Attached files
Exhibit 3.3
CERTIFICATE OF DESIGNATION
OF
SERIES D CONVERTIBLE PREFERRED STOCK
OF
YUMA ENERGY, INC.
To Be Designated
Series D Convertible Preferred Stock
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
Yuma
Energy, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware, as amended (the
“DGCL”), in accordance
with Section 151 of the DGCL, does hereby certify
that:
1. The
name of the corporation is Yuma Energy, Inc. (the
“Corporation”).
2. The
original Certificate of Incorporation of the Corporation (as may be
amended from time to time, the “Certificate of
Incorporation”) was filed with the Secretary of State
of the State of Delaware on February 10, 2016.
3.
Pursuant to the authority conferred upon the Board of Directors
(the “Board of
Directors”) of the Corporation by the Certificate of
Incorporation, and pursuant to the provisions of Sections 103 and
151(g) of the DGCL, said Board of Directors, by unanimous written
consent on October 26, 2016, adopted a resolution establishing the
rights, preferences, privileges and restrictions of, and the number
of shares comprising, the Corporation’s Series D Convertible
Preferred Stock, which resolution is as follows:
RESOLVED, that pursuant to the authority
conferred on the Board of Directors by the Certificate of
Incorporation, the issuance of a series of preferred stock, $0.001
par value per share, of the Corporation, which shall consist of
7,000,000 shares of Series D Convertible Preferred Stock be, and
the same hereby is, authorized; and that any of the Chairman of the
Board of Directors, President, Secretary, Treasurer or any person
authorized by the Board of Directors (each, an “Authorized Officer”) of
the Corporation be, and hereby is, authorized and directed to
execute and file with the Secretary of State of the State of
Delaware a Certificate of Designation of Series D Convertible
Preferred Stock of the Corporation fixing the designations, powers,
preferences and rights of the shares of such series, and the
qualifications, limitations or restrictions thereof (in addition to
the designations, powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, set forth in
the Certificate of Incorporation which may be applicable to the
Corporation’s preferred stock), as follows:
1. DESIGNATION
AND AMOUNT. A total of 7,000,000 shares of preferred stock,
$0.001 par value per share, of the Corporation, are hereby
designated as “Series D Convertible Preferred Stock”
(the “Series D
Preferred Stock”).
2.
DIVIDENDS. The holders of shares of
Series D Preferred Stock shall be entitled to receive, in
preference to all of the Corporation’s common stock, $0.001
par value per share (the “Common Stock”), issued
previously or hereafter, a 7.0% per annum dividend on the Original
Issue Price of each share of Series D Preferred Stock held by such
holder that is cumulative and payable in kind per share in such
number of shares of Series D Preferred Stock determined using a
price per share equal to $11.0741176 per share (adjusted
appropriately for stock splits, stock dividends, recapitalizations,
consolidations, mergers, reclassifications and the like with
respect to the Series D Preferred Stock) (the “Original Issue
Price’’) and calculated on actual number of days
elapsed in a year of 365 days. In lieu of the issuance of a
fractional share of Series D Preferred Stock as a dividend, the
Corporation shall issue a whole share of Series D Preferred Stock
(rounded to the nearest whole share), determined on the basis of
the total number of shares of Series D Preferred Stock held by the
holder with respect to which such dividends are being calculated.
Such dividends will be cumulative and compound on a quarterly basis
to the extent not paid for any reason. Dividends will accrue and be
cumulative from the date that the Series D Preferred Stock is
issued under this
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Certificate
of Designation, whether or not the Corporation has earnings or
profits, whether or not there are funds legally available for the
payment of such dividends and whether or not such dividends are
declared or paid. Quarterly dividends will be paid on the last
business day of the fiscal quarter (the “Payment Date”). Dividends
paid in an amount less than the total amount of such accrued
dividends at the time shall be allocated pro rata on a
share-by-share basis among all shares of Series D Preferred Stock
at the time outstanding. The record date for determination of the
holders of Series D Preferred Stock entitled to receive payment of
a dividend thereon shall be fifteen (15) days before the Payment
Date, or
such other date that the Corporation establishes no less than ten
(10) days and no more than thirty (30) days preceding the Payment
Date. In addition, if and when any dividend is declared or paid by
the Board of Directors with respect to the Common Stock, the Board
of Directors shall also declare and pay the same dividend on each
share of the Series D Preferred Stock then outstanding on an
as-if-converted to Common Stock basis.
