Exhibit 3
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CELSION CORPORATION
Articles Supplementary
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CELSION CORPORATION, a corporation (the "Corporation") organized and
existing under the laws of the State of Maryland, having its principal office in
Columbia, Maryland, hereby CERTIFIES to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to authority contained in the Corporation's Charter,
Seven Thousand (7,000) authorized but unissued shares of the Corporation's
capital stock, $.01 par value, have been duly reclassified by the Board of
Directors of the Corporation as authorized but unissued shares of Series A 10%
Convertible Preferred Stock.
SECOND: A description of the Series A 10% Convertible Preferred Stock
and of the powers, designation, preferences and rights of the shares of such
Series, and the qualifications, limitations, or restrictions thereof, is as
follows:
1. Designation and Par Value.
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The formal designation of the shares so reclassified by the
Board of Directors shall be Series A 10% Convertible Preferred Stock (referred
to herein for convenience as "Series A Preferred Stock" or as "Preferred
Shares"). The par value of Series A Preferred Stock is $.01 per share.
2. Liquidation Preference and Ranking.
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(a) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the business and affairs of the Corporation, and
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before the holders of shares of Common Stock or any other class or series of
stock of the Corporation ranking junior on liquidation to the Series A Preferred
Stock shall be entitled to any payment on account of such shares, the holders of
Series A Preferred Stock then outstanding shall be entitled to receive, as a
liquidation preference, an amount equal to One Thousand ($1,000.00) Dollars per
share (the "Original Cost"), plus any accrued but unpaid dividends (the Original
Cost plus such dividends being referred to as the "Liquidation Preference") to
which such shareholders have become entitled and which have not theretofore been
paid. After the holders of Series A Preferred Stock shall have received such
payment of the Liquidation Preference plus all accrued and unpaid dividends in
the course of such liquidation, dissolution or winding up, they shall have no
right or claim to any of the remaining assets of the Corporation.
(b) If upon any liquidation, dissolution or winding up, the
Corporation shall have insufficient funds to permit payment to the holders of
Series A Preferred Stock then outstanding of the entire amount to which they are
entitled as a Liquidation Preference thereunder, then such funds as are
available for such purpose shall be distributed among such holders on the basis
of the number of shares of Series A Preferred Stock held by each such holder so
that, as nearly as may be practicable, the amount each such holder shall receive
shall represent the same proportion of such available funds as such holder's
total holding of shares of Series A Preferred Stock represents of the total
shares of Series A Preferred Stock at the time outstanding.
(c) For all purposes under these Articles Supplementary, all
shares of Series A Preferred Stock shall be of equal rank with each other.
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3. Dividends.
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(a) The holders of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors of the
Corporation, out of capital surplus or earnings at the time legally available
therefor, dividends at the annual rate of 10% per share, payable in fully- paid
and non-assessable shares of Series A Preferred Stock which shall be valued, for
this purpose, at an amount equal to the Original Cost. Dividends shall accrue,
whether or not declared, unless such dividends are then prohibited by the
provisions of the Maryland General Corporation Law or the Corporation's
Certificate of Incorporation.
(b) Dividends shall be cumulative and shall be payable
semi-annually on March 31 and on September 30 in each year commencing January 1,
2000, to stockholders of record on the immediately preceding March 15th and
September 15th, respectively, or such other record date fixed for the purpose by
the Board of Directors. Dividends payable with respect to any shares of Series A
Preferred Stock for the initial dividend period and for any period less than a
full six-month period shall accrue from the date of issuance of such shares of
Series A Preferred Stock on which such dividends are payable, and shall be
computed and apportioned on the basis of a 180-day period composed of six 30-day
months. Holders of Series A Preferred Stock shall not be entitled to any
dividends in excess of the full dividends provided for herein, and no interest
or sum of money in lieu of interest shall be payable in respect of any dividend
payment which may be in arrears. No dividends shall be payable on any fractional
or full shares of Series A Preferred Stock which shall have been declared, paid
or distributed as dividends on outstanding Preferred Shares.
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4. No Dividends or Distributions to Junior Securities.
