with the applicable rules and regulations of the Principal
Market and the DGCL. This provision is intended to comply with the applicable sections of the DGCL permitting stockholder action,
approval and consent affected by written consent in lieu of a meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(21)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Disclosure</U>.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery
publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company
believes that a notice contains material, nonpublic information relating to the Company or its Subsidiaries, the Company shall
so indicate to the Holders contemporaneously with delivery of such notice, and in the absence of any such indication, the Holders
shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating
to the Company or its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(22)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>[Intentionally
omitted]</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(23)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Independent
Nature of Holders' Obligations and Rights</U>. The rights and obligations of each Holder under any Transaction Document are several
and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute any Holder as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Holder shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Certificate of Designations
or out of any other Transaction Documents, and it shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(24)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</B></FONT><U>Certain
Defined Terms</U>. For purposes of this Certificate of Designations, the following terms shall have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<B>&#9;</B>&quot;<B>Additional
Amount</B>&quot; means, on a per Preferred Share basis, the product of (A) the result of the following formula: (Dividend Rate)(N/365)
and (B) the Stated Value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Affiliate</B>&quot;
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that &quot;control&quot; of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such
Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Approved
Stock Plan</B>&quot; means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or director for services provided to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&#9;&quot;<B>Attribution
Parties</B>&quot; means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
any Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of any Holder or
any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with any Holder or any of
the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated
with any Holder's and such Holder's other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the
purpose of the foregoing is to subject collectively each Holder and all such Holder's other Attribution Parties to the Maximum
Percentage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Bloomberg</B>&quot;
means Bloomberg Financial Markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Business
Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Capital
Stock</B>&quot; means: (A) in the case of a corporation, corporate stock; (B) in the case of an association or business entity,
any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (C) in the
case of a partnership or limited liability company, partnership interests (whether general or limited) or membership or limited
liability company interests; and (D) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Change
of Control</B>&quot; means any Fundamental Transaction other than (A) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company's voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(i)&nbsp;&#9;&quot;<B>Closing
Bid Price</B>&quot; and &quot;<B>Closing Sale Price</B>&quot; means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or &quot;pink sheets&quot; by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 2(c)(iv). All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation
period.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(j)&nbsp;&#9;&quot;<B>Common
Stock</B>&quot; means (i) the Company's common stock, par value $0.0001 per share, and (ii)&nbsp;any share capital into which such
Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(k)&nbsp;&#9;&quot;<B>Company
Conversion Price</B>&quot; means, with respect to any Installment Date or other applicable date of determination, that price which
shall be the lower of (i) the then applicable Conversion Price and (ii) the Market Price as in effect on the applicable Installment
Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(l)&nbsp;&#9;&quot;<B>Contingent
Obligation</B>&quot; means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(m)&#9;&quot;<B>Conversion
Amount</B>&quot; means the sum of (A) the Stated Value and (B) the Additional Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(n)&#9;&quot;<B>Conversion
Price</B>&quot; means (i) $1.74, subject to adjustment as provided herein (the price set forth in this clause (i), the &quot;<B>Fixed
Conversion Price</B>&quot;) or (ii) with respect to a Qualifying Conversion, the lower of (I) the Fixed Conversion Price and (II)
the Market Price as in effect on the applicable date of determination (the price set forth in this clause (ii), the &quot;<B>Alternative
Conversion Price</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(o)&#9;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable
or exercisable for Common Stock.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(p)&#9;&quot;<B>Dividend
Balance Shares</B>&quot; means, for any Dividend Date, a number of shares of Common Stock equal to (i) the Post-Dividend Shares
with respect to such Dividend Date minus (ii) the amount of any Pre-Dividend Shares delivered on the related Dividend Pre-Payment
Date; provided that in the event that the amount of Pre-Dividend Shares exceeds the Post-Dividend Shares for such date (such excess,
the &quot;<B>Dividend Shares Excess</B>&quot;), the Dividend Balance Shares shall equal zero (0) for such date and in no event
shall (x) any Dividend Shares Excess reduce the number of Pre-Dividend Shares payable on the next Dividend Pre-Payment Date, if
any, and (y) any Holder be required to return any Dividends Shares Excess to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(q)&#9;&quot;<B>Dividend
Conversion Price</B>&quot; means, with respect to any Dividend Date or other applicable date of determination, that price which
shall be the lower of (i) the then applicable Conversion Price and (ii) the Market Price as in effect on the applicable Dividend
Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(r)&#9;&quot;<B>Dividend
Notice Due Date</B>&quot; means the eighteenth (18th) Trading Day prior to the applicable Dividend Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(s)&nbsp;&#9;&quot;<B>Dividend
Pre-Payment Date</B>&quot; means the fifteenth (15th) Trading Day prior to the applicable Dividend Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(t)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Dividend
Rate</B>&quot; means (A) nine percent (9.0%) per annum and (B) for the period from and after the occurrence of a Triggering Event
through such time that such Triggering Event is cured, eighteen percent (18%) per annum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&#9;&#9;&quot;<B>Eligible
Market</B>&quot; means the Principal Market, The New York Stock Exchange, Inc., The NYSE MKT LLC, The NASDAQ Global Select Market
or The NASDAQ Global Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(v)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Equity
Conditions</B>&quot; means: (A) on each day during the Equity Conditions Measuring Period, all shares of Common Stock issued and
issuable pursuant to the terms of this Certificate of Designations (without regard to any limitation or restriction on conversion
or exercise set forth herein),<FONT STYLE="background-color: white"> including, without limitation, the Pre-Dividend Shares and
the Dividend Shares issuable on the applicable Dividend Pre-Payment Date or Dividend Date, as applicable, and the shares of Common
Stock issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion, as applicable, requiring
the satisfaction of the Equity Conditions, </FONT>shall be either (x) issued or, to the extent not yet issued, issuable without
restrictive legends and shall be eligible for sale without restriction or limitation <FONT STYLE="background-color: white">pursuant
to Rule 144 of the Securities Act</FONT> and without the need for registration under any applicable federal or state securities
laws<FONT STYLE="background-color: white"> or (y) be subject to an effective registration statement</FONT>; (B) on each day during
the Equity Conditions Measuring Period, the Common Stock is designated for quotation on the Principal Market or an Eligible Market
and shall not have been suspended from trading from all such exchanges or markets nor shall proceedings for such delisting or suspension
from any applicable exchanges or markets have been commenced, threatened or pending either, in the case of such exchange or market
in writing by such exchange or market (<U>provided</U>, <U>however</U>, that in the event proceedings for such delisting or suspension
have been threatened or commenced, the Company shall have ninety (90) days from such threat or commencement, whichever is earlier,
to cure such failure before it is deemed, for all purposes hereunder, to have failed to satisfy such Equity Condition); (C) on
each day during the Equity Conditions Measuring Period, the Company shall have delivered Common Stock upon conversion of the Preferred
Shares on a timely basis as set forth in Section 2(c) hereof; (D) any applicable shares of Common Stock to be issued in connection
with the event requiring determination may be issued in full without violating Section 8 hereof or the rules or regulations of
the applicable Eligible Market; (E) during the Equity Conditions Measuring Period, the Company shall not have failed to timely
make any payments within ten (10) Business Days of when such payment is due pursuant to any Transaction Document; (F) during the
Equity Conditions Measuring Period, there shall not have occurred either (1) the public announcement of a pending, proposed or
intended Fundamental Transaction which has not been abandoned, terminated or consummated or (2) a Triggering Event or an event
that with the passage of time or giving of notice would constitute a Triggering Event; (G) the Company shall have no knowledge
of any fact that would cause all shares of Common Stock issued and issuable pursuant to the terms of this Certificate of Designations
not to be eligible for sale without restriction or limitation pursuant to Rule 144 of the Securities Act and without the need for
registration (other than as required under the Registration Statement) under any applicable federal or state securities laws; (H)
the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation or
warranty of any Transaction Document; (I) the Company shall have obtained the Stockholder Approval (as defined in the Securities
Purchase Agreement); (J) <FONT STYLE="background-color: white">on each day during Equity Conditions Measuring Period, </FONT>no
Holder shall be in possession of any material, nonpublic information received from the Company, any Subsidiary or its respective
agent or affiliates; (K) the shares of Common Stock issuable pursuant the event requiring the satisfaction of the Equity Conditions
are duly authorized and listed and eligible for trading without restriction on an Eligible Market; (L) the daily dollar trading
volume of the Common Stock as reported by Bloomberg shall be at least $350,000 on no less than ten (10) Trading Days during the
twenty (20) consecutive Trading Day immediately preceding the applicable date of determination; (M) the arithmetic average of the
daily dollar trading volume of the Common Stock as reported by Bloomberg during the twenty (20) consecutive Trading Day immediately
preceding the applicable date of determination shall be no less than $350,000; (N) the arithmetic average of the Weighted Average
Prices of the Common Stock on each Trading Day during the Equity Conditions Measuring Period exceeds $0.53 (as adjusted for any
stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the Subscription Date);
and (O) on each day during the Equity Conditions Measuring Period, the Company is in compliance with the requirement set forth
in Rule 144(c)(1).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(w)&#9;&quot;<B>Equity
Conditions Failure</B>&quot; means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not been satisfied (or waived in writing
by such Holder).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(x)&#9;&quot;<B>Equity
Conditions Measuring Period</B>&quot; means each day during the period beginning thirty (30) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(y)&#9;&quot;<B>Equity
Interests</B>&quot; means (i) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests,
beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests
in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and
(ii) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase,
subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(z)&#9;&quot;<B>Exchange
Act</B>&quot; means the Securities Exchange Act of 1934, as amended.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Excluded
Securities</B>&quot; means no more than an aggregate pursuant to all of the following events of 2,345,564 shares of Common Stock
(as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction after the Subscription
Date) (the &quot;<B>Excluded Securities Cap</B>&quot;) issued or issuable or deemed to be issued in accordance with Section 2(e)
hereof by the Company: (A) under any Approved Stock Plan; (B) in accordance with the terms of this Certificate of Designations;
<U>provided</U>, that the Certificate of Designations is not amended, modified or changed on or after the Subscription Date; (C)
upon conversion, exercise or exchange of any Options or Convertible Securities which are outstanding on the day immediately preceding
the Subscription Date, <U>provided</U>, that such issuance of Common Stock upon exercise of such Options or Convertible Securities
is made pursuant to the terms of such Options or Convertible Securities in effect on the date immediately preceding the Subscription
Date and such Options or Convertible Securities are not amended, modified or changed on or after the Subscription Date, (D) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to an unaffiliated Person (or to the equity holders of an unaffiliated Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities for the purpose of raising capital or to an entity whose primary business
is investing in securities or (E) in accordance with the terms of any securities issued to any of the initial Holders; <U>provided</U>,
<U>however</U>, that the Excluded Securities Cap shall not apply to, and the Excluded Securities Cap shall be calculated irrespective
of any restricted shares of Common Stock with respect to which the Company has not and will not file a registration statement for
the issuance or resale of such shares pursuant to the Securities Act, and which are issued in connection with (i) the acquisition
from Maglenta Enterprises Inc. and Champfremont Holding Ltd. of all of the issued and outstanding equity interests of the PayOnline
group of companies consisting of PayOnline System LLC, Innovative Payment Technologies LLC, Polimore Capital Limited and Brosword
Holding Limited, by TOT Group Europe, Ltd., a Subsidiary of the Company, and (ii) pursuant to the foregoing clause (D).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(bb)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Fixed
Conversion Price</B>&quot; shall have the meaning set forth in clause (i) of the definition of &quot;Conversion Price&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Fundamental
Transaction</B>&quot; means (i) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (a) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (b) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its &quot;significant subsidiaries&quot; (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (c) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or
have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (1) 50% of the outstanding shares of Common Stock, (2) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with
any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (3) such number of shares
of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (d) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (1) at least 50% of the outstanding shares
of Common Stock, (2) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement
or other business combination were not outstanding; or (3) such number of shares of Common Stock such that the Subject Entities
become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding
shares of Common Stock, or (e) reorganize, recapitalize or reclassify its Common Stock, (ii) that the Company shall, directly or
indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow&nbsp;any Subject
Entity individually or the Subject Entities in the aggregate to be or become the &quot;beneficial owner&quot; (as defined in Rule&nbsp;13d-3
under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender
offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (a) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock,
(b) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were
not outstanding, or (c) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger
or other transaction requiring other stockholders<B> </B>of the Company to surrender their shares of Common Stock without approval
of the stockholders of the Company or (iii) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in
one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner
to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>GAAP</B>&quot;
means United States generally accepted accounting principles, consistently applied.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Group</B>&quot;
means a &quot;group&quot; as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ff)&#9;&quot;<B>Indebtedness</B>&quot;
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) &quot;capital leases&quot; in accordance
with generally accepted accounting principles (other than trade payables entered into in the ordinary course of business), (iii)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through
(vii) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Initial
Company Conversion Price</B>&quot; means, with respect to any Installment Pre-Payment Date or other applicable date of determination,
that price which shall be the lower of (i) the then applicable Conversion Price and (ii) the Market Price as in effect on the applicable
Installment Pre-Payment Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Initial
Dividend Conversion Price</B>&quot; means, with respect to any Dividend Pre-Payment Date or other applicable date of determination,
that price which shall be the lowest of (i) the then applicable Conversion Price and (ii) the Market Price as in effect on the
applicable Dividend Pre-Payment Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Installment
Amount</B>&quot;<B> </B>means with respect to each Installment Date, an amount equal to the sum of (i) the aggregate Stated Amount
of the lesser of (A) one thousand (1,000) Preferred Shares (as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction occurring after the Subscription Date) and (B) the number of Preferred Shares outstanding
on such Installment Date, (ii) any Deferral Amount deferred pursuant to Section 4(a)(v) and included in such Installment Amount,
(iii) the applicable Make-Whole Amount for the Preferred Shares included in such Installment Amount and (iv) any accrued and unpaid
Dividends with respect to such Preferred Shares, as any such Installment Amount for each Holder may be reduced pursuant to the
terms hereof, whether upon conversion, redemption or otherwise. In the event a Holder shall sell or otherwise transfer or assign
any Preferred Shares, the transferee shall be allocated a pro rata portion of each unpaid Installment Amount hereunder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(jj)&#9;&quot;<B>Installment
Balance Conversion Shares</B>&quot; means, for any Installment Date, a number of shares of Common Stock equal to (i) the Post-Installment
Conversion Shares with respect to such Installment Date minus (ii) the amount of any Pre-Installment Conversion Shares delivered
on the related Installment Pre-Payment Date; provided that in the event that the amount of Pre-Installment Conversion Shares exceeds
the Post-Installment Conversion Shares for such date, (such excess, the &quot;<B>Installment Shares Excess</B>&quot;), the Installment
Balance Conversion Shares shall equal zero (0) for such date and in no event shall any Installment Shares Excess reduce the number
of Pre-Installment Conversion Shares payable on the next Installment Pre-Payment Date, if any</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(kk)&#9;&quot;<B>Installment
Date</B>&quot; means, the last Trading Day of each calendar month through the Maturity Date, with the first Installment Date being
May 29, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ll)&#9;&quot;<B>Issuance
Date</B>&quot; means April 30, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(mm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Lead
Investor</B>&quot; means [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(nn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Liquidation
Event</B>&quot; means the voluntary or involuntary liquidation, dissolution or winding up of the Company or such Subsidiaries the
assets of which constitute all or substantially all of the assets of the business of the Company and its Subsidiaries taken as
a whole, in a single transaction or series of transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(oo)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Make-Whole
Amount</B>&quot; means, the amount of any Dividends per applicable Preferred Share that, but for the event requiring the payment
of the Make-Whole Amount, would have accrued with respect to such Preferred Share if the Preferred Shares had remained outstanding
for the period from such event through the Maturity Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(pp)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Make-Whole
Price</B>&quot; means. with respect to any Conversion Date or other applicable date of determination, that price which shall be
the lower of (i) the then applicable Conversion Price and (ii) the Market Price as in effect on the applicable related Conversion
Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(qq)&#9;&quot;<B>Market
Price</B>&quot; means 92% of the lowest of (i) the arithmetic average of the three (3) lowest Weighted Average Prices of the Common
Stock during the fifteen (15) consecutive Trading Day period ending on the Trading Day immediately preceding the applicable date
of determination, (ii) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the applicable date
of determination and (iii) the Weighted Average Price of the Common Stock on the applicable date of determination. All such determinations
to be appropriately adjusted for any stock split, stock dividend, stock combination, reclassification or other similar transaction
during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(rr)&#9;&quot;<B>Maturity
Date</B>&quot; means April 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ss)&#9;&quot;<B>N</B>&quot;
means the number of days from, but excluding, the last Dividend Date with respect to which dividends have been paid in full by
the Company on the applicable Preferred Share, or the Issuance Date if no Dividend Date has occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(tt)&#9;&quot;<B>Option
Value</B>&quot; means the value of an Option based on the Black and Scholes Option Pricing model obtained from the &quot;OV&quot;
function on Bloomberg determined as of (i) the Trading Day prior to the public announcement of the applicable Option if the issuance
of such Option is publicly announced or (ii) the Trading Day immediately following the issuance of the applicable Option if the
issuance of such Option is not publicly announced, for pricing purposes and reflecting (a) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(b) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg
as of the day immediately following the public announcement of (i) the Trading Day immediately following the public announcement
of the applicable Option if the issuance of such Option is publicly announced or (ii) the Trading Day immediately following the
issuance of the applicable Option if the issuance of such Option is not publicly announced, (c) the underlying price per share
used in such calculation shall be the highest Weighted Average Price during the period beginning on the day prior to the execution
of definitive documentation relating to the issuance of the applicable Option and the public announcement of such issuance, (d)
a zero cost of borrow and (e) a 360 day annualization factor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(uu)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(vv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Parent
Entity</B>&quot; of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ww)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Person</B>&quot;
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(xx)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Pro
Rata Portion</B>&quot; means, for each Holder, at any time of determination, a fraction the numerator of which is the number of
Preferred Shares held by such Holder on the Issuance Date and the denominator of which is the total number of Preferred Shares
issued on the Issuance Date. In the event that a Holder shall sell or otherwise transfer any of its Preferred Shares, the transferee
shall be allocated a pro rata portion of the transferring Holder's Pro Rata Portion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(yy)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Post-Dividend
Shares</B>&quot; means, for any Dividend Date and without taking into account the delivery of any Pre-Dividend Shares, that number
of shares of Common Stock equal to the applicable amount of Dividends to be paid in Dividend Shares for such Dividend Date <I><U>divided
by</U></I> the Dividend Conversion Price, rounded up to the nearest whole number.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(zz)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Post-Installment
Conversion Shares</B>&quot; means, for any Installment Date and without taking into account the delivery of any Pre-Installment
Conversion Shares, that number of shares of Common Stock equal to the applicable Company Conversion Amount for such Installment
Date <I><U>divided by</U></I> the Company Conversion Price, rounded up to the nearest whole number.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(aaa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Principal
Market</B>&quot; means The NASDAQ Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(bbb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Qualifying
Conversion</B>&quot; means conversion of a Conversion Amount not exceeding on any given Trading Day three (3) times the Installment
Amount due on the Installment Date immediately following the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ccc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Redemption
Dates</B>&quot; means, collectively, the Triggering Event Redemption Date, the Change of Control Redemption Date, any Installment
Date and the date of any other redemption set forth herein, each of the foregoing, individually, a &quot;Redemption Date&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ddd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Redemption
Prices</B>&quot; means, collectively, the Triggering Event Redemption Price, the Change of Control Redemption Price, any Installment
Amount and any other redemption price set forth herein (including in each case any interest, damages and Make-Whole Amount thereon),
each of the foregoing, individually, a &quot;Redemption Price&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(eee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Registration
Statement</B>&quot; means the Company's Registration Statement on Form S-3 (File number 333-199432).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(fff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Required
Holders</B>&quot; means the holders of Preferred Shares representing at least sixty-five percent (65%) of the aggregate Preferred
Shares then outstanding and shall include the Lead Investor so long as the Lead Investor or any of its Affiliates holds any Preferred
Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ggg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Securities
Act</B>&quot; means the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(hhh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Securities
Purchase Agreement</B>&quot; means the Securities Purchase Agreement, dated as of the Subscription Date, by and among the Company
and the investors referred to therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(iii)&#9;&quot;<B>Stated
Value</B>&quot; means. Per Preferred Share, $1,000, subject to adjustment to preserve such value for stock splits, stock dividends,
recapitalizations, reorganizations, reclassifications, combinations, reverse stock splits or other similar events relating to the
Preferred Shares after the Subscription Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(jjj)&#9;&quot;<B>Subject
Entity</B>&quot; means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(kkk)&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Subscription
Date</B>&quot; means April 30, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(lll)&#9;&quot;<B>Subsidiaries</B>&quot;
means any joint venture or entity in which the Company, directly or indirectly, owns capital stock or an equity or similar interest,
including any Subsidiaries formed or acquired after the Subscription Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(mmm)&#9;&quot;<B>Successor
Entity</B>&quot; means the Person, which may be the Company, formed by, resulting from or surviving any Fundamental Transaction
or the Person with which such Fundamental Transaction shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed for trading on an Eligible Market, Successor Entity
shall mean such Person's Parent Entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(nnn)&#9;&nbsp;&nbsp;&quot;<B>Tax</B>&quot;
means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ooo)&nbsp;&nbsp;&#9;&quot;<B>Tax
Deduction</B>&quot; means a deduction or withholding for or on account of Tax from a payment under this Certificate of Designations
including any constructive payment or any payment in a form other than cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(ppp)&nbsp;&nbsp;&#9;&quot;<B>Trading
Day</B>&quot; means any day on which shares of Common Stock are traded on the Principal Market, or, if the Principal Market is
not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which
the shares of Common Stock are then traded; provided that &quot;Trading Day&quot; shall not include any day on which the shares
of Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the shares of Common
Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does
not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New
York Time).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(qqq)&nbsp;&nbsp;&#9;&quot;<B>Transaction
Documents</B>&quot; means this Certificate of Designations, the Securities Purchase Agreement and each of the other agreements
entered into by the parties to the Securities Purchase Agreement in connection with the transactions contemplated by the Securities
Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(rrr)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Weighted
Average Price</B>&quot; means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on an Eligible Market, the daily volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on such Eligible Market on which the Common Stock is then listed or quoted for trading as
reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)); (b)
if the Common stock is not then listed or quoted on an Eligible Market, and if the Common Stock is listed or quoted on the OTC
Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the OTC Link or &quot;pink sheets&quot; by OTC Markets Group Inc. (formerly Pink OTC Markets
Inc.) (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share
of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Required Holders and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company. If the Company and the Required Holders are unable to agree upon the fair market value of
the Common Stock, then such dispute shall be resolved pursuant to Section 2(c)(iv) below. All such determinations shall be appropriately
adjusted for any stock dividend, stock split or other similar transaction during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">* * * * *</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">IN WITNESS WHEREOF, the Company
has caused this Certificate of Designations to be signed by Oleg Firer, its Chief Executive Officer, as of the 30th day of April,
2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>NET ELEMENT, INC.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:</TD>
    <TD STYLE="width: 46%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EXHIBIT I</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">CONVERSION NOTICE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Reference is made to the
Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of Net Element, Inc. (the &quot;<B>Certificate
of Designations</B>&quot;). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to
convert the number of shares of Series A Convertible Preferred Stock, par value $0.01 per share (the &quot;<B>Preferred Shares</B>&quot;),
of Net Element, Inc., a Delaware corporation (the &quot;<B>Company</B>&quot;), indicated below into shares of Common Stock, par
value $0.0001 per share (the &quot;<B>Common Stock</B>&quot;), of the Company, as of the date specified below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 18%; text-indent: 0in">Date of Conversion:&nbsp;&nbsp;</TD>
    <TD STYLE="width: 75%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 37%; text-indent: 0in">Number of Preferred Shares to be converted:</TD>
    <TD STYLE="width: 56%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 48%; text-indent: 0in">Stock certificate no(s). of Preferred Shares to be converted:</TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 26%; text-indent: 0in">Tax ID Number (If applicable):</TD>
    <TD STYLE="width: 67%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%">Please confirm the following information:</TD>
    <TD STYLE="width: 66%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 16%; text-indent: 0in">Conversion Price:</TD>
    <TD STYLE="width: 77%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 90%; text-indent: 0in">Please check the following box if the Conversion Price is being determined by:</TD>
    <TD STYLE="width: 3%; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 90%; text-indent: 0in">Alternative Conversion Price:&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD>
    <TD STYLE="width: 3%; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 42%; text-indent: 0in">Number of shares of Common Stock to be issued:</TD>
    <TD STYLE="width: 51%; border-bottom: Black 1pt solid; text-indent: 0in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Please issue the Common Stock
into which the Preferred Shares are being converted in the following name and to the following address:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 9%">Issue to:</TD>
    <TD STYLE="width: 54%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Address:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 17%">Telephone Number:</TD>
    <TD STYLE="width: 46%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Facsimile Number:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 13%">Authorization:</TD>
    <TD STYLE="width: 50%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 6%">By:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 52%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Dated:&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 43%">Account Number (if electronic book entry transfer):</TD>
    <TD STYLE="width: 50%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 50%">Transaction Code Number (if electronic book entry transfer):</TD>
    <TD STYLE="width: 43%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Installment Amounts to be reduced and amount of reduction:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>[</B>NOTE TO HOLDER &mdash; THIS FORM MUST
BE SENT CONCURRENTLY TO TRANSFER AGENT<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">ACKNOWLEDGMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company hereby acknowledges
this Conversion Notice and hereby directs Continental Stock Transfer &amp; Trust Company to issue the above indicated number of
shares of Common Stock in accordance with the Irrevocable Transfer Agent Instructions dated April __, 2015 from the Company and
acknowledged and agreed to by Continental Stock Transfer &amp; Trust Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">NET ELEMENT, INC.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 34%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &ldquo;D&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTE PURCHASE AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SECURITIES PURCHASE AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>SECURITIES PURCHASE
AGREEMENT</B> (the &quot;<B>Agreement</B>&quot;), dated as of April 30, 2015, by and among Net Element Inc., a Delaware corporation,
with headquarters located at 3363 NE 163rd Street, Suite 705, North Miami Beach, FL 33160 (the &quot;<B>Company</B>&quot;), and
the investors listed on the Schedule of Buyers attached hereto (individually, a &quot;<B>Buyer</B>&quot; and collectively, the
&quot;<B>Buyers</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the &quot;<B>1933 Act</B>&quot;), and Rule 506(b) of Regulation D
(&quot;<B>Regulation&nbsp;D</B>&quot;) as promulgated by the United States Securities and Exchange Commission (the &quot;<B>SEC</B>&quot;)
under the 1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has authorized a new series of senior convertible notes of the Company, in substantially the form attached hereto as <U>Exhibit
A</U> (the &quot;<B>Notes</B>&quot;), which Notes shall be convertible into the Company's common stock, par value $0.0001 per share
(the&nbsp;&quot;<B>Common Stock</B>&quot;) (the shares of Common Stock issuable pursuant to the terms of the Notes, including,
without limitation, upon conversion, as payment of Interest and as part of the Make-Whole Amount (each, as defined in the Notes)
or otherwise, collectively, the &quot;<B>Conversion Shares</B>&quot;), in accordance with the terms of the Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Buyer wishes to purchase, and the Company wishes to sell at the Initial Closing (as defined below), upon the terms and conditions
stated in this Agreement, (i) that aggregate principal amount of Notes set forth opposite such Buyer's name in column (3)(a) on
the Schedule of Buyers attached hereto (which aggregate principal amount of Notes for all Buyers shall be $5,000,000) (the &quot;<B>Initial
Notes</B>&quot;), and (ii) Warrants, in substantially the form attached hereto as <U>Exhibit B</U> (the &quot;<B>Initial Warrants</B>&quot;),
representing the right to acquire that number of shares of Common Stock set forth opposite such Buyer's name in column (4)(a) on
the Schedule of Buyers, as appropriately adjusted for any stock dividend, stock split, stock combination or similar transaction
from and after the date hereof (as exercised, collectively, the &quot;<B>Initial</B> <B>Warrant Shares</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Buyer wishes to purchase, and the Company wishes to sell at an Additional Closing, upon the terms and conditions stated in this
Agreement, (i) that aggregate principal amount of Notes set forth opposite such Buyer's name in column (3)(b) on the Schedule of
Buyers attached hereto (which aggregate principal amount for all Buyers shall be $10,000,000) (the &quot;<B>Additional Notes</B>&quot;
and together with the Initial Notes, collectively referred to as the &quot;<B>Notes</B>&quot;) and (ii) warrants, in substantially
the form attached hereto as <U>Exhibit B</U> (the &quot;<B>Additional Warrants</B>&quot;, and together with the Initial Warrants,
the &quot;<B>Warrants</B>&quot;), to acquire up to that number of additional shares of Common Stock set forth opposite such Buyer's
name in columns (4)(b) of the Schedule of Buyers, as appropriately adjusted for any stock dividend, stock split, stock combination
or similar transaction from and after the date hereof (as exercised, collectively, the &quot;<B>Additional Warrant Shares</B>&quot;,
and together with the Initial Warrant Shares, the &quot;<B>Warrant Shares</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as <U>Exhibit C</U> (the &quot;<B>Registration Rights Agreement</B>&quot;), pursuant
to which the Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in
the Registration Rights Agreement) under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the transactions contemplated hereby, the Company desires each Buyer or group of affiliated Buyers (a &quot;<B>Buyer
Group</B>&quot;) to enter into, at or prior to the Initial Closing (as defined below), one or more deposit agreements, each substantially
in the form attached hereto as <U>Exhibit D</U> or in a form acceptable to the Company and the Buyers, with The Bank of New York
Mellon (the &quot;<B>Depositary</B>&quot;) with respect to the applicable Purchase Price (as defined in Section 1(b)) to be funded
by each Buyer or Buyer Group on or about (as provided herein) the date of the applicable Closing (as defined in Section 1(a)(ii))
(as amended or modified from time to time in accordance with its respective terms, each a &quot;<B>Deposit Agreement</B>&quot;
and, collectively, the &quot;<B>Deposit Agreements</B>&quot;).&nbsp; Each account governed by a Deposit Agreement shall be referred
to herein as an &quot;<B>Deposit Account</B>&quot; and collectively, the &quot;<B>Deposit Accounts</B>&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">G.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Notes, the Conversion Shares, the Warrants and the Warrant Shares collectively are referred to herein as the &quot;<B>Securities</B>&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>NOW, THEREFORE</B>,
the Company and each Buyer hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>PURCHASE
AND SALE OF NOTES AND WARRANTS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Purchase
of Notes and Warrants</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Initial
Closing</U>. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(a) and 7(a) below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Initial Closing
Date (as defined below), (x) a principal amount of Initial Notes as is set forth opposite such Buyer's name in column (3)(a) on
the Schedule of Buyers and (y) Initial Warrants to acquire up to that number of Initial Warrant Shares as is set forth opposite
such Buyer's name in column (4)(a) on the Schedule of Buyers (the &quot;<B>Initial</B> <B>Closing</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Closing</U>. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 1(d), 6(b) and 7(b) below, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on such Additional
Closing Date (as defined below), (x) a principal amount of Additional Notes not to exceed the amount as is set forth opposite such
Buyer's name in column (3)(b) on the Schedule of Buyers and (y) Additional Warrants to acquire up to that number of Additional
Warrant Shares as is set forth opposite such Buyer's name in column (4)(b) on the Schedule of Buyers, as appropriately adjusted
for any stock dividend, stock split, stock combination or similar transaction from and after the date hereof (each, an &quot;<B>Additional
Closing</B>&quot; and together with the Initial Closing, each a &quot;<B>Closing</B>&quot;).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Purchase
Price</U>. The aggregate purchase price for the Initial Notes and the Initial Warrants to be purchased by each Buyer at the Initial
Closing (the &quot;<B>Initial</B> <B>Purchase Price</B>&quot;) shall be the amount set forth opposite each Buyer's name in column
(5)(a) of the Schedule of Buyers (less, in the case of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]. (the &quot;<B>Lead Investor</B>&quot;),
any amounts withheld pursuant to Section 4(g)). The maximum aggregate purchase price for the maximum Additional Notes and the related
Additional Warrants to be purchased by each such Buyer at all Additional Closings (the amount at each Additional Closing, an &quot;<B>Additional
Purchase Price</B>&quot;, and all Additional Purchase Prices together with the Initial Purchase Price, the &quot;<B>Purchase Price</B>&quot;)
shall be the amount set forth opposite such Buyer's name in column (5)(b) of the Schedule of Buyers (less, in the case of the Lead
Investor, any amounts withheld pursuant to Section 4(g)). Each Buyer shall pay $1,000 for each $1,000 of principal amount of Notes
and related Warrants to be purchased by such Buyer at any Closing. The Buyers and the Company agree that the Notes and the Warrants
constitute an &quot;investment unit&quot; for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the
&quot;<B>Code</B>&quot;). The Buyers and the Company mutually agree that the allocation of the issue price of such investment unit
between the Initial Notes and the Initial Warrants in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section
1.1273-2(h) shall be an aggregate amount of $270,936 allocated to the Initial Warrants and the balance of the Initial Purchase
Price allocated to the Initial Notes. The Buyers and the Company mutually agree that the allocation of the issue price of such
investment unit between the Additional Notes and the Additional Warrants in accordance with Section 1273(c)(2) of the Code and
Treasury Regulation Section 1.1273-2(h) shall be an amount of $0.10 per Additional Warrant and the balance of the Additional Purchase
Price allocated to the Additional Notes. Neither the Buyers nor the Company shall take any position inconsistent with such allocations
in any tax return or in any judicial or administrative proceeding in respect of taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Initial
Closing Date</U>. The date and time of the Initial Closing (the &quot;<B>Initial</B> <B>Closing Date</B>&quot;) shall be 10:00
a.m., New York City time, on the date hereof (or such other date and time as is mutually agreed to by the Company and each Buyer)
after notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 6(a) and 7(a) below, at the
offices of Schulte Roth &amp; Zabel LLP, 919 Third Avenue, New York, New York 10022.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Closing Date</U>. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(b) and 7(b) below, until April
30, 2018 (the &quot;<B>Additional Closing Deadline</B>&quot;), each Buyer shall have the right, at such Buyer's sole option, to
require the Company to issue and sell to such Buyer, and such Buyer shall have the right, to purchase from the Company up to an
aggregate principal amount of Additional Notes and related Additional Warrants as set forth opposite such Buyer's name in columns
(3)(b) and 4(b), respectively, on the Schedule of Buyers. To exercise such right, each Buyer may deliver a notice (a &quot;<B>Buyer
Additional Closing Notice</B>&quot;) to the Company setting forth (i) the aggregate principal amount of Additional Notes and related
Additional Warrants that such Buyer wishes to purchase from the Company, which aggregate principal amount shall not exceed such
Buyer's maximum aggregate principal amount of maximum Additional Notes set forth opposite such Buyer's name in column (3)(b) on
the Schedule of Buyers and which aggregate number of Additional Warrants shall not exceed the number of Additional Warrants set
forth opposite such Buyer's name in column (4)(b) on the Schedule of Buyers and (ii) the date that the Company will be required
to sell such Additional Notes and related Additional Warrants to such Buyer (each, a &quot;<B>Buyer Additional Closing</B>&quot;),
which date shall not be less than one (1) Trading Day after delivery of such Buyer Additional Closing Notice and not later than
the Additional Closing Deadline. No Buyer shall be entitled to cause the Company to consummate more than one (1) Buyer Additional
Closing for such Buyer. Upon receipt of a Buyer Additional Closing Notice, subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6(b) and 7(b) below, the Company shall (i) be required to sell to such Buyer, and such Buyer shall be required
to purchase from the Company, the aggregate principal amount of Additional Notes and related Additional Warrants set forth in the
Buyer Additional Closing Notice on the date of the applicable Buyer Additional Closing set forth in such Buyer Additional Closing
Notice and (ii) within one (1) Business Day of receipt of a Buyer Additional Closing Notice from a Buyer, deliver written notice
thereof via facsimile or electronic mail and overnight courier to all other Buyers and the Company shall within one (1) Business
Day after any such delivery publicly disclose the delivery by a Buyer of a Buyer Additional Closing Notice on a Current Report
on Form 8-K. The date and time of each applicable Additional Closing (each, an &quot;<B>Additional Closing Date</B>&quot;, and
together with all Additional Closing Dates and the Initial Closing Date, each a &quot;<B>Closing Date</B>&quot;) shall be 10:00
a.m., New York City time, on the date specified in the applicable Buyer Additional Closing Notice (or such other date and time
as is mutually agreed to by the Buyers and the Company). The location of such Additional Closing shall be at the offices of Schulte
Roth &amp; Zabel LLP, 919 Third Avenue, New York, New York 10022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Form
of Payment</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Initial
Closing</U>. On the Initial Closing Date, (i) each Buyer shall deliver or reserve for payment and agree to, promptly upon the opening
of such Buyer's or Buyer Group's Deposit Account, deposit its respective Initial Purchase Price <FONT STYLE="background-color: white">(less
any amounts withheld pursuant to Section 4(g))</FONT> (the &quot;<B>Initial Deposit Amount</B>&quot;) to such Deposit Account by
wire transfer of immediately available funds in accordance with the wire instructions set forth in such Buyer's or Buyer Group's
Deposit Agreement, such Initial Deposit Amount to be held and released by the Depositary in accordance with and pursuant to the
terms and conditions of such Deposit Agreement, in each case, for the Initial Notes and the Initial Warrants to be issued and sold
to such Buyer at the Initial Closing and (ii)&nbsp;the Company shall deliver to each Buyer the Initial Notes (allocated in the
principal amounts as such Buyer shall request) which such Buyer is then purchasing hereunder along with the Initial Warrants (allocated
in the amounts as such Buyer shall request) which such Buyer is purchasing hereunder, in each case duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Closing</U>. On each Additional Closing Date, (i) each Buyer shall deliver or reserve for payment and agree to deposit its applicable
Additional Purchase Price <FONT STYLE="background-color: white">(less any amounts withheld pursuant to Section 4(g))</FONT> (the
&quot;<B>Applicable Additional Deposit Amount</B>&quot;) to such Buyer's or Buyer Group's Deposit Account, if any, by wire transfer
of immediately available funds in accordance with the wire instructions set forth in Buyer's or Buyer Group's Deposit Agreement,
such Applicable Additional Deposit Amount to be held and released by the Depositary in accordance with and pursuant to the terms
and conditions of such Deposit Agreement, in each case, for the Additional Notes and the Additional Warrants to be issued and sold
to such Buyer at such Additional Closing and (ii)&nbsp;the Company shall deliver to each Buyer such Additional Notes (allocated
in the principal amounts as such Buyer shall request) which such Buyer is then purchasing hereunder along with such Additional
Warrants (allocated in the amounts as such Buyer shall request) which such Buyer is purchasing hereunder, in each case duly executed
on behalf of the Company and registered in the name of such Buyer or its designee.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>BUYER'S
REPRESENTATIONS AND WARRANTIES</U>. Each Buyer, severally and not jointly, represents and warrants with respect to only itself
that, as of the date hereof and as of each applicable Closing Date<FONT STYLE="text-transform: uppercase">:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Public Sale or Distribution</U>. Such Buyer is (i) acquiring the Notes and the Warrants and (ii) upon conversion of the Notes and
exercise of the Warrants will acquire the Conversion Shares issuable pursuant to the Notes and the Warrant Shares issuable upon
exercise of the Warrants, for its own account and not with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; <U>provided</U>, <U>however</U>, that
by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such
Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute
any of the Securities. For purposes of this Agreement, &quot;<B>Person</B>&quot; means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency
thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Accredited
Investor and QIB Status</U>. Such Buyer is (i) an &quot;accredited investor&quot; as that term is defined in Rule 501(a) of Regulation
D and/or (ii) a &quot;qualified institutional buyer&quot; (&quot;<B>QIB</B>&quot;) as defined in Rule 144A under the Securities
Act, as indicated on the signature page of such Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Reliance
on Exemptions</U>. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Information</U>.
Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Governmental Review</U>. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Transfer
or Resale</U>. Such Buyer understands that except as provided in the Registration Rights Agreement: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned
or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company an opinion of
counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance
that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as
amended, (or a successor rule thereto) (collectively, &quot;<B>Rule 144</B>&quot;); (ii) any sale of the Securities made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of
the Securities under circumstances in which the seller (or the Person) through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Notwithstanding
the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement
secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)), including,
without limitation, this Section 2(f).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Legends</U>.
Such Buyer understands that the certificates or other instruments representing the Notes and the Warrants and, until such time
as the resale of the Conversion Shares and the Warrant Shares have been registered under the 1933 Act as contemplated by the Registration
Rights Agreement, the stock certificates representing the Conversion Shares and the Warrant Shares, except as set forth below,
shall bear any legend as required by the &quot;blue sky&quot; laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock certificates):</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify"><B>[</B>NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE <B>[</B>CONVERTIBLE<B>]</B>
<B>[</B>EXERCISABLE<B>] </B>HAVE BEEN<B>][</B>THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN<B>]</B> REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The legend set forth above shall be removed
and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue
to such holder by electronic delivery at the applicable balance account at The Depository Trust Company (&quot;<B>DTC</B>&quot;),
if, unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii)
in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under
the applicable requirements of the 1933 Act, or (iii) the Securities can be sold, assigned or transferred pursuant to Rule 144
or Rule 144A. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with such issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Validity;
Enforcement</U>. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer
in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Conflicts</U>. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not, in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations hereunder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>REPRESENTATIONS
AND WARRANTIES OF THE COMPANY</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company represents and
warrants to each of the Buyers that, as of the date hereof and as of each applicable Closing Date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Organization
and Qualification</U>. Each of the Company and its &quot;<B>Subsidiaries</B>&quot; (which for purposes of this Agreement means
any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest)
are entities duly organized and validly existing in good standing under the laws of the jurisdiction in which they are formed,
and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each
of the Company and its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, &quot;<B>Material Adverse Effect</B>&quot; means any material adverse effect on the business,
properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries,
taken as a whole, or on the transactions contemplated hereby or in the other Transaction Documents or by the agreements and instruments
to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations
under the Transaction Documents. The Company has no Subsidiaries except as set forth in Note 2 to Consolidated Financial Statements
&ndash; December 31, 2014 and 2013 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Authorization;
Enforcement; Validity</U>. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Lock-up Agreements (as defined in Section 7(x)), the
Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), the Voting Agreements (as defined in Section 4(r)), the Deposit
Agreements and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated
by this Agreement (collectively, the &quot;<B>Transaction Documents</B>&quot;) and to issue the Securities in accordance with the
terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes and the Warrants,
and the reservation for issuance and the issuance of the Conversion Shares and the reservation for issuance and issuance of Warrant
Shares issuable upon exercise of the Warrants have been duly authorized by the Company's Board of Directors and (other than the
filing with the SEC of one or more Registration Statements (as defined in the Registration Rights Agreement) in accordance with
the requirements of the Registration Rights Agreement and (other filings as may be required by state securities agencies) no further
filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Issuance
of Securities</U>. The issuance of the Notes and the Warrants are duly authorized and, upon issuance, shall be validly issued and
free from all taxes, liens and charges with respect to the issue thereof. As of the Initial Closing, a number of shares of Common
Stock shall have been duly authorized and reserved for issuance which equals or exceeds (the &quot;<B>Required Reserved Amount</B>&quot;)
the sum of (i) 25,000,000 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date hereof) to effect the issuance of the Conversion Shares pursuant to the Notes (without
taking into account any limitations on the issuance thereof pursuant to the terms of the Notes) and (ii) 130% of the maximum number
of Warrant Shares issued and issuable pursuant to the Warrants, each as of the Trading Day immediately preceding the applicable
date of determination (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants).
As of the date hereof, there are 152,539,968 shares of Common Stock authorized and unissued. Upon conversion of the Notes in accordance
with the Notes or exercise of the Warrants in accordance with the Warrants, as the case may be, the Conversion Shares and the Warrant
Shares, respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes,
liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common
Stock. Assuming the accuracy of each of the representations and warranties set forth in Section 2 of this Agreement, the offer
and issuance by the Company of the Securities is exempt from registration under the 1933 Act.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Conflicts</U>. The execution, delivery and performance of the Transaction Documents by the Company and any of its Subsidiaries
parties to any of the Transaction Documents and the consummation by the Company and any of its Subsidiaries of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the Warrants and reservation for
issuance and issuance of the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation (as defined in Section (3(r)) or Bylaws (as defined in Section (3(r)), any memorandum of association, certificate
of incorporation, certificate of formation, bylaws, any certificate of designations or other constituent documents of the Company
or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or the articles of association or bylaws
of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any material agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities
laws and regulations and the rules and regulations of The NASDAQ Capital Market (the &quot;<B>Principal Market</B>&quot;) and including
all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is bound or affected.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Consents</U>.
Other than the Nasdaq's Listing of Additional Shares notification in connection with the transactions contemplated hereby and filing
of the Current Report on Form 8-K with the SEC with respect to the transactions contemplated hereby and the other Transaction Documents
and filing of Form D (or applicable state equivalent form), neither the Company nor any of its Subsidiaries is required to obtain
any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory
or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated
by the Transaction Documents, in each case in accordance with the terms hereof or thereof. All consents, authorizations, orders,
filings and registrations which the Company or any of its Subsidiaries is required to obtain pursuant to the preceding sentence
have been obtained or effected on or prior to the Initial Closing Date, and the Company and its Subsidiaries are unaware of any
facts or circumstances that might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The Company is not in violation of the listing requirements of the Principal
Market and has no knowledge of any facts that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable
future. The issuance by the Company of the Securities shall not have the effect of delisting or suspending the Common Stock from
the Principal Market.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Acknowledgment
Regarding Buyer's Purchase of Securities</U>. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and
that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an &quot;affiliate&quot; of the Company
or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of the Company, a &quot;beneficial owner&quot; of
more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the &quot;<B>1934 Act</B>&quot;)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer's purchase of the
Securities. The Company further represents to each Buyer that the Company's decision to enter into the Transaction Documents has
been based solely on the independent evaluation by the Company and its representatives.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
General Solicitation; Placement Agent's Fees</U>. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent's
fees, financial advisory fees, or brokers' commissions (other than for persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable
to Revere Securities LLC, as placement agent (the &quot;<B>Placement Agent</B>&quot;) in connection with the sale of the Securities.
The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney's
fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement
Agent in connection with the sale of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries
has engaged any placement agent or other agent in connection with the sale of the Securities.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Integrated Offering</U>. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of any of the Securities under the 1933 Act, whether through integration with prior offerings or
otherwise, or cause this offering of the Securities (giving effect to the Exchange Cap (as defined in each of the Notes and the
Warrants)) to require approval of stockholders of the Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates and any
Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration
of any of the Securities under the 1933 Act or cause the offering of the Securities (giving effect to the Exchange Cap (as defined
in each of the Notes and the Warrants)) to be integrated with other offerings for purposes of any such applicable stockholder approval
provisions. The Company acknowledges and agrees that the Exchange Cap (as defined in each of the Notes and the Warrants) will be
removed when the Stockholder Approval (as defined in Section 4(p)) is obtained.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Dilutive
Effect</U>. The Company understands and acknowledges that the number of Conversion Shares issuable pursuant to terms of the Notes
and the number of Warrant Shares issuable pursuant to the terms of the Warrants will increase in certain circumstances. The Company
further acknowledges that its obligation to issue Conversion Shares and Warrant Shares pursuant to the terms of the Notes and Warrants
in accordance with this Agreement, the Notes and the Warrants is absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Application
of Takeover Protections; Rights Agreement</U>. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the jurisdiction
of its formation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company's issuance of the Securities and any Buyer's ownership of the Securities. The Company
has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock
or a change in control of the Company<FONT STYLE="font-weight: normal">.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>SEC
Documents; Financial Statements</U>. During the two (2) years prior to the date hereof, the Company has timely (other than certain
Current Reports on Form 8-K)) filed all reports, schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof, and all exhibits
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the &quot;<B>SEC Documents</B>&quot;). The Company has delivered to the Buyers or their respective representatives
true, correct and complete copies of the SEC Documents not available on the EDGAR system. As of their respective filing dates,
the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their
respective filing dates, the financial statements of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(d) of this Agreement or in the disclosure schedules to this Agreement,
contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made, not misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Absence
of Certain Changes</U>. Since December 31, 2014, there has been no material adverse change and no material adverse development
in the business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of the
Company or its Subsidiaries. Since December 31, 2014, neither the Company nor any of its Subsidiaries has (i) declared or paid
any dividends, (ii) sold any assets, in the aggregate, in excess of $100,000 outside of the ordinary course of business or (iii)
had capital expenditures, in the aggregate, in excess of $100,000. Neither the Company nor any of its Subsidiaries has taken any
steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors
intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor
to do so. The Company, individually, and the Company and its Subsidiaries, on a consolidated basis, are not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at any Closing, will not be Insolvent (as defined below).
For purposes of this Section 3(l), &quot;<B>Insolvent</B>&quot; means, with respect to any Person, (i) the present fair saleable
value of such Person's assets is less than the amount required to pay such Person's total Indebtedness (as defined in the Notes),
(ii) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability
to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Undisclosed Events, Liabilities, Developments or Circumstances</U>. No event, liability, development or circumstance has occurred
or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities
laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Conduct
of Business; Regulatory Permits</U>. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under any certificate of designations of any outstanding series of preferred stock of the Company (if any), its Certificate of
Incorporation or Bylaws or their organizational charter or memorandum of association or certificate of incorporation or articles
of association or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree
or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company
nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except for possible violations which
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing,
the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of
any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the Principal Market in
the foreseeable future. During the two (2) years prior to the date hereof, the Common Stock has been designated for quotation on
the Principal Market. During the two (2) years prior to the date hereof, (i) trading in the Common Stock has not been suspended
by the SEC or the Principal Market and (ii) the Company has received no communication, written or oral, from the SEC or the Principal
Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would
not have, in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such certificate, authorization or permit.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Foreign
Corrupt Practices</U>. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other Person
acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee
from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended (&quot;<B>FCPA</B>&quot;); or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Sarbanes-Oxley
Act</U>. The principal executive officer and principal financial officer of the Company have made all certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended (the &quot;<B>Sarbanes-Oxley Act</B>&quot;) and the rules and
regulations promulgated in connection therewith with respect to all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC, and the statements contained in any such certification are complete and correct. The Company and
all of the Company's directors and officers are in compliance in all respects with all applicable effective provisions of the Sarbanes-Oxley
Act.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#9;<U>Transactions With Affiliates</U>. Except as set forth in Item 13 of the Company&rsquo;s Annual Report on Form 10-K for the
fiscal year ended December 31, 2014 and on <U>Schedule 3(q)</U>, none of the officers, directors or employees of the Company or
any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director or employee or, to the knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer,
director, trustee or partner.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Equity
Capitalization</U>. As of the date hereof, the authorized capital stock of the Company consists of (i) 200,000,000 shares of Common
Stock, of which as of the date hereof, 46,911,282 shares are issued and outstanding, 9,121,422 shares are reserved for issuance
pursuant to the Company's stock option and purchase plans and 9,058,094 shares are reserved for issuance pursuant to securities
(other than the aforementioned options, the Notes and the Warrants) exercisable or exchangeable for, or convertible into, Common
Stock, and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share, 4,500 of which shares of preferred stock designated
as Series A Convertible Preferred Stock are issued and outstanding as of the date hereof. All of such outstanding shares have been,
or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in: (i) none of the Company's
capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by
the Company; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock
of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any
of its Subsidiaries is or may become bound to issue additional shares or capital stock of the Company or any of its Subsidiaries
or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) other than the financing statements perfecting the lien on the Company's Subsidiaries processing portfolios
income stream in connection with the credit facility from RBL Capital Group, LLC, there are no financing statements securing obligations
in any material amounts, either singly or in the aggregate, filed in connection with the Company or any of its Subsidiaries; (v)
there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of
any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation
rights or &quot;phantom stock&quot; plans or agreements or any similar plan or agreement; and (ix) the Company and its Subsidiaries
have no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company's or any of its Subsidiary's' respective businesses and which, in the
aggregate, do not or would not have a Material Adverse Effect. The Company has furnished or made available to the Buyers true,
correct and complete copies of the Company's Amended and Restated Certificate of Incorporation, as amended and as in effect on
the date hereof (the &quot;<B>Certificate of Incorporation</B>&quot;), and the Company's Bylaws, as amended and as in effect on
the date hereof (the &quot;<B>Bylaws</B>&quot;), and the terms of all securities convertible into, or exercisable or exchangeable
for shares of Common Stock and the material rights of the holders thereof in respect thereto.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Indebtedness
and Other Contracts</U>. Except as disclosed in <U>Schedule 3(s)</U>, neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which,
by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse
Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness,
except where such violations and defaults would not result, in the aggregate, in a Material Adverse Effect, or (iv) is a party
to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company's
officers, has or is expected to have a Material Adverse Effect. <U>Schedule 3(s)</U> provides a detailed description of the material
terms of any such outstanding Indebtedness. The Company hereby represents that loans of up to an aggregate principal amount of
$6,035,000 remain available to the Company pursuant that certain Loan and Security Agreement, dated June 30, 2014, among RBL Capital
Group, LLC, as lender, and TOT Group, Inc., TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and
TOT New Edge, LLC, as co-borrowers subject only to the satisfaction or waiver of the conditions precedents to each subsequent funding
specified in Section 5.01(e) thereof.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Absence
of Litigation</U>. There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company's Subsidiaries or any of the Company's
or its Subsidiaries' officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except
as set forth in <U>Schedule 3(t)</U>. The matters set forth in <U>Schedule 3(t)</U> would not reasonably be expected to have a
Material Adverse Effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Insurance</U>.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Employee
Relations</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that their relations with their employees are good. No executive officer of the Company or
any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such officer
intends to leave the Company or any such Subsidiary or otherwise terminate such officer's employment with the Company or any such
Subsidiary. No executive officer of the Company or any of its Subsidiaries, to the knowledge of the Company or any of its Subsidiaries,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, in the aggregate, reasonably be expected to result in a Material Adverse Effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Title</U>.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free
and clear of all liens, encumbrances and defects except for Permitted Liens (as defined in the Notes). Any real property and facilities
held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings
by the Company and its Subsidiaries.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Intellectual
Property Rights</U>. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (&quot;<B>Intellectual Property Rights</B>&quot;) necessary to conduct their respective businesses as now
conducted. Neither the Company nor any of its Subsidiaries owns any patents. None of the Company's Intellectual Property Rights
have expired or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within
three years from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding
its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which
might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Environmental
Laws</U>. The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where,
in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, in the aggregate,
a Material Adverse Effect. The term &quot;<B>Environmental Laws</B>&quot; means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, &quot;<B>Hazardous Materials</B>&quot;)<B>
</B>into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Subsidiary
Rights</U>. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Investment
Company Status</U>. The Company is not, and upon consummation of the sale of the Securities, and for so long any Buyer holds any
Securities, will not be, an &quot;investment company,&quot; a company controlled by an &quot;investment company&quot; or an &quot;affiliated
person&quot; of, or &quot;promoter&quot; or &quot;principal underwriter&quot; for, an &quot;investment company&quot; as such terms
are defined in the Investment Company Act of 1940, as amended.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Tax
Status</U>. The Company and each of its Subsidiaries (i) has made or filed all U.S. federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Internal
Accounting and Disclosure Controls</U>. Except as described in Item 9A of the Company's Form 10-K for the period ended December
31, 2014, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance
with management's general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared
with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference.
Except as described in Item 9A of the Company's Form 10-K for the period ended December 31, 2014, the Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and
procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company's management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. During
the twelve (12) months prior to the date hereof neither the Company nor any of its Subsidiaries has received any notice or correspondence
from any accountant relating to any material weakness in any part of the system of internal accounting controls of the Company
or any of its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Off
Balance Sheet Arrangements</U>. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed
or that otherwise would be reasonably likely to have a Material Adverse Effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Ranking
of Notes</U>. Except as set forth in <U>Schedule 3(ee)</U>, no Indebtedness of the Company or any of its Subsidiaries is senior
to or ranks <I>pari passu</I> with the Notes in right of payment, whether with respect of payment of redemptions, interest, damages
or upon liquidation or dissolution or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Eligibility
for Registration</U>. The Company is eligible to register the Conversion Shares and the Warrant Shares for resale by the Buyers
using Form S-3 promulgated under the 1933 Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfer
Taxes</U>. On each Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been,
fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Manipulation
of Price</U>. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) other than the Placement
Agent, sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) other than
the Placement Agent, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities
of the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(ii)&nbsp;&nbsp;[<U>Intentionally
omitted</U>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(jj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>U.S.
Real Property Holding Corporation</U>. The Company is not, has never been, and so long as any Securities remain outstanding, shall
not become, a U.S. real property holding corporation within the meaning of Section 897 of the Code and the Company shall so certify
upon any Buyer's request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(kk)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Bank
Holding Company Act.</U> Neither the Company nor any of its Subsidiaries or affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the &quot;<B>BHCA</B>&quot;) and to regulation by the Board of Governors of the Federal Reserve System (the
&quot;<B>Federal Reserve</B>&quot;). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(ll)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Additional Agreements</U>. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Buyer with
respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(mm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Disclosure</U>.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or
counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The
Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Buyers regarding the Company, or any of its Subsidiaries, their business
and the transactions contemplated hereby, including the disclosure schedules to this Agreement, furnished by or on behalf of the
Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each
press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries
or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. The Company
acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(nn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Shell
Company Status</U>. The Company is not, and has not been since October 5, 2012, an issuer identified in Rule 144(i)(1) of the 1933
Act. On of October 5, 2012, the Company filed a Current Report on Form 8-K (as amendment by a Current Report on Form 8-K/A filed
by the Company with the SEC on November 19, 2012) containing current &quot;Form 10 information&quot; (as defined in Rule 144 (i)(3))
with the SEC reflecting its status as an entity that was no longer an issuer described in Rule 144(i)(1)(i).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(oo)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stock
Option Plans</U>. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock
option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date
such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's stock
option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the
Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release
or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(pp)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Disagreements with Accountants and Lawyers</U>. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof,
the Company had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions,
the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(qq)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Disqualification Events</U>. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933
Act (&quot;<B>Regulation D Securities</B>&quot;), none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of
the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is
defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an &quot;<B>Issuer
Covered Person</B>&quot; and, together, &quot;<B>Issuer Covered Persons</B>&quot;) is subject to any of the &quot;Bad Actor&quot;
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a &quot;<B>Disqualification Event</B>&quot;), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether
any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its
disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(rr)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Other
Covered Persons</U>. The Company is not aware of any Person (other than the Placement Agent) that has been or will be paid (directly
or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D
Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 1in">(ss)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;</FONT><U>Office of Foreign Assets Control</U>.&nbsp; Neither the Company nor any director, officer, agent, employee or affiliate
of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (&quot;<B>OFAC</B>&quot;).&nbsp; Neither the Company nor any subsidiary or affiliate (a) will directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity currently subject to any U.S. sanctions administered by OFAC; (b) is knowingly engaged in, or
will knowingly engage in, any dealings or transactions or be otherwise associated with such persons or entities described in clause
(a) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 1in">(tt)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>Money Laundering Laws</U>. The operations of the Company and the Subsidiaries are and have been conducted at all times
in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
&quot;<B>Money Laundering Laws</B>&quot;), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any or its Subsidiaries with respect to the Money Laundering Laws is pending
or, to the Company's knowledge, threatened.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>COVENANTS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Best
Efforts</U>. Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be satisfied by
it as provided in Sections 6 and 7 of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Form
D and Blue Sky</U>. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Initial Closing Date, take such action
as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale
to the Buyers at each Closing pursuant to this Agreement under applicable securities or &quot;Blue Sky&quot; laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Initial Closing Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or &quot;Blue Sky&quot; laws of the states of the United States following
each Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Reporting
Status</U>. Until the date on which the Investors (as defined in the Registration Rights Agreement) shall have sold all of the
Conversion Shares and Warrant Shares<B> </B>and none of the Notes or<B> </B>Warrants are outstanding (the &quot;<B>Reporting Period</B>&quot;),
the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination, and the Company shall take all actions necessary to maintain
its eligibility to register the Conversion Shares and Warrant Shares for resale by the Investors on Form S-3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Use
of Proceeds</U>. The Company will use the proceeds from the sale of the Securities solely for general corporate purposes and for
working capital purposes but not for (i) the repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries
or (ii) the redemption or repurchase of any of its or its Subsidiaries' equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Financial
Information</U>. The Company agrees to send the following to each Buyer during the Reporting Period unless the following are filed
with the SEC through EDGAR and are available to the public through the EDGAR system, (i) within one (1) Business Day after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current Reports
on Form 8-K (or any analogous reports under the 1934 Act) and any registration statements (other than on Form S-8) or amendments
filed pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile or e-mailed copies of all press releases
issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given
to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.
As used herein, &quot;<B>Business Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law to remain closed.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Listing</U>.
The Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock then listed (subject
to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under
the terms of the Transaction Documents. The Company shall maintain the authorization for quotation of the Common Stock on the Principal
Market or any other Eligible Market (as defined in the Warrants). Neither the Company nor any of its Subsidiaries shall take any
action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market.
The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Fees</U>.
