EXHIBIT 10.3

 

ARTICLES OF AMENDMENT TO THE ARTICLCLES OF INCORPORATION OF
FORCE PROTECTION VIDEO EQUIPMENT CORP.

  

THE UNDERSIGNED, being the president and sole director of Force Protection Video
Equipment Corp. pursuant to Section 607.0602 of the Florida Business Corporation
Act does hereby amend its Articles of Incorporation effective October 22, 2020
as follows:

 

ARTICLE IV

 

DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES B PREFERRED STOCK

 

TERMS OF PREFERRED STOCK

 

Section 1. Definitions. For the purposes hereof, the following terms shall have
the following meanings:

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 of the Securities
Act.

 

“Alternate Consideration” shall have the meaning set forth in Section 7(e).

 

“Bankruptcy Event” means any of the following events: (a) the Corporation or any
Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation
S-X) thereof commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction relating to the
Corporation or any Significant Subsidiary thereof, (b) there is commenced
against the Corporation or any Significant Subsidiary thereof any such case or
proceeding that is not dismissed within 60 days after commencement, (c) the
Corporation or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or
proceeding is entered, (d) the Corporation or any Significant Subsidiary thereof
suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days
after such appointment, (e) the Corporation or any Significant Subsidiary
thereof makes a general assignment for the benefit of creditors, (f) the
Corporation or any Significant Subsidiary thereof calls a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts, or (g) the Corporation or any Significant Subsidiary thereof, by any
act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action for
the purpose of effecting any of the foregoing.

 

“Beneficial Ownership Limitation” shall have the meaning set forth in Section
6(e).

 

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“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Buy-In” shall have the meaning set forth in Section 6(d)(iv).

 

“Change of Control Transaction” means the occurrence after the date hereof of
any of (a) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d‑5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital
stock of the Corporation, by contract or otherwise) of in excess of 50% of the
voting securities of the Corporation (other than by means of conversion of
Preferred Stock), (b) the Corporation merges into or consolidates with any other
Person, or any Person merges into or consolidates with the Corporation and,
after giving effect to such transaction, the stockholders of the Corporation
immediately prior to such transaction own less than 50% of the aggregate voting
power of the Corporation or the successor entity of such transaction, (c) the
Corporation sells or transfers all or substantially all of its assets to another
Person and the stockholders of the Corporation immediately prior to such
transaction own less than 50% of the aggregate voting power of the acquiring
entity immediately after the transaction, (d) a replacement at one time or
within a one year period of more than one‑half of the members of the Board of
Directors which is not approved by a majority of those individuals who are
members of the Board of Directors on the Original Issue Date (or by those
individuals who are serving as members of the Board of Directors on any date
whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the Original Issue Date),
or (e) the execution by the Corporation of an agreement to which the Corporation
is a party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above. Notwithstanding the foregoing, Share Exchange
Transaction shall not be considered a Fundamental Transaction.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the Corporation’s common stock, par value $0.0001 per
share, and stock of any other class of securities into which such securities may
hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Corporation or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

“Conversion Amount” means the sum of the Stated Value at issue.

 

“Conversion Date” shall have the meaning set forth in Section 6(a).

 

“Conversion Price” shall have the meaning set forth in Section 6(c).

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable
upon conversion of the shares of Preferred Stock in accordance with the terms
hereof.

 

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“Dividend Rate” shall have the meaning set forth in Section 3(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Exempt Issuance” means the issuance of (a) after the Original Issue Date shares
of Common Stock or options to employees, officers or directors of the
Corporation pursuant to the Company’s existing stock option or restricted stock
plans, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or other securities exercisable or exchangeable
for or convertible into shares of Common Stock, issued and outstanding on the
date of this Agreement, or pursuant to other agreements of the Company existing
prior to the date hereof, provided that such securities and/or agreements have
not been amended (or adjusted) since the date of this Agreement to increase the
number of such securities or to decrease the exercise price, exchange price or
conversion price of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Corporation (but not securities issued primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities), (d) after the Original Issue Date securities to
advisors or independent contractors for the Company for compensatory purposes,
(e) securities pursuant to the Purchase Agreement, including the Preferred Stock
and Conversion Shares and (f) securities issued pursuant to Section 4.18 of the
securities purchase agreement dated June 25, 2020 and entered into between SRAX
and certain purchasers, provided, however, that the number of Common Stock
Equivalents issued or granted under clauses (a) and (d) shall be limited to
fifteen percent (15%) of the Fully Diluted Securities calculated immediately
subsequent to the Share Exchange Transaction.

 

“Final Closing Date” means the earlier of: (i) the last Additional Closing Date
as defined in the Transaction documents, or (ii) the six-month anniversary after
the Initial Closing Date.

