Exhibit 4.2 


 


AMENDMENT NO. 7 TO 


SHAREHOLDER RIGHTS AGREEMENT


 


This Amendment No. 7 to
Shareholder Rights Agreement (the “Amendment”), dated as of December 28, 2016, by and between NeuroMetrix,
Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC (the “Rights
Agent”), amends that certain Shareholder Rights Agreement, dated as of March 7, 2007, as amended as of September
8, 2009, June 5, 2013, June 25, 2014, May 28, 2015, December 29, 2015 and June 3, 2016 between the Company and the Rights Agent
(as so amended, the “Rights Agreement”).


 


WHEREAS, the Company
and the Rights Agent are parties to the Rights Agreement; and


 


WHEREAS, the Company
desires to enter into a Securities Purchase Agreement with the purchaser identified on the signature pages thereto (the “Purchaser”)
under which the Company will issue and sell up to 7,000 shares of Series E convertible preferred stock, par value $0.001 per share,
of the Company and warrants to purchase up to 10,000,000 shares of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”); and


 


WHEREAS, pursuant
to Section 27 of the Rights Agreement, the Company and the Rights Agent may from time to time supplement or amend the Rights Agreement
subject to the terms of the Rights Agreement; and


 


WHEREAS, the Board
of Directors of the Company has determined that an amendment to the Rights Agreement as set forth herein is necessary and desirable
in connection with the foregoing and the Company and the Rights Agent desire to evidence such amendment in writing.


 


NOW, THEREFORE,
in consideration of these premises and mutual agreements set forth herein, the parties agree as follows:


 


1.           Amendment of Section
1. Section 1 of the Rights Agreement, “Certain Definitions” is supplemented to add the following definitions in
the appropriate locations:


 


“2016
December Preferred Stock” shall mean the shares of Series E convertible preferred stock, par value $0.001 per share,
of the Company having the rights and preferences set forth in the form of the Certificate of Designation attached hereto as Exhibit
A.


 






    	 	 	 



     


    

 


“2016
December Securities Purchase Agreement” shall mean the Securities Purchase Agreement, dated on or about December 28,
2016, by and among the Company and the Purchaser.


 


“2016
December Transactions” shall mean the issuance of (a) 7,000 shares of the 2016 December Preferred Stock, and (b) the
2016 December Warrants, each pursuant to the 2016 December Securities Purchase Agreement, and the exercise of the 2016 December
Warrants in accordance with their terms.


 


“2016
December Warrants” shall mean the warrants to purchase up to 10,000,000 shares of Common Stock pursuant to the 2016 December
Securities Purchase Agreement.


 


“Purchaser”
shall mean the purchaser identified on the signature pages to the 2016 December Securities Purchase Agreement.


 


2.           Amendment of the
definition of “Acquiring Person”. The definition of “Acquiring Person” in Section 1 of the Rights Agreement
is amended by adding the following sentence at the end thereof:


 


“Notwithstanding
anything in this Rights Agreement to the contrary, neither the Purchaser nor any of its Affiliates or Associates shall be deemed
to be an Acquiring Person solely as a result of (i) the execution of the 2016 December Securities Purchase Agreement or the 2016
December Warrants or (ii) the consummation of the 2016 December Transactions or any other transaction contemplated by the 2016
December Securities Purchase Agreement, 2016 Prospectus, 2016 December Preferred Stock or the 2016 December Warrants.”


 


3.           Amendment of the
definition of “Section 11(a)(ii) Event”. The definition of “Section 11(a)(ii) Event” in Section 1 of
the Rights Agreement is amended by adding the following sentence at the end thereof:


 


“Notwithstanding
anything in this Rights Agreement to the contrary, a Section 11(a)(ii) Event shall not be deemed to have occurred solely as a result
of (i) the execution of the 2016 December Securities Purchase Agreement or the 2016 December Warrants or (ii) the consummation
of the 2016 December Transactions or any other transaction contemplated by the 2016 December Securities Purchase Agreement, 2016
December Preferred Stock or the 2016 December Warrants.”