The Company shall reimburse the Lead Investor (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any
Buyer or its counsel prior to the date of this Agreement) for all costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including, without limitation, all legal fees and disbursements in connection therewith,
documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection
therewith), which amount may be withheld by such Buyer from its Purchase Price for any Notes and Warrants purchased at the Initial
Closing and/or any Additional Closing to the extent not previously reimbursed by the Company. Notwithstanding the foregoing, in
no event will the fees of counsel to the Lead Investor reimbursed by the Company pursuant to this Section 4(g) exceed $27,500 without
the prior approval of the Company (the &quot;<B>Legal Fee Cap</B>&quot;). The Company shall be responsible for the payment of any
placement agent's fees, financial advisory fees, or broker's commissions or fees payable to the Depositary in connection with the
Deposit Agreements (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby,
including, without limitation, any fees or commissions payable to the Placement Agent. The Company agrees and acknowledges that
each Buyer may withhold the fees and expenses of the Depositary or related to such Buyer's or Buyer Group's Deposit Account from
its Purchase Price for any Notes and Warrants purchased at the Initial Closing and/or any Additional Closing amount or deduct such
amounts or direct (or permit such amounts to be deducted by the Depositary) from any amounts held in such Buyer's or Buyer Group's
Deposit Account. The Company shall pay and indemnify each Buyer for, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, reasonable attorney's fees and out-of-pocket expenses) arising in connection with any
claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall
bear its own expenses in connection with the sale of the Securities to the Buyers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Pledge
of Securities</U>. The Company acknowledges and agrees that the Securities may be pledged by an Investor in connection with a bona
fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities
shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document, including, without limitation, Section 2(f) hereof; <U>provided</U> that an Investor
and its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale, transfer or assignment
of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Disclosure
of Transactions and Other Material Information</U>. On or before 8:30 a.m., New York City time, on the first Business Day after
this Agreement has been executed (the &quot;<B>8-K Deadline</B>&quot;), the Company shall issue a press release reasonably acceptable
to the Buyers and file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents
in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement
(and all schedules and exhibits to this Agreement), the form of Notes, the form of the Warrant, the form of Lock-Up Agreement,
the Registration Rights Agreement, the form of Voting Agreement and, if applicable, the Deposit Agreements (to the extent such
Deposit Agreements are duly executed and delivered by all parties thereto on or prior to the 8-K Deadline) as exhibits to such
filing (including all attachments), the &quot;<B>8-K Filing</B>&quot;). From and after the filing of the 8-K Filing with the SEC,
no Buyer shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any
of their respective officers, directors, affiliates, employees or agents, that is not disclosed in the 8-K Filing. In addition,
effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand,
shall terminate. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers,
directors, affiliates, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company
or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer. If a Buyer has,
or believes it has, received any such material, nonpublic information regarding the Company or any of its Subsidiaries from the
Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, it may provide
the Company with written notice thereof. The Company shall, within two (2) Trading Days of receipt of such notice, make public
disclosure of such material, nonpublic information. In the event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees, affiliates and agents, in addition to any other
remedy provided herein or in the Transaction Documents, a Buyer shall have the right to make a public disclosure, in the form of
a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company,
its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability
to the Company, its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents for
any such disclosure. To the extent that the Company delivers any material, non-public information to a Buyer without such Buyer's
consent, the Company hereby covenants and agrees that such Buyer shall not have any duty of confidentiality to the Company, any
of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents not to
trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor
any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted
by the Company in connection with any such press release or other public disclosure prior to its release). Except for the Registration
Statement required to be filed pursuant to the Registration Rights Agreement, without the prior written consent of any applicable
Buyer, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer in any filing, announcement,
release or otherwise.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Additional
Notes; Variable Securities</U>. So long as any Buyer beneficially owns any Securities, the Company will not issue any Notes other
than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would cause a breach or default
under the Notes. Other than in connection with the acquisition of the PayOnline group of companies and except for any issuances
of securities to any of the Buyers, for so long as any Notes remain outstanding, the Company shall not, in any manner, issue or
sell any rights, warrants or options to subscribe for or purchase Common Stock or directly or indirectly convertible into or exchangeable
or exercisable for Common Stock at a price which varies or may vary with the market price of the Common Stock, including by way
of one or more reset(s) to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less
than the then applicable Fixed Conversion Price (as defined in the Notes) with respect to the Common Stock into which any Note
is convertible or the then applicable Exercise Price (as defined in the Warrants) with respect to the Common Stock into which any
Warrant is exercisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Corporate
Existence</U>. So long as any Buyer beneficially owns any Securities, the Company shall (i) maintain its corporate existence and
(ii) not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes and the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Reservation
of Shares</U>. So long as any Buyer owns any Securities, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than the Required Reserved Amount. If at any time the number of shares of Common
Stock authorized and reserved for issuance is not sufficient to meet the Required Reserved Amount, the Company will promptly take
all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a
special meeting of stockholders to authorize additional shares to meet the Company's obligations under Section 3(c), in the case
of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares,
and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that
the number of authorized shares is sufficient to meet the Required Reserved Amount. The initial number of shares of Common Stock
reserved for conversions of the Notes and exercises of the Warrants and each increase in the number of shares so reserved shall
be allocated pro rata among the Buyers based on the aggregate principal amount of Initial Notes held by each Buyer at the time
of issuance of the Initial Notes or increase in the number of reserved shares, as the case may be. In the event a Buyer shall sell
or otherwise transfer any of such Buyer's Notes or Warrants, each transferee shall be allocated a pro rata portion of the number
of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and allocated to any Person
which ceases to hold any Notes and/or Warrants (other than pursuant to a transfer of Notes or Warrants in accordance with the immediately
preceding sentence) shall be allocated to the remaining Investors, pro rata based on the number of Notes and/or Warrants then held
by such Investors.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;
</FONT>&#9;<U>Conduct of Business</U>. The business of the Company and its Subsidiaries shall not be conducted in violation of
any law, ordinance or regulation of any governmental entity, including, without limitation, FCPA, OFAC regulations and Money Laundering
Laws, except where such violations would not result, in the aggregate, in a Material Adverse Effect.&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Additional
Issuances of Securities</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Section 4(n), the following definitions shall apply.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares
of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Common
Stock Equivalents</B>&quot; means, collectively, Options and Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
the date hereof until the date no Notes are outstanding (the &quot;<B>Trigger Date</B>&quot;), the Company shall not, (x) (i) directly
or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option
to purchase or other disposition of) any of its or its Subsidiaries' equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a &quot;<B>Subsequent Placement</B>&quot;), or (ii) be party to any solicitations,
negotiations or discussions with regard to the foregoing or (y) directly or indirectly, (i) file any registration statement with
the SEC or file any amendment or supplement thereto, (ii) cause any registration statement to be declared effective by the SEC
or (iii) grant any registration rights to any Person that can be exercised prior to such date as set forth above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
the Trigger Date until the one (1) year anniversary of the Trigger Date, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this Section 4(n)(iii).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall deliver to each Buyer an irrevocable written notice (the &quot;<B>Offer Notice</B>&quot;) of any proposed or intended
issuance or sale or exchange (the &quot;<B>Offer</B>&quot;) of the securities being offered (the &quot;<B>Offered Securities</B>&quot;)
in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x)&nbsp;describe the price
and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (y)&nbsp;identify the persons or entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers at least fifty percent (50%)
of the Offered Securities, allocated among such Buyers (a) based on such Buyer's pro rata portion of the aggregate principal amount
of Notes purchased hereunder on the Initial Closing Date (the &quot;<B>Basic Amount</B>&quot;), and (b) with respect to each Buyer
that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of
other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic
Amounts (the &quot;<B>Undersubscription Amount</B>&quot;), which process shall be repeated until the Buyers shall have an opportunity
to subscribe for any remaining Undersubscription Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the tenth (10<SUP>th</SUP>)
Business Day after such Buyer's receipt of the Offer Notice (the &quot;<B>Offer Period</B>&quot;), setting forth the portion of
such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the &quot;<B>Notice of Acceptance</B>&quot;).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; <U>provided</U>, <U>however</U>, that if the Undersubscription
Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the
&quot;<B>Available Undersubscription Amount</B>&quot;), each Buyer who has subscribed for any Undersubscription Amount shall be
entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the
total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the
extent its deems reasonably necessary. Notwithstanding anything to the contrary contained herein, if the Company desires to modify
or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to the Buyers
a new Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day after such Buyer's receipt of such new Offer
Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have five (5) Business Days from the expiration of the Offer Period above to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the &quot;<B>Refused Securities</B>&quot;)
pursuant to a definitive agreement (the &quot;<B>Subsequent Placement Agreement</B>&quot;) but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in
the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement, and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
and any documents contemplated therein filed as exhibits thereto.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(n)(iii)(3) above), then each Buyer may, at its sole option and in its sole discretion, reduce the
number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(n)(iii)(2) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue,
sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to Section 4(n)(iii)(3) above prior to such
reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer
so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been
offered to the Buyers in accordance with Section&nbsp;4(n)(iii)(1) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from
the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 4(n)(iii)(3) above if the Buyers have so elected, upon the terms and conditions specified
in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery
by the Company and the Buyers of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance
to the Buyers and their respective counsel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
Offered Securities not acquired by the Buyers or other persons in accordance with Section 4(n)(iii)(3) above may not be issued,
sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and the Buyers agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the &quot;<B>Subsequent Placement
Documents</B>&quot;) shall include any term or provisions whereby any Buyer shall be required to agree to any restrictions in trading
as to any securities of the Company owned by such Buyer prior to such Subsequent Placement, and (y) any registration rights set
forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained in
the Registration Rights Agreement.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by the Buyers, the Company shall either confirm in
writing to the Buyers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case in such a manner such that the Buyers will not be in possession of
material non-public information, by the fifteenth (15<SUP>th</SUP>) Business Day following delivery of the Offer Notice. If by
the fifteenth (15<SUP>th</SUP>) Business Day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyers, such transaction shall be deemed to have been abandoned and the Buyers shall not be deemed to be in possession of
any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect
to the Offered Securities, the Company shall provide each Buyer with another Offer Notice and each Buyer will again have the right
of participation set forth in this Section 4(n)(iii). The Company shall not be permitted to deliver more than one such Offer Notice
to the Buyers in any 60 day period.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
restrictions contained in subsection (iii) of this Section 4(n) shall not apply in connection with the issuance of any Excluded
Securities (as defined in the Notes).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Public
Information</U>. At any time during the period commencing from the six (6) month anniversary of the Initial Closing Date and ending
at such time that all of the Securities, if a registration statement is not available for the resale of all of the Securities,
may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the
failure to satisfy the current public information requirement under Rule 144(c) or (ii) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a &quot;<B>Public Information Failure</B>&quot;) then, as partial relief for the damages to any Buyer
by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such Buyer an amount in cash equal to one and one-half percent
(1.5%) of the aggregate purchase price of such Buyer's Securities on the day of a Public Information Failure and on every thirtieth
day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information
Failure is cured and (ii) such time that such public information is no longer required pursuant to Rule 144. The payments to which
a holder shall be entitled pursuant to this Section 4(o) are referred to herein as &quot;<B>Public Information Failure Payments</B>.&quot;
Public Information Failure<B> </B>Payments shall be paid on the earlier of (I) the last day of the calendar month during which
such Public Information Failure<B> </B>Payments are incurred and (II) the third Business Day after the event or failure giving
rise to the Public Information Failure<B> </B>Payments is cured. In the event the Company fails to make Public Information Failure<B>
</B>Payments when due in a timely manner, such unpaid portion of the Public Information Failure<B> </B>Payments shall bear interest
at the rate of 1.5% per month (prorated for partial months) until paid in full.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Stockholder
Approval</U>. The Company shall file with the SEC and provide each stockholder of the Company with an information statement complying
with the requirements of the 1934 Act and substantially in the form that has been previously reviewed and approved by the Buyers
and Schulte Roth &amp; Zabel LLP informing such stockholders of the actions taken in accordance with the Resolutions and of the
Stockholder Approval (each, as defined below). In addition to the foregoing, if required by any governmental or regulatory agency,
the Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the
&quot;<B>Stockholder Meeting</B>&quot;), which shall be called at or prior to the Company's next annual meeting of stockholders,
but in no event later than the Stockholder Meeting Deadline (as defined below), a proxy statement (the &quot;<B>Proxy Statement</B>&quot;),
in a form reasonably acceptable to the Buyers after review by Schulte Roth &amp; Zabel LLP, soliciting each such stockholder's
affirmative vote at the Stockholder Meeting for approval of resolutions (the &quot;<B>Resolutions</B>&quot;) providing for the
issuance of all of the Securities as described in the Transaction Documents in accordance with applicable law, the provisions of
the Certificate of Incorporation and the rules and regulations of the Principal Market (such affirmative approval being referred
to herein as the &quot;<B>Stockholder Approval</B>&quot;), and the Company shall use its reasonable best efforts to solicit its
stockholders' approval of such Resolutions and to cause the Board of Directors of the Company to recommend to the stockholders
that they approve the Resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder
Meeting Deadline. If, despite the Company's reasonable best efforts, the Stockholder Approval is not obtained at the Stockholder
Meeting, the Company shall cause an additional Stockholder Meeting to be held each calendar quarter thereafter until Stockholder
Approval is obtained. In connection with the stockholders' meeting contemplated by this Section 4(p), the Company shall (i) use
its best efforts to solicit its stockholders' approval of the Resolutions and (ii) cause at least a majority of the Board of Directors
of the Company to recommend to the stockholders that they approve the Resolutions. As used herein, &quot;<B>Stockholder Meeting
Deadline</B>&quot; means (i) the date that is sixty (60) days after the Closing Date in the event the Proxy Statement is subject
to review by the SEC and (ii) the date that is thirty (30) days after the Closing Date in the event the Proxy Statement is not
subject to review by the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notice
of Disqualification Events</U>. The Company will notify the Buyers in writing, prior to any Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voting
Agreement</U>. The Company shall use its reasonable best efforts to effectuate the transactions contemplated by the Voting Agreement
substantially in the form attached hereto as <U>Exhibit E</U> (the &quot;<B>Voting Agreement</B>&quot;), executed on or prior to
the Closing by the Company and the stockholders set forth on <U>Schedule 4(r)</U> (collectively, the &quot;<B>Principal Stockholders</B>&quot;).
The Company shall not amend, except as contemplated in the immediately preceding sentence, or waive any provision of the Voting
Agreements and shall enforce the provisions of the Voting Agreements in accordance with its terms. If any of the Principal Stockholders
breach any provisions of either of the Voting Agreements, the Company shall promptly use its best efforts to seek specific performance
of the terms of such Voting Agreement in accordance with Section 4.02 thereof. In addition, if the Company receives any notice
from any of the Principal Stockholders pursuant to the Voting Agreement, the Company shall promptly, but in no event later than
two (2) Business Days, deliver a copy of such notice to each Buyer.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Lock-Up</U>.
The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except to extend the term
of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If any officer or
director that is a party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its
reasonable best efforts to seek specific performance of the terms of such Lock-Up Agreement.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deposit
Account</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 14.2pt; text-align: justify; text-indent: 1.5in">(i)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>On each thirty (30) day anniversary of the Monthly Deposit Release Date (as defined below) (or if any such date falls on
a day other than a Business Day (a &quot;<B>Holiday</B>&quot;), the next day that is not a Holiday) (I) if on such date there
is (A) no Equity Conditions Failure (as defined in the Notes) as, and (B) either an Effective Registration (as defined below),
which registration remains in effect and is available for resale of all of the Registrable Securities, or, after the Effective
144 Date (as defined below), the Company is in compliance with Rule 144(c)(1) and (II) if the Initial Deposit Amount held in such
Buyer's or Buyer Group's Deposit Account exceeds the Conversion Amount (as defined in the Notes) of Notes then outstanding and
held by the applicable Buyer or Buyer Group (such excess amount, an &quot;<B>Deposit</B> <B>Excess Amount</B>&quot;), each such
Buyer or Buyer Group to whom such Deposit Excess Amount is attributable shall issue a written instruction to the Depositary (with
a copy to the Company) to deliver to the Company by wire transfer of immediately available funds from such Buyer's or Buyer Group's
Deposit Account an amount equal to such Deposit Excess Amount pursuant to wire instructions provided by the Company to the Depositary
(with a copy to such Buyer or Buyer Group) in writing.&nbsp; For purposes hereof, &quot;<B>Monthly Deposit</B> <B>Release Date</B>&quot;
means the earlier of (x) the time of the effective registration of all of the Registrable Securities pursuant to and in accordance
with the Registration Rights Agreement (an &quot;<B>Effective Registration</B>&quot;), or (y) if there is no Effective Registration,
the time all of the Registrable Securities may be sold pursuant to Rule 144 without restriction or limitation (&quot;<B>Effective
144 Date&quot;</B>).&nbsp;</P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, on each Monthly Deposit Release Date, each Buyer or Buyer Group shall issue a written instruction to the Depositary (with
a copy to the Company) to deliver to the Company by wire transfer of immediately available funds from such Buyer's or Buyer Group's
Deposit Account an amount equal to the lesser of (x) (A) the sum of (I) with respect to the Initial Deposit Amount deposited in
such Buyer's or Buyer Group's Deposit Account, such Buyer's or Buyer Group's pro rata share of the Monthly Deposit Release Amount
(as defined below) (for purposes hereof, pro rata share shall be determined based on the aggregate principal amount of Initial
Notes purchased by such Buyer or Buyer Group on the Initial Closing Date in relation to the aggregate principal amount of Initial
Notes issued by the Company on the Initial Closing Date), and, (II) with respect to any Applicable Additional Deposit Amount deposited
in such Buyer's or Buyer Group's Deposit Account on the applicable Additional Closing Date, an amount equal to the Monthly Deposit
Release Percentage (as defined below) of such Buyer's or Buyer Group's Applicable Additional Deposit Amount, less, (B) in each
case, any Deposit Excess Amount and any other amounts of such Buyer or Buyer Group released or withdrawn since the immediately
preceding Monthly Deposit Release Date and (y) such lesser amount that then remains available in such Buyer's Buyer Group's Deposit
Account, pursuant to wire instructions provided by the Company to the Depositary (with a copy to such Buyer or Buyer Group) in
writing; <U>provided</U>, <U>however</U>, that a Buyer or Buyer Group shall only be required to issue such a written instruction
to the Depositary if (I) there is no Equity Conditions Failure (as defined in the Notes) as of such Monthly Deposit Release Date
and (II) the Stockholder Approval has been obtained.&nbsp;As used herein, (x) &quot;<B>Monthly Deposit Release Amount</B>&quot;
means, with respect to (I) the first (1<SUP>st</SUP>) Monthly Deposit Release Date hereunder, $2,500,000, (II) the second (2<SUP>nd</SUP>)
Monthly Deposit Release Date hereunder, $1,500,000 and (III) the third (3<SUP>rd</SUP>) Monthly Deposit Release Date hereunder,
the remainder of cash then remaining in such Buyer's or Buyer Group's Deposit Account and (y) &quot;<B>Monthly Deposit Release
Percentage</B>&quot; means, with respect to (I) the first (1<SUP>st</SUP>) Monthly Deposit Release Date following the applicable
Additional Closing Date , 50% of the Applicable Additional Deposit Amount deposited in such Buyer's or Buyer Group's Deposit Account,
(II) the second (2<SUP>nd</SUP>) Monthly Deposit Release Date following the applicable Additional Closing Date, 30% of the Applicable
Additional Deposit Amount deposited in such Buyer's or Buyer Group's Deposit Account, and (III) the third (3<SUP>rd</SUP>) Monthly
Deposit Release Date following the applicable Additional Closing Date, 20% of the Applicable Additional Deposit Amount deposited
in such Buyer's or Buyer Group's Deposit Account.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
the Business Day immediately preceding each Monthly Deposit Release Date, the Company shall send a written notice to each Buyer
with any money still held in a Deposit Account certifying whether there is an equity Conditions Failure as of such date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything herein to the contrary, any Buyer or Buyer Group may, in its sole and absolute discretion, elect to release cash exceeding
the amounts set forth in Sections 4(t)(i) and 4(t)(ii) from such Buyer's or Buyer Group's Deposit Account to the Company pursuant
to wire instructions provided in writing by the Company to the Depositary (with a copy to such Buyer or Buyer Group).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company hereby acknowledges and agrees that in the event that the Company is required to make any payment to any Buyer pursuant
to the terms of any of the Transaction Documents, such Buyer shall, in its sole discretion, be entitled to draw cash for the account
of such Buyer or direct disbursement or withdrawal of cash to such other applicable account from such Buyer's or Buyer Group's
Deposit Account in satisfaction, in whole or in part, of any such amount due to such Buyer pursuant to any of the Transaction Documents
by issuing a written instruction to the Depositary (with a copy to the Company) to request the wire transfer of immediately available
funds pursuant to wire instructions provided by such Buyer to the Depositary (with a copy to the Company). The withdrawal of such
funds shall not reduce in any respect the overall obligations of the Company under any Transaction Document other than, with respect
to such payments satisfied by such withdrawals, to the extent of the amount withdrawn. The Company hereby acknowledges that the
Depositary may maintain a lien on the funds held in any Deposit Account pursuant to the terms of the Deposit Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after payment in full by the Company on the Maturity Date of the Conversion Amount of any outstanding Notes, each Buyer shall issue
a written instruction to the Depositary (with a copy to the Company) to deliver to the Company by wire transfer of immediately
available funds from such Buyer's or Buyer Group's Deposit Account an amount equal to any cash then remaining in such Buyer's or
Buyer Group's Deposit Account pursuant to wire instructions provided by the Company to the Depositary (with a copy to such Buyer
or Buyer Group) in writing.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and each Buyer or Buyer Group shall use its best efforts to open such Buyer's or Buyer Group's Deposit Account as soon
as reasonably practicable. In the event such Buyer or Buyer Group is unable to open a Deposit Account on or prior to the date that
is two (2) weeks after the date hereof, the Company acknowledges and agrees that the portion of the applicable Purchase Price otherwise
required to be wired to such Buyer's or Buyer Group's Deposit Account on the applicable Closing Date shall remain with such Buyer
and the provisions of this Section 4(t) shall apply, <I>mutatis mutandis</I>, to releases of cash from such Buyer's own account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Post-Closing
Covenants</U>. On the first Business Day after each Deposit Agreement has been executed, the Company shall file or disclose in,
as applicable, a Current Report on Form 8-K describing the terms of the transactions contemplated by such Deposit Agreement in
the form required by the 1934 Act and attaching the Deposit Agreement (and all schedules and exhibits to thereto) as exhibits to
such filing (including all attachments, the &quot;<B>8-K Deposit Filing</B>&quot;). From and after the filing of the 8-K Deposit
Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information received from the Company, any of its
Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, that is not disclosed in the 8-K
Deposit Filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Closing
Documents</U>. On or prior to thirty (30) calendar days after each Closing Date, the Company agrees to deliver, or cause to be
delivered, to each Buyer and Schulte Roth &amp; Zabel LLP a complete closing set of the executed Transaction Documents, Securities
and any other documents required to be delivered to any party pursuant to Section 7 hereof or otherwise.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>REGISTER;
TRANSFER AGENT INSTRUCTIONS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Register</U>.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and
address of the Person in whose name the Notes and<B> </B>the Warrants have been issued (including the name and address of each
transferee), the principal amount of Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms
of the Notes and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep
the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Transfer
Agent Instructions</U>. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent,
in the form of <U>Exhibit F</U> attached hereto (the &quot;<B>Irrevocable Transfer Agent Instructions</B>&quot;) to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s),
for the Conversion Shares and the Warrant Shares issued at each Closing or upon conversion of the Notes or exercise of the Warrants
in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise of the Warrants.
The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b),
and stop transfer instructions to give effect to Section 2(f) hereof, will be given by the Company to its transfer agent, and that
the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in
this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance
with Section 2(f), the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates
or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to
effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves the Conversion Shares or
the Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer
agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled,
in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any bond or other security being required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Initial
Closing</U>. The obligation of the Company hereunder to issue and sell the Initial Notes and the related Initial Warrants to each
Buyer at the Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions,
provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion
by providing each Buyer with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
Buyer shall have delivered or reserved for payment and agree to, promptly upon the opening of such Buyer's or Buyer Group's Deposit
Account, deposit of the Initial Purchase Price <FONT STYLE="background-color: white">(less any amounts withheld pursuant to Section
4(g))</FONT> to such Deposit Account for the Initial Notes and the related Initial Warrants being purchased by such Buyer at the
Initial Closing by wire transfer of immediately available funds pursuant to the wire instructions set forth in such Buyer's or
Buyer Group's Deposit Agreement, such Initial Purchase Price to be held and released by such Depositary in accordance with and
pursuant to the terms and conditions of such Deposit Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality, which are accurate in all respects) as of the date when made and as of the Initial
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date which shall
be true and correct in all material respects (except for those representations and warranties that are qualified by materiality,
which are accurate in all respects) as of such specified date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by such Buyer at or prior to the Initial Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Closing</U>. The obligation of the Company hereunder to issue and sell the Additional Notes and the related Additional Warrants
to each Buyer at an Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of
each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
Buyer shall have delivered or reserved for payment and agree to deposit the Additional Purchase Price <FONT STYLE="background-color: white">(less
any amounts withheld pursuant to Section 4(g)) </FONT>to such Buyer's or Buyer Group's Deposit Account, if any, for the Additional
Notes and the related Additional Warrants being purchased by such Buyer at the Additional Closing by wire transfer of immediately
available funds pursuant to the wire instructions set forth in such Buyer's or Buyer Group's Deposit Agreement, such Additional
Purchase Price to be held and released by the Depositary in accordance with and pursuant to the terms and conditions of such Deposit
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
representations and warranties of such Buyer shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality, which are accurate in all respects) as of the date when made and as of such Additional
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date which shall
be true and correct in all material respects (except for those representations and warranties that are qualified by materiality,
which are accurate in all respects) as of such specified date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by such Buyer at or prior to such Additional Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>CONDITIONS
TO EACH BUYER'S OBLIGATION TO PURCHASE</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Initial
Closing</U>. The obligation of each Buyer hereunder to purchase the Initial Notes<B> </B>and the related Initial Warrants at the
Initial Closing is subject to the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided
that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its sole discretion by providing
the Company with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following documents to which
it is a party: (A) each of the Transaction Documents, (B) the Initial Notes (allocated in such principal amounts as such Buyer
shall request), being purchased by such Buyer at the Initial Closing pursuant to this Agreement and (C) the related Initial Warrants
(allocated in such amounts as such Buyer shall request) being purchased by such Buyer at the Initial Closing pursuant to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer the Voting Agreement duly executed and delivered by the Principal Stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
Buyer shall have received the opinion of Snell &amp; Wilmer L.L.P., the Company's outside counsel, dated as of the Initial Closing
Date, in substantially the form of <U>Exhibit G</U> attached hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of <U>Exhibit F</U>
attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its U.S. Subsidiaries in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction or a bring down of such good standing from Incorporating Services, Ltd., as of a date within ten (10) days of the
Initial Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the Company's and each of its U.S. Subsidiaries' qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which
the Company and its U.S. Subsidiaries conduct business or a bring down of such good standing from Incorporating Services, Ltd.,
as of a date within ten (10) days of the Initial Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation of the Company and each of its
U.S. Subsidiaries (other than the Subsidiaries formed in the State of Florida) as certified by the Secretary of State (or comparable
office) of the jurisdiction of formation of the Company and each of its Subsidiaries within ten (10) Business Days of the Initial
Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Initial
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's and each of its Subsidiaries'
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and each
of its Subsidiaries and (iii) the Bylaws of the Company and each of its Subsidiaries, each as in effect at the Initial Closing,
in the form attached hereto as <U>Exhibit H</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
representations and warranties of the Company shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of the date
when made and as of the Initial Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct in all material respects (except for those representations and warranties
that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of such specified date) and
the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Initial Closing Date.
Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Initial Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto
as <U>Exhibit I</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock issued and outstanding as of a date within five (5) days of the Initial Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to each Buyer a lock-up agreement in the form attached hereto as <U>Exhibit J</U> executed and delivered
by each of the Persons listed on <U>Schedule 7(a)(xi)</U> (collectively, the &quot;<B>Lock-Up Agreements</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as
of the Initial Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the
SEC or the Principal Market have been threatened, as of the Initial Closing Date, either (A) in writing by the SEC or the Principal
Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have obtained all governmental, regulatory, corporate or third party consents and approvals, if any, necessary for
the sale of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xiv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have submitted to the Principal Market a Listing of Additional Shares notification in connection with the transactions
contemplated hereby and the Principal Market shall have approved, orally or in writing, the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Closing Date</U>. The obligation of each Buyer hereunder to purchase the Additional Notes<B> </B>and the related Additional Warrants
at an Additional Closing is subject to the satisfaction, at or before the applicable Additional Closing Date, of each of the following
conditions, provided that these conditions are for each Buyer's sole benefit and may be waived by such Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following documents to which
it is a party: (A) each of the Transaction Documents, (B) the Additional Notes (allocated in such principal amounts as such Buyer
shall request), being purchased by such Buyer at such Additional Closing pursuant to this Agreement and (C) the related Additional
Warrants (allocated in such amounts as such Buyer shall request) being purchased by such Buyer at such Additional Closing pursuant
to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
Buyer shall have received the opinion of Snell &amp; Wilmer L.L.P., the Company's outside counsel, dated as of such Additional
Closing Date, in substantially the form of <U>Exhibit G</U> attached hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of <U>Exhibit F</U>
attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its U.S. Subsidiaries in such entity's jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction or a bring down of such good standing from Incorporating Services, Ltd., as of a date within ten (10) days of such
Additional Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate evidencing the Company's and each of its U.S. Subsidiaries' qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which
the Company and its U.S. Subsidiaries conduct business or a bring down of such good standing from Incorporating Services, Ltd.,
as of a date within ten (10) days of such Additional Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation of the Company and each of its
U.S. Subsidiaries (other than the Subsidiaries formed in the State of Florida) as certified by the Secretary of State (or comparable
office) of the jurisdiction of formation of the Company and each of its Subsidiaries within ten (10) Business Days of such Additional
Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of such Additional
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company's and each of its Subsidiaries'
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and each
of its Subsidiaries and (iii) the Bylaws of the Company and each of its Subsidiaries, each as in effect at such Additional Closing,
in the form attached hereto as <U>Exhibit H</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
representations and warranties of the Company shall be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of the date
when made and as of such Additional Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct in all material respects (except for those representations and warranties
that are qualified by materiality or Material Adverse Effect, which are accurate in all respects) as of such specified date) and
the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to such Additional Closing
Date. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of such Additional
Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached
hereto as <U>Exhibit I</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock issued and outstanding as of a date within five (5) days of such Additional Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended, as
of such Additional Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by
the SEC or the Principal Market have been threatened, as of such Additional Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to each Buyer the Lock-up Agreements executed and delivered by each of the Persons listed on <U>Schedule
7(a)(xi)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have obtained all governmental, regulatory, corporate or third party consents and approvals, if any, necessary for
the sale of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have submitted to the Principal Market a Listing of Additional Shares notification in connection with the transactions
contemplated hereby and the Principal Market shall have approved, orally or in writing, the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(xiv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>TERMINATION</U>.
