Attached files
Exhibit 3.1
Amended
and Restated
Certificate
of Incorporation
of
IMAGEWARE
SYSTEMS, INC.
ImageWare Systems,
Inc. (the “Corporation”), a Delaware
corporation hereby certifies as follows:
A.
The original
Certificate of Incorporation of the Corporation was filed with the
Secretary of the State of Delaware on October 26, 2005 (as amended,
amended and restated, supplemented or otherwise modified prior to
the filing of this Amended and Restated Certificate of
Incorporation, the “Original Certificate of
Incorporation”). This Amended and Restated Certificate
of Incorporation (this “Certificate of
Incorporation”) was duly adopted by the Board of
Directors of the Corporation (the “Board”) and the
stockholders of the Corporation in accordance with the applicable
provisions of Sections 242 and 245 of the General Corporation Law
of the State of Delaware (the “DGCL”).
B.
The Original
Certificate of Incorporation is hereby amended and restated to read
in its entirety as follows:
1. The name of the
Corporation is ImageWare Systems, Inc..
2. The address of the
Corporation’s registered office in the State of Delaware is
1209 Orange Street, in the City of Wilmington, 19801, County of New
Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the
business of the Corporation and the objects or purposes to be
transacted, promoted or carried on by it are as follows: To engage
in any lawful act or activity for which corporations may be
organized under the DGCL.
4. Capitalization.
(a) The total number of
shares of all classes of stock that the Corporation is authorized
to issue is One Billion, Five Million (1,005,000,000) shares,
consisting of One Billion (1,000,000,000) shares of Common Stock
with a par value of $0.01 per share (“Common Stock”) and Five
Million (5,000,000) shares of Preferred Stock with a par value of
$0.01 per share (“Preferred
Stock”).
(b) Common Stock.
i. Dividends. Subject to the
rights, preferences, privileges, restrictions and other matters
pertaining to the Preferred Stock that may from time to time be
issued, the holders of the Common Stock shall be entitled to
receive, when, as and if declared by the Board, out of any assets
of the Corporation legally available therefore, such dividends as
may be declared from time to time by the Board.
ii. Liquidation; Dissolution. In
the event of any liquidation, dissolution or winding up (either
voluntary or involuntary) of the Corporation, the holders of shares
of Common Stock shall be entitled to receive the assets and funds
of the Corporation available for distribution after payments to
creditors and to the holders of any Preferred Stock of the
Corporation that may at the time be outstanding, in proportion to
the number of shares held by them, respectively, without regard to
class.
iii. Voting
Rights. Except as otherwise required by law, or as otherwise
fixed by resolution or resolutions of the Board with respect to one
or more series of Preferred Stock, the entire voting power and all
voting rights shall be vested exclusively in the Common Stock, and
each stockholder of the Corporation who at the time possesses
voting power for any purpose shall be entitled to one vote for each
share of such stock standing in his name on the books of the
Corporation. There shall be no cumulative voting. Each holder of
Common Stock shall have one vote in respect of each share of Common
Stock held by him or her on all matters voted upon by the
stockholders. Except as otherwise required by law, holders of
Common Stock shall not be entitled to vote on any amendment to this
Certificate of Incorporation (including any certificate of
designation relating to any series of Preferred Stock) that relates
primarily to the terms of one or more outstanding series of
Preferred Stock if the holders of such affected series are
entitled, either separately or together with the holders of one or
more other such series, to vote thereon pursuant to this Amended
and Restated Certificate of Incorporation (including any
certificate of designation relating to any series of Preferred
Stock) or pursuant to the DGCL.
(c) Undesignated Preferred Stock.
