FIRST AMENDED AND RESTATED
CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
PETRO RIVER OIL CORP
a
Delaware corporation
_______________
On
behalf of Petro River Oil Corp., a Delaware corporation (the
“Corporation”), in accordance with the provisions of
Section 228 of the Delaware General Corporation Law (the
“DGCL”), the Corporation’s Board of Directors and
the holders of a majority of the issued and outstanding shares of
the Corporation’s Series A Convertible Preferred Stock (the
“Series A Preferred”) have duly approved and adopted
the following resolutions amending and restating the Certification
of Designations of Preferences and Rights of Series A Convertible
Preferred Stock:
WHEREAS, pursuant
to its authority, the Board of Directors of the Company previously
fixed the rights, preferences, restrictions and other matters
relating to a Series A Convertible Preferred Stock, consisting
of up to 500,000 shares of the Company’s preferred stock, par
value $0.00001 per share (“Preferred Stock”), as set
forth in a Certificate of Designations of Preferences and Rights
dated January 30, 2019 (the “Certificate of
Designations”); and
WHEREAS, the Board
of Directors wishes to amend and restate the Certificate of
Designations in its entirety.
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
amend and restate the Certificate of Designations and does hereby
provide for the issuance of a series of Preferred Stock for cash or
exchange of other securities, rights or property and does hereby
fix and determine the rights, preferences, restrictions and other
matters relating to such series of Preferred Stock as
follows:
SERIES A CONVERTIBLE PREFERRED STOCK
1.
Designation, Amount and Par
Value
. The series of preferred stock shall be designated as
the Corporation’s Series A Convertible Preferred Stock (the
“
Series A Preferred
Stock
”), and the number of shares so designated shall
be 500,000. Each share of Series A Preferred Stock shall have a par
value of $0.00001 per share, and a stated value equal to $20.00
(the “
Stated
Value
”).
2.
Definitions
. In addition to the
terms defined elsewhere in this Certificate of Designations, (a)
the terms set forth in
Exhibit A
hereto have the
meanings indicated therein, and (b) the following terms have the
meanings indicated:
“
Conversion Price
” means the Fixed
Conversion Price, as adjusted pursuant to this Certificate of
Designations.
“
Fixed
Conversion Price
” means $0.40.
“
Holder
” means any holder of Series
A Preferred Stock.
“
Original
Issue Date
” means the date of the first issuance of
any shares of the Series A Preferred Stock regardless of the
number of transfers of any particular shares of Series A Preferred
Stock and regardless of the number of certificates that may be
issued to evidence such Series A Preferred Stock.
“
Purchase Agreement
” means the
Securities Purchase Agreement, dated as of January 30, 2019, among
the Corporation and the original purchasers of the Series A
Preferred Stock.
3.
Dividends
. Unless the Company
elects to pay dividends to the holders of Common Stock, the Series
A Preferred Stock shall not be entitled to receive any
dividends.
4.
Registration of Series A Preferred
Stock
. The Corporation shall register shares of the Series A
Preferred Stock, upon records to be maintained by the Corporation
for that purpose (the “
Series
A Preferred Stock Register
”), in the name of the
record Holders thereof from time to time. The Corporation may deem
and treat the registered Holder of shares of Series A Preferred
Stock as the absolute owner thereof for the purpose of any
conversion hereof or any distribution to such Holder, and for all
other purposes, absent actual notice to the contrary.
5.
Registration of Transfers
. The
Corporation shall register the transfer of any shares of Series A
Preferred Stock in the Series A Preferred Stock Register, upon
surrender of certificates evidencing such Shares to the Corporation
at its address specified herein. Upon any such registration or
transfer, a new certificate evidencing the shares of Series A
Preferred Stock so transferred shall be issued to the transferee
and a new certificate evidencing the remaining portion of the
shares not so transferred, if any, shall be issued to the
transferring Holder.
6.
Liquidation
.