In the event that the Initial Closing shall not have occurred with respect to a Buyer on or before five (5) Business Days from
the date hereof due to the Company's or such Buyer's failure to satisfy the conditions set forth in Sections 6 and 7 above (and
the nonbreaching party's failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate
this Agreement with respect to such breaching party at the close of business on such date by delivering a written notice to that
effect to each other party to this Agreement and without liability of any party to any other party; <U>provided</U>, <U>however</U>,
that if this Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the Lead Investor
or its designee(s), as applicable, for the expenses described in Section 4(g) above without giving effect to the Legal Fee Cap.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>MISCELLANEOUS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Governing
Law; Jurisdiction; Jury Trial</U>. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. 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 to such party at the address for such notices to it under this Agreement 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 manner permitted by law. <B>EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Counterparts</U>.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Headings</U>.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Severability</U>.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Entire
Agreement; Amendments</U>. This Agreement and the other Transaction Documents supersede all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein
contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of at least sixty-five percent (65%) of the aggregate number of Registrable Securities
issued or issuable under the Notes and Warrants as of the date hereof and shall include the Lead Investor so long as the
Lead Investor or any of its affiliates holds any Registrable Securities (the &quot;<B>Required Holders</B>&quot;); provided
that any such amendment or waiver that complies with the foregoing but that disproportionately, materially and adversely
affects the rights and obligations of any Buyer relative to the comparable rights and obligations of the other Buyers shall
require the prior written consent of such adversely affected Buyer. Any amendment or waiver effected in accordance with this
Section 9(e) shall be binding upon each Buyer and holder of Securities and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the Buyers or holders of Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents
unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to
the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be. The Company has not, directly
or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by
the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company
confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation
to provide any financing to the Company or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Notices</U>.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall
be:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">If to the Company:<SUP> </SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Net Element, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">3363 NE 163rd Street, Suite 705</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">North Miami Beach, FL 33160</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Telephone:</TD><TD>(786) 923-0515</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Facsimile:</TD><TD>(786) 272-0696</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">E-mail:</TD><TD>swolberg@netelement.com</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Attention:</TD><TD>Chief Legal Officer</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">With a copy to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Snell &amp; Wilmer L.L.P.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">600 Anton Boulevard, 14th Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Costa Mesa, CA 92626</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Telephone: 714-427-7442</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Facsimile: 714-427-7799</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">E-mail:&#9;spavluk@swlaw.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Attention: Serge V. Pavluk</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">If to the Transfer Agent:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 143.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 143.3pt">Continental Stock Transfer &amp; Trust Company</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">17 Battery Place, 8<SUP>th</SUP> Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 143.3pt">New York, NY 10004<BR>
Telephone: (212) 845-3217</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 143.3pt">E-mail: mmullings@continentalstock.com<BR>
Attention: Michael G. Mullings</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If to a Buyer, to its address, facsimile number
and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in">with a copy (for informational purposes only) to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2in">Schulte Roth &amp; Zabel LLP<BR>
919 Third Avenue<BR>
New York, New York 10022</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Telephone:</TD><TD>(212) 756-2000</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Facsimile:</TD><TD>(212) 593-5955</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">Attention:</TD><TD>Eleazer N. Klein, Esq.</TD>
</TR></TABLE>

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<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.75in; text-align: left">E-mail:</TD><TD>eleazer.klein@srz.com</TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">or to such other address, facsimile number
and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile
machine or e-mail containing the time, date, recipient facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Successors
and Assigns</U>. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Notes or the Warrants. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Required Holders, including by way of a Fundamental Transaction (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants).
A Buyer may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be
deemed to be a Buyer hereunder with respect to such assigned rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Third Party Beneficiaries</U>. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that
each Indemnitee shall have the right to enforce the obligations of the Company with respect to Section 9(k).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Survival</U>.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive each Closing. Each Buyer shall
be responsible only for its own representations, warranties, agreements and covenants hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Further
Assurances</U>. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>General
Indemnification</U>. i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of each Buyer's execution and delivery
of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company's other obligations
under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder
of the Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors
and any of the foregoing Persons' agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the &quot;<B>Indemnitees</B>&quot;) from and against any and
all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought),
and including reasonable attorneys' fees and disbursements (the &quot;<B>Indemnified Liabilities</B>&quot;), incurred by any Indemnitee
as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by
the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee
by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting
from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to Section 4(i), or (iv)
the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by
the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible
under applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; <U>provided</U>, <U>however</U>, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by the
indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other
party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be
selected by the Buyers holding at least a majority of the Securities issued and issuable hereunder. The Indemnitee shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action or Indemnified Liabilities by
the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee that
relates to such action or Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for
any settlement of any action, claim or proceeding effected without its prior written consent, <U>provided</U>, <U>however</U>,
that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld conditioned or delayed, consent to
entry of any judgment or enter into any settlement or other compromise which (i) does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liabilities
or litigation, (ii) requires any admission of wrongdoing by such Indemnitee, or (iii) obligates or requires an Indemnitee to take,
or refrain from taking, any action. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the Indemnitee under this Section 9(k), except to
the extent that the indemnifying party is prejudiced in its ability to defend such action.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
where the following damages have been awarded to a third party and a party hereto has a duty of indemnification with respect to
such third party claim, in no event shall any claim for incidental, special, punitive or consequential damages of any nature whatsoever
be made by any party to the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>No
Strict Construction</U>. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Remedies</U>.
Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or
other security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Rescission
and Withdrawal Right</U>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or
in part without prejudice to its future actions and rights.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Payment
Set Aside</U>. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>Independent
Nature of Buyers' Obligations and Rights</U>. The obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group, and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are
not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.
The Company acknowledges and each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4.5pt; text-align: justify; text-indent: 1in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Tax
Indemnification</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
and all payments by or on account of any obligation of the Company under the Notes shall be made without deduction or withholding
for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from
any such payment, then the Company shall be entitled to make such deduction or withholding and shall timely pay the full amount
deducted or withheld to the relevant taxing authority in accordance with applicable law and, if such Tax is an Indemnified Tax,
then the sum payable by the Company shall be increased as necessary so that after such deduction or withholding has been made (including
such deductions and withholdings applicable to additional sums payable under this Section 9(q)) each Buyer receives an amount equal
to the sum it would have received had no such deduction or withholding been made.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall timely pay to the relevant taxing authority in accordance with applicable law any Other Taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall jointly and severally indemnify each Buyer, within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid
by such Buyer or required to be withheld or deducted from a payment to such Buyer and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant taxing
authority. A certificate as to the amount of such payment or liability delivered to the Company by a Buyer shall be conclusive
absent manifest error.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
soon as practicable after any payment of Taxes by the Company to a taxing authority pursuant to this Section 9(q), the Company
shall deliver to the relevant Buyer the original or a certified copy of a receipt issued by such taxing authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Buyer is a U.S. Person it shall deliver to the Company on or prior to the date on which such Buyer becomes a holder of Notes
(and from time to time thereafter upon the reasonable request of the Company), executed originals of IRS Form W-9 certifying that
such Buyer is exempt from U.S. federal backup withholding tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Buyer is not a U.S. Person (a &quot;<B>Foreign Buyer</B>&quot;) it shall, to the extent it is legally entitled to do so, deliver
to Company on or prior to the date on which such Foreign Buyer becomes a holder of Notes (and from time to time thereafter upon
the reasonable request of the Company), whichever of the following is applicable:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the case of a Foreign Buyer claiming the benefits of an income tax treaty to which the United States is a part, executed originals
of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;executed
originals of IRS Form W-8ECI; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the case of a Foreign Buyer claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x)
such Buyer hereby represents the Company that such Foreign Buyer is not a &quot;bank&quot; within the meaning of Section 881(c)(3)(A)
of the Code, a &quot;10 percent shareholder&quot; of the Company within the meaning of Section 881(c)(3)(B) of the Code, or a &quot;controlled
foreign corporation&quot; described in Section 881(c)(3)(C) of the Code and (y) such Foreign Buyer shall deliver to the Company
executed originals of IRS Form W-8BEN or W-8BEN-E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a payment made to a Buyer under any Note would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Buyer shall deliver to Company at the time or times prescribed by law and at such time or times
reasonably requested by the Company such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i)
of the Code) and such additional documentation reasonably requested by the Company as may be necessary for the Company to comply
with its obligations under FATCA and to determine that such Buyer has complied with such Buyer's obligations under FATCA or to
determine the amount to deduct and withhold from such payment under FATCA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 14.2pt; text-align: justify; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Section 9(q):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Excluded
Taxes</B>&quot; means any of the following Taxes imposed on or with respect to a Buyer or required to be withheld or deducted from
a payment to such Buyer, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits
Taxes, in each case, (i) imposed as a result of such Buyer being organized under the laws of, or having its principal office in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of the Buyer with respect to any Note pursuant to a law in effect
on the date on which such Buyer acquires such Note, (c) Taxes attributable to such Buyer's failure to comply with Section 9(q)(v)
or (vi), as applicable, and (d) any U.S. federal withholding Taxes imposed under FATCA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>FATCA</B>&quot;
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Indemnified
Taxes</B>&quot; means (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of the Company under any Note and (ii) to the extent not otherwise described in (i), Other Taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Other
Connection Taxes</B>&quot; means, with respect to any Buyer, Taxes imposed as a result of a present or former connection between
such Buyer and the jurisdiction imposing such Tax (other than connections arising from such Buyer having executed, delivered, become
a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged
in any other transaction pursuant to or enforced any Note, or sold or assigned an interest in any Note).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Other
Taxes</B>&quot; means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise
from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Tax</B>&quot;
means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[Signature Page Follows]</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>COMPANY:</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>NET ELEMENT, INC.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 45%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid">/s/ Oleg Firer</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;&nbsp;Oleg Firer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Title:&nbsp;&nbsp;&nbsp;Chief Executive Officer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><I>[Signature Page to Securities Purchase Agreement]</I></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed
as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><B>BUYERS:</B></TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>[BUYER]</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 0.5pt solid">
&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Name:&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Title:&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="3"><FONT STYLE="font-size: 10pt">Check as appropriate:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Accredited Investor </FONT></TD>
    <TD><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">QIB</FONT></TD>
    <TD><FONT STYLE="font: 10pt Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT></TD></TR>
<TR>
    <TD STYLE="width: 30%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 30%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SCHEDULE OF BUYERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">(3)(a)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">(3)(b)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">(4)(a)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 8pt">(4)(b)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">(5)(a)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">(5)(b)</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 8pt">(6)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Buyer</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Address
    and</B></FONT><FONT STYLE="font-size: 8pt"><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Facsimile Number</B></FONT></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Aggregate</B></FONT><FONT STYLE="font-size: 8pt"><BR>
    <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Principal</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Amount
    of<BR>
 Initial&nbsp;Notes</B></FONT></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Maximum
    <BR>
Aggregate <BR>
Principal <BR>
Amount of<BR>
Additional<BR>
 Notes</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Number
    of </B></FONT><FONT STYLE="font-size: 8pt"><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Initial Warrant<BR>

    Shares</B></FONT></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Maximum
    <BR>
Number of<BR>
 Additional<BR>
 Warrant <BR>
Shares</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Initial<BR>

    Purchase <BR>
Price</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Maximum<BR>

    Additional<BR>
Purchase<BR>
Price</B></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Legal
    Representative's <BR>
Address and Facsimile<BR>
 Number</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD>
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    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
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    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
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    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><I>[Signature Page to Securities Purchase Agreement]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>EXHIBITS</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%"><FONT STYLE="font-size: 10pt">Exhibit A</FONT></TD>
    <TD STYLE="width: 85%"><FONT STYLE="font-size: 10pt">Form of Notes</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit B</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Warrants</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit C</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Registration Rights Agreement</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit D</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Deposit Agreement</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit E</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Voting Agreement</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit F</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Irrevocable Transfer Agent Instructions</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit G</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Opinion of Company Counsel</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit H</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Secretary's Certificate</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit I</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Officer's Certificate</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Exhibit J</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Form of Lock-Up Agreement</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>SCHEDULES</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%"><FONT STYLE="font-size: 10pt">Schedule 3(q)</FONT></TD>
    <TD STYLE="width: 85%"><FONT STYLE="font-size: 10pt">Transactions with Affiliates </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 3(s)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Indebtedness and Other Contracts</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 3(t)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Absence of Litigation</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 3(cc)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Internal Accounting and Disclosure Controls</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 3(ee)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Ranking of Notes</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 4(r)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Principal Stockholders</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Schedule 7(a)(xi)</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Lock-Up Parties</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Schedule 3(q)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Transactions with Affiliates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Star Equities, LLC&rsquo;s loan to the Company
in the amount of $125,000 to pay the invoices from Star Media, the Company's public relations consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Schedule 3(s)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Indebtedness and Other
Contracts</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">1. Any Indebtedness under
the credit facility from RBL Capital Group, LLC. See Item 1 of the Company&rsquo;s Annual Report on Form 10-K for the fiscal year
ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">2. Any draw-downs under existing factoring
facilities with Bank Otkritie Financial Corp (see Item 1 of the Company&rsquo;s Annual Report on Form 10-K for the fiscal year
ended December 31, 2014) and Alfa-Bank (see Item 1 of the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended
December 31, 2014).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Schedule 3(t)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Absence of Litigation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Item 3 (Legal Proceedings) of the Company&rsquo;s
Annual Report on Form 10-K for the fiscal year ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Schedule 3(cc)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Internal Accounting and
Disclosure Controls</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">See disclosures set forth in Item 9A of the Company's
Form 10-K for the period ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Schedule 3(ee)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Ranking of Notes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The following Indebtedness
of the Subsidiaries is senior to the Notes in right of payment, whether with respect of payment of redemptions, interest, damages
or upon liquidation or dissolution or otherwise:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">1. Any Indebtedness under
the credit facility from RBL Capital Group, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">2. Any draw downs under existing factoring
facilities set forth in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Schedule 4(r)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Principal Stockholders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Kenges Rakishev Novatus Holding
PTE. Ltd., a company organized under the laws of the British Virgin Islands, Oleg Firer, Steven Wolberg, James Caan, Jonathan New,
David P. Kelley II, William Healy, Beno Distribution, Ltd., a company organized under the laws of the British Virgin Islands, Cayman
Invest S.A., a company organized under the laws of the British Virgin Islands, and Mayor Trans Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Schedule 7(a)(xi)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Lock-Up Parties</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">Oleg Firer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">Steven Wolberg</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">Jonathan New</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">Kenges Rakishev</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &ldquo;E&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM OF NOTE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="margin: 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[FORM OF SENIOR CONVERTIBLE NOTE]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT, OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iv) AND 18(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS
NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 3(c)(iv) OF THIS NOTE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-weight: normal; font-variant: small-caps">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>Net
Element, Inc.</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps">SENIOR
CONVERTIBLE NOTE</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Issuance Date: [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>1</SUP></P></TD>
    <TD STYLE="width: 51%; font-size: 10pt">Original Principal Amount: U.S. $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>FOR VALUE RECEIVED</B>,
Net Element, Inc., a Delaware corporation (the &quot;<B>Company</B>&quot;), hereby promises to pay to <FONT STYLE="text-transform: uppercase">[BUYER]</FONT>
or registered assigns (the &quot;<B>Holder</B>&quot;) in cash and/or in shares of Common Stock (as defined below) the amount set
out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion, amortization
or otherwise, the &quot;<B>Principal</B>&quot;) when due, whether upon the Maturity Date (as defined below), on any Installment
Date with respect to the Installment Amount due on such Installment Date, acceleration, redemption or otherwise (in each case in
accordance with the terms hereof) and to pay interest (&quot;<B>Interest</B>&quot;) on any outstanding Principal at the applicable
Interest Rate from the date set out above as the Issuance Date (the &quot;<B>Issuance Date</B>&quot;) until the same becomes due
and payable, whether upon an Interest Date (as defined below), any Installment Date, the Maturity Date, acceleration, conversion,
redemption or otherwise (in each case in accordance with the terms hereof). This Senior Convertible Note (including all Senior
Convertible Notes issued in exchange, transfer or replacement hereof, this &quot;<B>Note</B>&quot;) is one of an issue of Senior
Convertible Notes issued pursuant to the Securities Purchase Agreement on [<B>INSERT IN INITIAL NOTES: </B>the Initial Closing
Date] [<B>INSERT IN ADDITIONAL NOTES: </B>an Additional Closing Date] (collectively, the &quot;<B>Notes</B>&quot; and such other
Senior Convertible Notes, the &quot;<B>Other</B> <B>Notes</B>&quot;). Certain capitalized terms used herein are defined in Section
31.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;<SUP>1</SUP> [<B>INSERT
IN INITIAL NOTES:</B> April 30, 2015] [<B>INSERT IN ADDITIONAL NOTES: </B>the<B> </B>applicable Additional Closing Date (as defined
in the Securities Purchase Agreement)]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>PAYMENTS
OF PRINCIPAL; PREPAYMENT</U>. On each Installment Date, the Company shall pay to the Holder an amount equal to the Installment
Amount due on such Installment Date in accordance with Section 8. On the Maturity Date, the Company shall pay to the Holder an
amount in cash representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined
in Section 24(b)) on such Principal and Interest. The &quot;<B>Maturity</B> <B>Date</B>&quot; shall be [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>2</SUP>,
as may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of Default (as defined in Section
4(a)) shall have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall
have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time
and the failure to cure would result in an Event of Default<B> </B>and (ii) through the date that is ten (10) Business Days after
the consummation of a Change of Control in the event that a Change of Control is publicly announced or a Change of Control Notice
(as defined in Section 5(b)) is delivered prior to the Maturity Date. Other than as specifically permitted by this Note, the Company
may not prepay any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal
and Interest, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>2</SUP> [<B>INSERT IN INITIAL NOTES:</B> April 30, 2018] [<B>INSERT
IN ADDITIONAL NOTES: </B>Insert date that is thirty-six (36) months immediately following the<B> </B>applicable Additional Closing
Date.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>INTEREST</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Interest
Shares and Cash Interest</U>. Interest on this Note shall commence accruing on the Issuance Date at the Interest Rate and shall
be computed on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears for each calendar month on
the last Trading Day of each month after the date that is ninety (90) days after the Initial Closing Date (each, a &quot;<B>Interest
Date</B>&quot;) with the first Interest Date being July 31, 2015 (the &quot;<B>First Interest</B> <B>Date</B>&quot;). For the avoidance
of doubt, the Interest payable on the First Interest Date shall include all accrued and unpaid Interest since the Issuance Date.
Prior to the payment of Interest on an Interest Date, Interest shall accrue at the Interest Rate and be payable by way of inclusion
of the Interest in the Conversion Amount (as defined in Section 3(b)(i)). Interest shall be payable on each Interest Date, to the
record holder of this Note on the applicable Interest Date, in shares of Common Stock (&quot;<B>Interest Shares</B>&quot;) so long
as there has been no Equity Conditions Failure; <U>provided</U>, <U>however</U>, that the Company may, at its option following
notice to each Holder, pay Interest on any Interest Date in cash (&quot;<B>Cash Interest</B>&quot;) or, so long as there has been
no Equity Conditions Failure, in a combination of Cash Interest and Interest Shares. The Company shall deliver a written notice
(each, a &quot;<B>Interest Election Notice</B>&quot;) to the Holder and each holder of Other Notes and Additional Notes on or prior
to the applicable Interest Notice Due Date (the date such notice is delivered to the Holder and all holders of Other Notes and
Additional Notes, the &quot;<B>Interest</B> <B>Notice Date</B>&quot;) which notice (1) either (A) confirms that Interest to be
paid on such Interest Date shall be paid entirely in Interest Shares or (B) elects to pay Interest as Cash Interest or a combination
of Cash Interest and Interest Shares and specifies the amount of Interest that shall be paid as Cash Interest and the amount of
Interest, if any, that shall be paid in Interest Shares, (2) unless the Company has elected to pay Interest solely as Cash Interest,
certifies that there has been no Equity Conditions Failure as of such Interest Notice Date and (3) states the number of issued
and outstanding shares of Common Stock as of such Interest Notice Date. If there is an Equity Conditions Failure as of the Interest
Notice Date, then unless the Company has elected to pay such Interest as Cash Interest, the Interest Election Notice shall indicate
that unless the Holder waives the Equity Conditions Failure, the Interest shall be paid as Cash Interest. If the Company confirmed
the payment of the applicable Interest in Interest Shares, in whole or in part, and if there was no Equity Conditions Failure as
of the applicable Interest Notice Date but an Equity Conditions Failure occurred between the applicable Interest Notice Date and
any time prior to the applicable Interest Date (an &quot;<B>Interim Interest Period</B>&quot;), the Company shall provide the Holder
a subsequent notice to that effect indicating that unless the Holder waives the Equity Conditions Failure, the Interest shall be
paid as Cash Interest. If there occurs an Equity Conditions Failure (which is not waived in writing by the Holder) during such
Interim Interest Period, then at the option of the Holder, the Holder may require the Company to pay the amount of Interest (including
any portion of the Pre-Interest Shares (as defined below)) payable on the applicable Interest Date as a Cash Interest. If any portion
of Interest for a particular Interest Date shall be paid in Interest Shares, then (I) on the applicable Interest Pre-Payment Date,
the Company shall issue to the Holder, in accordance with Section 2(b), a number of shares of Common Stock equal to (x) the amount
of Interest payable on the applicable Interest Date in Interest Shares divided by (y) the applicable Initial Interest Conversion
Price (the &quot;<B>Pre-Interest</B> <B>Shares</B>&quot;) and (II) on the applicable Interest Date, the Company shall deliver a
notice setting forth the calculation of the Interest Balance Shares (and the calculation of the component parts of such calculation)
and issue to each Holder, in accordance with Section 2(b), a number of shares of Common Stock equal to any Interest Balance Shares.
All Pre-Interest Shares and Interest Shares shall be fully paid and nonassessable shares of Common Stock (rounded up to the nearest
whole share).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Payment
of Interest</U>. When any Pre-Interest Shares and Interest Shares are to be paid on an Interest Pre-Payment Date or an Interest
Date, as applicable, then the Company shall (i) credit such aggregate number of Interest Shares to which the Holder shall be entitled
to the Holder's or its designee's balance account with the Depository Trust Company (&quot;<B>DTC</B>&quot;) through its Deposit/Withdrawal
At Custodian (&quot;<B>DWAC</B>&quot;) system, for the number of Interest Shares to which the Holder shall be entitled and (ii)
with respect to each Interest Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any
Cash Interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Default
Interest</U>. From and after the occurrence and during the continuance of an Event of Default, the Interest Rate shall be increased
to eighteen percent (18.0%). In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding
sentence shall cease to be effective as of the date of such cure; <U>provided</U>, that the Interest as calculated and unpaid at
such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days
after the occurrence of such Event of Default through and including the date of cure of such Event of Default; <U>provided</U>,
<U>further</U>, that for the purpose of this Section 2, such Event of Default shall not be deemed cured unless and until any accrued
and unpaid Interest shall be paid to the Holder, including, without limitation, Interest accrued at the increased rate of eighteen
percent (18.0%). The Company shall pay any and all taxes that may be payable with respect to the issuance and delivery of shares
of Common Stock as Interest pursuant to this Section 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CONVERSION
OF NOTES</U>. At any time or times after the Issuance Date, this Note shall be convertible into shares of Common Stock, on the
terms and conditions set forth in this Section 3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conversion
Right</U>. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be entitled
to convert any portion of the outstanding and unpaid Conversion Amount into fully paid and nonassessable shares of Common Stock
in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share
of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the
Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer,
stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion
Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conversion
Rate</U>. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the &quot;<B>Conversion Rate</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Conversion
Amount</B>&quot; means the sum of (A) the portion of the Principal to be converted, amortized, redeemed or otherwise with respect
to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid
Late Charges, if any, with respect to such Principal and Interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Conversion
Price</B>&quot; means (i) $[_____]<SUP>3</SUP>, subject to adjustment as provided herein (the price set forth in this clause (i),
the &quot;<B>Fixed Conversion Price</B>&quot;) or (ii) with respect to a Qualifying Conversion, the lower of (I) the Fixed Conversion
Price and (II) the Market Price as in effect on the applicable date of determination (the price set forth in this clause (ii),
the &quot;<B>Alternative Conversion Price</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><SUP>3</SUP> [<B>INSERT IN INITIAL NOTES</B>:
Insert $1.624.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">[<B>INSERT IN ADDITIONAL
NOTES</B>: Insert price equal to 140% of the lowest of (i) the arithmetic average of the Weighted Average Prices of the Common
Stock during the thirty (30) Trading Days immediately prior to the date of the applicable Buyer Additional Closing Notice (as defined
in the Securities Purchase Agreement), (ii) the arithmetic average of the Weighted Average Prices of the Common Stock during the
fifteen (15) Trading Days immediately prior to the date of the applicable Buyer Additional Closing Notice and (iii) the last Closing
Bid Price of the Common Stock immediately prior to the date of the applicable Buyer Additional Closing Notice.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics
of Conversion</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Optional
Conversion</U>. To convert any Conversion Amount into shares of Common Stock on any date (a &quot;<B>Conversion Date</B>&quot;),
the Holder shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 11:59 p.m., New
York time, on such date, a copy of an executed notice of conversion in the form attached hereto as <U>Exhibit I</U> (the &quot;<B>Conversion
Notice</B>&quot;) to the Company and the Company's transfer agent (the &quot;<B>Transfer Agent</B>&quot;) and (B) if required by
Section 3(c)(iv), but without delaying the Company's requirement to deliver shares of Common Stock on the applicable Share Delivery
Date (as defined below), surrender this Note to a common carrier for delivery to the Company as soon as practicable on or following
such date (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction). On or before
the first (1st) Business Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic
mail a confirmation of receipt of such Conversion Notice to the Holder and the Transfer Agent. On or before the third (3rd) Trading
Day following the date of receipt of a Conversion Notice (the &quot;<B>Share Delivery</B> <B>Date</B>&quot;), the Company shall
(x) provided that the Conversion Shares are subject to an effective resale registration statement in favor of the Holder or at
a time when Rule 144 would be available for immediate resale of the Conversion Shares by the Holder, credit such aggregate number
of shares of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal At Custodian system or if (y) the Conversion Shares are not subject to an effective resale registration
statement in favor of the Holder and at a time when Rule 144 would not be available for immediate resale of the Conversion Shares
by the Holder, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of
the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically
surrendered for conversion as required by Section 3(c)(iv) and the outstanding Principal of this Note is greater than the Principal
portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three
(3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder a new Note (in accordance
with Section 18(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date, irrespective of the date such Conversion Shares are credited to the Holder's account
with DTC or the date of delivery of the certificates evidencing such Conversion Shares, as the case may be. In the event that the
Holder elects to convert a portion of the Principal amount of this Note prior to any applicable Installment Date, the Conversion
Amount so converted shall be deducted in reverse order starting from the final Installment Amount to be paid hereunder on the final
Installment Date, unless the Holder otherwise indicates and allocates among any Installment Dates hereunder in the applicable Conversion
Notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Company's
Failure to Timely Convert</U>. If the Company shall fail on or prior to the Share Delivery Date to credit the Holder's balance
account with DTC if the Conversion Shares are subject to an effective resale registration statement in favor of the Holder or at
a time when Rule 144 would be available for immediate resale of the Conversion Shares by the Holder, or issue and deliver a certificate
to the Holder, if the Conversion Shares are not subject to an effective resale registration statement in favor of the Holder and
at a time when Rule 144 would not be available for immediate resale of the Conversion Shares by the Holder, for the number of shares
of Common Stock to which the Holder is entitled upon the Holder's conversion of any Conversion Amount (a &quot;<B>Conversion Failure</B>&quot;),
then (A) the Company shall pay damages to the Holder for each Trading Day of such Conversion Failure in an amount equal to 1.5%
of the product of (1) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery
Date and to which the Holder is entitled, and (2) any trading price of the Common Stock selected by the Holder in writing as in
effect at any time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Date
and (B) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned,
as the case may be, any portion of this Note that has not been converted pursuant to such Conversion Notice; <U>provided</U> that
the voiding of a Conversion Notice shall not affect the Company's obligations to make any payments which have accrued prior to
the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if the Company shall fail
on or prior to the Share Delivery Date to credit the Holder's balance account with DTC, if the Conversion Shares are subject to
an effective resale registration statement in favor of the Holder or at a time when Rule 144 would be available for immediate resale
of the Conversion Shares by the Holder, or issue and deliver a certificate to the Holder, if the Conversion Shares are not subject
to an effective resale registration statement in favor of the Holder and at a time when Rule 144 would not be available for immediate
resale of the Conversion Shares by the Holder, for the number of shares of Common Stock to which the Holder is entitled upon the
Holder's conversion of any Conversion Amount or on any date of the Company's obligation to deliver shares of Common Stock as contemplated
pursuant to clause (y) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated
receiving from the Company (a &quot;<B>Buy-In</B>&quot;), then the Company shall, within three (3) Trading Days after the Holder's
request and in the Holder's discretion, either (x) pay cash to the Holder in an amount equal to the Holder's total purchase price
(including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the &quot;<B>Buy-In
Price</B>&quot;), at which point the Company's obligation to credit the Holder's balance account with DTC or issue and deliver
a certificate, as applicable, for the shares of Common Stock to which the Holder is entitled upon the Holder's conversion of the
applicable Conversion Amount shall terminate, or (y) promptly honor its obligation to credit the Holder's balance account with
DTC, or issue and deliver to the Holder a certificate, as applicable, for such shares of Common Stock and pay cash to the Holder
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times
(B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning
on the applicable Conversion Date and ending on the applicable Share Delivery Date. Nothing herein shall limit the Holder's right
to pursue aby other remedies available to it hereunder, at law or in equity including, without limitation, a degree of specific
performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of
Common Stock upon conversion of this Note as required pursuant to the terms hereof.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Additional
Conversion Shares</U>. In addition to the foregoing, on each Share Delivery Date, the applicable Make-Whole Amount (the &quot;<B>Additional
Conversion Obligations</B>&quot;) on the Conversion Amount being converted shall be paid to the Holder in shares of Common Stock
(&quot;<B>Additional Conversion Shares</B>&quot;) so long as there has been no Equity Conditions Failure; <U>provided</U>, <U>however</U>,
that the Company may pay such Additional Conversion Obligations on any Share Delivery Date in cash by wire transfer of immediately
available funds (&quot;<B>Cash Additional Conversion Payment</B>&quot;) or, provided that there is no Equity Conditions Failure,
in a combination of a Cash Additional Conversion Payment and Additional Conversion Shares pursuant to the immediately following
sentence. The Company shall pay the Additional Conversion Obligations in the same manner and proportion as the Company indicated
in the most recent Interest Election Notice prior to the applicable date of determination, or, in the case of any conversion occurring
prior to the delivery of the first (1<SUP>st</SUP>) Interest Election Notice hereunder, the Company hereby elects to pay any Make-Whole
Amounts in Additional Conversion Shares. If the Company is required pursuant to this Section 2(c)(iii) to pay the Additional Conversion
Obligations on a Share Delivery Date, in whole or in part, in Additional Conversion Shares, then on the applicable Share Delivery
Date, the Company shall, or shall direct the Transfer Agent to, credit the Holder's account with the DTC Fast Automated Securities
Transfer Program through its DWAC system if the Conversion Shares are subject to an effective resale registration statement in
favor of the Holder or at a time when Rule 144 would be available for immediate resale of the Conversion Shares by the Holder,
or issue and deliver a certificate to the Holder, if the Conversion Shares are not subject to an effective resale registration
statement in favor of the Holder and at a time when Rule 144 would not be available for immediate resale of the Conversion Shares
by the Holder, for a number of shares of Common Stock (rounded to the nearest whole share in accordance with Section 3(b)) equal
to the quotient of (a) the portion of the then applicable Additional Conversion Obligations the Company is required pursuant to
this Section 3(c)(iv) to pay in Additional Conversion Shares, divided by (b) the Make-Whole Price in effect as of the applicable
Conversion Date. If the Company has subsequently notified each Holder with respect to an Interest Date on or prior to the applicable
Conversion Date that there is an Equity Conditions Failure and the Company is required to pay such Additional Conversion Obligations
in Additional Conversion Shares, then, unless the Holder waives the Equity Conditions Failure, the Additional Conversion Obligations
shall be paid as Cash Additional Conversion Payment. If the Company is deemed to have elected to pay such Additional Conversion
Obligations in Additional Conversion Shares, in whole or in part, and if there was no Equity Conditions Failure as of the applicable
Conversion Date but an Equity Conditions Failure occurred between the applicable Conversion Date and any time prior to the applicable
Share Delivery Date, the Company shall provide the Holder a notice to that effect indicating that unless the Holder waives the
Equity Conditions Failure, the Additional Conversion Obligations shall be paid as a Cash Additional Conversion Payment. If an Equity
Conditions Failure occurs (that is not waived in writing by the Holder) during such period, then at the option of the Holder, the
Holder may require the Company to pay the amount of Additional Conversion Obligations payable on the applicable Share Delivery
Date as a Cash Additional Conversion Payment. All Additional Conversion Shares shall be fully paid and nonassessable shares of
Common Stock (rounded to the nearest whole share). The Company shall pay any and all taxes that may be payable with respect to
the issuance and delivery of Additional Conversion Shares.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration;
Book-Entry</U>. The Company shall maintain a register (the &quot;<B>Register</B>&quot;) for the recordation of the names and addresses
of the holders of each Note and the Principal amount of the Notes (and stated interest thereon) held by such holders (the &quot;<B>Registered
Notes</B>&quot;). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company
and the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes,
including, without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice
to the contrary. A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale
on the Register. Upon its receipt of a request to assign or sell all or part of any Registered Note by a Holder, the Company shall
record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate Principal
amount as the Principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section
18. Notwithstanding anything to the contrary in this Section 3(c)(iv), a Holder may assign any Note or any portion thereof to an
Affiliate of such Holder or a Related Fund of such Holder without delivering a request to assign or sell such Note to the Company
and the recordation of such assignment or sale in the Register (a &quot;<B>Related Party Assignment</B>&quot;); <U>provided</U>,
that (x) the Company may continue to deal solely with such assigning or selling Holder unless and until such Holder has delivered
a request to assign or sell such Note or portion thereof to the Company for recordation in the Register; (y) the failure of such
assigning or selling Holder to deliver a request to assign or sell such Note or portion thereof to the Company shall not affect
the legality, validity, or binding effect of such assignment or sale and (z) such assigning or selling Holder shall, acting solely
for this purpose as a non-fiduciary agent of the Company, maintain a register (the &quot;<B>Related Party Register</B>&quot;) comparable
to the Register on behalf of the Company, and any such assignment or sale shall be effective upon recordation of such assignment
or sale in the Related Party Register. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion
of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company
unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with
prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender
of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges, if any, converted
and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon conversion.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Pro
Rata Conversion; Disputes</U>. In the event that the Company receives a Conversion Notice from this Note and one or more holder
of Other Notes or Additional Notes for the same Conversion Date and the Company can convert some, but not all, of such portions
of this Note, the Other Notes and the Additional Notes submitted for conversion, the Company, subject to Section 3(d), shall convert
from the Holder and each holder of Other Notes and Additional Notes electing to have this Note, the Other Notes or Additional Notes
converted on such date a pro rata amount of such holder's portion of the Note, the Other Notes and/or Additional Notes submitted
for conversion based on the Principal amount of this Note, the Other Notes and/or the Additional Notes submitted for conversion
on such date by such holder relative to the aggregate Principal amount of this Note and all Other Notes and Additional Notes submitted
for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve
such dispute in accordance with Section 23.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Limitations
on Conversions</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Beneficial
Ownership</U>. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right
to convert any portion of this Note, to the extent that after giving effect to such conversion, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the &quot;<B>Maximum Percentage</B>&quot;) of the shares
of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of
shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable
upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of
Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially owned
by the Holder or any of the other Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or
warrants, including the Additional Notes and Warrants) beneficially owned by the Holder or any other Attribution Party subject
to a limitation on conversion or exercise analogous to the limitation contained in this Section 3(d)(i). For purposes of this Section
3(d)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of determining
the number of outstanding shares of Common Stock the Holder may acquire upon the conversion of the Note without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (i) the Company's most recent
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the
case may be, (ii) a more recent public announcement by the Company or (iii) any other written notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock outstanding (the &quot;<B>Reported Outstanding Share Number</B>&quot;).
