Attached files
| file | filename |
|---|---|
| 10-Q - LIQUIDMETAL TECHNOLOGIES INC | v199432_10q.htm |
| EX-10.5 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex10-5.htm |
| EX-10.2 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex10-2.htm |
| EX-10.4 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex10-4.htm |
| EX-31.2 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex31-2.htm |
| EX-32.1 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex32-1.htm |
| EX-10.3 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex10-3.htm |
| EX-31.1 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex31-1.htm |
| EX-32.2 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex32-2.htm |
| EX-10.1 - LIQUIDMETAL TECHNOLOGIES INC | v199432_ex10-1.htm |
Exhibit
3.1
AMENDED
AND RESTATED
CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES A
PREFERRED STOCK
OF
LIQUIDMETAL
TECHNOLOGIES, INC.
|
(Pursuant
to Section 151 of the
|
|
Delaware General Corporation
Law)
|
Pursuant
to Section 242 of the Delaware General Corporation Law, the undersigned officer
hereby certifies that:
A. He
is the duly elected and acting Chief Executive Officer of Liquidmetal
Technologies, Inc.., a Delaware corporation (the “Company”).
B. On
May 1, 2009, the Company filed with the Delaware Secretary of State a
Certificate of Designations, Preferences, and Rights of Series A Preferred Stock
(the “Designation”) creating a series of 1,875,000 shares of “Series
A-1 Preferred Stock” (hereinafter called the “Series A-1 Preferred
Stock”) and a series of 3,281,253 shares of “Series A-2 Preferred Stock”
(hereinafter called the “Series A-2 Preferred
Stock”).
C. Pursuant
to resolutions duly adopted by the board of directors of the Company as of
October 29, 2010, the Chief Executive Officer of the Company was authorized and
directed to file an amended and restated Designation setting forth the changes
to the rights and preferences of the Series A-1 Preferred Stock and Series A-2
Preferred Stock as are set forth below (the “Amended
Designation”).
D. The
Amended Designation was duly approved and consented to by the holders of the
Series A-1 Preferred Stock and Series A-2 Preferred Stock (both as separate
classes and as a single class) pursuant to and in accordance with Sections 6 and
7 of the Designation, Article VIII of the Company’s Certificate of
Incorporation, as amended, and Section 242 of the Delaware General Corporation
Law.
NOW, THEREFORE, the Designation is
hereby amended and restated as follows:
“Pursuant
to authority vested in the Board or Directors of the Company by Article IV
of the Company’s Certificate of Incorporation, out of the total authorized
number of ten million (10,000,000) shares of Company preferred stock (the “Preferred Stock”),
par value $0.001 per share, there shall be designated (i) a series of one
million eight hundred seventy-five thousand (1,875,000) shares which shall be
issued hereunder and constitute a single series to be known as “Series A-1
Preferred Stock” (hereinafter called the “Series A-1 Preferred
Stock”) and (ii) a series of three million two hundred eighty-one
thousand two hundred fifty-three (3,281,253) shares which shall be
issued hereunder and constitute a single series to be known as “Series A-2
Preferred Stock” (hereinafter called the “Series A-2 Preferred
Stock”, and together with the Series A-1 Preferred Stock, the “Series A Preferred
Stock”). The shares of Series A Preferred Stock have the
voting powers, designations, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth
below:
1. Certain
Definitions.
“Approved Stock Plan”
means any employee benefit, option or incentive plan which has been approved by
the Board of Directors and shareholders of the Company, pursuant to which the
Company’s securities may be issued to any employee, consultant, officer or
director for services provided to the Company; provided that the number of
shares of the Company’s Common Stock issuable pursuant to such plans, in the
aggregate, shall not exceed 10% of the shares of the Company’s Common Stock
outstanding on a fully-diluted basis on the date of the First Closing (as
defined in the Securities Purchase and Exchange Agreement) after giving effect
to the First Closing and the full exercise of the Series A-1 Option (as defined
in the Securities Purchase and Exchange Agreement), as adjusted for stock
splits, reverse stock splits, and the like, unless such increased amount of
shares is approved by the holders of the Company’s Common Stock and the holders
of the Company’s Series A Preferred Stock voting together as a single
class. For purposes of this definition, “fully-diluted basis” shall
take into account all outstanding shares of Common Stock as well as all shares
of Common Stock issuable upon the conversion of all outstanding convertible
securities of the Company, including all options and warrants
granted.
“Buyer” means a buyer
under the Securities Purchase and Exchange Agreement.
“Charter Amendment”
shall have the meaning set forth in the Securities Purchase and Exchange
Agreement.