3.
SALE
TRANSACTION AND LIQUIDATION.
(a) Payments to Holders of Series D Preferred
Stock. In the event of a Triggering Event, the holders of
Series D Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock by reason of their
ownership thereof, the Preference Amount payable with respect to
each outstanding share of Series D Preferred Stock held by them.
If, upon the occurrence of such Triggering Event, the assets and
funds thus distributed or the consideration paid to the holders of
the Corporation’s capital stock, as the case may be, among
the holders of Series D Preferred Stock shall be insufficient to
permit the payment to such holders of the full aforesaid Preference
Amounts, then the entire assets and funds of the Corporation
legally available for distribution or the consideration paid to the
holders of the Corporation’s capital stock, as the case may
be, shall be distributed ratably among the holders of Series D
Preferred Stock in proportion to the Preference Amounts each such
holder is otherwise entitled to receive. The term
“Triggering
Event” means a transaction or series of related
transactions that results in (i) the sale, conveyance, transfer or
other disposition of all or substantially all of the property,
assets or business of the Corporation or its subsidiaries, taken as
a whole, (ii) the merger of the Corporation with or into or the
consolidation of the Corporation with any other corporation,
limited liability company or other entity (other than a
wholly-owned subsidiary of the Corporation), (iii) a third party or
a group of related third parties (other than pursuant to an
offering registered under the Securities Act of 1933, as amended
(the “Securities
Act”)) acquiring from the Corporation, or from the
holders of the Corporation’s capital stock, shares
representing 50% or more of the outstanding voting power of the
Corporation, or (iv) the liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary; provided that
none of the following shall be considered a Triggering Event: (A) a
merger effected exclusively for the purpose of changing the
domicile of the Corporation or (B) a transaction in which the
stockholders of the Corporation immediately prior to the
transaction own 50% or more of the voting power of the surviving
corporation following the transaction. The term “Preference Amount” means,
with respect to each outstanding share of Series D Preferred Stock,
the greater of (x) the Original Issue Price for each outstanding
share of Series D Preferred Stock then held by them, plus accrued
but unpaid dividends and (y) the amount distributable or the
consideration payable with respect to Common Stock on the number of
shares of Common Stock into which such share of Series D Preferred
Stock is convertible in the event of a Triggering Event if all
outstanding shares of Series D Preferred Stock were deemed to have
converted into shares of Common Stock immediately prior to such
Triggering Event. Nothing in this Section 3(a) shall require the
distribution to stockholders of anything other than proceeds of
such Triggering Event in the event of a merger or consolidation of
the Corporation.
(b) Payments to Holders of Common Stock.
Upon the completion of the distribution required by Section 3(a)
above, if assets or consideration, as applicable, remain in the
Corporation the holders of the Common Stock of the Corporation
shall receive all of the remaining assets or consideration, as
applicable, of the Corporation on a pro rata basis based on the
number of shares of Common Stock held by each such
holder.
(c) Valuation of Consideration. In the event
of a Triggering Event as described in clauses (i), (ii) or (iii) of
the definition of Triggering Event, if the consideration received
by the Corporation is other than cash, its value will be deemed its
fair market value. Any securities shall be valued as
follows:
(i)
Securities not
subject to investment letter or similar restrictions on free
marketability:
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(A) if traded on a
securities exchange or market, the value shall be based on a
formula approved by the Board of Directors and derived from the
closing prices of the securities on such exchange or market over a
specified time period as determined in good faith by the Board of
Directors;
(B) if actively traded
over-the-counter, the value shall be based on a formula approved by
the Board of Directors and derived from the closing bid or sales
prices (whichever is applicable) of such securities over a
specified time period as determined in good faith by the Board of
Directors; and
(C) if there is no
active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board of
Directors.