If the Company receives a Conversion Notice from a Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common
Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause the Holder's beneficial ownership,
as determined pursuant to this Section 3(d)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced
number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written
or oral request of the Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder and any other Attribution
Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of
Common Stock to the Holder upon conversion of this Note results in the Holder and the other Attribution Parties being deemed to
beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined
under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder's and the other Attribution Parties'
aggregate beneficial ownership exceeds the Maximum Percentage (the &quot;<B>Excess Shares</B>&quot;) shall be deemed null and void
and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery
of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61<SUP>st</SUP>) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of
9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61<SUP>st</SUP>) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the
Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum
Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or
Rule 16a-1(a)(1) of the Exchange Act. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 3(d)(i) to the extent necessary to correct this paragraph (or any portion
of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section
3(d)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained
in this paragraph may not be waived and shall apply to a successor holder of this Note.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Principal
Market Regulation</U>. The Company shall not be obligated to issue any shares of Common Stock pursuant to the terms of this Note,
and the Holder shall not have the right to receive pursuant to the terms of this Note any shares of Common Stock, if the issuance
of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue pursuant
to the terms of the Notes and upon exercise of the Warrants without breaching the Company's obligations under the rules or regulations
of the Principal Market (the &quot;<B>Exchange Cap</B>&quot;), except that such limitation shall not apply in the event that the
Company (i) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances
of Common Stock in excess of such amount or (ii) obtains a written opinion from outside counsel to the Company that such approval
is not required, which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion
is obtained, no purchaser of the Notes pursuant to the Securities Purchase Agreement (the &quot;<B>Purchasers</B>&quot;) shall
be issued in the aggregate, pursuant to the terms of the Notes or upon exercise of the Warrants, shares of Common Stock in an amount
greater than the product of the Exchange Cap multiplied by a fraction, the numerator of which is the Principal amount of Notes
issued to such Purchaser pursuant to the Securities Purchase Agreement on the Initial Closing Date and the denominator of which
is the aggregate principal amount of all Notes issued to the Purchasers pursuant to the Securities Purchase Agreement on the Initial
Closing Date (with respect to each Purchaser, the &quot;<B>Exchange Cap Allocation</B>&quot;). In the event that any Purchaser
shall sell or otherwise transfer any of such Purchaser's Notes, the transferee shall be allocated a pro rata portion of such Purchaser's
Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion
of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of Notes shall convert all of such holder's
Notes into a number of shares of Common Stock which, in the aggregate, is less than such holder's Exchange Cap Allocation, then
the difference between such holder's Exchange Cap Allocation and the number of shares of Common Stock actually issued to such holder
shall be allocated to the respective Exchange Cap Allocations of the remaining holders of Notes on a pro rata basis in proportion
to the aggregate principal amount of the Notes then held by each such holder. In the event that the Company is prohibited from
issuing any Conversion Shares for which a Conversion Notice has been received as a result of the operation of this Section 3(d)(ii),
the Company shall pay cash in exchange for cancellation of the Conversion Amount that is subject to such Conversion Notice, at
a price per share of Common Stock that would have been issuable upon such conversion if this Section 3(d)(ii) were not in effect
equal to the highest trading price of the Common Stock in effect at any time during the period beginning on the applicable Conversion
Date and ending on the date the Company makes the payment provided for in this sentence.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RIGHTS
UPON EVENT OF DEFAULT</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Event
of Default</U>. Each of the following events shall constitute an &quot;<B>Event of Default</B>&quot;:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
failure of the applicable Registration Statement required to be filed pursuant to the Registration Rights Agreement to be filed
within the applicable time period specified in the Registration Rights Agreement or to be declared effective by the SEC on or prior
to the date that is thirty (30) days after the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement),
or, while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration
Rights Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation,
the issuance of a stop order) or is unavailable to any holder of the Notes for sale of all of such holder's Registrable Securities
in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of five
(5) consecutive days or for more than an aggregate of twenty (20) days in any 365-day period (other than days during an Allowable
Grace Period (as defined in the Registration Rights Agreement));</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
the suspension from trading for a period of five (5) consecutive Trading Days or for more than an aggregate of ten (10) Trading
Days in any 365-day period or (B) the failure of the Common Stock to be listed on an Eligible Market;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company's (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within ten (10)
Business Days after the applicable Conversion Date, (B) the occurrence of two (2) or more Conversion Failures or (C) notice, written
or oral, to the Holder or any holder of the Other Notes or the Additional Notes, including by way of public announcement or through
any of its agents, at any time, of its intention not to comply with a request for conversion of this Note, any Other Notes or the
Additional Notes into shares of Common Stock that is tendered in accordance with the provisions of this Note, the Other Notes or
the Additional Notes, other than pursuant to Section 3(d) (and analogous provisions under the Other Notes and the Additional Notes);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at
any time following the tenth (10<SUP>th</SUP>) consecutive Business Day that the Holder's Authorized Share Allocation is less than
the sum of (A) with respect to the shares issuable with respect to the terms of the Notes, 25,000,000 shares of Common Stock (as
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the Subscription
Date) and (B) 130% of the number of shares of Common Stock that the Holder would be entitled to receive upon exercise in full of
the Holder's Warrants (without regard to any limitations on exercise set forth in the Warrants);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company's failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts when and as due under this
Note or any other Transaction Document (as defined in the Securities Purchase Agreement);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company or any of its Subsidiaries other
than with respect to this Note, any Other Notes or any Additional Notes;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
default, event of default, breach or triggering event (or comparable term) under, redemption of or acceleration prior to maturity
of any security or instrument issued by the Company or any of its Subsidiaries;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company or any of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or
state law for the relief of debtors (collectively, &quot;<B>Bankruptcy Law</B>&quot;), (A) commences a voluntary case, (B) consents
to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official (a &quot;<B>Custodian</B>&quot;), (D) makes a general assignment for the benefit of its
creditors or (E) admits in writing that it is generally unable to pay its debts as they become due;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or
any of its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders
the liquidation of the Company or any of its Subsidiaries;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
final judgment or judgments for the payment of money aggregating in excess of $350,000 are rendered against the Company or any
of its Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within sixty (60) days after the expiration of such stay; <U>provided</U>, <U>however</U>, that any
judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $350,000
amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which
written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an
indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such
judgment;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
than as specifically set forth in another clause of this Section 4(a), the Company breaches any representation, warranty, covenant
or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term or condition
of any Transaction Document which is curable, only if such breach continues for a period of at least an aggregate of five (5) Business
Days;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company shall (A) fail to maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program or
(B) otherwise fail to credit or be unable to credit shares required to be delivered to the Holder pursuant to the terms of this
Notes to the Holder's account with the DTC Fast Automated Securities Transfer Program through its DWAC system if the Conversion
Shares are subject to an effective resale registration statement in favor of the Holder or at a time when Rule 144 would be available
for immediate resale of the Conversion Shares by the Holder;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
breach or failure in any respect to comply with either Sections 8, 14 or 15 of this Note;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xiv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
material damage to, or loss, theft or destruction of, a material amount of property of the Company, whether or not insured, or
any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more
than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of
the Company or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect
(as defined in the Securities Purchase Agreement);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xvi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
of the Company's Subsidiaries party to the RBL Facility request on or after the Subscription Date the funding of a loan thereunder
(with the prior written consent of the Required Holders) and the lender thereunder does not fund such requested loan, or the lender
thereunder notifies such Subsidiaries that it will refuse to fund upon request any additional loan thereunder;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xvii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(xviii)&nbsp;&nbsp;&nbsp;&nbsp;any
Event of Default (as defined in the Additional Notes) occurs with respect to any Additional Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Redemption
Right</U>. Upon the occurrence of an Event of Default with respect to this Note or any Other Note, the Company shall within one
(1) Business Day deliver written notice thereof via facsimile or electronic mail and overnight courier (an &quot;<B>Event of Default
Notice</B>&quot;) to the Holder. At any time after the earlier of the Holder's receipt of an Event of Default Notice and the Holder
becoming aware of an Event of Default, the Holder may require the Company to redeem (an &quot;<B>Event of Default Redemption</B>&quot;)
all or any portion of this Note by delivering written notice thereof (the &quot;<B>Event of Default Redemption Notice</B>&quot;)
to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to require
the Company to redeem. Each portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed
by the Company in cash by wire transfer of immediately available funds at a price equal to the sum of (i) the greater of (x) 125%
of the Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed and (B) the quotient determined
by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately
preceding such Event of Default and ending on the date the Holder delivers the Event of Default Redemption Notice, by (II) the
lowest Conversion Price in effect during such period and (ii) the Make-Whole Amount with respect to the Conversion Amount being
redeemed (the &quot;<B>Event of Default</B> <B>Redemption Price</B>&quot;). Redemptions required by this Section 4(b) shall be
made in accordance with the provisions of Section 11. To the extent redemptions required by this Section 4(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 4, but subject to Section 3(d), until the Event of Default
Redemption Price (together with any interest thereon) is paid in full, the Conversion Amount submitted for redemption under this
Section 4(b) (together with any interest thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant
to Section 3. In the event of a partial redemption of this Note pursuant hereto, the Principal amount redeemed shall be deducted
in reverse order starting from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder
otherwise indicates and allocates among any Installment Dates hereunder in the applicable Event of Default Redemption Notice. The
parties hereto agree that in the event of the Company's redemption of any portion of the Note under this Section 4(b), the Holder's
damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any Event of Default
redemption premium due under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of
the Holder's actual loss of its investment opportunity and not as a penalty.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RIGHTS
UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assumption</U>.
The Company shall not enter into or be party to a Fundamental Transaction unless (i)&nbsp; the Successor Entity assumes in writing
all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of
this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the
Required Holders prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to deliver to each
holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to the Notes, including, without limitation, having a principal amount and interest rate equal to the principal
amounts and the interest rates of the Notes then outstanding held by such holder, having similar conversion rights and having similar
ranking to the Notes and the Additional Notes , and satisfactory to the Required Holders and (ii) the Successor Entity (including
its Parent Entity) is a publicly traded corporation whose common capital stock is quoted on or listed for trading on an Eligible
Market. No later than (i) thirty (30) days prior to the occurrence or consummation of any Fundamental Transaction or (ii) if later,
the first Trading Day following the date the Company first becomes aware of the occurrence or potential occurrence of a Fundamental
Transaction, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to the Holder.
Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the occurrence or consummation
of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly and severally, shall succeed
to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally succeed to, and be added to
the term &quot;Company&quot; under this Note (so that from and after the date of such Fundamental Transaction, each and every provision
of this Note referring to the &quot;Company&quot; shall refer instead to each of the Company and the Successor Entity or Successor
Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities, jointly and severally, may exercise
every right and power of the Company prior thereto and shall assume all of the obligations of the Company prior thereto under this
Note with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named
as the Company in this Note, and, solely at the request of the Holder, if the Successor Entity and/or Successor Entities is a publicly
traded corporation whose common capital stock is quoted on or listed for trading on an Eligible Market, shall deliver (in addition
to and without limiting any right under this Note) to the Holder in exchange for this Note a security of the Successor Entity and/or
Successor Entities evidenced by a written instrument substantially similar in form and substance to this Note and convertible for
a corresponding number of shares of capital stock of the Successor Entity and/or Successor Entities (the &quot;<B>Successor Capital
Stock</B>&quot;) equivalent (as set forth below) to the shares of Common Stock acquirable and receivable upon conversion of this
Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction (such corresponding
number of shares of Successor Capital Stock to be delivered to the Holder shall equal the greater of (I) the quotient of (A) the
aggregate dollar value of all consideration (including cash consideration and any consideration other than cash (&quot;<B>Non-Cash
Consideration</B>&quot;), in such Fundamental Transaction, as such values are set forth in any definitive agreement for the Fundamental
Transaction that has been executed at the time of the first public announcement of the Fundamental Transaction or, if no such value
is determinable from such definitive agreement, as determined in accordance with Section 23 with the term &quot;Non-Cash Consideration&quot;
being substituted for the term &quot;Conversion Price&quot;) that the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental
Transaction, had this Note been converted immediately prior to such Fundamental Transaction or the record, eligibility or other
determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the conversion
of this Note) (the &quot;<B>Aggregate Consideration</B>&quot;) divided by (B) the per share Closing Sale Price of such corresponding
Successor Capital Stock on the Trading Day immediately prior to the consummation or occurrence of the Fundamental Transaction and
(II) the product of (A) the Aggregate Consideration and (B) the highest exchange ratio pursuant to which any stockholder of the
Company may exchange Common Stock for Successor Capital Stock) (provided, however, to the extent that the Holder's right to receive
any such shares of publicly traded common stock (or their equivalent) of the Successor Entity would result in the Holder and its
other Attribution Parties exceeding the Maximum Percentage, if applicable, then the Holder shall not be entitled to receive such
shares to such extent (and shall not be entitled to beneficial ownership of such shares of publicly traded common stock (or their
equivalent) of the Successor Entity as a result of such consideration to such extent) and the portion of such shares shall be held
in abeyance for the Holder until such time or times, as its right thereto would not result in the Holder and its other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be delivered such shares to the extent as if
there had been no such limitation), and such security shall be satisfactory to the Holder, and with an identical conversion price
to the Conversion Price hereunder (such adjustments to the number of shares of capital stock and such conversion price being for
the purpose of protecting after the consummation or occurrence of such Fundamental Transaction the economic value of this Note
that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction, as elected by the Holder
solely at its option). Upon occurrence or consummation of the Fundamental Transaction, and it shall be a required condition to
the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity or Successor Entities
shall deliver to the Holder confirmation that there shall be issued upon conversion of this Note at any time after the occurrence
or consummation of the Fundamental Transaction, as elected by the Holder solely at its option, shares of Common Stock, Successor
Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities, cash, assets or other
property purchasable upon the conversion of this Note 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 for purposes
of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such
Fundamental Transaction, had this Note been converted immediately prior to such Fundamental Transaction or the record, eligibility
or other determination date for the event resulting in such Fundamental Transaction (without regard to any limitations on the conversion
of this Note), as adjusted in accordance with the provisions of this Note. The provisions of this Section 5(a) shall apply similarly
and equally to successive Fundamental Transactions.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Redemption
Right</U>. No sooner than twenty-five (25) days nor later than twenty (20) days prior to the consummation of a Change of Control,
but not prior to the public announcement of such Change of Control, the Company shall deliver written notice thereof via facsimile
or electronic mail and overnight courier to the Holder (a &quot;<B>Change of Control</B> <B>Notice</B>&quot;). At any time during
the period beginning on the earlier to occur of (x) any oral or written agreement by the Company or any of its Subsidiaries, upon
consummation of which the transaction contemplated thereby would reasonably be expected to result in a Change of Control, (y) the
Holder becoming aware of a Change of Control and (z) the Holder's receipt of a Change of Control Notice and ending twenty-five
(25) Trading Days after the date of the consummation of such Change of Control, the Holder may require the Company to redeem (a
&quot;<B>Change of Control Redemption</B>&quot;) all or any portion of this Note by delivering written notice thereof (&quot;<B>Change
of Control Redemption Notice</B>&quot;) to the Company, which Change of Control Redemption Notice shall indicate the Conversion
Amount the Holder is electing to require the Company to redeem. The portion of this Note subject to redemption pursuant to this
Section 5(b) shall be redeemed by the Company in cash by wire transfer of immediately available funds at a price equal to the sum
of (i) the greater of (x) 125% of the Conversion Amount being redeemed and (y) the product of (A) the Conversion Amount being redeemed
and (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during the period
beginning on the date immediately preceding the earlier to occur of (x) the consummation of the Change of Control and (y) the public
announcement of such Change of Control and ending on the date the Holder delivers the Change of Control Redemption Notice, by (II)
the lowest Conversion Price in effect during such period and (ii) the Make-Whole Amount with respect to the Conversion Amount being
redeemed (the &quot;<B>Change of Control Redemption Price</B>&quot;). Redemptions required by this Section 5 shall be made in accordance
with the provisions of Section 11 and shall have priority to payments to stockholders in connection with a Change of Control. To
the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments
of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary
in this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any interest thereon)
is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any interest thereon) may
be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of a partial redemption
of this Note pursuant hereto, the Principal amount redeemed shall be deducted in reverse order starting from the final Installment
Amount to be paid hereunder on the final Installment Date, unless the Holder otherwise indicates and allocates among any Installment
Dates hereunder in the applicable Change of Control Redemption Notice. The parties hereto agree that in the event of the Company's
redemption of any portion of the Note under this Section 5(b), the Holder's damages would be uncertain and difficult to estimate
because of the parties' inability to predict future interest rates and the uncertainty of the availability of a suitable substitute
investment opportunity for the Holder. Accordingly, any Change of Control redemption premium due under this Section 5(b) is intended
by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and
not as a penalty.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Distribution
of Assets</U>. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all 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) (the &quot;<B>Distributions</B>&quot;), then the Holder will
be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (<U>provided</U>, <U>however</U>, that to the extent that the Holder's
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled
to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent)
and the portion of such Distribution shall be held in abeyance for the Holder until such time or times as its right thereto would
not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such rights (and any rights under this Section 6(a) on such initial rights or on any subsequent such rights to
be held similarly in abeyance) to the same extent as if there had been no such limitation).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Purchase
Rights</U>. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the &quot;<B>Purchase Rights</B>&quot;),
then the Holder 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 this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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 (<U>provided</U>, <U>however</U>, that to the extent that the Holder's right to participate in any such Purchase Right would
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled
to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common
Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right
granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to
the same extent as if there had been no such limitation).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Corporate Events</U>. In addition to and not in substitution for any other rights hereunder, prior to the occurrence or consummation
of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets
or other property with respect to or in exchange for shares of Common Stock (a &quot;<B>Corporate Event</B>&quot;), the Company
shall make appropriate provision to insure that, and any applicable Successor Entity or Successor Entities shall ensure that, and
it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have
the right to receive upon conversion of this Note at any time after the occurrence or consummation of the Corporate Event, shares
of Common Stock or Successor Capital Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities,
cash, assets or other property) purchasable upon the conversion of this Note prior to such Corporate Event (but not in lieu of
such items still issuable under Sections 6(a) and 6(b), which shall continue to be receivable on the Common Stock or on such shares
of stock, securities, cash, assets or any other property otherwise receivable with respect to or in exchange for shares of Common
Stock), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or
subscription rights and any shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or
consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate
Event, had this Note been converted immediately prior to such Corporate Event or the record, eligibility or other determination
date for the event resulting in such Corporate Event (without regard to any limitations on conversion of this Note). Provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Required Holders. The provisions
of this Section 6 shall apply similarly and equally to successive Corporate Events.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RIGHTS
UPON ISSUANCE OF OTHER SECURITIES</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
of Fixed Conversion Price upon Issuance of Common Stock</U>. If and whenever on or after the Subscription Date, the Company issues
or sells, or in accordance with this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed
to have been issued or sold by the Company in connection with any Excluded Securities) for a consideration per share (the &quot;<B>New
Issuance Price</B>&quot;) less than a price (the &quot;<B>Applicable Price</B>&quot;) equal to the Fixed Conversion Price in effect
immediately prior to such issue or sale or deemed issuance or sale (the foregoing a &quot;<B>Dilutive Issuance</B>&quot;), then
immediately after such Dilutive Issuance the Fixed Conversion Price then in effect shall be reduced to an amount equal to the New
Issuance Price. For purposes of determining the adjusted Fixed Conversion Price under this Section 7(a), the following shall be
applicable:</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Options</U>. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 7(a)(i), the &quot;lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise
of such Option&quot; shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion
or exchange or exercise of any Convertible Security issuable upon exercise of such Option less any consideration paid or payable
by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option
and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment
of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities
upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion or exchange or exercise
of such Convertible Securities.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Convertible Securities</U>. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion or exchange or exercise thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii),
the &quot;lowest price per share for which one share of Common Stock is issuable upon the conversion or exchange or exercise thereof&quot;
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise
of such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise of such Convertible Security.
No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon
conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities
is made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant to other
provisions of this Section 7(a), no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Change
in Option Price or Rate of Conversion</U>. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exchangeable or exercisable for shares of Common Stock increases or decreases at any time, the
Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed Conversion Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued
or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such
adjustment would result in an increase of the Fixed Conversion Price then in effect.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Calculation
of Consideration Received</U>. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value of such
Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company
pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash
received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company will be the Closing Sale Price of such publicly traded securities
on the date of receipt of such publicly traded securities. If any shares of Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value
of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Required
Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation
(the &quot;<B>Valuation Event</B>&quot;), the fair value of such consideration will be determined within five (5) Business Days
after the tenth (10<SUP>th</SUP>) day following the Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company; <U>provided</U>, <U>however</U>, that in the
event the determination of such appraiser is identical to the fair value of such consideration as determined by the Company, the
fees and expenses of such appraiser shall be borne equally among the holders of Notes who disputed the valuation of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Record
Date</U>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
of Fixed Conversion Price upon Subdivision of Common Stock</U>. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will be proportionately
reduced.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Events</U>. If any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Fixed Conversion Price
so as to protect the rights of the Holder under this Note; <U>provided</U>, that no such adjustment will increase the Fixed Conversion
Price as otherwise determined pursuant to this Section 7.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voluntary
Adjustment by Company</U>. The Company may at any time during the term of this Note, with the prior written consent of the Required
Holders, reduce the then current Fixed Conversion Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>COMPANY
CONVERSION OR REDEMPTION</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>General</U>.