“Closing Bid Price”
and “Closing Sale
Price” means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the OTC Bulletin Board, as reported by
Bloomberg Financial Markets, or, if the OTC Bulletin Board begins to operate on
an extended hours basis and does not designate the closing bid price or the
closing trade price, as the case may be, then the last bid price or last trade
price, respectively, of such security prior to 4:00 p.m., New York Time, as
reported by Bloomberg Financial Markets, or, if the OTC Bulletin Board is not
the principal securities exchange or trading market for such security, the last
closing bid price or last trade price, respectively, of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg Financial Markets, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg Financial Markets, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported by Pink OTC
Markets (formerly known as Pink Sheets). If the Closing Bid Price or
the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price,
as the case may be, of such security on such date shall be the fair market value
as mutually determined by the Company and the holders of Series A Preferred
Stock. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the
applicable calculation period.
2
“Common Stock” means
the common stock, $0.001 par value, of the Company, including the stock into
which the Series A Preferred Stock is convertible, and any capital stock of any
class of the Company thereafter authorized that shall not be limited to a fixed
sum in respect of the rights of the holders thereof to participate in dividends
or in the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company.
“Convertible
Securities” means any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock, but excluding Options.
“Current Market Price”
shall mean, with respect to any shares of capital stock or other securities, (i)
if such stock or securities are listed or admitted to trading on a national
securities exchange or an inter-dealer quotation system or traded in the
over-the-counter market, the price per share or security, as the case may be, at
the close of trading on the Trading Day on which the relevant determination is
to be made or, if such day is not a Trading Day, the Trading Day immediately
preceding such day and (ii) if such stock or security is not so listed, admitted
or traded, the fair market value of such stock or security as determined by the
Board of Directors of the Company or, if the Board of Directors of the Company
cannot agree, as determined by an Independent Appraiser (as defined
below).
“Excluded Securities”
means any share of Common Stock issued or issuable: (i) in connection with any
Approved Stock Plan; (ii) upon exercise of any warrants of the Company issued
pursuant to the Securities Purchase and Exchange Agreement or as dividends on
the Series A Preferred Stock, or (C) in connection with any public offering by
the Company; (iii) upon conversion or exercise of any Options or Convertible
Securities which are outstanding on the Original Issuance Date, (iv) pursuant to
or in connection with commercial credit arrangements, equipment lease
financings, acquisitions of other assets or businesses, and strategic
transactions not primarily for financing purposes (including licensing or
development agreements), but only to the extent the transactions described in
this clause (iv) are entered into with non-affiliates of the
Company.
“Independent
Appraiser” means an investment
banking firm, appraisal firm or any other financial expert of recognized
national standing in the United States, selected by the holders of a majority of
the Series A Preferred Stock and reasonably acceptable to the Company, that does
not (or whose directors, officers, employees, affiliates or stockholders do not)
have a direct or indirect material financial interest in the Company or a 5% or
greater holder of Series A Preferred Stock, who has not been, and, at the time
called upon to give independent financial advice to the Company or a holder of
Series A Preferred Stock, is not (and none of its directors, officers,
affiliates or stockholders are) a promoter, director or officer of the
Company.
3
“Options” means
rights, options or warrants to subscribe for, purchase or otherwise acquire
Common Stock or Convertible Securities.
“Original Issuance
Date” means May 1, 2009.
“Securities Purchase and
Exchange Agreement” means the Securities Purchase and Exchange Agreement,
dated May 1, 2009, among the Company and the persons identified as “Buyers”
therein.
“Senior Indebtedness”
means the principal of (and premium, if any), interest on, and all fees and
other amounts (including, without limitation, any reasonable costs, enforcement
expenses (including reasonable legal fees and disbursements, collateral
protection expenses and other reimbursement or indemnity obligations relating
thereto)), and all other obligations of the Company under (i) any of the
agreements or instruments evidencing any indebtedness of the Company and its
subsidiaries arising after the Original Issuance Date to an unaffiliated,
third-party commercial lender (together with any renewals, refundings,
refinancings or other extensions thereof) for purposes of purchasing equipment
(which debt shall be secured only by the assets purchased with such financing),
and (ii) indebtedness not to exceed $4,000,000 in the aggregate that is secured
solely by the Company’s and/or its subsidiaries’ accounts receivable and/or
inventory.
“Series A Issuance
Price” means $5.00 per share.
“Trading Day” means
(i) if the relevant stock or security is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; (ii) if the relevant stock or security
is not listed or admitted for trading on any national securities exchange but is
quoted on any system for the automated dissemination of quotations of securities
prices, a day on which trades may be effected through such system; or (iii) if
the relevant stock or security is not listed or admitted for trading on any
national securities exchange or quoted on any system for the automated
dissemination of quotation of securities prices, a day on which the relevant
stock or security is traded in a regular way in the over-the-counter market and
for which a closing bid and a closing asked price for such stock or security are
available.
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2.
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Dividends.
