Attached files
file | filename |
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EX-32.2 - CERTIFICATION - REED'S, INC. | reeds_10k-ex3202.htm |
EX-31.2 - CERTIFICATION - REED'S, INC. | reeds_10k-ex3102.htm |
EX-21 - SUBSIDIARIES - REED'S, INC. | reeds_10k-ex2100.htm |
EX-32.1 - CERTIFICATION - REED'S, INC. | reeds_10k-ex3201.htm |
EX-10.28 - LOAN AND SECURITY AGREEMENT - REED'S, INC. | reeds_10k-ex1028.htm |
EX-23.1 - CONSENT - REED'S, INC. | reeds_10k-ex2301.htm |
EX-31.1 - CERTIFICATION - REED'S, INC. | reeds_10k-ex3101.htm |
10-K - REED'S, INC. - REED'S, INC. | reeds_10k-123109.htm |
Exhibit 3.6
Amended
Certificate Of Designation
(Pursuant
to Section 151 of the Delaware General Corporation Law)
The
undersigned, Christopher J. Reed and Judy Holloway Reed, certify
that:
ONE.
They are the duly elected Chief Executive Officer and Secretary,
respectively, of the Reed’s, Inc., a Delaware corporation (the “Corporation”).
TWO. The
Certificate of Incorporation of this Corporation provides for a class of its
authorized shares known as Preferred Stock comprised of 500,000 shares issuable
from time to time in one or more series, of which 47,121 shares designated as
Series A Convertible Preferred Stock are currently outstanding and no shares
designated as Series B Convertible Preferred Stock are currently
outstanding.
THREE.
Pursuant to and in accordance with the provisions of Section 151 of the
Delaware General Corporation Law and the Certificate of Incorporation of this
Corporation (“Certificate of
Incorporation”), the Board of Directors of the Corporation (“Board of
Directors”) has duly authorized and adopted resolutions amending the
Certificate of Designation originally filed April 29, 2009 and amended November
16, 2009, by decreasing the Conversion Price (defined hereinbelow) of the Series
B Convertible Preferred Stock to $1.43.
FOUR. The
Board of Directors of the Corporation has duly authorized and adopted the
following recitals and resolutions on December 4, 2009:
WHEREAS,
the Board of Directors of this corporation is authorized to fix the number of
shares of any series of Preferred Stock and to determine the designation of any
such series and the rights, preferences, privileges and restrictions granted to
or imposed upon any wholly unissued series of Preferred Stock; and
WHEREAS,
the Board of Directors has previously fixed and determined the designation of,
the number of shares constituting, and the rights, preferences, privileges and
restrictions relating to a Series B Convertible Preferred Stock, pursuant to a
Certificate of Designation as filed with the Delaware Secretary of State on
April 29, 2009 and amended November 16, 2009; and
WHEREAS,
the Board of Directors wishes to amend and restate the Certificate of
Designation originally filed April 29, 2009 and amended November 16, 2009, by
decreasing the Conversion Price (defined hereinbelow) of the Series B
Convertible Preferred Stock to $1.43.
RESOLVED,
that the Board of Directors hereby amends and restates the Certificate of
Designation filed April 29, 2009 and amended November 16, 2009 in its entirety
and designates the number of shares, and fixes the relative rights, powers and
preferences thereof, and the limitations or restrictions of the Series B
Convertible Preferred Stock (in addition to any provisions set forth in the
Certificate of Incorporation that are applicable to the Preferred Stock of all
classes and series), as follows:
Series
B Convertible Preferred Stock
A total
of four hundred thousand (400,000) shares of the authorized and unissued
Preferred Stock of the Corporation, $10.00 stated value per share, are hereby designated
“Series B Convertible Preferred Stock” (the “Series B
Preferred”) with such series having the following rights, preferences,
powers, privileges and restrictions, qualifications and
limitations:
1. Rank. The
Series B Preferred shall rank (a) senior, in all matters, to (i) any class of
common stock of the Corporation, including, without limitation, the
Corporation’s common stock, $0.0001 par value per share (the “Common
Stock”), and any other class or series of capital stock into which the
Common Stock is reclassified or reconstituted, (ii) any other class or series of
capital stock of the Corporation either specifically ranking by its terms junior
to the Series B Preferred or not specifically ranking by its terms senior to or
on parity with the Series B Preferred, and (iii) any class or series of capital
stock of the Corporation into which the capital stock referred to in the
preceding subclauses (i) and (ii) is reclassified or reconstituted (the capital
stock referred to in this clause (a) is hereinafter referred to as the “Junior
Stock”); (b) on parity with any class or series of capital stock of the
Corporation specifically ranking by its terms on parity, in all matters
expressly provided, with the Series B Preferred (“Parity
Stock”); and (c) junior, in all matters expressly provided, to the
Corporation’s class of Preferred Stock designated as Series A Convertible
Preferred stock and any class or series of capital stock of the Corporation
specifically ranking by its terms senior to the Series B Preferred (“Senior
Stock”).
