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EXHIBIT 3.1(3)
CERTIFICATE OF DESIGNATION
OF SERIES B PREFERRED STOCK
OF CERUS CORPORATION
The undersigned, Stephen T. Isaacs, hereby certifies that:
1. He is the duly elected and acting President of CERUS CORPORATION, a
Delaware corporation (the "Company"). The date of filing of the Amended and
Restated Certificate of Incorporation (the "Certificate") was February 7, 1997.
2. The Board of Directors of the Company adopted the following recitals
and resolutions as required by Section 151 of the General Company Law of the
State of Delaware by unanimous written consent dated ______________, 1998:
WHEREAS, the Certificate provides for a class of shares known as
Preferred Stock, issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the Company is authorized by
Section A of Article IV of the Certificate and, pursuant to its
authority as aforesaid, desires to fix the terms of the second series of
said Preferred Stock, the number of shares constituting said series and
the designation of said series.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
deems it advisable to adopt, and hereby adopts, the following
Certificate of Designation of Preferences of Series B___ Preferred Stock
of the Company:
SECTION 1. DESIGNATION. _______________ (_________) shares of
Preferred Stock, $0.001 par value, are designated "Series B___ Preferred Stock"
with the powers, preferences, rights, qualifications, limitations and
restrictions specified herein (the "Series B___ Preferred"). The Series B___
Preferred Stock is further designated as a sub-series of Series B Preferred
Stock.
SECTION 2. VOTING RIGHTS. The holders of shares of Series B___
Preferred shall not have any voting rights, except as provided in Section 2,
Section 3(c)(1)(C), Section 3(c)(2) hereof, and as required under the General
Corporation Law of Delaware. Without first obtaining the affirmative vote or
written consent of the holders of at least a majority of the outstanding shares
of each series of Preferred Stock that is designated as a sub-series of Series B
Preferred Stock, voting together as a separate class, the Company shall not
authorize or issue shares of any class or series of stock, or reclassify any
class or series of stock, including without limitation, the Company's Common
Stock, into shares having preference or priority over the Series B Preferred as
to voting, liquidation preference or conversion rights.
SECTION 3. LIQUIDATION RIGHTS.
(a) Upon any liquidation, dissolution, or winding up of
the Company, whether voluntary or involuntary, before any payment or
distribution of assets of the Company (whether capital or surplus) shall be made
to or set aside for the holders of Common Stock,
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Series A Preferred Stock, or any other class or series of stock ranking junior
to the Series B Preferred with respect to liquidation preference, the holders of
Series B___ Preferred shall be entitled to be paid out of the assets of the
Company an amount per share of Series B___ Preferred equal to the "Original
Issue Price." The Original Issue Price of the Series B___ Preferred shall be
____________________ Dollars ($__________). If, upon any liquidation,
distribution, or winding up, the assets of the Company shall be insufficient to
make payment in full under this Section 3(a) to all holders of Series B___
Preferred, then such assets shall be distributed among the holders of Series
B___ Preferred at the time outstanding, ratably in proportion to the full stated
amounts to which they would otherwise be respectively entitled under this
Section 3(a).
(b) The following events shall be considered a
liquidation, dissolution or winding up under this Section 3:
(1) any consolidation or merger of the Company with
or into any other corporation or other entity or person in which the Company is
not the surviving entity, or any other consolidation, merger, corporate
reorganization or other transaction or series of transactions pursuant to which
the holders of the outstanding voting securities of the Company immediately
prior to such consolidation, merger, reorganization or other transaction or
series of transactions fail to hold equity securities representing a majority of
the voting power of the surviving entity immediately following such
consolidation, merger or reorganization or any transaction or series of related
transactions; or
(2) a sale, lease or other disposition of all or
substantially all of the assets of the Company.