(a)
In the event of any
liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary (a “
Liquidation Event
”), the Holders
of Series A Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets or surplus
funds of the Corporation to the holders of Junior Securities by
reason of their ownership thereof, an amount per share in cash
equal to the Stated Value for each share of Series A Preferred
Stock then held by them (as adjusted for any stock split, stock
dividend, stock combination or other similar transactions with
respect to the Series A Preferred Stock), plus all accrued but
unpaid dividends on such Series A Preferred Stock as of the date of
such event (the “
Series A
Stock Liquidation Preference
”). If, upon the
occurrence of a Liquidation Event, the assets and funds thus
distributed among the holders of the Series A Preferred Stock shall
be insufficient to permit the payment to such Holders of the full
Series A Stock Liquidation Preference, then the entire assets and
funds of the Corporation legally available for distribution shall
be distributed ratably among the Holders of the Series A Preferred
Stock in proportion to the aggregate Series A Stock Liquidation
Preference that would otherwise be payable to each of such Holders.
The purchase or redemption by the Corporation of stock of any
class, in any manner permitted by law, shall not, for the purposes
of this Certificate of Designations, be required as a Liquidation
Event. Neither the consolidation or merger of the Corporation with
or into any other Person, nor the sale or transfer by the
Corporation of less than substantially all of its assets shall, for
the purposes of this Certificate of Designations, be deemed to be a
Liquidation Event.
(b)
In the event of a
Liquidation Event, following completion of the distributions
required by the first sentence of paragraph (a) of this Section 6,
if assets or surplus funds remain in the Corporation, the holders
of the Common Stock shall share ratably in all remaining assets of
the Corporation, based on the number of shares of Common Stock then
outstanding.
(c)
The Corporation
shall provide written notice of any Liquidation Event to each
record Holder not less than 45 days prior to the payment date or
effective date thereof, provided that such information shall be
made known to the public prior to or in conjunction with such
notice being provided to the Holders.
7.
Conversion
.
(a)
Conversion at Option of Holder
.
At the option of any Holder, any Series A Preferred Stock held by
such Holder may be converted into Common Stock based on the
Conversion Price then in effect for such Series A Preferred Stock.
A Holder may convert Series A Preferred Stock into Common Stock
pursuant to this paragraph at any time and from time to time after
the Original Issue Date, by delivering to the Corporation a
Conversion Notice, in the form attached hereto, appropriately
completed and duly signed, and the date any such Conversion Notice
is delivered to the Corporation (as determined in accordance with
the notice provisions hereof) is a “
Conversion Date
.”
8.
Mechanics of
Conversion
.
(a)
The number of
Underlying Shares issuable upon any conversion of a share of Series
A Preferred Stock hereunder shall equal (i) the Stated Value of
such share of Series A Preferred Stock to be converted, divided by
the Conversion Price on the Conversion Date, plus (ii) the amount
of any accrued but unpaid dividends on such share of Series A
Preferred Stock through the Conversion Date, divided by the
Conversion Price on the Conversion Date.
(b)
Upon conversion of
any share of Series A Preferred Stock, the Corporation shall
promptly (but in no event later than three Trading Days after the
Conversion Date) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate a certificate for the
Underlying Shares issuable upon such conversion, free of
restrictive legends unless a registration statement covering the
resale of the Underlying Shares and naming the Holder as a selling
stockholder thereunder is not then effective and such Underlying
Shares are not then freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act of 1933, as amended.
The Holder, or any Person so designated by the Holder to receive
Underlying Shares, shall be deemed to have become holder of record
of such Underlying Shares as of the Conversion Date. The
Corporation shall, upon request of the Holder, use its best efforts
to deliver Underlying Shares hereunder electronically through the
DTC or another established clearing corporation performing similar
functions, and shall issue such Underlying Shares in the same
manner as dividend payment shares are issued pursuant to Section
3(f) above.
