Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
HYBRIDON, INC.
Hybridon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
1. The Corporation filed its original Certificate of Incorporation with
the Secretary of State of Delaware on May 25, 1989, which Certificate of
Incorporation was amended by a Certificate of Amendment of Certificate of
Incorporation filed on February 21, 1990, and amended and restated by a Restated
Certificate of Incorporation filed on June 5, 1990. A Restated Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
November 20, 1990, which Restated Certificate of Incorporation was amended by a
Certificate of Amendment of Restated Certificate of Incorporation filed on
October 16, 1991, a Certificate of Amendment of Restated Certificate of
Incorporation filed on March 3, 1992, a Certificate of Amendment of Restated
Certificate of Incorporation filed on March 23, 1992, a Certificate of Amendment
of Restated Certificate of Incorporation filed on October 23, 1992, a
Certificate of Amendment of Restated Certificate of Incorporation filed on
February 12, 1993, a Certificate of Amendment of Restated Certificate of
Incorporation filed on June 17, 1993, a Certificate
of Amendment of Restated Certificate of Incorporation filed on July 13, 1993, a
Certificate of Amendment of Restated Certificate of Incorporation filed on
September 9, 1994, a Certificate of Amendment of Restated Certificate of
Incorporation filed on July 7, 1995, a Certificate of Amendment of Restated
Certificate of Incorporation filed on December 19, 1995, and a Certificate of
Retirement of Stock filed on even date herewith.
2. At a meeting of the Board of Directors of the Corporation, a
resolution was duly adopted, pursuant to Sections 141(f) and 245 of the General
Corporation Law of the State of Delaware, setting forth a Restated Certificate
of Incorporation of the Corporation and declaring said Restated Certificate of
Incorporation advisable. The resolution setting forth the Restated Certificate
of Incorporation is as follows:
RESOLVED: That the Restated Certificate of Incorporation of the
Corporation, as amended, be and hereby is amended and restated in its entirety
so that the same shall read as follows:
FIRST. The name of the Corporation is:
Hybridon, Inc.
SECOND. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at
such address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
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FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issues is One Hundred Million (100,000,000)
shares of Common Stock, $.001 par value per share ("Common Stock"), and (ii)
Five Million ($5,000,000)shares of Preferred Stock, $.01 par value per share
("Preferred Stock"), which may be issued from time to time in one or more series
as set forth in Part B of this Articles FOURTH.
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. GENERAL. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated by the Board of Directors
upon any issuance of the Preferred Stock of any series.
2. VOTING. The holders of the Common Stock are entitled to one vote for
each share held at all meetings of stockholders (and written actions in lieu of
meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote, irrespective of the provisions of Section 242(b)(2) of the
General Corporation Law of Delaware.
3. DIVIDENDS. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. LIQUIDATION. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
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B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
the resolutions providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be junior to the
Preferred Stock of any other series to the extent permitted by law. Except as
otherwise specifically provided in this Certificate of Incorporation, no vote of
the holders of the Preferred Stock or Common Stock shall be a prerequisite to
the issuance of any shares of any series of the Preferred Stock authorized by
and complying with the conditions of the Certificate of Incorporation, the right
to have such vote being expressly waived by all present and future holders of
the capital stock of the Corporation.
FIFTH. The name and mailing address of the sole incorporator are as
follows:
NAME MAILING ADDRESS
---- ---------------
David P. Johst 60 State Street
Boston, MA 02109
SIXTH. In furtherance of and not in limitation of powers conferred by statute,
it is further provided:
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1. Election of directors need not be by written ballot.
2. The Board of Directors is expressly authorized to adopt,
amend or repeal the By-Laws of the Corporation.
SEVENTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any promise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH. Except to the extent that the General Corporation Law of the
State of Delaware prohibits the elimination or limitation of liability of
directors for breaches of fiduciary duty, no director of the Corporation shall
be personally liable to the Corporation or its stockholders for monetary damages
for any breach of fiduciary duty as a director, notwithstanding any provision of
law imposing such liability. No amendment to or repeal of this provision shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
NINTH. 1. ACTION, SUITS AND PROCEEDINGS OTHER THAN BY OR IN THE RIGHT
OF THE CORPORATION. The Corporation shall indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has
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agreed to become, a director or officer of the Corporation, or is or was
serving, or has agreed to serve, at the request of the Corporation, as a
director, officer or trustee of, or in a similar capacity with, another
corporation, partnership, joint venture, trust or other enterprise (including
any employee benefit plan) (all such persons being referred to hereafter as an
"Indemnitee"), or by reason of any action alleged to have been taken or omitted
in such capacity, against all expenses (including attorneys' fees) judgment,
fines and amounts paid in settlement actually and reasonably incurred by him or
on his behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful. Notwithstanding anything to the contrary in this Article, except
as set forth in Section 6 below, the Corporation shall not indemnify an
Indemnitee seeking indemnification in connection with a proceeding (or part
thereof) initiated by the Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation.
2. ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action, suit
or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or
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the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of such liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses (including attorneys' fees) which the Court of
Chancery of Delaware or such other court shall deem proper.
3. INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY. Notwithstanding
the other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or NOLO CONTENDERE by the Indemnitee, (iv) an adjudication that the
Indemnitee did not act in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
4. NOTIFICATION AND DEFENSE OF CLAIM. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Section 4. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a
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conflict of interest or position on any significant issue between the
Corporation and the Indemnitee in the conduct of the defense of such action or
(iii) the Corporation shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees and expenses of counsel
for the Indemnitee shall be at the expense of the Corporation, except as
otherwise expressly provided by this Article. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. ADVANCE OF EXPENSES. Subject to the provisions of Section 6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 4 of this Article of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Article, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter,
PROVIDED, HOWEVER, that the payment of such expense incurred by an Indemnitee in
advance of the final disposition of such matter shall be made only upon receipt
of an undertaking by or on behalf of the Indemnitee to repay all amounts so
advanced in the event that it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Corporation as authorized in this
Article. Such undertaking may be accepted without reference to the financial
ability of such person to make such repayment.
6. PROCEDURE FOR INDEMNIFICATION. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification or advancement of expenses shall be made promptly, and in
any event within 60 days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines, by clear and convincing evidence, within such 60-day
period that the Indemnitee did not meet the applicable standard of conduct set
forth in Section 1 or 2, as the case may be. Such determination shall be made in
each instance by (a) a majority vote of a quorum of the directors of the
Corporation consisting of persons who are not at that time parties to the
action, suit or proceeding in question ("disinterested directors'), (b) if no
such quorum is obtainable, a majority vote of a committee of two or more
disinterested directors,
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(c) a majority vote of a quorum of the outstanding shares of stock of all
classes entitled to vote for directors, voting as a single class, which quorum
shall consist of stockholders who are not at that time parties to the action,
suit or proceeding in question, (d) independent legal counsel (who may be
regular legal counsel to the Corporation), or (e) a court of competent
jurisdiction.
7. REMEDIES. The right to indemnification or advances as granted by
this Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6. Unless otherwise provided by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advanced of expenses under this
Article shall be on the Corporation. Neither the failure of the Corporation to
have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Section 6 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.
8. SUBSEQUENT AMENDMENT. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to indemnification under the provisions hereof with respect to
any action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or facts occurring prior to the final adoption of such
amendment, termination or repeal.
9. OTHER RIGHTS. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
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indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Article.
10. PARTIAL INDEMNIFICATION. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal,
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
11. INSURANCE. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation law of Delaware.
12. MERGER OR CONSOLIDATION. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
13. SAVINGS CLAUSE. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees) judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
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14. DEFINITIONS. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
15. SUBSEQUENT LEGISLATION. If the General Corporation Law of Delaware
is amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.
TENTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute and this Restated Certificate
of Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
ELEVENTH. This Article is inserted for the management of the business
and for the conduct of the affairs of the Corporation and shall not become
effective until the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, resulting in at least $10,000,000
of gross proceeds to the Corporation (a "Public Offering").
1. NUMBER OF DIRECTORS. The number of directors of the Corporation shall not be
less than three. The exact number of directors within the limitations specified
in the preceding sentence shall be fixed from time to time by, or in the manner
provided in, the Corporation's By-Laws.
2. CLASSES OF DIRECTORS. The Board of Directors shall be and is divided
into three classes: Class I, Class II and Class III. No one class shall have
more than one director more than any other class. If a fraction is contained in
the quotient arrived at by dividing the designated number of directors by three,
then, if such fraction is one-third, the extra director shall be a member of
Class II, and if such fraction is two-thirds, one of the extra directors shall
be a member of Class I and one of the extra directors shall be a member of Class
II, unless otherwise provided from time to time by resolution adopted by the
Board of Directors.
3. ELECTION OF DIRECTORS. Elections of directors need not be by written
ballot except as and to the extent provided in the By-Laws of the Corporation.
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4. TERMS OF OFFICE. Each director shall serve for a term ending on the
date of the third annual meeting following the annual meeting at which such
director was elected; PROVIDED, that each initial director in Class I shall
serve for a term ending on the date of the annual meeting in 1996; each initial
director in Class II shall serve for a term ending on the date of the annual
meeting in 1997; and each initial director in Class III shall serve for a term
ending on the date of the annual meeting in 1998; and PROVIDED FURTHER, that the
term of each director shall be subject to the election and qualification of his
successor and to his earlier death, resignation or removal.
5. ALLOCATION OF DIRECTORS AMONG CLASSES IN THE EVENT OF INCREASES OR
DECREASES IN THE NUMBER OF DIRECTORS. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as a director of the class of which he is a member
and (ii) the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors so as to ensure that no one class has more than one
director more than any other class. To the extent possible, consistent with the
foregoing rule, any newly created directorships shall be added to those classes
whose terms of office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of offices are to expire at the earliest dates
following such allocation, unless otherwise provided from time to time by
resolution adopted by the Board of Directors.
6. QUORUM; ACTION AT MEETING. A majority of the directors at any time
in office shall constitute a quorum for the transaction of business. In the
event one or more of the directors shall be disqualified to vote at any meeting,
then the required quorum shall be reduced by one for each director so
disqualified, provided that in no case shall less than one-third of the number
of directors fixed pursuant to Section 1 above constitute a quorum. If at any
meeting of the Board of Directors there shall be less than such a quorum, a
majority of those present may adjourn the meeting from time to time. Every act
or decision done or made by a majority of the directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of the Board
of Directors unless a greater number is required by law, by the By-Laws of the
Corporation or by this Restated Certificate of Incorporation.
7. REMOVAL. Directors of the Corporation may be removed only for cause
by the affirmative vote of the holders of at least two-thirds of the shares of
the capital stock of the Corporation issued and outstanding and entitled to
vote.
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8. VACANCIES. Any vacancy in the Board of Directors, however occurring,
including a vacancy resulting from an enlargement of the board, shall be filled
only by a vote of a majority of the directors then in office, although less than
a quorum, or by a sole remaining director. A director elected to fill a vacancy
shall be elected to hold office until the next election of the class for which
such director shall have been chosen, subject to the election and qualification
of his successor and to his earlier death, resignation or removal.
9. STOCKHOLDER NOMINATIONS AND INTRODUCTION OF BUSINESS, ETC. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given in
the manner provided by the By-Laws of the Corporation.
10. AMENDMENTS TO ARTICLE. Notwithstanding any other provisions of law,
this Restated Certificate of Incorporation or the By-Laws of the Corporation,
and notwithstanding the fact that a lesser percentage may be specified by law,
the affirmative vote of the holders of at least seventy-five percent (75%) of
the shares of capital stock of the Corporation issued and outstanding and
entitled to vote shall be required to amend or repeal, or to adopt any provision
inconsistent with, this Article ELEVENTH.
TWELFTH. Until the closing of a Public Offering, any action which is
required to be taken or which may be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote on such action were present
and voted. Effective upon the closing of a Public Offering, stockholders of the
Corporation may not take any action by written consent in lieu of a meeting.
Notwithstanding any other provisions of law, the Restated Certificate of
Incorporation or the By-Laws of the Corporation, and notwithstanding the fact
that a lesser percentage may be specified by law, the affirmative vote of the
holders of at least seventy-five percent (75%) of the shares of capital stock of
the Corporation issued and outstanding and entitled to vote shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article
TWELFTH.
THIRTEENTH. Effective upon the closing of a Public Offering, special
meetings of stockholders may be called at any time by only the Chief Executive
Officer (or if there is no Chief Executive Officer, the President) or the Board
of Directors. Business transacted at any special meeting of stockholders shall
be limited
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to matters relating to the purpose or purposes stated in the notice of meeting.
Notwithstanding any other provision of law, this Restated Certificate of
Incorporation or the By-Laws of the Corporation, as amended, and notwithstanding
the fact that a lesser percentage may be specified by law, the affirmative vote
of the holders of at least seventy-five percent (75%) of the shares of capital
stock of the Corporation issued and outstanding and entitled to vote shall be
required to amend or repeal, or to adopt any provision inconsistent with this
Article THIRTEENTH.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Restated Certificate of Incorporation to be signed by
its Chairman this 28TH March, 1996.
HYBRIDON, INC.
By: /s/ E. Andrews Grinstead, III
----------------------------------
Chairman
[Corporate Seal]
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CERTIFICATE OF AMENDMENT
OF
RESTATED
CERTIFICATE OF INCORPORATION
OF HYBRIDON, INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
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HYBRIDON, INC. (the "Corporation"), organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
By written action of the Board of Directors of the Corporation, dated
October 20, 1997, the Board of Directors duly adopted resolutions pursuant to
Sections 141(f) and 242 of the General Corporation Law of the State of Delaware
setting forth an amendment to the Restated Certificate of Incorporation of the
Corporation, as amended, and declaring said amendment to be advisable. The
stockholders of the Corporation duly approved, pursuant to said Section 242,
said proposed amendment at a Special Meeting of Stockholders held on November
18, 1997. The resolution setting forth the amendment to the Restated Certificate
of Incorporation is as follows:
RESOLVED: That, subject to stockholder approval, the following paragraph
be inserted prior to the first paragraph of Article FOURTH of
the Certificate of Incorporation:
"That upon the filing date of the Certificate of
Amendment of Restated Certificate of Incorporation of the
Corporation (the "Effective Date"), a one-for-five reverse
split of the Corporation's Common Stock (as defined below)
shall become effective, such that each five shares of Common
Stock outstanding and held of record by each stockholder of
the Corporation (including treasury shares)
immediately prior to the Effective Date shall represent one
share of Common Stock from and after the Effective Date."
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by its Chairman of the Board of Directors, President
and Chief Executive Officer this 10th day of December, 1997.
HYBRIDON, INC.
By: /s/ E. Andrews Grinstead, III
--------------------------------------
E. Andrews Grinstead, III
Chairman of the Board of Directors,
President and Chief Executive Officer
-2-
CERTIFICATE OF DESIGNATION
for
SERIES A CONVERTIBLE PREFERRED STOCK
of
HYBRIDON, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
HYBRIDON INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify that
pursuant to the authority conferred on the board of directors of the Corporation
(the "Board of Directors") by the Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation") of the Corporation and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors adopted the following resolution establishing a
series of 1,500,000 shares of preferred stock of the Corporation designated as
"Series A Convertible Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the
Board of Directors by the Certificate of Incorporation, a series of
preferred stock, par value $.01 per share, of the Corporation is hereby
established and created, and that the designation and number of shares
thereof and the voting and other powers, preferences and relative
participating, optional or other special rights of, the shares of such
series and the qualifications, limitations and restrictions thereof are
as follows:
Series A Convertible Preferred Stock
1. Designation and Amount and Definitions. (a) There shall be
a series of Preferred Stock designated as "Series A Convertible Preferred Stock"
and the number of shares constituting such series shall be 1,500,000. Such
series is referred to herein as the "Series A Preferred Stock". Notwithstanding
any other provision in this Certificate of Designation of the Series A Preferred
Stock (the "Certificate of Designation") to the contrary, such series shall be
senior to the common stock, par value $.001 per share of the Corporation (the
"Common Stock") with respect to dividends and the distribution of assets upon
liquidation, dissolution or winding up. Such number of shares may be increased
or decreased by resolution of the Board of Directors, subject to the provisions
of Section 7 hereof; provided, however, that no decrease shall reduce the number
of shares of Series A Preferred Stock to fewer than the number of shares then
issued and outstanding.
(b) As used in this Certificate of Designation, except as
otherwise provided in Subsection 4(c), the following terms shall have the
following meanings:
(i) The "Closing Bid Price" for any security for each
trading day shall be the reported per share closing bid price
of such security regular way on the Stock Market on such
trading day, or, if there were no transactions on such trading
day, the average of the reported closing bid and asked prices,
regular way, of such security on the relevant Stock Market on
such trading day.
(ii) "Fair Market Value" of any asset (including any
security) means the fair market value thereof as mutually
determined by the Corporation and the holders of a majority of
the Series A Preferred Stock then outstanding. If the
Corporation and the holders of a majority of the Series A
Preferred Stock then outstanding are unable to reach agreement
on any valuation matter, such valuation shall be submitted to
and determined by a nationally recognized independent
investment bank selected by the Board of Directors and the
holders of a majority of the Series A Preferred Stock then
outstanding (or, if such selection cannot be agreed upon
promptly, or in any event within ten days, then such valuation
shall be made by a nationally recognized independent
investment banking firm selected by the American Arbitration
Association in New York City in accordance with its rules),
the costs of which valuation shall be paid for by the
Corporation.
(iii) "Market Price" shall mean the average Closing
Bid Price for twenty (20) consecutive trading days, ending
with the trading day prior to the date as of which the Market
Price is being determined (with appropriate adjustments for
subdivisions or combinations of shares effected during such
period), provided that if the prices referred to in the
definition of Closing Bid Price cannot be determined on any
trading day, the Closing Bid Price for such trading day will
be deemed to equal Fair Market Value of such security on such
trading day.
(iv) "Registered Holders" shall mean, at any time,
the holders of record of the Series A Preferred Stock.
(v) The "Stock Market" shall mean, with respect to
any security, the principal national securities exchange on
which such security is listed or admitted to trading or, if
such security is not listed or admitted to trading on any
national securities exchange, shall mean The Nasdaq National
Market System ("NNM") or The Nasdaq SmallCap Market ("SCM"
and, together with NNM, "Nasdaq") or, if such security is not
quoted on Nasdaq, shall mean the OTC Bulletin Board or, if
such security is not quoted on the OTC Bulletin Board, shall
mean the over-the-counter market as furnished by any NASD
member firm selected from time to time by the Corporation for
that purpose.
(vi) A "trading day" shall mean a day on which the
relevant Stock Market is open for the transaction of business.
2. Dividends and Distributions. (a) The holders, as of the
Dividend Record Date (as defined below), of the Series A Preferred Stock shall
be entitled to receive semi-annual dividends on their respective shares of
Series A Preferred Stock (aggregating, for this purpose,
all shares of Series A Preferred Stock held of record or, to the Corporation's
knowledge, beneficially by such holder), payable, at the option of the
Corporation, in cash or additional shares of Series A Preferred Stock, at the
rate of 6.5% per annum (computed on the basis of a 360-day year of twelve 30 day
months) of the Dividend Base Amount (as defined below), payable semi-annually in
arrears; provided that, to the extent the declaration or payment of such
dividend is prohibited by applicable law, such dividend need not be paid but
shall nevertheless accrue and shall be paid promptly when applicable law
permits. Such dividends shall accrue from the date of issuance of such share and
shall be paid semi-annually on April 1 and October 1 of each year or, if any
such day is not a business day, on the next succeeding business day. Such
dividends shall be paid, at the election of the Corporation, either in cash or
additional duly authorized, fully paid and non assessable shares of Series A
Preferred Stock. In calculating the number of shares of Series A Preferred Stock
to be paid with respect to each dividend, the Series A Preferred Stock shall be
valued at $100.00 per share (subject to appropriate adjustment to reflect any
stock split, combination, reclassification or reorganization of the Series A
Preferred Stock). Notwithstanding the foregoing, the Corporation shall not be
required to issue fractional shares of Series A Preferred Stock; the Corporation
may elect, in its sole discretion, independently for each holder, whether such
number of shares (on an aggregated basis) will be rounded to the nearest whole
share (with .5 of a share rounded upward) or whether such holder will be given
cash in lieu of any fractional shares. The "Dividend Base Amount" of a share of
Series A Preferred Stock shall be $100.00 plus all accrued but unpaid dividends
(subject to appropriate adjustment to reflect any stock split, combination,
reclassification or reorganization of the Series A Preferred Stock). The
"Dividend Record Date" shall mean, for each semi-annual dividend, the March 15
or September 15, as the case may be, immediately preceding the dividend payment
date.
(b) In addition to the foregoing, subject to the rights of the
holders of any shares of any series or class of capital stock ranking prior, and
superior to, or pari passu with, the shares of Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive, as, when and if declared by the Board of Directors, out of
assets legally available for that purpose, dividends or distributions in cash,
stock or otherwise.
(c) The Corporation shall not declare any dividend or
distribution on any Junior Stock (as defined below) of the Corporation unless
all dividends required by Section 2(a) have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof set
apart for such payment, on the Series A Preferred Stock.
(d) [Reserved]
(e) All dividends or distributions declared upon the Series A
Preferred Stock shall be declared pro rata per share.
(f) Any reference to "distribution" contained in this Section
2 shall not be deemed to include any distribution made in connection with or in
lieu of any Liquidation Event (as defined below).
(g) No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Series A Preferred
Stock which may be in arrears (it being understood that this provision does not
alter the Corporation's obligations under Section 2(a)).
(h) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on any class or series of
stock of the Corporation ranking, as to dividends, on a parity with the Series A
Preferred Stock, for any period unless all dividends have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof set apart for such payment, on the Series A Preferred Stock.
When dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, upon the shares of the Series A Preferred Stock and any
other class or series of stock ranking on a parity as to dividends with the
Series A Preferred Stock, all dividends declared upon such other stock shall be
declared pro rata so that the amounts of dividends per share declared on the
Series A Preferred Stock and such other stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the shares of the
Series A Preferred Stock and on such other stock bear to each other.
(i) So long as any shares of the Series A Preferred Stock are
outstanding, no other stock of the Corporation ranking on a parity with the
Series A Preferred Stock as to dividends or upon liquidation, dissolution or
winding up shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund or
otherwise for the purchase or redemption of any shares of any such stock) by the
Corporation unless the dividends, if any, accrued on all outstanding shares of
the Series A Preferred Stock shall have been paid or set apart for payment.
(j) "Junior Stock" shall mean the Common Stock and any shares
of preferred stock of any series or class of the Corporation, whether presently
outstanding or hereafter issued, which are junior to the shares of Series A
Preferred Stock with respect to (i) the distribution of assets on any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, (ii)
dividends or (iii) voting.
3. Liquidation Preference. (a) In the event of a (i)
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (ii) a sale or other disposition of all or substantially all of the
assets of the Corporation or (iii) any consolidation, merger, combination,
reorganization or other transaction in which the Corporation is not the
surviving entity or shares of Common Stock constituting in excess of 50% of the
voting power of the Corporation are exchanged for or changed into stock or
securities of another entity, cash and/or any other property (a "Merger
Transaction") (items (i), (ii) and (iii) of this sentence being collectively
referred to as a "Liquidation Event"), after payment or provision for payment of
debts and other liabilities of the Corporation, the holders of the Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, whether such
assets are capital, surplus, or earnings, before any payment or declaration and
setting apart for payment of any amount shall be made in respect of any Junior
Stock of the Corporation, an amount equal to the Dividend Base Amount at such
time; provided, however, in the case of a Merger Transaction, such payment may
be made in cash, property (valued as provided in Subsection 3(b)) and/or
securities (valued as provided in Subsection 3(b)) of the entity surviving such
Merger Transaction. In the case of property or in the event that any such
securities are subject to an investment letter or other similar restriction on
transferability, the value of such property or securities shall be determined by
agreement between the Corporation and the holders of a majority of the Series A
Preferred Stock then outstanding. If upon any Liquidation Event, whether
voluntary or involuntary, the assets to be distributed to the holders of the
Series A Preferred Stock shall be insufficient to permit the payment to such
shareholders of the full preferential amounts aforesaid, then all of the assets
of the Corporation to be distributed shall be so distributed ratably to the
holders of the Series A Preferred Stock on the basis of the number of shares of
Series A Preferred Stock held. Notwithstanding item (iii) of the first sentence
of this Subsection 3(a), any consolidation, merger, combination, reorganization
or other transaction in which the Corporation is not the surviving entity but
the stockholders of the Corporation immediately prior to such transaction own in
excess of 50% of the voting power of the corporation surviving such transaction
and own amongst themselves such interest in substantially the same proportions
as prior to such transaction, shall not be considered a Liquidation Event
provided that the surviving corporation shall make appropriate provisions to
ensure that the terms of this Certificate of Designation survive any such
transaction. All shares of Series A Preferred Stock shall rank as to payment
upon the occurrence of any Liquidation Event senior to the Common Stock and,
unless the terms of such series shall provide otherwise, senior to all other
series of the Corporation's preferred stock.
(b) Any securities or other property to be delivered to the
holders of the Series A Preferred Stock pursuant to Subsection 3(a) hereof shall
be valued as follows:
(i) Securities not subject to an investment letter or
other similar restriction on free marketability:
(A) If actively traded on a Stock Market,
the per share value shall be deemed to be the Market
Price of such securities as of the third day prior to
the date of valuation.
(B) If not actively traded on a Stock
Market, the value shall be the Fair Market Value of
such securities.
(ii) For securities for which there is an active
public market but which are subject to an investment letter or
other restrictions on free marketability, the value shall be
the Fair Market Value thereof, determined by discounting
appropriately the per share Market Price thereof.
(iii) For all other securities, the value shall be
the Fair Market Value thereof.
4. Conversion.
(a) Right of Conversion. Commencing after the expiration of 12
months following the Alternative Equity Closing Date (as hereinafter defined),
but not prior thereto, the shares of Series A Preferred Stock shall be
convertible, in whole or in part, at the option of the holder thereof and upon
notice to the Corporation as set forth in Subsection 4(b), into fully paid and
nonassessable shares of Common Stock and such other securities and property as
hereinafter provided. The initial conversion price per share of Common Stock
(the "Conversion Price"), shall be equal to the product of 2.125 multiplied by
the per share price (the "Stated Common Price") of Common Stock sold by the
Corporation in connection with the Alternative Equity Offering (as such term is
defined in the Corporation's Offer to Exchange dated February 6, 1998 (the
"Original Offer to Exchange"), as amended by the Amendment thereto (the
"Amendment") dated March 30, 1998 (collectively, the "Offer to Exchange")) and
shall be subject to adjustment as provided herein. The rate at which each share
Series A Preferred Stock is convertible at any time into Common Stock (the
"Conversion Rate") shall be determined by dividing the then existing Conversion
Price (determined in accordance with this Section 4, including the last
paragraph hereof) into the Dividend Base Amount.
The Corporation shall prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Corporation setting forth the
Conversion Rate as of the date of the closing of the Alternative Equity Offering
(the "Alternative Equity Closing Date"), showing in reasonable detail the facts
upon which such Conversion Rate is based, and such certificate shall forthwith
be filed with the transfer agent of the Series A Preferred Stock.
(b) Conversion Procedures. Any holder of shares of Series A
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates evidencing such shares of Series A
Preferred Stock at the office of the transfer agent for the Series A Preferred
Stock, which certificate or certificates, if the Corporation shall so require,
shall be duly endorsed to the Corporation or in blank, or accompanied by proper
instruments of transfer to the Corporation or in blank, accompanied by
irrevocable written notice to the Corporation that the holder elects so to
convert such shares of Series A Preferred Stock and specifying the name or names
(with address) in which a certificate or certificates evidencing shares of
Common Stock are to be issued. The Corporation need not deem a notice of
conversion to be received unless the holder complies with all the provisions
hereof. The Corporation will instruct the transfer agent (which may be the
Corporation) to make a notation of the date that a notice of conversion is
received, which date of receipt shall be deemed to be the date of receipt for
purposes hereof.
The Corporation shall, as soon as practicable after such
deposit of certificates evidencing shares of Series A Preferred Stock
accompanied by the written notice and compliance with any other conditions
herein contained, deliver at such office of such transfer agent to the person
for whose account such shares of Series A Preferred Stock were so surrendered,
or to the nominee or nominees of such person, certificates evidencing the number
of full shares of Common Stock to which such person shall be entitled as
aforesaid, subject to Section 4(d). Subject to the following provisions of this
paragraph, such conversion shall be deemed to have been made as of the date of
such surrender of the shares of Series A Preferred Stock to be converted, and
the person or persons entitled to receive the Common Stock deliverable upon
conversion of such Series A Preferred Stock shall be treated for all purposes as
the record holder or holders of such Common Stock on such date; provided,
however, that the Corporation shall not be required to convert any shares of
Series A Preferred Stock while the stock transfer books of the Corporation are
closed for any purpose, but the surrender of Series A Preferred Stock for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books as if the
surrender had been made on the date of such reopening, and the conversion shall
be at the conversion rate in effect on such date. No adjustments in respect of
any dividends on shares surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the conversion of any shares of
Series A Preferred Stock.
The Corporation shall at all times, reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of Series A Preferred Stock,
such number of shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series A Preferred
Stock.
All notices of conversion shall be irrevocable; provided,
however, that if the Corporation has sent notice of an event pursuant to
Subsection 4(g) hereof, a holder of Series A Preferred Stock may, at its
election, provide in its notice of conversion that the conversion of its shares
of Series A Preferred Stock shall be contingent upon the occurrence of the
record date or effectiveness of such event (as specified by such holder),
provided that such notice of conversion is received by the Corporation prior to
such record date or effective date, as the case may be.
(c) Adjustment of Conversion Rate and Conversion Price.
(i) As used in this Subsection 4(c), the following
terms shall have the following meanings:
"Capital Stock" of any Person means the Common Stock
or Preferred Stock of such Person. Unless otherwise stated
herein or the context otherwise requires, "Capital Stock"
means Capital Stock of the Corporation;
"Common Stock" of any Person other than the
Corporation means the common equity (however designated),
including, without limitation, common stock or partnership or
membership interests of, or participation or interests in such
Person (or equivalents thereof). "Common Stock" of the
Corporation means the Common Stock, par value $.001 per share,
of the Corporation, any successor class or classes of common
equity (however designated) of the Corporation into or for
which such Common Stock may hereafter be converted, exchanged
or reclassified and any class or classes of common equity
(however designated) of the Corporation which may be
distributed or issued with respect to such Common Stock or
successor class of classes to holders thereof generally.
Unless otherwise stated herein or the context requires
otherwise, "Common Stock" means Common Stock of the
Corporation;
"Current Market Price" means, when used with respect
to any security as of any date, the last sale price, regular
way, or, in case no such sale takes place on such date, the
average of the closing bid and asked prices, regular way, of
such security in either case as reported for consolidated
transactions on the New York Stock Exchange or, if such
security is not listed or admitted to trading on the New York
Stock Exchange, as reported for consolidated transactions with
respect to securities listed on the principal national
securities exchange on which such security is listed or
admitted to trading or, if such security is not listed or
admitted to trading on any national securities exchange, as
reported on the Nasdaq National Market, or, if such security
is not listed or admitted to trading on the Nasdaq National
Market, as reported on the Nasdaq SmallCap Market, or if such
security is not listed or admitted to trading on any national
securities exchange or the Nasdaq National Market or the
Nasdaq SmallCap Market, the average of the high bid and low
asked prices of such security in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System or such other system then in
use or, if such security is not quoted by any such
organization, the average of the closing bid and asked prices
of such security furnished by an NASD member firm selected by
the Corporation. If such security is not quoted by any such
organization and no such NASD member firm is able to provide
such prices, the Current Market Price of such security shall
be the Fair Market Value thereof;
"Fair Market Value" means, at any date as to any
asset, Property or right (including without limitation,
Capital Stock of any Person, evidence of indebtedness or other
securities, but excluding cash), the fair market value of such
item as determined in good faith by the Board of Directors,
whose determination shall be conclusive; provided, however,
that such determination is described in an Officers'
Certificate filed with the transfer agent and that, if there
is a Current Market Price for such item on such date, "Fair
Market Value" means such Current Market Price (without giving
effect to the last sentence of the definition thereof);
"GAAP" means, as of any date, generally accepted
accounting principles in the United States and does not
include any interpretations or regulations that have been
proposed but that have not become effective;
"Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice
President of such Person;
"Officers' Certificate" means a certificate signed on
behalf of the Corporation by two Officers, one of whom must be
the Chairman of the Board, the President, the Treasurer or a
Vice-President of the Corporation;
"Person" means any individual, corporation,
partnership, association, trust
or any other entity or organization, including a government or
political subdivision or any agency or instrumentality
thereof;
"Preferred Stock" of any Person means the class or
classes of equity, ownership or participation interests
(however designated) in such Person, including, without
limitation, stock, share, partnership and membership
interests, which are preferred as to the payment of dividends
or distributions by, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of,
such Person (or equivalent thereof) over interests of any
other class of interests of such Person. Unless otherwise
stated herein or the context otherwise requires, "Preferred
Stock" means Preferred Stock of the Corporation;
"Property" of any Person means any and all types of
real, personal, tangible, intangible or mixed property owned
by such Person whether or not included on the most recent
consolidated balance sheet of such Person in accordance with
GAAP;
"Subsidiary" of a Person on any date means any other
Person of whom such Person owns, directly or indirectly
through a Subsidiary or Subsidiaries of such Person, Capital
Stock with voting power, acting independently and under
ordinary circumstances, entitling such person to elect a
majority of the board of directors or other governing body of
such other Person. Unless otherwise stated herein or the
context otherwise requires, "Subsidiary" means a Subsidiary of
the Corporation.
(ii) If the Corporation shall (i) pay a dividend or
other distribution, in Common Stock, on any class of Capital
Stock of the Corporation, (ii) subdivide the outstanding
Common Stock into a greater number of shares by any means or
(iii) combine the outstanding Common Stock into a smaller
number of shares by any means including, without limitation, a
reverse stock split), then in each such case the Conversion
Price in effect immediately prior thereto shall be adjusted so
that the Registered Holder of any shares of Series A Preferred
Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock that such
Registered Holder would have owned or have been entitled to
receive upon the happening of such event had such Series A
Preferred Stock been converted immediately prior to the
relevant record date or, if there is no such record date, the
effective date of such event. An adjustment made pursuant to
this Paragraph 4(c)(ii) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall
become effective immediately after the effective date of such
subdivision or combination, as the case may be.
(iii) If the Corporation shall (i) issue or
distribute (at a price per share less than the Current Market
Price per share of such Capital Stock on the date of such
issuance or distribution) Capital Stock generally to holders
of Common Stock or to holders of any class or series of
Capital Stock which is convertible
into or exchangeable or exercisable for Common Stock
(excluding an issuance or distribution of Common Stock
described in Paragraph 4(c)(ii)) or (ii) issue or distribute
generally to such holders rights, warrants, options or
convertible or exchangeable securities entitling the holder
thereof to subscribe for, purchase, convert into or exchange
for Capital Stock at a price per share less than the Current
Market Price per share of such Capital Stock on the date of
issuance or distribution, then, in each such case, at the
earliest of (A) the date the Corporation enters into a firm
contract for such issuance or distribution, (B) the record
date for the determination of stockholders entitled to receive
any such Capital Stock or any such rights, warrants, options
or convertible or exchangeable securities or (C) the date of
actual issuance or distribution of any such Capital Stock or
any such rights, warrants, options or convertible or
exchangeable securities, the Conversion Price shall be reduced
by multiplying the Conversion Price in effect immediately
prior to such earliest date by:
(A) if such Capital Stock is Common Stock, a
fraction the numerator of which is the number of
shares of Common Stock outstanding, on such earliest
date plus the number of shares of Common Stock which
could be purchased at the Current Market Price per
share of Common Stock on the date of such issuance or
distribution with the aggregate consideration (based
on the Fair Market Value thereof) received or
receivable by the Corporation either (A) in
connection with such issuance or distribution or (B)
upon the conversion, exchange, purchase or
subscription of all such rights, warrants, options or
convertible or exchangeable securities (the
"Aggregate Consideration"), and the denominator of
which is the number of shares of Common Stock
outstanding on such earliest date plus the number of
shares of Common Stock to be so issued or distributed
or to be issued upon the conversion, exchange,
purchase or subscription of all such rights,
warrants, options or convertible or exchangeable
securities; or
(B) if such Capital Stock is other than
Common Stock, a fraction the numerator of which is
the Current Market Price per share of Common Stock on
such earliest date minus an amount equal to (A) the
difference between (1) the Current Market Price per
share of such Capital Stock multiplied by the number
of shares of such Capital Stock to be so issued and
(2) the Aggregate Consideration, divided by (B) the
number of shares of Common Stock outstanding on such
date, and the denominator of which is the Current
Market Price per share of Common Stock on such
earliest date.
Such adjustment shall be made successively whenever
any such Capital Stock, rights, warrants, options or
convertible or exchangeable securities are so issued or
distributed. In determining whether any rights, warrants,
options or convertible or exchangeable securities entitle the
holders thereof to subscribe for, purchase, convert into or
exchange for shares of such Capital Stock at less than such
Current Market Price, there
shall be taken into account the Fair Market Value of any
consideration received or receivable by the Corporation for
such rights, warrants, options or convertible or exchangeable
securities. If any right, warrant,option or convertible or
exchangeable security, the issuance of which resulted in an
adjustment in the Conversion Price pursuant to this Paragraph
4(c)(iii), shall expire and shall not have been exercised, the
Conversion Price shall immediately upon such expiration be
recomputed to the Conversion Price which would have been in
effect if such right, warrant, option or convertible or
exchangeable securities had never been distributed or issued.
Notwithstanding anything contained in this paragraph to the
contrary, (i) the issuance of Capital Stock upon the exercise
of such rights, warrants or options or the conversion or
exchange of such convertible or exchangeable securities will
not cause an adjustment in the Conversion Price if no such
adjustment would have been required at the time such right,
warrant, option or convertible or exchangeable security was
issued or distributed; provided, however, that, if the
consideration payable upon such exercise, conversion or
exchange and/or the Capital Stock receivable thereupon are
changed after the time of the issuance or distribution of such
right, warrant, option or convertible or exchangeable security
then such change shall be deemed to be the expiration thereof
without having been exercised and the issuance or distribution
of new options, rights, warrants or convertible or
exchangeable securities and (ii) the issuance of convertible
preferred stock of the Corporation as a dividend on
convertible preferred stock of the Corporation will not cause
an adjustment in the Conversion Price if no such adjustment
would have been required at the time such underlying
convertible preferred stock was issued (or as a result of any
subsequent modification to the terms thereof) and the
conversion provisions of such convertible stock so issued as a
dividend are the same as in such underlying convertible
preferred stock.
Notwithstanding any contained in this Certificate of
Designation to the contrary, options, rights or warrants
issued or distributed by the Corporation, including options,
rights or warrants distributed prior to the date of filing of
this Certificate of Designation, to holders of Common Stock
generally which, until the occurrence of a specified event or
events (a "Trigger Event"), (i) are deemed to be transferred
with Common Stock, (ii) are not exercisable and (iii) are also
issued on a pro rata basis with respect to future issuances of
Common Stock, shall be deemed not to have been issued or
distributed for purposes of this Subsection 4(c) (and no
adjustment to the Conversion Price under this Subsection 4(c)
will be required) until the occurrence of the earliest Trigger
Event. Upon the occurrence of a Trigger Event, such options,
rights or warrants shall continue to be deemed not to have
been issued or distributed for purposes of this Subsection
4(c) (and no adjustment to the Conversion Price under this
Subsection 4(c) will be required) if and for so long as each
Registered Holder who thereafter converts such Registered
Holder's Series A Preferred Stock shall be entitled to receive
upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, a number of such options,
rights or warrants, as the case may be, equal to the number of
options, rights or warrants to which a holder of the number of
shares of
Common Stock equal to the number of shares of Common Stock
issuable upon conversion of such Registered Holder's Series A
Preferred Stock is entitled to receive at the time of such
conversion in accordance with the terms and provisions of, and
applicable to, such options, rights or warrants. Upon the
expiration of any such options, rights or warrants or at such
time, if any, as a Registered Holder is not entitled to
receive such options, rights or warrants upon conversion of
such Registered Holder's Series A Preferred Stock, an
adjustment (if any is required) to the Conversion Price shall
be made in accordance with this Paragraph 4(c)(iii) with
respect to the issuance of all such options, rights and
warrants as of the date of issuance thereof, but subject to
the provisions of the preceding paragraph, if any such option,
right or warrant, including any such options right or warrants
distributed prior to the date of filing of this Certificate of
Designation, are subject to events, upon the occurrence of
which such options, rights or warrants become exercisable to
purchase different securities, evidence of indebtedness, cash,
Properties or other assets or different amounts thereof, then,
subject to the preceding provision of this paragraph, the date
of the occurrence of any and each such event shall be deemed
to be the date of distribution and record date with respect to
new options, right or warrants with such new purchase rights
(and a termination or expiration of the existing options,
rights or warrants without exercise thereof). In addition, in
the event of any distribution (or deemed distribution) of
options, rights or warrants, or any Trigger Event or other
event of the type described in the preceding sentence, that
required (or would have required but for the provisions of
Paragraph 4(c)(vi) or this paragraph) an adjustment to the
Conversion Price under this Subsection 4(c) and such options,
rights or warrants shall thereafter have been redeemed or
repurchased without having been exercised, then the Conversion
Price shall be adjusted upon such redemption or repurchase to
give effect to such distribution, Trigger Event or other
event, as the case may, as though it had instead been a cash
distribution, equal on a per share basis to the result of the
aggregate redemption or repurchase price received by holders
of such options, rights or warrants divided by the number of
shares of Common Stock outstanding as of the date of such
repurchase or redemption, made to holders of Common Stock
generally as of the date of such redemption or repurchase.
(iv) If the Corporation shall pay or distribute, as a
dividend or otherwise, generally to holders of Common Stock or
any class or series of Capital Stock which is convertible into
or exercisable or exchangeable for Common Stock any assets,
Properties or rights (including, without limitation, evidences
of indebtedness of the Corporation, any Subsidiary or any
other Person, cash or Capital Stock or other securities of the
Corporation, any Subsidiary or any other Person, but excluding
payments and distributions as described in Paragraphs 4(c)(ii)
or (iii), dividends and distributions in connection with a
Liquidation Event and distributions consisting solely of cash
described in Paragraph 4(c)(v)), then in each such case the
Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the date of
such payment or distribution by a fraction, the numerator of
which is the Current Market Price per share of Common Stock on
the record
date for the determination of stockholders entitled to receive
such payment or distribution less the Fair Market Value per
share of Common Stock on such record date of the assets,
Properties or rights so paid or distributed, and the
denominator of which is the Current Market Price per share of
Common Stock on such record date. Such adjustment shall become
effective immediately after such record date. For purposes of
this Paragraph 4(c)(iv), such Fair Market Value per share
shall equal the aggregate Fair Market Value on such record
date of the assets, Properties or rights so paid or
distributed divided by the number of shares of Common Stock
outstanding on such record date. For all purposes of this
Certificate of Designation, adjustments to any security's
conversion or exercise price pursuant to such security's
original terms shall not be deemed a distribution or dividend
to holders thereof.
(v) If the Corporation shall, by dividend or
otherwise, make a distribution (other than in connection with
the liquidation, dissolution or winding up of the Corporation
in its entirety), generally to holders of Common Stock or any
class or series of Capital Stock which is convertible into or
exercisable or exchangeable for Common Stock, consisting
solely of cash where (x) the sum of (i) the aggregate amount
for such cash plus (ii) the aggregate amount of all cash so
distributed (by dividend or otherwise) to such holders within
the 12-month period ending on the record date for determining
stockholder entitled to receive such distribution with respect
to which no adjustment has been made to the Conversion Price
pursuant to this Paragraph 4(c)(v) exceeds (y) 10% of the
result of the multiplication of (1) the Current Market Price
per share of Common Stock on such record date times (2) the
number of shares of Common Stock outstanding on such record
date, then the Conversion Price shall be reduced, effective
immediately prior to the opening of business on the day
following such record date, by multiplying the Conversion
Price in effect immediately prior to the close of business on
the day prior to such record date by a fraction, the numerator
of which is the Current Market Price per share of Common Stock
on such record date less the aggregate amount of cash per
share so distributed and the denominator of which is such
Current Market Price; provided, however, that, if the
aggregate amount of cash per share is equal to or greater than
such Current Market Price, then, in lieu of the foregoing
adjustment, adequate provisions shall be made so that each
Registered Holder shall have the right to receive upon
conversion (with respect to each share of Common Stock issued
upon such conversion and in addition to the Common Stock
issuable upon conversion) the aggregate amount of cash per
share such Registered Holder would have received had such
Registered Holder's Series A Preferred Stock been converted
immediately prior to such record date. In no event shall the
Conversion Price be increased pursuant to this Paragraph
4(c)(v); provided, however, that if such distribution is not
so made, the Conversion Price shall be adjusted to be the
Conversion Price which would have been in effect if such
distribution had not been declared. For purposes of this
Paragraph 4(c)(v), such aggregate amount of cash per share
shall equal such sum divided by the number of shares of Common
Stock outstanding on such record date.
(vi) The provisions of this Subsection 4(c) shall
similarly apply to all successive events of the type described
in this Subsection 4(c). Notwithstanding anything contained
herein to the contrary, no adjustment in the Conversion Price
shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Price
then in effect; provided, however, that any adjustments which
by reason of this Paragraph 4(c)(vi) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4
shall be made by the Corporation and shall be made to the
nearest cent or to the nearest one hundredth of a share, as
the case may be, and the transfer agent shall be entitled to
rely conclusively thereon. Except as provided in this Section
4, no adjustment in the Conversion Price will be made for the
issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock or carrying the right to
purchase Common Stock or any securities so convertible or
exchangeable.
(vii) Whenever the Conversion Price is adjusted as
provided herein, the Corporation shall promptly file with the
transfer agent an Officers' Certificate setting forth the
Conversion Price in effect after such adjustment and setting
forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such Officers'
Certificate, the Corporation shall give or cause to be given
to each Registered Holder a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price
and the date on which such adjustment becomes effective.
(viii) Notwithstanding anything contained herein to
the contrary, in any case in which this Subsection 4(c)
provides that an adjustment in the Conversion Price shall
become effective immediately after a record date for an event,
the Corporation may defer until the occurrence of such event
(i) issuing to the Registered Holder of any Series A Preferred
Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment
required by such event over and above the number of shares of
Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such Registered
Holder any amount in cash in lieu of any fractional share of
Common Stock pursuant to Subsection 4(d).
(ix) Notwithstanding any other provision hereof, no adjustment
to the Conversion Price shall be made upon the issuance or
exercise or conversion of (1) options or warrants to purchase,
in the aggregate, up to 25% of the securities sold in the
offerings of securities of the Corporation described in the
Original Offer to Exchange or any options or warrants
described in the Amendment in respect of the Alternative
Equity Offering, in each case issued to (or to the designee
of) any placement agent or financial advisor (such options or
warrants, the "Offering Warrants"), (2) any equity securities
or warrants of the Corporation (including, without limitation,
the Series A Preferred Stock, warrants and equity securities
underlying warrants) issued in exchange for 9% Convertible
Subordinated
Notes due 2004 (the "9% Notes") of the Corporation or accrued
interest thereon or pursuant to the conversion or exercise
provisions thereof, (3) any warrants issued in connection with
the offerings described in the Original Offer to Exchange or
the Amendment (collectively, the "Offering"), (4) any warrants
issued to Forum Capital Markets, LLC ("Forum") in exchange for
or in addition to, or any amendment to, any warrants held by
Forum, in each case, pursuant to a letter agreement dated
January 5, 1998, between the Corporation and Forum, and any
other warrants to purchase Common Stock or shares of Common
Stock issued to Forum or its designee, (5) any Series A
Preferred Stock issued in the Offering, (6) any Capital Stock
issued or cash paid as dividends on the Series A Preferred
Stock or (7) any Capital Stock issued or cash paid upon the
mandatory conversion or redemption of any Series A Preferred
Stock in accordance with Section 5 of this Certificate of
Designation.
(d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of Series A Preferred Stock. If more than one certificate evidencing shares of
Series A Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series A Preferred
Stock so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of such aggregate number of shares
of Series A Preferred Stock, the Corporation may elect, in its sole discretion,
independently for each holder, whether such number of shares of Common Stock
will be rounded to the nearest whole share (with a .5 of a share rounded upward)
or whether such holder will be given cash, in lieu of any fractional share, in
an amount equal to the same fraction of the Market Price of the Common Stock as
of the close of business on the day of conversion.
(e) [Reserved]
(f) Reservation of Shares; Transfer Taxes, Etc. The
Corporation shall at all times reserve and keep available, out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of shares of its Common
Stock free of preemptive rights as shall be sufficient to effect the conversion
of all shares of Series A Preferred Stock from time to time outstanding. The
Corporation shall use its best efforts from time to time, in accordance with the
laws of the State of Delaware to increase the authorized number of shares of
Common Stock if at any time the number of shares of authorized, unissued and
unreserved Common Stock shall not be sufficient to permit the conversion of all
the then-outstanding shares of Series A Preferred Stock.
The Corporation shall pay any and all issue or other taxes
(excluding any income taxes) that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of the Series A Preferred
Stock. The Corporation shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue or delivery of
Common Stock (or other securities or assets) in a name other than that in which
the shares of Series A Preferred Stock so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount
of such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid or need not be paid.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall declare any dividend (or
any other distribution); or
(ii) the Corporation shall authorize the granting to
the holders of Common Stock of rights or warrants to subscribe
for or purchase any shares of stock of any class or of any
other rights or warrants; or
(iii) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding Common
Stock, or a change in par value, or from par value to no par
value, or from no par value to par value); or
(iv) of any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation shall be required, or of the
sale or transfer of all or substantially all of the assets of
the Corporation or of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or
other property; or
(v) of any Liquidation Event;
then the Corporation shall cause to be filed with the transfer agent for the
Series A Preferred Stock, and shall cause to be mailed to the Registered
Holders, at their last addresses as they shall appear upon the stock transfer
books of the Corporation, at least 20 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend. distribution or granting of
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined and a description of the cash,
securities or other property to be received by such holders upon such dividend,
distribution or granting of rights or warrants or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange or
Liquidation Event is expected to become effective, the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such exchange or Liquidation Event and the consideration, including securities
or other property, to be received by such holders upon such exchange; provided,
however, that no failure to mail such notice or any defect therein or in the
mailing thereof shall affect the validity of the corporate action required to be
specified in such notice.
(h) Other Changes in Conversion Rate. The Corporation from
time to time may increase the Conversion Rate by any amount for any period of
time if the period is at least 20 days and if the increase is irrevocable during
the period. Whenever the Conversion Rate is so increased, the Corporation shall
mail to the Registered Holders a notice of the increase at least 15 days before
the date the increased Conversion Rate takes effect, and such notice shall
state the increased Conversion Rate and the period it will be in effect.
The Corporation may make such increases in the Conversion
Rate, in addition to those required or allowed by this Section 4, as shall be
determined by it, as evidenced by a resolution of the Board of Directors, to be
advisable in order to avoid or diminish any income tax to holders of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes.
Notwithstanding anything to the contrary herein, in no case
shall the Conversion Price be adjusted to an amount less than $.001 per share,
the current par value of the Common Stock into which the Series A Preferred
Stock is convertible.
(i) Ambiguities/Errors. The Board of Directors of the
Corporation shall have the power to resolve any ambiguity or correct any error
in the provisions relating to the convertibility of the Series A Preferred
Stock, and its actions in so doing shall be final and conclusive.
5. Mandatory Conversion and Redemption. (a) At any time after
the expiration of 12 months after the Alternative Equity Closing Date, the
Corporation at its option, may cause the Series A Preferred Stock to be
converted in whole or in part, on a pro rata basis, into fully paid and
nonassessable shares of Common Stock using a conversion price equal to 200% of
the Stated Common Price if the Closing Bid Price (or, if the price referenced in
the definition of Closing Bid Price cannot be determined, the Fair Market Value)
of the Common Stock shall have equalled or exceeded 250% of the Conversion Price
for at least 20 trading days in any 30 consecutive trading day period ending
three days prior to the date of notice of conversion (such event, the "Market
Trigger"). Any shares of Series A Preferred Stock so converted shall be treated
as having been surrendered by the holder thereof for conversion pursuant to
Section 4 on the date of such mandatory conversion (unless previously converted
at the option of the holder).
(b) At any time after April 1, 2000, the Corporation, at its
option, may redeem the Series A Preferred Stock for cash equal to the Dividend
Base Amount at such time, if the Market Trigger has occurred in the period
ending three days prior to the date of notice of redemption (unless previously
converted at the option of the holder).
(c) No greater than 60 nor fewer than 20 days prior to the
date of any such mandatory conversion or redemption, notice by first class mail,
postage prepaid, shall be given to the holders of record of the Series A
Preferred Stock to be converted or redeemed, addressed to such holders at their
last addresses as shown on the stock transfer books of the Corporation. Each
such notice shall specify the date fixed for conversion or redemption, the place
or places for surrender of shares of Series A Preferred Stock and the then
effective Conversion Rate pursuant to Section 4.
Any notice which is mailed as herein provided shall be
conclusively presumed to have been duly given by the Corporation on the date
deposited in the mail, whether or not
the holder of the Series A Preferred Stock receives such notice; and failure
properly to give such notice by mail, or any defect in such notice, to the
holders of the shares to be converted or redeemed shall not affect the validity
of the proceedings for the conversion or redemption of any other shares of
Series A Preferred Stock. On or after the date fixed for conversion or
redemption (the "Take-Out Date") as stated in such notice, each holder of shares
called to be converted or redeemed shall surrender the certificate evidencing
such shares to the Corporation at the place designated in such notice for
conversion or redemption. After the mailing of such notice, but before the
Take-Out Date as stated therein, all rights whatsoever with respect to the
shares so called for conversion or redemption (except the right of the holders
to convert such shares pursuant to Section 4 and to have such shares converted
or redeemed, as the case may be, upon surrender of their certificates therefor,
pursuant to this Section 5) shall terminate. On or after the Take-Out Date,
notwithstanding that the certificates evidencing any shares properly called for
conversion or redemption shall not have been surrendered, such shares shall no
longer be deemed outstanding and all rights whatsoever with respect to the
shares so called for conversion or redemption (except the right of the holders
to have such shares converted or redeemed, as the case may be, upon surrender of
their certificates therefor, pursuant to this Section 5) shall terminate.
6. Outstanding Shares. For purposes of this Certificate of
Designation, a share of Series A Preferred Stock, when issued, shall be deemed
outstanding except (i) from the date, or the deemed date, of surrender of
certificates evidencing shares of Series A Preferred Stock, all shares of Series
A Preferred Stock converted into Common Stock or redeemed pursuant to Section 5
and (ii) from the date of registration of transfer, all shares of Series A
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
7. Class Voting Rights. The Corporation shall not, without the
affirmative vote or consent of the holders of at least 50% of all outstanding
Series A Preferred Stock, voting separately as a class, (i) amend, alter or
repeal any provision of the Certificate of Incorporation or the Bylaws of the
Corporation so as adversely to affect the relative rights, preferences,
qualifications, limitations or restrictions of the Series A Preferred Stock (it
being understood that the issuance of securities ranking prior to, or pari passu
with, the Series A Preferred Stock (A) upon a Liquidation Event or (B) with
respect to the payment of dividends or distributions shall not be considered
adversely to affect such relative rights, preferences, qualifications,
limitations or restrictions); or (ii) authorize or issue, or increase the
authorized amount of, Series A Preferred Stock, other than Series A Preferred
Stock issuable in connection with the Offering, issuable in exchange for 9%
Notes or accrued interest thereon or issuable as dividends on Series A Preferred
Stock.
8. Status of Acquired Shares. Shares of Series A Preferred
Stock received upon conversion or redemption pursuant to Section 4 or Section 5
or otherwise acquired by the Corporation will be restored to the status of
authorized but unissued shares of Preferred Stock, without designation as to
class, and may thereafter be issued, but not as shares of Series A Preferred
Stock.
9. Preemptive Rights. The Series A Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such changes as
shall be necessary to render the provision in question effective and valid under
applicable law.
11. Restrictions on Change of Control. Notwithstanding
anything to the contrary contained in this Certificate of Designation, without
the prior written consent of the Corporation, so long as any 9% Notes remain
outstanding under that certain Indenture dated as of March 26, 1997 (as amended,
the "Indenture") in respect of the 9% Notes, no holder of Series A Preferred
Stock shall have voting rights granted hereunder, be entitled to receive any
voting securities of the Corporation pursuant hereto or be entitled to exercise
any of the conversion rights set forth herein (each, a "Restricted Event"), to
the extent that any such Restricted Event could, in the Corporation's reasonable
judgment, either alone or in conjunction with other issuances or holdings of
capital stock, warrants or convertible securities of the Corporation, result in
a Change of Control (as defined in the Indenture).
[Signature page follows]
IN WITNESS WHEREOF, E. Andrews Grinstead, III, President and
Chief Executive Officer of the Corporation, acting for and on behalf of the
Corporation, has hereunto subscribed his name this 5th day of May, 1998.
HYBRIDON, INC.
By: /s/ E. Andrews Grinstead, III
------------------------------------------
Name: E. Andrews Grinstead, III
Title: President and Chief Executive Officer
CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
OF
HYBRIDON, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation")
is Hybridon, Inc.
2. The Certificate of Incorporation of the Corporation is hereby
amended by inserting a new sentence at the end of paragraph 4 of Subsection A of
Articles FOURTH thereof so that said paragraph as so amended shall read as
follows:
"4. LIQUIDATION. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock
will be entitled to receive all assets of the Corporation available for
distribution to its stockholders, subject to any preferential rights of
any then outstanding Preferred Stock. Notwithstanding the foregoing,
and notwithstanding any amendments to, or resolutions of the Board of
Directors in connection with, this Certificate of Incorporation, the
transaction between the Corporation and Boston Biosystems, Inc.
pursuant to that certain Asset Purchase Agreement of June 29, 2000,
shall not constitute a dissolution or liquidation of the Corporation
such as would entitle any holder of the Series A Preferred Stock to a
preferred distribution."
3. Paragraph 3 of the Certificate of Designation of the Corporation shall
be amended by inserting a new sentence at the end of the paragraph such
that said paragraph shall read as follows:
"3(c) Notwithstanding the foregoing, and notwithstanding any
amendments to, or resolutions of the Board of Directors in connection
with, this Certificate of Incorporation or Certificate of Designation,
the transaction between the Corporation and Boston Biosystems, Inc.
pursuant to that certain Asset Purchase Agreement dated as of June 29,
2000, shall not constitute a Liquidation Event of the Corporation such
as would entitle any holder of any series of Series A Preferred Stock
to any preferred distribution."
4. Every other Article and provision in the Certificate of Incorporation
of the Corporation remains in full force and effect.
5. The amendment of the Certificate of Incorporation herein certified has
been duly adopted in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
be duly signed by its President this 19th day of September, 2000.
HYBRIDON, INC.
