Document:

hsdt-ex101_6.htm

 

Ex 10.1

Separation AND Release Agreement

This Separation and Release Agreement (this “Agreement”) is made and entered into by and between Helius Medical Technologies, Inc., a Delaware corporation (the “Company”), and Joyce LaViscount (“Executive”).  Capitalized terms used but not defined in this Agreement will have the meanings ascribed to them in the Employment Agreement between Executive and the Company dated October 19, 2015, as amended (the “Employment Agreement”).

Recitals

Whereas, Executive is effectuating, and the board of directors of the Company (the “Board”) is accepting, a termination for Good Reason (as defined in the Employment Agreement) of Executive’s employment with the Company;  

Whereas, accordingly, and in exchange for the promises set forth in this Agreement, Executive will be deemed to have, effective as of July 20, 2021 (the “Separation Date”), resigned from all of her positions as an officer and employee of the Company and all of the Company’s subsidiaries and affiliates; and

Whereas, the Company and Executive (collectively, the “Parties” and each, without distinction, a “Party”) desire to settle fully and finally all obligations to Executive that the Company may have of any nature whatsoever as a result of Executive’s resignation, as well as (subject to certain limited exceptions expressly set forth in this Agreement) any asserted or unasserted claims that Executive may have against the Company, its subsidiaries or any other Company Released Parties (as defined below), all pursuant to and in accordance with the terms and conditions of this Agreement.

Agreement

Now, Therefore, in consideration of this Agreement and the mutual promises set forth in this Agreement, the Parties agree as follows:

Article 1
EMPLOYMENT SEPARATION

1.1Separation of Employment.  Executive acknowledges and confirms that, effective as of the Separation Date, Executive is resigning from all of her positions as an officer and employee of the Company and all of the Company’s subsidiaries and affiliates.  The Company shall pay Executive’s compensation for hours worked through the Separation Date, subject to withholding and payable in accordance with the Company’s payroll practices.  In addition, the Company will reimburse Executive for Executive’s documented business expenses incurred through the Separation Date that are reviewed and approved according to the Company’s policy and pay any other amounts required by law.  Executive will receive the foregoing payments regardless of whether she signs this Agreement. 

1.2Separation Consideration.  As consideration for Executive’s agreements and releases set forth herein, and provided that this Agreement has become effective in accordance with Section 2.2, the Company will pay Executive a total of $442,150, less required deductions and withholdings, in equal monthly installments of $36,845.83 (and a final payment of $36,845.87) during the twelve (12) month period following the Separation Date.  The installment payments will be made on the first payroll date of each month, beginning in August 2021.  If the revocation period referenced in Section 2.2 has not expired prior to the first installment payment date in August 2021, then the first installment payment will be made on the next payroll date after the expiration of the revocation period.  In addition to the foregoing, if Executive timely and accurately elects to continue health benefits under Pennsylvania’s “Mini-COBRA” law (Act 2 of 2009), the Company will pay the premiums for such continued benefits directly to the applicable benefit carrier from the Separation Date through the earliest of: (a) the date that is nine (9) months after the Separation Date; and (b) the date Employee becomes eligible for health insurance benefits from a subsequent employer.  Executive agrees to notify the Company within ten (10) days after Executive becomes eligible for health insurance benefits under any other employer’s medical plan.

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1.3Clawback.  Executive acknowledges and agrees that, pursuant to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Section 954”), certain payments received by Executive prior to the Separation Date, to the extent covered by Section 954, may be subject to “clawback” in the event the Company is required to prepare an accounting restatement of its applicable financial statements due to the Company’s material noncompliance with applicable financial reporting requirements.  Executive agrees to promptly return to the Company the amount of any compensation paid to Executive that is required to be forfeited in accordance with Section 954.

1.4Conflict with Other Agreements and Obligations.  In the event of any conflict of the provisions between this Agreement and the Employment Agreement, the provisions set forth in this Agreement shall control.  The Parties acknowledge that Executive holds certain equity interests or the rights to purchase equity interests in the Company, and all such interests will continue to be governed by the applicable plan documents and agreements, except as set forth in Section 1.7.

1.5Acknowledgement.  Except as provided in this Article 1, the Parties acknowledge and agree that Executive is not, and shall not after the Separation Date, be eligible for any additional payment by the Company of any bonus, salary, vacation pay, retirement pension, severance pay, back pay, or other remuneration or compensation of any kind in respect of employment by the Company.  Executive acknowledges and agrees that she does not meet the standard for being listed as an inventor on any of the Company’s patents and/or patent applications.  The Parties further acknowledge and agree that: (a) any right that Executive may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with her activities as an officer, director or employee of the Company is unaffected by her separation and shall remain in effect in accordance with its terms; and (b) Executive remains bound by, and will strictly comply with, her post-employment obligations set forth in the Employment Agreement.

1.6Cooperation and Assistance.  Executive agrees to return to the Company all Company documents and materials, apparatus, equipment and other physical property in Executive’s possession, including the Company mailbox key and the Company laptop in her possession, within seven (7) days of signing this Agreement and in the manner directed by the Board or its designee.  Executive may retain the Company phone in her possession, and the Company will cooperate with Executive and execute any necessary documents to port the phone number for such Company phone to Executive.  Executive will also provide the Company with the materials and information to access the Company storage site, including any keys and/or combinations to the facility.  Executive shall promptly deliver to Dane C. Andreeff at dane@heliusmedical.com all correspondence and any inquires that Executive receives (including the contents of any telephone calls or emails received by Executive) from any third party concerning any issue of material significance to the Company.  The Company will return any personal effects of Executive and will allow Executive to retrieve the treadmill contained in the Company storage unit within fourteen (14) days of the complete execution of this Agreement.

1.7Company Securities.  As of the Separation Date, the Company and Executive acknowledge and agree that Executive is the holder of: (a) 9,576 shares of the Company’s Class A Common Stock (the “Executive Common Stock”); (b) a warrant exercisable for 544 shares of the Company’s Class A Common Stock on the terms and conditions set forth therein (the “Executive Warrant”); and (c) options to purchase 28,629 shares of the Company’s Class A Common Stock, in the aggregate, on the terms and conditions set forth therein (the “Executive Stock Options”, together with the Executive Common Stock and the Executive Warrant, the “Executive Securities”).  In accordance with Section 5.1.1 of the Employment Agreement, there shall be accelerated vesting of Executive’s unvested options, such that Executive will have vested in all of her unvested options as of the Separation Date, with such options being exercisable through October 18, 2022 (i.e., one year plus 90 days from the Separation Date).  The Executive Securities will otherwise continue to be subject to the applicable plan documents and agreements.  Executive ratifies and confirms to the Company that the Executive Securities constitute the totality of the equity and debt securities of the Company and any of the Company’s subsidiaries or affiliates beneficially owned by Executive or to which Executive otherwise has rights as of the date of this Agreement.  