(c)
A Holder shall not
be required to deliver the original certificate(s) evidencing the
Series A Preferred Stock being converted in order to effect a
conversion of such Series A Preferred Stock. Execution and delivery
of the Conversion Notice shall have the same effect as cancellation
of the original certificate(s) and issuance of a new certificate
evidencing the remaining shares of Series A Preferred Stock. Upon
surrender of a certificate following one or more partial
conversions, the Corporation shall promptly deliver to the Holder a
new certificate representing the remaining shares of Series A
Preferred Stock.
(d)
The
Corporation’s obligations to issue and deliver Underlying
Shares upon conversion of Series A Preferred Stock in accordance
with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by any Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by any
Holder or any other Person of any obligation to the Corporation or
any violation or alleged violation of law by any Holder or any
other Person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Corporation to any
Holder in connection with the issuance of such Underlying
Shares.
9.
[Reserved]
.
10.
Triggering Events
.
(a)
At any time or
times following the occurrence of a Triggering Event, each Holder
shall have the option to elect, by notice to the Corporation (an
“
Event Notice
”),
to require the Corporation to repurchase all or any portion of (i)
the Series A Preferred Stock then held by such Holder, at a price
per share equal to the greater of (A) 100% of the Stated Value plus
all accrued but unpaid dividends thereon through the date of
payment (the “
Event Equity
Value
”), or (B) the Event Equity Value of the
Underlying Shares issuable upon conversion of such Series A
Preferred Stock (including such accrued but unpaid dividends
thereon), and (ii) any Underlying Shares issued to such Holder upon
conversion of Series A Preferred Stock, at a price per share equal
to the Event Equity Value of such Underlying Shares. The aggregate
amount payable pursuant to the preceding sentence is referred to as
the “
Event
Price
.” The Corporation shall pay the aggregate Event
Price to each Holder no later than the third Trading Day following
the date of delivery of the Event Notice, and upon receipt thereof
such Holder shall deliver original certificates evidencing the
shares of Series A Preferred Stock and Underlying Shares so
repurchased to the Corporation (to the extent such certificates
have been delivered to the Holder).
(b)
Upon the occurrence
of any Bankruptcy Event, the Corporation shall immediately be
obligated, without any further action by any Holder, to repurchase
all outstanding shares of Series A Preferred Stock and all such
Underlying Shares at the Event Price pursuant to the preceding
paragraph as if each Holder had delivered an Event Notice
immediately prior to the occurrence of such Bankruptcy
Event.
11.
Voting Rights
. Except as
otherwise provided herein or as required by applicable law, the
Holders of the Series A Preferred Stock shall be entitled to vote
on all matters on which holders of Common Stock are entitled to
vote, including, without limitation, the election of directors. For
such purposes, each Holder shall be entitled to a number of votes
in respect of the shares of Series A Preferred Stock owned by it
equal to the number of shares of Common Stock into which such
shares of Series A Preferred Stock are convertible as of the record
date for the determination of stockholders entitled to vote on such
matter, or if no record date is established, at the date such vote
is taken or any written consent of stockholders is solicited.
Except as otherwise provided herein, in any relevant agreement or
as required by applicable law, the holders of the Series A
Preferred Stock and Common Stock, respectively, shall vote together
as a single class on all matters submitted to a vote or consent of
stockholders; provided that so long as any shares of Series A
Preferred Stock are outstanding, the Corporation shall not, without
the affirmative vote of the Holders of a majority of the shares of
Series A Preferred Stock then outstanding, (a) alter or change
adversely the powers, preferences or rights given to the Series A
Preferred Stock or alter or amend this Certificate of Designation
(whether by merger, reorganization, consolidation or otherwise),
(b) authorize or create any class of stock ranking as to dividends,
redemption or distribution of assets upon a Liquidation Event or
Change of Control senior to or otherwise pari passu with the Series
A Preferred Stock;
provided
,
however
, that the Corporation
shall be permitted to issue without the consent of the Holders of
the Series A Preferred Stock any class of preferred stock ranking
pari passu with the Series A Preferred Stock if the conversion
price of such class of preferred stock, directly or indirectly to
Common Stock, is greater than the Conversion Price for the Series A
Preferred Stock, (c) amend its certificate or articles of
incorporation or other charter documents so as to affect adversely
any rights of the Holders (whether by merger, reorganization,
consolidation or otherwise), (d) increase the authorized
number of shares of Series A Preferred Stock, or (e) enter into any
agreement with respect to the foregoing.