 

“Fully Diluted Securities” shall mean immediately prior to an Optional
Conversion or Forced Conversion, the number of issued and outstanding shares of
capital stock of the Corporation on a fully as-converted and as-exercised basis,
assuming the full exercise and conversion of all outstanding Common Stock
Equivalents provided however that securities described in the definition of
Exempt Issuance, subsections (a), (b), (d), (e) and (f) will be excluded from
the calculation.

 

“Fundamental Transaction” shall have the meaning set forth in Section 7(e).

 

“GAAP” means United States generally accepted accounting principles.

 

“Holder” shall have the meaning given such term in Section 2.

   

“Junior Securities” means the Common Stock and all other Common Stock
Equivalents of the Corporation other than those securities which are explicitly
senior or pari passu to the Preferred Stock in dividend rights or liquidation
preference.

 

“Liquidation” shall have the meaning set forth in Section 5.

 

“New Jersey Courts” shall have the meaning set forth in Section 9(d).

 

“Notice of Conversion” shall have the meaning set forth in Section 6(a).

 

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“Original Issue Date” means the date of the first issuance of any shares of the
Preferred Stock regardless of the number of transfers of any particular shares
of Preferred Stock and regardless of the number of certificates which may be
issued to evidence such Preferred Stock.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Preferred Stock” shall have the meaning set forth in Section 2.

 

“Purchase Agreement” means the Securities Purchase Agreement, dated on or about
the Original Issue Date, among the Corporation and the original Holders, as
amended, modified or supplemented from time to time in accordance with its
terms.

 

“Qualified Financing” shall mean any equity financing pursuant to which, for the
primary purpose of raising capital, the Corporation sells shares of its capital
stock and or securities convertible into Common Stock, resulting in gross
proceeds to the Corporation of not less than $5,000,000, and excluding the
exchange or conversion of any outstanding securities or the cancellation of
indebtedness in exchange for securities in the Qualified Financing.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
on or about the Original Issue Date, among the Corporation and the original
Holders, as amended, modified or supplemented from time to time in accordance
with its terms.

 

“Securities” means the Preferred Stock and the Conversion Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Share Delivery Date” shall have the meaning set forth in Section 6(d).

 

“Share Exchange Transaction” means the transaction exchange of (i) the shares of
BIG Token, Inc. held by SRAX, for (ii) 88.9% of the issued and outstanding
shares of the Corporation as contemplated by that certain share exchange
agreement by and between SRAX and the Corporation dated September 30, 2020.

 

“SRAX” means SRAX, Inc.

 

“Stated Value” shall have the meaning set forth in Section 2, as the same may be
increased pursuant to Section 3.

 

“Subsidiary” means any subsidiary of the Corporation as set forth on Schedule
3.1(a) of the Purchase Agreement and shall, where applicable, also include any
direct or indirect subsidiary of the Corporation formed or acquired after the
date of the Purchase Agreement.

 

“Successor Entity” shall have the meaning set forth in Section 7(e).

 

“Trading Day” means a day on which the principal Trading Market is open for
business.

 

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“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any
successors to any of the foregoing), the Pink Sheets or any Inter-dealer
Quotation System.

 

“Transaction Documents” means this Certificate of Designation, the Purchase
Agreement, the Registration Rights Agreement, the Transfer Agent Instruction
Letter, all exhibits and schedules thereto and hereto and any other documents or
agreements executed in connection with the transactions contemplated pursuant to
the Purchase Agreement.

 

“Transfer Agent” means the current transfer agent of the Company, and any
successor transfer agent of the Corporation.

 

“Transfer Agent Instruction Letter” shall have the meaning ascribed to such term
in the Purchase Agreement.

 

“Triggering Event” means, wherever used herein any of the following events
(whatever the reason for such event and whether such event shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

 

i.the Corporation shall fail to deliver certificates representing Conversion
Shares issuable upon a conversion hereunder that comply with the provisions
hereof prior to the fifth Trading Day after such shares are required to be
delivered hereunder, or the Corporation shall provide written notice to any
Holder, including by way of public announcement, at any time, of its intention
not to comply with requests for conversion of any shares of Preferred Stock in
accordance with the terms hereof;

   

ii. the Corporation shall fail for any reason to pay in full the amount of cash
due pursuant to a Buy-In within three (3) calendar days after notice therefor is
delivered hereunder;

 

iii. following the effectiveness of the Charter Amendment, the Corporation shall
fail to have available a sufficient number of authorized and unreserved shares
of Common Stock to issue to such Holder upon a conversion hereunder;

 

iv. unless specifically addressed elsewhere in this Certificate of Designation
as a Triggering Event, the Corporation shall fail to observe or perform any
other covenant, agreement or warranty contained in, or otherwise commit any
breach of the Transaction Documents which results in a Material Adverse Effect,
and such failure or breach shall not, if subject to the possibility of a cure by
the Corporation, have been cured within ten (10) Trading Days after the date on
which written notice of such failure or breach shall have been delivered;

