Attached files
| file | filename |
|---|---|
| EX-10.5 - STEELCLOUD INC | v190281_ex10-5.htm |
| 8-K - STEELCLOUD INC | v190281_8k.htm |
| EX-10.4 - STEELCLOUD INC | v190281_ex10-4.htm |
| EX-10.1 - STEELCLOUD INC | v190281_ex10-1.htm |
| EX-10.6 - STEELCLOUD INC | v190281_ex10-6.htm |
| EX-99.1 - STEELCLOUD INC | v190281_ex99-1.htm |
| EX-10.7 - STEELCLOUD INC | v190281_ex10-7.htm |
| EX-10.9 - STEELCLOUD INC | v190281_ex10-9.htm |
| EX-10.3 - STEELCLOUD INC | v190281_ex10-3.htm |
| EX-10.8 - STEELCLOUD INC | v190281_ex10-8.htm |
| EX-10.10 - STEELCLOUD INC | v190281_ex10-10.htm |
| EX-10.2 - STEELCLOUD INC | v190281_ex10-2.htm |
ARTICLES
OF AMENDMENT
TO
THE CERTIFICATE OF INCORPORATION
OF
STEELCLOUD,
INC.
STEELCLOUD,
INC., A VIRGINIA CORPORATION, DOES HEREBY CERTIFY:
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1.
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THE
NAME OF THE CORPORATION IS STEELCLOUD,
INC.
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2.
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PURSUANT
TO VA CODE § 13.1-639A, ARTICLE 3 OF THE ARTICLES OF INCORPORATION OF THE
CORPORATION, IS AMENDED BY ADDING THE
FOLLOWING:
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Pursuant
to Article 3 of the Articles of Incorporation of the Corporation, seven hundred
fifty thousand (750,000) of the two million (2,000,000) shares of Preferred
Stock authorized therein, all of which are unissued, be and hereby are
classified as a series of Preferred Stock designated as the Series A Convertible
Preferred Stock (the “Series A Preferred
Stock”). The 750,000 shares of Series A Preferred Stock shall
have a par value of $0.001 per share and the designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations and restrictions as hereinafter set forth:
1. Dividends. The
holders of Series A Preferred Stock shall be entitled to receive cash dividends,
payable at such times and in such amounts as is set forth below:
(a) quarterly,
on the last day of each fiscal quarter of the Corporation, out of funds legally
available therefor, the Regular Quarterly Dividend, until the aggregate
Contingent Dividends paid pursuant to paragraph 1(b) below equals the Contingent
Dividend Cap; and
(b) quarterly,
on or before the Contingent Dividend Payment Date, out of funds legally
available therefor, in the amount of the Contingent Dividend determined as of
the end of the most recent fiscal quarter of the Corporation (beginning with the
fiscal quarter ending October 31, 2010), paid ratably to each holder of Series A
Preferred Stock in proportion to the number of shares of Series A Preferred
Stock held by each, until the aggregate Contingent Dividends paid pursuant to
this paragraph 1(b) equals the Contingent Dividend Cap.
No
dividends shall be paid with respect to any shares of Common Stock or any Junior
Stock unless the holders of Series A Preferred Stock are first paid (i) all due
and unpaid dividends and (ii) a dividend per share of Series A Preferred Stock
equal to the dividend which would be payable on the number of shares of Common
Stock into which each share of Series A Preferred Stock is then
convertible.
2. Liquidation. In
the event of a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, the holders of Series A Preferred Stock shall be entitled to
receive an amount per share equal to the Liquidation Preference, plus accrued
and unpaid dividends, before any distribution or payment is made to the holders
of Common Stock or any Junior Stock. If, upon any such sale,
liquidation, dissolution or winding up of the Corporation, the assets
distributable among the holders of all Series A Preferred Stock shall be
insufficient to permit the payment in full to such holders of the amount
hereinabove provided, then the entire assets of the Corporation shall be applied
ratably to the payment of such amount to the holders of Series A Preferred Stock
then outstanding. Thereafter, any remaining assets shall be
distributed ratably to the holders of Common Stock and holders of Series A
Preferred Stock (as if all outstanding shares of Series A Preferred Stock were
converted into Common Stock). The merger or consolidation of the
Corporation, the sale, lease, transfer or other conveyance of more than 50% of
the Corporation’s assets or the sale, lease, transfer or other conveyance of
assets which generated more than 50% of the Corporation’s revenues for its then
current fiscal year or for the fiscal year immediately prior thereto, shall each
be deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this paragraph 2 if the holders of a majority of the
shares of Series A Preferred Stock outstanding so determine by notice to the
Corporation no later than ten days after the occurrence thereof. The
holders of Series A Preferred Stock shall be given notice of any proposed
transaction set forth in this paragraph 2 at least 20 days prior to the approval
thereof.
