Exhibit 4.2


 


CERTIFICATE
OF CORRECTION


TO THE


CERTIFICATE
OF VALIDATION OF 


AUDIOEYE,
INC.






AudioEye, Inc., a corporation
organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does
hereby certify as follows.


 


1.                 
The name of the corporation is AudioEye, Inc.


 


2.                 
A Certificate of Validation of the Corporation (the “Certificate of Validation”) was filed with the Secretary of State of
the State of Delaware on March 27, 2020 and such Certificate of Validation requires correction as permitted by Section 103(f) of the General
Corporation Law of the State of Delaware.


 


3.                 
The inaccuracy in the Certificate of Validation is that Exhibit A to the Certificate of Validation inadvertently attached the incorrect
version of the Certificate of Designations of Series A Convertible Preferred Stock, rather than the execution version of the Certificate
of Designations of Series A Convertible Preferred Stock that was attached to the related Securities Purchase Agreement.


 


4.                 
The Certificate of Validation is hereby corrected in its entirety to read as set forth on Exhibit 1.


 


IN WITNESS WHEREOF, the undersigned has caused
this Certificate of Correction to be signed by its authorized this June 23, 2021.


 


	 	AUDIOEYE, INC.
	 
	 	By:	/s/ James Spolar
	 	 	James Spolar
	 	 	Secretary & General Counsel







 






     


     


    

 


EXHIBIT 1


 


CERTIFICATE OF VALIDATION


OF


AUDIOEYE, INC.


 


Pursuant to Section 204 of the General Corporation
Law of the State of Delaware


 


AudioEye, Inc., a corporation
organized and existing under the laws of the State of Delaware (the “Corporation”), certifies as follows:


 


1.                 
The defective corporate act that is the subject of this Certificate of Validation is the issuance of 175,000 shares of the Corporation’s
Series A Convertible Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”), on May 1, 2015 (the “Preferred
Stock Issuance”).


 


2.                 
The nature of the failures of authorization in respect of the Preferred Stock Issuance was: (i) the failure of the Board to have duly
approved the Certificate of Designations in the manner required by Section 151 of the General Corporation Law of the State of Delaware
(the “General Corporation Law”) and (ii) the failure of the Certificate of Designations to have authorized a sufficient number
of shares of Series A Preferred Stock and to have been filed and become effective prior to the issuance of the stock.


 


3.                 
The defective corporate act that is the subject of this Certificate of Validation was duly ratified in accordance with Section 204 of
General Corporation Law pursuant to resolutions of the Board of Directors of the Corporation adopted on March 27, 2020.


 


4.                 
The Certificate of Designations of Series A Convertible Preferred Stock was previously filed under Section 103 of the General Corporation
Law on May 4, 2015 and a Certificate of Correction to the Certificate of Designations Series A Convertible Preferred Stock of the Corporation
was filed on March 27, 2020, rendering such Certificate of Designations null and void. A certificate containing all of the information
required to be included under Section 151 of the General Corporation Law to give effect to the Preferred Stock Issuance is attached hereto
as Exhibit A. Such certificate shall be deemed to have become effective as of 12:01 a.m. on May 1, 2015.


 


 


[Signature Page Follows]





 






     


     


    

 


IN WITNESS WHEREOF, the Corporation
has caused this Certificate of Validation to be executed by its duly authorized officer as of this 27th day of March, 2020.


 


	 	AUDIOEYE, INC.
	 
	 	By:	 /s/ Carr Bettis
	 	 	Name: Carr Bettis
	 	 	Title: Executive Chairman







 






     


     


    

 


EXHIBIT A 


 


CERTIFICATE OF DESIGNATIONS

SERIES A CONVERTIBLE PREFERRED STOCK


OF AUDIOEYE, INC.


(pursuant to Section 151 of the Delaware General
Corporation Law)


 


AudioEye, Inc., a corporation organized and existing
under the laws of the State of Delaware (the “Corporation”), hereby certifies that the Board of Directors of the Corporation
(the “Board of Directors” or the “Board”) pursuant to authority of the Board of Directors under
Section 151 of the Delaware General Corporation Law (“DGCL”), and in accordance with the provisions of its Certificate
of Incorporation and Bylaws, adopted a resolution on April 24, 2015, which authorizes a series of the Corporation’s Preferred Stock,
par value $0.00001 per share designated Series A Convertible Preferred Stock (the “Preferred Stock”):


 


RESOLVED, that a series of Preferred Stock in the
Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and the designation
of such series, set forth below be, and it hereby is, authorized by the Board of Directors of the Corporation pursuant to authority given
by the Corporation’s Certificate of Incorporation.