The remaining shares of Preferred Stock may be issued from time to
time in one or more series. Subject to the limitations and
restrictions in this section 4(c) set forth, the Board, by
resolution or resolutions, is authorized to create or provide for
any such series, and to fix the designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including,
without limitation, the authority to fix or alter the dividend
rights, dividend rates, conversion rights, exchange rights, voting
rights, rights and terms of redemption (including sinking and
purchase fund provisions), the redemption price or prices, the
dissolution preferences and the rights in respect to any
distribution of assets of any wholly unissued series of Preferred
Stock and the number of shares constituting any such series, and
the designation thereof, or any of them and to increase or decrease
the number of shares of any series so created, subsequent to the
issue of that series but not below the number of shares of such
series then outstanding. In case the number of shares of any series
shall be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
There shall be no limitation or restriction on any variation
between any of the different series of Preferred Stock as to the
designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or
restrictions thereof; and the several series of Preferred Stock
may, except as hereinafter in this section 4(c) otherwise expressly
provided, vary in any and all respects as fixed and determined by
the resolution or resolutions of the Board, providing for the
issuance of the various series; provided, however, that all shares
of any one series of Preferred Stock shall have the same
designation, preferences and relative, participating, optional or
other special rights and qualifications, limitations and
restrictions.
(d) Series B Preferred Stock. The
rights, preferences, restrictions and other matters relating to the
Series B Preferred Stock are as follows:
i. Dividends. The holders of
shares of Series B Preferred Stock shall be entitled to receive
cumulative dividends in cash, subject to the availability of, and
only out of, any funds legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable
other than in Common Stock or other securities and rights
convertible into or entitling the holder thereof to receive,
directly or indirectly, additional shares of Common Stock of the
Corporation; provided, however, that such convertible securities or
rights shall not rank, as to dividend or liquidation rights, prior
to or on a parity with the Series B Preferred Stock) on the Common
Stock or any other series of Preferred Stock or series or class of
any other stock of the Corporation and prior and in preference to
any payment of monies to any sinking or purchase fund on the common
stock or any other series of Preferred Stock or series or class of
any other stock of the corporation for the redemption or repurchase
thereof, at the rate of $0.2125 per share per annum payable in
equal semiannual installments of $0.10625 per share, on the last
business day of October and April each year, and upon redemption of
the Series B Preferred Stock or conversion thereof as otherwise
provided herein. Dividends for less than a full calendar
semi-annual period shall be prorated, based on the actual number of
days elapsed during such semiannual period, divided by 180 days.
Declared dividends on outstanding shares of the Series B Preferred
Stock shall be paid to record holders as they appear on the stock
register of the Corporation at the close of business on the 15th
day of the month containing such dividend date as may be fixed by
the Board in advance of such dividend date, provided that no such
record date shall be more than 30 days prior to such dividend
date.
ii. Liquidation; Dissolution. (a)
In the event of any liquidation, dissolution or winding up (either
voluntary or involuntary) of the Corporation, the holders of Series
B 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 or any other series of
Preferred Stock or series or class of any other stock of the
Corporation by reason of their ownership thereof, an amount per
share equal to the sum of (i) $2.50 for each outstanding share of
Series B Preferred Stock (hereafter referred to as the
“Original Series B
Issue Price”) and (ii) an amount equal to accrued but
unpaid dividends on such share. If upon the occurrence of such
event, the assets and funds thus distributed among the holders of
the Series B Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts,
then, the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the
holders of the Series B Preferred Stock in proportion to the amount
of such stock owned by each such holder. The Corporation shall mail
to each holder of Series B Preferred Stock, at least twenty (20)
days prior to any liquidation event, a notice setting forth the
date on which such event is expected to become effective and the
type and amount of anticipated proceeds per share of Common Stock
to be distributed with respect thereto and shall afford each such
holder the opportunity to convert such shares of Series B Preferred
Stock pursuant to paragraph iii of this section 4(d) (conditional
upon the consummation of such liquidation event) prior to the
consummation thereof, (b) a consolidation or merger of the
Corporation with or into any other corporation or corporations, or
a sale, conveyance or disposition of all or substantially all of
the assets of the Corporation or the effectuation of an acquisition
of the Corporation by another entity by means of a transaction or
series of related transactions in which more than fifty percent
(50%) of the voting power of the Corporation is disposed of (a
“Sale”), shall be deemed
to be a liquidation; provided, however, that if holders of Series B
Preferred Stock are to receive more than the preferential amounts
due them under subsection (a) of this paragraph ii in the Sale,
then the Sale shall not be a liquidation and all holders of Series
B Preferred Stock shall participate ratably with the holders of
Common Stock and the holders of any other series of Preferred Stock
with similar rights in proportion to the amount of shares owned by
each such holder on an as-converted basis and shall not be entitled
to receive any preferential amounts.
iii. Conversion.
