ORBITAL TRACKINGCORP.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONSOF
SERIES J CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION 78 OF THE NEVADA REVISED STATUTES
The undersigned, Chief Executive Officer of Orbital Tracking Corp., a Nevada corporation (the “Corporation”) DOES HEREBY CERTIFY that the following resolutions were duly adopted by the Board of Directors of the Corporation by unanimous written consent on May 2, 2017;
WHEREAS, theBoard of Directors is authorizedwithinthelimitations and restrictionsstatedin the Articles of Incorporation of theCorporation, asamended(the“Articles”), to providebyresolution or resolutions for the issuance of 50,000,000shares of Preferred Stock, par value $0.0001 pershare, oftheCorporation, in such series and withsuch designations, preferences and relative,participating, optional or other special rights and qualifications,limitationsor restrictions as theCorporation’s Board of Directors shall fix by resolution or resolutionsproviding fortheissuance thereofduly adopted by the Board of Directors; and
WHEREAS, it is the desire of the Board of Directors, pursuantto itsauthorityas aforesaid, to authorize and fix theterms of anewseries of Preferred Stock and thenumber of shares constituting such series.
NOW, THEREFORE, BE IT RESOLVED:
Section 1.Designation and Authorized Shares. TheCorporation shall beauthorized to issue one hundred twenty five thousand (125,000) shares of Series J Preferred Stock, parvalue $0.0001pershare (the “Series J Preferred Stock”).
Section 2.Stated Value. Eachshare ofSeries J Preferred Stockshall have astated value often dollars ($10.00) (the“Stated Value”).
Section 3.Liquidation.
(a) Upon the liquidation, dissolution orwinding up of thebusinessof the Corporation, whethervoluntary orinvoluntary,each holder of Series J Preferred Stockshall be entitled to receive, for each share thereof, out of assets of the Corporation legallyavailable therefor, a preferentialamount in cash equal to (and notmorethan) the StatedValue. All preferential amounts to bepaidto the holders of Series J Preferred Stock in connection withsuch liquidation, dissolutionor winding upshall be paid before thepaymentor setting apart forpayment of anyamountfor, or the distribution of any assets of the Corporationto the holdersof(i) any other class or series of capital stock whose terms expressly provide that the holders of Series K Preferred Stock should receive preferential payment with respect to such distribution (to the extent of such preference) and (ii) the Corporation’s common stock (the “Common Stock”).If upon anysuch distribution the assets of the Corporation shall be insufficient topay the holders of theoutstanding shares of Series J Preferred Stock (or theholders ofanyclass or series of capital stock ranking on a paritywith theSeries J Preferred Stock as to distributionsin the event of a liquidation, dissolution or winding up of the Corporation)the fullamountstowhich they shall beentitled, such holdersshall share ratably in any distribution of assets in accordance with thesums which would be payable on suchdistributionif all sums payablethereon were paid infull.
(b) Anydistribution inconnection with the liquidation, dissolution or winding up of the Corporation, or anybankruptcy or insolvency proceeding, shall bemade in cash to the extent possible. Whenever any such distribution shall be paid inproperty other than cash,thevalue ofsuch distribution shall bethefair market value of such property asdetermined in goodfaithby the Board of Directors of the Corporation.
Section 4.Conversion.
(a)Conversion Right. Eachshareof Series J Preferred Stockmay, from time to time, beconvertedintoshares of fully paidand nonassessable shares ofCommon Stock (the“Conversion Shares”) in anamount equal to (i)multiplying the number of shares to be convertedby the StatedValuethereof, and then (ii)dividing the result bythe Conversion Price ineffect immediately prior tosuch conversion. The initial conversion price per share of Series J Preferred Stock (the “Conversion Price”)shall be$0.01 per share,subjecttoadjustment as applicable in accordance withSection 8 below.
