Attached files
Exhibit 3.1
CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS OF THE
0%
SERIES E CONVERTIBLE PREFERRED STOCK OF
MAJESCO
ENTERTAINMENT COMPANY
I,
[ ],
hereby certify that I am the
[ ]
of Majesco Entertainment Company (the “Company”), a corporation organized
and existing under the Delaware General Corporation Law (the
“DGCL”), and
further do hereby certify:
That
pursuant to the authority expressly conferred upon the Board of
Directors of the Company (the “Board”) by the Company’s
Restated Certificate of Incorporation, as amended, (the
“Certificate of
Incorporation”), the Board on December 1, 2016,
adopted the following resolutions creating a series of shares of
Preferred Stock designated as 0% Series E Convertible Preferred
Stock, none of which shares have been issued:
RESOLVED, that the
Board designates the 0% Series E Convertible Preferred Stock and
the number of shares constituting such series, and fixes the
rights, powers, preferences, privileges and restrictions relating
to such series in addition to any set forth in the Certificate of
Incorporation as follows:
TERMS
OF SERIES E CONVERTIBLE PREFERRED STOCK
1. Designation and Number of
Shares. There shall hereby be created and established by
this Certificate of Designations, Preferences and Rights of the 0%
Series E Convertible Preferred Stock (this “Certificate of Designations”) a
series of preferred stock of the Company designated as “0%
Series E Convertible Preferred Stock” (the
“Preferred
Shares”). The authorized number of Preferred Shares
shall be 7,050 shares. Each Preferred
Share shall have $0.001 par
value (the “Par Value”). Capitalized terms not defined herein
shall have the meaning as set forth in Section 22 below.
2. Liquidation and Ranking. (i)
Upon the liquidation, dissolution or
winding up of the business of the Company, whether voluntary or
involuntary, each holder of Preferred Shares shall be entitled to
receive, for each share thereof, out of assets of the Company
legally available therefor, a preferential amount in cash equal to
(and not more than) the Par Value. All preferential amounts to be
paid to the holders of Preferred Shares in connection with such
liquidation, dissolution or winding up shall be paid before the
payment or setting apart for payment of any amount for, or the
distribution of any assets of the Company to the holders of (i) any
other class or series of capital stock whose terms expressly
provide that the holders of Preferred Shares should receive
preferential payment with respect to such distribution (to the
extent of such preference) and (ii) the Common
Stock. If upon any such
distribution the assets of the Company shall be insufficient to pay
the holders of the Preferred Shares (or the holders of any class or
series of capital stock ranking on a parity with the Preferred
Shares as to distributions in the event of a liquidation,
dissolution or winding up of the Company) the full amounts to which
they shall be entitled, such holders shall share ratably in any
distribution of assets in accordance with the sums which would be
payable on such distribution if all sums payable thereon were paid
in full. Any distribution in connection with the liquidation,
dissolution or winding up of the Company, or any bankruptcy or
insolvency proceeding, shall be made in cash to the extent
possible. Whenever any such distribution shall be paid in property
other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the
Board.
(ii)
Ranking. Except to
the extent that the holders of at least 60% of the outstanding
Preferred Shares (the “Required Holders”) expressly
consent to the creation of Parity Stock (as defined below) or
Senior Preferred Stock (as defined below) in accordance with
Section 11, all shares of capital stock of the Company other than
the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock shall be junior in
rank to all Preferred Shares with respect to the preferences as to
dividends, distributions and payments upon the liquidation,
dissolution and winding-up of the Company (such junior stock is
referred to herein collectively as “Junior Stock”). The rights of all
such shares of capital stock of the Company shall be subject to the
rights, powers, preferences and privileges of the Preferred Shares.
Without limiting any other provision of this Certificate of
Designation, without the prior express consent of the Required
Holders, voting separate as a single class, the Company shall not
hereafter authorize or issue any additional or other shares of
capital stock that is (i) of senior rank to the Preferred Shares in
respect of the preferences as to dividends, distributions and
payments upon the liquidation,
dissolution and winding-up of the Company (collectively, the
“Senior Preferred
Stock”), (ii) of pari passu rank to the Preferred
Shares in respect of the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding-up of
the Company (collectively, the “Parity Stock”) or (iii) any Junior
Stock having a maturity date (or any other date requiring
redemption or repayment of such shares of Junior Stock) that is
prior to the date on which any Preferred Shares remain outstanding.
In the event of the merger or consolidation of the Company with or
into another corporation, the Preferred Shares shall maintain their
relative rights, powers, designations, privileges and preferences
provided for herein and no such merger or consolidation shall
result inconsistent therewith
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3. Dividends. In addition to
Sections 5(a) and 10 below, from and after the first date of
issuance of any Preferred Shares (the “Initial Issuance Date”), each
holder of a Preferred Share (each, a “Holder” and collectively, the
“Holders”) shall
be entitled to receive dividends (“Dividends”) when and as declared
by the Board, from time to time, in its sole discretion, which
Dividends shall be paid by the Company out of funds legally
available therefor, payable, subject to the conditions and other
terms hereof, in cash on the Stated Value of such Preferred Share.
In addition to the foregoing, the Preferred Shares shall
participate on an “as converted” basis, with all
Dividends declared on the Common Stock (as defined below) of the
Company as provided herein.
4. Conversion. Each Preferred
Share shall be convertible into validly issued, fully paid and
non-assessable shares of Common Stock on the terms and conditions
set forth in this Section 4.
(a) Holder’s Conversion
Right. At any time or times on or after the Initial Issuance
Date, each Holder shall be entitled to convert any whole number of
Preferred Shares into validly issued, fully paid and non-assessable
shares of Common Stock in accordance with Section 4(c) at the
Conversion Rate (as defined below).
