EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
ELITRA PHARMACEUTICALS INC.
Dr. Harry F. Hixson, Jr. and Alana B. McNulty hereby certify that:
ONE: The present name of this corporation is Elitra Pharmaceuticals
Inc. The corporation was originally incorporated under the name of Rajyabiotics
Corporation, and the date of filing the original Certificate of Incorporation of
this corporation with the Secretary of State of the State of Delaware is
February 19, 1998.
TWO: They are the duly elected and acting President and Secretary,
respectively, of Elitra Pharmaceuticals, a Delaware corporation.
THREE: The Certificate of Incorporation of this corporation is hereby
amended and restated to read as follows:
I.
The name of the corporation is ELITRA PHARMACEUTICALS INC. (the
"Corporation" or the "Company").
II.
The address of the registered office of the Corporation in the State of
Delaware is:
National Registered Agents, Inc.
9 East Loockerman
Dover, DE 19901
The name of the Corporation's registered agent at said address is
National Registered Agents.
III.
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
IV.
A. This Corporation is authorized to issue two classes of stock to
be designated, respectively, "Common Stock" and "Preferred Stock." The total
number of shares which the Corporation is authorized to issue is ninety-seven
million five hundred seventy-six thousand six hundred forty-eight
(97,576,648) shares, sixty million (60,000,000) shares of which shall be
Common Stock (the "Common Stock") and thirty-seven million five hundred
seventy-six thousand six hundred forty-eight (37,576,648) shares of which
shall be Preferred Stock (the "Preferred
1.
Stock"). The Preferred Stock shall have a par value of one-tenth of
one cent ($0.001) per share and the Common Stock shall have a par value of
one-tenth of one cent ($0.001) per share.
B. The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares of Common Stock then outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation (voting together on an as-if-converted basis).
C. Four million five hundred forty-five thousand four hundred
fifty-six (4,545,456) of the authorized shares of Preferred Stock are hereby
designated "Series A Preferred Stock" (the "Series A Preferred"), twenty-one
million six hundred fifty-one thousand sixty-three (21,651,063) of the
authorized shares of Preferred Stock are hereby designated "Series B
Preferred Stock" (the "Series B Preferred"), one million forty-one thousand
six hundred sixty-seven (1,041,667) of the authorized shares of preferred
stock are hereby designated "Series C Preferred Stock" (the "Series C
Preferred"), one million five hundred thirty-eight thousand four hundred
sixty-two (1,538,462) of the authorized shares of preferred stock are hereby
designated "Series D Preferred Stock" (the "Series D Preferred") and eight
million eight hundred thousand (8,800,000) shares are hereby designated
"Series E Preferred Stock" (the "Series E Preferred").
D. The rights, preferences, privileges, restrictions and other matters
relating to the Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred are as follows:
1. DIVIDEND RIGHTS.
a. Holders of Series A Preferred, Series B Preferred and
Series E Preferred, in preference to the holders of Series C Preferred, Series D
Preferred and the holders of any other stock of the Company ("Junior Stock"),
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds that are legally available therefor, cash dividends at the
rate of eight percent (8%) of the applicable "Original Issue Price" per annum on
each outstanding share of Series A Preferred, Series B Preferred and Series E
Preferred (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares). After payment of
any dividends required to be paid to the holders of Series A Preferred, Series B
Preferred and Series E Preferred, holders of Series C Preferred and Series D
Preferred, in preference to the holders of any Junior Stock, shall be entitled
to receive, when and as declared by the Board of Directors, but only out of
funds that are legally available therefor, cash dividends at the rate of eight
percent (8%) of the applicable "Original Issue Price" per annum on each
outstanding share of Series C Preferred and Series D Preferred (as adjusted for
any stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares). The Original Issue Price of the Series A Preferred
shall be sixty-six cents ($0.66) (the "Series A Original Issue Price"). The
Original Issue Price of the Series B Preferred shall be seventy-five cents
($0.75) (the "Series B Original Issue Price"). The Original Issue Price of the
Series C Preferred shall be four dollars and eighty cents ($4.80) (the "Series C
Original Issue Price"). The Original Issue Price of the Series D Preferred shall
be three dollars and twenty-five cents ($3.25) (the "Series D Original Issue
Price"). The Original Issue Price of the Series E Preferred shall be three
dollars and twenty-five cents ($3.25) (the "Series E Original Issue
2.
Price"). Such dividends shall be payable only when, as and if declared by the
Board of Directors and shall be non-cumulative.
b. So long as any shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred shall be
outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Junior Stock, nor
shall any shares of any Junior Stock of the Company be purchased, redeemed, or
otherwise acquired for value by the Company (except for acquisitions of Common
Stock by the Company pursuant to agreements which permit the Company to
repurchase such shares upon termination of services to the Company or in
exercise of the Company's right of first refusal upon a proposed transfer) until
all dividends (set forth in Section 1(a) above) on the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred shall have been paid or declared and set apart. In the event dividends
are paid on any share of Common Stock, an additional dividend shall be paid with
respect to all outstanding shares of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred in an amount equal
per share (on an as-if-converted to Common Stock basis) to the amount paid or
set aside for each share of Common Stock. The provisions of this Section 1(b)
shall not, however, apply to (i) a dividend payable in Common Stock, (ii) the
acquisition of shares of any Junior Stock in exchange for shares of any other
Junior Stock, or (iii) any repurchase of any outstanding securities of the
Company that is unanimously approved by the Company's Board of Directors.