2. Dividends.
(a) Subject
to the prior payment in full of any dividends to which any Senior Stock is
entitled pursuant to the Certificate of Incorporation, as then amended to date,
for a period of three (3) years from the date of issuance of the Series B
Preferred, the holders of the Series B Preferred (each, a “Series B
Holder”) shall be entitled to receive, out of funds legally available
therefor, dividends (the “Series B
Dividends”), which shall be cumulative and non-compounding and accrue on
a daily basis from the date on which a particular share of Series B Preferred is
issued, at an annual rate equal to five percent (5%) of the Original Purchase
Price (the “Series B Dividend
Rate,” subject to increase as provided below), payable as provided in
Section 2(b)
hereof. As used herein, “Original Purchase
Price” means ten dollars ($10.00).
(b) Series
B Dividends payable pursuant to Section 2(a)
hereof shall be payable in quarterly dividends equal to 1.25% of such
Liquidation Value (defined below) on each of September 30, December 31, March 31
and June 30 of each year (the “Series B Dividend
Payment Date”), for a period of 36 months from the date of issuance of
the Series B Preferred Convertible Preferred Stock. Such dividends
shall be payable, on each Series B Dividend Payment Date, in additional shares
of Series B Preferred Convertible Preferred Stock (“PIK
Dividends”), or, in the sole discretion of the Board of Directors, in
cash or Common Stock and such dividends shall be cumulative and shall accrue
whether or not declared, earned or payable from and after the date of issue of
the Series B Preferred. The shares of Series B Preferred distributed
as a PIK Dividend shall be deemed to be issued and outstanding from and after
such Series B Dividend Payment Date, and the amount of shares issued as a PIK
Dividend shall have an aggregate Liquidation Value, at the Series B Dividend
Payment Date equal to the value of the dividend accrued and
payable. The initial “Liquidation
Value” of each share of Series B Preferred will be $10.00 per share, and
thereafter, there will be added to the Liquidation Value of each share of Series
B Preferred, as of any Series B Dividend Payment Date, the amount of any
dividends payable on such share on that Series B Dividend Payment Date but not
paid on that Series B Dividend Payment Date, whether or not such dividends are
declared, earned or payable. The amount of Series B Dividends payable on the
Series B Preferred for any period shorter than a full calendar quarter shall be
computed on the basis of a 360-day year of twelve 30-day
months.
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(c) So
long as any shares of Series B Preferred are outstanding, the Corporation shall
not pay or declare any dividend, whether in cash or property, or make any other
distribution on any Junior Stock, or purchase, redeem or otherwise acquire for
value any shares of Junior Stock until all Series B Dividends as set forth in
Section 2(a) shall have been paid or declared and set apart.
(d) Any
Series B Dividend shall be paid in PIK Dividends, cash or shares of Common
Stock, in the sole and absolute discretion of the Board of
Directors.
(e) If
the Corporation elects to pay any Series B Dividend due in Common Stock (“Interest
Shares”), the issuance price of the Interest Shares will be equal to the
10-day Weighted Average Price (as defined below) of the Common Stock ending on
the day prior to Series B Dividend Payment Date. "Weighted Average
Price" means, for any security as of any date, the dollar volume-weighted
average price for such security on the principal national securities exchange on
which such equity securities are listed or admitted to trading (“Principal
Market”) during the period beginning at 9:30:01 a.m., New York Time (or
such other time as the Principal Market publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York Time (or such other time as
the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its "Volume at Price" functions, or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Weighted Average Price of such security on such date shall be as
determined by the affirmative vote of a majority of the members of the Board of
Directors, or, if the requisite approval of the Board of Directors cannot be
obtained, by a nationally recognized independent appraiser or investment bank
selected, in good faith, by a majority of the members of the Board of Directors;
provided, however, in
no event shall there be a reduction in the fair market value of such equity
securities based upon a “minority” or similar discount or based upon the fact
that there does not exist any public trading market for such equity
securities. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.