3. Conversion.
3.1
The holder of any share or shares of Series A Preferred Stock shall have the
right, at its option, to convert all or any portion of such shares into fully
paid and non-assessable shares of Common Stock of the Corporation, at any time
and from time to time after the date of issuance, at a conversion price of $0.10
per share (such price, giving effect to the latest prior adjustment pursuant to
subparagraph 3.6 hereof, if any, is hereinafter called the “Conversion
Price”). The number of shares of Common Stock issuable upon
conversion of each share of Series A Preferred Stock (the “Conversion Rate”)
shall be equal to the Original Purchase Price divided by the Conversion
Price. To the extent permitted by law, when shares of Series A
Preferred Stock are converted, all dividends accrued and unpaid on the stock so
converted to the date of conversion (whether or not currently payable) shall be
immediately due and payable in cash.
3.2
The Series A Preferred Stock shall be convertible at the principal office of the
Corporation into fully paid and non-assessable shares of Common Stock at the
Conversion Price.
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3.3
In order to convert shares of Series A Preferred Stock into shares of Common
Stock pursuant to the right of conversion set forth in subparagraph (a) above,
the holder thereof shall surrender the certificate or certificates representing
such shares of Series A Preferred Stock, duly endorsed to the Corporation or in
blank, at the principal office of the Corporation and shall give written notice
to the Corporation that such holder elects to convert the same, stating in such
notice the name or names in which such holder wishes the certificate or
certificates representing shares of Common Stock to be issued. The
Corporation shall, within five business days, deliver at said office or other
place to such holder of Series A Preferred Stock, or to such holder’s nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid, together with any cash to
which such holder shall be entitled in lieu of fractional shares in an amount
equal to the same fraction of the Conversion Price of a whole share of Common
Stock on the business day preceding the day of conversion. Shares of
Series A Preferred Stock shall be deemed to have been converted as of the date
of the surrender of such shares for conversion as provided above, 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. Upon conversion of only a
portion of the number of shares covered by a certificate representing shares of
Series A Preferred Stock surrendered for conversion, the Corporation shall issue
and deliver to, or upon the written order of, the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Series A Preferred Stock representing the
unconverted portion of the certificate so surrendered, which new certificate
shall entitle the holder thereof to the rights of the shares of Series A
Preferred Stock represented thereby to the same extent as if the certificate
theretofore covering such unconverted shares had not been surrendered for
conversion.
3.4
Notwithstanding the provisions of subparagraph (a) hereof, the issued and
outstanding shares of Series A Preferred Stock shall be automatically converted
into fully paid and non-assessable shares of Common Stock at the Conversion
Price upon the consent of Clipper as long as it holds a majority of the Series A
Preferred Stock.
3.5
The issuance of certificates for shares of Common Stock upon the conversion of
shares of Series A Preferred Stock shall be made without charge to the
converting stockholder for any original issue or transfer tax in respect of the
issuance of such certificates and any such tax shall be paid by the
Corporation.
3.6
The Conversion Price shall be subject to the following adjustments:
3.6.1 If
the Corporation shall declare and pay to the holders of Common Stock a dividend
or other distribution payable in shares of Common Stock, the Conversion Price in
effect immediately prior thereto shall be adjusted so that the holders of Series
A Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock which such holder would have owned
or been entitled to receive after the declaration and payment of such dividend
or other distribution if such shares of Series A Preferred Stock had been
converted immediately prior to the record date for the determination of
stockholders entitled to receive such dividend or other
distribution.
3.6.2 If
the Corporation shall subdivide the outstanding shares of Common Stock into a
greater number of shares of Common Stock, or combine the outstanding shares of
Common Stock into a lesser number of shares, or issue by reclassification of its
shares of Common Stock any shares of the Corporation, the Conversion Price in
effect immediately prior thereto shall be adjusted so that the holders of Series
A Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock which such holder would have owned
or been entitled to receive after the happening of any of the events described
above if such shares of Series A Preferred Stock had been converted immediately
prior to the happening of such event on the day upon which such subdivision,
combination or reclassification, as the case may be, becomes
effective.
