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EXHIBIT 3.1.2
CERTIFICATE OF DESIGNATION
OF
CELSION (DELAWARE) CORPORATION
Certificate of Designations, Preferences
Rights and Limitations of
SERIES A 10% CONVERTIBLE PREFERRED STOCK
under Section 151 of the Delaware General Corporation Law
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Spencer J. Volk and John Mon HEREBY CERTIFY that they are, respectively,
the President and Chief Executive Officer, and the Secretary, of CELSION
(DELAWARE) CORPORATION (the "Corporation"), a corporation organized and
existing under the laws of the State of Delaware, and that, pursuant to (i)
authority conferred upon the Board of Directors by the Corporations'
Certificate of Incorporation and (ii) Section 151 of the Delaware General
Corporation Law, the Board of Directors of the Corporation has duly adopted
the following resolution providing for the issuance of a series of convertible
preferred stock, as follows:
RESOLVED, that pursuant to authority expressly granted to and
vested in the Board of Directors by the provisions of the Certificate of
Incorporation and Section 151 of the Delaware General Corporation Law,
the Board of Directors hereby creates a series consisting of 7,000
shares of Series A 10% Convertible Preferred Stock of the Corporation,
and hereby fixes the powers, designation, preferences and rights of the
shares of such Series, and the qualifications, limitations, or
restrictions thereof (in addition to those provisions set forth in the
Certificate of Incorporation which may be applicable to the Preferred
Stock), as follows:
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:
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1. Designation and Par Value.
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.
(a) Upon any voluntary or involuntary liquidation, dissolution
or winding up of the business and affairs of the Corporation, and 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 Liquidations 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
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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 this Certificate of Designation,
all shares of Series A Preferred Stock shall be of equal rank with each other.
3. Dividends.
(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 Delaware 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
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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.
4. No Dividends or Distributions to Junior Securities.
Except as may be otherwise provided in this Certificate of
Designation, 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.
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.
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
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following rights of exchange and conversion, subject to any limitations and
conditions provided in this Certificate of Designation:
(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 Shares issued as dividends)
for Public Offering Securities at an exchange price which will be equal
to 70% of the public offering price of
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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 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 similar 30-day Election Period to elect either (1) to exchange 100%
of the holder's Preferred Shares for such Disposition Securities at
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an exchange price equal to 70% of the price of the Disposition
Securities established in the Disposition 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 had 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
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per 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 for 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 fort 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 me
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
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convert their 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 tot he 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 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 Preferred 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 have been converted, and on the specified effective date of
exchange for Preferred Shares
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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.
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 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 recapitalizatoin,
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 Prices 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 received 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 any provision contained therein for a
subsequent adjustment of such number)
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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 an 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 Prices 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 derived by dividing the aggregate
consideration received from such issuance of Addition Shares of
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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 so received,
computed as provided in clauses (i) and (ii) above, as
determined in good faith by the Board of Directors.
(f) Notwithstanding anything to the contrary contained in this
Section 7 or elsewhere in these Certificate of Designation, the following
issuances, transactions or
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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, Certificate of
Designation 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 issued to the
placement agent in the Private Placement, whether
issued on or after the Minimum Closing Date);
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(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
of the terms to be observed or preformed hereunder by the Corporation, will at
all times in good faith assist in the carrying out of all the provisions of
this Section 7 and in the
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taking of all such actions 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.
(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 noticed
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.
(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
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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, al 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.
(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 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
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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 disbributable 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 of 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.
(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.
(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
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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 this Certificate
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 to holders of record of
Preferred Shares to exercise the rights conferred by this Certificate of
Designation.
THIRD: The reclassification of authorized but unissued shares as set
forth in this Certificate of Designation does not increase the authorized
capital of the Corporation or the aggregate par value thereof.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation for its Series A 10% Convertible Preferred Stock to be duly
executed by its President and by its Secretary, respectively, this 15th day of
August 2000.
CELSION (DELAWARE) CORPORATION
By: S/SPENCER J. VOLK
---------------------------------------
Spencer J. Volk
President and Chief Executive Officer
By: S/JOHN MON
---------------------------------------
John Mon, Secretary
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EXHIBIT A
CELSION (DELAWARE) CORPORATION
NOTICE OF CONVERSIONOF
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
Certificate of Designation 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 Share of Series A 10% Convertible
Preferred Stock to be Converted:
-----------------------
Name of Holder:
---------------------------------
By:
-------------------------------
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 Certificates(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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