2. VOTING RIGHTS.
a. GENERAL RIGHTS. Except as otherwise provided herein or as
required by law, the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred and the Series E Preferred shall be voted
equally with the shares of the Common Stock of the Company and not as a separate
class, at any annual or special meeting of stockholders of the Company, and may
act by written consent in the same manner as the Common Stock, in either case
upon the following basis: each holder of shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred shall be
entitled to such number of votes as shall be equal to the whole number of shares
of Common Stock into which such holder's aggregate number of shares of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred, as applicable, are convertible (pursuant to Section 4 hereof)
immediately after the close of business on the record date fixed for such
meeting or the effective date of such written consent.
b. SEPARATE VOTE OF SERIES A PREFERRED, SERIES B PREFERRED
AND SERIES E PREFERRED. For so long as at least seven million five hundred
eighteen thousand five hundred seven (7,518,507) shares of Series A Preferred,
Series B Preferred and/or Series E Preferred (subject to adjustment for any
stock split, reverse stock split or other similar event affecting the Series A
Preferred, Series B Preferred or Series E Preferred) remain outstanding, in
addition to any other vote or consent required herein or by law, the vote or
written consent of the holders of at least sixty-six and two-thirds percent (66
2/3%) of the outstanding Series A Preferred, Series B Preferred and Series E
Preferred, voting together as a single class, shall be necessary for effecting
or validating the following actions:
3.
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Company (including any
filing of a Certificate of Designation);
(ii) Any increase or decrease in the authorized number of
shares of Common Stock or Preferred Stock;
(iii) Any redemption, repurchase, payment of dividends or
other distributions with respect to Junior Stock (except for acquisitions of
Common Stock by the Company pursuant to agreements which permit the Company to
repurchase such shares upon termination of services to the Company or in
exercise of the Company's right of first refusal upon a proposed transfer);
(iv) Any agreement by the Company or its stockholders
regarding an Acquisition or Asset Transfer (each as defined in Section 3(d));
(v) Any voluntary dissolution or liquidation of the
Company; or
(vi) Any increase or decrease in the authorized number of
members of the Company's Board of Directors.
c. SEPARATE VOTE OF SERIES A PREFERRED. For so long as at
least one million (1,000,000) shares of Series A Preferred (subject to
adjustment for any stock split, reverse stock split or other similar event
affecting the Series A Preferred) remain outstanding, in addition to any other
vote or consent required herein or by law, the vote or written consent of the
holders of at least a majority of the outstanding Series A Preferred shall be
necessary for effecting or validating the following actions:
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Company (including any
filing of a Certificate of Designation) that alters or changes the voting
powers, preferences, or other special rights or privileges, or restrictions of
the Series A Preferred so as to affect them adversely; or
(ii) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the Company ranking senior to
the Series A Preferred in right of redemption, liquidation preference, voting or
dividends or any increase in the authorized or designated number of any such new
class or series.
d. SEPARATE VOTE OF SERIES B PREFERRED. For so long as at
least four million seven hundred forty-one thousand five hundred eighty-three
(4,741,583) shares of Series B Preferred (subject to adjustment for any stock
split, reverse stock split or other similar event affecting the Series B
Preferred) remain outstanding, in addition to any other vote or consent required
herein or by law, the vote or written consent of the holders of at least a
majority of the outstanding Series B Preferred shall be necessary for effecting
or validating the following actions:
4.
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Company (including any
filing of a Certificate of Designation) that alters or changes the voting
powers, preferences, or other special rights or privileges, or restrictions of
the Series B Preferred so as to affect them adversely; or
(ii) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the Company ranking senior to
the Series B Preferred in right of redemption, liquidation preference, voting or
dividends or any increase in the authorized or designated number of any such new
class or series.
e. SEPARATE VOTE OF SERIES D PREFERRED. For so long as at
least one million (1,000,000) shares of Series D Preferred (subject to
adjustment for any stock split, reverse stock split or other similar event
affecting the Series D Preferred) remain outstanding, in addition to any other
vote or consent required herein or by law, the vote or written consent of the
holders of at least a majority of the outstanding Series D Preferred shall be
necessary for affecting or validating any amendment, alteration, or repeal of
any provision of the Certificate of Incorporation or the Bylaws of the Company
(including any filing of a Certificate of Designation) that alters or changes
the voting powers, preferences, or other special rights or privileges, or
restrictions of the Series D Preferred so as to affect them adversely in a
manner different from that of the other series of Preferred Stock.
Notwithstanding the foregoing, no separate vote or written consent of the
holders of the outstanding Series D Preferred shall be necessary for any
authorization or any designation, whether by reclassification or otherwise, or
any issuance, of any class or series of stock or any other securities
convertible into equity securities of the Company ranking PARI PASSU with or
senior to the Series D Preferred in right of redemption, liquidation preference,
voting or dividends or any increase in the authorized or designated number of
any such class or series.
f. SEPARATE VOTE OF SERIES E PREFERRED. For so long as at
least one million seven hundred seventy-six thousand nine hundred twenty-four
(1,776,924) shares of Series E Preferred (subject to adjustment for any stock
split, reverse stock split or other similar event affecting the Series E
Preferred) remain outstanding, in addition to any other vote or consent required
herein or by law, the vote or written consent of the holders of at least a
majority of the outstanding Series E Preferred shall be necessary for effecting
or validating the following actions:
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Company (including any
filing of a Certificate of Designation) that alters or changes the voting
powers, preferences, or other special rights or privileges, or restrictions of
the Series E Preferred so as to affect them adversely; or
(ii) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the Company ranking senior to
the Series E Preferred in right of redemption, liquidation preference, voting or
dividends or any increase in the authorized or designated number of any such new
class or series.