12.
Charges, Taxes and Expenses
.
Issuance of certificates for shares of Series A Preferred Stock and
for Underlying Shares issued on conversion of (or otherwise in
respect of) the Series A Preferred Stock shall be made without
charge to the Holders for any issue or transfer tax, withholding
tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes
and expenses shall be paid by the Corporation;
provided
,
however
, that the Corporation
shall not be required to pay any tax that may be payable in respect
of any transfer involved in the registration of any certificates
for Common Stock or Series A Preferred Stock in a name other than
that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring
the Series A Preferred Stock or receiving Underlying Shares in
respect of the Series A Preferred Stock.
13.
Replacement Certificates
. If
any certificate evidencing Series A Preferred Stock or Underlying
Shares is mutilated, lost, stolen or destroyed, the Corporation
shall issue or cause to be issued in exchange and substitution for
and upon cancellation hereof, or in lieu of and substitution for
such certificate, a new certificate, but only upon receipt of
evidence reasonably satisfactory to the Corporation of such loss,
theft or destruction and customary and reasonable indemnity, if
requested. Applicants for a new certificate under such
circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable
third-party costs as the Corporation may prescribe.
14.
Reservation of Underlying
Shares
. The Corporation covenants that it shall at all times
reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the
purpose of enabling it to issue Underlying Shares as required
hereunder, the number of Underlying Shares which are then issuable
and deliverable upon the conversion of (and otherwise in respect
of) all outstanding Series A Preferred Stock (taking into account
the adjustments of Section 15), free from preemptive rights or any
other contingent purchase rights of persons other than the Holder.
The Corporation covenants that all Underlying Shares so issuable
and deliverable shall, upon issuance in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
15.
Certain Adjustments
. The
Conversion Price is subject to adjustment from time to time as set
forth in this Section 15.
(a)
Stock Dividends and Splits
. If
the Corporation, at any time while Series A Preferred Stock is
outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that
is payable in shares of Common Stock (other than regular dividends
on the Series A Preferred Stock), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii)
combines outstanding shares of Common Stock into a smaller number
of shares, then in each such case the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b)
Pro Rata Distributions
. If the
Corporation, at any time while Series A Preferred Stock is
outstanding, distributes to all holders of Common Stock (i)
evidences of its indebtedness, (ii) any security (other than a
distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security,
or (iv) any other asset (in each case, “
Distributed Property
”), then in
each such case the Conversion Price in effect immediately prior to
the record date fixed for determination of stockholders entitled to
receive such distribution shall be adjusted (effective on such
record date) to equal the product of such Exercise Price times a
fraction of which the denominator shall be the average of the
Closing Prices for the five Trading Days immediately prior to (but
not including) such record date and of which the numerator shall be
such average less the then fair market value of the Distributed
Property distributed in respect of one outstanding share of Common
Stock, as determined by the Company's independent certified public
accountants that regularly examine the financial statements of the
Company (an “
Appraiser
”). In such event, the
Holder, after receipt of the determination by the Appraiser, shall
have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case such fair
market value shall be deemed to equal the average of the values
determined by each of the Appraiser and such appraiser. As an
alternative to the foregoing adjustment to the Conversion Price, at
the request of any Holder delivered before the 90th day after the
record date fixed for determination of stockholders entitled to
receive such distribution, the Corporation will deliver to such
Holder, within five (5) Trading Days after such request (or, if
later, on the effective date of such distribution), the Distributed
Property that such Holder would have been entitled to receive in
respect of the Underlying Shares for which such Holder’s
Series A Preferred Stock could have been converted immediately
prior to such record date. If such Distributed Property is not
delivered to a Holder pursuant to the preceding sentence, then upon
any conversion of Series A Preferred Stock that occurs after such
record date, such Holder shall be entitled to receive, in addition
to the Underlying Shares otherwise issuable upon such conversion,
the Distributed Property that such Holder would have been entitled
to receive in respect of such number of Underlying Shares had the
Holder been the record holder of such Underlying Shares immediately
prior to such record date.