3. Liquidation.
(a) In
the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, or a Triggering Event (as defined herein)
(each referred to herein as a “Liquidation
Event”), after payment or provision for payment of debts and other
liabilities of the Corporation and all amounts due and owing to the holders of
outstanding shares of Senior Stock, if any, each holder of Series B Preferred,
before any distribution or payment is made upon any Junior Stock, shall be
entitled to receive, out of the assets of the Corporation legally available for
distribution to stockholders (the “Available
Assets”), an amount equal to each holder’s Liquidation
Preference. The “Liquidation
Preference” payable with respect to each share of Series B Preferred
shall be equal to the greater of (i) the Liquidation Value and (ii) if such
share of Series B Preferred were then convertible into Common Stock, such amount
which the holder of Series B Preferred would be entitled to receive in
connection with the Liquidation Event if such holder had converted his, her or
its Series B Preferred immediately prior to the occurrence of the Liquidation
Event. Shares of Series B Preferred shall (i) not be entitled to any
distributions in the event of a Liquidation Event other than a distribution in
an amount equal to the Liquidation Preference, and (ii) be deemed cancelled upon
full distribution of such Liquidation Preference.
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(b) If
the Available Assets shall be insufficient to permit full payment of the
Liquidation Preference upon a Liquidation Event to all holders of Series B
Preferred, as well as all payments then due or due by reason of such Liquidation
Event on any Parity Stock, then the holders of Series B Preferred and holders of
such Parity Stock shall share ratably in any such distribution of the
Corporation’s assets in proportion to the full respective distributable amounts
to which they are entitled.
(c) Written
notice of a Liquidation Event, stating a payment date, the amount of the
Liquidation Preference and the place where said sums shall be payable, shall be
given by mail, postage prepaid, not less than thirty (30) nor more than sixty
(60) days prior to the payment date stated therein, to all holders of Series B
Preferred of record, such notice to be addressed to each such stockholder at
such holder’s post office address as shown by the records of the
Corporation.
(d) Unless
otherwise provided herein, whenever the distribution provided for in this Section 3 shall be
payable in property other than cash, the value of such property shall be the
Fair Market Value.
(e) As
used herein, the following terms shall have the following meanings:
(i) “Triggering
Event” means (a) a sale of all or substantially all of the assets of the
Corporation to any Person, (b) any transaction or series of transactions by
which any Person or group (as such term is used in Section 13(d) of the
Exchange Act) becomes the beneficial owner (as so defined), directly or
indirectly, of shares representing more than fifty percent (50%) of the
aggregate voting power of the Corporation. or (c) a merger, consolidation,
reorganization, recapitalization or other transaction or series of related
transactions (a “Recapitalization”)
in which the stockholders of the Corporation owning a majority of the voting
stock of the Corporation with the right to elect a majority of the Board of
Directors in the aggregate immediately prior to such Recapitalization do not own
a majority of such voting stock or voting power of the surviving, successor or
continuing entity following such Recapitalization.
(ii) “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
(iii) “Affiliate”
means, at any time, and with respect to any Person, any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, such first Person, and, with
respect to the Corporation, shall include any Person beneficially owning or
holding, directly or indirectly, ten percent (10%) or more of any class of
voting or equity interests of the Corporation or any subsidiary or any
corporation of which the Corporation and its subsidiaries beneficially own or
hold, in the aggregate, directly or indirectly, ten percent (10%) or more of any
class of voting or equity interests. As used in this definition,
“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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(iv) “Fair Market
Value” shall mean the following: (i) with respect to equity securities,
(A) in the event such equity securities are publicly traded, the 10-day Weighted
Average Price for such equity securities preceding the date of consummation of
the event requiring a determination of Fair Market Value (the “Determination
Date”) (B) in the event such equity securities are not publicly traded,
the fair market value of such equity securities shall be determined by the
affirmative vote of a majority of the members of the Board of Directors or, if
the requisite approval of the Board of Directors cannot be obtained, by a
nationally recognized independent appraiser or investment bank selected, in good
faith, by a majority of the members of the Board of Directors; provided, however, in no
event shall there be a reduction in the fair market value of such equity
securities based upon a “minority” or similar discount or based upon the fact
that there does not exist any public trading market for such equity securities;
(ii) with respect to debt securities, the present value of such debt securities
utilizing an interest rate equal to the prime rate on the Determination Date, as
published in The Wall Street Journal, Eastern Edition, on such Determination
Date; or (iii) with respect to any other property, the fair market value of such
property, as determined (A) by the affirmative vote of a majority of the members
of the Board of Directors or (B) if the requisite approval of the Board of
Directors referred to in the preceding clause (A) cannot be obtained, by a
nationally recognized independent appraiser selected, in good faith, by a
majority of the members of the Board of Directors.