1.8Statement Regarding Resignation; SEC Matters.  Executive acknowledges that the Company is obligated to report the terms of this Agreement on a Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”), within four (4) business days after the Parties’ execution of this Agreement (the “8-K Statement”).  The Company agrees to share the form of the 8-K Statement with Executive prior to filing it, and 

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the 8-K Statement will summarize the terms and conditions of this Agreement and indicate that Executive resigned her employment for Good Reason under the Employment Agreement.  Executive will cooperate with the Company in providing information with respect to all reports required to be filed by the Company with the SEC as they relate to required information with respect to Executive.  Further, Executive will remain in compliance with the terms of the Company’s insider trading policy with respect to purchases and sales of the Company’s securities.  Executive acknowledges and agrees that the Company is required to file a copy of this Agreement with the SEC.

Article 2
RELEASE

2.1Release of Claims.  In consideration for the separation consideration set forth in this Agreement, Executive, on behalf of herself, her heirs, executors, legal representatives, spouse and assigns (“Executive Releasing Parties”), hereby fully and forever releases the Company and its respective past and present officers, directors, employees, investors, stockholders, administrators, subsidiaries, affiliates, predecessor and successor corporations and assigns, attorneys and insurers (the “Company Released Parties”) of and from any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that any of them may possess arising from any omissions, acts or facts that have occurred through the date that Executive signs this Agreement, including, without limitation, any and all claims:

(a)which arise out of, result from, or occurred in connection with Executive’s employment by the Company or any of its affiliated entities, the termination of that employment relationship, any events occurring in the course of that employment, or any events occurring prior to the execution of this Agreement;

(b)for wrongful discharge, discrimination, harassment and/or retaliation; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; slander, libel or invasion of privacy; violation of public policy; fraud, misrepresentation or conspiracy; and false imprisonment;

(c)(i) any and all claims for wrongful discharge of employment, and/or (ii) violation of any federal, state or municipal statute relating to employment or employment discrimination, including, without limitation, (A) Title VII of the Civil Rights Act of 1964, as amended, (B) the Civil Rights Act of 1866, as amended, (C) the Civil Rights Act of 1991, as amended, (D) the Executive Retirement and Income Security Act of 1974, as amended, (E) the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), including, without limitation, by the Older Workers’ Benefit Protection Act, as amended (“OWBPA”), (F) the OWBPA, (G) the Americans with Disabilities Act of 1990, as amended, and (H) the Equal Pay Act;

(d)under common law or state statute including, but not limited to, those alleging wrongful discharge, express of implied breach of contract, negligence, invasion of privacy, intentional infliction of emotional distress, fraud, defamation, or violations of the Pennsylvania Human Relations Act and the Pennsylvania Whistleblower Law, each as amended together with all of their respective implementing regulations and/or any other federal, state, local or foreign law (statutory, regulatory or otherwise) that may be legally waived and released; 

(e)for back pay or other unpaid compensation;

(f)relating to equity of the Company; and/or

(g)for attorneys’ fees and costs.

Executive represents that she has not filed, and will not file, any lawsuit, arbitration, or other claim against any of the Company Released Parties regarding any released claim.  Executive states that she knows of no violation of state, federal, or municipal law or regulation by any of the Company Released Parties, and knows of no ongoing or pending investigation, charge, or complaint by any agency charged with enforcement of state, federal, or municipal law or regulation.  Executive agrees she shall not receive any monetary damages, recovery and/or relief of any type related to any released claim(s), whether pursued by Executive or any governmental agency, other person or group; 

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provided that nothing in the Agreement prevents Executive from participating in the whistleblower program maintained by the SEC and receiving a whistleblower award thereunder.    

2.2Acknowledgment of Waiver of Claims under ADEA.  Executive acknowledges that she is waiving and releasing any rights she may have under the OWBPA, the ADEA, and that this waiver and release is knowing and voluntary.  Executive acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled.  Executive further acknowledges that she has been advised by this writing that (a) she should consult with an attorney prior to executing this Agreement; (b) she has at least twenty-one (21) days within which to consider this Agreement and that if she signed this Agreement before expiration of that twenty-one (21) calendar day period, she did so knowingly and voluntarily and with the intent of waiving her right to utilize the full twenty-one (21) calendar day consideration period; and (c) she has seven (7) days following her execution of this Agreement to revoke the Agreement (the “Revocation Period”).  Communication of any such revocation by Executive to the Company shall be provided in writing and mailed by certified or registered mail with return receipt requested and shall be addressed to the Company at its principal corporate offices to the attention of the Chairman of the Company’s Board.  This Agreement shall not be effective until the Revocation Period has expired.

2.3No Admission of Liability.  Neither this Agreement nor any statement contained herein shall be deemed to constitute an admission of liability of either Party or the Company Released Parties.  This Agreement’s execution and implementation may not be used as evidence, and shall not be admissible in a subsequent proceeding of any kind, except one alleging a breach of this Agreement or the Employment Agreement.

2.4Non-Disparagement.  Executive remains bound by the non-disparagement obligation set forth in Section 7.2 of the Employment Agreement.  In addition, Executive agrees not to make any disparaging remarks about Dane Andreeff, Jeff Mathiesen, or any members of the Board, nor will she do anything to cast those individuals in a negative light.  The Company, in any statement to a third party through Dane Andreeff, Jeff Mathiesen, or any member of the Board, will not make any disparaging remarks about Executive, nor will it do or say anything to cast Executive in a negative light.  The foregoing restrictions do not apply to any truthful statements in any legal proceedings or in statements to any government agency, including the SEC.

Article 3
REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties of Executive.  Executive warrants and represents to the Company that she:

(a)has been advised to consult with legal counsel in entering into this Agreement;

(b)has entirely read this Agreement;

(c)has voluntarily executed this Agreement without any duress or undue influence and with the full intent of releasing all claims;

(d)has received no promise, inducement or agreement not herein expressed with respect to this Agreement or the terms of this Agreement;

(e)is the only person (other than her heirs) who is or may be entitled to receive or share in any damages or compensation on account of or arising out of her relationship with, or providing services to, the Company or any of its affiliated entities, the termination of that relationship or services, any actions taken in the course of that relationship or services, and any events related to that relationship or services or occurring prior to the execution of this Agreement;

(f)understands and agrees that in the event any injury, loss, or damage has been sustained by her which is not now known or suspected, or in the event that the losses or damage now known or suspected have present consequences not known or suspected, this Agreement shall nevertheless constitute a full and final release as 

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to the parties herein released, and that this Agreement shall apply to all such unknown or unsuspected injuries, losses, damages or consequences; and

(g)expressly acknowledges that her entry into this Agreement is in exchange for consideration in addition to anything of value to which she is already entitled.

3.2Authority.  Executive represents and warrants that she has the capacity to act on her own behalf and on behalf of all who might claim through her to bind them to the terms and conditions of this Agreement.  Executive has not assigned any claim released under this Agreement, and there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

3.3No Other Representations.  Neither Party has relied upon any representations or statements made by the other Party hereto that are not specifically set forth in this Agreement.

Article 4
MISCELLANEOUS

4.1Severability.  Should any provision of this Agreement be declared or be determined by any arbitrator or court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term, or provision shall be deemed not to be a part of this Agreement.

4.2Entire Agreement.  This Agreement represents the entire agreement and understanding between the Company and Executive concerning Executive’s separation from the Company, and supersedes and replaces any and all prior agreements and understandings concerning Executive’s relationship with the Company and her compensation by the Company, including without limitation the Employment Agreement, provided, however, that this Agreement does not supersede or modify any continuing obligations of Executive under the Employment Agreement that do not conflict with the terms and conditions of this Agreement, and all of the agreements entered into by Executive with respect to her equity interests or the rights to purchase equity interests, all of which shall continue in full force and effect except as modified here.  This Agreement may only be amended by a writing signed by Executive and the Company.