On each applicable Installment Date, provided there has been no Equity Conditions Failure, the Company shall pay to the Holder
of this Note the Installment Amount due on such date by converting all or some of such Installment Amount into Common Stock, in
accordance with this Section 8 (a &quot;<B>Company Conversion</B>&quot;); <U>provided</U>, <U>however</U>, that the Company may,
at its option following notice to the Holder as set forth below, pay the Installment Amount by redeeming such Installment Amount
in cash (a &quot;<B>Company Redemption</B>&quot;) or by any combination of a Company Conversion and a Company Redemption so long
as all of the outstanding applicable Installment Amount due on any Installment Date shall be converted and/or redeemed by the Company
on the applicable Installment Date, subject to the provisions of this Section 8. On or prior to the date which is the twenty-sixth
(26th) Trading Day prior to each Installment Date (each, an &quot;<B>Installment Notice Due Date</B>&quot;), the Company shall
deliver written notice (each, a &quot;<B>Company Installment Notice</B>&quot; and the date all of the holders receive such notice
is referred to as the &quot;<B>Company Installment Notice Date</B>&quot;), to the Holder and each holder of Other Notes and Additional
Notes which Company Installment Notice shall (i) either (A) confirm that the applicable Installment Amount of the Holder's Note
shall be converted to Common Stock in whole or in part pursuant to a Company Conversion (such amount to be converted, the &quot;<B>Company
Conversion Amount</B>&quot;) or (B) (1) state that the Company elects to redeem for cash, or is required to redeem for cash in
accordance with the provisions of the Notes, in whole or in part, the applicable Installment Amount pursuant to a Company Redemption
and (2) specify the portion (including Interest and Late Charges, if any, on such amount and Interest) which the Company elects
or is required to redeem pursuant to a Company Redemption (such amount to be redeemed, the &quot;<B>Company Redemption Amount</B>&quot;)
and the portion (including Interest and Late Charges, if any, on such amount and Interest, if any) that is the Company Conversion
Amount, which amounts, when added together, must at least equal the applicable Installment Amount, (ii) if the Installment Amount
is to be paid, in whole or in part, in Common Stock pursuant to a Company Conversion, certify that the Equity Conditions have been
satisfied as of the Company Installment Notice Date and (iii) state the number of issued and outstanding shares of Common Stock
as of such Company Installment Notice Date. Each Company Installment Notice shall be irrevocable. If the Company does not timely
deliver a Company Installment Notice in accordance with this Section 8, then the Company shall be deemed to have delivered an irrevocable
Company Installment Notice confirming a Company Conversion and shall be deemed to have certified that the Equity Conditions in
connection with any such conversion on the Company Installment Notice Date and Installment Date have been satisfied. Except as
expressly provided in this Section 8(a), the Company shall convert and/or redeem the applicable Installment Amount of this Note
pursuant to this Section 8 and the corresponding Installment Amounts of the Other Notes and Additional Notes pursuant to the corresponding
provisions of the Other Notes and the Additional Notes in the same ratio of the Installment Amount being converted and/or redeemed
hereunder. The Company Conversion Amount (whether set forth in the Company Installment Notice or by operation of this Section 8)
shall be converted in accordance with Section 8(b) and the Company Redemption Amount shall be redeemed in accordance with Section
8(c). Notwithstanding anything herein to the contrary, in the event of any partial conversion or redemption of this Note, the Principal
amount converted or redeemed shall be deducted in reverse order starting from the final Installment Amount to be paid hereunder
on the final Installment Date, unless the Holder otherwise indicates and allocates among any Installment Dates hereunder in the
applicable Conversion Notice or Redemption Notice, as applicable.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics
of Company Conversion</U>. If the Company delivers a Company Installment Notice and confirms, or is deemed to have confirmed, in
whole or in part, a Company Conversion in accordance with Section 8(a), then (1) on the date which is the twenty-third (23<SUP>rd</SUP>)
Trading Day prior to each Installment Date, the Company shall, or shall direct the Transfer Agent to, credit the Holder's account
with DTC for a number of shares of Common Stock (the &quot;<B>Pre-Installment Conversion Shares</B>&quot;) equal to the quotient
of (x) the Company Conversion Amount as of the applicable Installment Date divided by (y) the Company Pre-Installment Conversion
Price then in effect and (2) on the applicable Installment Date, the Company shall, or shall direct the Transfer Agent to, credit
the Holder's account with DTC for an additional number of shares of Common Stock, if any, equal to the Installment Balance Conversion
Shares; <U>provided</U>, that there shall not occur any Equity Conditions Failure (that is not waived in writing by the Holder)
on each day during the period commencing on such Company Installment Notice Date through the applicable Installment Date. On the
applicable Installment Notice the Company shall deliver a notice setting forth the calculation of the Installment Balance Conversion
Shares (and the calculation of the component parts of such calculation) to the Holder. In accordance with Section 4(b), if an Event
of Default occurs during the period from any Company Installment Notice Date through the Installment Date the Holder may elect
an Event of Default Redemption in accordance with Section 3(b). All Pre-Installment Conversion Shares and Installment Balance Conversion
Shares shall be fully paid and nonassessable shares of Common Stock (rounded to the nearest whole share). If the Equity Conditions
are not satisfied as of the Company Installment Notice Date, then unless the Company has elected to redeem such Installment Amount,
the Company Installment Notice shall indicate that unless the Holder waives the Equity Conditions, the Installment Amount shall
be redeemed for cash. If the Company confirmed (or is deemed to have confirmed by operation of Section 8(a)) the conversion of
the applicable Company Conversion Amount, in whole or in part, and there was no Equity Conditions Failure as of the applicable
Company Installment Notice Date (or is deemed to have certified that the Equity Conditions in connection with any such conversion
have been satisfied by operation of Section 8(a)) but an Equity Conditions Failure occurred between the applicable Company Installment
Notice Date and any time through the applicable Installment Date (the &quot;<B>Interim Installment Period</B>&quot;), the Company
shall provide the Holder a subsequent notice to that effect. If the Equity Conditions are not satisfied (or waived in writing by
the Holder) during such Interim Installment Period, then at the option of the Holder designated in writing to the Company, the
Holder may require the Company to do either one or both of the following: (i) the Company shall redeem all or any part designated
by the Holder of the Company Conversion Amount (including at the election of the Holder, such amount converted to Pre-Installment
Conversion Shares in which case the Holder shall return such Pre-Installment Conversion Shares, which the Holder has not otherwise
sold, transferred or disposed of, to the Company) (such designated amount is referred to as the &quot;<B>First Redemption Amount</B>&quot;)
on such Installment Date and the Company shall pay to the Holder on such Installment Date, by wire transfer of immediately available
funds, an amount in cash equal to 125% of such First Redemption Amount and/or (ii) the Company Conversion shall be null and void
with respect to all or any part designated by the Holder of the unconverted Company Conversion Amount and the Holder shall be entitled
to all the rights of a holder of this Note with respect to such amount of the Company Conversion Amount; <U>provided</U>, <U>however</U>,
that the Conversion Price for such unconverted Company Conversion Amount shall thereafter be adjusted to equal the lesser of (A)
the Company Conversion Price as in effect on the date on which the Holder voided the Company Conversion and (B) the Company Conversion
Price as in effect on the date on which the Holder delivers a Conversion Notice relating thereto. If the Company fails to redeem
any First Redemption Amount on or before the applicable Installment Date by payment of such amount on the applicable Installment
Date, then the Holder shall have the rights set forth in Section 11(a) as if the Company failed to pay the applicable Company Installment
Redemption Price (as defined below) and all other rights under this Note (including, without limitation, such failure constituting
an Event of Default described in Section 4(a)(v)). Notwithstanding anything to the contrary in this Section 8(b), but subject to
the limitations set forth in Section 3(d), until the Company credit the Holder's account with DTC for the shares of Common Stock
representing the Company Conversion Amount to the Holder, the Company Conversion Amount may be converted by the Holder into Common
Stock pursuant to Section 3. In the event that the Holder elects to convert the Company Conversion Amount prior to the applicable
Installment Date as set forth in the immediately preceding sentence, the Company Conversion Amount so converted shall be deducted
in reverse order starting from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder
otherwise indicates and allocates among any Installment Dates hereunder in the applicable Conversion Notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics
of Company Redemption</U>. If the Company elects a Company Redemption in accordance with Section 8, then the Company Redemption
Amount which is to be paid to the Holder on the applicable Installment Date shall be redeemed by the Company and the Company shall
pay to the Holder on such Installment Date, by wire transfer of immediately available funds, an amount in cash (the &quot;<B>Company
Installment Redemption Price</B>&quot;) equal to 100% of the Company Redemption Amount. If the Company fails to redeem the Company
Redemption Amount on the applicable Installment Date by payment of the Company Installment Redemption Price on such date, then
at the option of the Holder designated in writing to the Company (any such designation shall be deemed a &quot;<B>Conversion Notice</B>&quot;
pursuant to Section 3(c) for purposes of this Note), (i) the Holder shall have the rights set forth in Section 11(a) as if the
Company failed to pay the applicable Company Installment Redemption Price and all other rights as a Holder of Notes (including,
without limitation, such failure constituting an Event of Default described in Section 4(a)(v)) and (ii) the Holder may require
the Company to convert all or any part of the Company Redemption Amount at the Company Conversion Price as in effect on the applicable
Installment Date. Conversions required by this Section 8(c) shall be made in accordance with the provisions of Section 3(c). Notwithstanding
anything to the contrary in this Section 8(c), but subject to Section 3(d), until the Company Installment Redemption Price (together
with any interest thereon) is paid in full, the Company Redemption Amount (together with any interest thereon) may be converted,
in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event the Holder elects to convert all or any
portion of the Company Redemption Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence,
the Company Redemption Amount so converted shall be deducted in reverse order starting from the final Installment Amount to be
paid hereunder on the final Installment Date, unless the Holder otherwise indicates and allocates among any Installment Dates hereunder
in the applicable Conversion Notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deferred
Installment Amount</U>. Notwithstanding any provision of this Section 8 to the contrary, the Holder may, at its option and in its
sole discretion, deliver a written notice to the Company no later than the Business Day immediately prior to the applicable Installment
Date electing to have the payment of all or any portion of an Installment Amount payable on such Installment Date deferred (such
amount(s) deferred, the &quot;<B>Deferral Amount</B>&quot;) until any subsequent Installment Date selected by the Holder, in its
sole discretion, in which case, the Deferral Amount shall be added to, and become part of, the Installment Amount to be paid on
such subsequent Installment Date and such Deferral Amount shall continue to accrue Interest hereunder. Any notice delivered by
the Holder pursuant to this Section 8(d) shall set forth (i) the Deferral Amount and (ii) the date that such Deferral Amount shall
now be payable.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>NONCIRCUMVENTION</U>.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will
at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights
of the Holder of this Note.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RESERVATION
OF AUTHORIZED SHARES</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reservation</U>.
The Company shall initially reserve out of its authorized and unissued shares of Common Stock a number of shares of Common Stock
for each of this Note, the Other Notes and the Additional Notes equal to 25,000,000 (as adjusted for any stock dividend, stock
split, stock combination, reclassification or similar transaction occurring after the Subscription Date). So long as any of this
Note, the Other Notes and the Additional Notes are outstanding, the Company shall take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of this Note, the
Other Notes and the Additional Notes, the number of shares of Common Stock specified above in this Section 10(a) as shall from
time to time be necessary to effect the conversion of all of the Notes and the Additional Notes then outstanding; <U>provided</U>,
that at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved
pursuant hereto (in each case, without regard to any limitations on conversions) (the &quot;<B>Required Reserve Amount</B>&quot;).
The initial number of shares of Common Stock reserved for conversions of this Note, the Other Notes and the Additional Notes and
each increase in the number of shares so reserved shall be allocated pro rata among the Holder and the holders of the Other Notes
and the holders of the Additional Notes based on the Principal amount of this Note, the Other Notes and the Additional Notes held
by each holder at the Closing (as defined in the Securities Purchase Agreement) or increase in the number of reserved shares, as
the case may be (the &quot;<B>Authorized Share Allocation</B>&quot;). In the event that a holder shall sell or otherwise transfer
this Note or any of such holder's Other Notes or Additional Notes, each transferee shall be allocated a pro rata portion of such
holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any
Notes shall be allocated to the Holder and the remaining holders of Other Notes and Additional Notes, pro rata based on the Principal
amount of this Note, the Other Notes and the Additional Notes then held by such holders.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Insufficient
Authorized Shares</U>. If at any time while any of the Notes remain outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Notes
at least a number of shares of Common Stock equal to the Required Reserve Amount (an &quot;<B>Authorized Share Failure</B>&quot;),
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall either (x)
obtain the written consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock
and provide each stockholder with an information statement with respect thereto or (y) hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such increase
in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such
proposal. Notwithstanding the foregoing, if during any such time of an Authorized Share Failure, the Company is able to obtain
the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in the number
of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing
with the SEC an Information Statement on Schedule 14C. If, upon any conversion of this Note, the Company does not have sufficient
authorized shares to deliver in satisfaction of such conversion, then unless the Holder elects to rescind such attempted conversion,
the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable attempted conversion, cash
in an amount equal to the product of (i) the number of Conversion Shares that the Company is unable to deliver pursuant to this
Section 10, and (ii) the highest trading price of the Common Stock in effect at any time during the period beginning on the applicable
Conversion Date and ending on the date the Company makes the payment provided for in this sentence.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(11)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>REDEMPTIONS</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics</U>.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder within three (3) Business Days after the
Company's receipt of the Holder's Event of Default Redemption Notice (the &quot;<B>Event of Default Redemption Date</B>&quot;).
If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the
applicable Change of Control Redemption Price to the Holder (i) concurrently with the consummation of such Change of Control if
such notice is received prior to the consummation of such Change of Control and (ii) within three (3) Business Days after the Company's
receipt of such notice otherwise (such date, the &quot;<B>Change of Control Redemption Date</B>&quot;). The Company shall deliver
the applicable Company Installment Redemption Price to the Holder on the applicable Installment Date. The Company shall pay the
applicable Redemption Price to the Holder in cash by wire transfer of immediately available funds pursuant to wire instruction
provided by the holder in writing to the Company on the applicable due date. In the event of a redemption of less than all of the
Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance
with Section 18(d)) representing the outstanding Principal which has not been redeemed and any accrued Interest on such Principal
which shall be calculated as if no Redemption Notice has been delivered. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption
Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder
all or any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company's receipt of such notice, (x) the
applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return
this Note, or issue a new Note (in accordance with Section 18(d)) to the Holder representing such Conversion Amount to be redeemed
and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the lesser of (A) the Conversion Price as in effect
on the date on which the applicable Redemption Notice is voided and (B) the lowest Closing Bid Price of the Common Stock during
the period beginning on and including the date on which the applicable Redemption Notice is delivered to the Company and ending
on and including the date on which the applicable Redemption Notice is voided. The Holder's delivery of a notice voiding a Redemption
Notice and exercise of its rights following such notice shall not affect the Company's obligations to make any payments of Late
Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Redemption
by Other Holders</U>. Upon the Company's receipt of notice from any of the holders of the Other Notes or the Additional Notes for
redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section
4(b) or Section 5(b) or pursuant to equivalent provisions set forth in the Other Notes or the Additional Notes (each, an &quot;<B>Other
Redemption Notice</B>&quot;), the Company shall immediately, but no later than one (1) Business Day of its receipt thereof, forward
to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives a Redemption Notice and one or more
Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is three (3) Business
Days prior to the Company's receipt of the Holder's Redemption Notice and ending on and including the date which is three (3) Business
Days after the Company's receipt of the Holder's Redemption Notice and the Company is unable to redeem all principal, interest
and other amounts designated in such Redemption Notice and such Other Redemption Notices received during such seven (7) Business
Day period, then the Company shall redeem a pro rata amount from the Holder and each holder of the Other Notes and the Additional
Notes (including the Holder) based on the Principal amount of this Note, the Other Notes and the Additional Notes submitted for
redemption pursuant to such Redemption Notice and such Other Redemption Notices received by the Company during such seven Business
Day period.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Insufficient
Assets</U>. If upon a Redemption Date, the assets of the Company are insufficient to pay the applicable Redemption Price, the Company
shall (i) take all appropriate action reasonably within its means to maximize the assets available for paying the applicable Redemption
Price, (ii) redeem out of all such assets available therefor on the applicable Redemption Date the maximum possible Conversion
Amount that it can redeem on such date, pro rata among the Holder and the holders of the Other Notes and the Additional Notes to
be redeemed in proportion to the aggregate Principal amount of this Note, the Other Notes and the Additional Notes outstanding
on the applicable Redemption Date and (iii) following the applicable Redemption Date, at any time and from time to time when additional
assets of the Company become available to redeem the remaining Conversion Amount of this Note, the Other Notes and the Additional
Notes, the Company shall use such assets, at the end of the then current calendar month, to redeem the balance of such Conversion
Amount of this Note, the Other Notes and the Additional Notes, or such portion thereof for which assets are then available, on
the basis set forth above at the applicable Redemption Price, and such assets will not be used prior to the end of such calendar
month for any other purpose. Interest on the Principal amount of this Note, the Other Notes and the Additional Notes that have
not been redeemed shall continue to accrue until such time as the Company redeems this Note, the Other Notes and the Additional
Notes. The Company shall pay to each Holder the applicable Redemption Price without regard to the legal availability of funds unless
expressly prohibited by applicable law or unless the payment of the applicable Redemption Price could reasonably be expected to
result in personal liability to the directors of the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(12)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>VOTING
RIGHTS</U>. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly provided
in this Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(13)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RANK</U>.
All payments due under this Note (a) shall rank <I>pari passu</I> with all Other Notes and Additional Notes and (b) shall be senior
to all other Indebtedness of the Company and its Subsidiaries, except that Indebtedness of the Company's Subsidiaries under the
RBL Facility and under certain existing factoring facilities set forth in Item 1 of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2014 rank senior to this Note, the Other Notes and the Additional Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(14)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>NEGATIVE
COVENANTS</U>. As long as any Notes or Additional Notes are outstanding, the Company shall not, and the Company shall not permit
any of its Subsidiaries without the prior written consent of the Required Holders to, directly or indirectly:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;create,
or authorize the creation of, or issue or obligate itself to issue additional or other Capital Stock or securities exchangeable
for or convertible or exercisable into Capital Stock other than pursuant to any Approved Stock Plan as in effect on the Subscription
Date and other than shares of Common Stock deemed to have been issued or sold by the Company as Excluded Securities;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reclassify,
alter or amend any security of the Company existing as of the Subscription Date in respect of the distribution of assets on the
liquidation, dissolution or winding up of the Company, the payment of dividends, anti-dilution protections, or rights of redemption,
if such reclassification, alteration or amendment would make any such right, preference or privilege of such security senior to
any such right, preference or privilege of such security existing on the Subscription Date;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;decrease
the authorized number of shares of Common Stock or any other class or series of Capital Stock;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
than with respect to the Preferred Shares, redeem or repurchase its Equity Interest, or permit any Subsidiary to redeem or repurchase
its Equity Interests (except on a pro rata basis among all holders thereof);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;incur
or guarantee, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, &quot;<B>Liens</B>&quot;)
other than Permitted Liens;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
(other than this Note, the Other Notes and the Additional Notes), whether by way of payment in respect of principal of (or premium,
if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such
payment, an event constituting, or that with the passage of time and without being cured would constitute, an Event of Default
has occurred and is continuing;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;declare
or pay any cash dividend or distribution on any Equity Interest of the Company or of its Subsidiaries other than with respect to
the Preferred Shares;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;offer,
sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries' equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security whether or not such instrument or security is, at any time during its life and
under any circumstances, convertible into or exchangeable or exercisable for Common Stock or Common Stock Equivalents or be party
to any solicitations, negotiations or discussions with regard to the foregoing;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make,
any change in the nature of its business as described in the Company's most recent Annual Report filed on Form 10-K with the SEC
or modify its corporate structure or purpose;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorize
or effect (a) any Fundamental Transaction, or (b) a voluntary or involuntary liquidation, dissolution or winding up of the Company
or any of its Subsidiaries, or consent to any of the foregoing, not in compliance with the terms set forth in this Note;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;encumber
or allow any Liens on, any of its copyright rights, copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the
goodwill of the business of the Company and its Subsidiaries connected with and symbolized thereby, know-how, operating manuals,
trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement
of any of the foregoing, other than Permitted Liens; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;enter
into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate,
except in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable
for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than
would be obtainable in a comparable arm's length transaction with a Person that is not an Affiliate thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>AFFIRMATIVE
COVENANTS</U>. As long as any Notes or Additional Notes are outstanding, the Company shall, and the Company shall cause each Subsidiary
to, directly or indirectly:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain
at least $350,000 in cash that is unrestricted and unencumbered;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain
and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or
remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain
and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful
in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause
each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which
it occupies property, so as to prevent any loss or forfeiture thereof or thereunder; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: 0.5in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including,
without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties
(including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any
governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(16)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>VOTE
TO ISSUE, OR CHANGE THE TERMS OF, NOTES</U>. The affirmative vote at a meeting duly called for such purpose or the written consent
without a meeting of the Required Holders shall be required for any change or amendment or waiver of any provision to this Note
or any of the Other Notes or any of the Additional Notes. Any change, amendment or waiver by the Company and the Required Holders
shall be binding on the Holder of this Note and all holders of the Other Notes and the Additional Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(17)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>TRANSFER</U>.
This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the
Holder without the consent of the Company, subject only to the provisions of Section 2(f) of the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(18)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>REISSUANCE
OF THIS NOTE</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfer</U>.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 18(d) and subject to Section 3(c)(iv)), registered
as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire
outstanding Principal is being transferred, a new Note (in accordance with Section 18(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason
of the provisions of Section 3(c)(iv) following conversion or redemption of any portion of this Note, the outstanding Principal
represented by this Note may be less than the Principal stated on the face of this Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Lost,
Stolen or Mutilated Note</U>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Note
Exchangeable for Different Denominations</U>. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in Principal amounts of at least $100,000)
representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such
outstanding Principal as is designated by the Holder at the time of such surrender.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of New Notes</U>. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges, if any, on the Principal and Interest of this
Note, from the Issuance Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(19)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF</U>. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right
to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth
or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to
be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(20)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS</U>. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors' rights and involving a claim under this Note, then the Company shall pay the
costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys' fees and disbursements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(21)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CONSTRUCTION;
HEADINGS</U>. This Note shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed
against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of,
or affect the interpretation of, this Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(22)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>FAILURE
OR INDULGENCE NOT WAIVER</U>. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(23)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DISPUTE
RESOLUTION</U>. In the case of a dispute as to the determination of the Closing Bid Price, the Closing Sale Price or the Weighted
Average Price or the arithmetic calculation of the Conversion Rate, the Conversion Price or any Redemption Price, the Company shall
submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within one (1) Business Day of receipt,
or deemed receipt, of the Conversion Notice or Redemption Notice or other event giving rise to such dispute, as the case may be,
to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within one (1) Business
Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one
Business Day submit via facsimile or electronic mail (a) the disputed determination of the Closing Bid Price, the Closing Sale
Price or the Weighted Average Price to an independent, reputable investment bank selected by the Holder and approved by the Company,
such approval not to be unreasonably withheld or delayed, or (b) the disputed arithmetic calculation of the Conversion Rate, Conversion
Price or any Redemption Price to an independent, outside accountant, selected by the Holder and approved by the Company, such approval
not to be unreasonably withheld or delayed. The Company, at the Company's expense, shall cause the investment bank or the accountant,
as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later
than five (5) Business Days from the time it receives the disputed determinations or calculations; <U>provided</U>, <U>however</U>
that in the event the determination or calculation of the investment bank or the accountant, as the case may be, is identical to
the determination or calculation of the Company, the expenses of such investment bank or accountant, as the case may be, shall
be borne equally among the holders of the holders of Notes who disputed the determination or calculation of the Company. Such investment
bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable
error. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties
absent demonstrable error.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(24)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>NOTICES;
PAYMENTS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company shall give written notice to the Holder (i) immediately upon any adjustment
of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
twenty (20) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information
shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Payments</U>.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to
such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Purchasers,
shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement); <U>provided</U>, that
the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with
prior written notice setting out such request and the Holder's wire transfer instructions. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding
day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when
due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the
rate of eighteen percent (18.0%) per annum from the date such amount was due until the same is paid in full (&quot;<B>Late Charge</B>&quot;).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(25)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CANCELLATION</U>.
After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically
be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(26)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>WAIVER
OF NOTICE</U>. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(27)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>GOVERNING
LAW; JURISDICTION; JURY TRIAL</U>. This Note shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough
of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, 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 any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company 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 to such party
at the address it set forth on the signature page hereto 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 manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on
any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
<B>THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(28)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="text-transform: uppercase"><U>Severability</U></FONT>.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(29)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DISCLOSURE</U>.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the Company shall so indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(30)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>USURY</U>.
This Note is subject to the express condition that at no time shall the Company be obligated or required to pay interest hereunder
at a rate or in an amount which could subject the Holder to either civil or criminal liability as a result of being in excess of
the maximum interest rate or amount which the Company is permitted by applicable law to contract or agree to pay. If by the terms
of this Note, the Company is at any time required or obligated to pay interest hereunder at a rate or in an amount in excess of
such maximum rate or amount, the rate or amount of interest under this Note shall be deemed to be immediately reduced to such maximum
rate or amount and the interest payable shall be computed at such maximum rate or be in such maximum amount and all prior interest
payments in excess of such maximum rate or amount shall be applied and shall be deemed to have been payments in reduction of the
principal balance of this Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">(31)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CERTAIN
DEFINITIONS</U>. For purposes of this Note, the following terms shall have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<B>INSERT
IN ADDITIONAL NOTES: </B>&quot;<B>Additional Closing Date</B>&quot; shall have the meaning set forth in the Securities Purchase
Agreement, which date is the date the Company initially issued the Notes pursuant to the terms of the Securities Purchase Agreement.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Additional
Notes</B>&quot; means [<B>INSERT IN INITIAL NOTES</B>] [all Additional Notes (as defined in the Securities Purchase Agreement),
if any, issued by the Company pursuant to the Securities Purchase Agreement on an Additional Closing Date (as defined in the Securities
Purchase Agreement)] [<B>INSERT IN ADDITIONAL NOTES</B>] [all Initial Notes (as defined in the Securities Purchase Agreement) issued
by the Company pursuant to the Securities Purchase Agreement on the Initial Closing Date (as defined in the Securities Purchase
Agreement)].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Affiliate</B>&quot;
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that &quot;control&quot; of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such
Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Approved
Stock Plan</B>&quot; means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or director for services provided to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Attribution
Parties</B>&quot; means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or
any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of
the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated
with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Bloomberg</B>&quot;
means Bloomberg Financial Markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Business
Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Capital
Stock</B>&quot; means: (A) in the case of a corporation, corporate stock; (B) in the case of an association or business entity,
any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (C) in the
case of a partnership or limited liability company, partnership interests (whether general or limited) or membership or limited
liability company interests; and (D) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Change
of Control</B>&quot; means any Fundamental Transaction other than (A) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company's voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Closing
Bid Price</B>&quot; and &quot;<B>Closing Sale Price</B>&quot; means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or &quot;pink sheets&quot; by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Required Holders. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved pursuant to Section 23. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or similar transaction during the applicable calculation period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Common
Stock</B>&quot; means (i) the Company's common stock, par value $0.0001 per share, and (ii)&nbsp;any share capital into which such
Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Company
Conversion Price</B>&quot; means with respect to any Installment Date or other applicable date of determination, that price which
shall be the lower of (i) the Conversion Price then in effect and (ii) the Market Price as of the applicable Installment Date or
other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Company
Pre-Installment Conversion Price</B>&quot; means, with respect to any Company Installment Notice Date or other applicable date
of determination, that price which shall be the lower of (i) the Conversion Price then in effect and (ii) the Market Price as of
the applicable Company Installment Notice Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Contingent
Obligation</B>&quot; means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will
be protected (in whole or in part) against loss with respect thereto.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Conversion
Shares</B>&quot; means shares of Common Stock issuable by the Company pursuant to the terms of any of the Notes, including any
related Interest and Late Charges so converted, amortized or redeemed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;&quot;<B>Eligible
Market</B>&quot; means the Principal Market, The New York Stock Exchange, The <FONT STYLE="text-transform: uppercase">Nasdaq</FONT>
Global Market, The <FONT STYLE="text-transform: uppercase">Nasdaq</FONT> Global Select Market or the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions</B>&quot; means each of the following conditions: (i) on each day during Equity Conditions Measuring Period, either
(x) all Registration Statements filed and required to be filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities including the shares of Common Stock issuable upon conversion
of the Conversion Amount that is subject to the applicable Company Conversion, Pre-Interest Shares or Interest Shares, as applicable,
requiring the satisfaction of the Equity Conditions, in accordance with the terms of the Registration Rights Agreement and there
shall not have been any Grace Periods (as defined in the Registration Rights Agreement) or (y) all Conversion Shares issuable pursuant
to the terms of this Note, the Other Notes and the Additional Notes and exercise of the Warrants, including the shares of Common
Stock issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion, Pre-Interest Shares
or Interest Shares, as applicable, requiring the satisfaction of the Equity Conditions, shall be eligible for sale without restriction
pursuant to Rule 144 and without the need for registration under any applicable federal or state securities laws; (ii) on each
day during the Equity Conditions Measuring Period, the Common Stock is designated for quotation on the Principal Market or any
other Eligible Market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension
by such exchange or market been threatened, commenced or pending in writing by such exchange or market (<U>provided</U>, <U>however</U>,
that in the event proceedings for such delisting or suspension have been threatened or commenced, the Company shall have ninety
(90) days from such threat or commencement, whichever is earlier, to cure such failure before it is deemed, for all purposes hereunder,
to have failed to satisfy such Equity Condition); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered
Conversion Shares pursuant to the terms of this Note, the Other Notes and the Additional Notes and Warrant Shares upon exercise
of the Warrants to the holders on a timely basis as set forth in Section 3(c) hereof (and analogous provisions under the Other
Notes and the Additional Notes) and Section 1(a) of the Warrants; (iv) the shares of Common Stock issuable upon conversion of the
Conversion Amount that is subject to the applicable Company Conversion, Pre-Interest Shares or Interest Shares, as applicable,
requiring the satisfaction of the Equity Conditions may be issued in full without violating Section 3(d) hereof and the rules or
regulations of the Principal Market or any other applicable Eligible Market; (v) during the Equity Conditions Measuring Period,
the Company shall not have failed to timely make any payments within ten (10) Business Days of when such payment is due pursuant
to any Transaction Document; (vi) during the Equity Conditions Measuring Period, there shall not have occurred either (A) the public
announcement of a pending, proposed or intended Fundamental Transaction which has not been abandoned, terminated or consummated,
(B) an Event of Default or (C) an event that with the passage of time or giving of notice would constitute an Event of Default;
(vii) the Company shall have no knowledge of any fact that would cause (x) the Registration Statements required pursuant to the
Registration Rights Agreement not to be effective and available for the resale of all remaining Registrable Securities, including
the shares of Common Stock issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion,
Pre-Interest Shares or Interest Shares, as applicable, requiring the satisfaction of the Equity Conditions, in accordance with
the terms of the Registration Rights Agreement or (y) any shares of Common Stock issuable pursuant to the terms of this Note, the
Other Notes and the Additional Notes and shares of Common Stock issuable upon exercise of the Warrants, including the shares of
Common Stock issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion, Pre-Interest
Shares or Interest Shares, as applicable, requiring the satisfaction of the Equity Conditions, not to be eligible for sale without
restriction pursuant to Rule 144 promulgated under the Securities Act and any applicable state securities laws; (viii) during the
Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with and shall not have breached any provision,
covenant, representation or warranty of any Transaction Document; (ix) <FONT STYLE="background-color: white">on each day during
Equity Conditions Measuring Period, </FONT>the Holder shall not be in possession of any material, nonpublic information received
from the Company, any Subsidiary or its respective agent or affiliates; (x) the shares of Common Stock issuable upon conversion
of the Conversion Amount that is subject to the applicable Company Conversion, the Pre-Interest Shares or the Interest Shares,
as applicable, requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible for trading without
restriction on an Eligible Market; (xi) the Company shall have obtained the Stockholder Approval (as defined in the Securities
Purchase Agreement); (xii) the daily dollar trading volume of the Common Stock as reported by Bloomberg shall be at least $350,000
on no less than ten (10) Trading Days during the twenty (20) consecutive Trading Day immediately preceding the applicable date
of determination; (xiii) the arithmetic average of the daily dollar trading volume of the Common Stock as reported by Bloomberg
during the twenty (20) consecutive Trading Day immediately preceding the applicable date of determination shall be no less than
$350,000; (xiv) the arithmetic average of the Weighted Average Prices of the Common Stock on each Trading Day during the Equity
Conditions Measuring Period exceeds [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>4</SUP> (as adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction occurring after the Subscription Date); and (xv) <FONT STYLE="background-color: white">on
each day during the Equity Conditions Measuring Period, the Company is in compliance with the requirement set forth in Rule 144(c)(1).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions Failure</B>&quot; means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not each been satisfied (or waived in
writing by the Holder).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>4</SUP> [<B>INSERT IN INITIAL NOTES:</B> $0.535.] [<B>INSERT
IN ADDITIONAL NOTES</B>: Insert 50% of the Market Price as of the date of the applicable Buyer Additional Closing Notice.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions Measuring Period</B>&quot; means each day during the period beginning thirty (30) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Interests</B>&quot; means (a) all shares of capital stock (whether denominated as common capital stock or preferred capital stock),
equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or
profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting
or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable
or exercisable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Exchange
Act</B>&quot; means the Securities Exchange Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Excluded
Securities</B>&quot; means no more than an aggregate pursuant to all of the following events of 2,345,564 shares of Common Stock
(as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction after the Subscription
Date) (the &quot;<B>Excluded Securities Cap</B>&quot;) issued or issuable or deemed to be issued in accordance with Section 7(a)
hereof by the Company: (A) under any Approved Stock Plan; (B) in accordance with the terms of this Notes, the Other Notes, the
Additional Notes and the Warrants; <U>provided</U>, that this Notes, the Other Notes, the Additional Notes and the Warrants are
not amended, modified or changed on or after the Subscription Date; (C) upon conversion, exercise or exchange of any Options or