4. Voting
Rights.
(a) The
holders of the issued and outstanding Series B Preferred shall have no voting
rights except as required by law or as provided in Section
4(b).
(b) At
any time when shares of Series B Preferred are outstanding, in addition to any
other vote required by law or the Certificate of Incorporation, without the
written consent or affirmative vote of holders representing at least a majority
of the shares of Series B Preferred then outstanding, the Corporation shall not
issue or authorize the issuance of any Senior Stock or Parity
Stock.
(c) Any
action which by law requires the affirmative vote or consent of the holders of
Series B Preferred shall require the consent of holders representing at least a
majority of the shares of Series B Preferred then outstanding.
5. Conversion.
(a) Optional
Conversion. The holders of Series B Preferred shall have the
following conversion rights (each shall be referred to herein as an “Optional
Conversion”):
(i) At
any time after issuance the shares of Series B Preferred shall be convertible at
any time and from time to time, in whole or in part (but not in fractions of a
share), at the option of the holder thereof, until any Redemption Date, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by multiplying the number of shares to be converted with the
Conversion Rate.
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(ii) The
“Conversion
Rate” shall be the Original Purchase Price divided by the Conversion
Price at the time in effect for a share of such Series B
Preferred. The “Conversion
Price” per share of Series B Preferred initially shall be equal to One
Dollar and Forty Three Cents ($1.43), subject to adjustment from time to time as
provided below.
(iii) As
used herein, “Acquisition
Event” means (A) the execution of a definitive agreement with a Person
that is (1) the beneficial owner of at least a majority of the then outstanding
shares of Series B Preferred, or (2) an Affiliate of (1), providing for a
transaction which would constitute a Triggering Event or (B) the public
commencement by a Person that is not (1) the beneficial owner of at
least a majority of the then outstanding shares of Series B Preferred, or (3) an
Affiliate of (1), of an exchange or tender offer to acquire all of
the Common Stock.
(b) Mandatory
Conversion. At any time after issuance of the Series B
Preferred, if the closing price of the Common Stock as reported by the Principal
Market or quotation system on which such Common Stock is traded or reported
equals or exceeds Two Dollars and Seventy Five Cents ($2.75) per share of Common
Stock of the then current Conversion Price for five (5) consecutive trading
days, then the Corporation shall have the right to cause all (but not less than
all) outstanding shares of Series B Preferred to be automatically converted into
shares of Common Stock (such conversion being referred to herein as a “Mandatory
Conversion” and the date on which such Mandatory Conversion becomes
effective as the “Mandatory
Conversion Date”).
(c) Conversion
of the Series B Preferred may be effected by any holder thereof upon the
surrender to the transfer agent for the Series B Preferred, or at such other
office or offices, if any, as the Board of Directors may designate, of the
certificate for such shares of the Series B Preferred to be converted
accompanied (if the name(s) in which such certificate are to be registered
differ from the name(s) in which the certificate formerly representing shares of
Series B Preferred had been registered prior to conversion) by a written notice
stating the name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued and, if an Optional
Conversion, stating that such holder elects to convert all or a specified whole
number of such shares. In case such notice shall specify a name or
names other than that of such holder, such notice shall be accompanied by a
payment of all transfer taxes payable upon the issuance of shares of Common
Stock in such name or names. As promptly as practicable, and in any
event within five business days after the surrender of such certificate or
certificates and the receipt of such notice relating thereto and, if applicable,
payment of all transfer taxes (or the demonstration to the satisfaction of the
Corporation that such taxes have been paid), the Corporation shall deliver or
cause to be delivered (i) certificates representing the number of validly
issued, fully paid and nonassessable full shares of Common Stock to which the
holder of shares of the Series B Preferred being converted shall be entitled and
(ii) if less than the full number of shares of the Series B Preferred evidenced
by the surrendered certificate or certificates being converted, a new
certificate or certificates, of like tenor, for the number of shares evidenced
by such surrendered certificate or certificates less the number of shares being
converted.
