CERTIFICATE OF DESIGNATION
SETTING FORTH THE PREFERENCES, RIGHTS
AND LIMITATIONS OF SERIES D CONVERTIBLE PREFERRED
STOCK OF IMMUNOMEDICS, INC.
IMMUNOMEDICS, INC. , a Delaware corporation (the
"Company") certifies that pursuant to the authority contained in
Article IV of its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the
following resolution creating a series of its preferred stock to
be designated Series D Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized
preferred stock of the Company be hereby created, and that the
designation and amount thereof and the voting powers, preferences
and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations and
restrictions thereof are as follows:
Section 1. Designation, Amount, Ranking and Par
Value. The designation of the series of Preferred Stock
shall be "Series D Convertible Preferred Stock" (this
"Series") and the number of shares constituting this Series
shall be 200,000. The par value of each share of this
Series shall be $0.01. Shares of this Series shall have a
stated value of $50 per share (the "Stated Value"). The
shares of this Series shall rank prior to the Junior Stock
(as defined below) as to distribution of assets (upon
liquidation or otherwise) and payment of dividends.
Section 2. Dividends.
(a) The Holders shall be entitled to receive,
when and as declared by the Board of Directors out of funds
legally available for the purpose, dividends at the rate of
$2.50 per share per annum, payable at the option of the
Company, either in cash or shares of Common Stock (valued
at the average of the Per Share Market Value for the ten
Trading Days preceding the record date for determination of
Holders entitled to receive such dividend). The Company
shall give the Holders at least 30 days prior notice in the
event it elects to pay a dividend in shares of Common
Stock. Dividends on shares of this Series will accumulate
and be payable annually on June 30 of each year, commencing
June 30, 1997. Dividends on shares of this Series will be
cumulative whether or not earned or declared and whether or
not there shall be funds of the Company legally available
for the payment of such dividends. Accruals and
accumulations of dividends shall not bear interest.
Notwithstanding the foregoing, no dividends shall be
payable in respect of shares of this Series which are
converted prior to the June 30 payment date for the
respective year.
(b) So long as any shares of this Series are
outstanding, no dividend or distribution in cash or other
property on the Junior Stock (other than a dividend or
distribution described in Section 6) shall be declared or
paid or set apart for payment unless, at the same time, the
same dividend or distribution is declared or paid or set
apart, as the case may be, on each share of this Series in
the amount equal to the product of (i) the declared
dividend on the Junior Stock and (ii) the Conversion Ratio
(defined below) in effect on the Record Date (as defined
below). Any record date (the "Record Date") and the
payment date for this Series shall be the same as the
respective record date and payment date for dividends or
distributions on any Junior Stock.
Section 3. Redemption. Prior to the expiration of the
Conversion Term (as defined below), the shares of this
Series shall not be redeemable at the option of the
Company, except by agreement between the Company and the
Holder. After expiration of the Conversion Term, the
Company may redeem any shares of this Series at a price
equal to the Stated Value.
Section 4. Voting Rights. The holders shall not be
entitled to vote on matters submitted to the vote of the
holders of Common Stock. However, so long as any shares of
this Series are outstanding, the Company shall not, without
the affirmative vote of the Holders of two-thirds of the
outstanding shares of this Series, (i) alter or change the
powers, preferences or rights given to this Series
adversely or (ii) authorize or create any series or class
of capital stock or issue any shares of capital stock
ranking as to dividends or distribution of assets (upon
liquidation or otherwise) prior to or pari passu with this
Series.
Section 5. Liquidation. In the event of any complete
liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary, the Holders shall be
entitled to receive out of the assets of the Company,
whether such assets are capital or surplus, for each share
of this Series an amount equal to $50.00 per share before
any distribution shall be made to the holders of Junior
Stock of the Company, and if the assets of the Company
shall be insufficient to pay in full such amounts, then
such assets shall be distributed among such Holders ratably
in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were
paid in full.
Section 6. Conversion.
(a) Each share of this Series shall be
convertible into shares of Common Stock at the Conversion
Ratio, at the option of the Holder in whole or in part at
any time prior to the expiration of the Conversion Term.
The Company shall give to each Holder 30 days prior written
notice of the expiration of the Conversion Term. The
Holders shall effect conversions by delivering to the
Company a written notice substantially in the form of
conversion notice set forth on the reverse of the
certificate evidencing shares of this Series (the
"Conversion Notice"), which Conversion Notice, once given,
shall be irrevocable.
(b) No later than five Trading Days following
the last day of the applicable Pricing Period, each Holder,
who is converting shares, shall deliver to the Company the
certificate or certificates representing the shares of the
Series to be converted and within five Trading days
thereafter the Company will deliver to such Holder (i) a
certificate or certificates which shall be free of
restrictive legends and "stop transfer" restrictions
representing the number of shares of Common Stock being
acquired upon the conversion of shares of this Series and
(ii) if the Holder is converting less than all shares of
this Series, a certificate for such number of shares of
this Series as have not been converted.