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Except as may be otherwise provided in these Articles
Supplementary, so long as any shares of Series A Preferred Stock are
outstanding, no dividends shall be declared or paid or set aside for payment,
and no other distribution shall be declared or made, upon any Common Stock of
the Corporation or upon any other shares of a class or series of stock which is
junior in right and ranking to the Series A Preferred Stock, unless all amounts
then due to the holders of Series A Preferred Stock, including the dividends
provided for herein, have been paid.
5. Voting Rights.
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Except as otherwise expressly provided herein or as provided
by law, the Series A Preferred Stock shall have no voting rights. However,
notwithstanding the foregoing, the written consent or affirmative vote of the
holders of a majority of the outstanding Series A Preferred Stock is required to
approve (i) any proposed amendment to the Company's Certificate of Incorporation
that would materially alter or change the powers, preferences, or special rights
of the Series A Preferred Stock so as to affect the holders adversely, and (ii)
any plan of merger or consolidation that contains provisions which, if contained
in a proposed amendment to the Company's Certificate of Incorporation, would
have entitled the holders of the Series A Preferred Stock to vote, as a class,
on the issue.
6. Exchange and Conversion Rights.
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The Preferred Shares and any fractional Preferred Shares
(including, for such purposes, any shares and fractional shares issued or
issuable as dividends) will be entitled to the following rights of exchange and
conversion, subject to any limitations and conditions provided in these Articles
Supplementary:
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(a) (i) If the Corporation undertakes a public
securities offering ("Public Offering") registered with the Securities
and Exchange Commission ("SEC") consisting of either (i) equity
securities of the Corporation or (ii) units ("Units") comprised of
equity securities of the Corporation and of shares of any subsidiary of
the Corporation (the securities and/or Units to be sold in such public
offering being referred to as "Public Offering Securities"), and
provided that such Public Offering is consummated by the first
anniversary of the date of sale in a private placement (the "Private
Placement") offering of at least $2,500,000 in aggregate Original Cost
of Series A Preferred Stock (such date being referred to as the
"Minimum Closing Date"), the Corporation will promptly furnish each
holder with written notice of the Corporation's filing with the SEC of
a registration statement concerning the Public Offering. Within 30 days
after the giving of such notice (the "30-day Election Period"), each
such holder will be required to notify the Corporation, by returning a
form to be furnished to each holder of Preferred Shares by the
Corporation, that such holder elects, contingent on the consummation of
the Public Offering, either (1) to exchange 100% of the Preferred
Shares then held by such holder (including Preferred Shares and
fractional Preferred Shares issued as dividends) for such Public
Offering Securities at an exchange price which will be equal to 70% of
the public offering price of the Public Offering Securities, or (2) to
exchange 50% of the Preferred Shares then held by such holder
(including Preferred Shares and fractional Preferred Shares issued as
dividends) for Public Offering Securities at an exchange price which
will be equal to 70% of the public offering price of the Public
Offering Securities and to convert the remaining 50% of such Preferred
Shares into the Company's Common Stock ("Common Stock") at a conversion
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price of $0.41 per share of Common Stock, as such price may be adjusted
from time to time in accordance with the provisions of Section 7 below
(as so adjusted, the "Conversion Price"). Concurrently with the
consummation of the Public Offering, each holder who has made such an
election shall surrender and deliver to the Corporation or to the
exchange agent or transfer agent designated for such purpose by the
Corporation, certificates for the Preferred Shares being exchanged, or
exchanged and converted as the case may be, as set forth in such
holder's election as described in the immediately preceding sentence.
Within five (5) business days thereafter, the Corporation will cause to
be issued to each holder certificates representing the Public Offering
Securities being issued in exchange for such Preferred Shares, and, as
the case may be, certificates representing shares of Common Stock into
which 50% of such Preferred Shares are being converted if such holder
has so elected in accordance with this Paragraph (a).