5.
g. ELECTION OF BOARD OF DIRECTORS. For so long as at least
one million (1,000,000) shares of Series A Preferred remain outstanding (subject
to adjustment for any stock split, reverse stock split or similar event
affecting the Series A Preferred), the holders of Series A Preferred, voting as
a separate class, shall be entitled to elect two (2) members of the Company's
Board of Directors at each meeting or pursuant to each consent of the Company's
stockholders for the election of directors, and to remove from office such
directors and to fill any vacancy caused by the resignation, death or removal of
such directors. For so long as at least four million seven hundred forty-one
thousand five hundred eighty-three (4,741,583) shares of Series B Preferred
remaining outstanding the holders of Series B Preferred, voting as a separate
class, shall be entitled to elect two (2) members of the Company's Board of
Directors at each meeting or pursuant to each consent of the Company's
stockholders for the election of directors, and to remove from office such
directors and to fill any vacancy caused by the resignation, death or removal of
such directors. The holders of Common Stock, Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred, voting
together as a single class, shall be entitled to elect up to three (3)
additional members of the Board of Directors at each meeting or pursuant to each
consent of the Company's stockholders for the election of directors, and to
remove from office such directors and to fill any vacancy caused by the
resignation, death or removal of such directors.
3. LIQUIDATION RIGHTS.
a. Upon any liquidation, dissolution, or winding up of the
Company, whether voluntary or involuntary, before any distribution or payment
shall be made to the holders of any Series C Preferred, Series D Preferred or
the holders of any Junior Stock, the holders of Series A Preferred, Series B
Preferred and Series E Preferred shall be entitled to be paid out of the assets
of the Company an amount per share of Series A Preferred, Series B Preferred or
Series E Preferred, as the case may be, equal to the applicable Original Issue
Price plus all declared and unpaid dividends on the Series A Preferred, Series B
Preferred or Series E Preferred Stock (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to such
shares) for each share of Series A Preferred, Series B Preferred or Series E
Preferred held by them.
b. After the payment of the full liquidation preference of
the Series A Preferred, Series B Preferred and Series E Preferred as set forth
in Section 3(a) above, before any distribution or payment shall be made to the
holders of any Junior Stock the holders of Series C Preferred and Series D
Preferred shall be entitled to be paid out of the assets of the Company an
amount per share of Series C Preferred or Series D Preferred, as the case may
be, equal to the applicable Original Issue Price plus all declared and unpaid
dividends on the Series C Preferred or Series D Preferred (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares) for each share of Series C Preferred or Series D
Preferred held by them.
c. After the payment of the full liquidation preference of
the Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred as set forth in Sections 3(a) and 3(b) above,
the assets of the Company legally available for distribution, if any, shall be
distributed ratably to the holders of the Common Stock, Series A
6.
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
E Preferred on an as-if-converted to Common Stock basis.
d. The following events shall be considered a liquidation
under this Section unless such event results in automatic conversion of the
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred pursuant to Section 4(b)(i)(C):
(i) any consolidation or merger of the Company with or
into any other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization own less than fifty percent (50%)
of the Company's voting power immediately after such consolidation, merger or
reorganization, or any transaction or series of related transactions to which
the Company is a party in which in excess of fifty percent (50%) of the
Company's voting power is transferred (an "Acquisition"); or
(ii) a sale, lease or other disposition of all or
substantially all of the assets of the Company (an "Asset Transfer").
e. If, upon any liquidation, distribution, or winding up,
the assets of the Company shall be insufficient to make payment in full to all
holders of Series A Preferred, Series B Preferred and Series E Preferred of the
liquidation preference set forth in Section 3(a), then such assets shall be
distributed among the holders of Series A Preferred, Series B Preferred and
Series E Preferred at the time outstanding, ratably in proportion to the full
amounts to which they would otherwise be respectively entitled.
f. If, upon any liquidation, distribution, or winding up,
after making payment in full to all holders of Series A Preferred, Series B
Preferred and Series E Preferred, the assets of the Company shall be
insufficient to make payment in full to all holders of Series C Preferred and
Series D Preferred of the liquidation preference set forth in Section 3(b), then
such assets shall be distributed among the holders of Series C Preferred and
Series D Preferred at the time outstanding, ratably in proportion to the full
amounts to which they would otherwise be respectively entitled.
4. CONVERSION RIGHTS.
The holders of the Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred shall have the
following rights with respect to the conversion of the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred into shares of Common Stock (the "Conversion Rights"):
a. OPTIONAL CONVERSION. Subject to and in compliance with
the provisions of this Section 4 (and in particular Section 4(d)), any shares of
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred may, at the option of the holder, be converted at any
time into fully-paid and nonassessable shares of Common Stock. The number of
shares of Common Stock to which a holder of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred shall be
entitled upon conversion shall be the product obtained by multiplying the
"Series A Preferred Conversion Rate," "Series B Preferred Conversion Rate,"
"Series C Preferred Conversion Rate," "Series D Preferred
7.