(b) Conversion Rate. The number of
validly issued, fully paid and non-assessable shares of Common
Stock issuable upon conversion of each Preferred Share pursuant to
Section 4(a) shall be determined according to the following formula
(the “Conversion
Rate”):
Base Amount
Conversion
Price
No
fractional shares of Common Stock are to be issued upon the
conversion of any Preferred Shares. If the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the
nearest whole share.
(c) Mechanics of Conversion. The
conversion of each Preferred Share shall be conducted in the
following manner:
(i) Holder’s
Conversion. To convert a Preferred Share into validly
issued, fully paid and non-assessable shares of Common Stock on any
date (a “Conversion
Date”), a Holder shall deliver (whether via facsimile
or otherwise), for receipt on or prior to 11:59 p.m., New York
time, on such date, a copy of an executed notice of conversion of
the share(s) of Preferred Shares subject to such conversion in the
form attached hereto as Exhibit I
(the “Conversion
Notice”) to the Company. If required by Section
4(c)(vi), within five (5) Trading Days following a conversion of
any such Preferred Shares as aforesaid, such Holder shall surrender
to a nationally recognized overnight delivery service for delivery
to the Company the original certificates representing the share(s)
of Preferred Shares (the “Preferred Share Certificates”) so
converted as aforesaid.
(ii) Company’s
Response. On or before the first (1st) Trading Day
following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile an acknowledgment of confirmation, in
the form attached hereto as Exhibit II,
of receipt of such Conversion Notice to such Holder and the
transfer agent for the Company’s Common Stock (the
“Transfer
Agent”), which confirmation shall constitute an
instruction to the Transfer Agent to process such Conversion Notice
in accordance with the terms herein. On or before the second
(2nd)
Trading Day following the date of receipt by the Company of such
Conversion Notice, the Company shall (1) provided that the Transfer
Agent is participating in DTC Fast Automated Securities Transfer
Program, credit such aggregate number of shares of Common Stock to
which such Holder shall be entitled to such Holder’s or its
designee’s balance account with DTC through its Deposit and
Withdrawal at Custodian system, or (2) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, issue and deliver (via reputable overnight courier) to
the address as
specified in such Conversion Notice, a certificate, registered in
the name of such Holder or its designee, for the number of shares
of Common Stock to which such Holder shall be entitled. If the
number of Preferred Shares represented by the Preferred Share
Certificate(s) submitted for conversion pursuant to Section
4(c)(vi) is greater than the number of Preferred Shares being
converted, then the Company shall if requested by such Holder, as
soon as practicable and in no event later than three (3) Trading
Days after receipt of the Preferred Share Certificate(s) and at its
own expense, issue and deliver to such Holder (or its designee) a
new Preferred Share Certificate representing the number of
Preferred Shares not converted.
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(iii) Record
Holder. The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.
(iv) Company’s
Failure to Timely Convert. If the Company shall fail, for
any reason or for no reason, except in the case that the relevant
Preferred Share Certificate is required to be and shall not have
been timely received by the Transfer Agent, to issue to a Holder
within three (3) Trading Days after the Company’s receipt of
a Conversion Notice (whether via facsimile or otherwise) (the
“Share Delivery
Deadline”), a certificate for the number of shares of
Common Stock to which such Holder is entitled and register such
shares of Common Stock on the Company’s share register or to
credit such Holder’s or its designee’s balance account
with DTC for such number of shares of Common Stock to which such
Holder is entitled upon such Holder’s conversion of any
Preferred Shares (as the case may be) (a “Conversion Failure”), then, in
addition to all other remedies available to such Holder, such
Holder, upon written notice to the Company, (x) may void its
Conversion Notice with respect to, and retain or have returned (as
the case may be) any Preferred Shares that have not been converted
pursuant to such Holder’s Conversion Notice, provided that
the voiding of a Conversion Notice shall not affect the
Company’s obligations to make any payments which have accrued
prior to the date of such notice pursuant to the terms of this
Certificate of Designations or otherwise and (y) the Company shall
pay in cash to such Holder on each day after such third
(3rd)
Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1.0% of the greater of (y) the
Stated Value of the Preferred Shares subject to the Conversion
Failure and (z) the product of (A) the aggregate number of shares
of Common Stock not issued to such Holder on a timely basis and to
which the Holder is entitled and (B) the Closing Sale Price of the
Common Stock on the Trading Day immediately preceding the last
possible date on which the Company could have issued such shares of
Common Stock to the Holder without violating Section 4(c). In
addition to the foregoing, if within three (3) Trading Days after
the Company’s receipt of a Conversion Notice (whether via
facsimile or otherwise), the Company shall fail to issue and
deliver a certificate to such Holder and register such shares of
Common Stock on the Company’s share register or credit such
Holder’s or its designee’s balance account with DTC for
the number of shares of Common Stock to which such Holder is
entitled upon such Holder’s conversion hereunder (as the case
may be), and if on or after such third (3rd) Trading Day such
Holder (or any other Person in respect, or on behalf, of such
Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such
Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all
or any portion of the number of shares of Common Stock, issuable
upon such conversion that such Holder so anticipated receiving from
the Company, then, in addition to all other remedies available to
such Holder, the Company shall, within three (3) 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 (including, without limitation,
by any other Person in respect, or on behalf, of such Holder) (the
“Buy-In Price”),
at which point the Company’s obligation to so issue and
deliver such certificate 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
hereunder (as the case may be) (and to issue such shares of Common
Stock) shall terminate, or (ii) promptly honor its obligation to so
issue and deliver to such Holder a certificate or certificates
representing such shares of Common Stock 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 hereunder (as the case may be) 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 multiplied by (B) the lowest Closing Sale Price of the
Common Stock on any Trading Day during the period commencing on the
date of the applicable Conversion Notice and ending on the date of
such issuance and payment under this clause (ii).