(ii)
The method of
valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising
solely by virtue of a stockholder’s status as an affiliate or
former affiliate) shall be to make an appropriate discount from the
market value determined as specified above in Section 3(c)(i) to
reflect the approximate fair market value thereof, as determined in
good faith by the Board of Directors.
4.
VOTING.
(a) General Voting Rights. The holders of
the Series D Preferred Stock shall be entitled to notice of
all stockholder meetings at which holders of Common Stock shall be
entitled to vote and shall be entitled to vote equally with the
holders of the Common Stock as a single class on an as-converted
basis on any matter presented to the stockholders of the
Corporation for their action or consideration.
(b) Special
Voting Rights. In addition to any other vote required by
law, the Certificate of Incorporation or this Certificate of
Designation, the holders of shares of Series D Preferred Stock
shall be entitled to vote as a separate class on all matters
specifically affecting the Series D Preferred Stock. Without
limiting the foregoing, the Corporation shall not, either directly
or indirectly, by amendment, merger, consolidation or otherwise, do
any of the following without first obtaining the approval (by vote
or written consent, as provided by law) of the holders of at least
a majority of the outstanding shares of Series D Preferred
Stock, and any such act or transaction entered into without
such approval shall be null and void ab initio, and of no force or
effect:
(i) amend or repeal any
provision of, or add any provision to, the Certificate of
Incorporation or this Certificate of Designation if such action
would adversely alter or change the relative rights, preferences,
privileges or powers of the Series D Preferred
Stock;
(ii) authorize
or issue, or obligate itself to issue, any other equity security,
including any security convertible into or exercisable for any
equity security, having a preference over, or being on a parity
with, the Series D Preferred Stock with respect to voting
(other than the pari passu voting rights of Common Stock),
dividends, redemption, conversion or upon liquidation;
(iii) redeem,
purchase or otherwise acquire (or pay into or set aside for a
sinking fund for such purpose) any share of Common Stock or any
security (other than Series D Preferred Stock) convertible
into or exchangeable or exercisable for shares of Common Stock;
provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock at fair market value from
employees, officers, directors, consultants or other persons
performing services for this Corporation or any subsidiary pursuant
to agreements under which this Corporation has the option to
repurchase such shares under existing agreements and/or upon the
occurrence of certain events, such as the termination of employment
or service, or pursuant to a right of first refusal;
or
(iv) declare,
pay or set aside any dividends on any class of the
Corporation’s capital stock (other than the payment of
dividends on the Series D Preferred Stock in accordance with
Section 2).
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5.
CONVERSION. The holders of shares of
Series D Preferred Stock shall be entitled to conversion
rights as follows:
(a) Optional Conversion. Subject to Section
5(c), each share of Series D Preferred Stock (including any shares
of Series D Preferred Stock payable as dividends that have accrued
but are unpaid) shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at
the principal corporate offices of the Corporation or any transfer
agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing
(i) the Original Issue Price, by (ii) the conversion price (the
“Conversion
Price”) applicable to such share, determined as
hereafter provided, in effect on the date the stock certificate is
surrendered for conversion. The initial Conversion Price per share
of Series D Preferred Stock shall be $11.0741176, subject to
adjustment as set forth in Section 5(d).
(b) Mandatory Conversion. Without limiting
the conversion rights set forth in Section 5(a) above, each share
of Series D Preferred Stock shall, at the election of the
Corporation, automatically be converted into shares of Common Stock
at the Conversion Price then in effect for such share immediately
upon a Mandatory Conversion Event. The term “Mandatory Conversion
Event” means any of: (i) the date specified, if any,
by vote or written consent of the holders of a majority of the
outstanding shares of Series D Preferred Stock; (ii) with respect
to any holder, any time that less than 10% of the original number
of shares of Series D Preferred Stock issued to such holder (as
adjusted for stock splits, stock dividends, reclassification and
the like) are held by such holder together with its affiliates on
combined basis; or (iii) with respect to any holder, when such
holder, together with its affiliates on combined basis, is no
longer a holder of shares of the Corporation’s Common Stock
(or any securities received in consideration for such Common Stock
in the event of merger, reorganization, reclassification or similar
transaction).