(ii) In addition, if the Corporation shall, within 12
months after the Minimum Closing Date, consummate the sale of any
subsidiary of the Corporation (or all or substantially all of the
assets of such subsidiary) to a public company, or shall complete a
merger of such subsidiary into a public company (a "Disposition
Transaction"), for consideration consisting of securities of such
public company (the "Disposition Securities"), each holder of Preferred
Shares will be promptly notified of such Disposition Transaction in a
manner similar to that provided for in the immediately preceding
sub-paragraph, and will have a similar 30-day Election Period to elect
either (1) to exchange 100% of the holder's Preferred Shares for such
Disposition Securities at an exchange price equal to 70% of the price
of the Disposition Securities established in the Disposition
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Transaction, or (2) to exchange 50% of such holder's Preferred Shares
for Disposition Securities on the same terms and to convert the
remainder of such Preferred Shares into Common Stock at the Conversion
Price. Within 20 days after the expiration of the applicable 30-day
Election Period, each holder who has made such an election shall
surrender and deliver to the Corporation or to the exchange agent or
transfer agent designated for such purpose by the Corporation,
certificates for the Preferred Shares being exchanged, or exchanged and
converted as the case may be, as set forth in such holder's election as
described in the immediately preceding sentence. Within five (5)
business days thereafter, the Corporation will cause to be issued to
each holder certificates representing the Disposition Securities being
issued in exchange for such Preferred Shares, and, as the case may be,
certificates representing shares of Common Stock into which 50% of such
Preferred Shares are being converted if such holder has so elected.
(b) If any holder of Preferred Shares does not elect either
exchange alternative (1) or exchange alternative (2) described in sub-paragraph
(a) (i) or (a) (ii) above, as the case may be, within the applicable 30-day
Election Period, all rights of any such non-electing holder to exchange such
Preferred Shares for Public Offering Securities (or Disposition Securities, as
the case may be) or to convert such Preferred Shares into Common Stock at such
time or at any time thereafter shall, provided the Public Offering or the
Disposition Transaction, as the case may be, is consummated by the first
anniversary of the Minimum Closing Date, immediately lapse and completely
terminate. The Corporation will, within a reasonable time thereafter, redeem the
Preferred Shares held by such non-electing holder at a redemption price per
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share equal to 105% of the Liquidation Preference, in accordance with the
provisions of Section 8 below, except that such non-electing holder shall not be
permitted to exercise any right to convert the Preferred Shares into Common
Stock granted under the provisions of paragraph (c) of this Section 6.
(c) Other than as set forth in Paragraph (a) of this Section
6, the holders of Series A Preferred Stock will not have any right to convert
their Preferred Shares prior to the earlier of (i) the first anniversary of the
Minimum Closing Date or (ii) the Corporation's issuance of a Redemption Notice
as defined in paragraph (b) of Section 8. If the Public Offering is not
consummated by the first anniversary of the Minimum Closing Date, then, at the
election of any holder of Preferred Shares at any time thereafter, and subject
to the condition set forth in Paragraph (d) of this Section 6, such holder may
convert his Preferred Shares (including any whole or fractional Preferred Shares
received as dividends under the provisions of Section 3) in whole or in part
into shares of the Company's Common Stock at the Conversion Price, in accordance
with the conversion procedure set forth in Paragraph (e) of this Section 6.
(d) In addition, if at any time subsequent to the first
anniversary of the Minimum Closing Date (no sale of Public Offering Securities
having been consummated by such first anniversary), the Corporation undertakes a
public offering consisting of the sale of Common Stock for its own account,
then, at the specific election of the Corporation and upon notice to the holders
of the Preferred Stock, such holders may be required to convert their shares of
Preferred Stock (including any whole or fractional Preferred Shares received as
dividends under the provisions of Section 3) into shares of Common Stock at the
Conversion Price. Such election by the Corporation may be exercised by the
giving of notice to holders of Preferred Shares, establishing a period of least
30 days from the date of such notice, during which holders shall convert their
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Preferred Shares into shares of Common Stock at the Conversion Price, and after
which all conversion rights of such holders shall lapse and completely
terminate.