 


NOW, THEREFORE, BE IT RESOLVED, that the Board
of Directors hereby fixes and determines the number of shares constituting, and the rights, preferences, privileges and restrictions relating
to, a new series of Preferred Stock designated Series A Convertible Preferred Stock as follows:


 


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(d).


 


“Board of Directors” means the
board of directors of the Corporation.


 


“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.


 


“Certificate of Designations”
means this Certificate of Designations of the Series A Convertible Preferred Stock.


 


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


 









     


     


    

 


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


 


“Common Stock” means the Corporation’s
common stock, par value $0.00001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified
or changed.


 


“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.


 


“Corporation” means AudioEye,
Inc., a Delaware corporation.


 


“Dividend Payment Date” shall
have the meaning set forth in Section 2.


 


“Dividend Rate” shall mean 5%
per annum.


 


“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(d).


 


“GAAP” means United States generally
accepted accounting principles.


 


“Holder” shall mean a holder
of the Preferred Stock, and “Holders” shall mean multiple or all, as the context requires, holders of the Preferred Stock.


 


“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.


 


“Liquidity Event” means (i)
any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, (ii) any sale of all or substantially all
of the Company’s assets, or (iii) any other transaction that results in the Company’s stockholders immediately prior to such
transaction holding less than 50% of the voting power of the surviving entity.


 


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


 


“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 among the Corporation and the original Holders, as amended, modified or supplemented from time to time in
accordance with its terms for the purchase and sale of the Preferred Stock.


 


“Redemption Price” shall have
the meaning set forth in Section 8(a).


 


“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.


 


“Securities” means the Preferred
Stock and the Underlying Shares subject to the Purchase Agreement.


 


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


 


“Senior Securities” means a
class or series of capital stock the terms of which class or series expressly provide that it ranks senior to the Preferred Stock as to
dividend distributions and distributions upon any Liquidity Event.


 


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


 


“Stated Value” shall have the
meaning set forth in Section 2.


 


“Subsidiary” means any subsidiary
of the Corporation.


 


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


 


“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 LLC,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTC Markets, or the
OTC Bulletin Board (or any successors to any of the foregoing).


 


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


 









     


     


    

 


“Transfer Agent” means Corporate
Stock Transfer, Inc., the current transfer agent of the Corporation, 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.


 


“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 Preferred Stock then outstanding and reasonably
acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.


 


Section 2.              
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 be 200,000 (which shall not be subject to
increase without the written consent of Holders representing at least 67% of the Preferred Stock based on Liquidity Preference). Each
share of Preferred Stock shall have a par value of $0.00001 per share and a stated value equal to $10.00 (the “Stated Value”).
Preferred Stock represents equity interests in the Corporation and shall not give rise to a claim for payment of a principal amount at
a particular date.


 


Section 3.              
Dividends.


 


(a)              
The Holders shall be entitled to receive, when, as and if declared by the Board of Directors of the Corporation out of funds legally
available therefore, cumulative dividends at the annual rate of 5% of the Stated Value per share of the Preferred Stock. To the extent
declared, such dividends shall be payable in cash quarterly, on the last day of each quarter, beginning June 30, 2015 (each of such dates
being a “Dividend Payment Date”). Such dividends shall accrue on each such share commencing on the Original Issue Date,
and shall accrue from day to day, whether or not earned or declared. Dividends shall accumulate in each Quarter from and including the
preceding Dividend Payment Date, to but excluding the next Dividend Payment Date for such quarter, and dividends shall accrue on accumulated
dividends at the applicable Dividend Rate. If any Dividend Payment Date otherwise would fall on a date that is not a Business Day, dividends
shall be paid on the immediately succeeding Business Day without the accumulation of additional dividends. Any dividend payable on the
Preferred Stock shall be computed on the basis of a 365-day year.


 









     


     


    

 


(b)              
 So long as any shares of Preferred Stock remain outstanding, neither the Corporation nor any subsidiary thereof shall redeem,
purchase or otherwise acquire directly or indirectly any Junior Securities except in accordance with Section 4 hereof.


