Towerstream Corporation (NASDAQ:TWER) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01Entry into a Material Definitive Agreement.

Series D Preferred Stock

On December 30, 2016, the Company amended the terms (the
Amendment) of its Series D Preferred Stock and cancelled 50% of
its Series D Preferred stock remaining outstanding to an exchange
agreement. The Amendment eliminates a 200% liquidation preference
of the Series D Preferred Stock under which the holder would have
been entitled to 200% of the invested amount upon a merger, sale,
asset sale, liquidation or similar event. Following the
Amendment, holders of Series D Preferred Stock will continue to
be entitled to receive 100% (versus 200%) of the amount invested
upon the occurrence of a Fundamental Transaction (as defined in
the Series D Preferred Stock Certificate of Designations). In
addition, the holders of Series D Preferred Stock entered into an
exchange agreement (the Exchange Agreement) under which 1,233
shares of Series D Preferred Stock (the Exchange Securities) of
the total of 2,466 shares of Series D Preferred Stock then
outstanding were cancelled in exchange for 1,233 shares of the
Companys newly designated Series F Preferred Stock, with the
effect of reducing the conversion discount on conversions of
Series F Preferred Stock to 90% of the VWAP of the common stock
during the five trading days prior to conversion with a
conversion floor of $0.20 per common share. Prior to the
Amendment the Series D Preferred Stock had provided for a
conversion price equal to 75% of the closing price on the day
immediately preceding conversion. The terms of the Exchange
Agreement and Series F Preferred Stock were determined by
arms-length negotiation between the parties. Other than as
described herein, the terms of the Series D Preferred Stock were
not amended. No commission or other payment was received by the
Company in connection with the Exchange Agreement. Such exchange
was conducted to the exemption provided by Section3(a)(9) of the
Securities Act of 1933, as amended (the Securities Act), and
Series F Preferred Stock issuable to the Exchange Agreement and
the shares of common stock issuable upon conversion of the Series
F Preferred Stock will be issued in reliance on the exemption
from registration contained in Section3(a)(9) of the Securities
Act.

Series F Preferred Stock

On December 30, 2016 the Company filed with the Secretary of
State of the State of Delaware a Certificate of Designations of
Preferences, Rights and Limitations of Series F Convertible
Preferred Stock (the Series F Certificate of Designations).
Shares of Series F Preferred Stock are convertible into common
stock based on a conversion calculation per share equal to the
quotient of the stated value of such Series F Preferred Stock,
plus all accrued and unpaid dividends, if any, divided by the
conversion price. The stated value of each share of Series F
Preferred Stock is equal to $1,000 and the initial conversion
price is equal to 90% of the VWAP of the common stock during the
five trading days prior to conversion, subject to adjustment for
stock splits, stock dividends, recapitalizations, combinations,
subdivisions or other similar events, but not less than $0.20 per
share. So long as the common stock is not listed on a national
exchange in the event the Company issues securities at a price
per share of common stock less than the then conversion price of
the Series F Preferred Stock the conversion price of the
outstanding shares of Series F Preferred Stock shall be reduced
to such lower price.

In the event of a Liquidation Event, each share of Series F
Preferred Stock will be entitled to a per share preferential
payment equal to 100% of the stated value of such Series F
Preferred Stock, plus all accrued and unpaid dividends, if any.
All subsequent issuances and junior preferred issuances of our
capital stock will be junior in rank to Series F Preferred Stock
with respect to the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding-up of
the Company. The holders of Series F Preferred Stock will be
entitled to receive dividends if and when declared by our board
of directors. The Series F Preferred Stock shall participate on
an as converted basis, with all dividends declared on our common
stock. In addition, if we grant, issue or sell any rights to
purchase our securities pro rata to all our record holders of our
common stock, each holder will be entitled to acquire such
securities applicable to the granted purchase rights as if the
holder had held the number of shares of common stock acquirable
upon complete conversion of all Series F Preferred Stock then
held.

We are prohibited from effecting a conversion of the Series F
Preferred Stock to the extent that, as a result of such
conversion, the holder would beneficially own more than 9.99% of
the number of shares of common stock outstanding immediately
after giving effect to the issuance of shares of common stock
upon conversion of the Series F Preferred Stock, which beneficial
ownership limitation may be decreased by the holder at its
option. Each holder is entitled to vote on all matters submitted
to stockholders of the Company, and shall have the number of
votes equal to the number of shares of common stock issuable upon
conversion of such holders Series F Preferred Stock, but not in
excess of the beneficial ownership limitations. The foregoing
description of the Series F Certificate of Designations is not
complete and is qualified in its entirety by reference to the
full text of the Series F Certificate of Designations, a copy of
which is filed as Exhibit 3.1 to this report and is incorporated
herein by reference.

Item 3.02Unregistered Sales of Equity
Securities.

The information set forth in Item 1.01 is incorporated herein by
reference.

Item 5.03Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.

The information set forth in Item 1.01 is incorporated by
reference herein. On December 30, 2016, the Company filed with
the Secretary of State of the State of Delaware a Certificate of
Amendment (the Certificate of Amendment) to the Amended and
Restated Certificate of Designations of Preferences, Rights and
Limitations of Series D Convertible Preferred Stock originally
filed with the Secretary of State of Delaware on November 22,
2016. The foregoing description of the Certificate of Amendment
is not complete and is qualified in its entirety by reference to
the full text of the Certificate of Amendment, a copy of which is
filed as Exhibit 3.2 to this report and is incorporated herein by
reference.

Item 9.01Financial Statements and Exhibits

(d) Exhibits.