 

v. the Corporation shall redeem more than a de minimis number of Junior
Securities other than as to repurchases of Common Stock or Common Stock
Equivalents from departing officers and directors, provided that, while any of
the Preferred Stock remains outstanding, such repurchases shall not exceed an
aggregate of $100,000 from all officers and directors;

 

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vi. the Corporation shall be party to a Change of Control Transaction;

 

vii. there shall have occurred a Bankruptcy Event;

 

viii. the Common Stock shall fail to be listed or quoted for trading on a
Trading Market for more than five Trading Days, which need not be consecutive
Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;

 

ix. the occurrence of an “Event” under the Registration Rights Agreement;

 

x. any obligation or undertaking to be effected by the Corporation, its transfer
agent, or any other agent or representative of the Corporation necessary for
Holder to meet its compliance or clearing needs is not delivered within three
(3) days of such request in writing;

 

xi. any monetary judgment, writ or similar final process shall be entered or
filed against the Corporation, any subsidiary or any of their respective
property or other assets for more than $250,000, and such judgment, writ or
similar final process shall remain unvacated, unbonded or unstayed for a period
of forty-five (45) calendar days; or

 

xii. the Share Exchange Transaction shall not have closed within 180 days of the
Original Issue Date;

 

provided, however that the events set forth in paragraphs (iv), (viii), or (ix)
above shall not be considered to be Triggering Events if they occur during the
90-day period following the closing of the Share Exchange Transaction.

 

Section 2. Designation, Amount and Stated Value. The series of preferred stock
shall be designated as Series B 5% Convertible Preferred Stock (the “Preferred
Stock”) and the number of shares so designated shall be 34,729 (which shall not
be subject to increase without the written consent of all of the holders of the
Preferred Stock (each, a “Holder” and collectively, the “Holders”)). Each share
of Preferred Stock shall have a par value of $0.0001 per share and a stated
value equal to $100, subject to increase set forth in Section 3 below (the
“Stated Value”).

 

Section 3. Dividends.

 

a) Payment. Holders shall be entitled to receive, and the Corporation shall pay,
cumulative dividends at the rate per share (as a percentage of the Stated Value
per share) of 5% per annum (the “Dividend Rate”) in accordance with the terms of
this Certificate of Designation. Dividends shall first be paid on the first
anniversary of the Original Issue Date, and shall thereafter be paid on at the
end of each subsequent calendar quarter (each such date, a “Dividend Payment
Date”) (if any Dividend Payment Date is not a Trading Day, the applicable
payment shall be due on the next succeeding Trading Day). Dividends shall be
payable in duly authorized, validly issued, fully paid and non-assessable shares
of Preferred Stock calculated by multiplying (x) the number of outstanding
shares of Preferred Stock held by a Holder by (y) 0.05. If a Triggering Event
occurs, the Dividend Rate shall automatically increase to 15% per annum.

 

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b) Dividend Calculations. Dividends on the Preferred Stock shall be calculated
on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue quarterly commencing on the Original Issue Date, and shall be
deemed to accrue from such date whether or not earned or declared and whether or
not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends, provided however, that if the Preferred
Stock is converted prior to the initial Dividend Payment Date, the Holder agrees
to waive any dividends that may have accrued during the first year. Dividends
shall cease to accrue with respect to any Preferred Stock converted, provided
that, the Corporation actually delivers the Conversion Shares within the time
period required by Section 6(d)(i) herein.

 

c) Other Securities. So long as any Preferred Stock shall remain outstanding,
neither the Corporation nor any Subsidiary thereof shall redeem, purchase or
otherwise acquire directly or indirectly any Junior Securities. So long as any
Preferred Stock shall remain outstanding, neither the Corporation nor any
Subsidiary thereof shall directly or indirectly pay or declare any dividend or
make any distribution upon (other than a dividend or distribution described in
Section 6 or dividends due and paid in the ordinary course on preferred stock of
the Corporation at such times when the Corporation is in compliance with its
payment and other obligations hereunder), nor shall any distribution be made in
respect of, any Junior Securities as long as any dividends due on the Preferred
Stock remain unpaid, nor shall any monies be set aside for or applied to the
purchase or redemption (through a sinking fund or otherwise) of any Junior
Securities or shares pari passu with the Preferred Stock.