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(v) Pro
Rata Conversion; Disputes. In the event the Company receives
a Conversion Notice from more than one Holder for the same
Conversion Date and the Company can convert some, but not all, of
such Preferred Shares submitted for conversion, the Company shall
convert from each Holder electing to have Preferred Shares
converted on such date a pro rata amount of such Holder’s
Preferred Shares submitted for conversion on such date based on the
number of Preferred Shares submitted for conversion on such date by
such Holder relative to the aggregate number of Preferred Shares
submitted for conversion on such date. In the event of a dispute as
to the number of shares of Common Stock issuable to a Holder in
connection with a conversion of Preferred Shares, the Company shall
issue to such Holder the number of shares of Common Stock not in
dispute and resolve such dispute in accordance with Section
21.
(vi) Book-Entry. Notwithstanding
anything to the contrary set forth in this Section 4, upon
conversion of any Preferred Shares in accordance with the terms
hereof, no Holder thereof shall be required to physically surrender
the certificate representing the Preferred Shares to the Company
following conversion thereof unless (A) the full or remaining
number of Preferred Shares represented by the certificate are being
converted (in which event such certificate(s) shall be delivered to
the Company as contemplated by this Section 4(c)(vi)) or (B) such
Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting
reissuance of Preferred Shares upon physical surrender of any
Preferred Shares. Each Holder and the Company shall maintain
records showing the number of Preferred Shares so converted by such
Holder and the dates of such conversions or shall use such other
method, reasonably satisfactory to such Holder and the Company, so
as not to require physical surrender of the certificate
representing the Preferred Shares upon each such conversion. In the
event of any dispute or discrepancy, such records of the Company
establishing the number of Preferred Shares to which the record
holder is entitled shall be controlling and determinative in the
absence of manifest error. A Holder and any transferee or assignee,
by acceptance of a certificate, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion of
any Preferred Shares, the number of Preferred Shares represented by
such certificate may be less than the number of Preferred Shares
stated on the face thereof. Each certificate for Preferred Shares
shall bear the following legend:
ANY
TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW
THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS
RELATING TO THE SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY
THIS CERTIFICATE, INCLUDING SECTION 4(c)(vi) THEREOF. THE NUMBER OF
SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES E PREFERRED STOCK
STATED ON THE FACE HEREOF PURSUANT TO SECTION 4(c)(vi) OF THE
CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES E
PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.
(d) Taxes. The Company shall pay
any and all documentary, stamp, transfer (but only in respect of
the registered holder thereof), issuance and other similar taxes
that may be payable with respect to the issuance and delivery of
shares of Common Stock upon the conversion of Preferred
Shares.
(a) Purchase Rights. In addition to
any adjustments pursuant to Section 7 below, if at any time the
Company grants, issues or sells any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock
(the “Purchase Rights”), then each
Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such
Holder could have acquired if such Holder had held the number of
shares of Common Stock acquirable upon complete conversion of all
the Preferred Shares held by such Holder immediately before the
date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights.
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(b) Other Corporate Events. In
addition to and not in substitution for any other rights hereunder,
prior to the consummation of any Fundamental Transaction pursuant
to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that each Holder will
thereafter have the right to receive upon a conversion of all the
Preferred Shares held by such Holder (i) in addition to the shares
of Common Stock receivable upon such conversion, such securities or
other assets to which such Holder would have been entitled with
respect to such shares of Common Stock had such shares of Common
Stock been held by such Holder upon the consummation of such
Corporate Event (without taking into account any limitations or
restrictions on the convertibility of the Preferred Shares
contained in this Certificate of Designations) or (ii) in lieu of
the shares of Common Stock otherwise receivable upon such
conversion, such securities or other assets received by the holders
of shares of Common Stock in connection with the consummation of
such Corporate Event in such amounts as such Holder would have been
entitled to receive had the Preferred Shares held by such Holder
initially been issued with conversion rights for the form of such
consideration (as opposed to shares of Common Stock) at a
conversion rate for such consideration commensurate with the
Conversion Rate. The provisions of this Section 5(b) shall apply
similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion of the
Preferred Shares contained in this Certificate of
Designations.
(a) Assumption. The Company shall
not enter into or be party to a Fundamental Transaction unless
(i) the Successor Entity assumes in writing all of the
obligations of the Company under this Certificate of Designations
and the other Transaction Documents in accordance with the
provisions of this Section 6 pursuant to written agreements in form
and substance satisfactory to holders of Preferred Shares
representing the Required Holders and approved by the Required
Holders prior to such Fundamental Transaction, including agreements
to deliver to each holder of Preferred Shares in exchange for such
Preferred Shares a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to
this Certificate of Designations, including, without limitation,
having a stated value and dividend rate equal to the stated value
and dividend rate of the Preferred Shares held by the Holders and
having similar ranking to the Preferred Shares, and reasonably
satisfactory to the Required Holders and (ii) the Successor
Entity (including its Parent Entity) is a publicly traded
corporation whose shares of common stock are quoted on or listed
for trading on an Eligible Market. Upon the occurrence of any
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Certificate of
Designations and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Certificate
of Designations and the other Transaction Documents with the same
effect as if such Successor Entity had been named as the Company
herein and therein. In addition to the foregoing, upon consummation
of a Fundamental Transaction, the Successor Entity shall deliver to
each Holder confirmation that there shall be issued upon conversion
of the Preferred Shares at any time after the consummation of such
Fundamental Transaction, in lieu of the shares of Common Stock (or
other securities, cash, assets or other property (except such items
still issuable under Sections 5 and 10, which shall continue to be
receivable thereafter)) issuable upon the conversion of the
Preferred Shares prior to such Fundamental Transaction, such shares
of publicly traded common stock (or their equivalent) of the
Successor Entity (including its Parent Entity) which each Holder
would have been entitled to receive upon the happening of such
Fundamental Transaction had all the Preferred Shares held by each
Holder been converted immediately prior to such Fundamental
Transaction (without regard to any limitations on the conversion of
the Preferred Shares contained in this Certificate of
Designations), as adjusted in accordance with the provisions of
this Certificate of Designations. The provisions of this Section 6
shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations
on the conversion of the Preferred Shares.