4.3Assignment.  This Agreement may not be assigned by Executive without the prior written consent of the other party.  The Company may assign this Agreement without Executive’s consent in connection with a merger or sale of its assets and/or to a corporation controlling, controlled by or under common control with the Company.  This Agreement shall inure to the benefit of, and be binding upon, each Party’s respective heirs, legal representatives, successors and assigns.

4.4Governing Law; Consent to Jurisdiction, Waiver of Jury Trial.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Pennsylvania, without regard to its principles of conflicts of laws.  Each of the Parties hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts of the State of Pennsylvania for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under the Employment Agreement.  Each of the Parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each Party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.  In addition, should it become necessary for the Company to seek to enforce any of the covenants contained in this Agreement through any legal, administrative or alternative dispute resolution proceeding, Executive shall reimburse the Company for its reasonable fees and expenses (legal costs, attorneys’ fees and otherwise) related thereto.

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4.5Section 409A.  The provisions of this Agreement shall be interpreted and applied in such a manner that all payments required to be made hereunder either comply with Section 409A of the Code or are exempt from the requirements of Section 409A of the Code.  Any reimbursement of expenses to which the Executive is entitled under this Agreement shall, if subject to Section 409A of the Code, be made within the time period and be subject to the other terms and conditions prescribed in the Employment Agreement.  To the extent that any amounts payable hereunder are determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, such amounts shall be subject to such additional rules and requirements as specified by the Company from time to time in order to comply with Section 409A of the Code.  Each separately identified payment hereunder is to be treated as a “separate payment” for purposes of Section 409A of the Code.  Notwithstanding the foregoing, neither the Company nor any other person guarantees that any particular federal or state income, payroll, personal property or other tax consequence will result under this Agreement, and neither the Company nor any other person shall be liable for any federal or state tax consequence resulting from this Agreement.  

4.6Counterparts/Electronic Execution and Delivery.  This Agreement may be executed in one or more counterparts and by facsimile, each of which shall constitute an original and all of which together shall constitute one and the same instrument.  Signatures of the Parties transmitted by facsimile or via .pdf format shall be deemed to be their original signatures for all purposes.  The words “execution,” “signed,” “signature,” and words of like import shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the Pennsylvania Uniform Electronic Transactions Act, or any other similar state laws based on the Uniform Electronic Transactions Act.  This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any Party hereto or to any such agreement or instrument, the other Party hereto or thereto will re-execute original forms thereof and deliver them to the other Party. No Party hereto or to any such agreement or instrument will raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such Party forever waives any such defense, except to the extent such defense related to lack of authenticity.

Signatures on the Following Page

 

 

 

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The Parties have executed this Separation and Release Agreement as of the date set forth below.

 

		
	
THE COMPANY:

 

Helius Medical Technologies, Inc. 

 

/s/ Dane Andreeff

Name:Dane Andreeff

Title:President & CEO
	
EXECUTIVE:

 

 

 

/s/ Joyce LaViscount

Joyce LaViscount 

Date:  8/17/2021

 

	
 

 
	
 

 

 

Signature Page 

to Separation and Release AgreementExhibit 4.1

 

 

Filed in the Office of Secretary of State State Of Nevada Business Number E13302042021-1 Filing Number 20211688409 Filed On 8/18/2021 1:48:00 PM Number of Pages 20  

     

 

    

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF 9.0% SERIES A CUMULATIVE PERPETUAL PREFERRED STOCK OF

 

MECHANICAL TECHNOLOGY, INCORPORATED 

 

Pursuant to Nevada Revised Statutes § 78.1955

 

The undersigned hereby certifies that:

 

	
 

	
I.

	
She is the duly elected and acting Chief Financial Officer of MECHANICAL TECHNOLOGY, INCORPORATED, a publicly held Nevada corporation (the “Corporation”).

	 	 	 

	
 

	
II.

	
The Corporation, subject to the reporting requirements imposed by Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to authority expressly granted and vested in the Board of Directors of the Corporation by the provisions of the Corporation’s Articles of Incorporation, as amended (the “Articles of Incorporation”), through the Board of Directors, adopted the following resolution on June 22, 2021: (i) authorizing a series of the Corporation’s previously authorized 10,000,000 shares of preferred stock, par value $.001 per share, and, (ii) providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of up to 840,000 shares of 9.0% Series A Cumulative Perpetual Preferred Stock of the Corporation:

 

RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation by the Corporation’s Articles of Incorporation, a series of preferred stock of the Corporation be, and it hereby is, created out of the 10,000,000 authorized shares of the capital preferred stock of the Corporation (“Preferred Stock”), which shall have the following preferences, powers, designations and other special rights:

 

Section 1.       Designation. 
The designation of the series of Preferred Stock of the Corporation shall be 9.0% Series A Cumulative Perpetual Preferred Stock
(hereinafter referred to as the “Series A Preferred Stock”). 

 

Section 2.       Number of Authorized Shares. The number of authorized shares of Series A Preferred Stock initially is 840,000. The number of authorized shares of Series A Preferred Stock may from time to time be increased (but not in excess of the total number of authorized shares of Preferred Stock, less all shares of any other series of Preferred Stock authorized at the time of such increase) or decreased (but not below the number of shares of the Series A Preferred Stock then outstanding) by resolution of the Board of Directors (or a duly authorized committee of the Board of Directors), without the vote or consent of the holders of the Series A Preferred Stock. Shares of the Series A Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation will be cancelled and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series. The Corporation shall have the authority to issue fractional shares of the Series A Preferred Stock. The Corporation reserves the right to re-open this series and issue additional shares of the Series A Preferred Stock either through public or private sales at any time and from time to time without notice to or the consent of holders of the Series A Preferred Stock. The additional shares of the Series A Preferred Stock will be deemed to form a single series with the Series A Preferred Stock issued under this Certificate of Designations, Preferences And Rights (this “Certificate”).  Each share of the Series A Preferred Stock shall be identical in all respects to every other share of the Series A Preferred Stock, except that shares of the Series A Preferred Stock issued after August 23, 2021 (the “Original Issue Date”) shall accrue dividends from the later of the Original Issue Date and the Dividend Payment Date (as defined hereafter) immediately prior to the original issue date of such additional shares for which full cumulative dividends have been paid. As used in this Certificate, “accrual” (or similar terms) used with respect to a dividend or dividend period refers only to the determination of the amount of such dividend and does not imply that any right to a dividend in any dividend period that arises prior to the date on which such dividend is declared. In addition, subject to the limitations described herein, the Corporation may issue additional Preferred Stock from time to time in one or more series, each with such designation, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions applicable to any of those rights, including dividend rights, voting rights, conversion or exchange rights, terms of redemption and liquidation preferences, as the Board of Directors (or a duly authorized committee of the Board of Directors) may determine prior to the time of such issuance.

 

     

     

    

 

Section 3.       Ranking.