 






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4.           Amendment of the
definition of “Stock Acquisition Date”. The definition of “Stock Acquisition Date” in Section 1 of
the Rights Agreement is amended by adding the following sentence at the end thereof:


 


“Notwithstanding
anything in this Rights Agreement to the contrary, a Stock Acquisition Date shall not be deemed to have occurred solely as a result
of (i) the execution of the 2016 December Securities Purchase Agreement or the 2016 December Warrants or (ii) the consummation
of the 2016 December Transactions or any other transaction contemplated by the 2016 December Securities Purchase Agreement, 2016
December Preferred Stock or the 2016 December Warrants.”


 


5.           Amendment to Section
30. Section 30 of the Rights Agreement is amended by adding the following sentence at the end thereof:


 


“Nothing
in this Agreement shall be construed to give any holder of Rights or any other Person any legal or equitable rights, remedies or
claims under this Agreement by virtue of (i) the execution of the 2016 December Securities Purchase Agreement or the 2016 December
Warrants or (ii) the consummation of the 2016 December Transactions or any other transaction contemplated by the 2016 December
Securities Purchase Agreement, 2016 December Preferred Stock or the 2016 December Warrants.”


 


6.           Ratification.
The parties hereby ratify and confirm in all respects the Agreement, as amended by this Amendment.


 


7.           Governing Law.
This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such
State.


 


8.           Counterparts.
This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.


 






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9.           Descriptive Headings.
Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.


 


[remainder left intentionally blank]


 




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IN WITNESS WHEREOF, the
parties have entered into this Amendment No. 7 to Shareholder Rights Agreement as of the date first stated above.


 


NEUROMETRIX, INC.


 


	By:	/s/ Thomas
    T. Higgins 	 
	Name:	Thomas T. Higgins	 
	Title:	Senior Vice President, Chief Financial Officer, Treasurer and
    Principal Accounting Officer	 


 


AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC


 


	By:	/s/ Paula Caropolli	 
	Name:	Paula Caropolli	 
	Title:	Senior Vice President	 


 




    	 	 



     


    


 


Exhibit A


 


NEUROMETRIX,
Inc.


 


CERTIFICATE OF DESIGNATION OF PREFERENCES,



RIGHTS AND LIMITATIONS


OF


SERIES E CONVERTIBLE PREFERRED STOCK


 


PURSUANT
TO SECTION 151 OF THE 


Delaware
GENERAL CORPORATION LAW


 


The undersigned, Thomas T. Higgins, does hereby certify
that:


 


1. He is the Senior Vice
President, Chief Financial Officer and Treasurer of NeuroMetrix, Inc., a Delaware corporation (the “Corporation”).


 


2. The Corporation is authorized
to issue 5,000,000 shares of preferred stock, 193,181 of which have been issued.


 


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


 


WHEREAS, the certificate of incorporation of
the Corporation provides for a class of its authorized stock known as preferred stock, consisting of 5,000,000 shares, $0.001 par
value per share, issuable from time to time in one or more series;


 


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


 


WHEREAS, it is the desire of the Board of Directors,
pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of
the preferred stock, which shall consist of, up to 7,000 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.           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.


 


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


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise)
of in excess of 40% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock
and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of
the Corporation immediately prior to such transaction own less than 40% of the aggregate voting power of the Corporation or the
successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to another
Person and the stockholders of the Corporation immediately prior to such transaction own less than 60% of the aggregate voting
power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a one year period of more
than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members
of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors
on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who
are members on the Original Issue Date), or (e) the execution by the Corporation of an agreement to which the Corporation is a
party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.


 






    	 	 



     


    

 


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1 of the Purchase Agreement.


 


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


 


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


 


“Common
Stock” means the Corporation’s common stock, par value $0.0001 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 the sum of the Stated Value at issue.


 


“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.


 


“Conversion
Shares Registration Statement” means a registration statement that registers the resale of the Conversion Shares of the
Holders, who shall be named as “selling stockholders” therein and meets the requirements of the Registration Rights
Agreement.


 


“Effective
Date” means the date that the Conversion Shares Registration Statement filed by the Corporation pursuant to the Registration
Rights Agreement is first declared effective by the Commission.


 


“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 2.


 


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


 


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


 


“Liquidation”
shall have the meaning set forth in Section 4.


 


“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 2.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated December 28, 2016, among the Corporation and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the
Corporation and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.


 


“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 






    	 	 



     


    

 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


“Securities”
means 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.