(c) Any securities to be delivered to the holders of the
Series B Preferred pursuant to a transaction treated as a liquidation shall be
valued as follows:
(1) Securities not subject to investment letter or
other similar restrictions on free marketability:
(a) If traded on a national securities exchange
or the National Market System of the National Association of Securities Dealers,
Inc. (the "NMS"), the value shall be deemed to be the average of the security's
closing prices on such exchange or the NMS over the thirty (30) day period
ending three (3) days prior to the closing;
(b) If traded over-the-counter (but not on the
NMS), the value shall be deemed to be the average of the mean of the closing bid
and ask prices over the thirty (30) day period ending three (3) days prior to
the closing; or
(c) If there is no active public market, the
value shall be the fair market value thereof, as mutually determined by the
Board of Directors of the Company and the holders of a majority of the
outstanding Series B Preferred, voting together as a single class.
(2) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be to make
an appropriate discount from the
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market value determined as above in Sections 3(c)(1)(A), (B) or (C) to reflect
the approximate fair market value thereof, as mutually determined by the Board
of Directors of the Company and the holders of not less than a majority of the
outstanding Series B Preferred, voting together as a single class.
SECTION 4. REDEMPTION.
(a) The Company may elect to redeem all, but not less than
all, of the outstanding Series B___ Preferred at the Original Issue Price at any
time, from funds legally available for redemption. Without limiting the
foregoing, the Company shall have the right to redeem the outstanding Series
B___ Preferred within _____________ (___) days after receipt of a Conversion
Notice (as defined below). Any redemption pursuant to this Section 4(b) shall be
for all shares of Series B___ Preferred then outstanding. In the event the
Company desires to redeem the Series B___ Preferred pursuant to this subsection
(b), the Company shall send a notice to the Series B___ Preferred holder stating
that the Series B___ Preferred shall be redeemed pursuant to this subsection
(b); provided that, if such notice is in response to a Conversion Notice, the
notice must be sent within ______________ (_____) days of receipt of the
Conversion Notice. The amount to be paid for the Series B___ Preferred being
redeemed shall be referred to as the "Redemption Price."
(b) Within five (5) days after receipt of a redemption
notice from the Company pursuant to Section 4(a) above, the Series B___
Preferred holders shall surrender all Series B___ Preferred share certificates
at the principal executive office of the Company, and thereupon the Redemption
Price shall be payable, in cash to the order of the person whose name appears on
such certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. If the Company does not have sufficient funds
legally available to redeem all shares to be redeemed pursuant to this Section
4, then it shall use those funds which are legally available to redeem the
maximum possible number of such shares pro rata among the holders of the Series
B ___ Preferred Stock. At any time thereafter when funds of the Company are
legally available for the redemption of shares of Series B___ Preferred, such
funds will immediately be used to redeem the balance of the shares which the
Company has become obligated to redeem pursuant to this Section 4 but which it
has not redeemed.
SECTION 5. CONVERSION RIGHTS. The following provisions shall
apply with respect to the conversion of the Series B___ Preferred into shares of
Common Stock:
(a) OPTIONAL CONVERSION.
(1) At any time after the one-year anniversary of the
date of issuance of the Series B___ Preferred, each share of Series B___
Preferred may, at the option of the holder, be converted at any time into that
number of fully paid and nonassessable shares of Common Stock equal to the
Original Issue Price divided by the Conversion Price (as defined below), subject
to the Company's right to redeem the Series B___ Preferred pursuant to Section
4(a) above. The conversion price for the Series B ___Preferred shall initially
be equal to the Original Issue Price divided by 100 (the "Conversion Price").
Such initial Conversion Price shall be adjusted from time to time in accordance
with this Section 5. All references to the Conversion Price herein shall mean
the Conversion Price as so adjusted.
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(2) Notwithstanding anything contained in this
Section 5 to the contrary, the Series B___ Preferred shall not convert, and no
shares of Common Stock shall be issued by the Company thereby, unless and until
the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), have been complied with,
and any waiting period under the HSR Act applicable to the conversion of the
Series B___ Preferred has expired or been terminated and any approvals required
thereunder have been obtained.