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3.6.3 If,
after the date of issuance of the Series A Preferred Stock, the Corporation
shall issue or sell any Additional Shares of Common Stock for a consideration
per share less than the Conversion Price in effect immediately prior to such
issuance, then, and thereafter successively upon any such issuance or sale, the
Conversion Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying the Conversion Price
by a fraction the numerator of which shall be the number of shares of Common
Stock issuable upon the conversion of the outstanding Series A Preferred Stock
(based on the Conversion Price in effect on the date of and immediately prior to
this adjustment) plus the number of shares of Common Stock that the aggregate
consideration received by the Corporation for the total number of
Additional Shares of Common Stock so issued would purchase at the Conversion
Price in effect prior to such issue; and the denominator of which shall be the
number of shares of Common Stock issuable upon the conversion of the outstanding
Series A Preferred Stock (based on the Conversion Price in effect on the date of
and immediately prior to this adjustment) plus the number of such Additional
Shares of Common Stock so issued. For the purposes of this
subparagraph 3.6.3, the date as of which the Conversion Price shall be computed
shall be the earlier of (x) the date on which the Corporation shall enter into a
firm contract for the issuance or sale of such Additional Shares of Common Stock
or (y) the date of the actual issuance or sale of such shares.
3.6.4 If
the Corporation shall issue or sell any warrants or options or other rights
entitling the holders thereof to subscribe for or purchase either any Additional
Shares of Common Stock or evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable, with or without payment
of additional consideration in cash or property, for Additional Shares of Common
Stock (such convertible or exchangeable evidences of indebtedness, shares of
stock or other securities hereinafter being called “Convertible
Securities”), and the consideration per share for which Additional Shares
of Common Stock may at any time thereafter be issuable pursuant to such
warrants, options or other rights or pursuant to the terms of such Convertible
Securities (when added to the consideration per share of Common Stock, if any,
received for such warrants, options or other rights), shall be less than the
Conversion Price, then the Conversion Price shall be adjusted as provided in
subparagraph 3.6.3 on the basis of the consideration received and receivable by
the Corporation for the issuance of such Additional Shares of Common Stock
pursuant to such warrants, options or other rights or pursuant to the terms of
such Convertible Securities.
3.6.5 If
the Corporation shall issue or sell Convertible Securities and the consideration
per share for which Additional Shares of Common Stock may at any time thereafter
be issuable pursuant to the terms of such Convertible Securities shall be less
than the Conversion Price, then the Conversion Price shall be adjusted as
provided in subparagraph 3.6.3 on the basis that the aggregate consideration for
such maximum number of Additional Shares of Common Stock shall be deemed to be
the consideration received and receivable by the Corporation for the issuance of
such Additional Shares of Common Stock pursuant to the terms of such Convertible
Securities. No adjustment of the Conversion Price shall be made under
this subparagraph (v) upon the issuance of any Convertible Securities which are
issued pursuant to the exercise of any warrants, options or other rights, if
such adjustment shall previously have been made upon the issuance of such
warrants, options or other rights pursuant to subparagraph
3.6.4.
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3.6.6 For
the purposes of subparagraphs 3.6.4 and 3.6.5, the date as of which the
Conversion Price shall be computed shall be the earliest of (x) the date on
which the Corporation shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive any warrants, options or other rights
referred to in subsection 3.6.4 or to receive any Convertible Securities, (y)
the date on which the Corporation shall enter into a firm contract for the
issuance of such warrants, options or other rights or Convertible Securities or
(z) the date of the actual issuance of such warrants, options or other rights or
Convertible Securities.
3.6.7 No
adjustment of the Conversion Price shall be made under subparagraph 3.6.3 upon
the issuance of any Additional Shares of Common Stock which are issued pursuant
to the exercise of any warrants, options or other rights or pursuant to the
exercise of any conversion or exchange rights in any Convertible Securities, if
such adjustment shall previously have been made upon the issuance of such
warrants, options or other rights or upon the issuance of such Convertible
Securities (or upon the issuance of any warrants, options or other rights
therefor), pursuant to subparagraphs 3.6.4 or 3.6.5.
