Page 17 of 23 – SEC Filing
| CUSIP No. 532403201 | Page 17 of 24 |
The Company has the right to redeem the Series C Preferred Stock, in whole or in part at any
time (subject to certain limitations on partial redemptions), at a price per share equal to (i) the Stated Value then in effect multiplied by (a) 120% if redeemed during 2018, (b) 125% if redeemed during 2019 or (c) 130% if redeemed after 2019,
plus (ii) accrued and unpaid dividends thereon and any other amounts payable by the Company in respect thereof (the Optional Redemption Amount).
Each share of Series C Preferred Stock is convertible at any time at the option of the holder into a number of shares of Common Stock equal to
(i) the applicable Optional Redemption Amount divided by (ii) a conversion price of $6.15, subject to adjustment (the Conversion Price).
Following the Closing Date, each share of Series C Preferred Stock became immediately convertible into 19,512,195 shares of Common
Stock, based on an initial Conversion Price of $6.15 and the initial Optional Redemption Amount of 120% of the Stated Value.
Board
Appointment Rights
The Certificate of Designation provides that holders of shares of Series C Preferred Stock will have the right,
voting separately as a class, to designate (i) two members of the Companys board of directors (the Board) for as long as the shares of Common Stock issuable on conversion of the outstanding shares of Series C Preferred Stock
represent at least 15% of the outstanding shares of Common Stock (giving effect to conversion of all outstanding shares of Series C Preferred Stock) and (ii) one member of the Board for as long as the shares of Common Stock issuable on
conversion of the outstanding shares of Series C Preferred Stock represent at least 7.5% of the outstanding shares of Common Stock (giving effect to conversion of all outstanding shares of Series C Preferred Stock).
The Securities Purchase Agreement separately grants to the Purchasers substantially identical rights to appoint members of the Board as long
as the Purchasers and their affiliates beneficially own (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) shares of Common Stock issued or issuable upon conversion of shares of
Series C Preferred Stock representing the 15% and 7.5% thresholds of the outstanding Common Stock described above. However, the number of members of the Board the Purchasers have the right to designate under the Securities Purchase Agreement will be
reduced by the number of directors holders of shares of Series C Preferred Stock have the right to appoint under the Certificate of Designation.
In both the Certificate of Designation and Securities Purchase Agreement, the number of Board members the Purchasers may appoint is subject to
adjustment, upward or downward, as may be required by applicable law or stock exchange rules. The Company will be required to appoint the two Board members initially designated by the holders of shares of Series C Preferred Stock within ten business
days after notice to the Company from the holders of the identity of such designees, subject to confirmation that such designees meet the qualifications set forth in the Securities Purchase Agreement and Certificate of Designation.
Standstill
The
Securities Purchase Agreement includes a customary standstill provision pursuant to which the Purchasers agreed that they will not, directly or indirectly, take certain actions with respect to the Company or its securities until the earlier of
(i) the date on which the Purchasers and their affiliates are no longer entitled to designate any member of the Board pursuant to the Certificate of Designation or the Securities Purchase Agreement and (ii) the failure of the Company to
pay dividends on the Series C Preferred Stock in full in cash on any dividend payment date occurring after April 26, 2021.
Registration Rights Agreement
In connection with the issuance of the Preferred Shares, on January 31, 2018, the Issuer and the Purchasers entered into a registration
rights agreement (the Registration Rights Agreement) pursuant to
