Exhibit 4.2


 


DESCRIPTION
OF SECURITIES


 


The
following description of the securities of PeerStream, Inc. (“PeerStream,” the “Company,” “we,”
“our” or “us”) is a summary of the material terms of, and is qualified in its entirety by reference to,
our Certificate of Incorporation and our By-Laws, copies of which are filed as exhibits to this Annual Report on Form 10-K.


 


Our
purpose is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation
Law (the “DGCL”). Our authorized capital stock consists of 25,000,000 shares of common stock, par value $0.001
per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. No shares of preferred stock are issued
or outstanding as of the date hereof.


 


Common
Stock


 


As
of March 12, 2020, we had issued and outstanding 6,878,904 shares of common stock, including 1,900 shares of common
stock held by us as treasury stock.


 


Dividend
Rights


 


Holders
of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our Board of Directors
out of funds legally available therefor. We never have declared or paid cash dividends on any of our common stock and currently
do not anticipate paying any cash dividends after the offering or in the foreseeable future.


 


Voting
Rights


 


Each
holder of our common stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders,
including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. Accordingly,
holders of a plurality of the voting shares are able to elect all of the directors standing for election. Any other matters submitted
to the vote of the stockholders must be authorized by a majority of the votes cast, except where the DGCL prescribes a different
percentage of votes or a different exercise of voting power.


 


Liquidation


 


In
the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the
assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities.


 


Rights
and Preferences


 


Holders
of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund
provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject
to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate
in the future.


 


Holders


 


As
of March 12, 2020, there were approximately 79 holders of record of our common stock. This does not reflect the number of persons
or entities who held stock in nominee or street name through various brokerage firms.


 






     


     


    

 


Preferred
Stock


 


Our
Board of Directors has the authority, within the limitations and restrictions of our Certificate of Incorporation, to issue up
to 10,000,000 shares of preferred stock in one or more series and to fix the powers, preferences and rights thereof without
further action by our stockholders. These rights, preferences and privileges could include dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred
stock could have the effect of delaying, deferring or preventing a change of control of us or other corporate action. In addition,
the issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such
holders will receive dividend payments and payments upon liquidation. In some circumstances, the issuance of preferred stock could
have the effect of decreasing the market price of our common stock. No shares of preferred stock are outstanding, and we do not
currently intend to issue any shares of preferred stock.


 


Registration
Rights


 


On
October 7, 2016, we entered into a registration rights agreement with Clifford Lerner (the “Registration Rights Agreement”),
a former officer, director and employee of the Company. The Registration Rights Agreement provides that, subject to certain limitations,
Mr. Lerner may demand that the we register for resale under the Securities Act of 1933, as amended, all or a portion of his
shares of our common stock. In addition, the Registration Rights Agreement provides Mr. Lerner with certain incidental “piggy-back”
registration rights, which generally allow him to participate in registered offerings of our common stock that are initiated by
the Company or on behalf of other holders of the Company’s securities.


 


On
June 15, 2018, in connection with Mr. Lerner’s resignation from the Company, we entered into an amendment to the
Registration Rights Agreement (the “Registration Rights Amendment”). The Registration Rights Amendment provides that
Mr. Lerner may only exercise his demand registration rights to effect a firm commitment underwritten offering.


 


Anti-Takeover
Effects of Our Certificate of Incorporation and By-Laws and Certain Provisions of Delaware Law


 


Our
Certificate of Incorporation, By-Laws and the DGCL, which are summarized in the following paragraphs, contain provisions
that are intended to enhance the likelihood of continuity and stability in the composition of our Board of Directors. These provisions
are intended to avoid costly takeover battles, reduce our vulnerability to a hostile change of control and enhance the ability
of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these
provisions may have an anti-takeover effect and may delay, deter or prevent a merger or acquisition of our company by means
of a tender offer, a proxy contest or other takeover attempt that a stockholder might consider is in its best interest, including
those attempts that might result in a premium over the prevailing market price for the shares of common stock held by stockholders.


 


Authorized
but Unissued Capital Stock


 


The
authorized but unissued shares of our common stock and our preferred stock will be available for future issuance without any further
vote or action by our stockholders. These additional shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but
unissued shares of our common stock and our preferred stock could render more difficult or discourage an attempt to obtain control
over us by means of a proxy contest, tender offer, merger or otherwise.


 


Business
Combinations


 


We
are subject to the “business combination” provisions of Section 203 of the DGCL. In general, Section 203 of the
DGCL prohibits a publicly held Delaware corporation from engaging in various “business combination” transactions with
an interested stockholder for a period of three (3) years after the date of the transaction in which the person became an interested
stockholder, unless:


		 	 



		●	the
transaction is approved by the corporation’s Board of Directors prior to the date the interested stockholder became an interested
stockholder;



		 	 



		●	upon
the consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or



		 	 



		●	on
or subsequent to such date the business combination is approved by the corporation’s Board of Directors and authorized at
an annual or special meeting of the corporation’s stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.



