Exhibit 4.11


 


AMERICAN CARESOURCE HOLDINGS, INC. 


 


CERTIFICATE OF DESIGNATION OF PREFERENCES,



RIGHTS AND LIMITATIONS 


OF 


SERIES A CONVERTIBLE PREFERRED STOCK



 


PURSUANT TO SECTION 151 OF THE


DELAWARE GENERAL CORPORATION LAW


 


The undersigned, John Pappajohn and Adam S. Winger do hereby
certify that:


 


1. They are the Acting Chief Executive
Officer and Interim Chief Financial Officer, respectively, of American CareSource Holdings, Inc., a Delaware corporation (the “Corporation”).


 


2. The Corporation is authorized to issue
10,000,000 shares of preferred stock.


 


3. The following resolutions were duly
adopted by the board of directors of the Corporation (the “Board of Directors”) as required by Section 151(g)
of the Delaware General Corporation Law:


 


WHEREAS, the certificate of incorporation
of the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 10,000,000 shares, $0.01
par value per share, issuable from time to time in one or more series;


 


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


 


WHEREAS, it is the desire of the Board
of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to
a series of the preferred stock, which shall consist of, except as otherwise set forth in the Underwriting Agreement (as defined
herein), up to [ ] shares of the preferred stock which the Corporation has the authority to issue, as follows:


 


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


 


TERMS OF PREFERRED STOCK 


 


Section 1. Designation,
Amount and Par Value. The series of preferred stock shall be designated as its Series A Convertible Preferred Stock (the “Preferred
Stock”) and the number of shares so designated shall consist of [ ] shares (which shall not be subject to increase without
the written consent of all of the holders of the Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Preferred Stock shall have a par value of $0.01 per share and a stated value equal to $1,000, subject to increase
set forth in Section 3 below (the “Stated Value”).


 


Section 2. Definitions.
For the purposes hereof, the following terms shall have the following meanings:


 


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


 


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


 


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


 


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


 






    	 	1	 



     


    

 


“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).


 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section [●] of the Underwriting Agreement.


 


“Closing Date”
as defined in the Underwriting Agreement.


 


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


 


“Common Stock”
means the Corporation’s common stock, par value $0.01 per share, and stock of any other class of securities into which such
securities may hereafter be reclassified or changed.


 


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


 


“Conversion Amount”
means, with respect to each Holder, the aggregate Stated Value of the Preferred Stock owned by such Holder.


 


“Conversion Date”
shall have the meaning set forth in Section 6(a).


 


“Conversion Price”
shall have the meaning set forth in Section 6(b).


 


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


 


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


 


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


 


“GAAP” means
United States generally accepted accounting principles.


 


“Holder”
shall have the meaning given such term in Section 1.


 


“Liquidation”
shall have the meaning set forth in Section 5.


 


“New York Courts”
shall have the meaning set forth in Section 8(d).


 


“Notice of Conversion”
shall have the meaning set forth in Section 6(a).


 


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


 


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


 


“Preferred Stock”
shall have the meaning set forth in Section 1.


 


“Securities”
means the Shares, the Preferred Stock, the Warrants, the Warrant Shares and the Underlying Shares.


 


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


 


 


“Shares”
means the shares of Common Stock issued or issuable to each purchaser party to the Underwriting Agreement on the Closing Date.


 


“Share Delivery Date”
shall have the meaning set forth in Section 6(c).


 


“Stated Value”
shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 1.


 






    	 	2	 



     


    

 


“Subsidiary”
means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation
formed or acquired after the date of the Underwriting Agreement.


 


“Successor Entity”
shall have the meaning set forth in Section 7(e).


 


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


 


“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
(or any successors to any of the foregoing).


 


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


 


“Transfer Agent”
means Continental Stock Transfer & Trust Company, the current transfer agent of the Corporation, with a mailing address of
17 Battery Place, 8th Floor, New York, NY 10004 and a facsimile number of (●)[●] , and any successor transfer
agent of the Corporation.


 


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


 


“Underwriting Agreement”
means that certain Underwriting Agreement by and between American CareSource Holdings, Inc. and Joseph Gunnar & Co., LLC, as
the representative of the several underwriters.


 


“Warrants”
means the Common Stock purchase warrants, which Warrants shall be exercisable immediately and have a term of exercise equal to
five (5) years, in the form of Exhibit [ ]  attached to the Underwriting Agreement.


 


“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.


 


Section 3. Dividends.
Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders shall be entitled
to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock
basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are
paid on shares of the Common Stock. No other dividends shall be paid on shares of Preferred Stock.


 


Section 4. Voting Rights.
Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no voting rights. However,
as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders
of a majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely the powers, preferences
or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its certificate of incorporation
or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized
shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.


 


Section 5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount
that a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion
limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation
shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.


 


Section 6. Conversion.


 


(a) Conversions at Option
of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original
Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth
in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders
shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice
of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the
number of shares of Preferred Stock owned


 






    	 	3	 



     


    

 


prior to the conversion at issue, the number of
shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by facsimile or other electronic means such Notice of Conversion
to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original
Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice
of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence
of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender
the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented
thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly
following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the
terms hereof shall be canceled and shall not be reissued.


 


(b) Conversion Price.
The conversion price for the Preferred Stock shall equal $            ,
subject to adjustment herein (the “Conversion Price”).


 


(c) Mechanics of Conversion.