(c) Mechanics
of Conversion.
(i) Optional Conversion. Before any
holder of Series D Preferred Stock shall be entitled to convert
shares of Series D Preferred Stock into shares of Common Stock, the
holder shall surrender the certificate or certificates therefor,
duly endorsed, at the principal corporate office of the Corporation
or of any transfer agent for the Series D Preferred Stock, and
shall give written notice to the Corporation at its principal
corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Series D Preferred Stock,
or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such
holder shall be entitled as aforesaid. Such conversion shall be
deemed to have been made immediately prior to the close of business
on the date of such surrender of the shares of the Series D
Preferred Stock to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock as of such date. If the conversion
is in connection with a firm commitment underwritten public
offering of securities, the conversion may, at the option of any
holder tendering shares of Series D Preferred Stock for conversion,
be conditioned upon the closing of the sale of securities pursuant
to such offering, in which event such holder shall not be deemed to
have converted shares of Series D Preferred Stock until immediately
prior to the closing of such sale of securities. At least ten (10)
days prior to the occurrence of a Triggering Event, the Corporation
shall notify each holder of Series D Preferred Stock in
writing of such Triggering Event. If the conversion is in
connection with a Triggering Event, the conversion may, at the
option of any holder tendering shares of Series D Preferred
Stock for conversion, be conditioned upon the closing of such
Triggering Event, in which event such holder shall not be deemed to
have converted shares of Series D Preferred Stock until
immediately prior to the closing of such Triggering
Event.
(ii) Mandatory
Conversion. At any time following a Mandatory Conversion
Event, the Corporation shall have the right to convert all shares
of Series D Preferred Stock then outstanding into that number of
shares of Common Stock as determined by the Conversion Price. The
Corporation shall effect such conversion by providing the holders
of Series D Preferred Stock with written notice (a
“Notice of Mandatory
Conversion”) sent by facsimile or as a scanned e-mail
attachment to the e-mail address provided to the Corporation by
each such holder, promptly followed by delivery of such written
notice by overnight courier to the address provided to the
Corporation by each such holder, and (A) stating that a
Mandatory
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(iii) Conversion
Event has occurred, (B) specifying the then applicable Conversion
Price, the number of shares of Series D Preferred Stock owned prior
to the conversion, and the number of shares of Common Stock to be
received as a result of such conversion, and (C) the date on which
such conversion shall be consummated (the “Conversion Date”). From
and after the Conversion Date, the shares of Series D Preferred
Stock shall be null and void and only represent the right to
receive the shares of Common Stock due upon conversion thereof, and
each holder shall be deemed to have become the record holder of
such shares of Common Stock on the Conversion Date. The Corporation
shall issue the shares of Common Stock promptly following surrender
by the holder Series D Preferred Stock of the certificate(s)
representing the shares of Series D Preferred Stock to the
Corporation.
(d) Conversion Price Adjustments for Certain
Dilutive Issuances, Splits and Combinations. The Conversion
Price of the Series D Preferred Stock shall be subject to
adjustment from time to time as follows:
(i) Issuance of Additional Stock Below Conversion
Price. If the Corporation should issue, at any time after
the date upon which any shares of Series D Preferred Stock were
first issued (the “Issue Date”), any
Additional Stock (as defined below) without consideration or for a
consideration per share less than the Conversion Price in effect
immediately prior to the issuance of such Additional Stock (as
adjusted for stock splits, stock dividends, reclassification and
the like), the Conversion Price in effect immediately prior to each
such issuance shall automatically be adjusted as set forth in this
Section 5(d)(i), unless otherwise provided in this Section
5(d)(i).
(A) Adjustment Formula. Whenever the
Conversion Price is adjusted pursuant to this Section 5(d)(i), the
new Conversion Price shall be determined by multiplying the
Conversion Price then in effect by a fraction, (1) the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance (the “Outstanding Common”) plus
the number of shares of Common Stock that the aggregate
consideration received by the Corporation for such issuance would
purchase at such Conversion Price; and (2) the denominator of which
shall be the number of shares of Outstanding Common plus the number
of shares of such Additional Stock. For purposes of the foregoing
calculation, the term “Outstanding Common” shall
include shares of Common Stock deemed issued pursuant to Section
5(d)(i)(E) below.