Conversion Rate," or "Series E Preferred Conversion Rate," as applicable, then
in effect (determined as provided in Section 4(c)) by the respective number of
shares of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred being converted.
b. AUTOMATIC CONVERSION.
(i) Each share of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred shall
automatically be converted into shares of Common Stock, based on the
then-effective Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price, Series D Preferred
Conversion Price or Series E Preferred Conversion Price, (A) at any time upon
the affirmative election of the holders of at least sixty-six and two thirds
percent (66 2/3%) of the outstanding shares of the Series A Preferred, the
Series B Preferred, the Series C Preferred, the Series D Preferred and the
Series E Preferred, voting together as a single class, or (B) immediately upon
the closing of a firmly underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the offer and sale of Common Stock, at a public
offering price (prior to any underwriters' discounts or commissions) equal to or
greater than $3.25 per share (as adjusted for stock splits, dividends,
recapitalizations and the like) for the account of the Company in which the
equity of the Company is valued at no less than $120,000,000 in the aggregate
(the "Minimum Transaction Value"); or (C) immediately prior to the closing of
any Acquisition in which (i) the equity of the Company is valued at no less than
the Minimum Transaction Value and (ii) the Stockholders of the Company
immediately prior to such transaction receive cash or securities that are not
restricted stock for purposes of the Securities Act and are tradable on a
national securities exchange or automated quotation system having a value at the
time of such closing of at least $3.25 per share of Common Stock of the Company
(as adjusted for stock splits, dividends, recapitalizations and the like). Upon
such automatic conversion, any declared and unpaid dividends shall be paid in
accordance with the provisions of Section 4(e). The number of shares of Common
Stock to which a holder of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred or Series E Preferred shall be entitled upon
conversion shall be the product obtained by multiplying the "Series A Preferred
Conversion Rate," the "Series B Preferred Conversion Rate," the "Series C
Preferred Conversion Rate," the "Series D Preferred Conversion Rate," or the
"Series E Preferred Conversion Rate" then in effect (determined as provided in
Section 4(c)) by the respective number of shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred being
converted.
(ii) Upon the occurrence of an event specified in
paragraph (i) above, the outstanding shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred shall
be converted automatically without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Company or its transfer agent; PROVIDED, HOWEVER, that the
Company shall not be obligated to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless the certificates evidencing
such shares of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred are either delivered to the Company or
its transfer agent as provided below, or the holder notifies the Company or its
8.
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with such certificates. Upon the
occurrence of such automatic conversion of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred, the
holders of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred shall surrender the certificates representing
such shares at the office of the Company or any transfer agent for the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred. Thereupon, there shall be issued and delivered to such holder
promptly at such office and in its name as shown on such surrendered certificate
or certificates, a certificate or certificates for the number of shares of
Common Stock into which the shares of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred or Series E Preferred surrendered were
convertible on the date on which such automatic conversion occurred, and any
declared and unpaid dividends shall be paid in accordance with the provisions of
Section 4(e).
c. SERIES A PREFERRED, SERIES B PREFERRED, SERIES C
PREFERRED, SERIES D PREFERRED AND SERIES E PREFERRED CONVERSION RATE. The
conversion rate in effect at any time for conversion of the Series A Preferred
(the "Series A Preferred Conversion Rate") shall be the quotient obtained by
dividing the Series A Original Issue Price by the "Series A Preferred Conversion
Price," calculated as provided in Section 4(d). The conversion rate in effect at
any time for conversion of the Series B Preferred (the "Series B Preferred
Conversion Rate") shall be the quotient obtained by dividing the Series B
Original Issue Price by the "Series B Preferred Conversion Price," calculated as
provided in Section 4(d). The conversion rate in effect at any time for
conversion of the Series C Preferred (the "Series C Preferred Conversion Rate")
shall be the quotient obtained by dividing the Series C Original Issue Price by
the "Series C Preferred Conversion Price," calculated as provided in Section
4(d). The conversion rate in effect at any time for conversion of the Series D
Preferred (the "Series D Preferred Conversion Rate") shall be the quotient
obtained by dividing the Series D Original Issue Price by the "Series D
Preferred Conversion Price," calculated as provided in Section 4(d). The
conversion rate in effect at any time for conversion of the Series E Preferred
(the "Series E Preferred Conversion Rate") shall be the quotient obtained by
dividing the Series E Original Issue Price by the "Series E Preferred Conversion
Price," calculated as provided in Section 4(d).
d. SERIES A PREFERRED, SERIES B PREFERRED, SERIES C
PREFERRED, SERIES D PREFERRED AND SERIES E PREFERRED CONVERSION PRICE. The
conversion price for the Series A Preferred shall initially be the Series A
Original Issue Price (the "Series A Preferred Conversion Price"). The conversion
price for the Series B Preferred shall initially be the Series B Original Issue
Price (the "Series B Preferred Conversion Price"). The conversion price for the
Series C Preferred shall initially be the Series C Original Issue Price (the
"Series C Preferred Conversion Price"). The conversion price for the Series D
Preferred shall initially be the Series D Original Issue Price (the "Series D
Preferred Conversion Price"). The conversion price for the Series E Preferred
shall initially be the Series E Original Issue Price (the "Series E Preferred
Conversion Price"). Such initial Series A Preferred, Series B Preferred, Series
C Preferred, Series D Preferred or Series E Preferred Conversion Prices shall be
adjusted from time to time in accordance with this Section 4. All references to
the Series A Preferred Conversion Price, the Series B Preferred Conversion
Price, the Series C Preferred Conversion Price, the Series D Preferred
Conversion Price or the Series E Preferred Conversion Price herein shall
9.