By: /s/ Robert G. Andersen
---------------------------------------
Robert G. Andersen, Vice President
and CFO
CERTIFICATE OF DESIGNATION
for
SERIES B CONVERTIBLE PREFERRED STOCK
of
HYBRIDON, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
HYBRIDON, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify that
pursuant to the authority conferred on the board of directors of the Corporation
(the "Board of Directors") by the Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation") of the Corporation and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors adopted the following resolution establishing a
series of 85,000 shares of preferred stock of the Corporation designated as
"Series B Convertible Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the
Board of Directors by the Certificate of Incorporation, a series of
preferred stock, par value $.01 per share, of the Corporation is hereby
established and created, and that the designation and number of shares
thereof and the voting and other powers, preferences and relative
participating, optional or other special rights of, the shares of such
series and the qualifications, limitations and restrictions thereof are
as follows:
Series B Convertible Preferred Stock
1. Designation and Amount and Definitions. (a) There shall be
a series of Preferred Stock designated as "Series B Convertible Preferred Stock"
and the number of shares constituting such series shall be 85,000. Such series
is referred to herein as the "Series B Preferred Stock". Notwithstanding any
other provision in this Certificate of Designation of the Series B Preferred
Stock (the "Certificate of Designation") to the contrary, such series shall be
senior to the common stock, par value $.001 per share of the Corporation (the
"Common Stock"), and the Series A Convertible Preferred Stock, $.01 par value
per share, of the Corporation (the "Series A Preferred Stock"), with respect to
dividends and the distribution of assets upon liquidation, dissolution or
winding up. Such number of shares may be increased or decreased by resolution of
the Board of Directors, subject to the provisions of Section 7 hereof; provided,
however, that no decrease shall reduce the number of shares of Series B
Preferred Stock to fewer than the number of shares then issued and outstanding.
(b) As used in this Certificate of Designation, except as
otherwise provided in Subsection 4(c), the following terms shall have the
following meanings:
(i) "Closing Bid Price" for any security for each
trading day shall be the reported per share closing bid price
of such security regular way on the Stock Market on such
trading day, or, if there were no transactions on such trading
day, the average of the reported closing bid and asked prices,
regular way, of such security on the relevant Stock Market on
such trading day.
(ii) "Fair Market Value" of any asset (including any
security) means the fair market value thereof as mutually
determined by the Corporation and the holders of a majority of
the Series B Preferred Stock then outstanding. If the
Corporation and the holders of a majority of the Series B
Preferred Stock then outstanding are unable to reach agreement
on any valuation matter, such valuation shall be submitted to
and determined by a nationally recognized independent
investment bank selected by the Board of Directors and the
holders of a majority of the Series B Preferred Stock then
outstanding (or, if such selection cannot be agreed upon
promptly, or in any event within ten (10) days, then such
valuation shall be made by a nationally recognized independent
investment banking firm selected by the American Arbitration
Association in New York City in accordance with its rules),
the costs of which valuation shall be paid for by the
Corporation.
(iii) "Market Price" shall mean the average Closing
Bid Price for twenty (20) consecutive trading days, ending
with the trading day prior to the date as of which the Market
Price is being determined (with appropriate adjustments for
subdivisions or combinations of shares effected during such
period), provided that if the prices referred to in the
definition of Closing Bid Price cannot be determined on any
trading day, the Closing Bid Price for such trading day will
be deemed to equal Fair Market Value of such security on such
trading day.
(iv) "Registered Holders" shall mean, at any time,
the holders of record of the Series B Preferred Stock.
(v) "Stock Market" shall mean, with respect to any
security, the principal national securities exchange on which
such security is listed or admitted to trading or, if such
security is not listed or admitted to trading on any national
securities exchange, shall mean The Nasdaq National Market
System ("NNM") or The Nasdaq SmallCap Market ("SCM" and,
together with NNM, "Nasdaq") or, if
such security is not quoted on Nasdaq, shall mean the OTC
Bulletin Board or, if such security is not quoted on the OTC
Bulletin Board, shall mean the over-the-counter market as
furnished by any NASD member firm selected from time to time
by the Corporation for that purpose.
(vi) "Trading Day" shall mean a day on which the
relevant Stock Market is open for the transaction of business.
2. Dividends and Distributions. (a) The holders, as of the
Dividend Record Date (as defined below), of the Series B Preferred Stock shall
be entitled to receive semi-annual dividends on their respective shares of
Series B Preferred Stock (aggregating, for this purpose, all shares of Series B
Preferred Stock held of record or, to the Corporation's knowledge, beneficially
by such holder), payable, at the option of the Corporation, in cash or
additional shares of Series B Preferred Stock, at the rate of 8% per annum
(computed on the basis of a 360-day year of twelve 30 day months) of the
Dividend Base Amount (as defined below), payable semi-annually in arrears;
provided that, to the extent the declaration or payment of such dividend is
prohibited by applicable law, such dividend need not be paid but shall
nevertheless accrue and shall be paid promptly when applicable law permits. Such
dividends shall accrue (i) from March 6, 2001 for shares of Series B Preferred
Stock issued within thirty days of the date of the filing of this Certificate of
Designation, or (ii) from the date of issuance for shares of Series B Preferred
Stock issued after thirty days from the date of filing of this Certificate of
Designation, and shall be paid semi-annually on April 1 and October 1 of each
year or, if any such day is not a business day, on the next succeeding business
day. Such dividends shall be paid, at the election of the Corporation, either in
cash or additional duly authorized, fully paid and non assessable shares of
Series B Preferred Stock. In calculating the number of shares of Series B
Preferred Stock to be paid with respect to each dividend, the Series B Preferred
Stock shall be valued at $100.00 per share (subject to appropriate adjustment to
reflect any stock split, combination, reclassification or reorganization of the
Series B Preferred Stock). Notwithstanding the foregoing, the Corporation shall
not be required to issue fractional shares of Series B Preferred Stock; the
Corporation may elect, in its sole discretion, independently for each holder,
whether such number of shares (on an aggregated basis) will be rounded to the
nearest whole share (with .5 of a share rounded upward) or whether such holder
will be given cash in lieu of any fractional shares. The "Dividend Base Amount"
of a share of Series B Preferred Stock shall be $100.00 plus all accrued but
unpaid dividends (subject to appropriate adjustment to reflect any stock split,
combination, reclassification or reorganization of the Series B Preferred
Stock). The "Dividend Record Date" shall mean, for each semi-annual dividend,
the March 15 or September 15, as the case may be, immediately preceding the
dividend payment date.
(b) In addition to the foregoing, subject to the rights of the
holders of any shares of any series or class of capital stock ranking prior, and
superior to, or pari passu with, the shares of Series B Preferred Stock with
respect to dividends, and prior to the rights of the holders of Common Stock,
Series A Preferred Stock and any other series or class of capital stock, the
holders of shares of Series B Preferred Stock shall be entitled to receive, as,
when and if declared by the Board of Directors, out of assets legally available
for that purpose, dividends or distributions in cash, stock or otherwise.
(c) The Corporation shall not declare or pay any dividend or
distribution on any Junior Stock (as defined below) of the Corporation unless
all dividends required by Section 2(a) have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof set
apart for such payment, on the Series B Preferred Stock.
(d) [Reserved]
(e) All dividends or distributions declared upon the Series B
Preferred Stock shall be declared pro rata per share.
(f) Any reference to "distribution" contained in this Section
2 shall not be deemed to include any distribution made in connection with or in
lieu of any Liquidation Event (as defined below).
(g) No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Series B Preferred
Stock which may be in arrears (it being understood that this provision does not
alter the Corporation's obligations under Section 2(a)).
(h) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on any class or series of
stock of the Corporation ranking, as to dividends, on a parity with the Series B
Preferred Stock, for any period unless all dividends have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof set apart for such payment, on the Series B Preferred Stock.
When dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, upon the shares of the Series B Preferred Stock and any
other class or series of stock ranking on a parity as to dividends with the
Series B Preferred Stock, all dividends declared upon such other stock shall be
declared pro rata so that the amounts of dividends per share declared on the
Series B Preferred Stock and such other stock shall in all cases bear to each
other the same ratio that accrued dividends per share
on the shares of the Series B Preferred Stock and on such other stock bear to
each other.
(i) So long as any shares of the Series B Preferred Stock are
outstanding, no other stock of the Corporation ranking on a parity with the
Series B Preferred Stock as to dividends or upon liquidation, dissolution or
winding up shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund or
otherwise for the purchase or redemption of any shares of any such stock) by the
Corporation unless the dividends, if any, accrued on all outstanding shares of
the Series B Preferred Stock shall have been paid or set apart for payment.
(j) "Junior Stock" shall mean the Common Stock, Series A
Preferred Stock, and any shares of preferred stock of any series or class of the
Corporation, whether presently outstanding or hereafter issued, which are junior
to the shares of Series B Preferred Stock with respect to (i) the distribution
of assets on any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, (ii) dividends or (iii) voting.
3. Liquidation Preference. (a) In the event of a (i)
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (ii) a sale or other disposition of all or substantially all of the
assets of the Corporation or (iii) any consolidation, merger, combination,
reorganization or other transaction in which the Corporation is not the
surviving entity or shares of Common Stock constituting in excess of 50% of the
voting power of the Corporation are exchanged for or changed into stock or
securities of another entity, cash and/or any other property (a "Merger
Transaction") (items (i), (ii) and (iii) of this sentence being collectively
referred to as a "Liquidation Event"), after payment or provision for payment of
debts and other liabilities of the Corporation, the holders of the Series B
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, whether such
assets are capital, surplus, or earnings, before any payment or declaration and
setting apart for payment of any amount shall be made in respect of any Junior
Stock of the Corporation, an amount equal to the Dividend Base Amount at such
time; provided, however, in the case of a Merger Transaction, such payment may
be made in cash, property (valued as provided in Subsection 3(b)) and/or
securities (valued as provided in Subsection 3(b)) of the entity surviving such
Merger Transaction. In the case of property or in the event that any such
securities are subject to an investment letter or other similar restriction on
transferability, the value of such property or securities shall be determined by
agreement between the Corporation and the holders of a majority of the Series B
Preferred Stock then outstanding. If upon any Liquidation Event, whether
voluntary or involuntary, the assets to be distributed to the holders of the
Series B Preferred Stock shall be insufficient to
permit the payment to such shareholders of the full preferential amounts
aforesaid, then all of the assets of the Corporation to be distributed shall be
so distributed ratably to the holders of the Series B Preferred Stock on the
basis of the number of shares of Series B Preferred Stock held. Notwithstanding
item (iii) of the first sentence of this Subsection 3(a), any consolidation,
merger, combination, reorganization or other transaction in which the
Corporation is not the surviving entity but the stockholders of the Corporation
immediately prior to such transaction own in excess of 50% of the voting power
of the corporation surviving such transaction and own amongst themselves such
interest in substantially the same proportions as prior to such transaction,
shall not be considered a Liquidation Event provided that the surviving
corporation shall make appropriate provisions to ensure that the terms of this
Certificate of Designation survive any such transaction. All shares of Series B
Preferred Stock shall rank as to payment upon the occurrence of any Liquidation
Event senior to the Common Stock, the Series A Preferred Stock, and, unless the
terms of such series shall provide otherwise, senior to all other series of the
Corporation's preferred stock.
(b) Any securities or other property to be delivered to the
holders of the Series B Preferred Stock pursuant to Subsection 3(a) hereof shall
be valued as follows:
(i) Securities not subject to an investment letter or
other similar restriction on free marketability:
(A) If actively traded on a Stock Market,
the per share value shall be deemed to be the Market Price of
such securities as of the third day prior to the date of
valuation.
(B) If not actively traded on a Stock
Market, the value shall be the Fair Market Value of such
securities.
(ii) For securities for which there is an active
public market but which are subject to an investment letter or
other restrictions on free marketability, the value shall be
the Fair Market Value thereof, determined by discounting
appropriately the per share Market Price thereof.
(iii) For all other securities, the value shall be
the Fair Market Value thereof.
4. Conversion.
(a) Right of Conversion. The shares of Series B Preferred
Stock are convertible, in whole or in part, at the option of the holder thereof
and upon notice to the Corporation as set forth in Subsection 4(b), into fully
paid and nonassessable shares of Common Stock and such other securities and
property as hereinafter provided. The initial conversion price per share of
Common Stock (the "Conversion Price"), shall be $.50, subject to adjustment as
provided herein. The rate at which each share of Series B Preferred Stock is
convertible at any time into Common Stock (the "Conversion Rate") shall be
determined by dividing the then existing Conversion Price (determined in
accordance with this Section 4, including the last paragraph hereof) into the
Dividend Base Amount.
(b) Conversion Procedures. Any holder of shares of Series B
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates evidencing such shares of Series B
Preferred Stock at the office of the transfer agent for the Series B Preferred
Stock, which certificate or certificates, if the Corporation shall so require,
shall be duly endorsed to the Corporation or in blank, or accompanied by proper
instruments of transfer to the Corporation or in blank, accompanied by
irrevocable written notice to the Corporation that the holder elects so to
convert such shares of Series B Preferred Stock and specifying the name or names
(with address) in which a certificate or certificates evidencing shares of
Common Stock are to be issued. The Corporation need not deem a notice of
conversion to be received unless the holder complies with all the provisions
hereof. The Corporation will instruct the transfer agent (which may be the
Corporation) to make a notation of the date that a notice of conversion is
received, which date of receipt shall be deemed to be the date of receipt for
purposes hereof.
The Corporation shall, as soon as practicable after such
deposit of certificates evidencing shares of Series B Preferred Stock
accompanied by the written notice and compliance with any other conditions
herein contained, deliver at such office of such transfer agent to the person
for whose account such shares of Series B Preferred Stock were so surrendered,
or to the nominee or nominees of such person, certificates evidencing the number
of full shares of Common Stock to which such person shall be entitled as
aforesaid, subject to Section 4(d). Subject to the following provisions of this
paragraph, such conversion shall be deemed to have been made as of the date of
such surrender of the shares of Series B Preferred Stock to be converted, and
the person or persons entitled to receive the Common Stock deliverable upon
conversion of such Series B Preferred Stock shall be treated for all purposes as
the record holder or holders of such Common Stock on such date; provided,
however, that the Corporation shall not be required to convert any shares of
Series B Preferred Stock while the stock transfer books of the Corporation are
closed for any purpose, but the surrender of Series B Preferred Stock for
conversion during any period while such books are so closed shall become
effective for
conversion immediately upon the reopening of such books as if the surrender had
been made on the date of such reopening, and the conversion shall be at the
conversion rate in effect on such date. No adjustments in respect of any
dividends on shares surrendered for conversion or any dividend on the Common
Stock issued upon conversion shall be made upon the conversion of any shares of
Series B Preferred Stock.
The Corporation shall at all times, reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of Series B Preferred Stock,
such number of shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series B Preferred
Stock.
All notices of conversion shall be irrevocable; provided,
however, that if the Corporation has sent notice of an event pursuant to
Subsection 4(g) hereof, a holder of Series B Preferred Stock may, at its
election, provide in its notice of conversion that the conversion of its shares
of Series B Preferred Stock shall be contingent upon the occurrence of the
record date or effectiveness of such event (as specified by such holder),
provided that such notice of conversion is received by the Corporation prior to
such record date or effective date, as the case may be.
(c) Adjustment of Conversion Rate and Conversion Price.
(i) As used in this Subsection 4(c), the following
terms shall have the following meanings:
"Capital Stock" of any Person means the Common Stock
or Preferred Stock of such Person. Unless otherwise stated
herein or the context otherwise requires, "Capital Stock"
means Capital Stock of the Corporation; "Common Stock" of any
Person other than the Corporation means the common equity
(however designated), including, without limitation, common
stock or partnership or membership interests of, or
participation or interests in such Person (or equivalents
thereof).