 


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


 


“Shareholder
Approval” means (i) such approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market
(or any successor entity) from the shareholders of the Company with respect to the transactions contemplated by the Transaction
Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued and outstanding Common Stock
on the First Closing Date, (ii) the adjustment to the Repriced Securities (pursuant to Section 4.12 of the Purchase Agreement)
and (iii) the amendment to the Certificate of Designation relating to, and reflecting the Reset Price of, the Repriced Securities.


 


“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.


 


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


 


“Subsidiary”
means any subsidiary of the Corporation as set forth on Schedule 3.1(a) of the Purchase Agreement and shall, where applicable,
also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.


 


“Successor
Entity” shall have the meaning set forth in Section 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 the OTC Bulletin Board (or any successors to any of the foregoing).


 






    	 	 



     


    

 


“Transaction
Documents” shall have the meaning set forth in the Purchase Agreement.


 


“Transfer
Agent” means American Stock Transfer & Trust Company, the current transfer agent of the Corporation with a mailing
address of 59 Maiden Lane, New York, New York and a facsimile number of 718-236-4588, 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.


 


“VWAP”
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 a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market,
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 “Pink Sheets” published by 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
Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the fees and
expenses of which shall be paid by the Corporation.


 


“Warrants”
shall have the meaning set forth in the Purchase Agreement.


 


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


 


Section 2.           Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series E Convertible Preferred
Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 7,000 (which shall not be
subject to increase without the written consent of a majority 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 $0.001 per share
and a stated value equal to $1,000, subject to increase set forth in Section 3 below (the “Stated Value”).


 






    	 	 



     


    

 


Section 3.           Dividends.


 


a)           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 (other than dividends in the form of Common Stock) actually paid on shares of the Common
Stock when, as and if such dividends (other than dividends in the form of Common Stock) are paid on shares of the Common Stock.
Other than as set forth in the previous sentence, no other dividends shall be paid on shares of Preferred Stock; and the Corporation
shall pay no dividends (other than dividends in the form of Common Stock) on shares of the Common Stock unless it simultaneously
complies with the previous sentence.


 


b)           Other
Securities. So long as any Preferred Stock shall remain outstanding, the Corporation shall not redeem, purchase or otherwise
acquire directly or indirectly more than a de minimis amount of any Junior Securities other than as to repurchases of Common Stock
or Common Stock Equivalents from departing officers or directors, and provided that, while any of the Preferred Stock remains outstanding,
such repurchases shall not exceed an aggregate of $100,000 in any fiscal year from all officers and directors.


 


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) authorize or create any class of
stock ranking as to dividends, redemption or distribution of assets upon a liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, that is senior to the Preferred Stock, (c) amend its certificate of incorporation or other charter
documents in any manner that adversely affects any rights of the Holders, (d) increase the number of authorized shares of Preferred
Stock, or (e) enter into any agreement with respect to any of the foregoing.


 


Section 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 distributions out of the assets, whether capital or surplus, of the Corporation on a pari
passu basis with the 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) and Section 6(e)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion
Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex
A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred
Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of
Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date
may not be prior to the date the applicable Holder delivers by facsimile 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. The calculations and entries set forth
in the Notice of Conversion shall control in the absence of manifest or mathematical error. 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. 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 $0.70, subject to adjustment herein (the “Conversion
Price”).


 


		c)	Mechanics of Conversion



 


i.           Delivery
of Certificate 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) a certificate or certificates
representing the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or
(ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required
by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of the Preferred Stock
(including, if the Corporation has given continuous notice pursuant to Section 3(b) for payment of dividends in shares of Common
Stock at least 20 Trading Days prior to the date on which the Notice of Conversion is delivered to the Corporation, shares of Common
Stock representing the payment of accrued dividends otherwise determined pursuant to Section 3(a) but assuming that the Dividend
Notice Period is the 20 Trading Days period immediately prior to the date on which the Notice of Conversion is delivered to the
Corporation and excluding for such issuance the condition that the Corporation deliver the Dividend Share Amount as to such dividend
payment prior to the commencement of the Dividend Notice Period), and (B) a bank check in the amount of accrued and unpaid dividends
(if the Corporation has elected or is required to pay accrued dividends in cash). On or after the earlier of (i) the six month
anniversary of the Original Issue Date or (ii) the Effective Date, the Corporation shall use its best efforts to deliver any certificate
or certificates required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company
or another established clearing corporation performing similar functions.