 

(a)       The Series A Preferred Stock will, as to dividend rights and rights as to the distribution of assets upon the Corporation’s liquidation, dissolution or winding up, rank: (1) senior to all classes or series of the Corporation’s common stock, par value $0.001 per share (“Common Stock”) and to all other capital stock issued by the Corporation expressly designated as ranking junior to the Series A Preferred Stock, (2) on parity with any future class or series of the Corporation’s capital stock expressly designated as ranking on parity with the Series A Preferred Stock; (3) junior to any future class or series of the Corporation’s capital stock expressly designated as ranking senior to the Series A Preferred Stock; and (4) junior to all the Corporation’s existing and future indebtedness (including subordinated indebtedness and any indebtedness convertible into Common Stock or preferred stock) and other liabilities with respect to assets available to satisfy claims against the Corporation and structurally subordinated to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) existing or future subsidiaries of the Corporation.

 

(b)       The Corporation may issue junior capital stock described in Section 3(a)(1) above and parity capital stock described in Section 3(a)(2) above at any time and from time to time in one or more series without the consent of the holders of the Series A Preferred Stock. The Corporation’s ability to issue any senior capital stock described in Section (3)(a)(3) above is limited as described in Section 11(d)(i).

 

Section 4.       Dividends. 

 

(a)       Subject to the preferential rights, if any, of the holders of any class or series of capital stock of the Corporation ranking senior to the Series A Preferred Stock as to dividends, the holders of the Series A Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors (or a duly authorized committee of the Board of Directors), only out of funds legally available for the payment of dividends, cumulative cash dividends at the annual rate of 9.0% of the $25.00 liquidation preference per year (equivalent to $2.25 per year). A “dividend period” is the period from and including a dividend payment date (as defined herein) (except that the initial dividend period shall commence on and include August 23, 2021) and continuing to, but excluding, the next succeeding dividend payment date.  Dividends on the Series A Preferred Stock will accumulate and be cumulative from, and including, the Original Issue Date; except that shares of the Series A Preferred Stock issued after the Original Issue Date shall accrue dividends from the later of the Original Issue Date and the dividend payment date (as defined herein) immediately prior to the original issue date of such additional shares for which full cumulative dividends have been paid.

 

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(b)       Dividends, when, as and if declared by the Board of Directors (or a duly authorized committee of the Board of Directors), will be payable monthly in arrears on the final day of each month, beginning on August 31, 2021, each of which is a “dividend payment date”; provided that if any dividend payment date is not a business day (as defined below), then such date will nevertheless be a dividend payment date but the dividend which would otherwise have been payable on that dividend payment date, when, as and if declared, will be paid on the next succeeding business day and no interest, additional dividends or other sums will accumulate on the amounts so payable for the period from and after that dividend payment date to that next succeeding business day. As used in this Certificate, “business day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

 

(c)       Any dividend, including any dividend payable on the Series A Preferred Stock for any dividend period (or portion thereof) will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends are payable to holders of record of Series A Preferred Stock as they appear in the records of the Corporation’s transfer agent (the “Transfer Agent”) at the close of business on the applicable record date, which will be the date designated by the Board of Directors (or a duly authorized committee of the Board of Directors) for the payment of a dividend that is not more than thirty (30) nor less than ten (10) days prior to the applicable dividend payment date.

 

(d)      The Board of Directors (or a duly authorized committee of the Board of Directors) will not authorize, pay or set apart for payment by the Corporation any dividend on the Series A Preferred Stock at any time that: (i) the terms and provisions of any of the Corporation’s agreements, including any agreement relating to the Corporation’s indebtedness, prohibits such authorization, payment or setting apart for payment; (ii) the terms and provisions of any of the Corporation’s agreements, including any agreement relating to the Corporation’s indebtedness, provides that such authorization, payment or setting apart for payment thereof would constitute a breach of, or a default under, such agreement; or (iii) the law restricts or prohibits the authorization or payment. Notwithstanding the foregoing, dividends on the Series A Preferred Stock will accumulate whether or not the terms and provisions of any of the Corporation’s agreements relating to its indebtedness prohibit such authorization, payment or setting apart for payment, the Corporation has earnings, there are funds legally available for the payment of the dividends, or the dividends are authorized. Accordingly, if the Board of Directors (or a duly authorized committee of the Board of Directors) does not declare a dividend on the Series A Preferred Stock payable in respect of any dividend period before the related dividend payment date, such dividend shall accumulate and an amount equal to such accumulated dividend shall become payable out of funds legally available therefor upon the liquidation, dissolution or winding up of the Corporation’s affairs (or earlier redemption of such Series A Preferred Stock), to the extent not paid prior to such liquidation, dissolution or winding up or earlier redemption, as the case may be. No interest, or sums in lieu of interest, will be payable in respect of any dividend payment or payments on the Series A Preferred Stock, which may be in arrears, and holders of the Series A Preferred Stock will not be entitled to any dividends in excess of the full cumulative dividends described above.  Any dividend payment made on the Series A Preferred Stock shall first be credited against the earliest accumulated but unpaid dividends due with respect to those shares.

 

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Section 5.       Restrictions on Dividends, Redemption and Repurchases.

 

(a)         So long as any share of the Series A Preferred Stock remains outstanding, unless the Corporation also has either paid or declared and set apart for payment full cumulative dividends on the Series A Preferred Stock for all past completed dividend periods, the Corporation will not during any dividend period:

 

(i)        pay or declare and set apart for payment any dividends or declare or make any distribution of cash or other property on Common Stock or other capital stock that ranks junior to or on parity with the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up (other than, in each case, (a) a dividend paid in Common Stock or other stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up or (b) any declaration of a Common Stock dividend in connection with any stockholders’ rights plan, or the issuance of rights, stock or other property under any stockholders’ rights plan, or the redemption or repurchase of rights pursuant to the plan);

 

(ii)       redeem, purchase or otherwise acquire Common Stock or other capital stock that ranks junior to or on parity with the Series A Preferred Stock (other than the Series A Preferred Stock) with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up (other than (a) by conversion into or exchange for Common Stock or other capital stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, (b) the redemption of shares of capital stock pursuant to the provisions of the Articles of Incorporation relating to the restrictions upon ownership and transfer of our capital stock, (c) a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock and any other capital stock that ranks on parity with the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, (d) purchases, redemptions or other acquisitions of shares of the Corporation’s capital stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up pursuant to any employment contract, dividend reinvestment and stock purchase plan, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, consultants or advisors, (e) through the use of the proceeds of a substantially contemporaneous sale of stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, or (f) purchases or other acquisitions of shares of the Corporation’s capital stock pursuant to a contractually binding stock repurchase plan existing prior to the preceding dividend payment date on which dividends were not paid in full); or

 

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(iii)      redeem, purchase or otherwise acquire Series A Preferred Stock (other than (a) by conversion into or exchange for Common Stock or other capital stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, (b) a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock or (c) with respect to redemptions, a redemption pursuant to which all shares of Series A Preferred Stock are redeemed).

