Page 9 of 13 – SEC Filing
CUSIP No. 52110H 100
The foregoing summary of the Securities Purchase Agreement does not purport to be complete and is subject to,
and qualified in its entirety by, the full text of the form of Securities Purchase Agreement, which is filed as Exhibit 2 to this Schedule 13D and is incorporated by reference herein.
Preferred Stock and Appointment of Shackelton as Director
Pursuant to the Certificate of Designations of the Preferred Stock (the Certificate of Designations), the Preferred Stock will rank senior
to all outstanding capital stock of the Issuer. Except as required by law, holders of the Preferred Stock will be entitled to vote on an as-converted basis together with the holders of the Common Stock, and
not as a separate class, at any annual or special meeting of the Issuers stockholders. The Preferred Stock will be convertible into Common Stock at the holders election at any time, at an initial conversion price of $10.0625 per share of
Common Stock, subject to adjustment (as may be adjusted, the Conversion Price). The Conversion Price will be subject to adjustment for stock dividends, forward and reverse splits, combinations and similar events, as well as for
certain dilutive issuances.
Dividends on the Preferred Stock will accrue at an initial rate of 8% per annum (the Dividend Rate),
compounded quarterly, and be payable quarterly in arrears. If the Issuer does not declare and pay dividends on any dividend payment date, such accrued and unpaid dividends, until paid in full in cash, will accrue at the then applicable Dividend Rate
plus 2%. The Dividend Rate may increase to 11% per annum, compounded quarterly, depending on the Issuers senior indebtedness less unrestricted cash.
If, at any time following the second anniversary of the issuance of the Preferred Stock, the volume weighted average price of the Common Stock equals or
exceeds $25.00 (as adjusted for stock dividends, splits, combinations and similar events) for a period of thirty consecutive trading days, the Issuer may force the conversion of any or all of the outstanding Preferred Stock at the Conversion Price
then in effect. From and after the eighth anniversary of the issuance of the Preferred Stock, the Issuer may elect to redeem all, but not less than all, of the outstanding Preferred Stock in cash at the stated value thereof plus all accrued and
unpaid dividends. From and after the ninth anniversary of the issuance of the Preferred Stock, each holder of Preferred Stock has the right to require the Issuer to redeem all of such holders outstanding shares of Preferred Stock in cash at
the stated value thereof plus all accrued and unpaid dividends.
Under the Certificate of Designations, so long as shares of the Preferred Stock are
outstanding, the holders thereof, by the vote or written consent of the holders of a majority in voting power of the outstanding shares of the Preferred Stock, have the right to designate two members to the board of directors of the Issuer. In
connection with the Closing, Shackelton was appointed a Class C director of the Issuers board of directors to serve until the Issuers annual meeting to be held in 2021.
The foregoing summary of the Certificate of Designations does not purport to be complete and is subject to, and qualified in its entirety by, the full text of
the Certificate of Designations, which is filed as Exhibit 3 to this Schedule 13D and is incorporated by reference herein.
Warrants
Each Warrant represents the right to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment as discussed below. The Warrants
have a five-year exercise term and are immediately exercisable. The Warrants may be exercised on a cashless basis at any time at the holders option and include adjustments on the happening of certain other actions.
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