(B) Definition of Additional Stock. For
purposes of this Section 5(d)(i), “Additional Stock” shall
mean any shares of Common Stock issued (or deemed to have been
issued pursuant to Section 5(d)(i)(E)) by the Corporation after the
Issue Date, other than:
(1) securities
issued pursuant to stock splits, stock dividends or similar
transactions, as described in Section 5(d)(ii) hereof;
(2) securities issuable
upon conversion, exchange or exercise of convertible, exchangeable
or exercisable securities outstanding as of the Issue Date
including, without limitation, warrants, notes or
options;
(3) Common Stock (or
options therefor) issued or issuable to employees, consultants,
officers or directors of the Corporation pursuant to employee
benefit plans, stock option plans, incentive plans, or restricted
stock plans or agreements approved by the Board of Directors or a
duly authorized committee thereof;
(4) Common Stock issued
or issuable in an offering registered under the Securities Act, in
connection with which all outstanding shares of Series D Preferred
Stock convert to Common Stock;
(5) securities issued
or issuable in connection with the acquisition by the Corporation
of another company or business;
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(6) securities issued
or issuable to financial institutions, equipment lessors, brokers
or similar persons in connection with commercial credit
arrangements, equipment financings, commercial property lease
transactions or similar transactions;
(7) securities issued
or issuable to an entity as a component of any business
relationship with such entity primarily for the purpose of (A)
joint venture, technology licensing or development activities, (B)
distribution, supply or manufacture of the Corporation’s
products or services or (C) any other arrangements involving
corporate partners that are primarily for purposes other than
raising capital, the terms of which business relationship with such
entity are approved by the Board of Directors;
(8) Common Stock issued
or issuable upon conversion of the Series D Preferred Stock;
and
(9) securities issued
or issuable in any other transaction in which exemption from these
price-based antidilution provisions is approved by the affirmative
vote of at least a majority of the outstanding shares of Series D
Preferred Stock.
(C) No Fractional Adjustments. No adjustment
of the Conversion Price shall be made in an amount less than one
cent per share; provided that any adjustments which are not
required to be made by reason of this sentence shall be carried
forward and shall be either taken into account in any subsequent
adjustment made prior to three (3) years from the date of the event
giving rise to the adjustment being carried forward, or shall be
made at the end of three (3) years from the date of the event
giving rise to the adjustment being carried forward.
(D) Determination of Consideration. In the
case of the issuance of Common Stock for cash, the consideration
shall be deemed to be the amount of cash paid therefor before
deducting any reasonable discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting
or otherwise in connection with the issuance and sale thereof, as
determined by the Board of Directors. In the case of the issuance
of the Common Stock for a consideration in whole or in part other
than cash, the consideration other than cash shall be deemed to be
the fair value thereof as determined by the Board of Directors
irrespective of any accounting treatment.
(E) Deemed Issuances of Common Stock. In the
case of the issuance of securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (the “Common Stock
Equivalents”), the following provisions shall apply
for all purposes of this Section 5(d)(i):
(1)
The aggregate maximum number of shares of Common Stock deliverable
upon conversion, exchange or exercise (assuming the satisfaction of
any conditions to convertibility, exchangeability or
exercisability, including, without limitation, the passage of time,
but without taking into account potential antidilution adjustments)
of any Common Stock Equivalents and subsequent conversion, exchange
or exercise thereof shall be deemed to have been issued at the time
such securities were issued or such Common Stock Equivalents were
issued and for a consideration equal to the consideration, if any,
received by the Corporation for any such securities and related
Common Stock Equivalents (excluding any cash received on account of
accrued interest or accrued dividends), plus the minimum additional
consideration, if any, to be received by the Corporation (without
taking into account potential antidilution adjustments) upon the
conversion, exchange or exercise of any Common Stock Equivalents
(the consideration in each case to be determined in the manner
provided in Section 5(d)(i)(D)).