 






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In
general, a “business combination” is defined to include mergers, asset sales and other transactions resulting in financial
benefit to a stockholder and an “interested stockholder” is a person who, together with affiliates and associates,
owns or, within three years prior to the determination of interested stockholder status, previously owned 15% or more of a corporation’s
outstanding voting stock. This statute may encourage companies interested in acquiring our company to negotiate in advance with
our Board of Directors because the stockholder approval requirement would be avoided if our Board of Directors approves either
the business combination or the transaction which results in the stockholder becoming an interested stockholder. This statute
also may have the effect of preventing changes in our Board of Directors and may make it more difficult to accomplish transactions
which stockholders may otherwise deem to be in their best interests.


 


Removal
of Directors; Vacancies


 


Our
By-Laws provide that directors may be removed with or without cause upon the affirmative vote of a majority in voting power
of all outstanding shares of common stock present in person or by proxy and entitled to vote. Our By-Laws also provide that
any vacancies or newly created directorships on our Board of Directors will be filled only by the affirmative vote of a majority
of the remaining directors, even if less than a quorum, or by a sole remaining director.


 


No
Cumulative Voting


 


Under
Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation specifically authorizes cumulative
voting. Our Certificate of Incorporation does not authorize cumulative voting.


 


Special
Stockholder Meetings


 


Our
By-Laws provide that special meetings of our stockholders may be called only by our President whenever he deems advisable.
A special meeting of the stockholders will be called by the President whenever so directed in writing by a majority of the entire
Board of Directors or whenever the holders of one-third (1/3) of the number of shares of our capital stock entitled to vote
at such meeting request in writing that a special meeting be held. These provisions may have the effect of deferring, delaying
or discouraging hostile takeovers, or changes in control or management of our company.


 


Requirements
for Advance Notification of Director Nominations and Stockholder Proposals


 


Our
By-Laws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election
as directors, other than nominations made by or at the direction of the Board of Directors or a committee of the Board of Directors.
In order for any matter to be “properly brought” before a meeting, a stockholder has to comply with advance notice
requirements and provide us with certain information. Generally, to be timely, a stockholder’s notice must be received at
our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately
preceding annual meeting of stockholders. Our By-Laws also specify requirements as to the form and content of a stockholder’s
notice. These provisions may defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect
the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of our company.


 


Dissenters’
Rights of Appraisal and Payment


 


Under
the DGCL, with certain exceptions, our stockholders will have appraisal rights in connection with a merger or consolidation of
us. Pursuant to the DGCL, stockholders who properly request and perfect appraisal rights in connection with such merger or consolidation
will have the right to receive payment of the fair value of their shares as determined by the Delaware Court of Chancery.


 






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Stockholders’
Derivative Actions


 


Under
the DGCL, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative
action, provided that the stockholder bringing the action is a holder of our shares at the time of the transaction to which the
action relates or such stockholder’s stock thereafter devolved by operation of law.


 


Exclusive
Forum


 


Our
Certificate of Incorporation provides, subject to limited exceptions, that unless we consent to the selection of an alternative
forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive
forum for (i) any derivative action or proceeding brought on behalf of our company, (ii) any action asserting a claim of breach
of a fiduciary duty owed by any director, officer, or other employee or stockholder of our company to the Company or our stockholders,
(iii) any action asserting a claim arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our By-Laws,
or (iv) any other action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise
acquiring any interest in shares of capital stock of our company shall be deemed to have notice of and consented to the forum
provisions in our Certificate of Incorporation. However, the enforceability of similar forum provisions in other companies’
certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types
of provisions to be unenforceable.


 


Limitations
on Liability and Indemnification of Officers and Directors


 


Our
Certificate of Incorporation contains a provision permitted under the DGCL relating to the liability of directors. This provision
eliminates a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from
a breach of fiduciary duty; provided that such provision will not eliminate or limit a director’s liability for:


 


		●	any
breach of the director’s duty of loyalty;



		 	 



		●	acts
or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;



		 	 



		●	Section
174 of the DGCL (unlawful dividends); or



		 	 



		●	any
transaction from which the director derives an improper personal benefit.



 


The
principal effect of the limitation on liability provision is that a stockholder is unable to prosecute an action for monetary
damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available
under the DGCL. This provision, however, should not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief,
such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. This provision does not alter
a director’s liability under federal securities laws. The inclusion of this provision in our Certificate of Incorporation
may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties,
even though such an action, if successful, might otherwise have benefited us and our stockholders.


 


Our
Certificate of Incorporation and By-Laws provide that we are required to indemnify our directors and officers, to the fullest
extent permitted by law, for all judgments, fines, settlements, legal fees and other expenses incurred in connection with pending
or threatened legal proceedings because of the director’s or officer’s positions with us or another entity that the
director or officer serves at our request, subject to various conditions and exceptions, and to advance funds to our directors
and officers to enable them to defend against such proceedings.


 


We
have entered into indemnification agreements and employment agreements with our directors and certain of our executive officers,
respectively, pursuant to which we have agreed to indemnify such persons against any liability, damage, cost or expense incurred
in connection with the defense of any action, suit or proceeding to which such persons are a party to the extent permitted by
applicable law, subject to certain exceptions.


 


Trading
Market


 


Our
common stock is currently quoted on the OTCQB Marketplace under the symbol “PEER.”


 


Transfer
Agent and Registrar


 


The
transfer agent and registrar for our common stock is Corporate Stock Transfer, Inc.


 


 


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