 


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


 


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


 


iii. Obligation Absolute;
Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of
Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a
Holder to enforce


 






    	 	4	 



     


    

 


the same, any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to
the Corporation or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such
Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any
such action that the Corporation may have against such Holder. In the event a Holder shall elect to convert any or all of the Stated
Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one associated
or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction
from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder
shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150%
of the Stated Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion
of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it
obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon
a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i)
on the second Trading Day after the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder,
in cash, as liquidated damages and not as a penalty, for each $5,000 of Stated Value of Preferred Stock being converted, $50 per
Trading Day (increasing to $100 per Trading Day on the third Trading Day and increasing to $200 per Trading Day on the sixth Trading
Day after such damages begin to accrue) for each Trading Day after such second Trading Day after the Share Delivery Date until
such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue
actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder
shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable law.


 


iv. Compensation for
Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the
Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery
Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm to
purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to
receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall
(A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount, if
any, by which (x) such Holder’s total purchase price (including any brokerage commissions) for the Common Stock so
purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was
entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving
rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such
Holder, either reissue (if surrendered) the shares of Preferred Stock equal to the number of shares of Preferred Stock
submitted for conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of
shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements
under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect to which the
actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was
a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay
such Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in
respect of the Buy-In and, upon request of the Corporation, evidence of the amount of such loss. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to
timely deliver the Conversion Shares upon conversion of the shares of Preferred Stock as required pursuant to the terms
hereof.


 


v. Reservation of Shares
Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock as herein provided,
free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders
of the Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions
set forth in the Underwriting Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon
the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 






    	 	5	 



     


    

 


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


 


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


 


(d) Beneficial Ownership
Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to
convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable
Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with
such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder
and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion
of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or any of its Affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion
or exercise analogous to the limitation contained herein (including, without limitation, the Preferred Stock or the Warrants) beneficially
owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6(d),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Holder that the Corporation is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to
be filed in accordance therewith. To the extent that the limitation contained in this Section 6(d) applies, the determination
of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates)
and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of
a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be
converted (in relation to other securities owned by such Holder together with any Affiliates) and how many shares of the Preferred
Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction,
each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice
of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify
or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For
purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent
periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation
or (iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of a Holder, the Corporation shall within two Trading Days confirm orally
and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation,
including the Preferred Stock, by such Holder or its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of
Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon conversion of this Preferred Stock held by the Holder and the provisions of this Section 6(d)
shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of Preferred Stock.


 






    	 	6	 



     


    

 





Section 7. Certain Adjustments.


 


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


 


(b) [Reserved].


 


(c) Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any
Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all the record holders
of its Common Stock (the “Purchase Rights”), then the Holder of will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).


 






    	 	7	 



     


    

 


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


 


(e) Fundamental Transaction.
If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or
more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Corporation, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then,
upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that
would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard
to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of Common Stock of the
successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental Transaction
for each share of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock). For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation
shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the


 






    	 	8	 



     


    

 


extent necessary to effectuate the foregoing provisions,
any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation
with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing
the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor
entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Corporation under this Certificate of Designation and the other Transaction Documents
(as defined in the Underwriting Agreement) in accordance with the provisions of this Section 7(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the holder of this Preferred Stock, deliver to the Holder in exchange for this
Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without
regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion
price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred Stock
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation and the
other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise
every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.


 


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


 


(g) Notice to the Holders.


 


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


 


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


 






    	 	9	 



     


    

 


Section 8. Miscellaneous.


 


(a) Notices. Any and
all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier
service, addressed to the Corporation, at the address set forth above Attention: Chief Financial Officer, facsimile number [                    ],
e-mail address [                    ]
or such other facsimile number, email address, or address as the Corporation may specify for such purposes by notice to the Holders
delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by
the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation,
or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such
Holder, as set forth in the Underwriting Agreement. Any notice or other communication or deliveries hereunder shall be deemed
given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth in this Section 8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth in this Section 8 on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice is required to be given.


 


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


 


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


 


(d) Governing Law. All
questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed
by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of
conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of
the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal


 






    	 	10	 



     


    

 


service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence
an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.


 


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


 


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


 


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


 


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


 


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


 




    	 	11	 



     


    

 


Signature page to Certificate of Designation 


 


IN WITNESS WHEREOF, the undersigned have
executed this Certificate this          day of                     
2015.


 


	
          
	 	 	 	 
	John Pappajohn	 	 	 	Adam S. Winger
	Acting Chief Executive Officer	 	 	 	Interim Chief Financial Officer


 




    	 	12	 



     


    

 


Signature page to Certificate of Designation 


 


ANNEX A 


 


NOTICE OF CONVERSION


 


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


 


The undersigned hereby elects to convert the number of shares
of Series A Convertible Preferred Stock indicated below into shares of common stock, par value $0.01 per share (the “Common
Stock”), of American CareSource Holdings, Inc., a Delaware corporation (the “Corporation”), according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as may be required by the Corporation in accordance with the Underwriting Agreement. No fee will be charged
to the Holders for any conversion, except for any such transfer taxes.


 


Conversion calculations:


 


	Date to Effect Conversion:	 	 


 


	Number of shares of Preferred Stock owned prior to Conversion:	 	 


 


	Number of shares of Preferred Stock to be Converted:	 	 


 


	Stated Value of shares of Preferred Stock to be Converted:	 	 


 


	Number of shares of Common Stock to be Issued:	 	 


 


	Applicable Conversion Price:	 	 


 


	Number of shares of Preferred Stock subsequent to Conversion:	 	 


 


Address for Delivery:                                          
       


or


DWAC Instructions:


Broker no:                     


Account no:                     


 


	 	[HOLDER
	 	 	 
	 	By:	 	 
	 	 	 	Name:
	 	 	 	Title:


 






    	 	13