 

Section 4. Voting Rights. Holders of Preferred Stock shall have no voting
rights, except as required by law and as expressly provided in this Certificate
of Designation. To the extent that under applicable law the vote of the holders
of the Preferred Stock, voting separately as a class or series as applicable, is
required to authorize a given action of the Company, the affirmative vote or
consent of the holders of all of the shares of the Preferred Stock, voting
together in the aggregate and not in separate series unless required under
applicable law, represented at a duly held meeting at which a quorum is
presented or by written consent of the holders of at least a majority of the
outstanding shares of Preferred Stock (except as otherwise may be required under
applicable law), voting together in the aggregate and not in separate series
unless required under applicable law, shall constitute the approval of such
action by both the class or the series, as applicable. Subject to Section 6(e),
to the extent that under applicable law holders of the Preferred Stock are
entitled to vote on a matter with holders of shares of Common Stock, voting
together as one class, each share of Preferred Stock shall entitle the holder
thereof to cast that number of votes per share as is equal to the number of
shares of Common Stock into which it is then convertible (subject to the
ownership limitations specified in Section 6(e) hereof) using the record date
for determining the stockholders of the Company eligible to vote on such matters
as the date as of which the Conversion Price is calculated. Holders of the
Preferred Stock shall be entitled to written notice of all stockholder meetings
or written consents (and copies of proxy materials and other information sent to
stockholders) with respect to which they would be entitled by vote, which notice
would be provided pursuant to the Company’s bylaws and applicable law).

 

Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders
shall be entitled to receive out of the assets, whether capital or surplus, of
the Corporation an amount equal to their pro-rata basis of Common Stock on an as
converted to Common Stock basis, including any accrued but unpaid dividends. The
Corporation shall mail written notice of any such Liquidation, not less than 45
days prior to the payment date stated therein, to each Holder.

 

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Section 6. Conversion.

 

a) Conversions at Option of Holder. Each share of Preferred Stock shall be
convertible, at any time and from time to time from and after the Original Issue
Date at the option of the Holder thereof (“Optional Conversion”), into that
number of shares of Common Stock (subject to the limitations set forth in
Section 6(e)) determined by dividing the Stated Value of such share of Preferred
Stock plus accrued and unpaid dividends thereon, if any, by the Conversion
Price. Holders shall effect conversions by providing the Corporation with the
form of conversion notice attached hereto as Annex A (a “Notice of Conversion”).
Each Notice of Conversion shall specify the number of shares of Preferred Stock
to be converted, the number of shares of Preferred Stock owned prior to the
conversion at issue, the number of shares of Preferred Stock owned subsequent to
the conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by
facsimile such Notice of Conversion to the Corporation (such date, the
“Conversion Date”). If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion
to the Corporation is deemed delivered hereunder. No ink-original Notice of
Conversion shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Conversion form be required. The
calculations and entries set forth in the Notice of Conversion shall control in
the absence of manifest or mathematical error. To effect conversions of shares
of Preferred Stock, a Holder shall not be required to surrender the
certificate(s) representing the shares of Preferred Stock to the Corporation
unless all of the shares of Preferred Stock represented thereby are so
converted, in which case such Holder shall deliver the certificate representing
such shares of Preferred Stock promptly following the Conversion Date at issue.
Shares of Preferred Stock converted into Common Stock or redeemed in accordance
with the terms hereof shall be canceled and shall not be reissued.

   

b) Automatic Conversion. Upon the occurrence of a Qualified Financing, any
outstanding shares of Preferred Stock will automatically convert into shares of
Common Stock (“Forced Conversion”) (but subject to the limitations set forth in
Section 6(e) and only to the extent consistent with such limitations) by
dividing the Stated Value of such share of Preferred Stock plus accrued and
unpaid dividends thereon by the applicable Conversion Price as contained in
Section 6(c)(ii) below

 

c) Conversion Price. The conversion price (the “Conversion Price”) for the
Preferred Stock (i) prior to a Qualified Financing shall equal the quotient
resulting from dividing (x) $15,000,000 by (y) the number of Fully Diluted
Securities determined as of the time of conversion (“FDS Conversion Price”), and
(ii) upon and following a Qualified Financing shall be equal the lesser of (a)
eighty percent (80%) of the lowest per share purchase price of Common Stock in a
Qualified Financing (“QF Conversion Price”) and (b) the FDS Conversion Price
determined immediately prior to the completion of a Qualified Financing.

 

d) Mechanics of Conversion

 

i. Delivery of Certificate Upon Conversion. Not later than three (3) Trading
Days after each Conversion Date (the “Share Delivery Date”), the Corporation
shall deliver, or cause to be delivered, to the converting Holder a certificate
or certificates representing the number of Conversion Shares being acquired upon
the conversion of the Preferred Stock. The Corporation shall use its best
efforts to deliver any certificate or certificates required to be delivered by
the Corporation under this Section 6 electronically through the Depository Trust
Company or another established clearing corporation performing similar functions
to the extent practicable.

 

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ii. Failure to Deliver Certificates. If, in the case of any Notice of
Conversion, such certificate or certificates are not delivered to or as directed
by the applicable Holder by the Share Delivery Date, the Holder shall be
entitled to elect by written notice to the Corporation at any time on or before
its receipt of such certificate or certificates, to rescind such Conversion, in
which event the Corporation shall promptly return to the Holder any original
Preferred Stock certificate delivered to the Corporation and the Holder shall
promptly return to the Corporation the Common Stock certificates issued to such
Holder pursuant to the rescinded Conversion Notice.