(3) Before any holder of Series B___ Preferred shall
be entitled to convert the same into shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the
principal executive office of the Company or its transfer agent for such stock,
and shall give written notice to the corporation at such office that such holder
elects to convert the Series B Preferred and shall state therein the name or
names in which the holder wishes the certificate or certificates for shares of
Common Stock to be issued (the "Conversion Notice"). The Company shall, as soon
as practicable thereafter, issue and deliver at such office to such holder of
Series B ___ Preferred at the holder's address as set forth on the Company's
records, or such other address as the holder shall have furnished to the Company
in writing, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of surrender of the shares of Series B ___ Preferred to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
(4) Notwithstanding anything contained in this
Section 5 to the contrary, in the event that the approval of the Company's
stockholders is required pursuant to Rule 4460(i) of the Nasdaq Stock Market
prior to the issuance of any of the shares of Common Stock issuable upon
conversion of the Series B Preferred, the Company shall obtain such approval by
the conversion date under Section 5(a)(1) hereof. In the event such approval is
not obtained, the Company shall, in accordance with Section 4 hereof, redeem any
shares of Series B Preferred that would be convertible into shares of Common
Stock in excess of the limitation specified in Rule 4460(i).
(b) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Company shall at any time or from time to time after the date that the first
share of Series B ___ Preferred is issued (the "Original Issue Date") fix a
record date for the effectuation of a split or subdivision of the outstanding
Common Stock, the Conversion Price for the Series B ___ Preferred in effect
immediately before that subdivision shall be proportionately decreased.
Conversely, if the Company shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price for the Series B ___ Preferred in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this Section 5(b) shall become effective at the close of
business on the date the split, subdivision or combination becomes effective.
(c) ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND
DISTRIBUTIONS. If the Company at any time or from time to time after the
Original Issue Date makes, or fixes a
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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, in each such event the Conversion Price for the Series B ___ Preferred
that is then in effect shall be decreased as of the time of such issuance or, in
the event such record date is 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 is 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 is 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, that if such record date is 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 Section 5(c) to reflect the actual payment of such
dividend or distribution or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock.
(d) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If
the Company at any time or from time to time after the Original Issue Date makes
or fixes a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in securities of the Company
other than shares of Common Stock, in each such event for purposes of this
subsection 5(d), provision shall be made so that the holders of the Series B ___
Preferred shall receive upon conversion thereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of other securities of
the Company which they would have received had their Series B ___ Preferred been
converted into Common Stock as of the record date fixed for the determination of
the holders of Common Stock of the Company entitled to receive such distribution
and had they 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, subject to all other adjustments called for during
such period under this Section 5 with respect to the rights of the holders of
the Series B ___ Preferred or with respect to such other securities by their
terms.
(e) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
SUBSTITUTION. If at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of the Series B ___ Preferred is
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Section 5
or in Section 3), in any such event each holder of Series B ___ Preferred shall
have the right thereafter to convert such stock into the kind and amount of
stock and other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of shares of
Common Stock into which such shares of Series B ___ Preferred could have been
converted immediately prior to or as of such recapitalization, reclassification
or change, all subject to further adjustment as provided herein or with respect
to such other securities or property by the terms thereof. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of Series B ___
Preferred after such recapitalization, reclassification or change to the end
that the provisions of this
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Section 5 (including adjustment of the Conversion Price then in effect and the
number of shares issuable upon conversion of the Series B ___ Preferred) shall
be applicable after that event and be as nearly equivalent as practicable.
(f) REORGANIZATIONS. If at any time or from time to time
after the Original Issue Date, there is a capital reorganization of the Common
Stock (other than a recapitalization, subdivision, combination,
reclassification, exchange or substitution of shares provided for elsewhere in
this Section 5 or in Section 3), as a part of such capital reorganization,
provision shall be made so that the holders of the Series B ___ Preferred shall
thereafter be entitled to receive upon conversion of the Series B ___ Preferred
the number of shares of stock or other securities or property of the Company or
otherwise to which a holder of the number of shares of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization, subject
to adjustment in respect of such stock or securities by the terms thereof. In
any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 5 with respect to the rights of the holders of Series
B ___ Preferred after the capital reorganization to the end that the provisions
of this Section 5 (including adjustment of the Conversion Price then in effect
and the number of shares issuable upon conversion of the Series B ___ Preferred)
shall be applicable after that event and be as nearly equivalent as practicable.
(g) FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon conversion of Series B___ Preferred and the number of
shares of Common Stock to be issued shall be rounded down to the nearest whole
share. The Company shall, in lieu of issuing any fractional share, pay the
holder otherwise entitled to such fraction a sum in cash equal to the fair
market value of such fraction on the date of conversion (as determined in good
faith by the Board of Directors).
(h) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock or its treasury shares, solely for the purpose
of effecting the conversion of the shares of the Series B___ Preferred, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series B___ Preferred. If
at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then outstanding shares of the
Series B___ Preferred, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
(i) NOTICES. Any notice required by the provisions of this
Section 5 to be given to the holders of shares of the Series B___ Preferred
shall be deemed given upon the earlier of actual receipt or seventy-two (72)
hours after the same has been deposited in the United States mail, by certified
or registered mail, return receipt requested, and addressed to each holder of
record at the address of such holder appearing on the books of the Company.
(j) PAYMENT OF TAXES. The Company will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of Series B___ Preferred, excluding any tax or other charge
imposed in connection with any transfer involved in
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the issue and delivery of shares of Common Stock in a name other than that in
which the shares of Series B___ Preferred so converted were registered.
(k) NO DILUTION OR IMPAIRMENT. The Company shall not amend
its Certificate of Incorporation or participate in any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Series B Preferred
against dilution or other impairment.
SECTION 6. NOTICES OF RECORD. Upon any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, or upon any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company, any
merger or consolidation of the Company with or into any other corporation, or
any transfer of all or substantially all the assets of the Company to any other
person, or any voluntary or involuntary dissolution, liquidation or winding up
of the Company, or any shareholders' meeting to approve the terms thereof, the
Company shall mail to each holder of Series B___ Preferred at least twenty (20)
days prior to the record date specified therein a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (ii) the date
on which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and the date of the shareholders meeting to approve the terms thereof, if
applicable, (iii) the date, if any, that is to be fixed as to when the holders
of record of Common Stock (or other securities) shall be entitled to exchange
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up, and (iv) the
material terms thereof.
SECTION 7. NO REISSUANCE OF SERIES B ___ PREFERRED STOCK. No
share or shares of Series B___ Preferred acquired by the Company by reason of
redemption, purchase, conversion or otherwise shall be reissued.
SECTION 8. RESTRICTION ON TRANSFER. Neither the shares of Series
B ___ Preferred nor any right to receive redemption payments shall be assigned,
transferred, hypothecated or otherwise alienated by the holder thereof without
the prior written consent of the Company, except (i) in connection with, and to
the transferee of, all or substantially all of the business and assets of such
holder, or (ii) to a direct or indirect wholly owned subsidiary of Baxter
International Inc. Any such attempted action shall be null and void. The
foregoing restriction shall not apply to any Common Stock issued on conversion
of the Series B ___ Preferred.
RESOLVED FURTHER, that the President, the Chief Financial Officer
or the Secretary be, and each of them hereby is, authorized to execute,
verify and file, for and on behalf of the Company, the Certificate of
Designation of Preferences with the Delaware Secretary of State in
accordance with the General Company Law of the State of Delaware.
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RESOLVED FURTHER, that the officers of the Company be, and each
of them hereby is, authorized and directed in the name and on behalf of
the Company and under its corporate seal if appropriate, to execute and
deliver all agreements and instruments, effect all filings and
qualifications, and take all further action which is necessary or
appropriate to carry out the foregoing resolutions.
3. The authorized number of shares of Preferred Stock of this Company is
five million (5,000,000), of which 5,000 shares designated as Series A Preferred
Stock are issued and outstanding.
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IN WITNESS WHEREOF, this Company has caused this Certificate to be
signed by its duly authorized officer this _____ day of ____________________,
1998.
CERUS CORPORATION
By:
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Stephen T. Isaacs
President
CERTIFICATE OF DESIGNATION
SERIES B___ PREFERRED