(c)
Fundamental Transactions
. If,
at any time while Series A Preferred Stock is outstanding, (i) the
Corporation effects any merger or consolidation of the Corporation
with or into another Person, (ii) the Corporation effects any sale
of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer
(whether by the Corporation or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or
(iv) the Corporation effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by
Section 15(a) above) (in any such case, a “
Fundamental Transaction
”), then
upon any subsequent conversion of Series A Preferred Stock, each
Holder shall have the right to receive, for each Underlying Share
that would have been issuable upon such conversion absent such
Fundamental Transaction, the same kind and amount of securities,
cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of
one share of Common Stock (the “
Alternate Consideration
”). For
purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in
such Fundamental Transaction, and the Corporation shall apportion
the Conversion Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then each Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any conversion of Series A Preferred Stock following
such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Corporation or
surviving entity in such Fundamental Transaction shall issue to the
Holder a new series of preferred stock consistent with the
foregoing provisions and evidencing the Holders’ right to
convert such preferred stock into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction
is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Series A Preferred Stock (or any such
replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental
Transaction.
(d)
Calculations
. All calculations
under this
Section
15
shall be made to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account of the Corporation, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.
(e)
Notice of Adjustments
. Upon the
occurrence of each adjustment pursuant to this
Section 15
, the Corporation at
its expense will promptly compute such adjustment in accordance
with the terms hereof and prepare a certificate describing in
reasonable detail such adjustment and the transactions giving rise
thereto, including all facts upon which such adjustment is based.
Upon written request, the Corporation will promptly deliver a copy
of each such certificate to each Holder and to the
Corporation’s Transfer Agent.
(f)
Notice of Corporate Events
. If
the Corporation (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or
warrants to subscribe for or purchase any capital stock of the
Corporation or any Subsidiary, (ii) authorizes or approves, enters
into any agreement contemplating or solicits stockholder approval
for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of
the Corporation, then the Corporation shall deliver to each Holder
a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable
record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to
such transaction, and the Corporation will take all steps
reasonably necessary in order to insure that each Holder is given
the practical opportunity to convert its Series A Preferred Stock
prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver
such notice or any defect therein shall not affect the validity of
the corporate action required to be described in such
notice.
16.
Change of Control –
Reorganization,
Reclassification, Consolidation, Merger or Sale
. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of the Corporation's assets to another Person or
other transaction which is effected in such a way that holders of
Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to
or in exchange for Common Stock is referred to herein as
"
Organic
Change
." As long as any share
of Series A Preferred Stock is outstanding, prior to the
consummation of any (i) sale of all or substantially all of the
Corporation's assets to an acquiring Person or (ii) other Organic
Change following which the Corporation is not a surviving entity,
the Corporation will secure from the Person purchasing such assets
or the successor resulting from such Organic Change (in each case,
the "
Acquiring
Entity
") a written agreement
(in form and substance reasonably satisfactory to the Holders of at
least a majority of the Series A Preferred Stock then outstanding)
to deliver to each Holder of Series A Preferred Stock in exchange
for such shares, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to
the Series A Preferred Stock (including, without limitation, having
a stated value and liquidation preference equal to the Stated Value
and the Series A Stock Liquidation Preference held by such Holder)
and reasonably satisfactory to the Holders of at least a majority
of the Series A Preferred Stock then outstanding. Prior to the
consummation of any other Organic Change, the Corporation shall
make appropriate provision (in form and substance reasonably
satisfactory to the Holders of at least a majority of the Series A
Preferred Stock then outstanding) to insure that each of the
Holders of the Series A Preferred Stock will thereafter have the
right to acquire and receive in lieu of or in addition to (as the
case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the conversion of such Holder's
Series A Preferred Stock such shares of stock, securities or assets
that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of shares of Common Stock
which would have been acquirable and receivable upon the conversion
of such Holder's Series A Preferred Stock as of the date of such
Organic Change (without taking into account any limitations or
restrictions on the convertibility of the Series A Preferred
Stock).