(b)Conversion Procedure. In order to exercise the conversion privilege under thisSection4, the holder of any shares of Series J Preferred Stock tobe converted shall givewritten notice tothe Corporation at its principaloffice that such holder elects to convertsuchshares of Series J Preferred Stock or a specified portion thereof intoshares of Common Stock as set forth in suchnotice. Atsuchtime as the certificate or certificates representing the Series J Preferred Stock which has beenconvertedare surrendered to theCorporation, the Corporation shall issue and deliver a certificate orcertificates representing thenumberof shares of Common Stock determinedpursuant to thisSection4. In case of conversion of only a part of the shares of Series J Preferred Stock represented by a certificate surrendered tothe Corporation, the Corporation shall issue and deliver a new certificate for thenumber ofshares ofSeries J Preferred Stock which have not beenconverted. Until such time as the certificate or certificates representing Series JPreferred Stock which has been convertedaresurrendered to theCorporation and a certificate orcertificatesrepresenting theCommon Stock intowhich such Series J Preferred Stock has been converted have been issuedand delivered,the certificate or certificates representing the Series J Preferred Stock which have beenconverted shall represent the shares ofCommon Stock intowhich such shares of Series J Preferred Stock have beenconverted. The Corporation shall pay alldocumentary, stamp or similar issue or transfer tax due on theissueof shares of Common Stock issuable upon conversion of the Series J Preferred Stock.
(c)Maximum Conversion. Notwithstanding anything to the contrarycontained herein, a holder of shares of Series J Preferred Stock shall not beentitledtoconvert shares of Series J Preferred Stock if upon such conversionthe number of shares ofCommon Stock to be received, togetherwiththenumber of shares ofCommon Stock beneficially ownedby theholder and itsaffiliates on the conversion date, wouldresultin beneficial ownershipby the holder and itsaffiliatesofmore than 4.99% of the outstanding shares of Common Stock oftheCorporation on suchconversion date. For thepurposesof the provision in the immediately preceding sentence, beneficial ownership shall bedeterminedinaccordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, andRegulation 13d-3thereunder. The holder shall have theauthority and obligation todeterminewhether therestriction contained in this Section4(c)willlimit any conversion hereunderand to the extent that the holderdetermines that thelimitationcontained in this Section applies, thedetermination of thenumberof shares of Series J Preferred Stock that areconvertible shall be theresponsibilityand obligation of the holder.
Section 5.Voting. Except as otherwise expressly required bylaw, the conversionlimitationsof Section 4(c) or this Section 5, each holder of Series J Preferred Stockshallbe entitledto vote on all matters submitted to shareholders of theCorporationand shall beentitled to onevote for eachshare of Series J Preferred Stock owned on the record date for thedeterminationof shareholdersentitled to vote on such matter or, if no such record date is established, on the datesuch vote is taken or anywritten consent of shareholders is solicited. Except as otherwise required bylaw or this Section 5,the holders of shares ofSeries J Preferred Stock shall vote togetherwith the holders of Common Stock on allmatters and shall not vote as aseparate class.
Section 6.Other Provisions. The Corporation and its transfer agent, if any, for the Series JPreferred Stockmay deem andtreat the recordholder of any shares ofSeries J Preferred Stock and, upon conversion ofthe Series J Preferred Stock, the Conversion Shares, as reflected on the booksand records of the Corporationasthe sole true and lawful owner thereof forall purposes, andneitherthe Corporation nor any such transfer agent shall be affected by any notice to thecontrary.
Section 7.Restriction andLimitations.Except as expresslyprovided herein or as required by law, solongas any shares of Series J Preferred Stockremain outstanding,the Corporation shallnot, without the vote or written consent of the holders of at least a majority of the thenoutstanding shares of the Series J Preferred Stock, takeany action which wouldadversely andmaterially affect any of thepreferences,limitations or relative rights of the Series J Preferred Stock, including without limitation:
(a) Reduce theamount payable to the holders of Series J Preferred Stock upon thevoluntaryor involuntary liquidation, dissolution orwinding up of theCorporation,or change the relative seniority of the liquidationpreferences ofthe holders of Series J PreferredStock to the rights uponliquidationofthe holders of any other capital stock intheCorporation; or herein.
(b) Cancelor modifyadversely and materiallythe voting rights asprovided in Section 5.
(c)For a period of one (1) year from the date of filing this COD (i) the Company shall not issue any or become subject to any indebtedness greater than $250,000, except for ordinary trade payables without the written consent of holders then holding more than 50% of the shares of Series J Preferred Stock (the “Required Majority”) and (ii) the Company shall not issue any equity securities of the Company without the consent of the Required Majority, of which will not be unreasonably withheld, except for shares issued upon the conversion of currently existing securities or shares issued pursuant to the Company’s duly adopted equity incentive plan and as disclosed herewith inor for one yearfollowing the date of filingthis COD.
Section 8.Certain Adjustments.