The holders of the Series B Preferred Stock shall have conversion
rights as follows (the “Conversion
Rights”):
(a) Right to Convert. Subject to
subsection (c) of this paragraph iii, each share of Series B
Preferred Stock plus accrued but unpaid dividends thereon shall be
convertible, at the option of the holder thereof, at any time after
the date of issuance of such share, at the office of the
Corporation or any transfer agent for the Series B Preferred Stock,
into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Original Series B Issue
Price plus the aggregate amount of accrued but unpaid dividends
thereon by the Conversion Price at the time in effect for such
share. The initial Conversion Price per share for shares of Series
B Preferred Stock shall be the Original Series B Issue Price;
provided however, that the Conversion Price for the Series B
Preferred Stock shall be subject to adjustment as set forth in
subsection (c) of this paragraph iii.
(b) Mechanics of Conversion. Before
any holder of Series B Preferred Stock shall be entitled to convert
the same into shares of Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed in blank, at
the office of the Corporation or of any transfer agent for the
Series B Preferred Stock, and shall give written notice by mail,
postage prepaid, 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 B 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 Series B 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 an underwritten offer of securities registered pursuant to the
Securities Act of 1933, as amended, the conversion may, at the
option of any holder tendering Series B Preferred Stock for
conversion, be conditioned upon the closing with the underwriter of
the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock issuable upon
such conversion of the Series B Preferred Stock shall not be deemed
to have converted such Series B Preferred Stock until immediately
prior to the closing of such sale of securities.
(c) Conversion Price Adjustments of
Preferred Stock. The Conversion Price of the Series B
Preferred Stock shall be subject to adjustment from time to time as
follows: (i) in the event the Corporation should at any time or
from time to time after the date of the issuance of any shares of
Series B Preferred Stock 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 other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as
“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 of
the Series B Preferred Stock shall be appropriately decreased so
that the number of shares of Common Stock issuable on conversion of
each share of such series shall be increased in proportion to such
increase in the aggregate number of shares of Common Stock
outstanding and those issuable with respect to Common Stock
Equivalents or other rights or securities of the Corporation; and
(ii) if the number of shares of Common stock outstanding at any
time after the date of the issuance of any shares of Series B
Preferred Stock is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such
combination, the Conversion Price for the Series B Preferred Stock
shall be appropriately increased so that the number of shares of
Common Stock issuable on conversion of each share of such series
shall be decreased in proportion to such decrease in outstanding
shares.
(d) Other Distributions. In the
event the Corporation shall declare a distribution with respect to
the outstanding shares of Common Stock payable in securities of
other persons, evidences of indebtedness issued by the Corporation
or other persons, assets or options or rights not referred to in
subsection (c) of this section iii then, in each such case for the
purpose of this subsection (d) of section iii, the holders of the
Series B 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 B 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.