Convertible Securities which are outstanding on the day immediately preceding the Subscription Date, <U>provided</U>, that such
issuance of Common Stock upon exercise of such Options or Convertible Securities is made pursuant to the terms of such Options
or Convertible Securities in effect on the date immediately preceding the Subscription Date and such Options or Convertible Securities
are not amended, modified or changed on or after the Subscription Date, (D) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be
to an unaffiliated Person (or to the equity holders of an unaffiliated Person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing
securities for the purpose of raising capital or to an entity whose primary business is investing in securities; or (E) in accordance
with the terms of any securities issued to the initial Holder and to any initial holder of the Other Notes; <U>provided</U>, <U>however</U>,
that the Excluded Securities Cap shall not apply to, and the Excluded Securities Cap shall be calculated irrespective of any restricted
shares of Common Stock with respect to which the Company has not and will not file a registration statement for the issuance or
resale of such shares pursuant to the Securities Act, and which are issued in connection with (i) the acquisition from Maglenta
Enterprises Inc. and Champfremont Holding Ltd. of all of the issued and outstanding equity interests of the PayOnline group of
companies consisting of PayOnline System LLC, Innovative Payment Technologies LLC, Polimore Capital Limited and Brosword Holding
Limited, by TOT Group Europe, Ltd., a Subsidiary of the Company, and (ii) pursuant to the foregoing clause (D).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Fundamental
Transaction</B>&quot; means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its &quot;significant subsidiaries&quot; (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or
have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with
any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares
of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act)
of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares
of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement
or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities
become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding
shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that&nbsp;the Company shall, directly
or indirectly, through one or more Subsidiaries. Affiliates or otherwise, in one or more related transactions, allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the &quot;beneficial owner&quot; (as defined in Rule&nbsp;13d-3
under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender
offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock,
(y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were
not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger
or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of
the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one
or more related transactions the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>GAAP</B>&quot;
means United States generally accepted accounting principles, consistently applied.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Group</B>&quot;
means a &quot;group&quot; as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Holiday</B>&quot;
means a day other than a Business Day or on which trading does not take place on the Principal Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Indebtedness</B>&quot;
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) &quot;capital leases&quot; in accordance
with GAAP (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations
with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property,
assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or
sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP,
consistently applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (i) through (vii) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Initial
Closing Date</B>&quot; shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company
initially issued the Notes pursuant to the terms of the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Initial
Interest Conversion Price</B>&quot; means, with respect to any Interest Pre-Payment Date, that price which shall be the lower of
(i) the Conversion Price then in effect and (ii) the Market Price as in effect on the applicable Interest Pre-Payment Date or other
applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Installment
Amount</B>&quot; means with respect to each Installment Date, an amount equal to the sum of the (i) lesser of (A) $[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>5</SUP>
and (B) the Principal outstanding on such Installment Date, (ii) any Deferral Amount deferred pursuant to Section 8(d) and included
in such Installment Amount, (iii) the applicable Make-Whole Amount for the Principal amount included in such Installment Amount
and (iv) accrued and unpaid Interest with respect to such Principal and accrued and unpaid Late Charges, if any, with respect to
such Principal and Interest, as any such Installment Amount for each Holder may be reduced pursuant to the terms hereof, whether
upon conversion, redemption or otherwise. In the event the Holder shall sell or otherwise transfer or assign any portion of this
Note, the transferee shall be allocated a pro rata portion of each unpaid Installment Amount hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Installment
Balance Conversion Shares</B>&quot; means, for any Installment Date, a number of shares of Common Stock equal to (i) the Post-Installment
Conversion Shares with respect to such Installment Date minus (ii) the amount of any Pre-Installment Conversion Shares delivered
on the related Installment Pre-Payment Date; <U>provided</U>, that in the event that the amount of Pre-Installment Conversion Shares
exceeds the Post-Installment Conversion Shares for such date (such excess, the &quot;<B>Installment Conversion Shares Excess</B>&quot;),
the Installment Balance Conversion Shares shall equal zero (0) for such date and in no event shall the Installment Conversion Shares
Excess reduce the number of Pre- Installment Conversion Shares payable on the next Company Installment Notice Date, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Installment
Date</B>&quot; means the first (1<SUP>st</SUP>) Business Day of the calendar month immediately following the earlier of (i) the
date when all Registrable Securities have been registered pursuant to one or more Registration Statements that have been declared
effective by the SEC and (ii) the date that is six (6) months immediately following the Issuance Date of this Note, and every calendar
month anniversary thereafter through and including the Maturity Date, or, if any such date falls on a Holiday, the next day that
is not a Holiday.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Interest
Balance Shares</B>&quot; means, for any Interest Date, a number of shares of Common Stock equal to (i) the Post-Interest Shares
with respect to such Interest Date minus (ii) the amount of any Pre-Interest Shares delivered on the related Interest Pre-Payment
Date; provided that in the event that the amount of Pre-Interest Shares exceeds the Post-Interest Shares for such date (such excess,
the &quot;<B>Interest Shares Excess</B>&quot;), the Interest Balance Shares shall equal zero (0) for such date and in no event
shall (x) any Interest Shares Excess reduce the number of Pre-Interest Shares payable on the next Interest Pre-Payment Date, if
any, and (y) the Holder be required to return any Interest Shares Excess to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Interest
Conversion Price</B>&quot; means, with respect to any Interest Date, that price which shall be the lower of (i) the then applicable
Conversion Price and (ii) the Market Price as in effect on the applicable Interest Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(jj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Interest
Notice Due Date</B>&quot; means the twenty-sixth (26th) Trading Day prior to the applicable Interest Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(kk)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Interest
Pre-Payment Date</B>&quot; means the twenty-third (23rd) Trading Day prior to the applicable Interest Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ll)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Interest</B>
<B>Rate</B>&quot; means 7.00% per annum, subject to adjustment as set forth in Section 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt"><SUP>5</SUP>
</FONT>Insert 1/5th of the Holder's Original Principal Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(mm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Lead
Investor</B>&quot; means [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(nn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Make-Whole
Amount</B>&quot; means, the amount of any Interest on any Principal amount that, but for the event requiring the payment of the
Make-Whole Amount, would have accrued with respect to such Principal amount if the Notes had remained outstanding for the period
from such event through the Maturity Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(oo)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Make-Whole
Price</B>&quot; means. with respect to any Conversion Date, that price which shall be the lower of (i) the then applicable Conversion
Price and (ii) the Market Price as in effect on the applicable related Conversion Date or other applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(pp)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Market
Price</B>&quot; means 93% of the lowest of (i) the arithmetic average of the five (5) lowest Weighted Average Prices of the Common
Stock during the twenty (20) consecutive Trading Day period ending on the Trading Day immediately preceding the applicable date
of determination, (ii) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the applicable date
of determination and (iii) the Weighted Average Price of the Common Stock on the applicable date of determination. All such determinations
to be appropriately adjusted for any stock split, stock dividend, stock combination, reclassification or other similar transaction
during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(qq)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(rr)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Option
Value</B>&quot; means the value of an Option based on the Black and Scholes Option Pricing model obtained from the &quot;OV&quot;
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the applicable Option if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the
issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg
as of the day immediately following the public announcement of (A) the Trading Day immediately following the public announcement
of the applicable Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the
issuance of the applicable Option if the issuance of such Option is not publicly announced, (iii) the underlying price per share
used in such calculation shall be the highest Weighted Average Price during the period beginning on the day prior to the execution
of definitive documentation relating to the issuance of the applicable Option and the public announcement of such issuance, (iv)
a zero cost of borrow and (v) a 360 day annualization factor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Parent
Entity</B>&quot; of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(tt)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Permitted
Indebtedness</B>&quot; means (i) Indebtedness evidenced by this Note, the Other Notes and the Additional Notes, (ii) trade payables
incurred in the ordinary course of business consistent with past practice,<FONT STYLE="font-size: 12pt"> (iii) </FONT>unsecured
Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by this
Note, as reflected in a written agreement acceptable to the Required Holders and approved by the Required Holders in writing, and
which Indebtedness does not provide at any time for (a) the payment, prepayment, repayment, repurchase or defeasance, directly
or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after the Maturity Date or later and (b)
total interest and fees at a rate in excess of 7.00% per annum, (iv) Indebtedness secured by Permitted Liens described in clauses
(iv) and (v) of the definition of Permitted Liens and (v) Indebtedness existing on the Subscription Date set forth on <U>Schedule
31(tt)</U> attached hereto, <U>provided</U>, <U>however</U>, that such Indebtedness is not increased, refinanced, amended, modified
or changed on or after the Subscription Date; <U>provided</U>, <U>further</U>, that the Indebtedness evidenced by the RBL Facility
does not exceed, at any time while any Notes are outstanding, $3,965,000 without the prior written consent of the Required Holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(uu)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Permitted
Liens</B>&quot; 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 Company 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, or (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, (v) Liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension, renewal or replacement
Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended,
renewed or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses granted to others in the ordinary
course of the Company's business, not interfering in any material respect with the business of the Company and its Subsidiaries
taken as a whole, (vii)&nbsp;Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of
custom duties in connection with the importation of goods, (viii) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 4(a)(x); (ix) with respect to the Subsidiaries (and not the Company), Liens
pursuant to the RBL Facility, as in effect on the Subscription Date; and (x) with respect to the Subsidiaries (and not the Company),
Liens pursuant to the existing factoring facilities set forth in Item 1 of the Company&rsquo;s Annual Report on Form 10-K for the
fiscal year ended December 31, 2014, as in effect on the Subscription Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(vv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Person</B>&quot;
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ww)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Post-Installment
Conversion Shares</B>&quot; means, for any Installment Date and without taking into account the delivery of any Pre-Installment
Conversion Shares, that number of shares of Common Stock equal to the applicable Company Conversion Amount on such Installment
Date divided by the Company Conversion Price as in effect on the applicable Installment Date, rounded up to the nearest whole share
of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(xx)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Post-Interest
Shares</B>&quot; means, for any Interest Date and without taking into account the delivery of any Pre-Interest Shares, that number
of shares of Common Stock equal to the applicable amount of Interest to be paid in Interest Shares for such Interest Date <I><U>divided
by</U></I> the Interest Conversion Price, rounded up to the nearest whole number.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(yy)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Preferred
Shares</B>&quot; means Company's Series A Convertible Preferred Stock, par value $0.01 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(zz)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Principal
Market</B>&quot; means The NASDAQ Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(aaa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Qualifying
Conversion</B>&quot; means conversion of a Conversion Amount not exceeding on any given Trading Day three (3) times the Installment
Amount due on the Installment Date immediately following the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(bbb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>RBL
Facility</B>&quot; means that certain Loan and Security Agreement, dated June 30, 2014, among RBL Capital Group, LLC, as lender,
and TOT Group, Inc., TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC, as co-borrowers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ccc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Redemption
Notices</B>&quot; means, collectively, the Event of Default Redemption Notices, the Change of Control Redemption Notices and the
Company Installment Notices, each of the foregoing, individually, a Redemption Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ddd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Redemption
Prices</B>&quot; means, collectively, the Event of Default Redemption Price, the Change of Control Redemption Price and the Company
Installment Redemption Price, each of the foregoing, individually, a Redemption Price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(eee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registrable
Securities</B>&quot; shall have the meaning ascribed to such term in the Registration Rights Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(fff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registration
Rights Agreement</B>&quot; means that certain registration rights agreement dated as of the Subscription Date by and among the
Company and the Purchasers relating to, among other things, the registration of the resale of the shares of Common Stock issuable
upon conversion of this Note, the Other Notes and the Additional Notes and exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ggg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registration
Statement</B>&quot; shall have the meaning ascribed to such term in the Registration Rights Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(hhh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Related
Fund</B>&quot; means, with respect to any Person, a fund or account managed by such Person or an Affiliate of such Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Required
Holders</B>&quot; means the holders of Notes and Additional Notes representing at least sixty-five percent (65%) of the aggregate
principal amount of the Notes and Additional Notes then outstanding and shall include the Lead Investor so long as the Lead Investor
or any of its Affiliates holds any Notes or Additional Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(jjj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>SEC</B>&quot;
means the United States Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(kkk)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Securities
Act</B>&quot; means the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(lll)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Securities
Purchase Agreement</B>&quot; means that certain securities purchase agreement dated as of the Subscription Date by and among the
Company and the Purchasers of the Notes pursuant to which the Company issued the Notes, the Additional Notes and Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(mmm)&nbsp;&nbsp;&nbsp;&quot;<B>Subject
Entity</B>&quot; means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(nnn)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Subscription
Date</B>&quot; means April 30, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ooo)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Subsidiary</B>&quot;
shall have the meaning ascribed to such term in the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ppp)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Successor
Entity</B>&quot; means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(qqq)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Trading
Day</B>&quot; means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; provided that &quot;Trading Day&quot; shall not include any day on which the Common Stock is scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(rrr)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Warrants</B>&quot;
has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants issued in exchange therefor
or replacement thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(sss)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Warrant
Shares</B>&quot; means shares of Common Stock issuable by the Company upon the exercise of any of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ttt)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Weighted
Average Price</B>&quot; means, for any security as of any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other time as the Principal Market
publicly announces is the official close of trading) as reported by Bloomberg through its &quot;Volume at Price&quot; functions,
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York Time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other time
as such market publicly announces is the official close of trading) as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or &quot;pink sheets&quot; by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Required Holders. If the Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved pursuant to Section 23. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during the applicable
calculation period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[Signature Page Follows]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed as of the Issuance Date set out above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 85%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-variant: small-caps"><B>Net Element, Inc.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 4%; font-size: 10pt">By:</TD>
    <TD STYLE="width: 56%; border-bottom: Black 1pt solid; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Name:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">Title:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 4in; text-align: justify; text-indent: -4in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>&nbsp;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><U>Schedule 31(tt)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Subsidiary Indebtedness existing on the Subscription Date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">1. Any Indebtedness under the RBL Facility.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">2. Any draw downs under existing factoring facilities
set forth in Item 1 of the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">EXHIBIT I<BR>
<BR>
<FONT STYLE="text-transform: uppercase">NET ELEMENT, inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">CONVERSION NOTICE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Reference is made to the Senior Convertible
Note (the &quot;<B>Note</B>&quot;) issued to the undersigned by Net Element, Inc., a Delaware corporation (the &quot;<B>Company</B>&quot;).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of Common Stock par value $0.0001 per share (the &quot;<B>Common Stock</B>&quot;)
of the Company, as of the date specified below.&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="padding-top: 10pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0">Date of Conversion:</P></TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt; padding-left: 0.5in">Aggregate Conversion Amount to be converted:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="12" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">Please confirm the following information:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt; padding-left: 0.5in">Conversion Price:</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="10" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt; padding-left: 0.5in">Number of shares of Common Stock to be issued:</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="12" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">Please check the following box if the Conversion Price is being determined by:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="12" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">Alternative Conversion Price:&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="12" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">Please issue the Common Stock into which the Note is being converted in the following name and to the following address:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt; padding-left: 0.5in">Issue to:</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.5in">Facsimile Number and Electronic Mail:</TD>
    <TD COLSPAN="5" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="4" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.5in">Authorization:</TD>
    <TD COLSPAN="8" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.875in">By:</TD>
    <TD COLSPAN="9" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.875in">Title:</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">Dated:</TD>
    <TD COLSPAN="11" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="6" NOWRAP STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.875in">Account Number:</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9" STYLE="font-size: 10pt; text-align: left; padding-top: 0; padding-left: 1in; padding-bottom: 0">(if electronic book entry transfer)</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="8" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt; padding-left: 0.875in">Transaction Code Number:</TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9" STYLE="font-size: 10pt; text-align: left; padding-top: 0; padding-left: 1in; padding-bottom: 0">(if electronic book entry transfer)</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9" STYLE="font-size: 10pt; text-align: left; padding-top: 10pt">Installment Amounts to be reduced and amount of reduction: ___________________________</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: justify; padding-top: 10pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 9%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 9%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 47%; padding-top: 10pt"><FONT STYLE="font-size: 1pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">ACKNOWLEDGMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company hereby acknowledges
this Conversion Notice and hereby directs Continental Stock Transfer &amp; Trust Company to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated April&nbsp;__, 2015 from the Company and acknowledged
and agreed to by Continental Stock Transfer &amp; Trust Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 85%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-variant: small-caps"><B>Net Element, Inc.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 4%">By:</TD>
    <TD STYLE="width: 56%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Appendix &ldquo;F&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM OF WARRANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0"></P>&nbsp;

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>[FORM OF WARRANT]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Net
Element, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>Warrant
To Purchase Common Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Warrant No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Number of Shares of Common Stock:<U>_____________</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Date of Issuance: [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>1</SUP>
(&quot;<B>Issuance Date</B>&quot;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Net Element, Inc., a Delaware
corporation (the &quot;<B>Company</B>&quot;), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged<FONT STYLE="text-transform: uppercase">, [BUYER]</FONT>, the registered holder hereof or its permitted
assigns (the &quot;<B>Holder</B>&quot;), is entitled, subject to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m.,
New York time, on the Expiration Date, (as defined below), ______________ (_____________)<SUP>2</SUP> fully paid nonassessable
shares of Common Stock, subject to adjustment as provided herein<B> </B>(the &quot;<B>Warrant Shares</B>&quot;). Except as otherwise
defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued
in exchange, transfer or replacement hereof, this &quot;<B>Warrant</B>&quot;), shall have the meanings set forth in Section 17.
This Warrant is one of the Warrants to purchase Common Stock (the &quot;<B>SPA Warrants</B>&quot;) issued pursuant to Section 1
of that certain Securities Purchase Agreement, dated as of April 30, 2015 (the &quot;<B>Subscription Date</B>&quot;), by and among
the Company and the investors (the &quot;<B>Buyers</B>&quot;) referred to therein (the &quot;<B>Securities Purchase Agreement</B>&quot;).
Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"><SUP>1</SUP> [<B>INSERT IN INITIAL WARRANTS:</B>
April 30, 2015] [<B>INSERT IN ADDITIONAL WARRANTS: </B>the<B> </B>applicable Additional Closing Date (as defined in the Securities
Purchase Agreement)]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"><FONT STYLE="font-size: 10pt"><SUP>2</SUP> </FONT>[<B>INSERT
IN INITIAL NOTES:</B> Insert 88% of the number of shares of Common Stock issuable upon conversion of the Initial Notes purchased
by the Holder pursuant to the Securities Purchase Agreement.] [<B>INSERT IN ADDITIONAL NOTES:</B> Insert 88% of the number of shares
of Common Stock issuable upon conversion of the Additional Notes purchased by the Holder pursuant to the Securities Purchase Agreement.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>EXERCISE
OF WARRANT.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics
of Exercise</U>. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by
(i)&nbsp;delivery of a written notice, in the form attached hereto as <U>Exhibit A</U> (the &quot;<B>Exercise Notice</B>&quot;),
of the Holder's election to exercise this Warrant and (ii)&nbsp;(A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the &quot;<B>Aggregate Exercise
Price</B>&quot;) in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The
Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of
the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the
first (1<SUP>st</SUP>) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer
agent (the &quot;<B>Transfer Agent</B>&quot;). On or before the third (3rd) Trading Day following the date on which the Company
has received the Exercise Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise)
on or prior to the second (2nd) Trading Day following the date on which the Company has received the Exercise Notice (the &quot;<B>Share
Delivery Date</B>&quot;) (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery
Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company
shall (x) provided that the Warrant Shares are subject to an effective resale registration statement in favor of the Holder or,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, or (Y) if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and,
if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the
Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's
or its designee's balance account with The Depository Trust Company (&quot;<B>DTC</B>&quot;) through its Deposit / Withdrawal At
Custodian system, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such
Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares,
as applicable. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant
Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant
Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and
deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective
of any action or inaction by the 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exercise
Price</U>. For purposes of this Warrant, &quot;<B>Exercise Price</B>&quot; means $[ ]<SUP>3</SUP>, subject to adjustment as provided
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Company's
Failure to Timely Deliver Securities</U>. If the Company for any reason or for no reason shall fail (I) on or prior to the Share
Delivery Date to credit the Holder's balance account with DTC if the Warrant Shares are subject to an effective resale registration
statement in favor of the Holder or, if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate
resale of the Warrant Shares by the Holder, or issue and deliver to the Holder a certificate if the Warrant Shares are not subject
to an effective resale registration statement in favor of the Holder and, if exercised via Cashless Exercise, at a time when Rule
144 would not be available for immediate resale of the Warrant Shares by the Holder, for such number of shares of Common Stock
to which the Holder is entitled upon the Holder's exercise of this Warrant or (II) if the Registration Statement (as defined in
the Registration Rights Agreement) covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the &quot;<B>Unavailable
Warrant Shares</B>&quot;) is not available for the resale of such Unavailable Warrant Shares, to promptly, but in no event later
than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a &quot;<B>Notice Failure</B>&quot; and together
with the event described in clause (I) above, an &quot;<B>Exercise Failure</B>&quot;), then, in addition to all other remedies
available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such
Exercise Failure an amount equal to 1.5% of the product of (A) the sum of the number of shares of Common Stock not issued to the
Holder on or prior to the Share Delivery Date and to which the Holder is entitled, and (B) any trading price of the Common Stock
selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending
on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with
respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to
such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company's obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if
on or prior to the Share Delivery Date the Company shall fail to credit the Holder's balance account with DTC if the Warrant Shares
are subject to an effective resale registration statement in favor of the Holder or, if exercised via Cashless Exercise, at a time
when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, or to issue and deliver a certificate
to the Holder if the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder and, if
exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the
Holder, for the number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise hereunder or pursuant
to the Company's obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a &quot;<B>Buy-In</B>&quot;),
then the Company shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay
cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the &quot;<B>Buy-In Price</B>&quot;), at which point the Company's
obligation to credit such Holder's balance account with DTC or issue and deliver such certificate, as applicable, for such shares
of Common Stock shall terminate, or (ii) promptly honor its obligation to credit such Holder's balance account with DTC or issue
and deliver to the Holder a certificate, as applicable, for such shares of Common Stock and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable
Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the 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 Company's failure to timely deliver certificates representing shares of Common Stock (or to electronically
deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><SUP>3</SUP> [<B>INSERT IN INITIAL WARRANTS</B>:
Insert $1.74.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">[<B>INSERT IN ADDITIONAL WARRANTS</B>: Insert price equal to 150%
of the lowest of (i) the arithmetic average of the Weighted Average Prices of the Common Stock during the thirty (30) Trading Days
immediately prior to the date of the applicable Buyer Additional Closing Notice (as defined in the Securities Purchase Agreement),
(ii) the arithmetic average of the Weighted Average Prices of the Common Stock during the fifteen (15) Trading Days immediately
prior to the date of the applicable Buyer Additional Closing Notice and (iii) the last Closing Bid Price of the Common Stock immediately
prior to the date of the applicable Buyer Additional Closing Notice.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Cashless
Exercise</U>. <B> </B>Notwithstanding anything contained herein to the contrary, if the Registration Statement (as defined in the
Registration Rights Agreement) covering the resale of the Unavailable Warrant Shares is not available for the resale of such Unavailable
Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the &quot;Net Number&quot; of shares of Common Stock determined according to the following formula
(a &quot;<B>Cashless Exercise</B>&quot;):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in; text-align: justify; text-indent: 0in">Net Number = <U>(A
x B) - (A x C)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3in; text-align: justify; text-indent: 0in">D</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.5in; text-align: justify; text-indent: 0in">For purposes of
the foregoing formula:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">A= the total
number of shares with respect to which this Warrant is then being exercised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">B= the arithmetic
average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date immediately
preceding the date of the Exercise Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 94.5pt; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 94.5pt; text-align: justify; text-indent: -22.5pt">C= the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 94.5pt; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 94.5pt; text-align: justify; text-indent: -22.5pt">D= the Closing
Sale Price of the Common Stock on the date of the Exercise Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">For purposes of Rule 144(d)
promulgated under the 1933 Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in a Cashless Exercise
shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Disputes</U>.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Limitations
on Exercises</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.75in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Beneficial Ownership</U>.
Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant,
and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant
and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise,
the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the &quot;<B>Maximum
Percentage</B>&quot;) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other
Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any
convertible notes or convertible preferred stock or warrants, including the other SPA Warrants) beneficially owned by the Holder
or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f)(i). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the &quot;<B>1934 Act</B>&quot;). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the
Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most
recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities
and Exchange Commission (the &quot;<B>SEC</B>&quot;), as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding
(the &quot;<B>Reported Outstanding Share Number</B>&quot;). If the Company receives an Exercise Notice from the Holder at a time
when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall
(i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum
Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise
Notice (the number of shares by which such purchase is reduced, the &quot;<B>Reduction Shares</B>&quot;) and (ii) as soon as reasonably
practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in
writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number
of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which
the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the &quot;<B>Excess
Shares</B>&quot;) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote
or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null
and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of
a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61<SUP>st</SUP>) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of
9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the
sixty-first (61<SUP>st</SUP>) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply
only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party
of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of
the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section
13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any
effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of this Warrant.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.75in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Principal Market
Regulation</U>. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant and the Holder
shall not have the right to receive upon exercise of this Warrant any shares of Common Stock if the issuance of such shares of
Common Stock would exceed that number of shares of Common Stock which the Company may issue upon exercise of the SPA Warrants or
otherwise without breaching the Company's obligations under any applicable rules or regulations of any applicable Eligible Market
(the &quot;<B>Exchange Cap</B>&quot;), except that such limitation shall not apply in the event that the Company (x) obtains the
approval of its stockholders as required by the applicable rules of the Eligible Market for issuances of shares of Common Stock
in excess of such amount or (y) obtains a written opinion from outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Required Holders. Until such approval or written opinion is obtained, no
Holder shall be issued in the aggregate, upon exercise of any SPA Warrants, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is the total number of shares of Common Stock underlying
the SPA Warrants issued to such Holder pursuant to the Securities Purchase Agreement on the Issuance Date and the denominator of
which is the aggregate number of shares of Common Stock underlying the SPA Warrants issued to the Buyers pursuant to the Securities
Purchase Agreement on the Issuance Date (with respect to each Holder, the &quot;<B>Exchange Cap Allocation</B>&quot;). In the event
that any Holder shall sell or otherwise transfer any of such Holder's SPA Warrants, the transferee shall be allocated a pro rata
portion of such Holder's Exchange Cap Allocation, and the restrictions of the prior sentence shall apply to such transferee with
respect to the portion of the Exchange Cap Allocation allocated to such transferee. In the event that any holder of SPA Warrants
shall exercise all of such holder's SPA Warrants into a number of shares of Common Stock which, in the aggregate, is less than
such holder's Exchange Cap Allocation, then the difference between such holder's Exchange Cap Allocation and the number of shares
of Common Stock actually issued to such holder shall be allocated to the respective Exchange Cap Allocations of the remaining holders
of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each such
holder. In the event that the Company is prohibited from issuing any Warrant Shares for which an Exercise Notice has been received
as a result of the operation of this Section 1(f)(ii), then unless the Holder elects to void such exercise, the Holder may require
the Company to pay to the Holder within three (3) Trading Days of the applicable attempted exercise, cash in an amount equal to
the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that the Company is unable to deliver pursuant
to this Section 1(f)(ii), by (y) the total number of Warrant Shares issuable upon exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value; provided, that (x) references to &quot;the
day immediately following the public announcement of the applicable Fundamental Transaction&quot; in the definition of &quot;Black
Scholes Value&quot; shall instead refer to &quot;the date the Holder exercises this Warrant and the Company cannot deliver the
required number of Warrant Shares because of the Exchange Cap&quot; and (y) clause (iii) of the definition of &quot;Black Scholes
Value&quot; shall instead refer to &quot;the underlying price per share used in such calculation shall be the highest Weighted
Average Price during the period beginning on the date of the applicable date of exercise and the date that the Company makes the
applicable cash payment.&quot;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Insufficient
Authorized Shares</U>. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least
a number of shares of Common Stock equal to 130% of the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of all of this Warrant then outstanding (the &quot;<B>Required Reserve Amount</B>&quot; and the failure
to have such sufficient number of authorized and unreserved shares of Common Stock, an &quot;<B>Authorized Share Failure</B>&quot;),
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure,
the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this Warrant,
the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise, then unless the Holder elects
to void such attempted exercise, the Holder may require the Company to pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of (i) the quotient determined by dividing (x) the number of Warrant Shares that
the Company is unable to deliver pursuant to this Section 1(g), by (y) the total number of Warrant Shares issuable upon exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant) and (ii) the Black Scholes Value;
provided, that (x) references to &quot;the day immediately following the public announcement of the applicable Fundamental Transaction&quot;
in the definition of &quot;Black Scholes Value&quot; shall instead refer to &quot;the date the Holder exercises this Warrant and
the Company cannot deliver the required number of Warrant Shares because of an Authorized Share Failure&quot; and (y) clause (iii)
of the definition of &quot;Black Scholes Value&quot; shall instead refer to &quot;the underlying price per share used in such calculation
shall be the highest Weighted Average Price during the period beginning on the date of the applicable date of exercise and the
date that the Company makes the applicable cash payment.&quot;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mandatory
Exercise at the Company's Election</U>.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
at any time and from time to time after the date that no SPA Securities continue to be outstanding (the &quot;<B>Note Termination
Date</B>&quot;), if no Equity Conditions Failure has occurred and the Weighted Average Price of the Common Stock exceeds 125% of
the Exercise Price as in effect on the Issuance Date for forty (40) consecutive Trading Days after the Note Termination Date (the
&quot;<B>Price Condition</B>&quot;), the Company shall have the right, for so long as there is no Equity Conditions Failure and
the Price Condition is satisfied, to require the Holder and all, but not less than all, holders of the other SPA Warrants issued
on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date (as defined in the Securities Purchase Agreement)] [<B>INSERT IN
ADDITIONAL WARRANTS</B>: all Additional Closing Dates (as defined in the Securities Purchase Agreement] to exercise on a pro rata
basis this Warrant and such other applicable SPA Warrants for a number of Warrant Shares equal in the aggregate to no more than
25% of the number of Warrant Shares underlying this Warrant and the other applicable SPA Warrants issued on [<B>INSERT IN INITIAL
WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing Dates] (the &quot;<B>Mandatory
Exercise Cap</B>&quot;) on the Mandatory Exercise Date (as defined below) into fully paid, validly issued and nonassessable shares
of Common Stock in accordance with Section&nbsp;1(a) hereof at the Exercise Price in effect as of such Mandatory Exercise Date
(a &quot;<B>Mandatory Exercise</B>&quot;). The Company may exercise its right to require exercise under this Section 1(h) by delivering
a written notice thereof by facsimile or electronic mail and overnight courier to the Holder and all, but not less than all, of
the holders of the other applicable SPA Warrants issued on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT
IN ADDITIONAL WARRANTS</B>: all Additional Closing Date] and the Transfer Agent (a &quot;<B>Mandatory Exercise Notice</B>&quot;
and each date the Holder and all the holders of such applicable other SPA Warrants received such notice is referred to as the &quot;<B>Mandatory
Exercise Notice Date</B>&quot;). Each Mandatory Exercise Notice shall be irrevocable. Each Mandatory Exercise Notice shall (i)
state (a) the Trading Day on which such Mandatory Exercise shall occur, which Trading Day shall be the third (3<SUP>rd</SUP>) Trading
Day immediately following such Mandatory Exercise Notice Date (a &quot;<B>Mandatory Exercise Date</B>&quot;), (b) the aggregate
number of Warrant Shares subject to Mandatory Exercise from the Holder and all holders of the other applicable SPA Warrants issued
on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing
Dates], which number, together with the number of Warrant Shares underlying this Warrant and any applicable SPA Warrants issued
on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing
Dates] subject to any Mandatory Exercise preceding the applicable Mandatory Exercise shall not exceed the Mandatory Exercise Cap
(the &quot;<B>Mandatory Exercise Amount</B>&quot;) pursuant to this Section 1(h) (and analogous provisions under such other SPA
Warrants), (c) the number of shares of Common Stock to be issued to the Holder on such Mandatory Exercise Date and (d) the number
of issued and outstanding shares as of such Mandatory Exercise Notice Date and<B> </B>(ii) certify that there has been no Equity
Conditions Failure as of such Mandatory Exercise Notice Date and that the Price Condition has been satisfied. If the Company confirmed
that there was no such Equity Conditions Failure as of the Mandatory Exercise Notice Date and that the Price Condition has been
satisfied as of such Mandatory Exercise Notice Date but an Equity Conditions Failure occurs between such Mandatory Exercise Notice
Date and any time through the Mandatory Exercise Date (a &quot;<B>Mandatory Exercise Interim Period</B>&quot;) and/or the Price
Condition ceases to be satisfied at any time during such Mandatory Exercise Interim Period (a &quot;<B>Mandatory Exercise Failure</B>&quot;),
the Company shall provide the Holder and each holder of the other applicable SPA Warrants issued on [<B>INSERT IN INITIAL WARRANTS</B>:
the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing Dates] a subsequent notice to that effect.