 


(c)              
No dividend shall be declared or paid in cash or set apart for payment on any Junior Securities (other than a dividend payable
solely in shares of Junior Securities) unless full cumulative dividends have been or contemporaneously are being paid or provided for
on all outstanding Preferred Stock through the most recent Dividend Payment Date.


 


Section 4.              
Voting Rights. On any matter presented to the stockholders of the Corporation for their action or consideration at any
meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares
of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares
of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter.
Except as provided by law or by the other provisions of the Certificate of Designations, holders of the Preferred Stock shall vote together
with the holders of Common Stock, as a single class. Notwithstanding the foregoing, as long as any shares of Preferred Stock are outstanding,
the Corporation shall not, without the affirmative vote of the Holders of at least 67% in Stated Value of Preferred Stock then outstanding,
except as may be necessary to increase the authorized shares of Common Stock in order to account for any increase in the number of shares
issuable upon conversion of the Preferred Stock, (a) purchase or redeem any capital stock other than stock repurchased from former employees
or consultants in connection with the cessation of their employment services, at the lower of fair market value or cost, (b) amend, alter
or repeal any provision of its certificate of incorporation or other charter documents in a manner that adversely affects any rights of
the Holders or (c) authorize or issue Senior Securities. For the avoidance of doubt, the foregoing sentence shall not prevent the liquidation
of Preferred Stock as set forth in Section 5 hereof.


 


Section 5.              
Liquidation Rights. Subject to the right of a holder to convert shares of Preferred Stock, in the event of any Liquidity
Event, holders of each share of Preferred Stock shall be entitled to be paid out of the assets or surplus funds of the Corporation legally
available for distribution to holders of the Corporation’s capital stock of all classes (whether such assets are capital, surplus,
or earnings) and subject to the liquidating preference of the holders of any other series of Preferred Shares which may be on parity or
senior in right of preference to the Preferred Stock and before any sums shall be paid or any assets or surplus funds distributed among
the holders of Common Stock or any Junior Security, an amount equal to the Stated Value plus accrued but unpaid dividends as to such share
(the “Liquidity Preference”). If the assets of the Corporation shall be insufficient to permit the payment in full
to holders of the Preferred of the preferential amount set forth in this Section 5, then the entire assets of the Corporation available
for such distribution shall be distributed ratably among the holders of the Preferred in accordance with the aggregate liquidation preference
of the shares of Preferred Stock held by each of them. To the extent that the Holders of Preferred Stock receive a partial payment of
their Liquidation Preference, such partial payment shall reduce the Liquidation Preference of their Preferred Stock, but only to the extent
of such amount paid.


 


Section 6.              
Conversion.


 


(a)               Conversion
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 determined by dividing the
Stated Value plus any accrued but unpaid dividends with respect to such share 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. 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 (i) the full or remaining number
of shares of Preferred Stock represented by such certificate are being converted or (ii) such Holder has provided the Corporation
with prior written notice (which notice may be included in a Notice of Conversion) requesting reissuance of a certificate
representing the remaining shares of Preferred Stock upon physical surrender of any certificate representing the shares of Preferred
Stock being converted. Each Holder and the Corporation shall maintain records showing the number of shares of Preferred Stock so
converted by such Holder and the dates of such conversions or shall use such other method, reasonably satisfactory to such Holder
and the Corporation, so as not to require physical surrender of the certificate representing the shares of Preferred Stock upon each
such conversion. In the event of any dispute or discrepancy, such records of the Corporation establishing the number of shares of
Preferred Stock to which the record holder is entitled shall be controlling and determinative in the absence of manifest error.
Shares of Preferred Stock converted into Common Stock in accordance with the terms hereof shall be canceled and shall not be
reissued.


 






     


     


    

 


(b)              
Conversion Price. The per share conversion price for the Preferred Stock shall be $0.1754, subject to adjustment as set
forth 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 certificate or certificates
representing the number of Conversion Shares being acquired upon the conversion of the Preferred Stock. If requested by the Holder, 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)              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, not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth
in the respective 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. 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.


 






     


     


    

 


(iii)           
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.


 


(iv)            
Transfer Taxes. 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.


 


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 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 reclassification.


 


(b)               Subsequent
Rights Offerings. If the Corporation, at any time while the Preferred Stock is outstanding, shall issue rights, options or
warrants to all holders of Common Stock (and not proportionately to the Holders) entitling them to subscribe for or purchase shares
of Common Stock at a price per share that is lower than the VWAP on the record date for such issuance, and does not offer the same
rights to the Holders, then the Holder will be entitled to acquire, upon conversion of the Preferred Stock, such rights, options or
warrants 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 the conversion of such Preferred Stock)
immediately before the date on which a record is taken for the issuance of such rights, options or warrants, 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 issuance of such rights,
options or warrants.