 

iii. Obligation Absolute; Partial Liquidated Damages. The Corporation’s
obligation to issue and deliver the Conversion Shares upon conversion of
Preferred Stock in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by a Holder to enforce the
same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by such Holder or any other Person of any obligation to the
Corporation or any violation or alleged violation of law by such Holder or any
other person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Corporation to such Holder in connection with the
issuance of such Conversion Shares; provided, however, that such delivery shall
not operate as a waiver by the Corporation of any such action that the
Corporation may have against such Holder. In the event a Holder shall elect to
convert any or all of the Stated Value of its Preferred Stock, the Corporation
may not refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any violation of
law, agreement or for any other reason, unless an injunction from a court, on
notice to Holder, restraining and/or enjoining conversion of all or part of the
Preferred Stock of such Holder shall have been sought and obtained, and the
Corporation posts a surety bond for the benefit of such Holder in the amount of
150% of the Stated Value of Preferred Stock which is subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such
Holder to the extent it obtains judgment. In the absence of such injunction, the
Corporation shall issue Conversion Shares. If the Corporation fails to deliver
to a Holder such certificate or certificates pursuant to Section 6(d)(i) on the
Share Delivery Date applicable to such conversion, the Corporation shall pay to
such Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Stated Value of Preferred Stock being converted, $10 per Trading Day
(increasing to $20 per Trading Day after the fifth Trading Day) after the Share
Delivery Date until such certificates are delivered or Holder rescinds such
conversion.

 

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iv. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion. In addition to any other rights available to the Holder, if the
Corporation fails for any reason to deliver to a Holder the applicable
certificate or certificates by the Share Delivery Date pursuant to Section
6(d)(i), and if after such Share Delivery Date such Holder is required by its
brokerage firm to purchase (in an open market transaction or otherwise), or the
Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by such Holder of the Conversion Shares which such
Holder was entitled to receive upon the conversion relating to such Share
Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such
Holder (in addition to any other remedies available to or elected by such
Holder) the amount, if any, by which (x) such Holder’s total purchase price
(including any brokerage commissions) for the Common Stock so purchased exceeds
(y) the product of (1) the aggregate number of shares of Common Stock that such
Holder was entitled to receive from the conversion at issue multiplied by (2)
the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (B) at the
option of such Holder, either reissue (if surrendered) the shares of Preferred
Stock equal to the number of shares of Preferred Stock submitted for conversion
(in which case, such conversion shall be deemed rescinded) or deliver to such
Holder the number of shares of Common Stock that would have been issued if the
Corporation had timely complied with its delivery requirements under Section
6(d)(i). For example, if a Holder purchases shares of Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Preferred Stock with respect to which the actual sale
price of the Conversion Shares (including any brokerage commissions) giving rise
to such purchase obligation was a total of $10,000 under clause (A) of the
immediately preceding sentence, the Corporation shall be required to pay such
Holder $1,000. The Holder shall provide the Corporation written notice
indicating the amounts payable to such Holder in respect of the Buy-In and, upon
request of the Corporation, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Corporation’s
failure to timely deliver certificates representing shares of Common Stock upon
conversion of the shares of Preferred Stock as required pursuant to the terms
hereof.

 

v. Reservation of Shares Issuable Upon Conversion. The Corporation covenants
that it will at all times after the effectiveness of the Charter Amendment keep
available out of its authorized and unissued shares of Common Stock for the sole
purpose of issuance upon conversion of the Preferred Stock and payment of
dividends on the Preferred Stock, each as herein provided, free from preemptive
rights or any other actual contingent purchase rights of Persons other than the
Holder (and the other holders of the Preferred Stock), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms
and conditions set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 7) upon the conversion of
the then outstanding shares of Preferred Stock and payment of dividends
hereunder. The Corporation covenants that all shares of Common Stock that shall
be so issuable shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.

 

vi. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of the Preferred Stock. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such conversion, the Corporation shall at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price or round up to the next whole share.

 

vii. Transfer Taxes and Expenses. The issuance of certificates for shares of the
Common Stock on conversion of this Preferred Stock shall be made without charge
to any Holder for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate
upon conversion in a name other than that of the Holders of such shares of
Preferred Stock and the Corporation shall not be required to issue or deliver
such certificates unless or until the Person or Persons requesting the issuance
thereof shall have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has been paid.
The Corporation shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion.