17.
Limitation on
Conversion
.
(a) Notwithstanding
anything to the contrary contained herein, the number of shares of
Common Stock that may be acquired by any Holder upon any conversion
of Series A Preferred Stock (or otherwise in respect of the Series
A Preferred Stock) shall be limited to the extent necessary to
insure that, following such conversion (or other issuance), the
total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act of
1934, as amended, does not exceed 4.999% (the “
Maximum Percentage
”) of the total
number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such
conversion). For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. Each delivery of
a Conversion Notice by a Holder will constitute a representation by
such Holder that it has evaluated the limitation set forth in this
paragraph and determined that issuance of the full number of
Underlying Shares requested in such Conversion Notice is permitted
under this paragraph. By written notice to the Corporation, any
Holder may waive the provisions of this Section or increase or
decrease the Maximum Percentage to any other percentage specified
in such notice, but (i) any such waiver or increase will not be
effective until the 61st day after such notice is delivered to the
Corporation, and (ii) any such waiver or increase or decrease will
apply only to such Holder and not to any other Holder.
(b) Notwithstanding
anything to the contrary contained herein, the maximum number of
shares of Common Stock that the Company may issue pursuant to the
Transaction Documents at an effective purchase price less than the
Closing Price on the Trading Day immediately preceding the Closing
Date equals 19.99% of the outstanding shares of Common Stock
immediately preceding the Closing Date (the “
Issuable Maximum
”), unless the
Company obtains shareholder approval in accordance with the rules
and regulations of such Trading Market. If, at the time any Holder
requests a conversion of any of the Series A Preferred Stock, the
Actual Minimum (excluding any shares issued or issuable at an
effective purchase price in excess of the Closing Price on the
Trading Day immediately preceding the Closing Date) exceeds the
Issuable Maximum (and if the Company has not previously obtained
the required shareholder approval), then the Company shall issue to
the Holder requesting such exercise a number of shares of Common
Stock not exceeding such Holder’s pro-rata portion of the
Issuable Maximum (based on such Holder’s share
(vis-à-vis other Holders) of the aggregate purchase price paid
under the Purchase Agreement and taking into account any Series A
Preferred Stock previously issued to such Holder). For the purposes
hereof, “
Actual
Minimum
” shall mean, as of any date, the maximum
aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise
and/or conversion in full of all warrants issued pursuant to the
Transaction Documents and shares of Series A Preferred Stock,
without giving effect to any limits on the number of shares of
Common Stock that may be owned by a Holder at any one
time.
18.
Fractional Shares
. The
Corporation shall not be required to issue or cause to be issued
fractional Underlying Shares on conversion of Series A Preferred
Stock. If any fraction of an Underlying Share would, except for the
provisions of this Section, be issuable upon conversion of Series A
Preferred Stock, the number of Underlying Shares to be issued will
be rounded up to the nearest whole share.
19.