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2A. The
holders of the Series A Preferred Stock shall be entitled to receive
dividends, which shall begin to accrue on and be cumulative from the date of
issuance of the Series A Preferred Stock (whether or not such dividends have
been declared and whether or not there shall be net profits or net assets of the
Company legally available for the payment of such dividends) through and until
June 1, 2010, at an annual rate equal to eight percent (8%) of the sum of (A)
the Series A Issuance Price plus (B) any accrued dividends through the
immediately preceding Dividend Accrual Date that remain unpaid (the amount of
such dividends being referred to as the “Dividend
Amount”). The dividends shall accrue semi-annually on June 1
and December 1 of each year (the “Dividend Accrual
Dates”) and shall be payable either in cash or in
kind by issuance by the Company of additional shares of Series A Preferred Stock
(the “PIK
Shares”) at the option of the Company of the same securities. For
purposes of clarification, if the Company pays any Dividend Amount on shares of
Series A-1 Preferred Stock in PIK Shares, then such PIK Shares shall be shares
of Series A-1 Preferred Stock. If the Company pays any Dividend
Amount on shares of Series A-2 Preferred Stock in PIK Shares, then such PIK
Shares shall be shares of Series A-2 Preferred Stock. Dividends
shall be payable only when and as declared by the Board of Directors of the
Company. If the Company elects to pay any Dividend Amount in PIK
Shares, each holder of Series A Preferred Stock shall be deemed to be the holder
of record of such holder's pro rata share of the PIK
Shares issuable with respect to the relevant Dividend Amount notwithstanding
that the stock transfer books of the Company shall then be closed or that
certificates evidencing such PIK Shares shall not have been actually delivered
to such holder of Series A Preferred Stock. In the event that
dividends on the Series A Preferred Stock are paid with PIK Shares, each such
PIK Share (i) shall be valued at the then applicable Liquidation Preference per
share and (ii) shall have the same Liquidation Preference as each share of
Series A Preferred Stock with respect to which the PIK Share constituted a
dividend. No dividends shall be paid on any Common Stock of the
Company or any capital stock of the Company that ranks junior to the Series A
Preferred Stock during any fiscal year of the Company until dividends in the
aggregate Dividend Amount per share (as adjusted for any stock dividends,
combinations or splits with respect to such shares) of Series A Preferred
Stock for the current and each prior Dividend Accrual Date shall have been paid
or declared and set apart for payment to the holders of the Series A Preferred
Stock. For purposes hereof, the “Liquidation
Preference” of a share of Series A Preferred Stock means, as of any
specified date, the sum of (A) the Series A Issuance Price of such share plus
(B) any accrued but unpaid dividends on such share through the Dividend Accrual
Date that immediately precedes the specified date.
2B. The
amount of dividends payable for any period shorter than a full year shall be
determined on the basis of twelve 30-day months and a 360-day
year. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
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3.
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Liquidation;
Redemption.
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3A. Liquidation. Upon
any liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of the shares of Series A Preferred Stock shall be
entitled, before any distributions shall be made to the holders of the Common
Stock, or any other class of capital stock of the Company ranking junior to the
Series A Preferred Stock, to be paid an amount (the “Series A Liquidation
Amount”) equal to 1.08 multiplied by the Liquidation Preference per share
(appropriately adjusted to reflect the occurrence of any stock split, stock
dividend, stock combination, stock subdivision or like
occurrences); provided that if the amount per share that would be
received by the holders of the shares of Series A Preferred Stock of any series
if the assets of the Company were distributed ratably to the holders of the
Common Stock and the Series A Preferred Stock on an as converted to Common Stock
basis would be greater than the Liquidation Preference, then the holders of the
Series A Preferred Stock of such series shall be entitled to receive such
greater amount. If upon such liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary, the assets to be distributed
among the holders of Series A Preferred Stock of the Company shall be
insufficient to permit payment to the holders of Series A Preferred Stock of the
full Series A Liquidation Amount, then the entire assets of the Company to be
distributed shall be distributed to the holders of Series A Preferred
Stock. Written notice of such liquidation, dissolution or winding up,
stating a payment date, the Series A Liquidation Amount and the place where said
sums shall be payable shall be given by mail, postage prepaid, not less than 30
or more than 60 days prior to the payment date stated therein, to the holders of
record of each series of Series A Preferred Stock, such notice to be addressed
to each shareholder at his post office address as shown by the records of the
Company. Unless waived in writing by the holders of a majority of the
Series A Preferred Stock then outstanding, voting together as one class, a
consolidation or merger of the Company into or with any other entity or
entities, or the sale or transfer by the Company of all or substantially all of
its assets, in each case under circumstances in which the holders of a majority
in voting power of the outstanding capital stock of the Company, immediately
prior to such a merger, consolidation or sale, own less than a majority in
voting power of the outstanding capital stock of the company or the surviving or
resulting company or acquirer, as the case may be, immediately following such a
merger, consolidation or sale (each such transaction being hereinafter referred
to as a “Corporate
Transaction”) shall be treated as a liquidation within the meaning of
this paragraph 3 for the purpose of determining the consideration to be received
by holders of the Series A Preferred Stock upon redemption of such shares as
well as the timing of such deemed redemption.