(e) A right to convert Preferred Shares into shares of Common
Stock under paragraph (c) or (d) of this Section 6 shall be exercised by a
holder by delivering to the Corporation during regular business hours, or to
such agent as may be designated by the Corporation, the original certificate or
certificates for the shares to be converted, duly endorsed or assigned either in
blank or to the Corporation, accompanied by written notice in substantially the
form annexed hereto as Exhibit A, stating that the holder elects to convert such
shares (or the amount thereof as to which the conversion right is to be
exercised, which amount shall be not less than that represented by shares having
an aggregate Original Cost of $5,000) and stating the name or names (with
address and Social Security or Federal Taxpayer Identification Number) in which
the certificate or certificates for the shares of Common Stock are to be issued.
Conversion shall be deemed to have been effected on the date when the aforesaid
delivery is made (the "Conversion Date"). As promptly as practicable thereafter,
the Corporation shall issue and deliver to such holder (or upon the written
order of such holder) to the place designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled. The person in whose name the certificate or certificates for Common
Stock are to be issued shall be deemed to have become a stockholder of record on
the applicable Conversion Date unless the transfer books of the Corporation are
closed on that date, in which event such person shall be deemed to have become a
stockholder of record on the next succeeding date on which the transfer books
are open. Upon conversion of only a portion of the number of shares covered by a
certificate representing shares of Series A Preferred Stock surrendered for
conversion, the Corporation shall issue and deliver to such holder, or upon the
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written order of the holder of the certificate so surrendered for conversion, at
the expense of the Corporation, a new certificate covering the number of shares
of Series A Preferred Stock representing the unconverted portion of the
certificate so surrendered.
(f) The Corporation shall, at all times when Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
Series A Preferred Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock.
(g) All shares of Common Stock which may be issued in
connection with the conversion provisions set forth herein will, upon issuance
by the Corporation, be validly issued, fully paid and non-assessable. No
adjustment shall be made for dividends on any share of Series A Preferred Stock
which is being converted (unless such dividends have been accrued and are unpaid
as of the Conversion Date) or on any share of Common Stock issued on exercise of
a holder's Conversion Right.
(h) No fractional shares of Common Stock shall be issued upon
conversion of the Series A referred Stock and, in lieu of any fractional shares
to which the holder would otherwise be entitled, the number of shares of Common
Stock issuable upon conversion shall be rounded to the nearest whole number.
(i) All shares of Series A Preferred Stock which shall have
been surrendered for conversion or exchange as herein provided shall no longer
be deemed to be outstanding, and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall immediately
cease and terminate on the Conversion Date, with respect Preferred Shares which
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have been converted, and on the specified effective date of exchange for
Preferred Shares which have been exchanged, except only the right of the holders
thereof to receive shares of Common Stock, or Public Offering Securities, in
conversion or exchange therefor. Any shares of Series A Preferred Stock so
converted or exchanged shall be retired and canceled and shall not be reissued,
and the Corporation (without the need for stockholder action) may from time to
time take such appropriate action as may be necessary to reduce the authorized
number of shares of Series A Preferred Stock accordingly.
(j) The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issuance or delivery of shares of
Common Stock upon conversion of shares of Series A Preferred Stock pursuant to
this Section 6. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Preferred Stock so converted were registered, and no such issuance
or delivery shall be made unless and until the person or entity requesting such
issuance has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
7. Adjustments to Conversion Price.
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The Conversion Price (which is initially established at $.41
per share of Common Stock) in effect from time to time shall be subject to
adjustment (to the nearest cent) from time to time as follows:
(a) If the Corporation, at any time after the Minimum Closing
Date and at any time prior to the conversion of a Preferred Share shall have
subdivided its outstanding shares of Common Stock by recapitalization,
reclassification or split-up thereof, or if the Corporation shall have declared
a stock dividend or distributed shares of Common Stock to its stockholders, the
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Conversion Price immediately prior to such conversion shall be proportionately
increased; and if the Corporation, prior to such conversion, shall have at any
time combined the outstanding shares of Common Stock by recapitalization,
reclassification or comparable combination thereof, the Conversion Price
immediately prior to such conversion shall be proportionately increased.