Notices
. Any and all notices or
other communications or deliveries hereunder (including without
limitation any Conversion Notice) shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior
to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next
Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii)
the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if
to the Corporation, to 55 5
th
Avenue, Suite 1702,
New York, New York 10003, attention Scot Cohen, or (ii) if to a
Holder, to the address or facsimile number appearing on the
Corporation’s stockholder records or such other address or
facsimile number as such Holder may provide to the Corporation in
accordance with this Section.
20.
Miscellaneous
.
(a)
The
headings herein are for convenience only, do not constitute a part
of this Certificate of Designations and shall not be deemed to
limit or affect any of the provisions hereof.
(b)
No provision of
this Certificate of Designations may be amended, except in a
written instrument signed by the Company and Holders of at least
51% of the shares of Series A Preferred Stock then
outstanding.
(c)
Any of the rights
of the Holders of Series A Preferred Stock set forth herein,
including any Equity Conditions, Triggering Events or any other
similar conditions for the Holders’ benefit, may be waived by
the affirmative vote of Holders of at least 51% of the shares of
Series A Preferred Stock then outstanding. No waiver of any default
with respect to any provision, condition or requirement of this
Certificate of Designation shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such
right.
IN
WITNESS WHEREOF, the Corporation has caused this First Amended and
Restated Certificate of Designations to be duly executed as of this
13th day of March, 2019.
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PETRO
RIVER OIL CORP.
By:
/s/ Stephen
Brunner
Name: Stephen
Brunner
Title:
President
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EXHIBIT A
ADDITIONAL DEFINITIONS
“Bankruptcy Event”
means any
of the following events: (a) the Company or any Subsidiary
commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction relating to the Company or any Subsidiary thereof; (b)
there is commenced against the Company or any Subsidiary any such
case or proceeding that is not dismissed within 60 days after
commencement; (c) the Company or any Subsidiary is adjudicated
insolvent or bankrupt or any order of relief or other order
approving any such case or proceeding is entered; (d) the Company
or any Subsidiary suffers any appointment of any custodian or the
like for it or any substantial part of its property that is not
discharged or stayed within 60 days; (e) the Company or any
Subsidiary makes a general assignment for the benefit of creditors;
(f) the Company or any Subsidiary fails to pay, or states that it
is unable to pay or is unable to pay, its debts generally as they
become due; (g) the Company or any Subsidiary calls a meeting of
its creditors with a view to arranging a composition, adjustment or
restructuring of its debts; or (h) the Company or any Subsidiary,
by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any
corporate or other action for the purpose of effecting any of the
foregoing.
“Change of Control”
means
the occurrence of any of the following in one or a series of
related transactions: (i) an acquisition after the date hereof by
an individual or legal entity or “group” (as described
in Rule 13d-5(b)(1) under the Exchange Act) of more than one-half
of the voting rights or equity interests in the Company; (ii) a
replacement of more than one-third of the members of the
Company’s board of directors that is not approved by those
individuals who are members of the board of directors on the date
hereof (or other directors previously approved by such
individuals); (iii) a merger or consolidation of the Company or any
Subsidiary or a sale of more than one-third of the assets of the
Company in one or a series of related transactions, unless
following such transaction or series of transactions, the holders
of the Company’s securities prior to the first such
transaction continue to hold at least two-thirds of the voting
rights and equity interests in the surviving entity or acquirer of
such assets; (iv) a recapitalization, reorganization or other
transaction involving the Company or any Subsidiary that
constitutes or results in a transfer of more than one-half of the
voting rights or equity interests in the Company; (v) consummation
of a “Rule 13e-3 transaction” as defined in Rule 13e-3
under the Exchange Act with respect to the Company, or (vi) the
execution by the Company or its controlling shareholders of an
agreement providing for or reasonably likely to result in any of
the foregoing events.
“Closing Price”
means, for
any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or
quoted on an Eligible Market or any other national securities
exchange, the closing bid price per share of the Common Stock for
such date (or the nearest preceding date) on the primary Eligible
Market or exchange on which the Common Stock is then listed or
quoted; (b) if prices for the Common Stock are then quoted on the
OTCQB Market, the closing bid price per share of the Common Stock
for such date (or the nearest preceding date) so quoted; (c) if
prices for the Common Stock are then reported in the “Pink
Sheets” published by OTC Markets (or a similar organization
or agency succeeding to its functions of reporting prices), the
most recent closing bid price per share of the Common Stock so
reported; or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser
selected in good faith by Purchaser.
“Common Stock”
means the
common stock of the Company, par value $0.00001 per share, and any
securities into which such common stock may hereafter be
reclassified.
“Eligible Market”
means any
of the New York Stock Exchange, the NYSE American, the Nasdaq
Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market and the OTCQB Market.
“Person”
means an individual
or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock
company, government (or an agency or subdivision thereof) or other
entity of any kind.
“Subsidiaries”
shall mean
Spyglass and
Bandolier Energy LLC,
each indirect subsidiaries of the Company.
“Trading Day”
means (a) any
day on which the Common Stock is listed or quoted and traded on its
primary Trading Market, or (b) if the Common Stock is not then
listed or quoted and traded on any Trading Market, then any
Business Day.
“Trading Market”
means the
OTCQB Market or any other Eligible Market or any national
securities exchange, market or trading or quotation facility on
which the Common Stock is then listed or quoted.
“Transaction Documents”
means the Purchase Agreement, this Certificate of Designations and
any other documents or agreements executed or delivered in
connection with the transactions contemplated hereby.
“
Triggering Event
” means any of the
following events: (a) immediately prior to any Bankruptcy Event;
(b) the Common Stock is not listed or quoted, or is suspended from
trading, on an Eligible Market for a period of five Trading Days
(which need not be consecutive Trading Days); (c) the Company fails
for any reason to deliver a certificate evidencing any securities
to a Purchaser within five Trading Days after delivery of such
certificate is required pursuant to any Transaction Document or the
exercise or conversion rights of the Holders pursuant to the
Transaction Documents are otherwise suspended for any reason; (d)
the Company fails to have available a sufficient number of
authorized but unissued and otherwise unreserved shares of Common
Stock available to issue the Underlying Shares upon conversion of
Series A Preferred Stock; (e) the Company effects or publicly
announces its intention to effect any exchange, recapitalization or
other transaction that effectively requires or rewards physical
delivery of certificates evidencing the Common Stock; (f) the
Company fails to make any cash payment required under the
Transaction Documents and such failure is not cured within five
days after notice of such default is first given to the Company by
a Purchaser; (g) the Company defaults in the timely performance of
any other obligation under the Transaction Documents and such
default continues uncured for a period of 20 days after the date on
which written notice of such default is first given to the Company
by a Purchaser (it being understood that no prior notice need be
given in the case of a default that cannot reasonably be cured
within 20 days).
“
Underlying Shares
” means the
shares of Common Stock issuable upon conversion of Series A
Preferred Stock.
EXHIBIT B
FORM OF CONVERSION NOTICE
(To be
executed by the registered Holder
in
order to convert shares of Series A Preferred Stock)
The
undersigned hereby elects to convert the number of shares of Series
A Convertible Preferred Stock indicated below into shares of common
stock, $0.0001 par value (the “
Common Stock
”), of Petro River Oil
Corp, a Delaware corporation (the “
Corporation
”), according to the
conditions hereof, as of the date written below.
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Date to
Effect Conversion
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Number
of shares of Series A Preferred Stock owned prior to
Conversion
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Number
of shares of Series A Preferred Stock to be Converted
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Stated
Value of shares of Series A Preferred Stock to be
Converted
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Number
of shares of Common Stock to be Issued
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Applicable
Conversion Price
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Number
of shares of Series A Preferred Stock subsequent to
Conversion
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Name of
Holder
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By:
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Name:
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Title:
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