 






    	 	 



     


    

 


ii.          Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates 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 certificate or certificates, to rescind such Conversion, in which
event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation
and the Holder shall promptly return to the Corporation the Common Stock certificates issued to such Holder pursuant to the rescinded
Conversion Notice.


 


iii.         Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by
a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder.
In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may not refuse
conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining
conversion of all or 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 certificate or certificates 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 certificates are delivered or Holder rescinds
such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare a Triggering Event pursuant
to Section 10 hereof for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such
Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking
to enforce damages pursuant to any other Section hereof or under applicable law.


 






    	 	 



     


    

 


iv.         Compensation
for Buy-In on Failure to Timely Deliver Certificates 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 certificate or certificates 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 certificates representing shares of
Common Stock upon conversion of the shares of Preferred Stock as required pursuant to the terms hereof.


 






    	 	 



     


    

 


v.          Issuance
Limitations. Notwithstanding anything herein to the contrary, if the Corporation has not obtained Shareholder Approval, then
the Corporation may not issue, upon conversion of the Preferred Stock, a number of shares of Common Stock which, when aggregated
with any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date in connection with
any conversion of Preferred Stock issued pursuant to the Purchase Agreement, that would exceed 1,193,058 shares of Common Stock
(subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable
Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing
(x) the original Stated Value of such Holder’s Preferred Stock by (y) the aggregate Stated Value of all Preferred Stock issued
on the Original Issue Date to all Holders. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum among
Preferred Stock and Warrants held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a Holder
no longer holds any Preferred Stock or Warrants and the amount of shares issued to such Holder pursuant to such Holder’s
Preferred Stock and Warrants was less than such Holder’s pro-rata share of the Issuable Maximum.


 


vi.         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 and payment
of dividends on the Preferred Stock, each 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 Purchase Agreement) be issuable (taking
into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock
and payment of dividends hereunder. 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 and, if the Conversion Shares Registration Statement
is then effective under the Securities Act, shall be registered for public resale in accordance with such Conversion Shares Registration
Statement (subject to such Holder’s compliance with its obligations under the Registration Rights Agreement).


 


vii.        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.


 






    	 	 



     


    

 


viii.       Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock 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 certificates, 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 certificate 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 certificates 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.


 


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 (such Persons, “Attribution Parties”)) 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 and Attribution Parties 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 or Attribution Parties 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 or Attribution Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 6(d) applies, the
determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with
any Affiliates and Attribution Parties) 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 Attribution Parties) 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 or Attribution Parties 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.


 






    	 	 



     


    

 


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 the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred
Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


d)           Pro
Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes 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, or (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) and Section 6(e) 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 as a result of such Fundamental Transaction by a holder of the number of shares 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) and Section 6(e) 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 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 Purchase 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 by facsimile or e-mail 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
by facsimile or email to each Holder at its last facsimile number or email 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.


 






    	 	 



     


    

 


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: Thomas Higgins, facsimile number
(781) 890-1556, or such other facsimile number 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 e-mail attachment, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books
of the Corporation, or if no such facsimile number, e-mail address or address appears on the books of the Corporation, at the principal
place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth in this Section prior to 5:30 p.m. (New
York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth in this Section on a day that is not
a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.


 


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


 


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


 






    	 	 



     


    

 


d)           Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of 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 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 Purchase Agreement.
If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of preferred stock and shall no longer be designated as Series E Convertible Preferred Stock.


 


*********************


 




    	 	 



     


    

 


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


 


IN WITNESS WHEREOF, the undersigned have executed
this Certificate this 28th day of December 2016.


 


	/s/ Thomas T. Higgins	 
	Name: Thomas T. Higgins	 
	Title: Senior Vice President, and Chief Financial Officer and Treasurer	 


 




    	 	 



     


    

 


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 E Convertible Preferred Stock indicated below into shares of common stock, par value $0.0001 per share
(the “Common Stock”), of NeuroMetrix, 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 Purchase Agreement. No fee will be charged
to the Holders for any conversion, except for any such transfer taxes.


 


Conversion calculations:


 


	Date to Effect Conversion: _____________________________________________
	 
	Number of shares of Preferred Stock owned prior to Conversion: _______________
	 
	Number of shares of Preferred Stock to be Converted: ________________________
	 
	Stated Value of shares of Preferred Stock to be Converted: ____________________
	 
	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: