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THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT, WAIVER AND FIRST AMENDMENT TO FEE LETTER
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT, WAIVER AND FIRST AMENDMENT TO FEE LETTER (this “Amendment”), dated as of October 25, 2019 (the “Amendment Effective Date”), is made by and among Apollo Endosurgery, Inc., a Delaware corporation (“Parent”), Apollo Endosurgery US, Inc., a Delaware corporation (“Apollo Endo”), Apollo Endosurgery International LLC, a Delaware limited liability company (“Apollo International”), Lpath Therapeutics Inc., a Delaware corporation (“Lpath”; together with Parent, Apollo Endo and Apollo International, individually and collectively, jointly and severally, “Borrower”), Solar Capital Ltd., a Maryland corporation (“Solar”), in its capacity as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”) and the Lenders listed on Schedule 1.1 of the Loan and Security Agreement (as defined below) or otherwise a party hereto from time to time including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”).
The Borrower, the Lenders and Collateral Agent are parties to a Loan and Security Agreement dated as of March 15, 2019 (as amended, by that certain First Amendment to Loan and Security Agreement, dated as of June 20, 2019, Second Amendment to Loan and Security Agreement, dated as of August 7, 2019, and as further amended restated, modified or supplemented from time to time, the “Loan and Security Agreement”).  The Borrower has requested that the Lenders agree to certain amendments to the Loan and Security Agreement.  The Lenders have agreed to such request, subject to the terms and conditions hereof.
Pursuant to the that certain Notice of Default dated as of September 26, 2019, the Borrower has failed to (i) comply with (i) Section 7.13(b) of the Loan and Security Agreement for the calendar month ending August 31, 2019 and (ii) Section 6.2(a)(xiii) of the Loan and Security Agreement for the failure to give timely notice of the Event of Default set forth in the preceding clause (i) (together, the “Specified Defaults”).  The Borrower has requested that Collateral Agent and the Lenders agree to waive the Specified Defaults and their rights and remedies against the Borrower with respect to the Specified Defaults.  Although Collateral Agent and the Lenders are under no obligation to do so, they have agreed to such requests, subject to the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
SECTION 1.Definitions; Interpretation.
(a)Terms Defined in Loan and Security Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.
(b)Interpretation.  The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable to this Amendment and are incorporated herein by this reference.
SECTION 2.Waiver of Specified Defaults.
(a)Subject to the terms of this Amendment, Collateral Agent and the Lenders hereby waive the Specified Defaults.  Collateral Agent’s and the Lenders’ waiver of the Specified Defaults shall apply only to the foregoing periods specified in the definition of “Specified Defaults.”
(b)Collateral Agent’s and the Lenders’ agreement to waive the Specified Defaults (1) in no way shall be deemed an agreement by Collateral Agent or the Lenders to waive Borrower’s compliance with the above-described covenant(s) as of all other dates, (2) shall not limit or impair Collateral Agent’s or the Lenders’ right to demand strict performance of the covenant(s) as of all other dates and (3) shall not limit or impair Collateral Agent’s or the Lenders’ right to demand strict performance of all other covenants as of any date.
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(c)The waiver set forth in this Section 2 is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (1) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (2) otherwise prejudice any right or remedy which Collateral Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document.
SECTION 3.Amendments to the Loan and Security Agreement and Fee Letter.
(a)The Loan and Security Agreement shall be amended as follows effective as of the Amendment Effective Date: 
(i)New Definitions.  The following definitions are added to Section 1.4 in their proper alphabetical order: 
“Third Amendment” means that certain Third Amendment to Loan and Security Agreement and First Amendment to Fee Letter, dated as of the Third Amendment Effective Date, by and among Borrowers, Collateral Agent and the Lenders party thereto.
“Third Amendment Effective Date” means October 25, 2019.
(ii)The definition of “Qualified Cash Amount” is hereby amended by adding “as in effect on the First Amendment Effective Date” immediately after “Section 7.13(b)” therein.
(iii)Section 7.13(b) is hereby amended by amending and restating Section 7.13(b) in its entirety as follows: 
(b) Minimum Specified Product Revenue.  Permit Specified Product Revenue, measured on a trailing six-month basis on the last day of each month, to be lower than the following:
						