(b) In case the Corporation, after the Minimum Closing Date,
shall consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, the Conversion Price shall be adjusted in such manner that the holder of
Preferred Shares, upon the conversion thereof as provided in Section 6 above, at
any time after the consummation of such consolidation, merger or conveyance,
shall be entitled to receive the securities or property to which such holder
would have been entitled upon such consummation if such holder had exercised his
right to convert such Preferred Shares immediately prior thereto.
(c) For purposes hereof, the term "Additional Shares of Common
Stock" shall mean all shares of Common Stock issued by the Corporation after the
Minimum Closing Date, or shares of Common Stock issuable upon conversion or
exchange of any securities (including, for this purpose, preferred stock other
than the Preferred Shares, and notes and debentures) convertible into Common
Stock ("Convertible Securities"), but not warrants or options issued after the
Minimum Closing Date, except to the extent such warrants or options are actually
exercised. If the Corporation at any time or from time to time after the Minimum
Closing Date shall agree to issue any Convertible Securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Convertible Securities, then the maximum number of shares of
Common Stock (as set forth in the instrument relating thereto without regard to
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any provision contained therein for a subsequent adjustment of such number)
issuable upon the conversion such Convertible Securities shall be deemed to be
Additional Shares of Common Stock, but only as of the time of such issuance of
Convertible Securities or, in case such a record date shall have been fixed,
only as of the close of business on such record date, provided that Additional
Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to paragraph (e) of this Section 7)
of such Additional Shares of Common Stock would be less than the Adjustment Base
Price as defined below in effect on the date of and immediately prior to such
issue, or such record date, as the case may be, and provided further that in any
such case in which Additional Shares of Common Stock are deemed to be issued
pursuant to this paragraph (c), no further adjustment in the Conversion Price
shall be made upon the subsequent issuance of Common Stock at the time of the
actual conversion of such Convertible Securities.
(d) In the event the Corporation shall at any time after the
Minimum Closing Date issue Additional Shares of Common Stock, including
Additional Shares of Common Stock deemed to be issued pursuant to paragraph (c)
of this Section 7 (except for issuances of Common Stock described in paragraph
(f) below) without consideration or for a consideration per share less than the
greater of (A) the applicable Conversion Price in effect immediately prior to
such issuance, and (B) 50% of the Current Market Value per share of Common Stock
(as defined below) as of the date of such issuance (such greater amount being
defined as the "Adjustment Base Price"), then and in such event, such Conversion
Price shall be reduced, concurrently with such issuance, to a price (calculated
to the nearest cent) determined by multiplying such Conversion Price by a
fraction: (A) the numerator of which shall be (1) the number of shares of Common
Stock outstanding immediately prior to such issuance plus (2) the quotient
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derived by dividing the aggregate consideration received from such issuance of
Additional Shares of Common Stock by the Adjustment Base Price; and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of such Additional Shares of
Common Stock so issued. For purposes hereof, Current Market Value shall mean the
Common Stock average closing price over a period of 60 trading days ending on
the day immediately preceding the date of issuance of the shares which are the
subject of the above calculations.
(e) For purposes of Paragraph (d) of this Section 7, the
consideration received by the Corporation for the issue of any Additional Shares
of Common Stock referred to therein shall be computed as follows:
Cash and Property: Such consideration shall:
(I) insofar as it consists of cash, be computed at
the gross amount of aggregate cash received by the
Corporation, excluding amounts paid or payable for
accrued interest and the costs of the issuance;
(II) insofar as it consists of property other than
cash, be computed at the fair market value thereof at
the time of such issue, as determined in good faith
by the Board of Directors; and
(III) in the event Additional Shares of Common Stock
are issued together with other shares or securities
or other assets of the Corporation for consideration
which covers both, be the proportion of such
consideration so received, computed as provided in
clauses (I) and (II) above, as determined in good
faith by the Board of Directors.