 

(b)       Notwithstanding the foregoing, if the Board of Directors (or a duly authorized committee of the Board of Directors) elects to declare only partial instead of full dividends for a dividend payment date and related dividend period on the shares of the Series A Preferred Stock or any class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends, then, to the extent permitted by the terms of the Series A Preferred Stock and each outstanding class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends, such partial dividends shall be declared on shares of the Series A Preferred Stock and class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends, and dividends so declared shall be paid, as to any such dividend payment date and related dividend period, in amounts such that the ratio of the partial dividends declared and paid on each such series to full dividends on each such series is the same. As used in this paragraph, “full dividends” means, as to any class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends that bears dividends on a cumulative basis, the amount of dividends that would need to be declared and paid to bring such class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends current in dividends, including undeclared dividends for past dividend periods. To the extent a dividend period with respect to the Series A Preferred Stock or any class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends (in either case, the “first series”) coincides with more than one dividend period with respect to another series as applicable (in either case, a “second series”), then, for purposes of this paragraph, the Board of Directors (or a duly authorized committee of the Board of Directors) may, to the extent permitted by the terms of each affected series, treat such dividend period for the first series as two or more consecutive dividend periods, none of which coincides with more than one dividend period with respect to the second series, or may treat such dividend period(s) with respect to any class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends and dividend period(s) with respect to the Series A Preferred Stock for purposes of this paragraph in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on such class or series of the Corporation’s capital stock that ranks on parity with the Series A Preferred Stock with respect to dividends and the Series A Preferred Stock.

 

(c)       Subject to the foregoing, dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors (or a duly authorized committee of the Board of Directors) may be declared and paid on any Common Stock or other stock ranking junior to the Series A Preferred Stock with respect to dividend rights and rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up from time to time out of any funds legally available therefor, and the shares of the Series A Preferred Stock shall not be entitled to participate in any such dividend.

 

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Section 6.       Liquidation Preference.

 

(a)       In the event of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the holders of shares of Series A Preferred Stock will be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders (i.e., after satisfaction of all the Corporation’s liabilities to creditors, if any) and, subject to the rights of holders of any shares of each other class or series of capital stock ranking, as to rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, senior to the Series A Preferred Stock, a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment may be made to holders of shares of Common Stock or any other class or series of the Corporation’s capital stock ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, junior to the Series A Preferred Stock (the “liquidation preference”).

 

(b)       If, upon such voluntary or involuntary liquidation, dissolution or winding up of the Corporation’s affairs, the assets of the Corporation legally available for distribution to the Corporation’s stockholders are insufficient to pay the full amount of the liquidation preference on all outstanding shares of Series A Preferred Stock and the corresponding amounts payable on all shares of each other class or series of capital stock of the Corporation ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, on parity with the Series A Preferred Stock, then the holders of the Series A Preferred Stock and each such other class or series of capital stock of the Corporation ranking, as to rights to the distribution of assets upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, on parity with the Series A Preferred Stock will share ratably in any distribution of assets in proportion to the full liquidation preference to which they would otherwise be respectively entitled. In any such distribution, the “liquidation preference” of any holder of the Corporation’s capital stock other than the Series A Preferred Stock means the amount otherwise payable to such holder in such distribution (assuming no limitation on the Corporation’s assets available for such distribution), including an amount equal to any declared but unpaid dividends in the case of any holder or stock on which dividends accrue on a non-cumulative basis and, in the case of any holder of stock on which dividends accrue on a cumulative basis, an amount equal to any unpaid, accrued, cumulative dividends, whether or not earned or declared, as applicable.

 

(c)       Holders
of Series A Preferred Stock will be entitled to written notice of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, no fewer than thirty (30) days and no more than sixty (60) days prior to the payment date. 

 

(d)      If the liquidation preference has been paid in full to all holders of the Series A Preferred Stock and each such other class or series of capital stock ranking, as to rights to the distribution of assets any voluntary or involuntary liquidation, dissolution or winding up, on parity with the Series A Preferred Stock, holders of shares of the Series A Preferred Stock and each such other class or series of capital stock ranking, as to rights to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up, on parity with the Series A Preferred Stock will have no right or claim to any of the Corporation’s remaining assets and the holders of shares of Common Stock or any class or series of capital stock ranking, as to rights to the distribution of assets any voluntary or involuntary liquidation, dissolution or winding up, junior to the Series A Preferred Stock, will be entitled to receive all of the Corporation’s remaining assets according to their respective rights and preferences.

 

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(e)       The consolidation, merger or other business combination of the Corporation with or into any other entity or the sale, lease, transfer or conveyance of all or substantially all of the assets, property or business of the Corporation will not be deemed to constitute a liquidation, dissolution or winding up of the Corporation.

 

Section 7.       Optional Redemption.

 

(a)       The Series A Preferred Stock is perpetual and has no maturity date. The Series A Preferred Stock is not redeemable prior to August 23, 2026, except under the circumstances described in Section 9 hereof.

 

(b)       On or after August 23, 2026, the Series A Preferred Stock may be redeemed at the Corporation’s option, in whole or in part, from time to time, at a redemption price of $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption (the “Redemption Date”), upon the giving of notice, as provided in Section 8 hereof.

 

Section 8.       Redemption Procedures.

 

(a)       In the event the Corporation elects to redeem Series A Preferred Stock, notice of redemption will be mailed to each holder of record of Series A Preferred Stock called for redemption at such holder’s address as it appears on the Corporation’s stock transfer records, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date. Any notice mailed as provided in this paragraph shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series A Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock. Notwithstanding the foregoing, if the shares of Series A Preferred Stock are issued in book-entry form through The Depository Trust Company (“DTC”) or any other similar facility, notice of redemption may be given to the holders of Series A Preferred Stock at such time and in any manner permitted by such facility.

 

(b)       The notice will notify the holder of the election to redeem the shares and will state at least the following: (i) the Redemption Date; (ii) the redemption price; (iii) the number of shares of Series A Preferred Stock to be redeemed (and, if fewer than all the shares are to be redeemed, the number of shares to be redeemed from such holder or the method for determining such number); (iv) the place(s) where holders may surrender certificates, if any, evidencing the Series A Preferred Stock for payment; (v) if applicable, that the Series A Preferred Stock is being redeemed pursuant to the Corporation’s special optional redemption right in connection with the occurrence of a Delisting Event or Change of Control (each as defined hereafter), as applicable, and a brief description of the transaction or transactions or circumstances constituting such Delisting Event or Change of Control, as applicable; (vi) if applicable, that the holders of the Series A Preferred Stock to which the notice relates will not be able to convert such shares of Series A Preferred Stock in connection with the Delisting Event or Change of Control, as applicable, and each share of Series A Preferred Stock tendered for conversion that is selected, prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each as defined hereafter), as applicable, for redemption will be redeemed on the related date of redemption instead of converted on the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable; and (vii) that dividends on such shares of Series A Preferred Stock will cease to accumulate on the date prior to the Redemption Date.

 

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(c)       If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the shares to be redeemed will be determined pro rata (as nearly as practicable without creating fractional shares) or by lot. So long as all shares of Series A Preferred Stock are held of record by the nominee of DTC, the Corporation will give notice, or cause notice to be given, to DTC of the number of Series A Preferred Stock to be redeemed, and DTC will determine the number of Series A Preferred Stock to be redeemed from the account of each of its participants holding such shares in its participant account.  Thereafter, each participant will select the number of shares to be redeemed from each beneficial owner for whom it acts (including the participant, to the extent it holds Series A Preferred Stock for its own account). A participant may determine to redeem Series A Preferred Stock from some beneficial owners (including the participant itself) without redeeming Series A Preferred Stock from the accounts of other beneficial owners. Subject to the provisions hereof, the Board of Directors (or a duly authorized committee of the Board of Directors) shall have full power and authority to prescribe the terms and conditions on which shares of Series A Preferred Stock shall be redeemed from time to time. If the Corporation shall have issued certificates for the Series A Preferred Stock and fewer than all shares represented by any certificates are redeemed, new certificates shall be issued representing the unredeemed shares without charge to the holders thereof.