(d) In
the event of any Optional Conversion, such conversion shall be deemed to have
been made immediately prior to the close of business on the date of the
surrender of the certificate or certificates for the shares of Series B
Preferred to be converted and the giving of the notice relating thereto, 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 on such date. In the event of
a Mandatory Conversion, such conversion shall be deemed to have been made on the
Mandatory Conversion Date, 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 on the
Mandatory Conversion Date. On the date on which a conversion is
deemed pursuant to this Section 5(d) to have
been made, the rights of the holder of the shares of the Series B Preferred
deemed to have been converted as to the shares being converted shall cease
except for the right to receive shares of Common Stock in accordance herewith
and the corresponding rights of a holder of Common Stock thereupon
created.
6
(e) In
connection with the conversion of any shares of the Series B Preferred, no
fractions of shares of Common Stock shall be issued, but in lieu thereof the
Corporation shall pay a cash adjustment in respect of such fractional interest
in an amount equal to such fractional interest multiplied by the then effective
Conversion Price. If more than one share of the Series B Preferred
shall be surrendered for conversion by the same holder at the same time, the
number of full shares of Common Stock issuable on conversion thereof shall be
computed on the basis of the total number of shares of the Series B Preferred so
surrendered.
(f) The
Corporation shall at all times reserve, and keep available for issuance upon the
conversion of the Series B Preferred, such number of its authorized but unissued
shares of Common Stock as will from time to time be sufficient to permit the
conversion of all outstanding shares of the Series B Preferred, and shall take
all action required to increase the authorized number of shares of Common Stock
if necessary to permit the conversion of all outstanding shares of the Series B
Preferred.
(g) The
Conversion Price shall be subject to adjustment from time to time as
follows:
(i) Adjustments for Subdivisions or
Combinations of Common Stock. In the event the outstanding
shares of Common Stock shall be subdivided by stock split, stock dividend or
otherwise, into a greater number of shares of Common Stock, the Conversion Price
of the Series B Preferred then in effect shall, concurrently with the
effectiveness of such subdivision, be proportionately decreased. In
the event the outstanding shares of Common Stock shall be combined or
consolidated into a lesser number of shares of Common Stock, the Conversion
Price of the Series B Preferred then in effect shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
increased.
(ii) Adjustments for Non-Cash Dividends
and Other Distributions. In the event the Corporation makes,
or fixes a record date for the determination of holders of Common Stock entitled
to receive, any distribution (excluding repurchases of securities by the
corporation not made on a pro rata basis) payable in property or in securities
of the Corporation other than shares of Common Stock, then and in each such
event the holders of Series B Preferred shall receive, at the time of such
distribution, the amount of property or the number of securities of the
Corporation that they would have received had their Series B Preferred been
converted into Common Stock on the date of such event.
(iii) Adjustments for Reorganizations,
Reclassifications or Similar Events. If the Common Stock shall
be changed into the same or a different number of shares of any other class or
classes of stock or other securities or property, whether by capital
reorganization, reclassification or otherwise, then each share of Series B
Preferred shall thereafter be convertible into the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of such shares of Series B
Preferred shall have been entitled upon such reorganization, reclassification or
other event.
7
(iv) Shares Owned by
Corporation. For purposes of this Section 5(g), the
number of shares of Common Stock at any time outstanding shall not include any
shares of Common Stock then owned or held by or for the account of the
Corporation.
(v) Certificate of Independent
Accountant. The certificate of any firm of independent public
accountants of recognized national standing selected by the Board of Directors
of the Corporation (which may be the firm of independent public accountants
regularly employed by the Corporation) shall be presumptively correct for any
computation made under this Section
5(g).
(vi) No Adjustments for Abandoning
Dividend Distributions. If the Corporation shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment in the Conversion
Price or the number of shares of Common Stock issuable upon exercise of the
right of conversion granted by this Section 5(g) shall be
required by reason of the taking of such record.
(vii) No Adjustments for Mergers,
Reorganizations, Acquisitions or Similar Events. There
shall be no adjustment of the Conversion Price in case of the issuance of any
stock of the Corporation to the security holders of any other corporation in a
merger, reorganization, acquisition or other similar transaction except as set
forth in this Section
5(g).
(h) In
case of any capital reorganization or reclassification of outstanding shares of
Common Stock (other than a reclassification covered by Section 5(g)(iii)),
or in the case of a share exchange of Common Stock for securities of another
corporation, or in case of any consolidation or merger of the Corporation with
or into another corporation, or in case of any sale or conveyance to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety (each of the foregoing being referred to as a “Transaction”),
each share of the Series B Preferred then owned by such holder shall thereafter
be convertible into, in lieu of the Common Stock issuable upon such conversion
prior to consummation of such Transaction, the kind and amount of shares of
stock and other securities and property receivable (including cash) upon the
consummation of such Transaction by a holder of that number of shares of Common
Stock into which one share of the Series B Preferred was convertible immediately
prior to such Transaction (including, on a pro rata basis, the cash, securities
or property received by holders of Common Stock in any tender or exchange offer
that is a step in such Transaction).
(i) Upon
any adjustment of the Conversion Price then in effect, the Corporation, at its
expense, shall, upon the written request of any holder of Series B Preferred,
promptly compute such adjustment in accordance with the terms hereof and furnish
to each holder of Series B Preferred a certificate setting forth such adjustment
and showing in reasonable detail the facts upon which such adjustment is
based.
(j) Upon
any conversion of Series B Preferred pursuant to this Section 5, the holder
of such shares being converted shall receive any unpaid and accrued dividends on
such shares being converted.
8
6. Redemption.
(a) At
any time after the third anniversary of the issuance of the Series B Preferred,
all, but not less than all, the shares of Series B Preferred
outstanding may be redeemed by the Corporation (a “Mandatory
Redemption”) at its sole discretion, at a price equal to the greater of
(i) one hundred ten percent (110%) of the Original Purchase Price, plus an
amount equal to any unpaid and accrued dividends and (ii) the Fair Market Value
on the Redemption Date of such number of shares of Common Stock which the holder
of the redeemed Series B Preferred would be entitled to receive had the redeemed
Series B Preferred been converted immediately prior to the redemption. The right
of the Corporation to redeem the Series B Preferred provided under this Section 6(a), shall
cease upon the occurrence of an Acquisition Event.
(b) Redemption Notice.
Upon the determination by the Corporation to effectuate a Mandatory Redemption
or a Partial Redemption, written notice of such redemption (the “Redemption
Notice”) shall be mailed, postage prepaid, to each holder of record of
Series B Preferred, at its post office address last shown on the records of the
Corporation, not less than five (5) business days prior to the date such
redemption is to occur (the “Redemption
Date”). Each Redemption Notice shall state:
(i) the
number of shares of Series B Preferred held by the holder that the Corporation
shall redeem on the Redemption Date;
(ii) the
Redemption Date and the price the Corporation shall pay to the holders of Series
B Preferred upon such redemption as determined pursuant to Section 6(a), as
applicable (the “Redemption
Price”); and
(iii) that
the holder is to surrender to the Corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing the shares
of Series B Preferred to be redeemed.
(c) Redemption Mechanics.
On any Redemption Date, the Corporation shall redeem such number of shares of
Series B Preferred set forth in the Redemption Notice. If on any
Redemption Date the Corporation does not have sufficient funds legally available
to redeem such number of shares of Series B Preferred set forth in the
Redemption Notice, the Corporation shall redeem a pro rata portion of each
Series B Preferred holder’s redeemable shares out of funds legally available
therefor, based on the respective amounts which would otherwise be payable in
respect of such shares to be redeemed if the legally available funds were
sufficient to redeem all such shares, and shall redeem the remaining shares to
have been redeemed as soon as practicable after the Corporation has funds
legally available therefor. The Corporation may delay or cancel
any redemption by providing notice of such delay or cancellation to each holder
of Series B Preferred that received a Redemption Notice in connection with such
redemption as promptly as practicable following the determination by the
Corporation to delay or cancel such redemption.
(d) Surrender of Certificates;
Payment. On or before the applicable Redemption Date, each
holder of shares of Series B Preferred to be redeemed on such Redemption Date,
unless such holder has exercised his, her or its right to convert such shares as
provided in Section
5, shall surrender the certificate or certificates representing such
shares to the Corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price for 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 and retired. In the event less than all of the shares of
Series B Preferred represented by a certificate are redeemed, a new certificate
representing the unredeemed shares of Series B Preferred shall promptly be
issued to such holder.