	Month-End	Specified Product Revenue
	June 2019	$22,000,000
	July 2019	$22,000,000
	August 2019	$21,750,000
	September 2019
	$22,250,000
	October 2019	$22,500,000
	November 2019	$22,500,000
	December 2019	$22,000,000
	January 2020 and each month through and including December 2021	80% of projected Specified Product Revenue in accordance with an annual plan submitted by Borrower to Lenders pursuant to Section 6.2(a)(iv), such plan to be approved by Borrower’s board of directors and by Agent and Lenders in writing

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	January 2022 and each month thereafter	75% of projected Specified Product Revenue in accordance with an annual plan submitted by Borrower to Lenders pursuant to Section 6.2(a)(iv), such plan to be approved by Borrower’s board of directors and by Agent and Lenders in writing

(b)Section 2 of the Fee Letter shall be amended and restated as follows effective as of the Amendment Effective Date:
2. Final Fee.  a final fee (the “Final Fee”) (A) due and payable on the earliest to occur of (i) the Maturity Date, (ii) the acceleration of any Term Loan (including, but not limited to, upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), and (iii) the prepayment, refinancing, substitution or replacement of any Term Loan pursuant to Section 2.2(b), (c) or (d) of the Loan Agreement, (B) equal to 4.90% of the Term Loans funded.  The Final Fee shall be fully earned on the date so paid, non-refundable for any reason and payable to the Lenders in accordance with their respective Pro Rata Shares.  The Final Fee shall also be payable in the event the Obligations (and/or the Loan Agreement and/or this Fee Letter) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means.  EACH BORROWER AND GUARANTOR EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING FINAL FEE IN CONNECTION WITH ANY SUCH ACCELERATION.
(c)References Within Loan and Security Agreement.  Each reference in the Loan and Security Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.
SECTION 4.Conditions of Effectiveness.  The effectiveness of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:
(a)Fees and Expenses.  The Borrower shall have paid (i) an amendment fee of Thirty Five Thousand Dollars ($35,000), which shall be deemed fully earned and non-refundable upon payment, (ii) all invoiced costs and expenses then due in accordance with Section 6(e), and (iii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement. 
(b)This Amendment.  Collateral Agent shall have received this Amendment, executed by the Borrower.
(c)Representations and Warranties; No Default.  On the Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement contemplated hereby:
(i)The representations and warranties contained in Section 5 shall be true and correct on and as of the Amendment Effective Date as though made on and as of such date; and
(ii)There exist no Events of Default or events that with the passage of time would result in an Event of Default.
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SECTION 5.Representations and Warranties.  To induce the Lenders to enter into this Amendment, the Borrower hereby confirms, as of the date hereof, (a) that the representations and warranties made by it in Section 5 of the Loan and Security Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; (b) that there has not been and there does not exist a Material Adverse Change; and (c) that the information included in the Perfection Certificate delivered to Collateral Agent on the Effective Date remains true and correct.   For the purposes of this Section 5, (i) each reference in Section 5 of the Loan and Security Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment, and (ii) any representations and warranties which relate solely to an earlier date shall not be deemed confirmed and restated as of the date hereof (provided that such representations and warranties shall be true, correct and complete in all material respects as of such earlier date).
SECTION 6.Miscellaneous.
(a)Loan Documents Otherwise Not Affected; Reaffirmation.  Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.  The Lenders’ and Collateral Agent’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.  The Borrower hereby reaffirms the grant of security under Section 4.1 of the Loan and Security Agreement and hereby reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, including without limitation any Term Loans funded on or after the Amendment Effective Date, as of the date hereof.
(b)Conditions.  For purposes of determining compliance with the conditions specified in Section 4, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Collateral Agent shall have received notice from such Lender prior to the Amendment Effective Date specifying its objection thereto.
(c)Release.  In consideration of the agreements of Collateral Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Collateral Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lenders and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.  Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.  Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.
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(d)No Reliance.  The Borrower hereby acknowledges and confirms to Collateral Agent and the Lenders that the Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.
(e)Costs and Expenses.  The Borrower agrees to pay to Collateral Agent within ten (10) days of its receipt of an invoice (or on the Amendment Effective Date to the extent invoiced on or prior to the Amendment Effective Date), the reasonable out-of-pocket costs and expenses of Collateral Agent and the Lenders party hereto, and the reasonable fees and disbursements of counsel to Collateral Agent and the Lenders party hereto  (including allocated costs of internal counsel), in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Amendment Effective Date or after such date.
(f)Binding Effect.  This Amendment binds and is for the benefit of the successors and permitted assigns of each party.  
(g)Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES that would result in the application of any laws other than the laws OF the State of New York), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.
(h)Complete Agreement; Amendments; Exit Fee Agreement.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.  For the avoidance of doubt and notwithstanding anything to the contrary in this Amendment, Borrower (a) reaffirms its obligations under the Exit Fee Agreement, including without limitation its obligation to pay the Exit Fee (as defined in the Exit Fee Agreement) if and when due thereunder, and (b) agrees that the defined term “Loan Agreement” as defined in the Exit Fee Agreement shall on and after the Amendment Effective Date mean the Loan and Security Agreement as amended by this Amendment and as may be amended, restated or modified from time to time on or after the Amendment Effective Date. 
(i)Severability of Provisions.  Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.
(j)Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.
(k)Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.
[Balance of Page Intentionally Left Blank; Signature Pages Follow] 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.
									