 

  10

 

 

e) Beneficial Ownership Limitation. The Corporation shall not effect any
conversion of the Preferred Stock, and a Holder shall not have the right to
convert any portion of the Preferred Stock, to the extent that, after giving
effect to the conversion set forth on the applicable Notice of Conversion, such
Holder (together with such Holder’s Affiliates, and any Persons acting as a
group together with such Holder or any of such Holder’s Affiliates) would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by such Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon conversion of the Preferred Stock
with respect to which such determination is being made, but shall exclude the
number of shares of Common Stock which are issuable upon (i) conversion of the
remaining, unconverted Stated Value of Preferred Stock beneficially owned by
such Holder or any of its Affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Corporation
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
6(e), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. To the
extent that the limitation contained in this Section 6(e) applies, the
determination of whether the Preferred Stock is convertible (in relation to
other securities owned by such Holder together with any Affiliates) and of how
many shares of Preferred Stock are convertible shall be in the sole discretion
of such Holder, and the submission of a Notice of Conversion shall be deemed to
be such Holder’s determination of whether the shares of Preferred Stock may be
converted (in relation to other securities owned by such Holder together with
any Affiliates) and how many shares of the Preferred Stock are convertible, in
each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, each Holder will be deemed to represent to the
Corporation each time it delivers a Notice of Conversion that such Notice of
Conversion has not violated the restrictions set forth in this paragraph and the
Corporation shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 6(e), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as
stated in the most recent of the following: (i) the Corporation’s most recent
periodic or annual report filed with the Commission, as the case may be, (ii) a
more recent public announcement by the Corporation or (iii) a more recent
written notice by the Corporation or the Transfer Agent setting forth the number
of shares of Common Stock outstanding. Upon the written or oral request of a
Holder, the Corporation shall within two Trading 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
Corporation, including the Preferred Stock, by such Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon conversion of Preferred Stock
held by the applicable Holder. A Holder, upon not less than 61 days’ prior
notice to the Corporation, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 6(e) applicable to its Preferred Stock
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of
the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon conversion of this
Preferred Stock held by the Holder and the provisions of this Section 6(e) shall
continue to apply. Any such increase or decrease will not be effective until the
61st day after such notice is delivered to the Corporation and shall only apply
to such Holder and no other Holder. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 6(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of Preferred Stock.

 

  11

 

   

Section 7. Certain Adjustments and Other Matters.

 

a) Stock Dividends and Stock Splits. If the Corporation, at any time while this
Preferred Stock is outstanding after the completion of a Qualified Financing:
(i) pays a stock dividend or otherwise makes a distribution or distributions
payable in shares of Common Stock on shares of Common Stock or any other Common
Stock Equivalents (which, for avoidance of doubt, shall not include any shares
of Common Stock issued by the Corporation upon conversion of, or payment of a
dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of a
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues, in the event of a reclassification of shares of the
Common Stock, any shares of capital stock of the Corporation, then the
Conversion Price then in effect shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding any treasury
shares of the Corporation) outstanding immediately before such event, and of
which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section 7(a)
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re‑classification.

   

b) [Intentionally Omitted].

 

c) Subsequent Rights Offerings. In addition to any adjustments pursuant to
Section 7(a) above, if at any time the Corporation grants, issues or sells any
Common Stock Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the “Purchase Rights”), then the Holder of Preferred Stock at such time
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon complete
conversion of such Holder’s Preferred Stock (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) 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 shares of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that the Holder’s right to participate in any such
Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such
Purchase Right to such extent (or beneficial ownership of such shares of Common
Stock as a result of such Purchase Right to such extent) and such Purchase Right
to such extent shall be held in abeyance for the Holder until such time, if
ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

d) Pro Rata Distributions. During such time as this Preferred Stock is
outstanding, if the Corporation declares or makes any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Preferred Stock, then,
in each such case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have participated therein
if the Holder had held the number of shares of Common Stock acquirable upon
complete Conversion of this Preferred Stock (without regard to any limitations
on Conversion hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in
such Distribution (provided, however, to the extent that the Holder’s right to
participate in any such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to
participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Beneficial Ownership Limitation).

   

  12

 

   

