CERTIFICATE OF DESIGNATION
SETTING FORTH THE PREFERENCES, RIGHTS
AND LIMITATIONS OF SERIES C CONVERTIBLE PREFERRED
STOCK OF IMMUNOMEDICS, INC.
IMMUNOMEDICS, INC. , a Delaware corporation
(the "Company") certifies that pursuant to the authority contained
in Article IV of its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the
following resolution creating a series of its preferred stock to be
designated Series C Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized
preferred stock of the Company be hereby created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations
and restrictions thereof are as follows:
Section 1. Designation, Amount, Ranking and Par
Value. The designation of the series of Preferred Stock shall
be "Series C Convertible Preferred Stock" (this "Series") and
the number of shares constituting this Series shall be
200,000. The par value of each share of this Series shall be
$0.01. Shares of this Series shall have a stated value of $50
per share (the "Stated Value"). The shares of this Series shall
rank prior to the Junior Stock (as defined below) as to
distribution of assets (upon liquidation or otherwise) and
payment of dividends.
Section 2. Dividends.
(a) The Holders shall not be entitled to receive
dividends unless a dividend is declared on any Junior Stock.
(b) No dividend or distribution in cash or
other property on the Junior Stock (other than a dividend or
distribution described in Section 6) shall be declared or paid
or set apart for payment unless, at the same time, the same
dividend or distribution is declared or paid or set apart, as
the case may be, on each share of this Series in the amount
equal to the product of (i) the declared dividend on the
Junior Stock and (ii) the Conversion Ratio (defined below) in
effect on the Record Date (as defined below).
(c) Any record date (the "Record Date") and
the payment date for this Series shall be the same as the
respective record date and payment date for dividends or
distributions on any Junior Stock.
Section 3. Redemption. Prior to the expiration of the
Conversion Term (as defined below), the shares of this
Series shall not be redeemable at the option of the
Company, except by agreement between the Company and
the Holder. After expiration of the Conversion Term, the
Company may redeem any shares of this Series at a price
equal to the Stated Value.
Section 4. Voting Rights. The holders shall not be
entitled to vote on matters submitted to the vote of the
holders of Common Stock. However, so long as any shares
of this Series are outstanding, the Company shall not,
without the affirmative vote of the Holders of two-thirds of
the outstanding shares of this Series, (i) alter or change the
powers, preferences or rights given to this Series adversely
or (ii) authorize or create any series or class of capital stock
or issue any shares of capital stock ranking as to dividends
or distribution of assets (upon liquidation or otherwise) prior
to or pari passu with this Series.
Section 5. Liquidation. In the event of any complete
liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary, the Holders shall be
entitled to receive out of the assets of the Company,
whether such assets are capital or surplus, for each share of
this Series an amount equal to $50.00 per share before any
distribution shall be made to the holders of Junior Stock of
the Company, and if the assets of the Company shall be
insufficient to pay in full such amounts, then such assets
shall be distributed among such Holders ratably in
accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were
paid in full.
Section 6. Conversion.
(a) Each share of this Series shall be
convertible into shares of Common Stock at the Conversion
Ratio, at the option of the Holder in whole or in part at any
time prior to the expiration of the Conversion Term. The
Company shall give to each Holder 30 days prior written
notice of the expiration of the Conversion Term. The
Holders shall effect conversions by delivering to the
Company a written notice substantially in the form of
conversion notice set forth on the reverse of the certificate
evidencing shares of this Series (the "Conversion Notice"),
which Conversion Notice, once given, shall be irrevocable.
(b) No later than five (5) Trading Days
following the last day of the applicable Pricing Period, each
Holder, who is converting shares, shall deliver to the
Company the certificate or certificates representing the
shares of the Series to be converted and within five (5)
Trading days thereafter the Company will deliver to such
Holder (i) a certificate or certificates which shall be free of
restrictive legends and "stop transfer" restrictions
representing the number of shares of Common Stock being
acquired upon the conversion of shares of this Series and (ii)
if the Holder is converting less than all shares of this Series,
a certificate for such number of shares of this Series as have
not been converted.
(c)(i) The Conversion Price (the "Conversion
Price") in effect on any Conversion Date or Record Date
shall equal 90 1/4% of the Pricing Period Average Price;
provided, however, that if the Average Price during the last
fifteen (15) Trading Days of a relevant Pricing Period
exceeds the Average Price during the first fifteen (15)
Trading Days of such Pricing Period by at least 30% but less
than 40%, then the Conversion Price shall equal 95 1/2% of
the Pricing Period Average Price; and provided, further, that
if the Average Price during the last fifteen (15) Trading Days
of a Pricing Period exceeds the Average Price during the
first fifteen (15) Trading Days of such Pricing Period by at
least 40%, then the Conversion Price shall equal the Pricing
Period Average Price.