(c)(i) The Conversion Price (the "Conversion
Price") in effect on any Conversion Date or Record Date
shall equal 89% of the Pricing Period Average Price.
(ii) If the Company, during any Pricing
Period, shall (A) pay a stock dividend or otherwise make a
distribution or distributions on shares of its Junior Stock
payable in shares of its capital stock (whether payable in
shares of its Common Stock or of capital stock of any
class), (B) subdivide outstanding shares of Common Stock
into a larger number of shares, (C) combine outstanding
shares of Common Stock into a smaller number of shares,
(D) issue by reclassification of shares of Common Stock any
shares of capital stock of the Company, (E) issue rights or
warrants to all holders of Common Stock (but not to the
Holders) entitling them (for a period expiring within 45
days after the record date mentioned below) to subscribe
for or purchase shares of Common Stock at a price per
share less than the Per Share Market Value of Common Stock
at the record date for determining holders entitled to
receive such rights, (F) distribute to all holders of
Common Stock (and not to the Holders) rights or warrants to
subscribe for or purchase any security (excluding those
referred to in subsection 6(c)(ii)(E) above), or (G) take
any other action similar to the above which materially and
adversely affects the rights of the Holders different than
or distinguished from the effects generally on the rights
of the holders of any other class of the Company's capital
stock), the Company shall make an appropriate adjustment to
the Sales Price for each Trading Day in the Pricing Period
prior to the record date or effective date of such event so
as to continue to give to each Holder, the economic value
of the Conversion Price formula set forth in Section
6(c)(i), as determined by the Board of Directors of the
Company in good faith; provided, however that if the
Holders of a majority in interest of the shares of this
Series ("Majority in Interest") disagree with the
determination of the Board of Directors, then the Holders
of a Majority in Interest and the Company shall each in
good faith select a national or regional investment banking
firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly
examines the financial statements of the Company) (an
"Appraiser") who shall mutually agree on the amount, if any
of the adjustment required by this section and provided,
further that if the Appraisers are unable to agree, the
amount of the adjustment be equal to the average of the
determinations by each such Appraiser.
(iii) Whenever an adjustment is required
pursuant to Section 6(c)(ii), the Company shall promptly
mail to each Holder a notice setting forth the Sales Prices
after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(iv) In case of any reclassification of
the Common Stock, any consolidation or merger of the
Company with or into another person, sale or transfer of
all or substantially all of the assets of the Company or
any compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other
securities, cash or property, then the Holders shall have
the right thereafter to convert such shares only into the
kind and amount of shares of stock and other securities and
property receivable upon or deemed be held following such
reclassification, consolidation, merger, sale, transfer or
share exchange by a Holder of a number of shares of the
Common Stock of the Company into which such shares this
Series could have been converted immediately prior to such
reclassification, consolidation, merger, sale, transfer or
share exchange. The terms of any such consolidation,
merger, sale, transfer or share exchange shall include such
terms so as to continue to give to each Holder, the
economic value of the Conversion Price formula set forth in
Section 6(c)(i) following such consolidation, merger, sale,
transfer or share exchange. This provision shall similarly
apply to successive reclassification, consolidation,
mergers, sales, transfers or share exchanges.
(v) All calculations under this Section
6 shall be made to the nearest cent or the nearest 1/l00th
of a share, as the case may be.
(d) The Company shall at all times reserve and
keep available, out of its authorized and unissued Common
Stock solely for the purpose of issuance upon conversion of
this Series as herein provided, free from preemptive rights
or any other actual or contingent purchase rights of
Persons other than the Holders, such number of shares of
Common Stock as shall be issuable upon the conversion of
all outstanding shares of this Series. All shares of
Common Stock that shall be so issued upon conversion of
shares of this Series shall be duly and validly issued and
fully paid and nonassessable.
(e) The Company shall not be required to issue
stock certificates representing fractions of shares of
Common Stock, but may if otherwise permitted, make a cash
payment in respect of any final fraction of a share based
on the Per Share Market Value at such time. If the Company
elects not, or is unable, to make such a cash payment, each
Holder shall be entitled to receive, in lieu of the final
fraction of a share, one whole share of Common Stock.
(f) The issuance of certificates for shares of
Common Stock on conversion of this Series shall be made
without charge to the Holders for any documentary stamp or
similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided, that the Company
shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that
of the Holder converted and the Company shall not be
required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company
that such tax has been paid.
(g) The Company shall have no right to require
any Holder to convert any or all of this Series into Common
Stock.
(h) Shares of this Series converted into
Common Stock shall be canceled and shall have the status of
authorized but unissued shares of Preferred Stock but may
not be reissued as shares of this Series.