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(a) Intentionally
Omitted.
(b) Adjustment of Conversion Price upon
Subdivision or Combination of Common Stock. Without limiting
any provision of Sections 5 and 10, if the Company at any time on
or after the Initial Issuance Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. Without limiting any
provision of Sections 5 and 10, if the Company at any time on or
after the Initial Issuance Date combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination
will be proportionately increased. Any adjustment pursuant to this
Section 7(a) shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an
adjustment under this Section 7(a) occurs during the period that a
Conversion Price is calculated hereunder, then the calculation of
such Conversion Price shall be adjusted appropriately to reflect
such event.
(c) Intentionally
Omitted.
(d) Calculations. All calculations
under this Section 7 shall be made by rounding to the nearest
one-hundred thousandth of a cent or the nearest 1/100th of a share, as
applicable. 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 Company, and the disposition of any such shares,
other than a return thereof to the Company’s treasury for
cancellation shall be considered an issue or sale of Common
Stock.
(a) Reservation. The Company shall
initially reserve out of its authorized and unissued Common Stock a
number of shares of Common Stock equal to 100% of the Conversion
Rate with respect to the Base Amount of each Preferred Share as of
the Initial Issuance Date (assuming for purposes hereof, that all
the Preferred Shares issuable pursuant to the Agreement and Plan of
Reorganization have been issued, such Preferred Shares are
convertible at the Conversion Price and without taking into account
any limitations on the conversion of such Preferred Shares set
forth in herein) issuable pursuant to the terms of this Certificate
of Designations from the Initial Issuance Date through the second
anniversary of the Initial Issuance Date assuming (assuming for
purposes hereof, that all the Preferred Shares issuable pursuant to
the Agreement and Plan of Reorganization have been issued and
without taking into account any limitations on the issuance of
securities set forth herein). So long as any of the Preferred
Shares are outstanding, the Company shall take all action necessary
to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares, as of any given date, 100% of
the number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of all of the Preferred Shares
issued or issuable pursuant to the Agreement and Plan of
Reorganization assuming for purposes hereof, that all the Preferred
Shares issuable pursuant to the Agreement and Plan of
Reorganization have been issued and without taking into account any
limitations on the issuance of securities set forth herein),
provided that at no time shall the number of shares of Common Stock
so available be less than the number of shares required to be
reserved by the previous sentence (without regard to any
limitations on conversions contained in this Certificate of
Designations) (the “Required
Amount”). The initial number of shares of Common Stock
reserved for conversions of the Preferred Shares and each increase
in the number of shares so reserved shall be allocated pro rata
among the Holders based on the number of Preferred Shares held by
each Holder on the Initial Issuance Date or increase in the number
of reserved shares (as the case may be) (the “Authorized Share Allocation”). In
the event a Holder shall sell or otherwise transfer any of such
Holder’s Preferred Shares, each transferee
shall be allocated a pro rata portion of such Holder’s
Authorized Share Allocation. Any shares of Common Stock reserved
and allocated to any Person which ceases to hold any Preferred
Shares shall be allocated to the remaining Holders of Preferred
Shares, pro rata based on the number of Preferred Shares then held
by such Holders.
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(b) Insufficient Authorized Shares.
If, notwithstanding Section 8(a) and not in limitation thereof, at
any time while any of the Preferred Shares remain outstanding the
Company does not have a sufficient number of authorized and
unissued shares of Common Stock to satisfy its obligation to have
available for issuance upon conversion of the Preferred Shares at
least a number of shares of Common Stock equal to the Required
Amount (an “Authorized Share
Failure”), then the Company shall promptly take all
action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to
reserve and have available the Required Amount for all of the
Preferred Shares then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of
the occurrence of an Authorized Share Failure, but in no event
later than ninety (90) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders
or conduct a consent solicitation for the approval of an increase
in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with
a proxy statement (or consent solicitation statement, as the case
may be) and shall use its best efforts to solicit its
stockholders’ approval of such increase in authorized shares
of Common Stock and to cause its Board to recommend to the
stockholders that they approve such proposal. Nothing contained in
this Section 8 shall limit any obligations of the Company under any
provision of the Agreement and Plan of Reorganization. In the event
that the Company is prohibited from issuing shares of Common Stock
upon a conversion of any Preferred Share due to the failure by the
Company to have sufficient shares of Common Stock available out of
the authorized but unissued shares of Common Stock (such
unavailable number of shares of Common Stock, the
“Authorization Failure
Shares”), in lieu of delivering such Authorization
Failure Shares to such Holder of such Preferred Shares, the Company
shall pay cash in exchange for the cancellation of such Preferred
Shares convertible into such Authorized Failure Shares at a price
equal to the greater of (y) the Stated Value of the Preferred
Shares subject to the Conversion Notice with respect to such
Authorization Failure Shares and (z) the sum of (i) the product of
(x) such number of Authorization Failure Shares and (y) the Closing
Sale Price on the Trading Day immediately preceding the date such
Holder delivers the applicable Conversion Notice with respect to
such Authorization Failure Shares to the Company and (ii) to the
extent such Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Holder of Authorization Failure Shares, any brokerage
commissions and other out-of-pocket expenses, if any, of such
Holder incurred in connection therewith.
9. Voting Rights. Except as
otherwise expressly required by law, each holder of Preferred
Shares shall be entitled to vote on all matters submitted to
shareholders of the Company and shall be entitled to such number of
votes equal to two votes for every one
share of Common Stock into which such Preferred Stock shall be
convertible into at the record date for the determination of
shareholders entitled to vote on such matter or, if no such record
date is established, at the date such vote is taken or any written
consent of shareholders is solicited. Except as otherwise required
by law, the holders of Preferred Shares shall vote together with
the holders of Common Stock on all matters and shall not vote as a
separate class.