(e) Recapitalizations. If at any
time or from time to time there shall be a capital reorganization
of the Corporation or any reclassification of the Common Stock or
in case of the consolidation or merger of the Corporation with any
other person or entity or in case of any sale, conveyance or
disposition of all or substantially all of the assets of the
Corporation to an affiliate of the Corporation (other than a
subdivision, combination a liquidation or a Sale as provided for
elsewhere herein), the Corporation and the person or entity formed
by such consolidation or resulting from such capital
reorganization, reclassification of capital stock or merger, as the
case may be, shall make provision in the articles or certificate of
incorporation or other governing instruments of such person such
that each share of Series B Preferred Stock shall thereafter be
convertible only into the kind and amount of shares of stock, other
securities, cash and other property receivable upon such capital
reorganization, reclassification of capital stock, consolidation,
merger, sale, conveyance or disposition, as the case may be, by a
holder of the number of shares of Common Stock into which such
shares of Series B Preferred Stock was convertible immediately
prior to such capital reorganization, reclassification of capital
stock, consolidation, merger, sale, conveyance or disposition. In
any such case, appropriate adjustment shall be made in the
application of the provisions of this section 4(d) with respect to
the rights of the holders of the Series B Preferred Stock after
such capital reorganization, reclassification of capital stock,
consolidation, merger, sale, conveyance or disposition to the end
that the provisions of this section 4(d) (including adjustment of
the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series B Preferred Stock) shall
be applicable after that event as nearly equivalent as may be
practicable.
(f) No Fractional Shares and Certificate
as to Adjustments. (i) No fractional shares shall be issued
upon conversion of the Series B Preferred Stock. If any fractional
interest in shares of Common Stock would, except for the provisions
of this subsection 4(f), be deliverable upon the conversion of any
Series B Preferred Stock, the Corporation shall, in lieu of
delivering the fractional share therefore, adjust such fractional
interest by payment to the holder of such converted Series B
Preferred Stock an amount in cash equal to the current market value
of such fractional interest (computed to the nearest cent). Whether
or not cash in lieu of fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of
shares of Series B 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. (ii) Upon the
occurrence of each adjustment or readjustment of the Conversion
Price of Series B Preferred Stock pursuant to this paragraph iii of
section 4(d), 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 B
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 B 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 B Preferred Stock.
(g) 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 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 B Preferred Stock, at least twenty (20)
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.
(h) 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 the Series B Preferred 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 the Series B 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 the Series B Preferred
Stock, in addition to such other remedies as shall be available to
the holder of such Series B 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.
(i) Notices. Any notice required by
the provisions of this section 4 to be given to the holder of
shares of Series B Preferred Stock shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed
to each holder of record at his address appearing on the books of
the Corporation.
iv. Voting Rights.
(a) The holder of each
share of Series B Preferred Stock shall have the right to one (1)
vote for each share of Common Stock into which such Series B
Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion basis being rounded to the
nearest whole share), and with respect to such vote, such holder
shall have full voting rights and powers equal to the voting rights
and powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any
shareholders, meeting in accordance with the Bylaws, and shall be
entitled to vote, together with holders of Common Stock, with
respect to any question upon which holders of Common Stock have the
right to vote.
(b) Election of Directors.
Notwithstanding subsection iv.(a) above, so long as the Corporation
is in default in the payment of any dividends due the holders of
Series B Preferred Stock, the holders of Series B Preferred Stock,
voting as a separate class, shall be entitled to elect one (1)
director of the Corporation and the holders of Series B Preferred
Stock and Common Stock, voting on an as converted basis, shall be
entitled to elect the remaining directors of the Corporation. At
such time as the Corporation is no longer in default on the payment
of any dividends due the holders of Series B Preferred Stock, the
special voting provisions set forth in the preceding sentence shall
no longer be effective and the voting provisions of section iv(a)
above shall apply. The director elected by the holders of Series B
Preferred Stock shall thereupon be deemed to have resigned. At any
meeting held for the purpose of electing directors, the presence in
person or by proxy of the holders of a majority of the Series B
Preferred Stock then outstanding shall constitute a quorum of the
Series B Preferred Stock for the election of directors to be
elected solely by the holders of Series B Preferred Stock. A
vacancy in any directorship elected by the holders of Series B
Preferred Stock shall be filled only by vote of the holders of
Series B Preferred Stock and a vacancy in the directorship elected
by the holders of Series B Preferred Stock and Common Stock voting
together shall be filled only by the vote of the holders of Series
B Preferred Stock and Common Stock voting together as provided
above.
v. Redemption.
(a) Redemption by the Corporation.