3.6.8 If
any warrants, options or other rights (or any portions thereof) which shall have
given rise to an adjustment pursuant to subparagraph 3.6.4 or conversion rights
pursuant to Convertible Securities which shall have given rise to an adjustment
pursuant to subparagraph 3.6.5 shall have expired or terminated without the
exercise thereof and/or if by reason of the terms of such warrants, options or
other rights or Convertible Securities there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable upon the
exercise or conversion thereof, then the Conversion Price shall be readjusted
(but to no greater extent than originally adjusted) on the basis of (x)
eliminating from the computation any Additional Shares of Common Stock
corresponding to such warrants, options or other rights or conversion rights as
shall have expired or terminated, (y) treating the Additional Shares of Common
Stock, if any, actually issued or issuable pursuant to the previous exercise of
such warrants, options or other rights or of conversion rights pursuant to any
Convertible Securities as having been issued for the consideration actually
received and receivable thereof, and (z) treating any of such warrants, options
or other rights or of conversion rights pursuant to any Convertible Securities
which remain outstanding as being subject to exercise or conversion on the basis
of such exercise or conversion price as shall be in effect at the time;
provided, however, that any consideration which was actually received by the
Corporation in connection with the issuance or sale of such warrants, options or
other rights shall form part of the readjustment computation even though such
warrants, options or other rights shall have expired without the exercise
thereof. The Conversion Price shall be adjusted as provided in
subparagraph 3.6.3 as a result of any increase in the number of Additional
Shares of Common Stock issuable, or any decrease in the consideration payable
upon any issuance of Additional Shares of Common Stock, pursuant to any
anti-dilution provisions contained in any warrants, options or other rights or
in any Convertible Securities.
3.6.9 (A) In
case any Additional Shares of Common Stock, Convertible Securities or warrants,
options or other rights to purchase any such Additional Shares of Common Stock
or Convertible Securities shall be issued or sold for cash, the consideration
received thereof or shall be deemed to be the amount received by the Corporation
therefor.
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(B) In
case any Additional Shares of Common Stock, Convertible Securities or warrants,
options or other rights to purchase any such Additional Shares of Common Stock
or Convertible Securities shall be offered by the Corporation for subscription,
the consideration received therefor shall be deemed to be the subscription
price.
(C) In
any such case covered by subparagraphs (A) or (B) herein, in determining the
amount of consideration received by the Corporation, if the consideration is in
whole or in part consideration other than cash, the amount of the consideration
shall be deemed to be the fair value of such consideration as determined in good
faith by the Board of Directors of the Corporation. If Additional
Shares of Common Stock shall be issued as part of a unit with warrants, options,
or other rights, then the amount of consideration for the warrants, option or
other right shall be deemed to be the amount determined at the time of issuance
by the Board of Directors of the Corporation. If the Board of
Directors of the Corporation shall not make any such determination, the
consideration for the warrant, option or other right shall be deemed to be
zero.
(D) In
any such case covered by subparagraphs (A), (B) or (C) (D) herein, in
determining the amount of consideration received by the Corporation (I) any
amounts paid or receivable for accrued interest or accrued dividends shall be
excluded, and (II) any compensation, discounts, or expenses paid or incurred in
connection therewith shall not be deducted.
(E) In
any case covered by subparagraphs (A) or (B) herein, there shall be added to the
consideration received by the Corporation at the time of issuance or sale, the
minimum aggregate amount of additional consideration payable to the Corporation
upon the exercise of such warrants, options or other rights which relate to
Convertible Securities, and the minimum aggregate amount of consideration, if
any, payable upon the conversion or exchange thereof.
(F) In
case any Additional Shares of Common Stock, Convertible Securities or any
options, warrants or other rights to purchase such Additional Shares of Common
Stock or Convertible Securities shall be issued in connection with any merger or
consolidation in which the Corporation is the surviving corporation, the amount
of consideration therefor shall be deemed to be the fair value, as determined by
the Board of Directors of the Corporation, of such portion of the assets and
business of the non-surviving corporation or corporations as such Board shall
determine to be attributable to such Additional Shares of Common Stock,
Convertible Securities or warrants, options or other rights to purchase such
Additional Shares of Common Stock or Convertible Securities.