 






     


     


    

 


(c)              
Pro Rata Distributions. If the Corporation, at any time while the Preferred Stock is outstanding, distributes to all holders
of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security, then in each such case the Conversion Price shall be adjusted by multiplying such Conversion
Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by
a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall
be such VWAP on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness
or rights or warrants so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors of
the Corporation in good faith. In either case the adjustments shall be described in a statement delivered to the Holders describing the
portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned
above.


 


(d)               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 and excluding shares acquired upon conversion of
any currently outstanding convertible securities in accordance with the terms thereof as in effect on the date hereof) (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, the number of shares of securities 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. 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 Designations 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
Designations and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this
Section 7(d) 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.


 






     


     


    

 


(e)              
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.


 


(f)               
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 ten (10) 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 Preferred Stock (or any part hereof) during the 10-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.              
Redemption.


 


(a)              
Optimal Company Redemption. Subject to the terms hereof, at any time the Corporation shall be entitled to redeem any or
all of the outstanding shares of Preferred Stock (the “Optional Company Redemption”) at a per share price equal to
125% of the Stated Value plus accumulated and unpaid dividends (such amount, the “Redemption Price”), payable in cash;
provided that the Corporation shall have funds legally available for such payment.


 


(b)               Notice
of Optional Company Redemption. Notice of any Optional Company Redemption of shares of Preferred Stock, specifying the time and
place of redemption and the Redemption Price (a “Redemption Notice”), shall be sent by courier or first class
overnight mail, pre-paid, to each holder of Preferred Stock to be redeemed, at the address for such holder shown on the
Company’s records, not more than sixty (60) nor less than ten (10) days prior to the Redemption Date. If, in any case, less
than all of the shares of Preferred Stock then owned by such holder are to be redeemed, the Redemption Notice shall also specify the
number of shares which are to be redeemed; provided, however, that no failure to give such Redemption Notice nor any defect therein
shall affect the validity of the procedure for the redemption of any shares of Preferred Stock to be redeemed except as to the
holder to whom the Corporation has failed to give said Redemption Notice or except as to the holder whose Redemption Notice was
defective. Each such Redemption Notice shall state:


 






     


     


    

 


(i)                
the Redemption Date;


 


(ii)             
the Redemption Price;


 


(iii)           
the number of shares of Preferred Stock to be redeemed and, if fewer than all the shares of Preferred Stock held by a holder are
to be redeemed, the number of shares thereof to be redeemed from such holder;


 


(iv)            
the manner and place or places at which payment for the shares of Preferred Stock to be redeemed will be made, upon presentation
and surrender to the Corporation of the certificates evidencing the shares being redeemed; and


 


(v)              
that the rights of holders to convert shares of Preferred Stock being redeemed shall terminate at the close of business on the
Redemption Date unless the Corporation defaults in the payment of the Redemption Price. For the avoidance of doubt, this Section shall
not affect the right of holders to convert shares of Preferred Stock prior to the Redemption Date.


 


Upon mailing any such Redemption Notice, the Corporation
shall become obligated to redeem at the Redemption Price on the Redemption Date all shares of Preferred Stock therein specified; provided,
however, any redemption contemplated by any Redemption Notice may be conditioned upon the occurrence of one or more transactions or other
events and the Redemption Date in such Redemption Notice may be the date on which such transaction is consummated or such other event
occurs.


 


Section 9.              
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 5210 E. Williams Circle, Suite 500, Tucson, Arizona 85711, facsimile number (520)
844-2989, 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 10. Any and all notices or other communications or deliveries to be provided by the
Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the
Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business
of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed
given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at
the facsimile number set forth in this Section prior to 5:30 p.m. (Arizona time) on any date, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (Arizona 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 Designations shall alter or
impair the obligation of the Corporation, which is absolute and unconditional, to pay 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
Designations 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. 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 Designations 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 Designations 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 Designations is invalid, illegal or unenforceable, the balance of
this Certificate of Designations 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 Designations
and shall not be deemed to limit or affect any of the provisions hereof.


 


(i)                
Status of Converted Preferred Stock. If any shares of Preferred Stock shall be converted 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.