(i) If the Company shall authorize or declare
the taking of any event set forth in Section 6(c)(ii) or
(iv) during a Pricing Period, the Holders of a Majority in
Interest may in their sole discretion, elect by written
notice to the Company to reduce the term of the Pricing
Period to the Trading Day immediately preceding the date of
such authorization or declaration and to accelerate the
delivery of the shares to a date which is five business
days after the date of the notice given by such Holders.
(j) If Company intends to initiate a public
offering of its securities during the Conversion Term, in
an amount exceeding $12 million in the aggregate (excluding
any shares sold by selling shareholders or pursuant to the
exercise of an overallotment option) and the Company
reasonably believes that the conversion of any shares of
this Series may have an adverse effect on the ability of
the Company to complete such offering or the price at which
such securities could be sold therein, the Company, upon at
least 30 days' prior written notice to all Holders, may
suspend the right of all Holders to convert such shares
pursuant to Section 6 for the period commencing on the date
the Company files with the Securities and Exchange
Commission a registration statement under the Securities
Act of 1933 and terminating 30 days after the closing of
the public offering relating thereto; provided, however,
that such period shall not exceed four months and provided,
further, that the last day of the Conversion Term shall be
extended for 120% of such number of days as the conversion
right was suspended.
Section 7. Definitions. For the purposes hereof,
the following terms shall have the following meanings:
"Common Stock" means shares now or hereafter
authorized of the class of Common Stock, $0.01 par value,
of the Company presently authorized and stock of any other
class into which such shares may hereafter have been
reclassified or changed.
"Conversion Date" means the last day of the
relevant Pricing Period.
"Conversion Ratio" means a fraction, of which
the numerator is Stated Value, and of which the denominator
is the Conversion Price.
"Conversion Term" means the period commencing
on the date that the shares of this Series are issued and
ending on the second anniversary of the date of such
issuance, or such later date as the Company and the Holder
may agree in writing
"Junior Stock" means the Common Stock of the
Company and any other capital stock of the Company, except
as to shares of capital stock of any series or class which,
by its terms, is prior in right of distribution to the
shares of this Series.
"Holder" means a holder of record of
outstanding shares of this Series. Any notice required or
permitted to be given to a Holder shall be given to such
Holder at its last address as it shall appear upon the
stock books of the Company.
"Per Share Market Value" means on any
particular date (a) the last sale price per share of the
Common Stock on such date on the principal stock exchange
or The Nasdaq Stock Market, as the case may be, on which
the Common Stock is then traded or, if there is no such
price on such date, then the last price on such exchange on
the date nearest preceding such date, or (b) if the Common
Stock is not listed on any stock exchange or The Nasdaq
Stock Market, the average of the bid and asked price for a
share of Common Stock in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions
of reporting prices), or (c) if the Common Stock is no
longer publicly traded the fair market value of a share of
Common Stock as determined by an Appraiser selected in good
faith by the Holders of a Majority in Interest; provided,
however, that if the Company, after receipt of the
determination by such Appraiser shall have the right to
select an additional Appraiser, in which case, the fair
market value shall be equal to the average of the
determinations by each such Appraiser; provided further
that none of the transactions related to the foregoing
determination shall include purchases by any "affiliate"
(as such term is defined in the General Rules and
Regulations under the Securities Act of 1933) of the
Company.
"Person" means a corporation, an association,
a partnership, organization, a business, an individual, a
government or political subdivision thereof or a
governmental agency.
"Pricing Period" means the 10 Trading Days
immediately preceding the date of the related Conversion
Notice (or Record Date for distributions) and the 10
Trading Days commencing on the date of the related
Conversion Notice (or Record Date for distributions).
"Pricing Period Average Price" means the
average of the Sales Price during each day of the relevant
Pricing Period.
"Sales Price" means, with respect to any
Trading Day, (a) if the Common Stock is then listed or
quoted on a principal stock exchange or The Nasdaq Stock
Market, the low sales price on such day of the Pricing
Period or (b) if the Common Stock is not listed or quoted
on a principal stock exchange or The Nasdaq Stock Market
but is quoted in the over-the-counter market, the closing
bid price on such day.
"Trading Day" means (a) a day on which the
Common Stock is traded on the principal stock exchange or
The Nasdaq Stock Market, as the case may be, as reported
by such stock exchange or The Nasdaq Stock Market, or (b)
if the Common Stock is not traded on a principal stock
exchange or The Nasdaq Stock Market, a day on which the
Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or
any similar organization or agency succeeding to its
functions of reporting prices).
IN WITNESS WHEREOF, IMMUNOMEDICS, INC. has caused this
Certificate of Designation to be executed by its Chairman of
the Board and Chief Executive Officer and attested to by its
Secretary this 26th day of June, 1996.
IMMUNOMEDICS, INC.
By /s/ David M. Goldenberg
________________________________
David M. Goldenberg
Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Amy Factor
______________________
Amy Factor
Secretary