	BORROWER:	

	

	

	

	

	APOLLO ENDOSURGERY, INC.	

	APOLLO ENDOSURGERY INTERNATIONAL, LLC

	

	

	

	

	

	

	By: /s/Stefanie Cavanaugh
	

	By: /s/Stefanie Cavanaugh

	Name:  Stefanie Cavanaugh
	

	Name:  Stefanie Cavanaugh

	Title: Chief Financial Officer
	

	Title: Chief Financial Officer

	

	

	

	

	

	

	APOLLO ENDOSURGERY US, INC.	

	LPATH THERAPEUTICS INC.
	

	

	

	

	

	

	By: /s/Stefanie Cavanaugh
	

	By: /s/Stefanie Cavanaugh

	Name:  Stefanie Cavanaugh
	

	Name:  Stefanie Cavanaugh

	Title: Chief Financial Officer
	

	Title: Chief Financial Officer

	

	

	

[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]

						
	GUARANTOR:	

	

	

	APOLLO ENDOSURGERY UK LTD	

	

	

	

	

	By: /s/Stefanie Cavanaugh
	

	Name:  Stefanie Cavanaugh
	

	Title: Director	

	

	

	

	

	

	

[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]

						
	GUARANTOR:	

	

	

	APOLLO ENDOSURGERY COSTA RICA S.R.L.	

	

	

	

	

	By: /s/Todd Newton
	

	Name:  Todd Newton
	

	Title: Manager
	

	

	

	

	

	

	

	

	

STATE OF        Texas     )
              ) ss.
COUNTY OF      Travis    )

On October 25, 2019, before me, the undersigned Notary Public, personally appeared Todd Newton (name of signer), personally known to me or proved to me on the basis of satisfactory evidence of identification, which were 10953171(license), to be the person(s) whose name is signed on the preceding or attached document, and acknowledge to me that he/she/they signed it voluntarily and for its stated purpose.

WITNESS my hand and official seal.
SEAL
/s/ Margaret Rose Keller
________________________________
Notary Public in and for said State

[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]

									
	COLLATERAL AGENT:	

	

	

	

	

	SOLAR CAPITAL LTD.		
	