 

(d)      On or after the Redemption Date, each holder of Series A Preferred Stock to be redeemed that holds a certificate other than through DTC book entry must present and surrender the certificates evidencing the shares of Series A Preferred Stock at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender.

 

(e)       From and after the Redemption Date or, if notice of redemption has been duly given, and if on or before the Redemption Date specified in the notice, all funds necessary for the redemption have been set aside by the Corporation, separate and apart from the Corporation’s other funds, in trust for the pro rata benefit of the holders of the shares called for redemption, so as to be and continue to be available for that purpose, then, in each case unless the Corporation defaults in payment of the redemption price: (i) all dividends on the shares designated for redemption in the notice will cease to accumulate on or after the Redemption Date; (ii) all rights of the holders of the shares, except the right to receive the redemption price thereof (including all accumulated and unpaid dividends up to the date prior to the Redemption Date), will cease and terminate; and (iii) the shares designated for redemption in the notice will be deemed to not be outstanding for any purpose whatsoever.

 

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(f)       Any funds held in trust and unclaimed at the end of two years from the Redemption Date, to the extent permitted by law, shall be released from the trust so established and may be commingled with the Corporation’s other funds, and after that time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

 

(g)       Notwithstanding any other provision herein, any declared but unpaid dividends payable on a Redemption Date that occurs subsequent to the applicable record date for a dividend period shall not be paid to the holder entitled to receive the redemption price on the Redemption Date, but rather shall be paid to the holder of record of the redeemed shares on such record date relating to the applicable dividend payment date.

 

Section 9.       Special Optional Redemption.

 

(a)        During any period of time (whether before or after August 23, 2026) that both (i) the Series A Preferred Stock are no longer (a) listed on The Nasdaq Stock Market LLC (“Nasdaq”), the New York Stock Exchange LLC (the “NYSE”), or the NYSE American LLC (the “NYSE AMER”) or (b) listed or quoted on an exchange or quotation system that is a successor to Nasdaq, the NYSE or the NYSE AMER, and (ii) the Corporation is not subject to the reporting requirements of the Exchange Act, but any Series A Preferred Stock is still outstanding (collectively, a “Delisting Event”), the Corporation may, at its option, redeem the Series A Preferred Stock, in whole or in part and within ninety (90) days after the date of the Delisting Event (the “Delisting Event Redemption Period”), by paying $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the Redemption Date.

 

(b)        During any period of time (whether before or after August 23, 2026), upon the occurrence of a Change of Control (as defined hereafter), the Corporation may, at its option, redeem the Series A Preferred Stock, in whole or in part and within one hundred twenty (120) days after the first date on which such Change of Control occurred (the “Change of Control Redemption Period”), by paying $25.00 per share of Series A Preferred Stock, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the date of such redemption.

 

(c)        If,
prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each as defined below), as applicable, the
Corporation has provided or provides notice of redemption with respect to the Series A Preferred Stock (whether pursuant
to its optional redemption right in Section 7 or its special optional redemption rights in this Section 9), the holders of Series A
Preferred Stock will not be permitted to exercise the conversion rights in Section 10 in respect of their shares called for redemption. 

 

(d)        As used in this Certificate, a “Change of Control” is when, after the Original Issue Date, the following have occurred and are continuing:

 

(i)        the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of the Corporation’s stock entitling that person to exercise more than 50% of the total voting power of all shares of the Corporation’s stock entitled to vote generally in elections of the Corporation’s directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and

 

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(ii)       following the closing of any transaction referred to in (i) above, neither the Corporation nor any acquiring or surviving entity (or, if, in connection with such transaction shares of Common Stock are converted into or exchanged for (in whole or in part) common capital stock of another entity, such other entity) has a class of common securities (or American Depositary Receipts representing such securities) (x) listed on Nasdaq, the NYSE, or the NYSE AMER or (y) listed or quoted on an exchange or quotation system that is a successor to Nasdaq, the NYSE or the NYSE AMER.

 

Section 10.     Conversion.

 

(a)       The shares of Series A Preferred Stock are not convertible into or exchangeable for any other property or securities of the Corporation or any other entity, except as provided for in this Section 10.

 

(b)        Upon the occurrence of a Delisting Event or a Change of Control, as applicable, each holder of Series A Preferred Stock will have the right, unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, the Corporation has provided or provides notice of its election to redeem the Series A Preferred Stock pursuant to Section 7 or Section 9, to convert some or all of the shares of Series A Preferred Stock held by such holder (the “Delisting Event Conversion Right” or “Change of Control Conversion Right,” as applicable) on the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, into a number of shares of Common Stock (or equivalent value of alternative consideration) per share of Series A Preferred Stock (the “Common Stock Conversion Consideration”) equal to the lesser of:

 

(i)        the quotient obtained by dividing (1) the sum of (x) the $25.00 liquidation preference per share of Series A Preferred Stock plus (y) the amount of any accumulated and unpaid dividends to, but not including, the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable (unless the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount relating to such record date will be included in this sum) by (2) the Common Stock Price (as defined herein); and

 

(ii)       7.04225352 (the “Share Cap”), subject to certain adjustments described below.

 

(c)        The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of shares of the Common Stock to existing holders of Common Stock), subdivisions or combinations (in each case, a “Share Split”) with respect to the Common Stock as follows: the adjusted Share Cap as the result of a Share Split will be the number of shares of Common Stock that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of shares of Common Stock outstanding after giving effect to such Share Split and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such Share Split.

 

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(d)      In the case of a Delisting Event or Change of Control, as applicable, pursuant to, or in connection with, which shares of Common Stock will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of Series A Preferred Stock electing to exercise its Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, will receive upon conversion of such Series A Preferred Stock the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive upon the Delisting Event or Change of Control, as applicable, had such holder held a number of shares of Common Stock equal to the Common Stock Conversion Consideration immediately prior to the effective time of the Delisting Event or Change of Control, as applicable (the “Alternative Conversion Consideration”; and the Common Stock Conversion Consideration or the Alternative Conversion Consideration, as may be applicable to a Delisting Event or Change of Control, as applicable, is referred to herein as the “Conversion Consideration”).

 

(e)       If the holders of Common Stock have the opportunity to elect the form of consideration to be received in the Delisting Event or Change of Control, as applicable, the Conversion Consideration that the holders of Series A Preferred Stock will receive will be the form and proportion of the aggregate consideration elected by the holders of Common Stock who participate in the determination (based on the weighted average of elections) and will be subject to any limitations to which all holders of Common Stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in, or in connection with, the Delisting Event or Change of Control, as applicable.

 

(f)       The Corporation will not issue fractional shares of Common Stock upon the conversion of Series A Preferred Stock. In the event that the conversion would result in the issuance of fractional shares of Common Stock, the Corporation will pay the holder of Series A Preferred Stock the cash value of such fractional shares in lieu of such fractional shares.