mean the Series A Preferred Conversion Price as so adjusted, the Series B
Preferred Conversion Price as so adjusted, the Series C Preferred Conversion
Price as so adjusted, the Series D Preferred Conversion Price as so adjusted,
and the Series E Preferred Conversion Price as so adjusted, respectively.
e. MECHANICS OF CONVERSION. Each holder of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred who desires to convert the same into shares of Common Stock pursuant
to this Section 4 shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any transfer agent for the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred and shall give written notice to the Company at such office that
such holder elects to convert the same. Such notice shall state the number of
shares of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred being converted. Thereupon, the Company shall
promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled and shall promptly pay in cash or, to the extent sufficient funds are
not then legally available therefor, in Common Stock (at the Common Stock's fair
market value determined by the Board of Directors as of the date of such
conversion), any declared and unpaid dividends on the shares of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred being converted. Such conversion shall be deemed to have been made
at the close of business on the date of such surrender of the certificates
representing the shares of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred or Series E Preferred to be converted, and the
person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
f. 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 E Preferred is issued (the "Original Issue Date") effect a
subdivision of the outstanding Common Stock without a corresponding subdivision
of the Preferred Stock, the Series A Preferred Conversion Price, the Series B
Preferred Conversion Price, the Series C Preferred Conversion Price, the Series
D Preferred Conversion Price and the Series E Preferred Conversion Price 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 without a corresponding combination of the Preferred
Stock, the Series A Preferred Conversion Price, the Series B Preferred
Conversion Price, the Series C Preferred Conversion Price, the Series D
Preferred Conversion Price and the Series E Preferred Conversion Price in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this Section 4(f) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
g. 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 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 Series A Preferred Conversion
Price, the Series B Preferred Conversion Price, the Series C Preferred
10.
Conversion Price, the Series D Preferred Conversion Price and the Series E
Preferred Conversion Price 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 Series A
Preferred Conversion Price, the Series B Preferred Conversion Price, the
Series C Preferred Conversion Price, the Series D Preferred Conversion Price
or the Series E Preferred 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 Series A Preferred Conversion
Price, the Series B Preferred Conversion Price, the Series C Preferred
Conversion Price, the Series D Preferred Conversion Price and the Series E
Preferred Conversion Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Series A Preferred Conversion
Price, the Series B Preferred Conversion Price, the Series C Preferred
Conversion Price, the Series D Preferred Conversion Price and the Series E
Preferred Conversion Price shall be adjusted pursuant to this Section 4(g) to
reflect the actual payment of such dividend or distribution.
h. 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 A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred or Series E 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 an
Acquisition or Asset Transfer as defined in Section 3(c) or a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4), in
any such event each holder of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred or Series E 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 A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred could have been converted immediately
prior to 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.
i. REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF
ASSETS. 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 an Acquisition or
Asset Transfer as defined in Section 3(c) or a recapitalization, subdivision,
combination, reclassification, exchange or substitution of shares provided for
elsewhere in this Section 4, as a part of such capital reorganization, provision
shall be made so that the holders of the Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred shall thereafter
be entitled to receive upon conversion of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or Series E Preferred the
number of shares of stock or other securities or property of the Company to
which a holder of the number of shares of Common Stock deliverable upon
conversion would have
11.
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 4
with respect to the rights of the holders of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred after
the capital reorganization to the end that the provisions of this Section 4
(including adjustment of the Series A Preferred Conversion Price, Series B
Preferred Conversion Price, Series C Preferred Conversion Price, Series D
Preferred Conversion Price or Series E Preferred Conversion Price then in effect
and the number of shares issuable upon conversion of the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or Series E
Preferred) shall be applicable after that event and be as nearly equivalent as
practicable.
j. SALE OF SHARES BELOW SERIES A PREFERRED, SERIES B
PREFERRED, SERIES D PREFERRED AND SERIES E PREFERRED CONVERSION PRICE.
(i) If at any time or from time to time after the Original
Issue Date, the Company issues or sells, or is deemed by the express provisions
of this Section 4(j) to have issued or sold, Additional Shares of Common Stock
(as defined in Section 4(j)(v) below), other than as a dividend or other
distribution on any class of stock as provided in Section 4(g) above, and other
than a subdivision or combination of shares of Common Stock as provided in
Section 4(f) above, for an Effective Price (as defined in Section 4(j)(v) below)
less than the then effective Series A Preferred Conversion Price, Series B
Preferred Conversion Price or Series E Preferred Conversion Price, then and in
each such case the then existing Series A Preferred Conversion Price, Series B
Preferred Conversion Price or Series E Preferred Conversion Price, as the case
may be, shall be reduced, as of the opening of business on the date of such
issue or sale, to a price determined by multiplying the Series A Preferred
Conversion Price, Series B Preferred Conversion Price or Series E Preferred
Conversion Price, as the case may be, by a fraction (i) the numerator of which
shall be (A) the number of shares of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale, plus (B) the number of shares of
Common Stock which the aggregate consideration received (as defined in Section
4(j)(iii)) by the Company for the total number of Additional Shares of Common
Stock so issued would purchase at such Series A Preferred Conversion Price,
Series B Preferred Conversion Price or Series E Preferred Conversion Price, and
(ii) the denominator of which shall be the number of shares of Common Stock
deemed outstanding (as defined below) immediately prior to such issue or sale
plus the total number of Additional Shares of Common Stock so issued. For the
purposes of the preceding sentence, the number of shares of Common Stock deemed
to be outstanding as of a given date shall be the sum of (A) the number of
shares of Common Stock actually outstanding, (B) the number of shares of Common
Stock into which the then outstanding shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred could
be converted if fully converted on the day immediately preceding the given date,
and (C) the number of shares of Common Stock which could be obtained through the
exercise or conversion of all other rights, options and convertible securities
on the day immediately preceding the given date.
(ii) If at any time after the Original Issue Date and prior
to January 1, 2001, the Company shall issue or be deemed to have issued
Additional Shares of Common Stock for an Effective Price per share of less than
the then effective Series D Preferred Conversion Price, then the Series D
Preferred Conversion Price then in effect shall be adjusted to
12.
equal the Effective Price per share for which such Additional Shares of Common
Stock were issued or deemed to have been issued. This Section 4(j)(ii) shall
terminate and be of no further force or effect from and after January 1, 2001.
(iii) For the purpose of making any adjustment required under
this Section 4(j), the consideration received by the Company for any issue or
sale of securities shall (A) to the extent it consists of cash, be computed at
the net amount of cash received by the Company after deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by the Company in connection with such issue or sale but without deduction of
any expenses payable by the Company, (B) to the extent it consists of property
other than cash, be computed at the fair value of that property as determined in
good faith by the Board of Directors, and (C) if Additional Shares of Common
Stock, Convertible Securities (as defined in Section 4(j)(iv)) or rights or
options to purchase either Additional Shares of Common Stock or Convertible
Securities are issued or sold together with other stock or securities or other
assets of the Company for a consideration which covers both, be computed as the
portion of the consideration so received that may be reasonably determined in
good faith by the Board of Directors to be allocable to such Additional Shares
of Common Stock, Convertible Securities or rights or options.
(iv) For the purpose of the adjustment required under this
Section 4(j), if the Company issues or sells (A) stock or other securities
convertible into, Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities") or (B) rights
or options for the purchase of Additional Shares of Common Stock or Convertible
Securities and if the Effective Price of such Additional Shares of Common Stock
is less than the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series D Preferred Conversion Price or Series E Preferred
Conversion Price, in each case the Company shall be deemed to have issued at the
time of the issuance of such rights or options or Convertible Securities the
maximum number of Additional Shares of Common Stock issuable upon exercise or
conversion thereof and to have received as consideration for the issuance of
such shares an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such rights or options or
Convertible Securities, plus, in the case of such rights or options, the minimum
amounts of consideration, if any, payable to the Company upon the exercise of
such rights or options, plus, in the case of Convertible Securities, the minimum
amounts of consideration, if any, payable to the Company (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion thereof; PROVIDED that if in the case of
Convertible Securities the minimum amounts of such consideration cannot be
ascertained, but are a function of antidilution or similar protective clauses,
the Company shall be deemed to have received the minimum amounts of
consideration without reference to such clauses; PROVIDED further that if the
minimum amount of consideration payable to the Company upon the exercise or
conversion of rights, options or Convertible Securities is reduced over time or
on the occurrence or non-occurrence of specified events other than by reason of
antidilution adjustments, the Effective Price shall be recalculated using the
figure to which such minimum amount of consideration is reduced; PROVIDED
further that if the minimum amount of consideration payable to the Company upon
the exercise or conversion of such rights, options or Convertible Securities is
subsequently increased, the Effective Price shall be again recalculated using
the increased minimum amount of consideration payable to the Company upon the
exercise or conversion of such rights, options or
13.
Convertible Securities. No further adjustment of the Series A Preferred
Conversion Price, Series B Preferred Conversion Price, Series D Preferred
Conversion Price or Series E Preferred Conversion Price, as adjusted upon the
issuance of such rights, options or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series D Preferred Conversion Price or Series E Preferred
Conversion Price as adjusted upon the issuance of such rights, options or
Convertible Securities shall be readjusted to the Series A Preferred Conversion
Price, Series B Preferred Conversion Price, Series D Preferred Conversion Price
or Series E Preferred Conversion Price which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common
Stock so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of such Convertible Securities, and such Additional Shares of Common Stock, if
any, were issued or sold for the consideration actually received by the Company
upon such exercise, plus the consideration, if any, actually received by the
Company for the granting of all such rights or options, whether or not
exercised, plus the consideration received for issuing or selling the
Convertible Securities actually converted, plus the consideration, if any,
actually received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion of such
Convertible Securities, PROVIDED that such readjustment shall not apply to prior
conversions of Series A Preferred, Series B Preferred, Series D Preferred or
Series E Preferred.
(v) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Company or deemed to be issued pursuant
to this Section 4(j), whether or not subsequently reacquired or retired by
the Company other than (A) shares of Common Stock issued or issuable upon
conversion of the Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred; (B) shares of Common Stock and/or
options, warrants or other Common Stock purchase rights, and the Common Stock
issued or issuable pursuant to such options, warrants or other rights to
employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary pursuant to stock purchase or stock option plans or
other arrangements that are approved by the Board; (C) shares of Common Stock
issued or issuable for consideration other than cash pursuant to a merger,
consolidation, acquisition or similar business combination; (D) shares of
Common Stock issued or issuable pursuant to any equipment loan or leasing
arrangement, or debt financing from a bank or similar financial institution;
and (E) shares of Common Stock issued or issuable in connection with
licensing transactions involving the Company and other entities, including
(1) joint ventures, manufacturing, marketing or distribution arrangements or
(2) technology transfer or development arrangements; PROVIDED that such
transactions in (1) and (2) and the issuance of shares therein has been
approved by at least five of the nine members of the Company's Board of
Directors. The "Effective Price" of Additional Shares of Common Stock shall
mean the quotient determined by dividing the total number of Additional
Shares of Common Stock issued or sold, or deemed to have been issued or sold
by the Company under this Section 4(j), into the aggregate consideration
received, or deemed to have been received by the Company for such issue under
this Section 4(j), for such Additional Shares of Common Stock.
14.
k. CERTIFICATE OF ADJUSTMENT. In each case of an adjustment
or readjustment of the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price, Series D Preferred
Conversion Price or Series E Preferred Conversion Price for the number of shares
of Common Stock or other securities issuable upon conversion of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred, if the Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred is then convertible pursuant to this
Section 4, the Company, at its expense, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to each registered holder of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred at the holder's address as shown in the Company's books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (i) the consideration received or deemed to be received by the
Company for any Additional Shares of Common Stock issued or sold or deemed to
have been issued or sold, (ii) the Series A Preferred Conversion Price, the
Series B Preferred Conversion Price, the Series C Preferred Conversion Price,
the Series D Preferred Conversion Price or the Series E Preferred Conversion
Price, as the case may be, at the time in effect, (iii) the number of Additional
Shares of Common Stock and (iv) the type and amount, if any, of other property
which at the time would be received upon conversion of the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or Series E
Preferred.
l. NOTICES OF RECORD DATE. Upon (i) 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 (ii) any Acquisition (as defined in Section 3(d)) or
other 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 Asset
Transfer (as defined in Section 3(d)), or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Company shall mail to
each holder of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred at least twenty (20) days prior to the
record date specified therein a notice specifying (A) 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, (B) the date on which any such
Acquisition, reorganization, reclassification, transfer, consolidation, merger,
Asset Transfer, dissolution, liquidation or winding up is expected to become
effective, and (C) 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 Acquisition, reorganization, reclassification,
transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or
winding up.
m. FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred or Series E Preferred. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more than
one share of Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred or Series E Preferred by a holder thereof shall be aggregated for
purposes of determining whether the conversion would result in the issuance of
15.
any fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of any fractional share, the Company shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the Board
of Directors) on the date of conversion.
n. 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, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred or Series E 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 A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E 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 A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E 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.
o. NOTICES. Any notice required by the provisions of this
Section 4 shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All notices
shall be addressed to each holder of record at the address of such holder
appearing on the books of the Company.
p. 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 A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred or Series E Preferred, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred so converted were registered.
q. NO DILUTION OR IMPAIRMENT. Without the consent of the
holders of then outstanding Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred as required under Section
2, the Company shall not amend its Restated Certificate of Incorporation or
participate in any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or take 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 A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred against dilution or other impairment.
16.
5. REDEMPTION.
a. The Series A Preferred, Series C Preferred, Series D
Preferred and Series E Preferred shall not be redeemable by the Company.
b. The Company shall be obligated to redeem the Series B
Preferred as follows:
(i) At the individual option of each holder of the then
outstanding shares of Series B Preferred, the Company, to the extent it may
lawfully do so, shall redeem the number of shares of Series B Preferred held by
such holder that is specified in a written request for redemption (a "Redemption
Request") delivered to the Company by the holder on or prior to the date that is
sixty (60) days before the fifth anniversary of the Original Issue Date, which
redemption shall occur in three (3) equal annual installments beginning on the
fifth anniversary of the Original Issue Date, and ending on the date three (3)
years from such first redemption date (each a "Redemption Date"). The Company
shall effect such redemptions on the applicable Redemption Date by paying in
cash in exchange for the shares of Series B Preferred to be redeemed a sum equal
to the Series B Original Issue Price per share of Series B Preferred (as
adjusted for any stock dividends, combinations, splits, recapitalizations and
the like) plus declared and unpaid dividends with respect to such shares plus an
amount equal to 8% of the Series B Original Issue Price per share of Series B
Preferred (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like) compounded annually from the second anniversary
of the Original Issue Date through the applicable Redemption Date. The total
amount to be paid for the Series B Preferred to be redeemed is hereinafter
referred to as the "Redemption Price." The number of shares of Series B
Preferred that the Company shall be required to redeem on any one Redemption
Date shall be equal to the amount determined by dividing (A) the aggregate
number of shares of Series B Preferred for which the Company timely received a
Redemption Request that are outstanding immediately prior to the Redemption Date
by (B) the number of remaining Redemption Dates (including the Redemption Date
to which such calculation applies). Shares subject to redemption pursuant to
this Section 5(b) shall be redeemed from each holder of Series B Preferred who
has timely submitted a Redemption Request on a pro rata basis.
(ii) At least thirty (30) days but no more than sixty
(60) days prior to the first Redemption Date, the Company shall send a notice (a
"Redemption Notice") to all holders of Series B Preferred to be redeemed setting
forth (A) the Redemption Price for the shares to be redeemed; and (B) the place
at which such holders may obtain payment of the Redemption Price upon surrender
of their share certificates. If the Company does not have sufficient funds
legally available to redeem all shares to be redeemed at the Redemption Date,
then it shall redeem such shares pro rata (based on the portion of the aggregate
Redemption Price payable to them) to the extent possible and shall redeem the
remaining shares to be redeemed as soon as sufficient funds are legally
available.
(iii) On or after such Redemption Date, each holder of
shares of Series B Preferred to be redeemed shall surrender such holder's
certificates representing such shares to the Company in the manner and at the
place designated in the Redemption Notice, and thereupon the Redemption Price of
such shares shall be payable to the order of the person whose
17
name appears on such certificate or certificates as the owner thereof and
each surrendered certificate shall be canceled. In the event less than all
the shares represented by such certificates are redeemed, a new certificate
shall be issued representing the unredeemed shares. From and after such
Redemption Date, unless there shall have been a default in payment of the
Redemption Price or the Company is unable to pay the Redemption Price due to
not having sufficient legally available funds, all rights of the holder of
such shares as a holder of Series B Preferred (except the right to receive
the Redemption Price without interest upon surrender of their certificates),
shall cease and terminate with respect to such shares; PROVIDED that in the
event that shares of Series B Preferred are not redeemed due to a default in
payment by the Company or because the Company does not have sufficient
legally available funds, such shares of Series B Preferred shall remain
outstanding and shall be entitled to all of the rights and preferences
provided herein.
(iv) In the event of a call for redemption of any
shares of Series B Preferred, the Conversion Rights (as defined in Section 4)
for such Series B Preferred shall terminate as to the shares designated for
redemption at the close of business on the fifth (5th) day preceding the
Redemption Date, unless default is made in payment of the Redemption Price.
6. NO REISSUANCE OF SERIES A PREFERRED, SERIES B PREFERRED,
SERIES C PREFERRED, SERIES D PREFERRED OR SERIES E PREFERRED.
No share or shares of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred or Series E Preferred acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise shall be
reissued.
V.
A. To the extent permitted by applicable law a director of the corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for any breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. To the extent
permitted by applicable law if the Delaware General Corporation Law is amended
after approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
B. Any repeal or modification of this Article V shall only be prospective
and shall not effect the rights under this Article V in effect at the time of
the alleged occurrence of any action or omission to act giving rise to
liability.
VI.
For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation, of its
18.
directors and of its stockholders or any class thereof, as the case may be, it
is further provided that:
A. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by the Board
of Directors in the manner provided in the Bylaws and pursuant to Article
IV.D.2.g. herein.
B. The Board of Directors may from time to time make, amend, supplement or
repeal the Bylaws; PROVIDED, HOWEVER, that the stockholders may change or repeal
any Bylaw adopted by the Board of Directors by the affirmative vote of the
percentage of holders of capital stock as provided therein; and, PROVIDED
further that no amendment or supplement to the Bylaws adopted by the Board of
Directors shall vary or conflict with any amendment or supplement thus adopted
by the stockholders.
C. The directors of the Corporation need not be elected by written ballot
unless the Bylaws so provide.
* * * *
FOUR: This Restated Certificate of Incorporation has been duly approved
by the Board of Directors of this Corporation.
FIVE: This Restated Certificate of Incorporation has been duly adopted
in accordance with the provisions of Sections 228, 242 and 245 of the General
Corporation Law of the State of Delaware by the Board of Directors and the
stockholders of the Corporation. The total number of outstanding shares entitled
to vote or act by written consent was 4,785,101 shares of Common Stock,
4,545,456 shares of Series A Preferred, 21,333,334 shares of Series B Preferred,
1,041,667 shares of Series C Preferred and 1,538,462 shares of Series D
Preferred. A majority of the outstanding shares of Common Stock, a majority of
the outstanding shares of Series A Preferred Stock, a majority of the
outstanding shares of Series B Preferred Stock, a majority of the outstanding
shares of Series D Preferred Stock and 66 2/3% of the outstanding shares of
Series A Preferred and Series B Preferred voting as a single class approved this
Restated Certificate of Incorporation by written consent in accordance with
Section 228 of the General Corporation Law of the State of Delaware and written
notice of such was given by the Corporation in accordance with said Section 228.
19.
IN WITNESS WHEREOF, Elitra Pharmaceuticals Inc. has caused this Restated
Certificate of Incorporation to be signed by the President and the Secretary in
San Diego, California this 18th day of August, 2000.
ELITRA PHARMACEUTICALS INC.
By: /s/ DR. HARRY F. HIXSON, JR.
-----------------------------------
Dr. Harry F. Hixson, Jr., President
ATTEST:
By: /s/ Alana B. Mcnulty
-------------------------------
Alana B. McNulty, Secretary