	

	

	

	

	

	By: /s/Anthony J. Storino
	

	

	Name: Anthony J. Storino
	

	

	Title: Authorized Signatory
	

	

	

	

	

[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]

LENDER:
									
	

	

	

	LENDER:	

	

	

	

	

	SOLAR CAPITAL LTD.		
	

		
	By: /s/Anthony J. Storino
		
	Name: Anthony J. Storino
		
	Title: Authorized Signatory
		
	

		
	SCP PRIVATE CREDIT INCOME FUND SPV LLC		
	

	

	

	By: /s/Anthony J. Storino
	

	

	Name: Anthony J. Storino
	

	

	Title: Authorized Signatory
	

	

	

	

	

	SCP PRIVATE CREDIT INCOME BDC SPV LLC		
	

	

	

	By: /s/Anthony J. Storino
	

	

	Name: Anthony J. Storino
	

	

	Title: Authorized Signatory
	

	

	

	

	

	SCP PRIVATE CORPORATE LENDING FUND SPV LLC		
	

	

	

	By: /s/Anthony J. Storino
	

	

	Name: Anthony J. Storino
	

	

	Title: Authorized Signatory
	

	

	

	

	

	SCP CAYMAN DEBT MASTER FUND SPV LLC		
	

	

	

	By: /s/Anthony J. Storino
	

	

	Name: Anthony J. Storino
	

	

	Title: Authorized Signatory
	

	

[Signature Page to Third Amendment to Loan and Security Agreement, Waiver and First Amendment to Fee Letter (Apollo Endo/Solar)]Exhibit 4.1

 

RESTATED CERTIFICATE OF INCORPORATION

 

OF

 

HBT FINANCIAL, INC.

 

HBT Financial, Inc., a Delaware corporation (the “Corporation”), hereby certifies as follows:

 

1.              The Corporation was originally formed as Heartland Financial Bancshares, Inc. and filed its original certificate of incorporation with the Secretary of State on June 28, 1982.

 

2.              The restated certificate of incorporation (as it may be amended, this “Certificate of Incorporation”) amends, restates and integrates the provisions of the certificate of incorporation of said corporation and has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”) by written consent of the Board of Directors and by the holders of a majority of the outstanding stock entitled to vote thereon in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

 

3.              The text of the certificate of incorporation is hereby amended and restated to read in full as set forth on Exhibit A attached hereto and made a part hereof.

 

*   *   *   *   *

 

 

IN WITNESS WHEREOF, HBT Financial, Inc. has caused this certificate to be signed by Fred L. Drake, its Chairman and Chief Executive Officer, on the 10th day of October, 2019.

 

	
 
    	
HBT FINANCIAL, INC.
    
	
 
    	
 
    
	
 
    	
/s/ Fred L. Drake
    
	
 
    	
Name:
    	
Fred L. Drake
    
	
 
    	
Its:
    	
Chairman and Chief Executive Officer
    

 

 

EXHIBIT A

 

RESTATED CERTIFICATE OF INCORPORATION

 

OF

 

HBT FINANCIAL, INC.

 

FIRST. The name of the Corporation is HBT Financial, Inc.

 

SECOND. The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive in the City of Wilmington, County of New Castle, Zip Code 19808. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc.

 

THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

FOURTH.

 

A.                                    Classes and Number of Shares.

 

1.                                      The total number of shares of all classes of stock which the Corporation shall have authority to issue is 150,000,000, of which 125,000,000 shares, par value of $0.01 per share, shall be designated as Common Stock and 25,000,000 shares, par value of $0.01 per share, shall be designated as Preferred Stock.

 

2.                                      Upon the effectiveness of the filing of this Certificate of Incorporation (the “Effective Time”), each share of the Corporation’s Series A Common Stock, par value $0.01 per share (the “Series A Common Stock”), issued and outstanding immediately prior to the Effective Time shall be reclassified as and converted  into one share of Common Stock.  Until surrendered, each certificate that prior to the Effective Time represented shares of Series A Common Stock shall, from and after the Effective Time, represent the number of shares of Common Stock into which the shares of Series A Common Stock represented by such stock certificate immediately prior to the Effective Time were reclassified and converted pursuant hereto.