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(e) Rights Subsequent to
Redemption. If the Redemption Notice shall have been duly
given, and if on the applicable Redemption Date the Redemption Price payable
upon redemption of the shares of Series B Preferred to be redeemed on such
Redemption Date is paid or tendered for payment or deposited with an independent
payment agent so as to be available therefor, then notwithstanding that the
certificates evidencing any of the shares of Series B Preferred so called for
redemption shall not have been surrendered, dividends with respect to such
shares of Series B Preferred shall cease to accrue after such Redemption Date
and all rights with respect to such shares shall forthwith after the Redemption
Date terminate, except only the right of the holders to receive the Redemption
Price without interest upon surrender of their certificate or certificates
therefor.
7. Payment of
Taxes. The Corporation shall pay all documentary, stamp,
transfer and other taxes (other than taxes on income of the holders of shares of
Series B Preferred) and other governmental charges attributable to the issuance,
delivery, conversion or redemption of shares of Series B Preferred; provided, however, that the
Corporation shall not be required to pay any taxes payable in respect of any
transfer involved in the issuance or delivery of any certificate for such shares
in a name other than that of the holder of the shares of Series B Preferred in
respect of which such shares are being issued.
8. Exclusion of Other
Rights. Except as may otherwise be required by law, the shares
of Series B Preferred shall not have any preferences or relative, participating,
optional or other special rights, other than those specifically set forth
herein. The shares of Series B Preferred shall have no preemptive or
subscription rights.
9. Severability. If
any right, preference or limitation of the Series B Preferred set forth herein
is invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other rights, preferences and limitations set forth herein
which can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
10. Status of Reacquired
Shares. Shares of Series B Preferred that have been issued and
reacquired in any manner shall (upon compliance with any applicable provisions
of the laws of the State of Delaware) have the status of authorized and unissued
shares of Preferred Stock issuable in series undesignated as to series and may
be redesignated and reissued.
11. Waivers. The
holders of Series B Preferred shall also be entitled to, and shall not be deemed
to have waived, any other applicable rights granted to such holders under the
Delaware General Corporation Law. Any of the rights of the holders of
Series B Preferred set forth herein may be waived by the affirmative consent or
vote of the holders of at least a majority of the then outstanding shares of
Series B Preferred, subject to applicable law.
12. Registration of Series B
Convertible Preferred Stock. The Corporation shall register
shares of the Series B Preferred, upon records to be maintained by the
Corporation for that purpose (the “Series B
Preferred Register”), in the name of the record holders thereof from time
to time. The Corporation may deem and treat the registered holder of
shares of Series B Preferred as the absolute owner thereof for the purpose of
any distribution to such holder, and for all other purposes, absent actual
notice to the contrary.
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13. Registration of
Transfers. The Corporation shall register the transfer of any
shares of Series B Preferred in the Series B Preferred Register, upon surrender
of certificates evidencing such Shares to the Corporation at its address
specified herein. Upon any such registration or transfer, a new
certificate evidencing the shares of Series B Preferred so transferred shall be
issued to the transferee and a new certificate evidencing the remaining portion
of the shares not so transferred, if any, shall be issued to the transferring
holder.
14. Replacement
Certificates. If any certificate evidencing Series B Preferred
is mutilated, lost, stolen or destroyed, the Corporation shall issue or cause to
be issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for such certificate, a new certificate, but only upon
receipt of an affidavit of loss and indemnity agreement reasonably satisfactory
to the Corporation evidencing such loss, theft or destruction and customary and
reasonable indemnity, if requested. Applicants for a new certificate
under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Corporation may prescribe.
15. 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 purposes of effecting the conversion of the shares of
Series B Preferred, 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; 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 B Preferred, in addition to such other
remedies as shall be available to the holders of such 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.
This
Certificate shall become effective upon the filing thereof with the Secretary of
State of the State of Delaware.
* * *
[signature
page follows]
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The
Corporation has caused this Amended Certificate of Designation to be duly
executed and acknowledged by its undersigned duly authorized officers this 4th
day of December, 2009.
REED’S,
Inc.
By: /s/ Christopher J.
Reed
Name: Christopher
J. Reed
Title: President
& Chief Executive Officer
|
REED’S,
Inc.
By: /s/ Judy Holloway
Reed
Name: Judy
Holloway Reed
Title: Secretary
|
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