e) Fundamental Transaction. If, at any time while this Preferred Stock is
outstanding, (i) the Corporation, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Corporation with or into
another Person, (ii) the Corporation, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions,
(iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Corporation or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Corporation, directly or
indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, or (v) the Corporation,
directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than
50% of the outstanding shares of Common Stock (not including any shares of
Common Stock 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) and the Corporation
is not the surviving entity (each a “Fundamental Transaction”), then, upon any
subsequent conversion of this Preferred Stock, the Holder shall have the right
to receive, for each Conversion Share that would have been issuable upon such
conversion immediately prior to the occurrence of such Fundamental Transaction
(without regard to any limitation in Section 6(e) on the conversion of this
Preferred Stock), the number of shares of Common Stock of the successor or
acquiring corporation or of the Corporation, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of
Common Stock for which this Preferred Stock is convertible immediately prior to
such Fundamental Transaction (without regard to any limitation in Section 6(e)
on the conversion of this Preferred Stock). For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Corporation shall apportion the Conversion
Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
conversion of this Preferred Stock following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any successor to
the Corporation or surviving entity in such Fundamental Transaction shall file a
new Certificate of Designation with the same terms and conditions and issue to
the Holders new preferred stock consistent with the foregoing provisions and
evidencing the Holders’ right to convert such preferred stock into Alternate
Consideration. The Corporation shall cause any successor entity in a Fundamental
Transaction in which the Corporation is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Corporation under
this Certificate of Designation and the other Transaction Documents (as defined
in the Purchase Agreement) in accordance with the provisions of this Section
7(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the
holder of this Preferred Stock, deliver to the Holder in exchange for this
Preferred Stock a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Preferred Stock
which is convertible for a corresponding number of shares of capital stock of
such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon conversion of this Preferred Stock (without
regard to any limitations on the conversion of this Preferred Stock) prior to
such Fundamental Transaction, and with a conversion price which applies the
conversion price hereunder to such shares of capital stock (but taking into
account the relative value of the shares of Common Stock pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the
purpose of protecting the economic value of this Preferred Stock immediately
prior to the consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such 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 Designation and the other
Transaction Documents referring to the “Corporation” shall refer instead to the
Successor Entity), and may exercise every right and power of the Corporation and
shall assume all of the obligations of the Corporation under this Certificate of
Designation and the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Corporation herein. Notwithstanding the
foregoing, the Share Exchange Transaction shall not be considered a Fundamental
Transaction.

 

  13

 

 

f) Calculations. All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 7, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding any treasury shares of the Corporation) issued and
outstanding.

 

g) [Intentionally Omitted].

 

h) Notice to the Holders.

 

i.Adjustment to Conversion Price. Whenever the Conversion Price is adjusted
pursuant to any provision of this Section 7, the Corporation shall promptly
deliver to each Holder a notice setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

   

ii. Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a
dividend (or any other distribution in whatever form) on the Common Stock, (B)
the Corporation shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Corporation shall authorize the granting
to all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Corporation shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to
which the Corporation is a party, any sale or transfer of all or substantially
all of the assets of the Corporation, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property or (E) the
Corporation shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, then, in each case,
the Corporation shall cause to be filed at each office or agency maintained for
the purpose of conversion of this Preferred Stock, and shall cause to be
delivered to each Holder at its last address as it shall appear upon the stock
books of the Corporation, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or
contains, material, non-public information regarding the Corporation or any of
the Subsidiaries, the Corporation shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert the Conversion Amount of this Preferred Stock (or any part
hereof) during the 20-day period commencing on the date of such notice through
the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

  

  14

 

 

Section 8. Redemption.

 

a) [Intentionally Omitted].

 

b) Holder Redemption. At any time after the occurrence of a Triggering Event
which Triggering Event shall be continuing, the Holder shall have the right to
redeem any or all of the Preferred Stock then outstanding (the “Holder Optional
Redemption Amount”) on the Holder Optional Redemption Date (as defined below) (a
“Holder Optional Redemption”). The Preferred Stock subject to redemption
pursuant to this Section 8 shall be redeemed by the Company in cash at a price
(the “Holder Optional Redemption Price”) equal to 125% of the Stated Value plus
any accrued by unpaid dividends thereon. The Holder may exercise its right to
require redemption under this Section 8 by delivering a written notice thereof
to the Company (the “Holder Optional Redemption Notice” and the date the Company
received such notice is referred to as the “Holder Optional Redemption Notice
Date”). The Holder may deliver more than one Holder Optional Redemption Notice
hereunder and such Holder Optional Redemption Notice shall be revocable. The
Holder Optional Redemption Notice shall (x) state the date on which the Holder
Optional Redemption shall occur (the “Holder Optional Redemption Date”) which
date shall not be less than two (2) Trading Days nor more than five (5) Trading
Days following the Holder Optional Redemption Notice Date and (y) state the
aggregate amount of the Preferred Stock which is being redeemed in such Holder
Optional Redemption from such Holder pursuant to this Section 8 on the Holder
Optional Redemption Date. Notwithstanding anything herein to the contrary, at
any time prior to the date the Holder Optional Redemption Price is paid, in
full, the Holder Optional Redemption Amount may be converted, in whole or in
part, by any Holder into shares of Common Stock pursuant to Section 6. All
Preferred Stock converted by a Holder after the Holder Optional Redemption
Notice Date shall reduce the Holder Optional Redemption Amount of the Preferred
Stock of such Holder required to be redeemed on the Holder Optional Redemption
Date. If the Corporation fails to deliver the Holder Optional Redemption Price
by the Holder Optional Redemption Date, the Corporation shall pay to such
Holder, in cash, as liquidated damages and not as a penalty, $20 for every
$1,000 in Stated Value of the outstanding Preferred Stock per Trading Day for
each Trading Day after the Holder Optional Redemption Date until the Holder
Optional Redemption Price is paid in full.