 

B.                                    Powers and Rights of Common Stock.

 

1.                                      Except as otherwise provided by the DGCL or this Certificate of Incorporation and subject to the rights of holders of any series of Preferred Stock, all of the voting power of the stockholders of the Corporation shall be vested in the holders of the Common Stock.  Each share of Common Stock shall entitle the holder thereof to one vote for each share held by such holder on all matters voted upon by the stockholders of the Corporation; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) or pursuant to the DGCL.

 

 

2.                                      Except as otherwise required by law or expressly provided in this Certificate of Incorporation, each share of Common Stock shall have the same powers, rights and privileges and shall rank equally, share ratably and be identical in all respects as to all matters.

 

3.                                      Subject to the rights of the holders of Preferred Stock and to the other provisions of applicable law and this Certificate of Incorporation, holders of Common Stock shall be entitled to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of the Corporation if, as and when declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.

 

4.                                      In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the Corporation’s debts and any other payments required by law and amounts payable upon shares of Preferred Stock ranking senior to the shares of Common Stock upon such dissolution, liquidation or winding up, if any, the remaining net assets of the Corporation shall be distributed to the holders of shares of Common Stock and the holders of shares of any other class or series ranking equally with the shares of Common Stock upon such dissolution, liquidation or winding up, equally on a per share basis.  A merger or consolidation of the Corporation with or into any other corporation or other entity, or a sale or conveyance of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to its stockholders) shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Paragraph B.4.

 

5.                                      No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.

 

C.                                    Powers and Rights of Preferred Stock.

 

1.                                      Shares of Preferred Stock may be issued in one or more series from time to time by the Board of Directors.

 

2.                                      The Board of Directors is expressly authorized to fix by resolution or resolutions the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, of the shares of each series of Preferred Stock, including, without limitation, the following:

 

a.                   the distinctive serial designation of such series which shall distinguish it from other series;

 

b.                   the number of shares included in such series;

 

c.                    the dividend rate (or method of determining such rate) payable to the holders of the shares of such series, any conditions upon which such dividends shall be paid and the date or dates upon which such dividends shall be payable;

 

d.                   whether dividends on the shares of such series shall be cumulative and, in the case of shares of any series having cumulative dividend rights, the date or dates or

 

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method of determining the date or dates from which dividends on the shares of such series shall be cumulative;

 

e.                    the amount or amounts which shall be payable out of the assets of the Corporation to the holders of the shares of such series upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of the shares of such series;

 

f.                     the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series may be redeemed, in whole or in part, at the option of the Corporation or at the option of the holder or holders thereof or upon the happening of a specified event or events;

 

g.                    the obligation, if any, of the Corporation to purchase or redeem shares of such series pursuant to a sinking fund or otherwise and the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

h.                   whether or not the shares of such series shall be convertible or exchangeable, at any time or times at the option of the holder or holders thereof or at the option of the Corporation or upon the happening of a specified event or events, into shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation, and the price or prices or rate or rates of exchange or conversion and any adjustments applicable thereto;

 

i.                       whether or not the holders of the shares of such series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such voting rights; and

 

j.                      any other powers, preferences and rights and qualifications, limitations and restrictions not inconsistent with the DGCL.

 

3.                                      For all purposes, this Certificate of Incorporation shall include each certificate of designations setting forth the terms of a series of Preferred Stock.

 

4.                                      Unless otherwise provided in the resolution or resolutions of the Board of Directors or a duly authorized committee thereof establishing the terms of a series of Preferred Stock, no holder of any share of Preferred Stock shall be entitled as of right to vote on any amendment or alteration of the Certificate of Incorporation to authorize or create, or increase the authorized amount of, any other class or series of Preferred Stock or any alteration, amendment or repeal of any provision of any other series of Preferred Stock that does not adversely affect in any material respect the rights of the series of Preferred Stock held by such holder.