(i) The Corporation shall have the right, but not the obligation,
exercisable at any time or from time to time, upon at least sixty
(60) days’ prior written notice to the holders of the
outstanding shares of Series B Preferred Stock to redeem all or
some of the outstanding shares of Series B Preferred Stock, pro
rata, by paying a sum per share equal to the Original Series B
Issue Price (subject to adjustments as a result of distributions,
if any, made pursuant to subsection iii(c) plus an amount equal to
all accrued but unpaid dividends, if any, through the date of
redemption. (ii) In compliance with the applicable notice period
set forth in this subsection v(a), the Corporation shall mail,
postage prepaid, to each holder of record of Series B Preferred
Stock to be redeemed, at such holder’s address last shown on
the records of the Corporation, notifying such holder of such
redemption, specifying the date fixed for the redemption (the
“Redemption
Date”), which shall also be the date on which such
holder’s Conversion Rights as to the shares called for
redemption shall terminate, and calling upon such holder to
surrender to the Corporation, and in the manner and at the place
designated, such holder’s certificate or certificates
representing the shares of Series B Preferred Stock to be redeemed
(such notice is hereinafter referred to as the “Redemption Notice”), On
or prior to the Redemption Date, each holder of the Series B
Preferred Stock to be redeemed shall surrender its certificate or
certificates representing such shares to the Corporation, in the
manner and at the place designated in the Redemption Notice, and
thereupon the appropriate redemption price as specified in this
subsection v(a) (the “Redemption Price”) of
such shares (except that such number of shares shall be reduced by
the number of shares which shall have been converted pursuant to
subsection 3 hereof between the date of notice of redemption and
the date on which Conversion Rights to such shares terminate) shall
be payable to the order of the person whose name appears on such
certificate or certificates as the owner therefor and each
surrendered certificate shall be canceled. From and after the
Redemption Date, unless there shall have been a default in payment
of the Redemption Price (whether because there is no source of
funds legally available for such redemption or because such funds
shall not be paid or made available for payment), all rights of the
holders of the Series B Preferred Stock (except the right to
receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on the
books of the Corporation or be deemed to be outstanding for any
purpose whatsoever.
(b) Redemption Consideration.
Amounts to be paid pursuant to subsection v(a) above shall be paid,
at the sole discretion of the Corporation, in cash or notes or any
combination of cash and notes. The notes, if issued by the
Corporation in satisfaction of the redemption of Series B Preferred
Stock, shall bear interest, payable monthly, at ten percent (10%)
per annum and shall provide for repayment of the principal amount
in two equal installments on the next two immediately succeeding
anniversary dates of the date of redemption of the shares of Series
B Preferred Stock so requested to be redeemed.
(c) Surrender of Certificate.
Except as prohibited pursuant to applicable California corporate
law, on or after the Redemption Date, each holder of Series B
Preferred Stock to be redeemed shall surrender to this Corporation
the certificate or certificates representing such shares, and
thereupon the Redemption Price of such shares shall be payable to
the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate
shall be canceled. In the event less than all the shares
represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.
(d) No Dividends After Redemption.
From and after the Redemption Date, unless there shall have been a
default in payment of the Redemption Price, all dividends on the
Series B Preferred Stock designated for redemption in the
Redemption Notice shall cease to accrue, all rights of the holders
of such shares as holder of Series B Preferred Stock (except the
right to receive the Redemption Price without interest upon
surrender of their certificate or certificates) shall cease with
respect to such shares, and such shares shall not thereafter be
transferred on the books of this Corporation or be deemed to be
outstanding for any purpose whatsoever. Subject to the rights of
series of Preferred Stock which may from time to time come into
existence, if the funds of the Corporation legally available for
redemption on shares of Series B Preferred Stock on any Redemption
Date are insufficient to redeem the total number of shares of
Series B Preferred Stock to be redeemed on such date, those funds
which are legally available will be used to redeem the maximum
possible number of such shares ratably among the holders of such
shares to be redeemed. The shares of Series B Preferred Stock not
redeemed shall remain outstanding and entitled to all the rights
and preferences provided herein. Subject to the rights of series of
Preferred Stock which may from time to time come into existence, at
any time thereafter when additional funds of the Corporation are
legally available for the redemption of shares of Series B
Preferred Stock, such funds will immediately be used to redeem the
balance of the shares which the Corporation has become obligated to
redeem on any Redemption Date but which it has not redeemed;
provided, however, that this Corporation shall give ten (10) days
advance written notice to each such holder of shares to be redeemed
that the Corporation at that time has funds available for the
redemption of shares of Series B Preferred Stock, and any such
holder may direct that the Corporation not redeem any or all of
that holder’s remaining shares previously requested by that
holder to be redeemed, and such shall not be redeemed, so long as
written notice of such direction is received by the Corporation no
later than ten (10) days after this Corporation’s advance
notice was given.