10. Participation. The Holders
shall, as holders of Preferred Shares, be entitled to receive such
dividends paid and distributions made to the holders of shares of
Common Stock to the same extent as if such Holders had converted
each Preferred Share held by each of them into shares of Common
Stock and had held such shares of Common Stock on the record date
for such dividends and distributions. Payments under the preceding
sentence shall be made concurrently with the dividend or
distribution to the holders of shares of Common Stock.
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11. Vote to Change the Terms of or Issue
Preferred Shares. In addition to any other rights provided
by law, except where the vote or written consent of the holders of
a greater number of shares is required by law or by another
provision of the Certificate of Incorporation, without first
obtaining the affirmative vote at a meeting duly called for such
purpose or the written consent without a meeting of the Required
Holders, voting together as a single class, the Company shall not:
(a) amend or repeal any provision of, or add any provision to, its
Certificate of Incorporation or bylaws, or file any certificate of
designations or articles of amendment of any series of shares of
preferred stock, if such action would adversely alter or change in
any respect the preferences, rights, privileges or powers, or
restrictions provided for the benefit, of the Preferred Shares,
regardless of whether any such action shall be by means of
amendment to the Certificate of Incorporation or by merger,
consolidation or otherwise; (b) increase or decrease (other than by
conversion) the authorized number of Preferred Shares; (c) without
limiting any provision of Section 2, create or authorize (by
reclassification or otherwise) any new class or series of shares
that has a preference over or is on a parity with the Preferred
Shares with respect to dividends or the distribution of assets on
the liquidation, dissolution or winding-up of the Company; (d)
purchase, repurchase or redeem any shares of capital stock of the
Company junior in rank to the Preferred Shares (other than pursuant
to equity incentive agreements (that have in good faith been
approved by the Board) with employees giving the Company the right
to repurchase shares upon the termination of services); (e) without
limiting any provision of Section 2, pay dividends or make any
other distribution on any shares of any capital stock of the
Company junior in rank to the Preferred Shares; or (f) without
limiting any provision of Section 15, whether or not prohibited by
the terms of the Preferred Shares, circumvent a right of the
Preferred Shares.
12. Intentionally
Omitted.
13. Lost or Stolen Certificates.
Upon receipt by the Company of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any
certificates representing Preferred Shares (as to which a written
certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or
destruction, of an indemnification undertaking by the applicable
Holder to the Company in customary and reasonable form and, in the
case of mutilation, upon surrender and cancellation of the
certificate(s), the Company shall execute and deliver new
certificate(s) of like tenor and date.
14. Remedies, Characterizations, Other
Obligations, Breaches and Injunctive Relief. The remedies
provided in this Certificate of Designations shall be cumulative
and in addition to all other remedies available under this
Certificate of Designations and any of the other Transaction
Documents, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and no remedy
contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy. Nothing herein shall limit
any Holder’s right to pursue actual and consequential damages
for any failure by the Company to comply with the terms of this
Certificate of Designations. The Company covenants to each Holder
that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or
provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be
received by a Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the
Holders and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any
such breach or threatened breach, each Holder shall be entitled, in
addition to all other available remedies, to an injunction
restraining any such breach or any such threatened breach, without
the necessity of showing economic loss and without any bond or
other security being required. The Company shall provide all
information and documentation to a Holder that is requested by such
Holder to enable such Holder to confirm the Company’s
compliance with the terms and conditions of this Certificate of
Designations.
-8-
15. Noncircumvention. The Company
hereby covenants and agrees that the Company will not, by amendment
of its Certificate of Incorporation, bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Certificate of
Designations, and will at all times in good faith carry out all the
provisions of this Certificate of Designations and take all action
as may be required to protect the rights of the Holders. Without
limiting the generality of the foregoing or any other provision of
this Certificate of Designations, the Company (i) shall not
increase the par value of any shares of Common Stock receivable
upon the conversion of any Preferred Shares above the Conversion
Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common
Stock upon the conversion of Preferred Shares and (iii) shall, so
long as any Preferred Shares are outstanding, take all action
necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the Preferred Shares, the maximum
number of shares of Common Stock as shall from time to time be
necessary to effect the conversion of the Preferred Shares then
outstanding (without regard to any limitations on conversion
contained herein).
16. Failure or Indulgence Not
Waiver. No failure or delay on the part of a Holder in the
exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. No
waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party. This Certificate of
Designations shall be deemed to be jointly drafted by the Company
and all Holders and shall not be construed against any Person as
the drafter hereof.
17. Notices. The Company shall
provide each Holder of Preferred Shares with prompt written notice
of all actions taken pursuant to the terms of this Certificate of
Designations, including in reasonable detail a description of such
action and the reason therefor. Whenever notice is required to be
given under this Certificate of Designations, unless otherwise
provided herein, such notice must be in writing and shall be given
in accordance with the Agreement and Plan of Reorganization.
Without limiting the generality of the foregoing, the Company shall
give written notice to each Holder (i) promptly following any
adjustment of the Conversion Price, setting forth in reasonable
detail, and certifying, the calculation of such adjustment and (ii)
at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend
or distribution upon the Common Stock, (B) with respect to any
grant, issuances, or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property
to all holders of shares of Common Stock as a class or (C) for
determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided, in each case,
that such information shall be made known to the public prior to,
or simultaneously with, such notice being provided to any
Holder.
18. Transfer of Preferred Shares.
The Holder may transfer some or all of its Preferred Shares without
the consent of the Company.