(ii) If the Company, during any Pricing
Period, shall (A) pay a stock dividend or otherwise make a
distribution or distributions on shares of its Junior Stock
payable in shares of its capital stock (whether payable in
shares of its Common Stock or of capital stock of any class),
(B) subdivide outstanding shares of Common Stock into a
larger number of shares, (C) combine outstanding shares of
Common Stock into a smaller number of shares, (D) issue
by reclassification of shares of Common Stock any shares of
capital stock of the Company, (E) issue rights or warrants to
all holders of Common Stock (but not to the Holders)
entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share less than the
Per Share Market Value of Common Stock at the record date
for determining holders entitled to receive such rights, (F)
distribute to all holders of Common Stock (and not to the
Holders) rights or warrants to subscribe for or purchase any
security (excluding those referred to in subsection 6(c)(ii)(E)
above), or (G) take any other action similar to the above
which materially and adversely affects the rights of the
Holders different than or distinguished from the effects
generally on the rights of the holders of any other class of
the Company's capital stock), the Company shall make an
appropriate adjustment to the Average Price for each
Trading Day in the Pricing Period prior to the record date or
effective date of such event so as to continue to give to each
Holder, the economic value of the Conversion Price
formula set forth in Section 6(c)(i), as determined by the
Board of Directors of the Company in good faith; provided,
however that if the Holders of a majority in interest of the
shares of this Series ("Majority in Interest") disagree with the
determination of the Board of Directors, then the Holders of
a Majority in Interest and the Company shall each in good
faith select a national or regional investment banking firm or
firm of independent certified public accountants of
recognized standing (which may be the firm that regularly
examines the financial statements of the Company) (an
"Appraiser") who shall mutually agree on the amount, if any
of the adjustment required by this section and provided,
further that if the Appraisers are unable to agree, the amount
of the adjustment be equal to the average of the
determinations by each such Appraiser.
(iii) Whenever an adjustment is
required pursuant to Section 6(c)(ii), the Company shall
promptly mail to each Holder a notice setting forth the
Average Prices after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
(iv) In case of any reclassification of
the Common Stock, any consolidation or merger of the
Company with or into another person, sale or transfer of all
or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other
securities, cash or property, then the Holders shall have the
right thereafter to convert such shares only into the kind and
amount of shares of stock and other securities and property
receivable upon or deemed be held following such
reclassification, consolidation, merger, sale, transfer or share
exchange by a Holder of a number of shares of the
Common Stock of the Company into which such shares this
Series could have been converted immediately prior to such
reclassification, consolidation, merger, sale, transfer or share
exchange. The terms of any such consolidation, merger,
sale, transfer or share exchange shall include such terms so
as to continue to give to each Holder, the economic value
of the Conversion Price formula set forth in Section 6(c)(i)
following such consolidation, merger, sale, transfer or share
exchange. This provision shall similarly apply to successive
reclassifications, consolidation, mergers, sales, transfers or
share exchanges.
(v) All calculations under this Section
6 shall be made to the nearest cent or the nearest 1/l00th of
a share, as the case may be.
(d) The Company shall at all times reserve
and keep available, out of its authorized and unissued
Common Stock solely for the purpose of issuance upon
conversion of this Series as herein provided, free from
preemptive rights or any other actual or contingent purchase
rights of Persons other than the Holders, such number of
shares of Common Stock as shall be issuable upon the
conversion of all outstanding shares of this Series. All
shares of Common Stock that shall be so issued upon
conversion of shares of this Series shall be duly and validly
issued and fully paid and nonassessable.
(e) The Company shall not be required to
issue stock certificates representing fractions of shares of
Common Stock, but may if otherwise permitted, make a
cash payment in respect of any final fraction of a share
based on the Per Share Market Value at such time. If the
Company elects not, or is unable, to make such a cash
payment, each Holder shall be entitled to receive, in lieu of
the final fraction of a share, one whole share of Common
Stock.
(f) The issuance of certificates for shares of
Common Stock on conversion of this Series shall be made
without charge to the Holders for any documentary stamp
or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided, that the Company
shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the
Holder converted and the Company shall not be required to
issue or deliver such certificates unless or until the person
or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax
has been paid.
(g) The Company shall have no right to
require any Holder to convert any or all of this Series into
Common Stock.
(h) Shares of this Series converted into
Common Stock shall be canceled and shall have the status
of authorized but unissued shares of Preferred Stock but
may not be reissued as shares of this Series.
(i) If the Company should make an
authorization or declaration of any event pursuant to this
Section 6 during a Pricing Period, the Holders of a Majority
in Interest may in their sole discretion, elect by written
notice to the Company to reduce the term of the Pricing
Period to the Trading Day immediately preceding the date
of such authorization or declaration and to accelerate the
delivery of the shares to a date which is five (5) business
days after the date of the notice given by such Holders.
(k) If Company intends to initiate a public
offering of its securities during the Conversion Term, in an
amount exceeding $12 million in the aggregate and the
Company reasonably believes that the conversion of any
shares of this Series may have an adverse effect on the
ability of the Company to complete such offering or the
price at which such securities could be sold therein, the
Company, upon at least 30 days' prior written notice to all
Holders, may suspend the right of all Holders to convert
such shares pursuant to Section 6 for the period
commencing on the date the Company files with the
Securities and Exchange Commission a registration
statement under the Securities Act of 1933 and terminating
30 days after the closing of the public offering relating
thereto; provided, however, that such period shall not
exceed four months and provided, further, that the last day
of the Conversion Term shall be extended for 120% of such
number of days as the conversion right was suspended.