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(f) Notwithstanding anything to the contrary contained in this
Section 7 or elsewhere in these Articles Supplementary, the following issuances,
transactions or occurrences shall be excluded from those events requiring any
adjustment in accordance with Paragraph (d):
(i) The accrual or payment in kind of dividends
on the Series A Preferred Stock;
(ii) The issuance or re-issuance of the Preferred
Shares to any investors in the Private
Placement (or any subsequent issuance or
reissuance to their transferees) and any
exchange, conversion or redemption of any
Preferred Shares (and of any shares of
Series A Preferred Stock representing
dividends paid in kind) in accordance with
provisions governing such exchange,
conversion or redemption as set forth in the
Corporation's Articles of Incorporation,
Articles Supplementary and By-Laws;
(iii) The issuance to any of the Corporation's
executives, directors, employees and
consultants of options, warrants or shares
granted under any incentive, stock option,
bonus or other benefit plan, program or
policy of the Corporation, provided that
such issuances in the aggregate do not
exceed 15% in the aggregate of the
Corporation's then outstanding shares of
Common Stock;
(iv) The issuance of shares of Common Stock upon
the exercise of any option or warrant of the
Corporation outstanding on the Minimum
Closing Date (including all warrants to be
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issued to the placementagent in the Private
Placement, whether issued on or after the
Minimum Closing Date);
(v) The issuance of shares of Common Stock, or
warrants or options for the purchase of
shares of Common Stock, to pay, settle or
compromise Corporation obligations to
suppliers, vendors, contractors, licensors
and joint venture partners, including,
without limiting the generality of the
foregoing, Duke University and assignees or
designees of Warren C. Stearns and Stearns
Management Company; and
(vi) The future issuance of shares, or options or
warrants for the purchase of shares, at a
discount from the current market value, to
the placement agent in the Private Placement
or to another placement agent, or to an
underwriter, bank, commercial lender or
other institution, or to a broker-dealer or
investor which is furnishing or arranging
financing for the Company, provided that any
such issuance is not at a price which is
less than the Adjustment Base Price, it
being understood that, if such price is less
than the Adjustment Base Price, the
provisions of Paragraph (d) of this Section
7 shall govern the adjustment to be made to
the Conversion Price.
(g) The Corporation will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
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of the terms to be observed or performed hereunder by the Corporation, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders of the
Series A Preferred Stock against impairment.
(h) Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this Section 7, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of Series A Preferred Stock, upon the
request of such holder, a certificate setting forth such adjustment or
readjustment and showing the facts upon which such adjustment or readjustment is
based and the then Conversion Price.
8. Redemption.
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(a) Beginning six (6) months after the Minimum Closing Date
the Corporation, at its sole option, expressed by resolution of its Board of
Directors, may call for redemption and may redeem shares of Series A Preferred
Stock in whole, or from time to time in part, upon notice as set forth below.
The redemption price per share of Series A Preferred Stock shall be equal to
105% of the Liquidation Preference plus accrued and unpaid dividends.
(b) Notice of any redemption of the Series A Preferred Stock
(the "Redemption Notice") shall be given at least 30 days prior to the date
fixed in such notice for such redemption (the "Redemption Date") to each holder
of record of shares of Series A Preferred Stock, at such holder's address as the
same shall appear on the books of the Corporation. Such notice shall specify the
time and place of redemption, the redemption price, and, if less than all the
outstanding Preferred Shares are to be redeemed, shall also specify the
proportion of shares which are to be redeemed.
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(c) If any such notice of redemption shall have been duly
given and if, on or before the Redemption Date specified therein, all funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares so called for redemption, so as to be and continue to
be available therefor, then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for cancellation, all
shares so called for redemption shall no longer be deemed outstanding on and
after the Redemption Date, and the right to receive dividends thereon and all
other rights with respect to such shares shall forthwith on such Redemption Date
cease and terminate, except only the right of the holders thereof to receive the
amount payable on redemption, without interest.
(d) From and after the giving of the notice of redemption,
holders of Series A Preferred Stock shall continue to have the conversion rights
provided in Section 6, which rights shall continue in effect until the
Redemption Date.
(e) Shares of Series A Preferred Stock which have been
redeemed, purchased or otherwise acquired by the Corporation shall be canceled
and shall not be subject to re-issuance by the Corporation for any purpose.