(2) In the event of any
change in the number of shares of Common Stock deliverable or in
the consideration payable to the Corporation upon conversion,
exchange
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(3) or exercise of any
Common Stock Equivalents, other than a change resulting from the
antidilution provisions thereof, the Conversion Price, to the
extent in any way affected by or computed using such Common Stock
Equivalents, shall be recomputed to reflect such change, but no
further adjustment shall be made for the actual issuance of Common
Stock or any payment of such consideration upon the conversion,
exchange or exercise of such Common Stock Equivalents.
(4) Upon the
termination or expiration of the convertibility, exchangeability or
exercisability of any Common Stock Equivalents, the Conversion
Price, to the extent in any way affected by or computed using such
Common Stock Equivalents, shall be recomputed to reflect the
issuance of only the number of shares of Common Stock (and Common
Stock Equivalents that remain convertible, exchangeable or
exercisable) actually issued upon the conversion, exchange or
exercise of such Common Stock Equivalents.
(5) The number of
shares of Common Stock deemed issued and the consideration deemed
paid therefor pursuant to Section 5(d)(i)(E) shall be appropriately
adjusted to reflect any change, termination or expiration of the
type described in either Section 5(d)(i)(E)(2) or (3).
(F) No Increased Conversion Price.
Notwithstanding any other provisions of this Section 5(d)(i),
except to the limited extent provided for in Sections 5(d)(i)(E)(2)
and (3), no adjustment of the Conversion Price pursuant to this
Section 5(d)(i) shall have the effect of increasing the Conversion
Price above the Conversion Price in effect immediately prior to
such adjustment.
(ii) Stock
Splits and Dividends. In the event the Corporation should at
any time after the filing date of this Certificate of Designation
fix a record date for the effectuation of a split or subdivision of
the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or the
Common Stock Equivalents without payment of any consideration by
such holder for the additional shares of Common Stock or the Common
Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Conversion Price shall
be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of Series D Preferred
Stock shall be increased in proportion to such increase of the
aggregate number of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents with the
number of shares issuable with respect to Common Stock Equivalents
determined from time to time in the manner provided for deemed
issuances in Section 5(d)(i)(E).
(iii) Reverse
Stock Splits. If the number of shares of Common Stock
outstanding at any time after the filing date of this Certificate
of Designation is decreased by a combination of the outstanding
shares of Common Stock (including by way of a reverse stock split),
then, following the record date of such combination, the Conversion
Price shall be appropriately increased so that the number of shares
of Common Stock issuable on conversion of each share of Series D
Preferred Stock shall be decreased in proportion to such decrease
in outstanding shares.
(e) Other Distributions. In the event the
Corporation shall declare a distribution payable in securities of
other persons, evidences of indebtedness issued by the Corporation
or other persons, assets (excluding cash dividends) or options or
rights not referred to in Section 5(d)(ii) or 5(d)(iii), then, in
each such case for the purpose of this Section 5(e), the holders of
Series D Preferred Stock shall be entitled to a proportionate share
of any such distribution as though they were the holders of the
number of shares of Common Stock of the Corporation into which
their shares of Series D Preferred Stock are convertible as of the
record date fixed for the determination of the holders of Common
Stock of the Corporation entitled to receive such
distribution.
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(f) Recapitalizations. If at any time or
from time to time there shall be a recapitalization of the Common
Stock (other than a subdivision, combination or merger or sale of
assets transaction or other Triggering Event provided for elsewhere
in this Section 5 or in Section 3), a provision shall be made so
that the holders of Series D Preferred Stock shall thereafter be
entitled to receive upon conversion of shares of Series D Preferred
Stock the number of shares of stock or other securities or property
of the Corporation or otherwise, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 5 with
respect to the rights of the holders of Series D Preferred Stock
after the recapitalization to the end that the provisions of this
Section 5 (including adjustment of the Conversion Price then in
effect and the number of shares issuable upon conversion of each
share of Series D Preferred Stock) shall be applicable after that
event and be as nearly equivalent as practicable.
(g) No
Fractional Shares and Certificate as to Adjustments.