 

(g)       Within fifteen (15) days following the expiration of the Delisting Event Redemption Period or the Change of Control Redemption Period, as applicable, (or, if the Corporation waives its right to redeem the Series A Preferred Stock prior to the expiration of the Delisting Event Redemption Period or the Change of Control Redemption Period, as applicable, within fifteen (15) days following the date of such waiver) the Corporation will provide to holders of Series A Preferred Stock a notice of occurrence of the Delisting Event or Change of Control, as applicable, that describes the resulting Delisting Event Conversion Right or Change of Control Conversion Right, as applicable. This notice will state the following:

 

(i)        the events constituting the Delisting Event or Change of Control, as applicable;

 

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(ii)       the date of the Delisting Event or Change of Control, as applicable;

 

(iii)      the date on which the Delisting Event Redemption Period or the Change of Control Redemption Period, as applicable, expired or was waived;

 

(iv)      the last date on which the holders of Series A Preferred Stock may exercise their Delisting Event Conversion Right or Change of Control Conversion Right, as applicable;

 

(v)       the method and period for calculating the Common Stock Price (as defined hereafter);

 

(vi)      the “Delisting Event Conversion Date” or “Change of Control Conversion Date”, as applicable, which will be a business day fixed by the Board of Directors that is not fewer than twenty (20) days nor more than thirty-five (35) days after the date on which the Corporation provides the notice pursuant to this section to holders of the Series A Preferred Stock;

 

(vii)     if applicable, the type and amount of Conversion Consideration entitled to be received per share of Series A Preferred Stock;

 

(viii)    the name and address of the paying agent and the conversion agent;

 

(ix)      the procedures that the holders of Series A Preferred Stock must follow to exercise the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable; and

 

(x)       the last date on which holders of Series A Preferred Stock may withdraw shares surrendered for conversion and the procedures that such holders must follow to effect such a withdrawal.

 

(h)       The Corporation will issue a press release for publication on the Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if these organizations are not in existence at the time of issuance of the press release, such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public), or post notice on the Corporation’s website, in any event prior to the opening of business on the first business day following any date on which the Corporation provides notice pursuant to Section 10(g) above to the holders of Series A Preferred Stock.

 

(i)        To exercise the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, each holder of Series A Preferred Stock will be required, on or before the close of business on the business day preceding the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, to notify the Corporation of the number of Series A Preferred Stock to be converted and otherwise to comply with any applicable procedures contained in the notice described in Section 10(g) above or otherwise required by the Transfer Agent or DTC for effecting the conversion.

 

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(j)         As used in this Certificate:

 

(i)        the “Common Stock Price” for any Change of Control will be: (i) if the consideration to be received in the Change of Control by the holders of Common Stock is solely cash, the amount of cash consideration per share of Common Stock; and (ii) if the consideration to be received in the Change of Control by holders of Common Stock is other than solely cash (x) the average of the closing prices per share of Common Stock on the principal U.S. securities exchange on which the Corporation’s Common Stock is then traded (or, if no closing sale price is reported, the average of the closing bid and ask prices per share or, if more than one in either case, the average of the average closing bid and the average closing ask prices per share) for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred as reported on the principal U.S. securities exchange on which the Common Stock is then traded, or (y) the average of the last quoted bid prices for the Common Stock in the over-the-counter market as reported by OTC Markets Group, Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the date on which such Change of Control occurred, if the Common Stock is not then listed for trading on a U.S. securities exchange; and

 

(ii)       the “Common Stock Price” for any Delisting Event will be the average of the closing price per share of the Common Stock on the ten (10) consecutive trading days immediately preceding, but not including, the effective date of the Delisting Event.

 

(k)        Holders of the Series A Preferred Stock may withdraw any notice of exercise of a Delisting Event Conversion Right or Change of Control Conversion Right, as applicable (in whole or in part), by a written notice of withdrawal delivered to the Transfer Agent prior to the close of business on the third business day preceding the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable. The notice of withdrawal must state: (i) the number of withdrawn shares of Series A Preferred Stock; (ii) if certificated shares of Series A Preferred Stock have been issued, the receipt or certificate numbers of the withdrawn shares of Series A Preferred Stock; and (iii) the number of shares of Series A Preferred Stock, if any, which remain subject to the conversion notice.

 

(l)        Notwithstanding the foregoing, if the shares of Series A Preferred Stock are held in global form, the conversion notice and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC.

 

(m)      Shares of Series A Preferred Stock as to which the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Delisting Event Conversion Right or Change of Control Conversion Right, as applicable, on the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, the Corporation has provided or provides notice of its election to redeem such shares of Series A Preferred Stock, whether pursuant to Section 7 or Section 9. If the Corporation elects to redeem shares of Series A Preferred Stock that would otherwise be converted into the applicable Conversion Consideration on a Delisting Event Conversion Date or Change of Control Conversion Date, as applicable, such shares of Series A Preferred Stock will not be so converted and the holders of such shares will be entitled to receive on the applicable Redemption Date $25.00 per share, plus all dividends accumulated and unpaid (whether or not declared) on the Series A Preferred Stock up to, but not including, the Redemption Date.

 

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(n)       The Corporation will take commercially reasonable efforts to deliver the applicable Conversion Consideration no later than the third business day following the Delisting Event Conversion Date or the Change of Control Conversion Date, as applicable.

 

Section 11.     Voting Rights.

 

(a)       Holders of the Series A Preferred Stock shall not have any voting rights, except as set forth in this Section 11 or as otherwise required by law.

 

(b)       In any matter in which the Series A Preferred Stock may vote (as expressly provided herein or as may be required by law), each share of Series A Preferred Stock shall be entitled to one vote per $25.00 of liquidation preference; provided that if the Series A Preferred Stock and any other stock ranking on parity to the Series A Preferred Stock as to dividend rights and rights as to the distribution of assets upon the Corporation’s liquidation, dissolution or winding up are entitled to vote together as a single class on any matter, the holders of each will vote in proportion to their respective liquidation preferences.

 

(c)        As used in this Certificate, “voting preferred stock” means any other class or series of the Corporation’s preferred stock ranking equally with the Series A Preferred Stock as to dividends (whether cumulative or non-cumulative) and the distribution of the Corporation’s assets upon liquidation, dissolution or winding up and upon which like voting rights to the Series A Preferred Stock have been conferred and are exercisable.

 

(d)       So long as any shares of Series A Preferred Stock remain outstanding, the Corporation will not, without the consent or the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock and each other class or series of preferred stock entitled to vote thereon (voting together as a single class), given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose:

 

(i)        authorize, create or issue, or increase the number of authorized or issued number of shares of, any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon the liquidation, dissolution or winding up of the Corporation or reclassify any authorized capital stock of the Corporation into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or

 

(ii)       amend, alter or repeal the provisions of the Articles of Incorporation, including the terms of the Series A Preferred Stock, whether by merger, consolidation, transfer or conveyance of all or substantially all of the Corporation’s assets or otherwise, so as to materially and adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock, taken as a whole.