3B. Optional
Redemption. The Company shall have the right at any time when
no Notes remain outstanding to redeem the Series A Preferred Stock in whole or
in part upon not less than 30 days’ notice at a redemption price equal to the
Liquidation Preference plus any accrued and unpaid dividends through the
redemption date. Such redemption notice will include a certification
by the Company’s Chief Executive Officer that the Company has sufficient funds
available for such redemption. In the event of a redemption of the Series A
Preferred Stock in part, the Company shall redeem the shares of each holder of
Series A Preferred Stock pro rata (subject to rounding for fractional shares of
Series A Preferred Stock). The holders of Series A Preferred Stock
shall have the right to convert the Series A Preferred Stock into Common Stock
as set forth in Section 4A below at any time prior to the redemption
date.
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4.
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Conversion.
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4A. Right to
Convert. Subject to the terms and conditions of this
subparagraph 4A, the holder of any share or shares of Series A Preferred Stock
shall have the right, at its option at any time, to convert any such shares of
Series A Preferred Stock into such number of fully paid and nonassessable whole
shares of Common Stock as is obtained by multiplying (A) the number of shares of
Series A Preferred Stock so to be converted by (B) the Liquidation Preference
per share multiplied by 1.08, and dividing the result (together with any accrued
but unpaid dividends on the shares being converted as of the conversion date) by
(i) in the case of Series A-1 Preferred Stock, the conversion price of $0.10 per
share of Common Stock, (ii) in the case of Series A-2 Preferred Stock, the
conversion price of $0.22 per share of Common Stock, or (iii) if there has been
an adjustment of such conversion prices, by the conversion prices as last
adjusted and in effect at the date any share or shares of Series A Preferred
Stock are surrendered for conversion (such prices, or such prices as last
adjusted, being referred to herein as the “Series A-1 Conversion
Price” for the Series A-1 Preferred Stock and the “Series A-2 Conversion
Price” for the Series A-2 Preferred Stock, and the Series A-1 Conversion
Price and Series A-2 Conversion Price are herein together referred to as the
“Conversion
Price”). Such right of conversion shall be exercised by the
holder thereof by surrender of a certificate or certificates for the shares to
be converted to the Company at its principal office (or such other office or
agency of the Company as the Company may designate by notice in writing to the
holder or holders of the Series A Preferred Stock) at any time during its usual
business hours on the date set forth in such notice, together with a properly
completed notice of conversion in the form attached to the Series A Preferred
Stock certificate with a statement of the name or names (with address), subject
to compliance with applicable laws to the extent such designation shall involve
a transfer, in which the certificate or certificates for shares of Common Stock,
shall be issued. No dividends will be paid on the Series A Preferred
Stock at the time of conversion.
4B. Issuance of Certificates;
Time Conversion Effected. On or before the second business day
following the date of receipt by the Company of the written notice referred to
in subparagraph 4A and surrender of the certificate or certificates for the
share or shares of the Series A Preferred Stock to be converted (the “Share Delivery
Date”), the Company shall issue and deliver, or cause to be issued and
delivered, to the holder, registered in such name or names as such holder may
direct, subject to compliance with applicable laws to the extent such
designation shall involve a transfer, a certificate or certificates for the
number of whole shares of Common Stock issuable upon the conversion of such
share or shares of Series A Preferred Stock. To the extent permitted by law,
such conversion shall be deemed to have been effected and the Conversion Price
shall be determined as of the close of business on the date on which such
written notice shall have been received by the Company and the certificate or
certificates for such shares shall have been surrendered as aforesaid, and at
such time the Series A Preferred Stock rights of the holder of such share or
shares shall cease, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby.
4C. Fractional Shares;
Dividends; Partial Conversion. No fractional shares shall be
issued upon conversion of the Series A Preferred Stock into Common Stock, and
the number of shares of Common Stock to be issued shall be rounded to the
nearest whole share, and no payment or adjustment shall be made upon any
conversion on account of any cash dividends paid on the Series A Preferred Stock
so converted or the Common Stock issued upon such conversion. In case
the number of shares of Series A Preferred Stock represented by the certificate
or certificates surrendered pursuant to subparagraph 4A exceeds the number of
shares converted, the Company shall upon such conversion, execute and deliver to
the holder thereof at the expense of the Company, a new certificate for the
number of shares of Series A Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted.
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4D.
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Adjustments
to Conversion
Price.
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(1) [Reserved]
(2). Subdivision or Combination
of Stock. In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares or shall declare or pay a
dividend on its outstanding shares of Common Stock payable in shares of Common
Stock, the Series A-1 Conversion Price and Series A-2 Conversion Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, such Conversion Prices in effect
immediately prior to such combination shall be proportionately
increased.
(3). Record
Date. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (i) to receive a dividend
or other distribution payable in Common Stock, Options or Convertible
Securities, or (ii) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(4). Certain
Distributions. If, at any time or from time to time after the
Original Issuance Date, the Company shall issue or distribute to the holders of
shares other than Series A Preferred Stock (the “Dividend Stock”)
evidences of its indebtedness, any other securities of the Company or any cash,
property or other assets (excluding any issuance or distribution described in
paragraph 4D(2) or 4(E), and also excluding cash dividends or cash
distributions paid out of net profits legally available therefor in the full
amount thereof) (any such non-excluded event being herein called a "Special Dividend"),
then and in each such event the holders of each series of Series A Preferred
Stock shall receive, simultaneously with the distribution to the holders of
Common Stock, a dividend or other distribution of such securities or other
property in an amount equal to the amount of such securities or other property
as they would have received if all outstanding shares of Series A Preferred
Stock of such series had been converted into Common Stock on the date of such
event.
8
4E. Reorganization or
Reclassification. If any capital reorganization or
reclassification of the capital stock of the Company shall be effected in such a
way (including, without limitation, by way of consolidation or merger, but
excluding a consolidation, merger or sale which is treated as a Liquidation with
respect to holders of Series A Preferred Stock for purposes of paragraph 3) that
holders of Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock then, as a condition of such
reorganization or reclassification, lawful and adequate provision (in form
satisfactory to the holders of at least a majority of the outstanding shares of
Series A Preferred Stock, voting together as one class) shall be made whereby
each holder of a share or shares of Series A Preferred Stock shall thereafter
have the right to receive, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock of the Company
immediately theretofore receivable upon the conversion of such share or shares
of the Series A Preferred Stock, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common Stock equal to the number of shares of such stock
immediately theretofore so receivable had such reorganization or
reclassification not taken place and in any such case appropriate provision
shall be made with respect to the rights and interests of such holder to the end
that the provisions hereof (including without limitation provisions for
adjustments of the Conversion Price) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights (including an immediate
adjustment, by reason of such reorganization or reclassification, of the
Conversion Price to the value for the Common Stock reflected by the terms of
such reorganization or reclassification if the value so reflected is less than
the Conversion Price in effect immediately prior to such reorganization or
reclassification). In the event of a merger or consolidation of the
Company as a result of which a greater or lesser number of shares of common
stock of the surviving company are issuable to holders of the Common Stock of
the Company outstanding immediately prior to such merger or consolidation, the
Conversion Price in effect immediately prior to such merger or consolidation
shall be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the
Company. The Company will not effect any such consolidation or
merger, or any sale of all or substantially all its assets and properties,
unless prior to the consummation thereof the successor company (if other than
the Company) resulting from such consolidation or merger or the company
purchasing such assets shall assume by written instrument (in form satisfactory
to the holders of at least a majority of the outstanding shares of Series A
Preferred Stock voting together as one class) executed and mailed or delivered
to each holder of shares of Series A Preferred Stock at the last address of such
holder appearing on the books of the Company, the obligation to deliver to such
holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to receive.
4F. Notice of
Adjustment. Upon any adjustment of the Series A-1 Conversion
Price or Series A-2 Conversion Price, then, and in each such case, the Company
shall give written notice thereof by first class mail, postage prepaid,
addressed to each holder of shares of Series A-1 Preferred Stock or Series A-2
Preferred Stock, as applicable, at the address of such holder as shown on the
books of the Company, which notice shall state the Conversion Price resulting
from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4G. Other
Notices. In case at any time:
(1) the
Company shall declare any dividend upon its Common Stock payable in cash or
stock or make any other distribution to the holders of its Common
Stock;
(2) the
Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of such stock of any class or other
rights;
(3) there
shall be any capital reorganization or reclassification of the capital stock of
the Company, or a consolidation or merger of the Company with, or a sale of all
or substantially all its assets to, another company; or
9
(4) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then, in
any one or more of said cases, the Company shall give, by first class mail,
postage prepaid, addressed to each holder of any shares of Series A Preferred
Stock at the address of such holder as shown on the books of the Company, (a) at
least 15 days’ prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, at least 15 days’ prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (a) shall
also specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of Common Stock shall be entitled thereto,
and such notice in accordance with the foregoing clause (b) shall also specify
the date on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.
4H. Mandatory
Conversion. The Board of Directors of the Company shall have
the right at any time to convert each share of Series A Preferred Stock
into Common Stock upon no less than 30 days prior written notice to holders of
Series A Preferred Stock. In addition, (A) the Board of Directors of
the Company shall convert each share of Series A-1 Preferred Stock into
Common Stock upon receipt of the written notice of holders of a majority of the
then-outstanding shares of Series A-1 Preferred Stock of their election to cause
an automatic conversion pursuant to this subparagraph 4H, and (B) the Board of
Directors of the Company shall convert each share of Series A-2 Preferred
Stock into Common Stock upon receipt of the written notice of holders of a
majority of the then-outstanding shares of Series A-2 Preferred Stock of their
election to cause an automatic conversion pursuant to this subparagraph
4H. Any such conversion shall be effected in accordance with the
provisions of subparagraphs 4B and 4C hereof, and any Series A Preferred Stock
converted pursuant to this paragraph shall be converted into a number of shares
of Common Stock equal to the quotient obtained by dividing (i) the Liquidation
Preference per share of Series A Preferred Stock multiplied by 1.08, by (ii) the
applicable Conversion Price.
10
4I. Stock to be
Reserved.
(1) The
Company will at all times reserve and keep available out of its authorized but
unissued Common Stock, solely for the purpose of issuance upon the conversion of
the Series A Preferred Stock as herein provided, such number of shares of Common
Stock as shall then be issuable upon the conversion of all outstanding shares of
Series A Preferred Stock. All shares of Common Stock which shall be
so issued shall be duly and validly issued and fully paid and nonassessable and
free from all liens, duties and charges arising out of or by reason of the issue
thereof (including, without limitation, in respect of taxes) and, without
limiting the generality of the foregoing, the Company covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Conversion Price. The Company will take all such action
within its control as may be necessary on its part to assure that all such
shares of Common Stock may be so issued without violation of any applicable law
or regulation, or of any requirements of any national securities exchange upon
which the Common Stock of the Company may be listed. The Company will
not take any action which results in any adjustment of the Conversion Price if
after such action the total number of shares of Common Stock issued and
outstanding and thereafter issuable upon exercise of all options and conversion
of Convertible Securities, including upon conversion of the Series A Preferred
Stock, would exceed the total number of shares of such class of Common Stock
then authorized by the Company's Certificate of Incorporation.
(2) The
Company will at all times reserve and keep available out of its authorized but
unissued Series A Preferred Stock, a sufficient number of shares solely for the
purpose of satisfying the Company’s obligations to issue PIK Shares as herein
provided. All shares of Series A Preferred Stock which shall be so
issued shall be duly and validly issued and fully paid and nonassessable and
free from all liens, duties and charges arising out of or by reason of the issue
thereof (including, without limitation, in respect of taxes).
4J. No Reissuance of Series A
Preferred Stock. Shares of Series A Preferred Stock that are
converted into shares of Common Stock as provided herein shall not be
reissued.
4K. Issue
Tax. The issuance of certificates for shares of Common Stock
upon conversion of the Series A Preferred Stock shall be made without charge to
the holders thereof for any issuance tax, stamp tax, transfer tax, duty or
charge in respect thereof, provided that the Company shall not be required to
pay any tax, duty or charge which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the holder of the Series A Preferred Stock which is being
converted.
4L. Closing of
Books. The Company will at no time close its transfer books
against the transfer of any Series A Preferred Stock or of any shares of Common
Stock issued or issuable upon the conversion of any shares of Series A Preferred
Stock in any manner which interferes with the timely conversion of such Series A
Preferred Stock; provided, however, nothing
herein shall be construed to prevent the Company from setting record dates for
the holders of its securities.
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4M. Limitations on
Conversions.
(1) Beneficial
Ownership. Unless waived by a holder of Series A Preferred
Stock upon no less than sixty one (61) days prior written notice to the Company,
the Company shall not effect any conversion of the Series A Preferred Stock
pursuant to this Section 4 to the extent that after giving effect to such
conversion such holder (together with such holder’s affiliates) would
beneficially own in excess of 4.99% of the number of shares of Common Stock
outstanding immediately after giving effect to such conversion. Even
if such holder waives the limitation set forth in the preceding sentence, the
Company shall in no event effect any conversion under this Section 4, and such
holder shall not have the right to convert Series A Preferred Stock pursuant to
this Section 4, to the extent that after giving effect to such conversion, such
holder (together with such holder’s affiliates) would beneficially own in excess
of 9.99% of the number of shares of Common Stock outstanding immediately after
giving effect to such conversion. For purposes of the foregoing
sentences, the number of shares of Common Stock beneficially owned by a holder
of Series A Preferred Stock and its affiliates shall include the number of
shares of Common Stock issuable upon conversion of the Series A Preferred Stock
with respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be issuable upon
(A) conversion of the remaining Series A Preferred Stock owned by such holder or
any of its affiliates and (B) conversion of the unexercised or nonconverted
portion of any other securities of the Company subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by such holder or any of its affiliates. Except as set forth in
the preceding sentence, for purposes of this Section 4(M)(1), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this Section
4(M)(1), in determining the number of outstanding shares of Common Stock, the
holders of Series A Preferred Stock may rely on the number of outstanding shares
of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form
10-K, (y) a more recent public announcement by the Company or (z) any other
notice by the Company or the Company’s transfer agent setting forth the number
of shares of Common Stock outstanding. For any reason at any time,
upon the written or oral request of a holder of Series A Preferred Stock, the
Company shall within two (2) business days confirm orally and in writing to such
holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including the Series A Preferred Stock, by such holder or its affiliates since
the date as of which such number of outstanding shares of Common Stock was
reported. Notwithstanding the foregoing, the limitations of this
paragraph shall not apply to Carlyle Liquid, LLC, Carlyle Holdings, LLC, Abdi
Mahamedi, Atlantic Realty, and Ricardo Salas.
(2) [Reserved]
4N. Company’s Failure to Timely
Convert. If the Company shall fail to issue a certificate to a
holder of Series A Preferred Stock or credit such holder’s balance account with
the Depository Trust Company (“DTC”) through its
Deposit/Withdrawal At Custodian system for the number of shares of Common Stock
to which such holder is entitled upon conversion of any Series A Preferred Stock
on or prior to the date which is five (5) business days after the date that such
holder exercises its conversion rights pursuant to this Section 4 (a “Conversion Failure”),
then (A) the Company shall pay liquidated damages to such holder for each day of
such Conversion Failure in an amount equal to 1.0% of the product of (I) the sum
of the number of shares of Common Stock not issued to such holder on or prior to
the Share Delivery Date and to which the such holder is entitled, and (II) the
Closing Sale Price of the Common Stock on the Share Delivery Date and (B) such
holder, upon written notice to the Company, may void its notice of conversion
(in the form attached to the Series A Preferred Stock) with respect to, and have
returned any Series A Preferred Stock that has not been converted pursuant to
such notice of conversion; provided that the voiding of such notice of
conversion shall not affect the Company’s obligations to make any payments of
dividends pursuant to Section 2 hereof which have accrued prior to the date of
such notice pursuant to this Section 4(N) or otherwise. In addition
to the foregoing, if within three (3) Trading Days after the Company's receipt
of such notice of conversion, the Company shall fail to issue and deliver a
certificate to such holder or credit such holder’s balance account with DTC for
the number of shares of Common Stock to which such holder is entitled upon such
holder's conversion of any Series A Preferred Stock, and if on or after such
Trading Day such holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by such holder of Common Stock
issuable upon such conversion that such holder anticipated receiving from the
Company (a "Buy-In"), then the
Company shall, within five (5) business days after such
holder’s request and in such holder’s discretion, either (i) pay cash
to such holder in an amount equal to such holder’s total purchase price
(including brokerage commissions and other out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the "Buy-In Price"), at
which point the Company's obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to such holder a certificate or certificates representing such Common
Stock and pay cash to such holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date that such holder exercises its
conversion rights pursuant to this Section 4.
12
5.
Right to Participate in
Future Issuances.
In case
the Company proposes at any time to issue or sell any Common Stock or any
Options or Convertible Securities other than Excluded Securities and other than
securities issued in a public offering (the “Offered Securities”),
the Company shall, no later than ten (10) days prior to the consummation of such
transaction (a “Preemptive Rights
Transaction”), give notice in writing (the “Preemptive Rights Offer
Notice”) of such Preemptive Rights Transaction to each Series A Preferred
Stock holder (each, a “Preemptive Rights
Holder”). The Preemptive Rights Offer Notice shall describe
the proposed Preemptive Rights Transaction, identify the proposed purchaser, and
contain an offer (the “Preemptive Rights
Offer”) to sell to each Preemptive Rights Holder, at the same
consideration to be paid by the proposed purchasers, that number of Offered
Securities required to maintain such Preemptive Rights Holder’s ownership
percentage of the fully-diluted Common Stock in effect as of the date of the
Preemptive Rights Offer Notice (the “Maximum Offer
Amount”); provided, however, that in calculating such ownership
percentage, only the Preemptive Rights Holder’s Series A Preferred Stock (and
not any outstanding shares of Common Stock or Options or other Convertible
Securities then held by the Preemptive Rights Holder) will be included when the
percentage interest is calculated. A Preemptive Rights Holder may
subscribe for all or a portion of its Maximum Offer Amount on or prior to the
30th
day following the date of sale of the Offered Securities to the initial
purchasers. Any of the Offered Securities not subscribed for by a
Preemptive Rights Holder shall be offered to the other Preemptive Rights Holders
pursuant to a written notice from the Company on a pro rata basis for a period
of 30 days. When the Offered Securities are accepted in the manner
set forth in this paragraph 5, the Company shall, as promptly as practicable but
no later than twenty (20) days after acceptance by a Preemptive Rights Holder of
its subscription portion of the Maximum Offer Amount, issue certificates
representing the applicable number of Offered Securities (free of all liens and
encumbrances) to such holder against delivery by such holder of the
consideration payable therefor. Any notice required to be given by
Company pursuant to this paragraph 5 shall (i) specify the name of the proposed
purchaser, the number of shares to be issued, the amount and type of
consideration to be received therefor, and the other material terms on which the
Company proposes to issue the shares, and (ii) contain an offer to sell to those
holders permitted to participate in such offer all of such shares at the same
price per share and for consideration consisting of (x) cash equal to the amount
of cash proposed to be paid by the proposed purchaser and (y) if any of the
consideration to be paid by the proposed purchaser is non-cash consideration,
either the same non-cash consideration or, at the election of the particular
holder, cash having an equivalent value to the non-cash consideration proposed
to be paid by the proposed purchaser. The determination of equivalent
value required by the preceding sentence shall be made by an Independent
Appraiser, it being understood that the fees and expenses of such Independent
Appraiser shall be paid by the Company. Notwithstanding anything to
contrary herein, before the Company sends a Preemptive Rights Offer Notice to a
Preemptive Rights Holder, the Company shall send written notification to such
Preemptive Rights Holder that the Company intends to send a Preemptive Rights
Offer Notice to such Preemptive Rights Holder (such notice, the “Pre-Notice”). If
the Company does not receive, within three (3) business days from the date of
the Pre-Notice, a written notice from such Preemptive Rights Holder stating that
he, she or it does not wish to receive material non-public information relating
to the Company, then the Company shall send a Preemptive Rights Offer Notice to
such Preemptive Rights Holder and such Preemptive Rights Holder shall not have
the rights set forth in this paragraph.
13
6. Voting - Series A Preferred
Stock. In addition to any class voting rights provided by law
and the Certificate of Incorporation, the holders of Series A Preferred Stock
shall have the right to vote together with the holders of Common Stock as a
single class on any matter on which the holders of Common Stock are entitled to
vote, at any annual or special meeting of the
stockholders and not as a separate class, and may act by written consent in the
same manner as the holders of Common Stock; provided, however, the voting
rights of the holders of Series A Preferred Stock shall be subject to any
limitations or additional rights that are set forth in the Company’s Certificate
of Incorporation, as amended through the date of this Amended Certificate of
Designation. With respect to the voting rights of the holders of the
Series A Preferred Stock pursuant to the preceding sentence, each holder of
Series A Preferred Stock shall be entitled to one vote for each share of Common
Stock that would be issuable to such holder upon the conversion of all the
shares of Series A Preferred Stock held by such holder on the record date for
the determination of shareholders entitled to vote at such meeting or the effective date of such written
consent (after taking into account the
conversion limitation set forth in Section 4M(1) above), and shall have voting rights and powers equal to the
voting rights and powers of the Common Stock, and shall be entitled to notice of
any stockholders’ meeting in accordance with the Bylaws of the
Company.
14
7. Further
Restrictions. As long as at least 25% of the number of shares
of Series A Preferred Stock issued on the Original Issuance Date are
outstanding, and in addition to any other vote of the holders of Series A
Preferred Stock required by law or by the Certificate of Incorporation, the
prior consent of the holders of at least two-thirds of the outstanding Series A
Preferred Stock shall be required for the Company to take any action that: (i)
alters or changes the rights, preferences or privileges of the Series A
Preferred Stock, (ii) creates (by reclassification or otherwise) any new class
or series of shares or securities having rights, preferences or privileges
senior to, or on a parity with, the Series A Preferred Stock, (iii) results in
the redemption of any shares of Common Stock or any other shares or securities
on a parity with or junior to the Series A Preferred Stock (other than pursuant
to equity incentive agreements with service providers giving the Company the
right to repurchase shares upon the termination of services), (iv) results in
any merger, other corporate reorganization, sale of control, or any transaction
in which all or substantially all of the assets of the Company are sold, (v)
amends or waives any provision of the Company’s Certificate of Incorporation or
Bylaws relative to the Series A Preferred Stock, (vi) increases the authorized
size of the Company’s Board of Directors, (vii) results in the payment or
declaration of any dividend on any shares of Common Stock or any other shares or
securities junior to the Series A Preferred Stock, (viii) results in a confession of judgment against the Company,
or settle or compromise by or against the Company (provided that no such consent
shall be required for matters involving less than $50,000.00), (ix) results in any
filing by the Company for bankruptcy or receivership, (x) results in any
guaranty of any debt of a third party other than a direct or indirect wholly
owned subsidiary of the Company; (xi)
results in the making of any material cash investments in the securities of
another entity other than in the ordinary course of business or other than
investments in wholly owned subsidiaries of the Company, or (xii) results in the
Company entering into a materially new line of businesses not related to the
Company’s current line of business.
8. No
Waiver. Except as otherwise modified or provided for herein,
the holders of Series A Preferred Stock shall also be entitled to, and shall not
be deemed to have waived, any other applicable rights granted to such holders
under the applicable provisions of the Delaware General Corporation
Law.
9. No
Impairment. The Company will not, through any reorganization,
transfer of assets, merger, dissolution, issue or sale of securities on any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company but will
at all times in good faith assist in the carrying out of all the provisions of
Article Four and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights and liquidation
preferences granted hereunder of the holders of the Series A Preferred Stock
against impairment.”
15
IN WITNESS WHEREOF, this Amended and
Restated Certificate of Designation has been executed by the Company by a duly
authorized executive officer as of this 2nd day of November, 2010.
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LIQUIDMETAL
TECHNOLOGIES, INC.
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By:
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/s/ Tony Chung
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Name:
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Tony
Chung
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Title:
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Chief
Financial Officer
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