vi. Covenants. So long as the
Corporation is in default on any provision of this section 4(d),
the Corporation shall not repurchase or redeem any shares of Common
Stock or any shares of any series of Preferred Stock of the
Corporation, except for shares of Series B Preferred
Stock.
vii. Reissuance
of Series B Preferred Stock. Any share or shares of Series B
Preferred Stock or of any other series or class of stock of the
Corporation acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be restored to the status
of authorized by unissued shares of Preferred
Stock.
viii. Residual
Rights. Preferred Stock shall not have any pre-emptive
rights. All rights accruing to the outstanding shares of the
Corporation not expressly provided for to the contrary herein shall
be vested in the Common Stock.
(e) Series D Convertible Preferred
Stock. Subject to the terms of the certificate of
designations of Series D Convertible Preferred Stock
(“Series D
Preferred”), the rights, preferences, restrictions and
other matters relating to the Series D Preferred are as
follows:
i. Election of Directors. Subject
to Section 4(d)iv hereof, for so long as any shares of Series D
Preferred are outstanding, the holders of Series D Preferred,
voting as a separate class, shall be entitled to elect two (2)
directors of the Corporation (together, the “Series D Directors”). A
vacancy in any directorship elected by the holders of Series D
Preferred shall be filled only by vote of a majority of the shares
owned by the holders of Series D Preferred. Two (2) of the
directors of the Corporation shall be independent directors
(together, the “Independent Directors”),
and shall initially be appointed by a majority vote of Kristin
Taylor and the Series D Directors. From and after the first annual
meeting of the Board following the date hereof, each of the
Independent Directors shall be elected by vote of a majority of the
shares owned by the holders of Preferred Stock, on an as-converted
basis, and Common Stock voting together as a single
class.
ii. For so long as any
shares of Series D Preferred are outstanding, this Certificate of
Incorporation may not be modified, amended or waived without the
prior written consent of the holders of a majority of the shares of
Series D Preferred.
5. Bylaws. The Board is expressly
authorized to make, alter or repeal the Bylaws of the Corporation
(the “Bylaws”).
6. Election of Directors. Except
as otherwise provided by resolutions of the Board designating the
rights, powers and preferences of any Preferred Stock, the number
of directors of the Corporation shall initially be five (5), as set
forth on Annex A
attached hereto, and may thereafter be fixed from time to time,
exclusively by resolution of a majority of the directors then in
office, in accordance with the Bylaws. Elections of directors need
not be by written ballot unless the Bylaws shall so
provide.
7. Removal of Directors. Subject
to any limitations imposed by law and to any rights of any class or
series of Preferred Stock having the right to elect directors under
specified circumstances, any director may be removed from office
with or without cause by the affirmative vote of the holders of the
majority of the voting power of all the then-outstanding shares of
capital stock entitled to vote generally in the election of
directors, voting as a single class.
8. Creditors. Whenever a
compromise or arrangement is proposed between this Corporation and
its creditors or any class of them and/or between this Corporation
and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application
in a summary way of this Corporation or of any creditor or
stockholder thereof, or on the application of any receiver or
receivers appointed for this Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279
of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be
summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall,
if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this
Corporation.