"Common Stock" of the Corporation means the Common
Stock, par value $.001 per share, of the Corporation, any
successor class or classes of common equity (however
designated) of the Corporation into or for which such Common
Stock may hereafter be converted, exchanged or reclassified
and any class or classes of common equity (however designated)
of the Corporation which may be distributed or issued with
respect to such Common Stock or successor class of classes to
holders thereof generally. Unless otherwise stated herein or
the
context requires otherwise, "Common Stock" means Common Stock
of the Corporation;
"Current Market Price" means, when used with respect
to any security as of any date, the last sale price, regular
way, or, in case no such sale takes place on such date, the
average of the closing bid and asked prices, regular way, of
such security in either case as reported for consolidated
transactions on the New York Stock Exchange or, if such
security is not listed or admitted to trading on the New York
Stock Exchange, as reported for consolidated transactions with
respect to securities listed on the principal national
securities exchange on which such security is listed or
admitted to trading or, if such security is not listed or
admitted to trading on any national securities exchange, as
reported on the Nasdaq National Market, or, if such security
is not listed or admitted to trading on the Nasdaq National
Market, as reported on the Nasdaq SmallCap Market, or if such
security is not listed or admitted to trading on any national
securities exchange or the Nasdaq National Market or the
Nasdaq SmallCap Market, the average of the high bid and low
asked prices of such security in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System or such other system then in
use or, if such security is not quoted by any such
organization, the average of the closing bid and asked prices
of such security furnished by an NASD member firm selected by
the Corporation. If such security is not quoted by any such
organization and no such NASD member firm is able to provide
such prices, the Current Market Price of such security shall
be the Fair Market Value thereof;
"Fair Market Value" means, at any date as to any
asset, Property or right (including without limitation,
Capital Stock of any Person, evidence of indebtedness or other
securities, but excluding cash), the fair market value of such
item as determined in good faith by the Board of Directors,
whose determination shall be conclusive; provided, however,
that such determination is described in an Officers'
Certificate filed with the transfer agent and that, if there
is a Current Market Price for such item on such date, "Fair
Market Value" means such Current Market Price (without giving
effect to the last sentence of the definition thereof);
"GAAP" means, as of any date, generally accepted
accounting principles in the United States and does not
include any
interpretations or regulations that have been proposed but
that have not become effective;
"Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice
President of such Person;
"Officers' Certificate" means a certificate signed on
behalf of the Corporation by two Officers, one of whom must be
the Chairman of the Board, the President, the Treasurer or a
Vice-President of the Corporation;
"Person" means any individual, corporation,
partnership, association, trust or any other entity or
organization, including a government or political subdivision
or any agency or instrumentality thereof;
"Preferred Stock" of any Person means the class or
classes of equity, ownership or participation interests
(however designated) in such Person, including, without
limitation, stock, share, partnership and membership
interests, which are preferred as to the payment of dividends
or distributions by, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of,
such Person (or equivalent thereof) over interests of any
other class of interests of such Person. Unless otherwise
stated herein or the context otherwise requires, "Preferred
Stock" means Preferred Stock of the Corporation;
"Property" of any Person means any and all types of
real, personal, tangible, intangible or mixed property owned
by such Person whether or not included on the most recent
consolidated balance sheet of such Person in accordance with
GAAP;
"Subsidiary" of a Person on any date means any other
Person of whom such Person owns, directly or indirectly
through a Subsidiary or Subsidiaries of such Person, Capital
Stock with voting power, acting independently and under
ordinary circumstances, entitling such person to elect a
majority of the board of directors or other governing body of
such other Person. Unless otherwise stated herein or the
context otherwise requires, "Subsidiary" means a Subsidiary of
the Corporation.
(ii) If the Corporation shall (i) pay a dividend or
other distribution, in Common Stock, on any class of Capital
Stock of the Corporation, (ii) subdivide the outstanding
Common Stock into a greater number of shares by any means or
(iii) combine the outstanding Common Stock into a smaller
number of shares by any means including, without limitation, a
reverse stock split), then in each such case the Conversion
Price in effect immediately prior thereto shall be adjusted so
that the Registered Holder of any shares of Series B Preferred
Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock that such
Registered Holder would have owned or have been entitled to
receive upon the happening of such event had such Series B
Preferred Stock been converted immediately prior to the
relevant record date or, if there is no such record date, the
effective date of such event. An adjustment made pursuant to
this Paragraph 4(c)(ii) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall
become effective immediately after the effective date of such
subdivision or combination, as the case may be.
(iii) If the Corporation shall (i) issue or
distribute (at a price per share less than the Current Market
Price per share of such Capital Stock on the date of such
issuance or distribution) Capital Stock generally to holders
of Common Stock or to holders of any class or series of
Capital Stock which is convertible into or exchangeable or
exercisable for Common Stock (excluding an issuance or
distribution of Common Stock described in Paragraph 4(c)(ii))
or (ii) issue or distribute generally to such holders rights,
warrants, options or convertible or exchangeable securities
entitling the holder thereof to subscribe for, purchase,
convert into or exchange for Capital Stock at a price per
share less than the Current Market Price per share of such
Capital Stock on the date of issuance or distribution, then,
in each such case, at the earliest of (A) the date the
Corporation enters into a firm contract for such issuance or
distribution, (B) the record date for the determination of
stockholders entitled to receive any such Capital Stock or any
such rights, warrants, options or convertible or exchangeable
securities or (C) the date of actual issuance or distribution
of any such Capital Stock or any such rights, warrants,
options or convertible or exchangeable securities, the
Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to such earliest
date by:
(A) if such Capital Stock is Common Stock, a
fraction the numerator of which is the number of
shares of Common Stock outstanding, on such earliest
date plus the number of shares of Common Stock which
could be purchased at the Current Market Price per
share of Common Stock on the date of such issuance or
distribution with the aggregate consideration (based
on the Fair Market Value thereof) received or
receivable by the Corporation either (A) in
connection with such issuance or distribution or (B)
upon the conversion, exchange, purchase or
subscription of all such rights, warrants, options or
convertible or exchangeable securities (the
"Aggregate Consideration"), and the denominator of
which is the number of shares of Common Stock
outstanding on such earliest date plus the number of
shares of Common Stock to be so issued or distributed
or to be issued upon the conversion, exchange,
purchase or subscription of all such rights,
warrants, options or convertible or exchangeable
securities; or
(B) if such Capital Stock is other than
Common Stock, a fraction the numerator of which is
the Current Market Price per share of Common Stock on
such earliest date minus an amount equal to (A) the
difference between (1) the Current Market Price per
share of such Capital Stock multiplied by the number
of shares of such Capital Stock to be so issued and
(2) the Aggregate Consideration, divided by (B) the
number of shares of Common Stock outstanding on such
date, and the denominator of which is the Current
Market Price per share of Common Stock on such
earliest date.
Such adjustment shall be made successively whenever any such
Capital Stock, rights, warrants, options or convertible or
exchangeable securities are so issued or distributed. In
determining whether any rights, warrants, options or
convertible or exchangeable securities entitle the holders
thereof to subscribe for, purchase, convert into or exchange
for shares of such Capital Stock at less than such Current
Market Price, there shall be taken into account the Fair
Market Value of any consideration received or receivable by
the Corporation for such rights, warrants, options or
convertible or exchangeable securities. If any right, warrant,
option or convertible or exchangeable security, the issuance
of which resulted in an adjustment in the Conversion Price
pursuant to this Paragraph 4(c)(iii), shall expire and shall
not have been exercised, the Conversion Price shall
immediately upon such expiration be recomputed to the
Conversion Price which would have
been in effect if such right, warrant, option or convertible
or exchangeable securities had never been distributed or
issued. Notwithstanding anything contained in this paragraph
to the contrary, (i) the issuance of Capital Stock upon the
exercise of such rights, warrants or options or the conversion
or exchange of such convertible or exchangeable securities
will not cause an adjustment in the Conversion Price if no
such adjustment would have been required at the time such
right, warrant, option or convertible or exchangeable security
was issued or distributed; provided, however, that, if the
consideration payable upon such exercise, conversion or
exchange and/or the Capital Stock receivable thereupon are
changed after the time of the issuance or distribution of such
right, warrant, option or convertible or exchangeable security
then such change shall be deemed to be the expiration thereof
without having been exercised and the issuance or distribution
of new options, rights, warrants or convertible or
exchangeable securities and (ii) the issuance of convertible
preferred stock of the Corporation as a dividend on
convertible preferred stock of the Corporation will not cause
an adjustment in the Conversion Price if no such adjustment
would have been required at the time such underlying
convertible preferred stock was issued (or as a result of any
subsequent modification to the terms thereof) and the
conversion provisions of such convertible stock so issued as a
dividend are the same as in such underlying convertible
preferred stock.
Notwithstanding any contained in this Certificate of
Designation to the contrary, options, rights or warrants
issued or distributed by the Corporation, including options,
rights or warrants distributed prior to the date of filing of
this Certificate of Designation, to holders of Common Stock
generally which, until the occurrence of a specified event or
events (a "Trigger Event"), (i) are deemed to be transferred
with Common Stock, (ii) are not exercisable and (iii) are also
issued on a pro rata basis with respect to future issuances of
Common Stock, shall be deemed not to have been issued or
distributed for purposes of this Subsection 4(c) (and no
adjustment to the Conversion Price under this Subsection 4(c)
will be required) until the occurrence of the earliest Trigger
Event. Upon the occurrence of a Trigger Event, such options,
rights or warrants shall continue to be deemed not to have
been issued or distributed for purposes of this Subsection
4(c) (and no adjustment to the Conversion Price under this
Subsection 4(c) will be required) if and for so long as each
Registered Holder who thereafter converts such Registered
Holder's Series B Preferred Stock shall be entitled to receive
upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion,
a number of such options, rights or warrants, as the case may
be, equal to the number of options, rights or warrants to
which a holder of the number of shares of Common Stock equal
to the number of shares of Common Stock issuable upon
conversion of such Registered Holder's Series B Preferred
Stock is entitled to receive at the time of such conversion in
accordance with the terms and provisions of, and applicable
to, such options, rights or warrants. Upon the expiration of
any such options, rights or warrants or at such time, if any,
as a Registered Holder is not entitled to receive such
options, rights or warrants upon conversion of such Registered
Holder's Series B Preferred Stock, an adjustment (if any is
required) to the Conversion Price shall be made in accordance
with this Paragraph 4(c)(iii) with respect to the issuance of
all such options, rights and warrants as of the date of
issuance thereof, but subject to the provisions of the
preceding paragraph, if any such option, right or warrant,
including any such options right or warrants distributed prior
to the date of filing of this Certificate of Designation, are
subject to events, upon the occurrence of which such options,
rights or warrants become exercisable to purchase different
securities, evidence of indebtedness, cash, Properties or
other assets or different amounts thereof, then, subject to
the preceding provision of this paragraph, the date of the
occurrence of any and each such event shall be deemed to be
the date of distribution and record date with respect to new
options, right or warrants with such new purchase rights (and
a termination or expiration of the existing options, rights or
warrants without exercise thereof). In addition, in the event
of any distribution (or deemed distribution) of options,
rights or warrants, or any Trigger Event or other event of the
type described in the preceding sentence, that required (or
would have required but for the provisions of Paragraph
4(c)(vi) or this paragraph) an adjustment to the Conversion
Price under this Subsection 4(c) and such options, rights or
warrants shall thereafter have been redeemed or repurchased
without having been exercised, then the Conversion Price shall
be adjusted upon such redemption or repurchase to give effect
to such distribution, Trigger Event or other event, as the
case may, as though it had instead been a cash distribution,
equal on a per share basis to the result of the aggregate
redemption or repurchase price received by holders of such
options, rights or warrants divided by the number of shares of
Common Stock outstanding as of the date of such repurchase or
redemption, made to holders of Common Stock generally as of
the date of such redemption or repurchase.
(iv) If the Corporation shall pay or distribute, as a
dividend or otherwise, generally to holders of Common Stock or
any class or series of Capital Stock which is convertible into
or exercisable or exchangeable for Common Stock any assets,
Properties or rights (including, without limitation, evidences
of indebtedness of the Corporation, any Subsidiary or any
other Person, cash or Capital Stock or other securities of the
Corporation, any Subsidiary or any other Person, but excluding
payments and distributions as described in Paragraphs 4(c)(ii)
or (iii), dividends and distributions in connection with a
Liquidation Event and distributions consisting solely of cash
described in Paragraph 4(c)(v)), then in each such case the
Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the date of
such payment or distribution by a fraction, the numerator of
which is the Current Market Price per share of Common Stock on
the record date for the determination of stockholders entitled
to receive such payment or distribution less the Fair Market
Value per share of Common Stock on such record date of the
assets, Properties or rights so paid or distributed, and the
denominator of which is the Current Market Price per share of
Common Stock on such record date. Such adjustment shall become
effective immediately after such record date. For purposes of
this Paragraph 4(c)(iv), such Fair Market Value per share
shall equal the aggregate Fair Market Value on such record
date of the assets, Properties or rights so paid or
distributed divided by the number of shares of Common Stock
outstanding on such record date. For all purposes of this
Certificate of Designation, adjustments to any security's
conversion or exercise price pursuant to such security's
original terms shall not be deemed a distribution or dividend
to holders thereof.
(v) If the Corporation shall, by dividend or
otherwise, make a distribution (other than in connection with
the liquidation, dissolution or winding up of the Corporation
in its entirety), generally to holders of Common Stock or any
class or series of Capital Stock which is convertible into or
exercisable or exchangeable for Common Stock, consisting
solely of cash where (x) the sum of (i) the aggregate amount
for such cash plus (ii) the aggregate amount of all cash so
distributed (by dividend or otherwise) to such holders within
the 12-month period ending on the record date for determining
stockholder entitled to receive such distribution with respect
to which no adjustment has been made to the Conversion Price
pursuant to this Paragraph 4(c)(v) exceeds (y) 10% of the
result of the multiplication of (1) the Current Market Price
per share of Common Stock on such record date times (2)
the number of shares of Common Stock outstanding on such
record date, then the Conversion Price shall be reduced,
effective immediately prior to the opening of business on the
day following such record date, by multiplying the Conversion
Price in effect immediately prior to the close of business on
the day prior to such record date by a fraction, the numerator
of which is the Current Market Price per share of Common Stock
on such record date less the aggregate amount of cash per
share so distributed and the denominator of which is such
Current Market Price; provided, however, that, if the
aggregate amount of cash per share is equal to or greater than
such Current Market Price, then, in lieu of the foregoing
adjustment, adequate provisions shall be made so that each
Registered Holder shall have the right to receive upon
conversion (with respect to each share of Common Stock issued
upon such conversion and in addition to the Common Stock
issuable upon conversion) the aggregate amount of cash per
share such Registered Holder would have received had such
Registered Holder's Series B Preferred Stock been converted
immediately prior to such record date. In no event shall the
Conversion Price be increased pursuant to this Paragraph
4(c)(v); provided, however, that if such distribution is not
so made, the Conversion Price shall be adjusted to be the
Conversion Price which would have been in effect if such
distribution had not been declared. For purposes of this
Paragraph 4(c)(v), such aggregate amount of cash per share
shall equal such sum divided by the number of shares of Common
Stock outstanding on such record date.