(a)Dividend, Subdivision or Combination of CommonStock.If the Corporationshall, at anytimeor from time to time, (i) pay a dividend or make any otherdistribution upon theCommon Stock or any other capital stock of the Corporation payablein shares ofCommon Stock orin orsecurities convertible into Common Stock, or (ii)subdivide(by anystock split, recapitalization orotherwise)itsoutstanding shares ofCommon Stock into a greaternumber of shares, the Conversion Price ineffect immediately prior toany such dividend, distribution or subdivisionshallbeproportionately reducedand the numberof Conversion Shares issuable uponconversion of the Series J Preferred Stock shall be proportionatelyincreased. If the Corporation atany time combines (bycombination, reverse stock split or otherwise) its outstanding shares ofCommon Stockinto asmaller number of shares, the ConversionPrice ineffectimmediatelyprior tosuch combinationshall be proportionatelyincreased and thenumberof Conversion Shares issuableupon conversion ofthe Series J Preferred Stock shall beproportionately decreased. Any adjustment underthis Section8(a) shall become effectiveat theclose ofbusiness on the date the dividend, subdivision orcombination becomes effective.
(b)FundamentalTransaction.Inthe event of any(i) capital reorganization of theCorporation, (ii) reclassification of the stock of the Corporation (other than a change in par value or from par value to no par value or from nopar valuetopar value oras aresultof astock dividend orsubdivision, split-up orcombination of shares), (iii) consolidation ormergerof theCorporation with orinto anotherentity, (iv) sale ofall orsubstantially all of theCorporation’sassets or (v) othersimilar transaction (other than any such transaction covered by Section 8(a), in each case which entitles the holders of Common Stockto receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange forCommonStock, eachshare of Series J Preferred Stock shall, immediately after such reorganization,reclassification, consolidation,merger,sale orsimilar transaction,remainoutstanding and shall thereafter,in lieu of or inadditionto (as the case may be) thenumber of Conversion Shares then convertible for such share, beexercisable for the kind andnumberof shares of stock or other securities or assets of the Corporation or of the successor person resulting from such transaction to which suchshare would have beenentitleduponsuch reorganization, reclassification, consolidation,merger,sale orsimilar transaction if thesharehad beenconverted in full immediately prior to thetimeof such reorganization, reclassification, consolidation,merger, sale or similartransaction and acquired the applicable number of Conversion Shares then issuable hereunder as a result of suchconversion (withouttakinginto accountany limitations or restrictions on theconvertibilityof suchshare, if any);and, insuch case,appropriate adjustment shall bemade with respect to suchholder’srights under this Certificate ofDesignation to insure that the provisions of this Section 8hereof shall thereafter beapplicable,as nearly as possible, to the Series J Preferred Stock inrelation toany shares of stock, securities or assets thereafter acquirable upon conversion of Series J Preferred Stock (including, inthe case of anyconsolidation, merger, sale orsimilar transaction inwhich the successor or purchasing person is other than the Corporation,an immediate adjustmentin the Conversion Price to the value per share for the Common Stock reflectedbytheterms of suchconsolidation, merger,sale orsimilar transaction, and a correspondingimmediateadjustment to thenumber of Conversion Shares acquirable upon conversion of the Series JPreferred Stock withoutregardto anylimitations or restrictions on conversion, if the value so reflected is less than theConversion Price ineffectimmediately priorto such consolidation, merger, sale orsimilartransaction). The provisions of this Section 8(b)shall similarly apply tosuccessive reorganizations, reclassifications, consolidations,mergers,sales or similartransactions. The Corporation shall noteffectany such reorganization, reclassification, consolidation,merger, saleor similar transaction unless, prior to the consummation thereof,the successor person (if other thanthe Corporation) resulting from suchreorganization,reclassification, consolidation,merger, sale or similartransaction,shall assume, by written instrument substantiallysimilar in form and substance to this Certificate of Designation, the obligation to deliver to the holders of Series J Preferred Stock suchsharesof stock,securities or assetswhich,in accordance with the foregoing provisions, such holders shall be entitled to receive upon conversion of the Series J Preferred Stock.
IN WITNESS WHEREOF, the undersigned have executed thisCertificate of Designation this 31stday of May 2017.
| | ORBITAL TRACKING CORP. |
| | | |
| | By: | /s/ David Phipps |
| | Name: | David Phipps |
| | Title: | ChiefExecutive Officer |