9. General.
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(a) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series A Preferred Stock so
as to affect adversely the Series A Preferred Stock, without the written consent
or affirmative vote of the holders of a majority of the then outstanding shares
of Series A Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class, in accordance
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with applicable law. For this purpose, without limiting the generality of the
foregoing, the authorization of any shares of capital stock with preference or
priority over the Series A Preferred Stock as to the right to receive either
dividends or amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series A Preferred
Stock, and the authorization of any shares of capital stock on a parity with
Series A Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
shall not be deemed to affect adversely the Series A Preferred Stock.
(b) The number of authorized shares of Series A Preferred
Stock may be increased (but only for the purpose of providing a sufficient
number of authorized Preferred Shares for the payment of dividends on
outstanding Preferred Shares) or decreased (but not below the number of shares
then outstanding) by the directors of the Corporation.
(c) Any of the rights of the holders of Series A Preferred
Stock set forth herein may be waived by the affirmative vote of the holders of a
majority of the shares of Series A Preferred Stock then outstanding.
(d) Fractional shares of Series A Preferred Stock may be
issued as required in connection with the payment of dividends or transfers of
Preferred Shares among holders.
10. Notices.
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(a) Any notices required to be given to any holder of Series A
Preferred Stock shall be deemed properly given if deposited in the United States
mail, postage prepaid, or sent by facsimile or by overnight or express delivery
service, followed by duplicate notice via United States first class mail,
postage prepaid, and addressed to the holder of record at such holder's address
appearing at the books of the Corporation.
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(b) In case:
i. of any capital reorganization of the
Corporation , any reclassification of the
capital stock of the Corporation , any
consolidation or merger of the Corporation
with or into another corporation, or any
conveyance of all or substantially all of
the assets of the Corporation to another
corporation; or
ii. of any voluntary or involuntary dissolution,
liquidation or winding up of the
Corporation; or
iii. any other event specified in these Articles
requiring the taking of such a record,
Then, and in each such case, the Corporation shall mail or
cause to be mailed to each holder a notice specifying, as the case may be, the
date on which a record is to be taken for the foregoing purposes and providing
the information reasonably required in order enable the holders of record of
Preferred Shares to exercise the rights conferred by these Articles
Supplementary.
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THIRD: The reclassification of authorized but unissued shares as set
forth in these Articles Supplementary does not increase the authorized capital
of the Corporation or the aggregate par value thereof.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary for its Series A 10% Convertible Preferred Stock to be duly
executed by its President and by its Secretary, respectively, this 31st day of
January, 2000.
CELSION CORPORATION
By: /s/ Spencer J. Volk
--------------------
Spencer J. Volk
President and Chief Executive Officer
By: /s/ John Mon
------------
John Mon
Secretary
[Corporate Seal]
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EXHIBIT A
---------
CELSION CORPORATION
NOTICE OF CONVERSION OF
Series A 10% Convertible Preferred Stock
(To be Executed by the Registered Holder in order to Convert the Series A
Preferred Stock)
The undersigned Holder hereby irrevocably elects to convert ____ shares
of Series A Preferred Stock, represented by stock certificate No(s). ___________
(the "Preferred Stock Certificates") into shares of common stock ("Common
Stock") of Celsion Corporation according to the conditions set forth in the
Articles Supplementary for Series A Preferred Stock, as of the date written
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any. A copy of each
of the Preferred Stock Certificates being converted is attached hereto.
Date of Submission:
----------------------------------
Number of Shares of Series A 10% Convertible
Preferred Stock to be Converted:
--------------------
Name of Holder:
--------------------------------------
By:
--------------------------------------------------
(Signature)
Title:
-----------------------------------------------
Address:
---------------------------------------------
Social Security or
Federal Taxpayer ID No:
------------------------------
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IMPORTANT
---------
No shares of Common Stock will be issued until the original
Series A Preferred Stock Certificate(s) to be converted and the Notice
of Conversion are received by the Company. The Holder shall fax, or
otherwise deliver, a copy of this completed and fully executed Notice
of Conversion to the Corporation at the office of the Corporation or
such other location designated by the Corporation and shall deliver, at
the same time, the original Series A Preferred Stock Certificate(s)
representing the Series A Preferred Stock being converted, duly
endorsed for transfer.
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