Section 7. Definitions. For the purposes hereof, the
following terms shall have the following meanings:
"Average Price" means, with respect to any
Trading Day, (a) if the Common Stock is then listed or
quoted on a principal stock exchange or The Nasdaq Stock
Market, the average (rounded to the nearest thousandth of a
dollar) of the high and low sales price on such day of the
Pricing Period or (b) if the Common Stock is not listed or
quoted on a principal stock exchange or The Nasdaq Stock
Market but is quoted in the over-the-counter market, the
average (rounded to the nearest thousandth of a dollar) of
the average of the daily closing bid and ask price on such
day.
"Common Stock" means shares now or
hereafter authorized of the class of Common Stock, $0.01
par value, of the Company presently authorized and stock
of any other class into which such shares may hereafter
have been reclassified or changed.
"Conversion Date" means the last day of the
relevant Pricing Period.
"Conversion Ratio" means a fraction, of which
the numerator is Stated Value, and of which the
denominator is the Conversion Price.
"Conversion Term" means the period
commencing on the date that the shares of this Series are
issued and ending on the date that is 180 calendar days
after the date of initial issuance of shares of this Series, or
such later date as the Company and the Holder may agree,
and provided that (a) if the Average Price during the 60
Trading Day period ending on the expiration date of such
initial 180-day period is greater than $7.00 but less than
$10.00 the Conversion Term shall be extended to the date
that is 300 calendar days after the date of initial issuance of
shares of this Series, (b) if the Average Price during the 60
Trading Day period ending on the expiration date of such
initial 180-day period is greater than $5.00 but less than
$7.00, then the Conversion Term shall be extended to the
date that is 360 calendar days after the date of the initial
issuance of shares of this Series, and (c) if the Average Price
during the 60 Trading Day period ending on the expiration
date of such initial 180-day period is less than $5.00, then
the Conversion Term shall be extended to the date that is
600 calendar days after the date of initial issuance of shares
of this Series. If there occurs an event of the type listed in
Section 6(c)(ii), the Company shall make appropriate
adjustment to the dollar amount set forth in this paragraph.
"Junior Stock" means the Common Stock of
the Company and any other capital stock of the Company,
except as to shares of capital stock of any series or class
which, by its terms, is prior in right of distribution to the
shares of this Series.
"Holder" means a holder of record of
outstanding shares of this Series. Any notice required or
permitted to be given to a Holder shall be given to such
Holder at its last address as it shall appear upon the stock
books of the Company.
"Per Share Market Value" means on any
particular date (a) the last sale price per share of the
Common Stock on such date on the principal stock
exchange or The Nasdaq Stock Market, as the case may be,
on which the Common Stock is then traded or, if there is no
such price on such date, then the last price on such
exchange on the date nearest preceding such date, or (b) if
the Common Stock is not listed on any stock exchange or
The Nasdaq Stock Market, the average of the bid and asked
price for a share of Common Stock in the over-the-counter
market as reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding
to its functions of reporting prices), or (c) if the Common
Stock is no longer publicly traded the fair market value of a
share of Common Stock as determined by an Appraiser
selected in good faith by the Holders of a Majority in
Interest; provided, however, that if the Company, after
receipt of the determination by such Appraiser shall have
the right to select an additional Appraiser, in which case,
the fair market value shall be equal to the average of the
determinations by each such Appraiser; provided further
that none of the transactions related to the foregoing
determination shall include purchases by any "affiliate" (as
such term is defined in the General Rules and Regulations
under the Securities Act of 1933) of the Company.
"Person" means a corporation, an association,
a partnership, organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
"Pricing Period" means the fifteen (15)
Trading Days immediately preceding the date of the related
Conversion Notice (or Record Date for distributions) and the
fifteen (15) Trading Days commencing on the date of the
related Conversion Notice (or Record Date for distributions).
"Pricing Period Average Price" means the
average of the Average Price during each day of the relevant
Pricing Period.
"Trading Day" means (a) a day on which the
Common Stock is traded on the principal stock exchange or
The Nasdaq Stock Market, as the case may be, as reported
by such stock exchange or The Nasdaq Stock Market, or (b)
if the Common Stock is not traded on a principal stock
exchange or The Nasdaq Stock Market, a day on which the
Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or
any similar organization or agency succeeding to its
functions of reporting prices).
IN WITNESS WHEREOF, IMMUNOMEDICS, INC.
has caused this Certificate of Designation to be executed by its
Chairman of the Board and Chief Executive Officer and attested to
by its Secretary this 25th day of September, 1995.
IMMUNOMEDICS, INC.
By /s/ David M. Goldenberg
David M. Goldenberg
Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Amy Factor
Amy Factor
Secretary