9. Amendment. Notwithstanding
Sections 4(b)iii and 4(e)ii hereof, this Certificate of
Incorporation may not be amended in a manner that would materially
and adversely affect (on its face) the holders of any series of
Preferred Stock disproportionately as compared to other series of
Preferred Stock, in each case, without the consent of a majority of
the holders of such disproportionately affected series of Preferred
Stock.
10. Director Liability;
Indemnification. To the fullest extent permitted by Delaware
statutory or decisional law, as amended or interpreted, no director
of this Corporation shall be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary
duty as a director. This section 10 does not affect the
availability of equitable remedies for breach of fiduciary duties.
To the extent permitted by applicable law, the Corporation is also
authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware
law permits the Corporation to provide indemnification) through
Bylaw provisions, agreements with such agents or other persons,
vote of stockholders or disinterested directors or otherwise, in
excess of the indemnification and advancement otherwise permitted
by Section 145 of the DGCL, subject only to limits created by
applicable Delaware law (statutory or non-statutory), with respect
to actions for breach of duty to the Corporation, its stockholders
and others. Any repeal or modification of any of the foregoing
provisions of this section 10 shall be prospective and shall not
adversely affect any right or protection of a director, officer,
agent or other person existing at the time of, or increase the
liability of any director with respect to any acts or omissions of
such director occurring prior to, such repeal or
modification.
11. Action By Stockholders. Any
corporate action required or permitted to be taken at any annual or
special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the Corporation
(either by hand or by certified or registered mail, return receipt
requested) at its registered office in the State of Delaware or its
principal place of business, or to an officer or agent of the
Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded.
12. Corporate Opportunities. The
Corporation renounces any interest or expectancy of the Corporation
in, or in being offered an opportunity to participate in, or in
being informed about, an Excluded Opportunity. An
“Excluded Opportunity” is any matter, transaction or
interest that is presented to, or acquired, created or developed
by, or which otherwise comes into the possession of, (i) any
director of the Corporation who is not an employee of the
Corporation or any of its subsidiaries (a “Non-Employee Director”),
or (ii) any holder of Preferred Stock or any affiliate, partner,
member, director, stockholder, employee, agent or other related
person of any such holder, other than someone who is an employee of
the Corporation or any of its subsidiaries (collectively,
“Covered
Persons”), unless such matter, transaction or interest
is presented to, or acquired, created or developed by, or otherwise
comes into the possession of, a Covered Person expressly and solely
in such Covered Person’s capacity as a director of the
Corporation. Without limiting the generality of the foregoing, the
Corporation specifically renounces any rights the Corporation might
have in any Excluded Opportunity, even if the Excluded Opportunity
is one that the Corporation or its subsidiaries might reasonably be
deemed to have pursued or had the ability or desire to pursue if
granted the opportunity to do so. Furthermore, it shall not be
deemed a breach of any fiduciary or other duties, if any, whether
express or implied, for any Non-Employee Director or holder of
Preferred Stock to permit itself or one of its affiliates to engage
in an Excluded Opportunity in preference or to the exclusion of the
Corporation and such Non-Employee Director or holder of Preferred
Stock or any of their respective affiliates shall have no
obligation to disclose to the Corporation or any of its
subsidiaries any information related to its business or
opportunities, disclose to the Corporation or the Board any
confidential information regarding any Excluded Opportunity in the
possession of such Non-Employee Director or holder of Preferred
Stock even if it is material and relevant to the Corporation and/or
the Board, present Excluded Opportunities to the Corporation,
refrain from engaging in any line of business, refrain from
investing in any person or refrain from doing business with any
person.
13. Exclusive Jurisdiction For
Certain Actions.