 

  15

 

 

Section 9. Miscellaneous.

 

a) Notices. Any and all notices or other communications or deliveries to be
provided by the Holders hereunder including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service, addressed to the
Corporation, at the address set forth in the Purchase Agreement, or such other
facsimile number or address as the Corporation may specify for such purposes by
notice to the Holders delivered in accordance with this Section 9. Any and all
notices or other communications or deliveries to be provided by the Corporation
hereunder shall be in writing and delivered personally, by facsimile or email,
or sent by a nationally recognized overnight courier service addressed to each
Holder at the facsimile number, email or address of such Holder appearing on the
books of the Corporation, or if no such facsimile number or address appears on
the books of the Corporation, at the principal place of business of such Holder,
as set forth in the Purchase Agreement. Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email set forth in this Section
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email set forth in this Section on
a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the second Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given.

  

b) Absolute Obligation. Except as expressly provided herein, no provision of
this Certificate of Designation shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay liquidated damages,
accrued dividends and accrued interest, as applicable, on the shares of
Preferred Stock at the time, place, and rate, and in the coin or currency,
herein prescribed.

 

c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of Preferred Stock so
mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership hereof
reasonably satisfactory to the Corporation.

 

  16

 

 

d) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Certificate of Designation shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Florida, without regard to the principles of conflict of laws
thereof. Each party agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions contemplated by any
of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the in Bergen,
Essex and Hudson Counties, State of New Jersey (the “New Jersey Courts”). Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
Jersey Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
such New Jersey Courts, or such New Jersey Courts are improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Certificate of Designation and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Certificate of Designation or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any
provisions of this Certificate of Designation, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.

 

e) Waiver. Any waiver by the Corporation or a Holder of a breach of any
provision of this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designation or a waiver by any
other Holders. The failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or more
occasions shall not be considered a waiver or deprive that party (or any other
Holder) of the right thereafter to insist upon strict adherence to that term or
any other term of this Certificate of Designation on any other occasion. Any
waiver by the Corporation or a Holder must be in writing.

 

f) Severability. If any provision of this Certificate of Designation is invalid,
illegal or unenforceable, the balance of this Certificate of Designation shall
remain in effect, and if any provision is inapplicable to any Person or
circumstance, it shall nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other amount deemed
interest due hereunder violates the applicable law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum rate of interest permitted under applicable law.

     

g) Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

 

h) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designation and shall not be deemed to
limit or affect any of the provisions hereof.

 

i) Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock
may only be issued pursuant to the Purchase Agreement. If any shares of
Preferred Stock shall be converted, redeemed or reacquired by the Corporation,
such shares shall resume the status of authorized but unissued shares of
preferred stock and shall no longer be designated as Series B 5% Convertible
Preferred Stock.

 

*********************

 

  17

 

 

RESOLVED, FURTHER, that the chairman, chief executive officer, chief financial
officer, president or any vice-president, and the secretary or any assistant
secretary, of the Corporation be and they hereby are authorized and directed to
prepare and file a Designation of Preferences, Rights and Limitations of Series
B Preferred Stock in accordance with the foregoing resolution and the provisions
of Delaware law.

 

I hereby certify that the foregoing was adopted by a majority vote of the
Directors of the Company on October 22, 2020 and that shareholder action was not
required.

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate this 22nd day
of October, 2020.

   

  FORCE PROTECTION VIDEO EQUIPMENT CORP.         Signed: /s/Paul Feldman

 

Name:

Paul Feldman     Title: Chief Executive Officer  

 

 

 

    

ANNEX A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder in order to Convert Shares of Preferred
Stock)

 

The undersigned hereby elects to convert the number of shares of Series B 5%
Convertible Preferred Stock indicated below into shares of common stock, par
value $0.0001 per share (the “Common Stock”), of Force Protection Video
Equipment Corp., a Florida corporation (the “Corporation”), according to the
conditions hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a Person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as may be required by the Corporation in
accordance with the Purchase Agreement. No fee will be charged to the Holders
for any conversion, except for any such transfer taxes.

 

Conversion calculations:

 

 

Date to Effect Conversion: _____________________________________________

 

 

 

Number of shares of Preferred Stock owned prior to Conversion: _______________

 

 

 

Number of shares of Preferred Stock to be Converted: ________________________

 

 

 

Stated Value of shares of Preferred Stock to be Converted: ____________________

 

 

 

Number of shares of Common Stock to be Issued: ___________________________

 

 

 

Applicable Conversion Price:____________________________________________

 

 

 

Number of shares of Preferred Stock subsequent to Conversion: ________________

 

 

 

Address for Delivery: ______________________

 

or

 

DWAC Instructions:

 

Broker no: _________

 

Account no: ___________

  

 

[HOLDER]

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title: