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EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF UROSURGE, INC.
UroSurge, Inc., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
A. The name of the Corporation is UroSurge, Inc. The Corporation was
originally incorporated under the same name and the original Certificate of
Incorporation was filed with the Delaware Secretary of State on August 18, 1993.
B. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation restates and
amends the provisions of the Certificate of Incorporation of this Corporation.
C. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:
FIRST. The name of the Corporation is UroSurge, Inc.
SECOND. The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or promoted
by the Corporation is as follows: to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH. The Corporation is authorized to issue two classes of stock to be
designated Common Stock and Preferred Stock. The total number of shares of
Common Stock which the Corporation has authority to issue is fifty million
(50,000,000) with par value of $.01 per share. The total number of shares of
Preferred Stock which the Corporation has authority to issue is 12,220,000 with
a par value of $.01 per share. One million six hundred eighty-five thousand
(1,685,000) shares of Preferred Stock
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are designated as Series A Convertible Preferred Stock ("Series A Preferred
Stock"), three million five hundred thirty five thousand (3,535,000) shares of
Preferred Stock are designated as Series B Convertible Preferred Stock ("Series
B Preferred Stock") and two million (2,000,000) shares of Preferred Stock are
designated as Series C Convertible Preferred Stock ("Series C Preferred Stock").
The remaining 5,000,000 shares shall be undesignated Preferred Stock and
may be issued from time to time in one or more series pursuant to a resolution
or resolutions providing for such issue duly adopted by the board of directors
(authority to do so being hereby expressly vested in the board). The board of
directors is further authorized to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock and to fix the number of shares of any series of
Preferred Stock and the designation of any such series of Preferred Stock. The
board of directors, within the limits and restrictions stated in any resolution
or resolutions of the board of directors originally fixing the number of shares
constituting any series, may increase or decrease (but not below the number of
shares in any such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series.
The authority of the board of directors with respect to each such class
or series shall include, without limitation of the foregoing, the right to
determine and fix:
(i) the distinctive designation of such class or series and the number
of shares to constitute such class or series;
(ii) the rate at which dividends on the shares of such class or series
shall be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall be cumulative or accruing, and whether the shares of
such class or series shall be entitled to any participating or other dividends
in addition to dividends at the rate so determined, and if so, on what terms;
(iii) the right or obligation, if any, of the Corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption;
(iv) the special and relative rights and preferences, if any, and the
amount or amounts per share, which the shares of such class or series of
Preferred Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
(v) the terms and conditions, if any, upon which shares of such class
or series shall be convertible into, or exchangeable for, shares of capital
stock of any other class or series, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;
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(vi) the obligation, if any, of the Corporation to retire, redeem or
purchase shares of such class or series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such obligation;
(vii) voting rights, if any, on the issuance of additional shares of
such class or series or any shares of any other class or series of Preferred
Stock;
(viii) limitations, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
and
(ix) such other preferences, powers, qualifications, special or
relative rights and privileges thereof as the board of directors of the
Corporation, acting in accordance with this Certificate of Incorporation, may
deem advisable and are not inconsistent with law and the provisions of this
Certificate of Incorporation.
The corporation shall from time to time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit conversion of the Preferred
Stock.
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the
holders of the Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock.
2. Voting. The holders of the Common Stock are entitled to one
vote for each share held at all meetings of stockholders (and written actions in
lieu of meetings). There shall be no cumulative voting.
3. Dividends. Dividends may be declared and paid on the Common
Stock from funds lawfully available therefor as and when determined by the Board
of Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
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1. Dividends. In each fiscal year of the Corporation, the
holders of shares of Preferred Stock shall be entitled to receive, before any
cash dividends shall be declared and paid upon or set aside for the Common Stock
in such fiscal year, when and as declared by the Board of Directors of the
Corporation out of funds legally available for that purpose, dividends payable
in cash in an amount per share for such fiscal year at least equal to the
product of (i) the per share amount, if any, of the cash dividend declared, paid
or set aside for the Common Stock during such fiscal year, multiplied by (ii)
the number of whole shares of Common Stock into which each such share of
Preferred Stock is then convertible. Any cash dividends payable to holders of
shares of Preferred Stock shall be payable pari passu among the holders of
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock,
and in preference and priority to any payment of any cash dividend on the Common
Stock. The right to such dividends shall not be cumulative, and no right shall
accrue to holders of Common Stock or Preferred Stock by reason of the fact that
dividends on said shares are not declared in any prior period.