19. Preferred Shares Register. The
Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice
to the Holders), a register for the Preferred Shares, in which the
Company shall record the name, address and facsimile number of the
Persons in whose name the Preferred Shares have been issued, as
well as the name and address of each transferee. The Company may
treat the Person in whose name any Preferred Shares is registered
on the register as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events
recognizing any properly made transfers.
-9-
20. Stockholder Matters;
Amendment.
(a) Stockholder Matters. Any
stockholder action, approval or consent required, desired or
otherwise sought by the Company pursuant to the DGCL, the
Certificate of Incorporation, this Certificate of Designations or
otherwise with respect to the issuance of Preferred Shares may be
effected by written consent of the Company’s stockholders or
at a duly called meeting of the Company’s stockholders, all
in accordance with the applicable rules and regulations of the
DGCL. This provision is intended to comply with the applicable
sections of the DGCL permitting stockholder action, approval and
consent affected by written consent in lieu of a
meeting.
(b) Amendment. This Certificate of
Designations or any provision hereof may be amended by obtaining
the affirmative vote at a meeting duly called for such purpose, or
written consent without a meeting in accordance with the DGCL, of
the Required Holders, voting separate as a single class, and with
such other stockholder approval, if any, as may then be required
pursuant to the DGCL and the Certificate of
Incorporation.
(a)
Disputes Over Closing Bid
Price, Closing Sale Price, Conversion Price, VWAP or Fair Market
Value.
(i) In the case of a dispute relating to a
Closing Bid Price, a Closing Sale Price, a Conversion Price, a VWAP
or fair market value (as the case may be) (including, without
limitation, a dispute relating to the determination of any of the
foregoing), the Company or such applicable Holder (as the case may
be) shall submit the dispute via facsimile (I) within two (2)
Business Days after delivery of the applicable notice giving rise
to such dispute to the Company or such Holder (as the case may be)
or (II) if no notice gave rise to such dispute, at any time after
such Holder learned of the circumstances giving rise to such
dispute. If such Holder and the Company are unable to resolve such
dispute relating to such Closing Bid Price, such Closing Sale
Price, such Conversion Price, such VWAP or such fair market value
(as the case may be) by 5:00 p.m. (New York time) on the third
(3rd)
Business Day following such delivery by the Company or such Holder
(as the case may be) of such dispute to the Company or such Holder
(as the case may be), then such Holder shall select an independent,
reputable investment bank to resolve such dispute.
(ii) Such Holder and the Company shall
each deliver to such investment bank (x) a copy of the initial
dispute submission so delivered in accordance with the first
sentence of this Section 22(a) and (y) written documentation
supporting its position with respect to such dispute, in each case,
no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day
immediately following the date on which such Holder selected such
investment bank (the “Dispute
Submission Deadline”) (the documents referred to in
the immediately preceding clauses (x) and (y) are collectively
referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either such Holder or the
Company fails to so deliver all of the Required Dispute
Documentation by the Dispute Submission Deadline, then the party
who fails to so submit all of the Required Dispute Documentation
shall no longer be entitled to (and hereby waives its right to)
deliver or submit any written documentation or other support to
such investment bank with respect to such dispute and such
investment bank shall resolve such dispute based solely on the
Required Dispute Documentation that was delivered to such
investment bank prior to the Dispute Submission Deadline). Unless
otherwise agreed to in writing by both the Company and such Holder
or otherwise requested by such investment bank,
neither the Company nor such Holder shall be entitled to deliver or
submit any written documentation or other support to such
investment bank in connection with such dispute (other than the
Required Dispute Documentation).
-10-
(iii) The Company and such Holder shall
cause such investment bank to determine the resolution of such
dispute and notify the Company and such Holder of such resolution
no later than ten (10) Business Days immediately following the
Dispute Submission Deadline. The fees and expenses of such
investment bank shall be borne solely by the Company, and such
investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(i) In the case of a dispute as to the
arithmetic calculation of a Conversion Rate, the Company or such
Holder (as the case may be) shall submit the disputed arithmetic
calculation via facsimile (i) within two (2) Business Days after
delivery of the applicable notice giving rise to such dispute to
the Company or such Holder (as the case may be) or (ii) if no
notice gave rise to such dispute, at any time after such Holder
learned of the circumstances giving rise to such dispute. If such
Holder and the Company are unable to resolve such disputed
arithmetic calculation of such Conversion Rate by 5:00 p.m. (New
York time) on the third (3rd) Business Day
following such delivery by the Company or such Holder (as the case
may be) of such disputed arithmetic calculation, then such Holder
shall select an independent, reputable accountant or accounting
firm to perform such disputed arithmetic calculation.
(ii) Such Holder and the Company shall
each deliver to such accountant or accounting firm (as the case may
be) (x) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 22(a) and (y)
written documentation supporting its position with respect to such
disputed arithmetic calculation, in each case, no later than 5:00
p.m. (New York time) by the fifth (5th) Business Day
immediately following the date on which such Holder selected such
accountant or accounting firm (as the case may be) (the
“Submission
Deadline”) (the documents referred to in the
immediately preceding clauses (x) and (y) are collectively referred
to herein as the “Required
Documentation”) (it being understood and agreed that
if either such Holder or the Company fails to so deliver all of the
Required Documentation by the Submission Deadline, then the party
who fails to so submit all of the Required Documentation shall no
longer be entitled to (and hereby waives its right to) deliver or
submit any written documentation or other support to such
accountant or accounting firm (as the case may be) with respect to
such disputed arithmetic calculation and such accountant or
accounting firm (as the case may be) shall perform such disputed
arithmetic calculation based solely on the Required Documentation
that was delivered to such accountant or accounting firm (as the
case may be) prior to the Submission Deadline). Unless otherwise
agreed to in writing by both the Company and such Holder or
otherwise requested by such accountant or accounting firm (as the
case may be), neither the Company nor such Holder shall be entitled
to deliver or submit any written documentation or other support to
such accountant or accounting firm (as the case may be) in
connection with such disputed arithmetic calculation of the
Conversion Rate (other than the Required
Documentation).
(iii) The Company and such Holder shall
cause such accountant or accounting firm (as the case may be) to
perform such disputed arithmetic calculation and notify the Company
and such Holder of the results no later than ten (10) Business Days
immediately following the Submission Deadline. The fees and
expenses of such accountant or accounting firm (as the case may be)
shall be borne solely by the Company, and such accountant’s
or accounting firm’s (as the case may be) arithmetic
calculation shall be final and binding upon all parties absent
manifest error.
-11-
(c)
Miscellaneous. The Company expressly acknowledges and agrees that
(i) this Section 22 constitutes an agreement to arbitrate between
the Company and such Holder (and constitutes an arbitration
agreement) under § 7501, et seq. of the New York Civil
Practice Law and Rules (“CPLR”) and that each party shall
be entitled to compel arbitration pursuant to CPLR § 7503(a)
in order to compel compliance with this Section 22, (ii) the terms
of this Certificate of Designations and each other applicable
Transaction Document shall serve as the basis for the selected
investment bank’s resolution of the applicable dispute, such
investment bank shall be entitled (and is hereby expressly
authorized) to make all findings, determinations and the like that
such investment bank determines are required to be made by such
investment bank in connection with its resolution of such dispute
and in resolving such dispute such investment bank shall apply such
findings, determinations and the like to the terms of this
Certificate of Designations and any other applicable Transaction
Documents, (iii) the terms of this Certificate of Designations and
each other applicable Transaction Document shall serve as the basis
for the selected accountant’s or accounting firm’s
performance of the applicable arithmetic calculation, (iv) for
clarification purposes and without implication that the contrary
would otherwise be true, disputes relating to matters described in
Section 22(a) shall be governed by Section 22(a) and not by Section
22(b), (v) such Holder (and only such Holder), in its sole
discretion, shall have the right to submit any dispute described in
this Section 22 to any state or federal court sitting in The City
of New York, Borough of Manhattan in lieu of utilizing the
procedures set forth in this Section 22 and (vi) nothing in this
Section 22 shall limit such Holder from obtaining any injunctive
relief or other equitable remedies (including, without limitation,
with respect to any matters described in Section 22(a) or Section
22(b)).
22. Certain Defined Terms. For
purposes of this Certificate of Designations, the following terms
shall have the following meanings:
(a) “1934 Act” means the Securities Exchange Act of
1934, as amended.
(b) “Affiliate” as applied to any
Person, means any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person. For the
purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and
“under common control
with”), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract
or otherwise. For purposes of this definition, a Person shall be
deemed to be “controlled by” a Person
if such latter Person possesses, directly or indirectly, power to
vote 10% or more of the securities having ordinary voting power for
the election of directors of such former Person
(c) “Agreement and Plan of
Reorganization” means the Agreement and Plan of
Reorganization by and among the
Company, Majesco Acquisition Corp., a Nevada corporation and
wholly-owned subsidiary of the Company PolarityTE, Inc., a Nevada
corporation and Denver Lough dated December 1,
2016
(d) “Base Amount” means, with respect
to each Preferred Share, as of the applicable date of
determination, the sum of (1) the Stated Value thereof, plus (2)
the Unpaid Dividend Amount thereon as of such date of
determination.
(e) “Bloomberg” means Bloomberg,
L.P.
(f) “Business Day” means any day other
than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain
closed.
-12-
(g) “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 Principal Market, as reported by
Bloomberg, or, if the Principal Market 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
4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market 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, 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, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).
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
applicable Holder. If the Company and such Holder are unable to
agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in
Section 21. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other
similar transaction during such period.
(h) “Common Stock” means (i) the
Company’s shares of common stock, $0.001 par value per share,
and (ii) any capital stock into which such common stock shall have
been changed or any share capital resulting from a reclassification
of such common stock.
(i) “Conversion Price” means, with
respect to each Preferred Share, as of any Conversion Date or other
applicable date of determination, $1.00, subject to adjustment as
provided herein.
(j) “Convertible Securities” means any
stock or other security (other than Options) that is at any time
and under any circumstances, directly or indirectly, convertible
into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common
Stock.
(k) “Eligible Market” means the
Principal Market, The New York Stock Exchange, the NYSE MKT, the
NASDAQ Capital Market, the Nasdaq Global Select Market, the Nasdaq
Global Market, the OTCQX and the OTCQB (or any successor
thereto).
(l) “Fundamental Transaction” “
means that (i) the Company or any of its Subsidiaries shall,
directly or indirectly, in one or more related transactions, (1)
consolidate or merge with or into (whether or not the Company or
any of its Subsidiaries is the surviving corporation) any other
Person, or (2) sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective
properties or assets to any other Person, or (3) allow any other
Person to make a purchase, tender or exchange offer that is
accepted by the holders of more than 50% of the outstanding shares
of Voting Stock of the Company (not including any shares of Voting
Stock of the Company held by the Person or Persons making or party
to, or associated or affiliated with the Persons making or party
to, such purchase, tender or exchange offer), or (4) consummate a
stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other Person whereby
such other Person acquires more than 50% of the outstanding shares
of Voting Stock of the Company (not including any shares of Voting
Stock of the Company held by the other Person or other Persons
making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement
or other business combination), or (5) reorganize, recapitalize or
reclassify the Common Stock, or (ii) any “person” or
“group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and
regulations promulgated thereunder) is or
shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and
outstanding Voting Stock of the Company.
-13-
(m) “Options” means any rights,
warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.
(n) “Parent Entity” of a Person means
an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is
quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with
the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.
(o) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity or a government or any department or agency
thereof.
(p) “Principal Market” means the NASDAQ
Capital Market.
(q) “SEC” means the Securities and
Exchange Commission or the successor thereto.
(r) “Stated Value” shall mean $1,000
per share, subject to adjustment for stock splits, stock dividends,
recapitalizations, reorganizations, reclassifications,
combinations, subdivisions or other similar events occurring after
the Initial Issuance Date with respect to the Preferred
Shares.
(s) “Subsidiaries” shall means any corporation, partnership, limited
liability company, joint venture, trust, association or other
entity of which the Company owns, directly or indirectly, (i) 50%
or more of the stock or other equity interests the holders of which
are generally entitled to elect at least a majority of the board of
directors or other governing body of such corporation, partnership,
limited liability company, joint venture, trust, association or
other entity or (ii) if there are no such voting interests, 50% or
more of the equity interests in such corporation, partnership,
limited liability company, joint venture, trust, association or
other entity.
(t) “Successor Entity” means the Person
(or, if so elected by the Required Holders, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction
or the Person (or, if so elected by the Required Holders, the
Parent Entity) with which such Fundamental Transaction shall have
been entered into.
(u) “Trading Day” means, as applicable,
(x) with respect to all price determinations relating to the Common
Stock, any day on which the Common Stock is traded on the Principal
Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities
exchange or securities market on which the Common Stock is then
traded, provided that “Trading Day” shall not include
any day on which the Common Stock is scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00:00 p.m.,
New York time) unless such day is otherwise designated as a Trading
Day in writing by the Required Holders or (y) with respect to all
determinations other than price determinations relating to the
Common Stock, any day on which The New York Stock Exchange (or any
successor thereto) is open for trading of securities.
(v) “Transaction Documents” means the
Agreement and Plan of
Reorganization
(w) and each of the other agreements and
instruments entered into or delivered by the Company or any of the
Holders in connection with the transactions contemplated by the
Agreement and Plan of
Reorganization, all as may be amended from time to time in
accordance with the terms thereof.
-14-
(x) “Unpaid Dividend Amount” means, as
of the applicable date of determination, with respect to each
Preferred Share, all accrued and unpaid Dividends on such Preferred
Share.
(y) “Voting Stock” of a Person means
capital stock of such Person of the class or classes pursuant to
which the holders thereof have the general voting power to elect,
or the general power to appoint, at least a majority of the board
of directors, managers, trustees or other similar governing body of
such Person (irrespective of whether or not at the time capital
stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
(z) “VWAP” means, for any security as
of any date, the dollar volume-weighted average price for such
security on the Principal Market (or, if the Principal Market is
not the principal trading market for such security, then on the
principal securities exchange or securities market on which such
security is then traded) during the period beginning at 9:30:01
a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg through its “HP” function set to
“weighted average” 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, and ending at 4:00:00 p.m., New York time, 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 OTC Markets Group Inc. (formerly Pink
Sheets LLC). If the VWAP cannot be calculated for such security on
such date on any of the foregoing bases, the VWAP of such security
on such date shall be the fair market value as mutually determined
by the Company and such Holder. If the Company and such Holder are
unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in
Section 22. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other
similar transaction during such period.
23. Disclosure. Upon receipt or
delivery by the Company of any notice in accordance with the terms
of this Certificate of Designations, unless the Company has in good
faith determined that the matters relating to such notice do not
constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall simultaneously with
any such receipt or delivery publicly disclose such material,
non-public information on a Current Report on Form 8-K or
otherwise. In the event that the Company believes that a notice
contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to each
Holder contemporaneously with delivery of such notice, and in the
absence of any such indication, each Holder shall be allowed to
presume that all matters relating to such notice do not constitute
material, non-public information relating to the Company or its
Subsidiaries. Nothing contained in this Section 23 shall limit any
obligations of the Company, or any rights of any Holder, under the
Subscription Agreements.
* * * *
*
-15-
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations of 0% Series E Convertible Preferred Stock of Majesco
Entertainment Company to be signed by its [___] on this [___] day
of [____], 2016.
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MAJESCO
ENTERTAINMENT COMPANY
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By:
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Name:
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Title:
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-16-
EXHIBIT I
MAJESCO ENTERTAINMENT COMPANY
CONVERSION
NOTICE
Reference is made
to the Certificate of Designations, Preferences and Rights of the
0% Series E Convertible Preferred Stock of Majesco Entertainment
Company (the “Certificate of
Designations”). In accordance with and pursuant to the
Certificate of Designations, the undersigned hereby elects to
convert the number of shares of Series E Convertible Preferred
Stock, $0.001 par value per share (the “Preferred Shares”), of Majesco
Entertainment Company, a Delaware corporation (the
“Company”),
indicated below into shares of common stock, $0.001 par value per
share (the “Common
Stock”), of the Company, as of the date specified
below.
Date of
Conversion:
Number
of Preferred Shares to be
converted:
Share
certificate no(s). of Preferred Shares to be
converted:
Tax ID
Number (If
applicable):
Conversion
Price:_________________________________________________________
Number
of shares of Common Stock to be
issued:
Please
issue the shares of Common Stock into which the Preferred Shares
are being converted in the following name and to the following
address:
Issue
to:
Address:
_________________________________________
Telephone Number:
________________________________
Facsimile
Number:
Holder:
By:
Title:
Dated:_____________________________
Account
Number (if electronic book entry
transfer):
Transaction Code
Number (if electronic book entry
transfer):
-17-
EXHIBIT II
ACKNOWLEDGMENT
The
Company hereby acknowledges this Conversion Notice and hereby
directs
[ ]
to issue the above indicated number of shares of Common Stock in
accordance with the Irrevocable Transfer Agent Instructions dated
__________, 2016 from the Company and acknowledged and agreed to by
[ ].
MAJESCO
ENTERTAINMENT COMPANY
By:
Name:
Title:
-18-