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3.6.10 In
case the Corporation shall effect a reorganization, shall merge with or
consolidate into another corporation, or shall sell, transfer or otherwise
dispose of all or substantially all of its property, assets or business (unless
any of the foregoing constitutes a liquidation pursuant to paragraph 2 hereof)
and, pursuant to the terms of such reorganization, merger, consolidation or
disposition of assets, shares of stock or other securities, property or assets
of the Corporation, successor or transferee or an affiliate thereof or cash are
to be received by or distributed to the holders of Common Stock, then each
holder of Series A Preferred Stock shall be given a written notice from the
Corporation informing each holder of the terms of such reorganization, merger,
consolidation, or disposition of assets and of the record date thereof for any
distribution pursuant thereto, at least ten days in advance of such record date,
and each holder of Series A Preferred Stock shall have the right thereafter to
receive, upon conversion of such Series A Preferred Stock, the number of shares
of stock or other securities, property or assets of the Corporation, successor
or transferee or affiliate thereof or cash receivable upon or as a result of
such reorganization, merger, consolidation or disposition of assets by a holder
of the number of shares of Common Stock equal to the then-applicable Conversion
Rate, multiplied by the number of shares of Series A Preferred Stock as may be
converted. The provisions of this subparagraph (x) shall similarly
apply to successive reorganizations, mergers, consolidations or dispositions of
assets.
3.6.11 If
a purchase, tender or exchange offer is made to and accepted by the holders of
more than 50% of the outstanding shares of Common Stock, the Corporation shall
not effect any consolidation, merger or sale with the person having made such
offer or with any affiliate of such person, unless prior to the consummation
thereof each holder of shares of Series A Preferred Stock shall have been given
a reasonable opportunity to elect to receive, upon conversion of the shares of
Series A Preferred Stock then held by such holder, either the stock, securities,
cash or assets then issuable with respect to the Common Stock or the stock,
securities, cash or assets issued to previous holders of the Common Stock in
accordance with such offer, or the equivalent thereof.
3.6.12 The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Corporation, and the
disposition of such shares shall be considered an issue or sale of Common Stock,
for the purposes of this paragraph 3.6.
3.6.13 The
Corporation will not pay or declare a dividend (other than in Common Stock) upon
the Common Stock payable otherwise than out of earnings or earned surplus
(determined in accordance with generally accepted accounting
principles).
3.6.14 If
a state of facts shall occur which, without being specifically controlled by the
provisions of this paragraph 3.6, would not fairly protect the conversion rights
of the Series A Preferred Stock in accordance with the essential intent and
principles of such provisions, then the Board of Directors of the Corporation
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such conversion
rights.
3.6.15 All
calculations under this paragraph 3.6 shall be made to the nearest
one-thousandth of a share.
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3.6.16 Whenever
the Conversion Price shall be adjusted pursuant to this paragraph 3.6, the
Corporation shall forthwith obtain, and cause to be delivered to each holder of
Series A Preferred Stock, a certificate signed by the principal financial or
accounting officer of the Corporation, setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board of Directors
of the Corporation determined the fair value of any consideration other than
cash pursuant to subparagraph 3.6.9) and specifying the new Conversion
Price. In the case referred to in subparagraph 3.6.10, such a
certificate shall be issued describing the amount and kind of stock, securities,
property or assets or cash which shall be receivable upon conversion of the
Series A Preferred Stock after giving effect to the provisions of such
subparagraph 3.6.10.
3.7
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 Series A Preferred Stock, the full number of shares
of Common Stock then deliverable upon the conversion or exchange of all shares
of Series A Preferred Stock at the time outstanding. The Corporation
shall at all times take such corporate action as shall be necessary in order
that the Corporation may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the conversion of Series A Preferred Stock in
accordance with the provisions hereof.
3.8
No fractional shares of Common Stock or scrip representing fractional shares of
Common Stock shall be issued upon any conversion of Series A Preferred Stock,
but, in lieu thereof, there shall be paid an amount in cash equal to the same
fraction of the Conversion Price of a whole share of Common Stock on the
business day preceding the day of conversion.
4. Voting
Rights.
4.1
The holders of Series A Preferred Stock, voting separately as a class, shall be
entitled to elect three (3) directors of the Corporation. Except as
otherwise required by the Virginia Stock Corporation Act, the holders of shares
of Series A Preferred Stock shall have the right to vote, together with the
holders of all the outstanding shares of Common Stock and not by classes, on all
matters on which holders of Common Stock shall have the right to
vote. The holders of shares of Series A Preferred Stock shall have
the right to cast two hundred (200) votes for each share of Series A Preferred
Stock held by them.