 

(e)        If any event described in Section 11(d)(ii) would materially and adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock, taken as a whole, disproportionately relative to any other class or series of voting preferred stock, the affirmative vote of the holders of at least two-thirds of the outstanding shares of the Series A Preferred Stock, voting as a separate class, will also be required. Furthermore, if holders of shares of the Series A Preferred Stock receive the $25.00 per share of the Series A Preferred Stock liquidation preference plus all accrued and unpaid dividends thereon or greater amounts pursuant to the occurrence of any of the events described in Section 11(d)(ii), then such holders shall not have any voting rights with respect to the event described in Section 11(d)(ii).

 

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(f)        The following actions are not deemed to materially and adversely affect the rights, preferences, powers or privileges of the Series A Preferred Stock:

 

(i)        any increase in the amount of authorized shares of Common Stock or preferred stock or the creation or issuance of capital stock or any class or series ranking, as to dividends (whether cumulative or not) or the distribution of assets upon the Corporation’s liquidation, dissolution or winding up, on parity with, or junior to, the Series A Preferred Stock; or

 

(ii)       the amendment, alteration or repeal or change of any provision of the Articles of Incorporation, including this Certificate, as a result of a merger, consolidation, reorganization or other business combination, if (x) the shares of the Series A Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, the shares of Series A Preferred Stock are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and restrictions and limitations thereof, of the Series A Preferred Stock, taken as a whole, immediately prior to such consummation.

 

(g)        Without the consent of the holders of the Series A Preferred Stock, the Corporation may amend, alter, supplement or repeal any terms of the Series A Preferred Stock:

 

(i)        to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate for the Series A Preferred Stock that may be defective or inconsistent, so long as such action does not materially and adversely affect the rights, preferences, privileges and voting powers of the Series A Preferred Stock, taken as a whole;

 

(ii)       to conform this Certificate to the Description of the Series A Preferred Stock set forth in the Corporation’s final prospectus related to the Series A Preferred Stock, dated August 18, 2021; or

 

(iii)      to make any provision with respect to matters or questions arising with respect to the Series A Preferred Stock that is not inconsistent with the provisions of this Certificate.

 

(h)        The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required shall be effected, all outstanding shares of the Series A Preferred Stock have been redeemed or called for redemption on proper notice and sufficient funds have been set aside by the Corporation for the benefit of the holders of the Series A Preferred Stock to effect the redemption within ninety (90) days unless all or a part of the outstanding shares of the Series A Preferred Stock are being redeemed with the proceeds from the sale of shares of, any class or series of stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon the Corporation’s liquidation, dissolution or winding up.

 

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(i)        The rules and procedures for calling and conducting any meeting of the holders of the Series A Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors (or a duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Articles of Incorporation, the Amended and Restated Bylaws of the Corporation, applicable law and any national securities exchange or other trading facility on which the Series A Preferred Stock may be listed or traded at the time.

 

(j)        Holders of the Series A Preferred Stock will not have any voting rights with respect to, and the consent of the holders of the Series A Preferred Stock is not required for, the taking of any corporate action, including any merger or consolidation involving the Corporation or a sale of all or substantially all of the Corporation’s assets, regardless of the effect that such merger, consolidation or sale may have upon the powers, preferences, voting power or other rights or privileges of the Series A Preferred Stock, except as set forth above.

 

Section 12.     No Preemptive Rights. Holders of the Series A Preferred Stock do not have any preemptive rights.

 

Section 13.     No Maturity, Sinking Fund or Mandatory Redemption. The Series A Preferred Stock has no maturity date and the Corporation is not required to redeem the Series A Preferred Stock at any time. Accordingly, the Series A Preferred Stock will remain outstanding indefinitely, unless the Corporation decides, at its option, to exercise its redemption right or, under circumstances where the holders of Series A Preferred Stock have a conversion right, such holders convert the Series A Preferred Stock into the Corporation’s common stock. The Series A Preferred Stock is not subject to any sinking fund.

 

Section 14.     Exclusion
of Other Rights. The shares of the Series A Preferred Stock do not have any voting powers, preferences or
relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than
as set forth in this Certificate or in the Articles of Incorporation of the Corporation. 

 

Section 15.     Headings of Subdivisions. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

Section 16.     Severability of Provisions. If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock set forth in this Certificate are invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of Series A Preferred Stock set forth in this Certificate which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.

 

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Section 17.     Record Holders. To the fullest extent permitted by applicable law, the Corporation and the Transfer Agent may deem and treat the record holder of any share of the Series A Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the Transfer Agent shall be affected by any notice to the contrary.

 

Section 18.     Notices. All notices or communications in respect of the Series A Preferred Stock will be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate, in the Articles of Incorporation or the Bylaws of the Corporation or by applicable law.

 

Section 19.     Certificates. The
Corporation may at its option issue shares of the Series A Preferred Stock without certificates. If DTC or its nominee is
the registered owner of the Series A Preferred Stock, the following provisions of this Section 19 shall apply. If and
as long as DTC or its nominee is the registered owner of the Series A Preferred Stock, DTC or its nominee, as the case may be,
shall be considered the sole owner and holder of all such shares of the Series A Preferred Stock of which DTC or its nominee is
the registered owner for all purposes under the instruments governing the rights and obligations of holders of shares of the Series
A Preferred Stock.  If DTC discontinues providing its services as securities depositary with respect to the shares of the
Series A Preferred Stock, or if DTC ceases to be registered as a clearing agency under the Exchange Act, in the event that a successor
securities depositary is not obtained within ninety (90) days, the Corporation shall either print and deliver certificates for
the shares of the Series A Preferred Stock or provide for the direct registration of the Series A Preferred Stock with the Transfer
Agent. If the Corporation decides to discontinue the use of the system of book-entry-only transfers through DTC (or a successor
securities depositary), the Corporation shall print certificates for the shares of the Series A Preferred Stock and deliver such
certificates to DTC or shall provide for the direct registration of the Series A Preferred Stock with the Transfer Agent. Except
in the limited circumstances referred to above, owners of beneficial interests in the Series A Preferred Stock of which DTC or
its nominee is the registered owner: 

 

(a)       shall not be entitled to have such Series A Preferred Stock registered in their names;

 

(b)       shall not receive or be entitled to receive physical delivery of securities certificates in exchange for beneficial interests in the Series A Preferred Stock; and

 

(c)       shall not be considered to be owners or holders of the shares of the Series A Preferred Stock for any purpose under the instruments governing the rights and obligations of holders of shares of the Series A Preferred Stock.

 

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Section 20.     Restatement of Articles. On any restatement of the Articles of Incorporation of the Corporation, Section 1 through Section 19 of this Certificate shall be included in the Articles of Incorporation under the heading “9.0% Series A Cumulative Perpetual Preferred Stock” and this Section 20 may be omitted. If the Board of Directors so determines, the numbering of Section 1 through Section 19 may be changed for convenience of reference or for any other proper purpose.

 

[Signature Page Follows]

 

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In witness whereof, the undersigned hereto has executed this Certificate as of the 18th day of August, 2021.

 

	 	
MECHANICAL TECHNOLOGY, INCORPORATED

	 	
 

	
 

	 	
By:

	
/s/ Jessica L. Thomas

	 	
 

	
Jessica L. Thomas

	 	
 

	
Chief Financial Officer

 

[Signature Page to Certificate of Designation]

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