(a) Exclusive Forum. Unless the
Board otherwise approves, in accordance with Section 141 of
the DGCL, this Certificate of Incorporation or the Bylaws of the
Corporation, the selection of an alternate forum, the Court of
Chancery of the State of Delaware (or, if the Court of Chancery of
the State of Delaware does not have jurisdiction, the Superior
Court of the State of Delaware or, if the Superior Court of the
State of Delaware also does not have jurisdiction, the United
States District Court for the District of Delaware) shall, to the
fullest extent permitted by applicable law, be the sole and
exclusive forum for (i) any derivative action or proceeding
brought on behalf of the Corporation, (ii) any action
asserting a claim of breach of a fiduciary duty owed by any
director, officer or other employee of the Corporation to the
Corporation or the Corporation’s stockholders, (iii) any
action asserting a claim against the Corporation arising pursuant
to any provision of the DGCL, this Certificate of Incorporation or
the Bylaws of the Corporation, (iv) any action to interpret,
apply, enforce or determine the validity of this Certificate of
Incorporation or the Bylaws of the Corporation or (v) any
action asserting a claim against the Corporation governed by the
internal affairs doctrine (each a “Covered Corporate
Proceeding”).
Unless
the Board consents in writing to the selection of an alternative
forum, the federal district courts of the United States of America
shall be the exclusive forum for the resolution of any complaint
asserting a cause of action arising under the Securities Act of
1933, as amended (the “Covered Securities
Proceeding” and together with “Covered Corporate
Proceedings,” the “Covered Proceeding”). Any
person or entity purchasing or otherwise acquiring any interest in
any security of the Corporation shall be deemed to have notice of
and consented to this provision.
(b) Personal Jurisdiction. If any
action the subject matter of which is a Covered Corporate
Proceeding is filed in a court other than the Court of Chancery of
the State of Delaware, or, where permitted in accordance with
paragraph (a) above, the Superior Court of the State of
Delaware or the United States District Court for the District of
Delaware (each, a “Foreign Corporate
Action”), in the name of any person or entity (a
“Claiming
Party”) without the prior approval of the Board or one
of its committees in the manner described in paragraph
(a) above, such Claiming Party shall be deemed to have
consented to (i) the personal jurisdiction of the Court of
Chancery of the State of Delaware or, where applicable, the
Superior Court of the State of Delaware and the United States
District Court for the District of Delaware, in connection with any
action brought in any such courts to enforce paragraph
(a) above (an “Enforcement Action”) and
(ii) having service of process made upon such Claiming Party
in any such Enforcement Action by service upon such Claiming
Party’s counsel in the Foreign Corporate Action as agent for
such Claiming Party.
If any
action the subject matter of which is a Covered Securities
Proceeding is filed in a court other than a federal district court
of the United States of America (each, a “Foreign Securities
Action”), in the name of a Claiming Party without the
prior consent of the Board or one of its committees in the manner
described in paragraph (a) above, such Claiming Party shall be
deemed to have consented to (i) the personal jurisdiction of
the federal district court of the United States of America, in
connection with any Enforcement Action and (ii) having service
of process made upon such Claiming Party in any such Enforcement
Action by service upon such Claiming Party’s counsel in the
Foreign Securities Action as agent for such Claiming
Party.
(c) Notice and Consent. Any person
or entity purchasing or otherwise acquiring any interest in the
shares of capital stock of the Corporation shall be deemed to have
notice of and consented to the provisions of this Section 13 and
waived any argument relating to the inconvenience of the forums
referenced above in connection with any Covered
Proceeding.
14. DGCL Section 203. The
Corporation expressly elects not to be governed by Section 203 of
the DGCL.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Incorporation to be made, executed and acknowledged by its duly
authorized officer this 12th day of November, 2020.
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IMAGEWARE
SYSTEMS, INC.
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By:
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/s/ Kristin Taylor
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Name:
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Kristin
Taylor
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Title:
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Chief
Executive Officer
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Annex A
Initial Directors
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Name
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Address
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Kristin
Taylor
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13500
Evening Creek Drive N., Suite 550 San Diego, CA 92128
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Jim
Demitrieus
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13500
Evening Creek Drive N., Suite 550 San Diego, CA 92128
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Benjamin
Smeal
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13500
Evening Creek Drive N., Suite 550 San Diego, CA 92128
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