4.2
Without the prior approval of the holders of a majority of the shares of Series
A Preferred Stock outstanding, the Corporation will not (i) authorize, create or
issue any series or shares of capital stock which have any rights (such as
voting, liquidation, redemption or otherwise) which are senior or pari passu to, or could
adversely affect any of the rights of, the Series A Preferred Stock, or adopt or
otherwise issue any stock or options to, employees, consultants or directors of
the Corporation, (iii) increase or decrease the authorized number of shares of
Series A Preferred Stock, or (iv) take any action which would alter or adversely
affect the rights of the holders of the Series A Preferred Stock.
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5. Definitions.
(a) “Additional Shares of Common
Stock” shall mean all shares of Common Stock of the Corporation issued by
the Corporation after July 2, 2010, except Common Stock which may be issued
pursuant to (i) conversion of the Series A Preferred Stock; (ii) conversion of
any outstanding evidences of indebtedness of the Corporation, pursuant to the
terms thereof; (iii) the issuance of shares of Common Stock or rights,
options or warrants to subscribe for, purchase or otherwise acquire Common Stock
pursuant to any equity incentive plan or benefit plan approved by the Board of
Directors of the Corporation, and any shares of Common Stock issued on exercise
of such rights, options or warrants; (iv) subject to approval of the Board of
Directors, the issuance of stock, warrants or other securities to financial
institutions or issued in connection with credit arrangements and equipment
leases or other similar transactions; and (v) subject to approval of the Board
of Directors, the issuance of stock, warrants or other securities in connection
with corporate partnerships or similar strategic arrangements, including
strategic licensing transactions.
(b) “Clipper” shall mean
Clipper Investors LLC, an Illinois limited liability company.
(c) “Common Stock” shall
mean the common stock, par value $0.001 per share, of the
Corporation.
(d)
“Contingent
Dividend” shall mean an amount equal to 40% of the Excess Net Income
measured as of the end of the applicable fiscal quarter of the Corporation,
minus (i) the aggregate amount of Contingent Dividends earned previously during
the applicable Measurement Period, and (ii) the aggregate amount of Regular
Quarterly Dividends earned during the applicable Measurement
Period.
(e) “Contingent Dividend
Cap” shall mean $3,000,000.
(f) “Contingent Dividend Payment
Date” shall mean the date that is twenty (20) days after the end of each
fiscal quarter of the Corporation.
(g) “Excess Net Income”
shall mean, as of the end of the applicable fiscal quarter of the Corporation,
an amount equal to the Corporation’s Net Income for the then-trailing four (4)
fiscal quarters, minus $1,500,000, provided, however, that Excess Net Income
measured as of September 30, 2010, December 31, 2010, and March 31, 2011 shall
mean an amount equal to the Corporation’s Net Income earned during the
applicable quarter then-ended, minus $375,000.
(h) “Junior Stock” shall
mean the Common Stock and any class or series of capital stock of the
Corporation which may be issued which, at the time of issuance, is not declared
to be on a parity with or senior to the Series A Preferred Stock as to all of
the following: dividends, rights upon liquidation or redemption or
voting rights.
(i)
“Liquidation
Preference” shall mean $3,000,000 divided by the aggregate number of
shares of Series A Preferred Stock to be issued on or about July 2,
2010.
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(j)
“Measurement
Period” shall mean the fiscal quarter or the trailing four (4) fiscal
quarters, as applicable, during which Net Income is measured for purposes of
calculating Excess Net Income.
(k) “Net Income” shall
mean, for any period, the net income of the Corporation for such period,
determined in accordance with generally accepted accounting principles,
consistently applied, and as reported by the Corporation in its filings with the
Securities Exchange Commission, if such filings are then being made by the
Corporation.
(l)
“Original
Purchase Price” shall mean $2.00 per share of Series A Preferred Stock
(subject to equitable adjustments in the event of stock splits or other similar
events).
(m)
“Regular Quarterly
Dividend” shall mean an amount equal to 10% per share per annum of the
Original Purchase Price.
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3.
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THE
FOREGOING AMENDMENT WAS
ADOPTED ON JULY 1, 2010.
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4.
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THE
AMENDMENT WAS DULY ADOPTED BY THE BOARD OF DIRECTORS OF THE
CORPORATION.
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The
undersigned declares that the facts herein stated are true as of the 1st of July
2010.
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STEELCLOUD,
INC.
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By:
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/s/ Brian H. Hajost
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Brian
H. Hajost
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President
and CEO
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