(vi) The provisions of this Subsection 4(c) shall
similarly apply to all successive events of the type described
in this Subsection 4(c). Notwithstanding anything contained
herein to the contrary, no adjustment in the Conversion Price
shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Price
then in effect; provided, however, that any adjustments which
by reason of this Paragraph 4(c)(vi) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4
shall be made by the Corporation and shall be made to the
nearest cent or to the nearest one hundredth of a share, as
the case may be, and the transfer agent shall be entitled to
rely conclusively thereon. Except as provided in this Section
4, no adjustment in the Conversion Price will be made for the
issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock or carrying the right to
purchase Common Stock or any securities so convertible or
exchangeable.
(vii) Whenever the Conversion Price is adjusted as
provided herein, the Corporation shall promptly file with the
transfer agent an Officers' Certificate setting forth the
Conversion Price in effect after such adjustment and setting
forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such Officers'
Certificate, the Corporation shall give or cause to be given
to each Registered Holder a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price
and the date on which such adjustment becomes effective.
(viii) Notwithstanding anything contained herein to
the contrary, in any case in which this Subsection 4(c)
provides that an adjustment in the Conversion Price shall
become effective immediately after a record date for an event,
the Corporation may defer until the occurrence of such event
(i) issuing to the Registered Holder of any Series B Preferred
Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment
required by such event over and above the number of shares of
Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such Registered
Holder any amount in cash in lieu of any fractional share of
Common Stock pursuant to Subsection 4(d).
(ix) Notwithstanding any other provision hereof, no
adjustment to the Conversion Price shall be made upon the
issuance or exercise or conversion of (1) any Capital Stock
issued or cash paid as dividends on the Series B Preferred
Stock, or (2) any Capital Stock issued or cash paid upon the
mandatory conversion or redemption of any Series B Preferred
Stock in accordance with Section 5 of this Certificate of
Designation.
(d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of Series B Preferred Stock. If more than one certificate evidencing shares of
Series B Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series B Preferred
Stock so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of such aggregate number of shares
of Series B Preferred Stock, the Corporation may elect, in its sole discretion,
independently for each holder, whether such number of shares of Common Stock
will be rounded to the nearest whole share (with a .5 of a share rounded upward)
or whether such holder will be given cash, in
lieu of any fractional share, in an amount equal to the same fraction of the
Market Price of the Common Stock as of the close of business on the day of
conversion.
(e) [Reserved]
(f) Reservation of Shares; Transfer Taxes, Etc. The
Corporation shall at all times reserve and keep available, out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Series B Preferred Stock, such number of shares of its Common
Stock free of preemptive rights as shall be sufficient to effect the conversion
of all shares of Series B Preferred Stock from time to time outstanding. The
Corporation shall use its best efforts from time to time, in accordance with the
laws of the State of Delaware to increase the authorized number of shares of
Common Stock if at any time the number of shares of authorized, unissued and
unreserved Common Stock shall not be sufficient to permit the conversion of all
the then-outstanding shares of Series B Preferred Stock.
The Corporation shall pay any and all issue or other taxes
(excluding any income taxes) that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of the Series B Preferred
Stock. The Corporation shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue or delivery of
Common Stock (or other securities or assets) in a name other than that in which
the shares of Series B Preferred Stock so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid or need not be
paid.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall declare any dividend (or
any other distribution); or
(ii) the Corporation shall authorize the granting to
the holders of Common Stock or the Series A Preferred Stock of
rights or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights or warrants; or
(iii) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding Common
Stock, or a change in par value, or from par value to no par
value, or from no par value to par value); or
19
(iv) of any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation shall be required, or of the
sale or transfer of all or substantially all of the assets of
the Corporation or of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or
other property; or
(v) of any Liquidation Event;
then the Corporation shall cause to be filed with the transfer agent for the
Series B Preferred Stock, and shall cause to be mailed to the Registered
Holders, at their last addresses as they shall appear upon the stock transfer
books of the Corporation, at least twenty (20) days prior to the applicable
record date hereinafter specified, a notice stating (x) the date on which a
record (if any) is to be taken for the purpose of such dividend, distribution or
granting of rights or warrants or, if a record is not to be taken, the date as
of which the holders of Common Stock or Series A Preferred Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be determined
and a description of the cash, securities or other property to be received by
such holders upon such dividend, distribution or granting of rights or warrants
or (y) the date on which such reclassification, consolidation, merger, sale,
transfer, share exchange or Liquidation Event is expected to become effective,
the date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such exchange or Liquidation Event and the
consideration, including securities or other property, to be received by such
holders upon such exchange; provided, however, that no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice.
(h) Other Changes in Conversion Rate. The Corporation from time
to time may increase the Conversion Rate by any amount for any period of time if
the period is at least 20 days and if the increase is irrevocable during the
period. Whenever the Conversion Rate is so increased, the Corporation shall mail
to the Registered Holders a notice of the increase at least 15 days before the
date the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period it will be in effect.
The Corporation may make such increases in the Conversion
Rate, in addition to those required or allowed by this Section 4, as shall be
determined by it, as evidenced by a resolution of the Board of Directors, to be
advisable in order to avoid or diminish any income tax to holders of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes.
Notwithstanding anything to the contrary herein, in no case
shall the Conversion Price be adjusted to an amount less than $.001 per share,
the current par value of the Common Stock into which the Series B Preferred
Stock is convertible.
(i) Ambiguities/Errors. The Board of Directors of the
Corporation shall have the power to resolve any ambiguity or correct any error
in the provisions relating to the convertibility of the Series B Preferred
Stock, and its actions in so doing shall be final and conclusive.
5. Mandatory Conversion and Redemption. (a) In the event the
Corporation causes the Series A Preferred Stock to be converted in whole or in
part, into fully paid and nonassessable shares of Common Stock, then the
Corporation shall also convert the Series B Preferred Stock, in whole or in
part, on a pro rata basis among holders of the Series B Preferred Stock, into
fully paid and nonassessable shares of Common Stock using a conversion price of
$.50. Any shares of Series B Preferred Stock so converted shall be treated as
having been surrendered by the holder thereof for conversion pursuant to Section
4 on the date of such mandatory conversion (unless previously converted at the
option of the holder).
(b) If, at any time, the Corporation redeems the Series A
Preferred Stock, the Corporation may, at its option, redeem the Series B
Preferred Stock, in whole or in part, on a pro rata basis among holders of the
Series B Preferred Stock.
(c) No greater than 60 nor fewer than 20 days prior to the
date of any such mandatory conversion or redemption, notice by first class mail,
postage prepaid, shall be given to the holders of record of the Series B
Preferred Stock to be converted or redeemed, addressed to such holders at their
last addresses as shown on the stock transfer books of the Corporation. Each
such notice shall specify the date fixed for conversion or redemption, the place
or places for surrender of shares of Series B Preferred Stock and the then
effective Conversion Rate pursuant to Section 4.
Any notice which is mailed as herein provided shall be
conclusively presumed to have been duly given by the Corporation on the date
deposited in the mail, whether or not the holder of the Series B Preferred Stock
receives such notice; and failure properly to give such notice by mail, or any
defect in such notice, to the holders of the shares to be converted or redeemed
shall not affect the validity of the proceedings for the conversion or
redemption of any other shares of Series B Preferred Stock. On or after the date
fixed for conversion or redemption (the "Take-Out Date") as stated in such
notice, each holder of shares called to be converted or
redeemed shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice for conversion or redemption.
After the mailing of such notice, but before the Take-Out Date as stated
therein, all rights whatsoever with respect to the shares so called for
conversion or redemption (except the right of the holders to convert such shares
pursuant to Section 4 and to have such shares converted or redeemed, as the case
may be, upon surrender of their certificates therefor, pursuant to this Section
5) shall terminate. On or after the Take-Out Date, notwithstanding that the
certificates evidencing any shares properly called for conversion or redemption
shall not have been surrendered, such shares shall no longer be deemed
outstanding and all rights whatsoever with respect to the shares so called for
conversion or redemption (except the right of the holders to have such shares
converted or redeemed, as the case may be, upon surrender of their certificates
therefor, pursuant to this Section 5) shall terminate.
6. Outstanding Shares. For purposes of this Certificate of
Designation, a share of Series B Preferred Stock, when issued, shall be deemed
outstanding except (i) from the date, or the deemed date, of surrender of
certificates evidencing shares of Series B Preferred Stock, all shares of Series
B Preferred Stock converted into Common Stock or redeemed pursuant to Section 5
and (ii) from the date of registration of transfer, all shares of Series B
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
7. Class Voting Rights. The Corporation shall not, without the
affirmative vote or consent of the holders of at least 50% of all outstanding
Series B Preferred Stock, voting separately as a class, (i) amend, alter or
repeal any provision of the Certificate of Incorporation or the Bylaws of the
Corporation so as to adversely affect the relative rights, preferences,
qualifications, limitations or restrictions of the Series B Preferred Stock;
(ii) authorize or issue, or increase the authorized amount of, Series B
Preferred Stock, other than Series B Preferred Stock issuable in exchange for 8%
Notes or accrued interest thereon or issuable as dividends on Series B Preferred
Stock; or (iii) issue securities ranking prior to, or pari passu with the Series
B Preferred Stock.
8. Status of Acquired Shares. Shares of Series B Preferred
Stock received upon conversion or redemption pursuant to Section 4 or Section 5
or otherwise acquired by the Corporation will be restored to the status of
authorized but unissued shares of Preferred Stock, without designation as to
class, and may thereafter be issued, but not as shares of Series B Preferred
Stock.
9. Preemptive Rights. The Series B Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
10. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such changes as
shall be necessary to render the provision in question effective and valid under
applicable law.
IN WITNESS WHEREOF, Sudhir Agrawal, President and Acting Chief
Executive Officer of the Corporation, acting for and on behalf of the
Corporation, has hereunto subscribed his name this 15 day of March, 2001.
HYBRIDON, INC.
By: //Sudhir Agrawal
------------------------------------------------
Name: Sudhir Agrawal
Title: President and Acting Chief Executive
Officer
HYBRIDON, INC.
CERTIFICATE OF ELIMINATION
OF NUMBER OF SHARES OF PREFERRED STOCK
DESIGNATED AS
SERIES B CONVERTIBLE PREFERRED STOCK
Hybridon, Inc., a Delaware corporation (the "Corporation"), pursuant to
authority conferred upon the Board of Directors of the Corporation by the
Corporation's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and in accordance with the provisions of
Section 151(g) of the General Corporation Law of the State of Delaware (the
"Delaware Law"), certifies that the Board of Directors of the Corporation duly
adopted the following resolution:
"RESOLVED: That no shares of the Corporation's Series B
Convertible Preferred Stock (the "Series B Preferred
Stock") are outstanding and no shares of Series B
Preferred Stock will be issued subject to the
Certificate of Designation dated March 28, 2001 with
respect to such series (the "Series B Certificate of
Designation"); and that the proper officers of the
Corporation be and hereby are authorized and directed
in the name and on behalf of the Corporation to
execute and file a certificate with the Secretary of
State of the State of Delaware pursuant to Section
151(g) of the Delaware Law setting forth the text of
this resolution, upon the filing and effectiveness of
which all matters are set forth in the Series B
Certificate of Designation shall be deemed to have
been eliminated from the Certificate of Incorporation
and the 85,000 shares of Preferred Stock previously
designated as Series B Preferred Stock shall resume
their status as undesignated shares of Preferred
Stock available for future issuance in accordance
with the Certificate of Incorporation."
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed
hereto and this Certificate to be signed by its Chief Executive Officer this
10th day of December, 2001.
HYBRIDON, INC.
By: /s/ Stephen R. Seiler
Stephen R. Seiler
Chief Executive Officer
CERTIFICATE OF DESIGNATIONS
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
HYBRIDON, INC.
------------------------------
Hybridon, Inc., a corporation organized and existing under the laws of the State
of Delaware (hereinafter called the "Corporation"), hereby certifies that the
following resolution was adopted by the Board of Directors of the Corporation at
a meeting duly called and held on December 10, 2001:
RESOLVED: That pursuant to the authority granted to and vested in the Board of
Directors of the Corporation (hereinafter called the "Board") in accordance with
the provisions of the Certificate of Incorporation, as amended, the Board hereby
creates a series of Preferred Stock, $.01 par value per share (the "Preferred
Stock"), of the Corporation and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitations thereof as
follows:
Series C Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be designated
as "Series C Junior Participating Preferred Stock" (the "Series C Preferred
Stock") and the number of shares constituting the Series C Preferred Stock shall
be one hundred thousand (100,000). Such number of shares may be increased or
decreased by resolution of the Board prior to issuance; provided, that no
decrease shall reduce the number of shares of Series C Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series C Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
C Preferred Stock with respect to dividends, the holders of shares of Series C
Preferred Stock, in preference to the holders of Common Stock, par value $.001
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board out
of funds of the Corporation legally available for the payment of dividends,
quarterly dividends payable in cash on the last day of each fiscal quarter of
the Corporation in each year (each such date being
-1-
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series C Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series C Preferred Stock.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event. In
the event the Corporation shall at any time declare or pay any dividend on the
Series C Preferred Stock payable in shares of Series C Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of
Series C Preferred Stock (by reclassification or otherwise than by payment of a
dividend in shares of Series C Preferred Stock) into a greater or lesser number
of shares of Series C Preferred Stock, then in each such case the amount to
which holders of shares of Series C Preferred Stock were entitled immediately
prior to such event under clause (b) of the first sentence of this Section 2(A)
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Series C Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number of
shares of Series C Preferred Stock outstanding immediately after such event.
(B) The Corporation shall declare a dividend or distribution on the Series C
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) and the Corporation shall pay such
dividend or distribution on the Series C Preferred Stock before the dividend or
distribution declared on the Common Stock is paid or set apart; provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on the
Series C Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of
Series C Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares of
Series C Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment
-2-
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series C
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
may fix a record date for the determination of holders of shares of Series C
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series C Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of
Series C Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series C Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event. In the event the Corporation shall at any time declare or
pay any dividend on the Series C Preferred Stock payable in shares of Series C
Preferred Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Series C Preferred Stock (by reclassification or otherwise
than by payment of a dividend in shares of Series C Preferred Stock) into a
greater or lesser number of shares of Series C Preferred Stock, then in each
such case the number of votes per share to which holders of shares of Series C
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Series C Preferred Stock that were outstanding immediately prior to
such event and the denominator of which is the number of shares of Series C
Preferred Stock outstanding immediately after such event.
(B) Except as otherwise provided herein, in the Certificate of Incorporation or
by law, the holders of shares of Series C Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series C Preferred Stock shall be in
arrears in an amount equal to six quarterly dividends thereon, the holders of
the Series C Preferred Stock, voting as a separate series from all other series
of Preferred Stock and classes of capital stock, shall be entitled to elect two
members of the Board in addition to any Directors elected by any other series,
class or classes of securities and the authorized number of Directors
-3-
will automatically be increased by two. Promptly thereafter, the Board of the
Corporation shall, as soon as may be practicable, call a special meeting of
holders of Series C Preferred Stock for the purpose of electing such members of
the Board. Such special meeting shall in any event be held within 45 days of the
occurrence of such arrearage.