(i) No fractional
shares shall be issued upon the conversion of any share or shares
of Series D Preferred Stock, and the number of shares of Common
Stock to be issued shall be rounded to the nearest whole share. The
number of shares issuable upon such conversion shall be determined
on the basis of the total number of shares of Series D Preferred
Stock the holder is at the time converting into Common Stock and
the number of shares of Common Stock issuable upon such aggregate
conversion. If the conversion would result in any fractional share,
the Corporation shall, in lieu of issuing any such fractional
share, pay the holder thereof an amount in cash equal to the fair
market value of such fractional share on the date of conversion, as
determined in good faith by the Board of Directors.
(ii) Upon
the occurrence of each adjustment or readjustment of the Conversion
Price pursuant to this Section 5, the Corporation, at its expense,
shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each
holder of Series D Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any holder of Series
D Preferred Stock, furnish or cause to be furnished to such holder
a like certificate setting forth (A) such adjustment and
readjustment, (B) the Conversion Price at the time in effect, and
(C) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the
conversion of a share of Series D Preferred Stock.
(h) Notices of Record Date. In the event of
any taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right,
the Corporation shall mail to each holder of Series D Preferred
Stock, at least ten (10) business days prior to the date specified
therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution
or right.
(i) Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and
keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the
shares of Series D Preferred Stock that is convertible into Common
Stock, such number of its shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all outstanding
shares of Series D Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares
of Series D Preferred Stock, in addition to such other remedies as
shall be available to the holder of shares of Series D Preferred
Stock, the Corporation will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including, without
limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to the Certificate
of Incorporation.
(j) Reservation
of Series D Preferred Stock Issuable as Dividends. The
Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Series D Preferred Stock,
solely for the purpose of effecting the payment of dividends in
kind on the Series D Preferred Stock, such number of its shares of
Series D Preferred Stock as shall from time to time be sufficient
to effect such payment of dividends on all outstanding shares of
Series D Preferred Stock; and if at any time the number of
authorized but unissued shares of Series D Preferred Stock shall
not be sufficient to effect the payment of dividends in kind on all
then outstanding shares of Series D Preferred Stock, in addition to
such other remedies as shall be available to the holder of shares
of Series D Preferred Stock, the Corporation will take such
corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Series
D Preferred Stock to such number of shares as shall be sufficient
for such purposes, including, without limitation, engaging in best
efforts to obtain the requisite stockholder approval of any
necessary amendment to this Certificate of
Designation.
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(k) Notices.
Any notice required by the provisions of this Section 5 to be given
to the holders of shares of Series D Preferred Stock shall be
deemed given if deposited 48 hours after being deposited in the
United States mail, as certified mail with postage prepaid, and
addressed to each holder of record at its address appearing on the
records of the Corporation or its transfer agent.
6.
MISCELLANEOUS.
(a) Any provision in
this Certificate of Designation (including, but not limited to, any
notice requirements) may be waived, in whole or in part, amended or
otherwise modified by the prior vote or written consent of holders
representing at least a majority of the outstanding shares of
Series D Preferred Stock.
(b) If any Series D
Preferred Stock certificate shall be mutilated, lost, stolen or
destroyed, the Corporation will issue, in exchange and in
substitution for and upon cancellation of the mutilated
certificate, or in lieu of and substitution for the certificate
lost, stolen or destroyed, a new Series D Preferred Stock
certificate of like tenor and representing an equivalent amount of
Series D Preferred Stock, upon receipt of evidence of such loss,
theft or destruction of such certificate and, if requested by the
Corporation, an indemnity on customary terms for such situations
reasonably satisfactory to the Corporation.
(c) The headings of the
various subdivisions hereof are for convenience of reference only
and shall not affect the interpretation of any of the provisions
hereof.
(d) This Certificate of
Designation shall become effective upon the filing thereof with the
Secretary of State of the State of Delaware.
7.
NO OTHER RIGHTS. The shares of Series D
Preferred Stock shall not have any relative, participating,
optional or other special rights or powers except as set forth
herein or as may be required by law.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Designation to be signed by its
Authorized Officer, this 26th day of October, 2016.
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