 

5.                                      Except as otherwise required by the DGCL or provided in the resolution or resolutions of the Board of Directors or a duly authorized committee thereof establishing the terms of a series of Preferred Stock, no holder of Common Stock, as such, shall be entitled to vote on any amendment or alteration of the Certificate of Incorporation that alters, amends or changes the powers,

 

3

 

preferences, rights or other terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other series of Preferred Stock, to vote thereon pursuant to the Certificate of Incorporation or pursuant to the DGCL.

 

6.                                      Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of any class or series of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the outstanding shares of such class or series, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL or any corresponding provision hereafter enacted.

 

7.                                      Unless otherwise provided in the resolution or resolutions of the Board of Directors or a duly authorized committee thereof establishing the terms of a series of Preferred Stock, no holder of any share of Preferred Stock shall, in such capacity, be entitled to bring a derivative action, suit or proceeding on behalf of the Corporation.

 

FIFTH.  The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal Bylaws of the Corporation.

 

SIXTH.

 

A.                                    The number of directors of the corporation shall be fixed from time to time pursuant to the Bylaws of the Corporation.

 

B.                                    The directors shall be elected by a plurality of the votes cast; provided that, whenever the holders of any class or series of capital stock of the Corporation are entitled to elect one or more directors pursuant to the provisions of this Certificate of Incorporation (including, but not limited to, any duly authorized certificate of designation), such directors shall be elected by a plurality of the votes cast by such holders. Elections of directors need not be by written ballot except and to the extent provided in the Bylaws of the Corporation.

 

C.                                    Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, disqualification, removal from office or any other cause may be filled only by resolution of a majority of the directors then in office, although less than a quorum, or by a sole remaining director, and may not be filled in any other manner.  A director elected or appointed to fill a vacancy shall serve for the unexpired term of his or her predecessor in office and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal.  A director elected or appointed to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director shall have been elected or appointed and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.  No decrease in the authorized number of directors shall shorten the term of any incumbent director.

 

SEVENTH.  Subject to the rights of the holders of any series of Preferred Stock then outstanding and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by or at the direction of the Chairperson of the Board of Directors or by Board of Directors pursuant to a written resolution adopted by the affirmative vote of the majority

 

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of the total number of directors that the Corporation would have if there were no vacancies.  Any business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of the meeting.

 

EIGHTH.  Prior to the first date on which the voting trust governed by the Voting Trust Agreement, dated as of May 4, 2016, among Fred L. Drake, the Corporation and the depositors party thereto, ceases to own of record more than thirty-five (35%) of the outstanding shares of Common Stock (the “Trigger Date”), any action required or permitted to be taken at a meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding Common Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.  From and after the Trigger Date, any action required or permitted to be taken by the Corporation’s stockholders may be taken only at a duly called annual or special meeting of the Corporation’s stockholders and the power of stockholders to consent in writing without a meeting is specifically denied; provided, however, that any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided the resolutions creating  such series of Preferred Stock.

 

NINTH.

 

A.                                    To the fullest extent authorized by the DGCL, a director of the Corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of such director’s fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the DGCL as currently in effect or as the same may hereafter be amended.

 

B.                                    To the fullest extent permitted by the DGCL, the corporation is authorized to provide indemnification of (and advancement of expenses to) the Corporation’s directors, officers, employees and agents (and any other persons to which the DGCL permits the corporation to provide indemnification) through the Corporation’s by-laws, agreements with such persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to actions for breach of duty to the corporation, its stockholders and others, and by any applicable federal or state bank regulatory laws or regulations. Such right to indemnification and advancement of expenses shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

C.                                    No amendment, modification or repeal of this Article NINTH shall adversely affect any right or protection of a director, officer, employee or agent or other person existing at the time of, or increase the liability of any person with respect to any acts or omissions of such person occurring prior to, such amendment, modification or repeal.

 

TENTH. The corporation expressly elects not to be governed by Section 203 of the DGCL.

 

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