If there is a Mandatory Exercise Failure (which is not waived in writing by the Holder) during such Mandatory Exercise Interim
Period, then the Mandatory Exercise shall be null and void with respect to all or any part designated by the Holder of the unexercised
Mandatory Exercise Amount subject to the Mandatory Exercise and the Holder shall be entitled to all the rights of a holder of this
Warrant with respect to such Mandatory Exercise Amount of this Warrant. The Company may not effect more than five (5) Mandatory
Exercise under this Warrant and the other applicable SPA Warrants issued on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing
Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing Dates]. Notwithstanding anything to the contrary in this Section
1(h), until the Mandatory Exercise has occurred, the Mandatory Exercise Amount of this Warrant subject to the Mandatory Exercise
may be exercised, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 1(a). All exercises of this
Warrant by the Holder after the Mandatory Exercise Notice Date shall reduce the Mandatory Exercise Amount required to be exercised
on the Mandatory Exercise Date, unless the Holder otherwise indicates in the applicable Exercise Notice.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company elects to cause a Mandatory Exercise pursuant to Section 1(h)(i), then it must simultaneously take the same action
in the same proportion with respect to all of the other SPA Warrants issued on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial
Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: any Additional Closing Date]. For the avoidance of doubt, if the Company elects
a Mandatory Exercise of this Warrant pursuant to Section 1(h)(i) (or similar provisions under the other SPA Warrants issued on
[<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: any Additional Closing Date])
with respect to less than all of the Warrant Shares underlying such SPA Warrants then outstanding, then the Company shall require
exercise of a number of Warrant Shares underlying such SPA Warrants from the Holder and each of the holders of the other SPA Warrants
issued on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: any Additional Closing
Date] equal to the product of (i) the aggregate number of Warrant Shares which the Company has elected to cause to be exercised
pursuant to Section 1(h)(i), multiplied by (ii) the fraction, the numerator of which is the sum of the aggregate number of Warrant
Shares underlying the SPA Warrant issued to such holder pursuant to the Securities Purchase Agreement on [<B>INSERT IN INITIAL
WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: any Additional Closing Date] and the denominator
of which is the sum of the aggregate number of Warrant Shares underlying the SPA Warrants issued to all holders pursuant to the
Securities Purchase Agreement on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>:
all Additional Closing Dates] (such fraction with respect to each holder is referred to as its &quot;<B>Exercise Allocation Percentage</B>,&quot;
and such amount with respect to each holder is referred to as its &quot;<B>Pro Rata Exercise Amount</B>&quot;); <U>provided</U>,
<U>however</U>, that in the event that any holder's Pro Rata Exercise Amount exceeds the outstanding number of such applicable
SPA Warrants, then such excess Pro Rata Exercise Amount shall be allocated amongst the remaining holders of SPA Warrants issued
on [<B>INSERT IN INITIAL WARRANTS</B>: the Initial Closing Date] [<B>INSERT IN ADDITIONAL WARRANTS</B>: all Additional Closing
Dates] in accordance with the foregoing formula. In the event that the initial holder of any SPA Warrants shall sell or otherwise
transfer any of such holder's SPA Warrants, the transferee shall be allocated a pro rata portion of such holder's Exercise Allocation
Percentage and Pro Rata Exercise Amount.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES</U>. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
Upon Issuance of Shares of Common Stock</U>. If and whenever on or after the Subscription Date, the Company issues or sells, or
in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have
been issued or sold by the Company in connection with any Excluded Securities for a consideration per share (the &quot;<B>New Issuance
Price</B>&quot;) less than a price (the &quot;<B>Applicable Price</B>&quot;) equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a &quot;<B>Dilutive Issuance</B>&quot;), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price.
Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares issuable immediately prior to such Dilutive
Issuance shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price then in effect
immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior
to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining
the adjusted Exercise Price under this Section 2(a), the following shall be applicable:<SUP>4</SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Options</U>. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(a)(i), the &quot;lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option&quot; shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock
upon conversion, exercise or exchange of such Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>4</SUP> NTD: What is provided in this section is a typical
full ratchet provision. Your proposal for adjustments below market price is not.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of Convertible Securities</U>. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii),
the &quot;lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof&quot;
shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common Stock
upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other
provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason
of such issue or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Change
in Option Price or Rate of Conversion.</U> If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise
Price and the number of Warrant Shares, which would have been in effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option
or Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect
or a decrease in the number of Warrant Shares.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Calculation
of Consideration Received</U>. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value of such
Options and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold
for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company
pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration other than cash
received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company will be the Closing Sale Price of such publicly traded securities
on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be
deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such
shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash
or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the &quot;<B>Valuation Event</B>&quot;),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10<SUP>th</SUP>) day following
the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination
of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser
shall be borne by the Company; <U>provided</U>, <U>however</U>, that in the event the determination of such appraiser is identical
to the fair value of such consideration as determined by the Company, the fees and expenses of such appraiser shall be borne equally
among the holders of the SPA Warrants who disputed the valuation of the Company.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Record
Date</U>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A)&nbsp;to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B)&nbsp;to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 1in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Readjustments</U>. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section 2(a)
and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after the
fact for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have been in
effect if such Dilutive Issuance had not occurred or been consummated.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voluntary
Adjustment By Company</U>. The Company may at any time during the term of this Warrant, with the prior written consent of the Required
Holders, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Adjustment
Upon Subdivision of Common Stock</U>. If the Company at any time on or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. Any adjustment under this Section&nbsp;2(c) shall become effective at the close
of business on the date the subdivision becomes effective.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Other
Events</U>. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company&rsquo;s Board of Directors and the Required Holders, so as to protect
the rights of the Holder; <U>provided</U> that no such adjustment pursuant to this Section 2(d) will increase the Exercise Price
or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RIGHTS
UPON DISTRIBUTION OF ASSETS</U>. If the Company 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, options, evidence of indebtedness or any other assets by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a &quot;<B>Distribution</B>&quot;),
at any time after the issuance of this Warrant, 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 Warrant (without regard to any limitations or restrictions on exercise of this Warrant,
including without limitation, the Maximum Percentage) 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 (<U>provided</U>, <U>however</U>, that to the extent that the Holder's right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the
Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted
such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly
in abeyance) to the same extent as if there had been no such limitation).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Purchase
Rights</U>. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the &quot;<B>Purchase Rights</B>&quot;), then the Holder 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 exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) 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 (<U>provided</U>, <U>however</U>,
that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial
ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such
initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been
no such limitation).</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fundamental
Transactions</U>. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 4(b) pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction, including agreements , if so requested by the Holder,
to deliver to each holder of the SPA Warrants in exchange for such SPA Warrants a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise
price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable
for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and
reasonably satisfactory to the Required Holders, and with an exercise price which applies the exercise 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 adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the occurrence or consummation
of such Fundamental Transaction), and (ii)&nbsp;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. Any security issuable or potentially issuable to the
Holder pursuant to the terms of this Warrant on the consummation of a Fundamental Transaction shall be registered and freely tradable
by the Holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable
securities laws. Upon the occurrence or consummation of any Fundamental Transaction, and it shall be a required condition to the
occurrence or consummation of any Fundamental Transaction that, the Company and the Successor Entity or Successor Entities, jointly
and severally, shall succeed to, and the Company shall cause any Successor Entity or Successor Entities to jointly and severally
succeed to, and be added to the term &quot;Company&quot; under this Warrant (so that from and after the date of such Fundamental
Transaction, each and every provision of this Warrant referring to the &quot;Company&quot; shall refer instead to each of the Company
and the Successor Entity or Successor Entities, jointly and severally), and the Company and the Successor Entity or Successor Entities,
jointly and severally, may exercise every right and power of the Company prior thereto and shall assume all of the obligations
of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor Entities,
jointly and severally, had been named as the Company in this Warrant, and, solely at the request of the Holder, if the Successor
Entity and/or Successor Entities is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible
Market, shall deliver (in addition to and without limiting any right under this Warrant) to the Holder in exchange for this Warrant
a security of the Successor Entity and/or Successor Entities evidenced by a written instrument substantially similar in form and
substance to this Warrant and exercisable for a corresponding number of shares of capital stock of the Successor Entity and/or
Successor Entities (the &quot;<B>Successor Capital Stock</B>&quot;) equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction
(such corresponding number of shares of Successor Capital Stock to be delivered to the Holder shall be equal to the greater of
(A) the quotient of (i) the aggregate dollar value of all consideration (including cash consideration and any consideration other
than cash (&quot;<B>Non-Cash Consideration</B>&quot;), in such Fundamental Transaction, as such values are set forth in any definitive
agreement for the Fundamental Transaction that has been executed at the time of the first public announcement of the Fundamental
Transaction or, if no such value is determinable from such definitive agreement, as determined in accordance with Section 12 with
the term &quot;Non-Cash Consideration&quot; being substituted for the term &quot;Exercise Price&quot;) that the Holder would have
been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date
for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental
Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without
regard to any limitations on the exercise of this Warrant) (the &quot;<B>Aggregate Consideration</B>&quot;) divided by (ii) the
per share Closing Sale Price of such Successor Capital Stock on the Trading Day immediately prior to the consummation or occurrence
of the Fundamental Transaction and (B) the product of (i) the Aggregate Consideration and (ii) the highest exchange ratio pursuant
to which any stockholder of the Company may exchange Common Stock for Successor Capital Stock) (provided, however, to the extent
that the Holder's right to receive any such shares of publicly traded common stock (or their equivalent) of the Successor Entity
would result in the Holder and its other Attribution Parties exceeding the Maximum Percentage, if applicable, then the Holder shall
not be entitled to receive such shares to such extent (and shall not be entitled to beneficial ownership of such shares of publicly
traded common stock (or their equivalent) of the Successor Entity as a result of such consideration to such extent) and the portion
of such shares shall be held in abeyance for the Holder until such time or times, as its right thereto would not result in the
Holder and its other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be delivered
such shares to the extent as if there had been no such limitation), and such security shall be reasonably satisfactory to the Holder,
and with an identical exercise price to the Exercise Price hereunder (such adjustments to the number of shares of capital stock
and such exercise price being for the purpose of protecting after the consummation or occurrence of such Fundamental Transaction
the economic value of this Warrant that was in effect immediately prior to the consummation or occurrence of such Fundamental Transaction,
as elected by the Holder solely at its option). Upon occurrence or consummation of the Fundamental Transaction, and it shall be
a required condition to the occurrence or consummation of such Fundamental Transaction that, the Company and the Successor Entity
or Successor Entities shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any
time after the occurrence or consummation of the Fundamental Transaction, as elected by the Holder solely at its option, shares
of Common Stock, Successor Capital Stock or, in lieu of the shares of Common Stock or Successor Capital Stock (or other securities,
cash, assets or other property purchasable upon the exercise of this Warrant 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 for purposes of clarification may continue to be shares of Common Stock, if any, that the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction or the record, eligibility or other determination date for the event
resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior to such Fundamental Transaction or
the record, eligibility or other determination date for the event resulting in such Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition to
and not in substitution for any other rights hereunder, prior to the occurrence or consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other property with respect
to or in exchange for shares of Common Stock (a &quot;<B>Corporate Event</B>&quot;), the Company shall make appropriate provision
to insure that, and any applicable Successor Entity or Successor Entities shall ensure that, and it shall be a required condition
to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon exercise
of this Warrant at any time after the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor Capital
Stock or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Corporate Event (but not in lieu of such items still issuable under
Sections 3 and 4(a), which shall continue to be receivable on the Common Stock or on the such shares of stock, securities, cash,
assets or any other property otherwise receivable with respect to or in exchange for shares of Common Stock), such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any
shares of Common Stock) which the Holder would have been entitled to receive upon the occurrence or consummation of such Corporate
Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Warrant
been exercised immediately prior to such Corporate Event or the record, eligibility or other determination date for the event resulting
in such Corporate Event (without regard to any limitations on exercise of this Warrant). Provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply
similarly and equally to successive Fundamental Transactions and Corporate Events.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, in the event of Fundamental Transaction, at the request of the Holder delivered before the ninetieth (90<SUP>th</SUP>)
day after the occurrence or consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>NONCIRCUMVENTION</U>.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i)&nbsp;shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii)&nbsp;shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the SPA Warrants, 130% of the number of shares of Common Stock as shall from
time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>WARRANT
HOLDER NOT DEEMED A STOCKHOLDER</U>. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>REISSUANCE
OF WARRANTS</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfer
of Warrant</U>. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Lost,
Stolen or Mutilated Warrant</U>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Exchangeable
for Multiple Warrants</U>. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; <U>provided</U>, <U>however</U>, that no SPA
Warrants for fractional Warrant Shares shall be given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Issuance
of New Warrants</U>. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>NOTICES</U>.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment
of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; <U>provided</U> in each case that such
information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly
understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not
be disputed or challenged by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>AMENDMENT
AND WAIVER</U>. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders. Any change, amendment or waiver by the Company and the Required Holders shall be binding
on the Holder of this Warrant and all holders of SPA Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>GOVERNING
LAW; JURISDICTION; JURY TRIAL</U>. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, 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 any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company 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
to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement 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 manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's
obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or
other court ruling in favor of the Holder. <B>THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>CONSTRUCTION;
HEADINGS</U>. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>DISPUTE
RESOLUTION</U>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the
Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten
(10) Business Days from the time it receives the disputed determinations or calculations; <U>provided</U>, <U>however</U> that
in the event the determination or calculation of the investment bank or the accountant, as the case may be, is identical to the
determination or calculation of the Company, the expenses of such investment bank or accountant, as the case may be, shall be borne
equally among the holders of the SPA Warrants who disputed the determination or calculation of the Company. Such investment bank's
or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF</U>. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>TRANSFER</U>.<U></U>
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of
the Company, except as may otherwise be required by Section&nbsp;2(f) of the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>SEVERABILITY</U>.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DISCLOSURE</U>.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<U>CERTAIN
DEFINITIONS</U>. For purposes of this Warrant, the following terms shall have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>1933
Act</B>&quot; means the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Affiliate</B>&quot;
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that &quot;control&quot; of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such
Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Attribution
Parties</B>&quot; means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or
any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of
the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated
with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Approved
Stock Plan</B>&quot; means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant
to which the Company's securities may be issued to any employee, officer or director for services provided to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Black
Scholes Value</B>&quot; means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the &quot;OV&quot;
function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction,
or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated,
(iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a zero cost of borrow
and (v) a 360 day annualization factor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Bloomberg</B>&quot;
means Bloomberg Financial Markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Business
Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Closing
Bid Price</B>&quot; and &quot;<B>Closing Sale Price</B>&quot; means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or &quot;pink sheets&quot; by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Common
Stock</B>&quot; means (i)&nbsp;the Company's shares of Common Stock, par value $0.0001 per share, and (ii)&nbsp;any share capital
into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Eligible
Market</B>&quot; means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market or The
New York Stock Exchange, Inc.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions</B>&quot; means each of the following conditions: (i) on each day during Equity Conditions Measuring Period, either
(x) all Registration Statements filed and required to be filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities, including the shares of Common Stock issuable upon exercise
of the Warrants that is subject to the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions, in accordance
with the terms of the Registration Rights Agreement and there shall not have been any Grace Periods (as defined in the Registration
Rights Agreement) or (y) all shares of Common Stock issuable pursuant to the terms of the SPA Securities and exercise of the Warrants,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, shall be eligible for sale without restriction pursuant to Rule 144 and without
the need for registration under any applicable federal or state securities laws; (ii) on each day during the Equity Conditions
Measuring Period, the Common Stock is designated for quotation on the Principal Market or any other Eligible Market and shall not
have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market been threatened,
commenced or pending in writing by such exchange or market (<U>provided</U>, <U>however</U>, that in the event proceedings for
such delisting or suspension have been threatened or commenced, the Company shall have ninety (90) days from such threat or commencement,
whichever is earlier, to cure such failure before it is deemed, for all purposes hereunder, to have failed to satisfy such Equity
Condition); (iii) during the Equity Conditions Measuring Period, the Company shall have delivered the shares of Common Stock pursuant
to the terms of the SPA Securities and Warrant Shares upon exercise of the Warrants to the holders on a timely basis as set forth
in Section 3(c) of the SPA Securities and Section 1(a) of this Warrant (and analogous provisions under the other SPA Warrants);
(iv) the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise requiring
the satisfaction of the Equity Conditions may be issued in full without violating Section 1(f) hereof and the rules or regulations
of the Principal Market or any other applicable Eligible Market; (v) during the Equity Conditions Measuring Period, the Company
shall not have failed to timely make any payments within ten (10) Business Days of when such payment is due pursuant to any Transaction
Document; (vi) during the Equity Conditions Measuring Period, there shall not have occurred either (A) the public announcement
of a pending, proposed or intended Fundamental Transaction which has not been abandoned, terminated or consummated, (B) an Event
of Default (as defined in the SPA Securities) or (C) an event that with the passage of time or giving of notice would constitute
an Event of Default; (vii) the Company shall have no knowledge of any fact that would cause (x) the Registration Statements required
pursuant to the Registration Rights Agreement not to be effective and available for the resale of all remaining Registrable Securities,
including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory Exercise
requiring the satisfaction of the Equity Conditions, in accordance with the terms of the Registration Rights Agreement or (y) any
shares of Common Stock issuable pursuant to the terms of the SPA Securities and shares of Common Stock issuable upon exercise of
the Warrants, including the shares of Common Stock issuable upon exercise of the Warrants that is subject to the applicable Mandatory
Exercise requiring the satisfaction of the Equity Conditions, not to be eligible for sale without restriction pursuant to Rule
144 promulgated under the Securities Act and any applicable state securities laws; (viii) during the Equity Conditions Measuring
Period, the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation
or warranty of any Transaction Document; (ix) <FONT STYLE="background-color: white">on each day during Equity Conditions Measuring
Period, </FONT>the Holder shall not be in possession of any material, nonpublic information received from the Company, any Subsidiary
or its respective agent or affiliates; (x) the shares of Common Stock issuable upon exercise of the Warrants that is subject to
the applicable Mandatory Exercise requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible
for trading without restriction on an Eligible Market; (xi) the Company shall have obtained the Stockholder Approval (as defined
in the Securities Purchase Agreement); (xii) the daily dollar trading volume of the Common Stock as reported by Bloomberg shall
be at least $350,000 on no less than ten (10) Trading Days during the twenty (20) consecutive Trading Day immediately preceding
the applicable date of determination; (xiii) the arithmetic average of the daily dollar trading volume of the Common Stock as reported
by Bloomberg during the twenty (20) consecutive Trading Day immediately preceding the applicable date of determination shall be
no less than $350,000; (xiv) the arithmetic average of the Weighted Average Prices of the Common Stock on each Trading Day during
the Equity Conditions Measuring Period exceeds [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<SUP>5</SUP> (as adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction occurring after the Subscription Date); and (xv) <FONT STYLE="background-color: white">on
each day during the Equity Conditions Measuring Period, the Company is in compliance with the requirement set forth in Rule 144(c)(1).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions Failure</B>&quot; means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not each been satisfied (or waived in
writing by the Holder).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><SUP>5</SUP> [<B>INSERT IN INITIAL NOTES:</B> $0.535.] [<B>INSERT
IN ADDITIONAL NOTES</B>: Insert 50% of the Market Price (as defined in the SPA Securities) as of the date of the applicable Buyer
Additional Closing Notice.]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Equity
Conditions Measuring Period</B>&quot; means each day during the period beginning thirty (30) Trading Days prior to the applicable
date of determination and ending on and including the applicable date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Excluded
Securities</B>&quot; means no more than an aggregate pursuant to all of the following events of 2,345,564 shares of Common Stock
(as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction after the Subscription
Date) (the &quot;<B>Excluded Securities Cap</B>&quot;) issued or issuable or deemed to be issued in accordance with Section 2(a)
hereof by the Company: (A) under any Approved Stock Plan; (B) in accordance with the terms of this Warrant, the other SPA Warrants
and the SPA Securities; <U>provided</U>, that this Warrant, the other SPA Warrants and the SPA Securities are not amended, modified
or changed on or after the Subscription Date; (C) upon conversion, exercise or exchange of any Options or Convertible Securities
which are outstanding on the day immediately preceding the Subscription Date, <U>provided</U>, that such issuance of Common Stock
upon exercise of such Options or Convertible Securities is made pursuant to the terms of such Options or Convertible Securities
in effect on the date immediately preceding the Subscription Date and such Options or Convertible Securities are not amended, modified
or changed on or after the Subscription Date, (D) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to an unaffiliated Person
(or to the equity holders of an unaffiliated Person) which is, itself or through its subsidiaries, an operating company or an owner
of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities for the purpose
of raising capital or to an entity whose primary business is investing in securities; or (E) in accordance with the terms of any
securities issued to any of the initial Holders; <U>provided</U>, <U>however</U>, that the Excluded Securities Cap shall not apply
to, and the Excluded Securities Cap shall be calculated irrespective of any restricted shares of Common Stock with respect to which
the Company has not and will not file a registration statement for the issuance or resale of such shares pursuant to the Securities
Act, and which are issued in connection with (i) the acquisition from Maglenta Enterprises Inc. and Champfremont Holding Ltd. of
all of the issued and outstanding equity interests of the PayOnline group of companies consisting of PayOnline System LLC, Innovative
Payment Technologies LLC, Polimore Capital Limited and Brosword Holding Limited, by TOT Group Europe, Ltd., a Subsidiary of the
Company, and (ii) pursuant to the foregoing clause (D).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Expiration
Date</B>&quot; means the date thirty-six (36) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a &quot;<B>Holiday</B>&quot;), the next day that is not a
Holiday.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Fundamental
Transaction</B>&quot; means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company or any of its &quot;significant subsidiaries&quot; (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or
have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with
any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares
of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such
purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of
at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase
agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject
Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or
indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity
individually or the Subject Entities in the aggregate to be or become the &quot;beneficial owner&quot; (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer,
exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization,
spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of
either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities
as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other
equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction
requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the
Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents,
the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Group</B>&quot;
means a &quot;group&quot; as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 1.5in">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Lead
Investor</B>&quot; means [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Option
Value</B>&quot; means the value of an Option based on the Black and Scholes Option Pricing model obtained from the &quot;OV&quot;
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Option,
if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable
Option if the issuance of such Option is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable
date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT
function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance
of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the
issuance of such Option is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest
Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Option and ending on (A) the Trading Day immediately following the public
announcement of such issuance, if the issuance of such Option is publicly announced or (B) the Trading Day immediately following
the issuance of the applicable Option if the issuance of such Option is not publicly announced, (iv) a zero cost of borrow and
(v) a 360 day annualization factor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Parent
Entity</B>&quot; of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Required Holders, any other market, exchange or quotation system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Required Holders or in the absence of such designation, such Person or entity with
the largest public market capitalization as of the date of consummation of the Fundamental Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(w)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Person</B>&quot;
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Principal Market</B>&quot; means The NASDAQ Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registrable
Secuirties</B>&quot; shall have the meaning set forth in the Registration Rights Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registration
Rights Agreement</B>&quot; means that certain Registration Rights Agreement dated as of the Subscription Date by and among the
Company and the Buyers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(aa)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Registration
Statement</B>&quot; shall have the meaning set forth in the Registration Rights Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(bb)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Required
Holders</B>&quot; means the holders of the SPA Warrants representing at least sixty-five percent (65%) of the shares of Common
Stock underlying the SPA Warrants then outstanding and shall include the Lead Investor so long as the Lead Investor or any of its
Affiliates holds any SPA Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(cc)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>SPA
Securities</B>&quot; means the Notes issued pursuant to the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(dd)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Subject
Entity</B>&quot; means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ee)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Subsidiary</B>&quot;
shall have the meaning ascribed to such term in the Securities Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(ff)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Successor
Entity</B>&quot; means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(gg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Trading
Day</B>&quot; means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; <U>provided</U> that &quot;Trading Day&quot; shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1.5in">(hh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Weighted
Average Price</B>&quot; means, for any security as of any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its &quot;Volume at Price&quot; function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or &quot;pink sheets&quot; by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 12 with the term &quot;Weighted Average Price&quot; being
substituted for the term &quot;Exercise Price.&quot; All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>[Signature Page Follows]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><B>NET ELEMENT, INC.</B></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 40%">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 3%">By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: justify; width: 47%">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">Name:</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">Title:</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#9;<B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EXERCISE NOTICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TO BE EXECUTED BY THE REGISTERED HOLDER TO
EXERCISE THIS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>WARRANT TO PURCHASE COMMON STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Net
element, inc. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (&quot;<B>Warrant Shares</B>&quot;)
of Net Element, Inc., </FONT>a <FONT STYLE="font-size: 10pt">Delaware corporation (the &quot;<B>Company</B>&quot;), evidenced by
the attached Warrant to Purchase Common Stock (the &quot;<B>Warrant</B>&quot;). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">1. Form of Exercise Price.
The Holder intends that payment of the Exercise Price shall be made as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.75in; text-align: justify; text-indent: -2in">&#9;____________&#9;a
&quot;<U>Cash Exercise&quot;</U> with respect to _________________ Warrant Shares; and/or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.75in; text-align: justify; text-indent: -2in">&#9;____________&#9;a
<U>&quot;Cashless Exercise&quot;</U> with respect to _______________ Warrant Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">2. Payment of Exercise
Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">3. Delivery of Warrant
Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Date: _______________ __, ______</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-left: 0.125in"><FONT STYLE="font-size: 10pt">Name of Registered Holder</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 96%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Name:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>ACKNOWLEDGMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Company hereby acknowledges
this Exercise Notice and hereby directs Continental Stock Transfer &amp; Trust Company to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated April [__], 2015 from the Company and acknowledged and
agreed to by Continental Stock Transfer &amp; Trust Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><B>NET ELEMENT, INC.</B></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 47%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">Name:</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">Title:</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ANNUAL MEETING OF SHAREHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[______________ _], 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notice of Internet Availability of Proxy
Materials</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Proxy materials relating to the Annual Meeting
of Shareholders are available at<I> http://www.cstproxy.com/netelement/2015</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned shareholder(s) of Net Element,
Inc., a Delaware corporation (the &quot;Company&quot;), hereby appoint(s) Oleg Firer and Jonathan New, or either of them, as proxies,
each with the power to appoint a substitute, and hereby authorize(s) them to represent the undersigned and to vote, as designated
on the reverse side of this proxy card, all of the shares of Common Stock of the Company that the undersigned is/are entitled to
vote at the Annual Meeting of Shareholders of the Company to be held be held on [________ __], 2015, at 11:00 am, local time, at
3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160 and any adjournment or postponement of that meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED SHAREHOLDER(S). IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF
THE COMPANY'S DIRECTOR NOMINEES, FOR PROPOSALS 2, 3 and 4.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Board of Directors recommends that you vote FOR the following:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">1.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Election of Directors</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><b>Nominees</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For </b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>All</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Withhold </b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>All</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For All Except</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To withhold authority to vote for any individual nominee(s),
        mark &quot;For All Except&quot; and write the number(s) of the nominee(s) on the line below.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 21%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">01<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>Oleg Firer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">02<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>Kenges Rakishev</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">03<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>David P. Kelley II</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <TD STYLE="width: 18%; padding-right: 5.4pt; text-align: left">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">04<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>James Caan</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">05<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>William Healy</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">06<font style="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </font>Drew J. Freeman</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P></td>
    <TD STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <TD STYLE="width: 38%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td></tr>
<tr>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td>
    <TD>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Board of Directors recommends that you vote FOR the following
proposal:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 67%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2.<FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp; </FONT>To
        approve an amendment to the Company's Amended and Restated Certificate of Incorporation to increase authorized common stock
        to 300 million shares.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For </b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Against</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Abstain</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Board of Directors recommends that you vote FOR the following
proposal:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 67%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3. To approve the issuance by the Company,
        for purposes of the NASDAQ Listing Rules 5635(a) and (b), of Common Stock of the Company issued and issuable pursuant to the terms
        of the Certificate of Designations of the 5,500 shares of Series A Convertible Preferred Stock, par value $0.01 upon conversion,
        amortization, payment of dividends, as part of the make-whole amount or otherwise of, or with respect to, such Preferred Stock,
        in each case, without giving effect to the Exchange Cap.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For </b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Against</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Abstain</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Board of Directors recommends that you vote FOR the following
proposal:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 67%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4. To approve the issuance by the Company
        for purposes of the NASDAQ Listing Rule 5635(d), of Common Stock of the Company issued and issuable (x) pursuant to the terms of
        the Senior Convertible Notes of the Company upon conversion, amortization, payment of interest, and as part of the make-whole amount,
        or otherwise of, or with respect to, such Notes and (y) upon exercise of the accompanying Warrants, in each case, without giving
        effect to the Exchange Cap.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For </b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Against</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td>
    <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Abstain</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><b>&uml;</b></P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 33%; border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 17%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 7%; border-right: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 26%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td>
    <td style="width: 17%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td></tr>
<tr style="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Signature [PLEASE SIGN WITHIN BOX]</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Date</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Signature (Joint Owners)</font></td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Date</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Authority is hereby given to the proxies identified on the front
of this card to vote in their discretion upon such other business that may properly come before the annual meeting or any postponement
or adjournment thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE: Please sign exactly as your name appears on this proxy
card. If shares are held jointly, each holder should sign. When signing as attorney, executor, administrator, corporation, trustee
or guardian, please give full title as such. If a corporation, please sign in full corporate name by other authorized officer.
If a partnership, please sign in partnership name by authorized person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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