2. Liquidation, Dissolution or Winding Up.
(a) Preferred Stock Preference. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock shall be entitled to receive on a pari passu basis,
prior and in preference to any distribution of any of the assets or surplus
funds of the Corporation to the holders of Common Stock by reason of their
ownership of such shares, an amount equal to $1.00, $2.00 and $5.00 per share,
respectively, plus an amount equal to any declared but unpaid dividends thereon,
with respect to such liquidation, dissolution or winding up. If the assets and
funds thus distributed among the holders of the Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amount, then the
entire assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
(b) Remaining Assets. After the payment or irrevocable
setting apart of all preferential amounts required to be paid to the holders of
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
upon the dissolution, liquidation or winding up of the Corporation as set forth
in subsection 2(a) above, the holders of shares of Common Stock then outstanding
shall be entitled to receive the remaining assets and funds of the Corporation
available for distribution to its stockholders.
(c) Consolidation or Merger. The merger or consolidation
of the Corporation into or with another corporation, or the sale of all or
substantially all the assets of the Corporation, in which transaction the
Corporation's stockholders immediately prior to such transaction own immediately
after such transaction less than 50% of the voting securities of the surviving
corporation (or its parent), shall be deemed to be a liquidation, dissolution or
winding up of the Corporation for purposes of this Section 2. The amount deemed
distributed to the holders of Preferred Stock upon any such merger or
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consolidation shall be the cash or the value of the property, rights or
securities distributed to such holders by the acquiring person, firm or other
entity. The value of such property, rights or other securities shall be
determined in good faith by the Board of Directors of the Corporation.
3. Voting.
(a) General. Each holder of outstanding shares of Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of Preferred Stock held by such
holder are convertible (as adjusted from time to time pursuant to Section 4
hereof), at each meeting of stockholders of the Corporation (and written actions
of stockholders in lieu of meetings) with respect to any and all matters
presented to the stockholders of the Corporation for their action or
consideration. Except as provided by law or by the provisions of subsection 3(b)
below, the holders of Preferred Stock shall vote together with the holders of
Common Stock as a single class.
(b) Board of Directors. Notwithstanding Section 3(a) above, the
holders of Series A Preferred Stock shall be entitled to elect one (1) director
of the Corporation, the holders of Series B Preferred Stock shall be entitled to
elect one (1) director of the Corporation, and the holders of Common Stock and
Preferred Stock, voting together, shall be entitled to elect all remaining
directors of the Corporation. Notwithstanding any bylaw provision to the
contrary, the stockholders entitled to elect a particular director shall be
entitled to remove such director or to fill a vacancy in the seat formerly held
by such director, all in accordance with the applicable provisions of the
Delaware General Corporation Law.
(c) General Protective Provisions. In addition to any other
rights provided by law or by this Section 3, so long as there shall be issued
and outstanding a number of shares of Preferred Stock equal to at least 67% of
the total number of shares of Preferred Stock ever issued by the Corporation
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares), the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than 67% of the then outstanding shares of
Preferred Stock consenting or voting (as the case may be) together as a single
class:
(i) Merge or consolidate into or with any other
corporation or sell all or substantially all of the Corporation's assets;
(ii) Voluntarily or involuntarily liquidate, dissolve or
wind up the Corporation or its business;
(iii) Amend or repeal any provision of, or add any
provision to, the Corporation's Certificate of Incorporation or Bylaws, if such
action would alter or change the preferences, rights, privileges or powers of,
or the restrictions provided for the benefit of, any series of Preferred Stock,
or increase or decrease the number of authorized shares of any series of
Preferred Stock;
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(iv) Authorize or issue any new or existing class or
classes or series of capital stock having any preference or priority as to
amounts distributable upon dissolution, liquidation or winding up of the
Corporation superior to or on a parity with any such preference or priority of
any series of Preferred Stock, or authorize or issue shares of stock of any
class or any bonds, debentures, notes or other obligations convertible into or
exchangeable for, or having option rights to purchase, any shares of stock of
the Corporation having any preference or priority as to amounts distributable
upon dissolution, liquidation or winding up of the Corporation superior to or on
a parity with any such preference or priority of any series of Preferred Stock;
(v) Reclassify any Common Stock into shares having any
preference or priority as to amounts distributable upon dissolution, liquidation
or winding up of the Corporation superior to or on a parity with any such
preference or priority of any series of Preferred Stock; or
(vi) Pay or declare any dividend or distribution on any
shares of its capital stock, or apply any of its assets to the redemption,
retirement, purchase or acquisition, directly or indirectly, through
subsidiaries or otherwise, of any shares of its capital stock (other than in
accordance with the terms of restricted stock or similar agreements with
employees or directors of, or consultants to, the Corporation previously
approved by the Board of Directors).
(d) Special Series C Protective Provision. In addition to any
other rights provided by law or by this Section 3, so long as there are any
issued and outstanding shares of Series C Preferred Stock, the Corporation shall
not, without first obtaining the affirmative vote or written consent of the
holders of not less than 75% of the then outstanding shares of Series C
Preferred Stock consenting or voting (as the case may be) together as a separate
class, amend, modify, or repeal any provision of Article Fourth, Section B,
Subsection 2 (Liquidation, Dissolution or Winding Up).
4. Optional Conversion. The holders of Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for the Preferred Stock. Each share of Preferred Stock shall be convertible into
the number of shares of Common Stock which results from dividing the "Conversion
Price" per share in effect for such series of Preferred Stock at the time of
conversion into the "Conversion Value" per share of such series of Preferred
Stock. The number of shares of Common Stock into which a series of Preferred
Stock is convertible is hereinafter referred to as the "Conversion Rate" for
such series of Preferred Stock. The Conversion Price per share of Series A
Preferred Stock shall initially be $1.00, and the Conversion Value per share of
Series A Preferred Stock shall be $1.00. The Conversion Price per share of
Series B Preferred Stock shall initially be $2.00 and the Conversion Value per
share of Series B Preferred Stock shall be $2.00. The Conversion Price per share
of Series C Preferred Stock shall initially be $5.00 and the Conversion Value
per share of Series C Preferred Stock shall be $5.00. The Conver sion Price of
the Series A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock shall be subject to adjustment as hereinafter provided. In the
event of a liquidation of the Corporation,
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the Conversion Rights shall terminate at the close of business on the first full
day preceding the date fixed for the payment of any amounts distributable on
liquidation to the holders of Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective applicable Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Preferred Stock to convert
shares of Preferred Stock into shares of Common Stock, such holder shall
surrender the certificate or certificates for such shares of Preferred Stock, at
the office of the transfer agent for the Preferred Stock (or at the principal
office of the Corporation if the Corporation serves as its own transfer agent),
together with written notice that such holder elects to convert all or any
number of the shares of the Preferred Stock represented by such certificate or
certificates. Such notice shall state such holder's name or the names of the
nominees in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in form satisfactory to the Corporation,
duly executed by the registered holder or his or its attorney duly authorized in
writing. The date of receipt of such certificates and notice by the transfer
agent (or by the Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date ("Conversion Date"). The Corporation shall,
as soon as practicable after the Conversion Date, issue and deliver at such
office to such holder of Preferred Stock, or to his or its nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled, together with cash in lieu of any fraction of a
share.
(ii) The Corporation shall at all times when the
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Preferred Stock, such number of its duly authorized shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding Preferred Stock. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value of the shares
of Common Stock issuable upon conversion of the Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any accrued and unpaid dividends, if any, on
the Preferred Stock surrendered for conversion or on the Common Stock delivered
upon conversion.
(iv) All shares of Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect
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to such shares, including the rights, if any, to receive notices and to vote,
shall immediately cease and terminate on the Conversion Date, except only the
right of the holders thereof to receive shares of Common Stock in exchange
therefor and payment of any declared and unpaid dividends thereon. Any shares of
Preferred Stock so converted shall be retired and canceled and shall not be
reissued, and the Corporation may from time to time take such appropriate action
as may be necessary to reduce the authorized Preferred Stock accordingly.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Article
FOURTH, the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities (as defined below), excluding
rights, options or warrants to acquire shares described in clause V of
subsection 4(d)(i)(D) below;
(B) "Filing Date" shall mean the date on which
this Restated Certificate of Incorporation is filed with the Delaware Secretary
of State.
(C) "Convertible Securities" shall mean any
evidence of indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" with
respect to the Preferred Stock shall mean all shares of Common Stock issued (or,
pursuant to subsection 4(d)(iii) below deemed to be issued) by the Corporation
after the Filing Date, other than:
(I) all shares of Common Stock and
Preferred Stock outstanding on the date of filing of this certificate with the
Delaware Secretary of State;
(II) all shares of Common Stock issued or
issuable upon conversion of shares of Preferred Stock;
(III) all shares of Common Stock issued or
issuable as a dividend or distribution on Preferred Stock;
(IV) all shares of Common Stock issued or
issuable as a result of any stock split, combination, dividend, distribution,
reclassification, exchange or substitution for which an adjustment is provided
in subsections 4(e), (f), (g) or (h) below; or
(V) all shares of Common Stock,
outstanding from time to time, or shares of Common Stock issued or issuable upon
exercise of rights, options or warrants, outstanding from time to time, granted
or issued to officers, directors or employees of, or consultants to, the
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Corporation pursuant to a stock grant, stock option plan, employee stock
purchase plan, restricted stock plan or other similar plan or agreement or
otherwise, in each case as approved by the Board of Directors, in an amount not
to exceed in the aggregate at any time 1,010,000 shares (subject to appropriate
adjustment for any stock dividend, stock split, combination or other similar
recapitalization affecting such shares).
(ii) No Adjustment of Conversion Price. No adjustment in
the number of shares of Common Stock into which any series of Preferred Stock is
convertible shall be made, by adjustment in the applicable Conversion Price
thereof: (a) unless the consideration per share (determined pursuant to
subsection 4(d)(v) for an Additional Share of Common Stock issued or deemed to
be issued by the Corporation is less than the Conversion Price for such series
of Preferred Stock in effect on the date of, and immediately prior to, the
issuance of such Additional Share of Common Stock, or (b) if prior to such
issuance, the Corporation receives written notice from the holders of at least
67% of the then outstanding shares of such series of Preferred Stock agreeing
that no such adjustment shall be made as the result of the issuance of
Additional Shares of Common Stock.
(iii) Issue of Securities; Deemed Issue of Additional
Shares of Common Stock. If the Corporation, at any time or from time to time
after the Filing Date for the applicable series of Preferred Stock, shall issue
any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares of Common
Stock (as set forth in the instrument relating thereto without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that Additional Shares of Common Stock
shall not be deemed to have been issued unless the consideration per share
(determined pursuant to subsection 4(d)(v) hereof) of such Additional Shares of
Common Stock would be less than the Conversion Price for such series of
Preferred Stock in effect on the date of and immediately prior to such issue, or
such record date, as the case may be, and provided further that in any such case
in which such Additional Shares of Common Stock are deemed to be issued:
(A) No further adjustment in the Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) If such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issue date thereof (or
upon the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or
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decrease insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities;
(C) No readjustment pursuant to clause (B) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date;
(D) Upon the expiration or termination of any
unexercised Option, the Conversion Price shall not be readjusted but the
Additional Shares of Common Stock deemed issued as the result of the original
issue date of such Option shall not be deemed issued for the purposes of any
subsequent adjustment of such Conversion Price; and
(E) In the event of any change in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange of any
Option or Convertible Security, including, but not limited to, a change
resulting from the anti-dilution provisions thereof, the Conversion Price then
in effect shall forthwith be readjusted to such Conversion Price as would have
obtained had the adjustment which was made upon the issuance of such Option or
Convertible Security not exercised or converted prior to such change been made
upon the basis of such change, but no further adjustment shall be made for the
actual issuance of Common Stock upon the exercise or conversion of any such
Option or Convertible Security.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the Corporation shall, at any
time after the Filing Date, issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to subsection
4(d)(iii), but excluding shares issued as a dividend or distribution as provided
in subsection 4(f) or upon a stock split or combination as provided in
subsection 4(e)), without consideration or for a consideration per share less
than the applicable Conversion Price in effect on the date of and immediately
prior to such issue, then and in such event, such Conversion Price shall be
reduced, concurrently with such issue, to a price (calculated to the nearest
cent) determined by multiplying such Conversion Price by a fraction, (A) the
numerator of which shall be (1) the number of shares of Common Stock outstanding
immediately prior to such issue plus (2) the number of shares of Common Stock
which the aggregate consideration received by the Corporation for the total
number of Additional Shares of Common Stock so issued would purchase at such
Conversion Price; and (B) the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issue plus the number of
such Additional Shares of Common Stock so issued; provided that, for the purpose
of this subsection 4(d)(iv), (i) all shares of Common Stock issuable upon
exercise or conversion of Options or Convertible Securities outstanding
immediately prior to such issue shall be deemed to be outstanding, and (ii) the
number of shares of Common Stock deemed issuable upon conversion of such
outstanding Options and Convertible Securities shall not give effect to any
adjustments to the conversion price or conversion rate of such Options or
Convertible Securities resulting from the issuance of Additional Shares of
Common Stock that is the subject of this calculation.
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Notwithstanding the foregoing, the applicable Conversion Price shall not
be so reduced at such time if the amount of such reduction would be an amount
less than $.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.01 or more.
(v) Determination of Consideration. For purposes of this
subsection 4(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be
computed at the aggregate of cash received by the Corporation, excluding amounts
paid or payable for accrued interest or accrued dividends;
(II) insofar as it consists of property
other than cash, be computed at the fair market value thereof at the time of
such issue, as determined in good faith by the Board of Directors; and
(III) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the proportion of
such consideration so received, computed as provided in clauses (I) and (II)
above, as determined in good faith by the Board of Directors.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to subsection 4(d)(iii),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating the relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
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(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Filing Date effect
a subdivision of the outstanding Common Stock, the Conversion Price for each
series of Preferred Stock then in effect immediately before that subdivision
shall be proportionately decreased. If the Corporation shall at any time or from
time to time after the Filing Date combine the outstanding shares of Common
Stock, the Conversion Price for each series of Preferred Stock then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this paragraph shall become effective at the close of business
on the date the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time, or from time to time after the Filing Date,
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Conversion
Price for each series of Preferred Stock then in effect shall be decreased as of
the time of such issuance or, in the event such a record date shall have been
fixed, as of the close of business on such record date, by multiplying the
Conversion Price then in effect by a fraction:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution:
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(g) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Filing Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of Preferred Stock
shall receive upon conversion thereof in addition to the number of shares of
Common Stock receivable thereupon, the amount of securities of the Corporation
that they would have received had their Preferred Stock been converted into
Common Stock on the date of such event and had thereafter, during the period
from the date of such event to and including the Conversion Date, retained such
securities receivable by them as aforesaid during such period giving application
to all adjustments called for during such period, under this paragraph with
respect to the rights of the holders of the Preferred Stock.
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(h) Adjustment for Reclassification Exchange, or Substitution.
If the Common Stock issuable upon the conversion of the Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets provided
for below), then and in each such event the holder of each such share of
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the
number of shares of Common Stock into which such shares of Preferred Stock might
have been converted immediately prior to such reorganization, reclassification,
or change, all subject to further adjustment as provided herein.
(i) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger or sale which is treated
as a liquidation pursuant to subsection 2(c)), each share of Preferred Stock
shall thereafter be convertible into the kind and amount of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of such Preferred Stock
would have been entitled upon such consolidation, merger or sale; and, in such
case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Section 4
set forth with respect to the rights and interest thereafter of the holders of
the Preferred Stock, to the end that the provisions set forth in this Section 4
(including provisions with respect to changes in and other adjustments of the
Conversion Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Preferred Stock.
(j) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Preferred Stock against impairment. This provision shall not restrict the
Corporation from amending its Certificate of Incorporation in accordance with
the General Corporation Law of the State of Delaware.
(k) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price for the Preferred Stock
pursuant to this Section 4, the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Preferred Stock, furnish or cause to be
furnished to such holder a similar certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price for the series of
Preferred Stock held by such holder then in effect, and (iii) the
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number of shares of Common Stock and the amount, if any, of other property which
then would be received upon the conversion of the Preferred Stock held by such
holder.
(l) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding shares
of Common Stock or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or with another corporation, or
of the sale of all substantially all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Preferred Stock, and shall cause to be
mailed to the holders of the Preferred Stock at their last addresses as shown on
the records of the Corporation or such transfer agent, at least ten days prior
to the record date specified in (A) below or twenty days before the date
specified in (B) below, a notice stating
(A) the record date of such dividend,
distribution, subdivision or combination, or, if record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution subdivision or combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution or winding up.
5. Mandatory Conversion.
(a) Mandatory Conversion Time. All outstanding shares of
Preferred Stock shall automatically be converted into shares of Common Stock, at
the then current Conversion Price, upon the earlier (the "Mandatory Conversion
Date") of (i) the closing of the sale of shares of Common Stock at a price of at
least $7.50 per share (subject to appropriate adjustment for stock splits, stock
dividends, combinations and other similar recapitalizations affecting such
shares) in an underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, resulting in at least
$15,000,000 of gross proceeds to the Corporation, or (ii) the date on which
there are issued
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and outstanding a number of shares of Preferred Stock equal to less than 33% of
the total number of shares of Preferred Stock ever issued by the Corporation
(subject to appropriate adjustment for stock splits, stock dividends,
combinations and other similar recapitalizations affecting such shares).
(b) Mechanics of Conversion. All holders of record of shares of
Preferred Stock will be given written notice of the Mandatory Conversion Date
and the place designated for mandatory conversion of all such shares of
Preferred Stock pursuant to this Section 5. Such notice need not be given in
advance of the occurrence of the Mandatory Conversion Date. Such notice shall be
sent by first class or registered mail, postage prepaid, to each record holder
of Preferred Stock at such holder's address last shown on the records of the
transfer agent for the Preferred Stock (or the records of the corporation, if it
serves as its own transfer agent). Upon receipt of such notice, each holder of
shares of Preferred Stock shall surrender his or its certificate or certificates
for all such shares to the corporation at the place designated in such notice,
and shall thereafter receive certificates for the number of shares of Common
Stock to which such holder is entitled pursuant to this Section 5. On the
Mandatory Conversion Date, all rights with respect to the Preferred Stock so
converted, including the rights, if any, to receive notices and vote, will
terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such shares of Preferred Stock have
been converted, and payment of any declared or accrued but unpaid dividends
thereon (all of which shall be deemed to be declared by the Board of Directors
on the Mandatory Conversion Date). If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for
Preferred Stock, the Corporation shall cause to be issued and delivered to such
holder, or on his or its written order, a certificate or certificates for the
number of full shares of Common Stock issuable on such conversion in accordance
with the provisions hereof and cash as provided in subsection 4(b) in respect of
any fraction of a share of Common Stock otherwise issuable upon such conversion.
(c) Retirement of Shares. All certificates evidencing shares of
Preferred Stock which are required to be surrendered for conversion in
accordance with the provisions hereof shall, from and after the Mandatory
Conversion Date, be deemed to have been retired and cancelled and the shares of
Preferred Stock presented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. The Corporation may thereafter take such
appropriate action (without the need for stockholder action) as may be necessary
to reduce the authorized Preferred Stock accordingly.
FIFTH. In furtherance of and not in limitation of powers conferred by
statute, it is further provided:
1. Election of directors need not be by written ballot.
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2. The Board of Directors is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation.
SIXTH. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
SEVENTH. Except to the extent that the General Corporation Law of
Delaware prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty, no director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, notwithstanding any provision of law
imposing such liability. No amendment to or repeal of this provision shall apply
to or have any effect on the liability or alleged liability of any director of
the Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment.
EIGHTH. The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of Delaware, as amended from time to time,
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was, or has agreed to become, a director or officer of the Corporation, or
is or was serving, or has agreed to serve, at the request of the Corporation, as
a director, officer or trustee of, or in a similar capacity with, another
Corporation, partnership, joint venture, trust or other enterprise (including
any employee benefit plan), or by reason of any action alleged to have been
taken or omitted in such capacity, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom.
With respect to any action, suit, proceeding or investigation for which
indemnity will or could be sought, the Corporation will be entitled to
participate therein at its own expense and/or to assume the
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defense thereof at its own expense, with legal counsel reasonably acceptable to
the person seeking indemnification.
In the event that the Corporation does not assume the defense of any
action, suit, proceeding or investigation for which indemnity will or could be
sought, any expenses (including attorneys' fees) incurred by the person seeking
indemnification in defending a civil or criminal action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance of the final disposition of such matter upon receipt of an undertaking
by the person indemnified to repay such payment if it is ultimately determined
that such person is not entitled to indemnification under this Article, which
undertaking may be accepted without reference to the financial ability of such
person to make such repayment.
The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the Corporation.
The indemnification rights provided in this Article EIGHTH (i) shall not
be deemed exclusive of any other rights to which those indemnified may be
entitled under any law, agreement or vote of stockholders or disinterested
directors or otherwise, and (ii) shall inure to the benefit of the heirs,
executors and administrators of such persons. The Corporation may, to the extent
authorized from time to time by its Board of Directors, grant indemnification
rights to other employees or agents of the Corporation or other persons serving
the Corporation and such rights may be equivalent to, or greater or less than,
those set forth in this Article.
NINTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute and this Certificate of
Incorporation, and all rights conferred upon stock holders herein are granted
subject to this reservation.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by David H. Maupin, its President, as of April ___, 1998.
UROSURGE, INC.
By:______________________________________
David H. Maupin, President
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