(ii) During any period when the holders of Series C Preferred Stock, voting as a
separate series, shall be entitled and shall have exercised their right to elect
two Directors, then, and during such time as such right continues, (a) the then
authorized number of Directors shall be increased by two, and the holders of
Series C Preferred Stock, voting as a separate series, shall be entitled to
elect the additional Directors so provided for, and (b) each such additional
Director shall not be a member of any existing class of the Board, but shall
serve until the next annual meeting of stockholders for the election of
Directors, or until his successor shall be elected and shall qualify, or until
his right to hold such office terminates pursuant to the provisions of this
Section 3(C).
(iii) A Director elected pursuant to the terms hereof may be removed with or
without cause by the holders of Series C Preferred Stock entitled to vote in an
election of such Director.
(iv) If, during any interval between annual meetings of stockholders for the
election of Directors and while the holders of Series C Preferred Stock shall be
entitled to elect two Directors, there is no such Director in office by reason
of resignation, death or removal, then, promptly thereafter, the Board shall
call a special meeting of the holders of Series C Preferred Stock for the
purpose of filling such vacancy and such vacancy shall be filled at such special
meeting. Such special meeting shall in any event be held within 45 days of the
occurrence of such vacancy.
(v) At such time as the arrearage is fully cured, and all dividends accumulated
and unpaid on any shares of Series C Preferred Stock outstanding are paid, and,
in addition thereto, at least one regular dividend has been paid subsequent to
curing such arrearage, the term of office of any Director elected pursuant to
this Section 3(C), or his successor, shall automatically terminate, and the
authorized number of Directors shall automatically decrease by two, the rights
of the holders of the shares of the Series C Preferred Stock to vote as provided
in this Section 3(C) shall cease, subject to renewal from time to time upon the
same terms and conditions, and the holders of shares of the Series C Preferred
Stock shall have only the limited voting rights elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise provided by law, holders of
Series C Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
-4-
(A) Whenever quarterly dividends or other dividends or distributions payable on
the Series C Preferred Stock as provided in Section 2 are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series C Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Preferred Stock, except dividends
paid ratably on the Series C Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the
Series C Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of
Series C Preferred Stock, or any shares of stock ranking on a parity with the
Series C Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board) to all holders of such
shares upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock or as otherwise required by law.
-5-
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Stock unless, prior thereto, the holders of shares of Series
C Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred Stock, except distributions made ratably on the Series C
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
(B) Neither the consolidation, merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease, exchange or
conveyance of all or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.
(C) In the event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series C Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of paragraph (A) of this Section 6 shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event. In the event the Corporation shall at any time declare or pay any
dividend on the Series C Preferred Stock payable in shares of Series C Preferred
Stock, or effect a subdivision, combination or consolidation of the outstanding
shares of Series C Preferred Stock (by reclassification or otherwise than by
payment of a dividend in shares of Series C Preferred Stock) into a greater or
lesser number of shares of Series C Preferred Stock, then in each such case the
aggregate amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under the proviso in clause (1) of
paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Series C Preferred
Stock that were outstanding immediately prior to such event and the denominator
of which is the number of shares of Series C Preferred Stock outstanding
immediately after such event.
Section 7. Consolidation, Merger, etc. Notwithstanding anything to the contrary
contained herein, in case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share
-6-
of Series C Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series C Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series C Preferred Stock payable
in shares of Series C Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series C Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of Series
C Preferred Stock) into a greater or lesser number of shares of Series C
Preferred Stock, then in each such case the amount set forth in the first
sentence of this Section 7 with respect to the exchange or change of shares of
Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Series C Preferred
Stock that were outstanding immediately prior to such event and the denominator
of which is the number of shares of Series C Preferred Stock outstanding
immediately after such event.
Section 8. No Redemption. The shares of Series C Preferred Stock shall not be
redeemable.
Section 9. Rank. The Series C Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Preferred Stock issued either before or after the issuance of
the Series C Preferred Stock (including, without limitation, the Series A
Convertible Preferred Stock $.01 par value, of the Company established pursuant
to the Certificate of Designation for Series A Convertible preferred Stock dated
May 5, 1998), unless the terms of any such series shall provide otherwise.
Section 10. Amendment. At such time as any shares of Series C Preferred Stock
are outstanding, the Certificate of Incorporation, as amended, of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series C Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series C Preferred Stock, voting
together as a single class.
Section 11. Fractional Shares. Series C Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series C Preferred Stock.
-7-
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of
the Corporation by its Chief Executive Officer this 10th day of December, 2001.
HYBRIDON, INC.
By: /s/ Stephen R. Seiler
Name: Stephen R. Seiler
Title: Chief Executive Officer
-8-
CERTIFICATE OF INCREASE
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
HYBRIDON, INC.
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
Hybridon, Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "Corporation") does hereby certify:
FIRST: In a Certificate of Designations filed with the Secretary of State
of the State of Delaware on December 10, 2001, pursuant to Section
151 of the Delaware General Corporation Law, the Corporation was
authorized to issue 100,000 shares of Series C Junior Participating
Preferred Stock as a series of the Corporation's authorized
Preferred Stock, par value $.01 per share; and
SECOND: The board of directors of the Corporation, by resolution adopted
June 22, 2003, duly authorized and directed that the number of
shares of the Corporation's Series C Junior Participating Preferred
Stock be increased from 100,000 shares to 150,000 shares.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Increase to be signed by its duly authorized officer this 4th day of December,
2003.
By: /s/Stephen R. Seiler
---------------------------------
Name: Stephen R. Seiler
Title: Chief Executive Officer
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
HYBRIDON, INC.
Hybridon, Inc. (hereinafter called the "Corporation"), organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
does hereby certify as follows:
By action of the Board of Directors of the Corporation at a meeting a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth amendments to the Certificate of Incorporation
of the Corporation and declaring said amendments to be advisable. The
stockholders of the Corporation duly approved said proposed amendments at a
meeting in accordance with Section 242 of the General Corporation Law of the
State of Delaware. The resolutions setting forth the amendments are as follows:
RESOLVED: That Section 2(a) of the Certificate of Designation of the Series A
Convertible Preferred Stock of the Corporation filed on May 6, 1998
is hereby amended by deleting the reference to "6.5%" therein and
inserting in lieu thereof "1.0%".
RESOLVED: That Section 3(a) of the Certificate of Designation of the Series A
Convertible Preferred Stock of the Corporation filed on May 6, 1998
is hereby amended by deleting the first sentence of Section 3(a) in
its entirety and inserting in lieu thereof the following sentence:
"3. Liquidation Preference. (a) In the event of a (i) liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
(ii) a sale or other disposition of all or substantially all of the assets of
the Corporation or (iii) any consolidation, merger, combination, reorganization
or other transaction in which the Corporation is not the surviving entity or
shares of Common Stock constituting in excess of 50% of the voting power of the
Corporation are exchanged for or changed into stock or securities of another
entity, cash and/or any other property (a "Merger Transaction") (items (i), (ii)
and (iii) of this sentence being collectively referred to as a "Liquidation
Event"), after payment or provision for payment of debts and other liabilities
of the Corporation, the holders of the Series A Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, whether such assets are capital, surplus, or
earnings, before any payment or declaration and setting apart for payment of any
amount shall be made in respect of any Junior Stock of the Corporation, an
amount equal to $1.00 per share (subject to appropriate adjustment in the event
of any stock split, stock dividend, combination or other similar
recapitalization affecting the Series A Preferred Stock), plus any dividends
declared or accrued but unpaid on such shares; provided, however, in the case of
a Merger Transaction, such payment may be made in cash, property (valued as
provided in Subsection 3(b)) and/or securities (valued as provided in Subsection
3(b)) of the entity surviving such Merger Transaction."
RESOLVED: That Section 4(a) of the Certificate of Designation of the Series A
Convertible Preferred Stock of the Corporation filed on May 6, 1998
is hereby amended by deleting the first paragraph of Section 4(a) in
its entirety and inserting in lieu thereof the following paragraph:
"(a) Right of Conversion. Commencing after the expiration of 12 months
following the Alternative Equity Closing Date (as hereinafter defined), but not
prior thereto, the shares of Series A Preferred Stock shall be convertible, in
whole or in part, at the option of the holder thereof and upon notice to the
Corporation as set forth in Subsection 4(b), into fully paid and nonassessable
shares of Common Stock and such other securities and property as hereinafter
provided. The initial conversion price per share of Common Stock (the
"Conversion Price"), shall be equal to the product of 2.125 multiplied by the
per share price (the "Stated Common Price") of Common Stock sold by the
Corporation in connection with the Alternative Equity Offering (as such term is
defined in the Corporation's Offer to Exchange dated February 6, 1998 (the
"Original Offer to Exchange"), as amended by the Amendment thereto (the
"Amendment") dated March 30, 1998 (collectively, the "Offer to Exchange")) and
shall be subject to adjustment as provided herein. The rate at which each share
of Series A Preferred Stock is convertible at any time into Common Stock (the
"Conversion Rate") shall be determined by dividing the then existing Conversion
Price (determined in accordance with this Section 4, including the last
paragraph hereof) into the Dividend Base Amount; provided, however, that, during
the period beginning on the date of the filing of this Certificate of Amendment
and ending on the date 60 days after the date of the filing of this Certificate
of Amendment (the "Early Conversion Period"), the Conversion Rate shall be
determined by dividing the Conversion Price (in effect as of the first day of
the Early Conversion Period) into an amount equal to 125% of the Dividend Base
Amount. For illustrative purposes only, if the Conversion Price equals $4.25 and
the Dividend Base Amount equals $100.00, then each share of Series A Preferred
Stock will be convertible into 23.53 shares of Common Stock ($100.00 / $4.25);
provided, however, that during the Early Conversion Period, each share of Series
A Preferred Stock will be convertible into 29.41 shares of Common Stock ($125.00
/ $4.25)."
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its authorized officer on the 4th day of December,
2003.
By: /s/Stephen R. Seiler
------------------------------------
Name: Stephen R. Seiler
Title: Chief Executive Officer
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
HYBRIDON, INC.
Hybridon, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State
of Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law of
the State of Delaware, setting forth an amendment to the Restated Certificate
of Incorporation of the Corporation, as amended to date (the "Certificate of
Incorporation"), and declaring said amendment to be advisable. The
stockholders of the Corporation duly approved said proposed amendment in
accordance with Section 242 of the General Corporation Law of the State of
Delaware at a meeting of stockholders held on June 24, 2004. The resolution
setting forth the amendment is as follows:
RESOLVED: That the first paragraph of Article FOURTH of the Certificate of
Incorporation be and hereby is amended and restated in its
entirety so that the same shall read as follows:
"FOURTH. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is (i)
One Hundred Eighty Five Million (185,000,000) shares of
Common Stock, $.001 par value per share ("Common Stock"),
and (ii) Five Million (5,000,000) shares of Preferred Stock,
$.01 par value per share ("Preferred Stock"), which may be
issued from time to time in one or more series as set forth
in Part B of this Article FOURTH."
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its Chief Executive Officer on this 25th day of
June 2004.
HYBRIDON, INC.
/s/ Stephen R. Seiler
----------------------
Name: Stephen R. Seiler
Title: Chief Executive Officer
CERTIFICATE OF INCREASE
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
HYBRIDON, INC.
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
Hybridon, Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "Corporation") does hereby certify:
FIRST: In a Certificate of Designations filed with the Secretary of State
of the State of Delaware on December 10, 2001, pursuant to Section
151 of the Delaware General Corporation Law, the Corporation was
authorized to issue 100,000 shares of Series C Junior Participating
Preferred Stock as a series of the Corporation's authorized
Preferred Stock, par value $.01 per share;
SECOND: In a Certificate of Increase filed with the Secretary of State of
the State of Delaware on December 4, 2003, pursuant to Section 151
of the Delaware General Corporation Law, the number of authorized
shares of the Corporation's Series C Junior Participating Preferred
Stock was increased from 100,000 to 150,000; and
THIRD: The board of directors of the Corporation, by resolution adopted
March 15, 2005, duly authorized and directed that the number of
authorized shares of the Corporation's Series C Junior Participating
Preferred Stock be increased from 150,000 shares to 185,000 shares.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Increase to be signed by its duly authorized officer this 24th day of March,
2005.
By: /s/ Sudhir Agrawal
-----------------------------
Name: Sudhir Agrawal, D. Phil
Title: Chief Executive Officer, President
and Chief Scientific Officer
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
HYBRIDON, INC.
Hybridon, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution was
duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth an amendment to the Restated Certificate of
Incorporation of the Corporation, as amended to date (the "Certificate of
Incorporation"), and declaring said amendment to be advisable. The stockholders
of the Corporation duly approved said proposed amendment in accordance with
Section 242 of the General Corporation Law of the State of Delaware at a meeting
of stockholders held on June 15, 2005. The resolution setting forth the
amendment is as follows:
RESOLVED: That the first paragraph of Article FOURTH of the Certificate of
Incorporation be and hereby is amended and restated in its entirety
so that the same shall read as follows:
"FOURTH. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is (i) Two Hundred
Million (200,000,000) shares of Common Stock, $.001 par value per
share ("Common Stock"), and (ii) Five Million (5,000,000) shares of
Preferred Stock, $.01 par value per share ("Preferred Stock"), which
may be issued from time to time in one or more series as set forth
in Part B of this Article FOURTH."
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its Chief Executive Officer on this 17th day of June
2005.
HYBRIDON, INC.
/s/ Sudhir Agrawal
------------------------------
Name: Sudhir Agrawal
Title: Chief Executive Officer
CERTIFICATE OF INCREASE
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
HYBRIDON, INC.
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
Hybridon, Inc., a corporation organized and existing under the Delaware
General Corporation Law (the "Corporation") does hereby certify:
FIRST: In a Certificate of Designations filed with the Secretary of State
of the State of Delaware on December 10, 2001, pursuant to Section
151 of the Delaware General Corporation Law, the Corporation was
authorized to issue 100,000 shares of Series C Junior Participating
Preferred Stock as a series of the Corporation's authorized
Preferred Stock, par value $.01 per share;
SECOND: In a Certificate of Increase filed with the Secretary of State of
the State of Delaware on December 4, 2003, pursuant to Section 151
of the Delaware General Corporation Law, the number of authorized
shares of the Corporation's Series C Junior Participating Preferred
Stock was increased from 100,000 to 150,000;
THIRD: In a Certificate of Increase filed with the Secretary of State of
the State of Delaware on March 24, 2005, pursuant to Section 151 of
the Delaware General Corporation Law, the number of authorized
shares of the Corporation's Series C Junior Participating Preferred
Stock was increased from 150,000 to 185,000; and
FOURTH: The board of directors of the Corporation, by resolution adopted
March 15, 2005, duly authorized and directed that, effective as of
June 15, 2005, the number of authorized shares of the Corporation's
Series C Junior Participating Preferred Stock be increased from
185,000 shares to 200,000 shares.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Increase to be signed by its duly authorized officer this 21st day of June 2005.
By: /s/ Robert G. Andersen
------------------------------
Name: Robert G. Andersen
Title: Chief Financial Officer