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EXHIBIT 3.1B
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 01:00 PM 11/30/1999
991508790 -- 2313878
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RIGHTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK
OF
SPECTRX, INC.
SpectRx, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by
the Restated Certificate of Incorporation of the Corporation, and pursuant to
the provisions of Section 151 of Title B of the Delaware General Corporation
Law, said Board of Directors by unanimous written consent executed on
November 5, 1999, adopted resolutions providing for the designations,
preferences and relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, of the Redeemable
Convertible Preferred Stock of the Corporation, which resolutions are set forth
below (with the attachment to such resolution being attached hereto as
Schedule 1):
WHEREAS, Section 151(g) of the Delaware General Corporation Law and
the Restated Certificate of Incorporation of SpectRx, Inc. (the "Company")
authorized the Board of Directors to divide the share of the Company's $.001
par value preferred stock into one or more series and to issue shares of any
such series, and to fix and to determine the relative rights and preferences
of the shares of such series; and
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company to enter into a Redeemable Convertible
Preferred Stock Purchase Agreement by and among the Company and Abbott
Laboratories (the "Purchase Agreement"), pursuant to which the Company will
issue and sell 525,000 shares of its Redeemable Convertible Preferred Stock for
$10.00 per share or the aggregate consideration of $5,250,000;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Company hereby
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establishes a series of $.001 par value preferred stock of the
Company to be designated the "Redeemable Convertible Preferred
Stock";
FURTHER RESOLVED, that the number of shares of
Redeemable Convertible Preferred Stock, the voting rights,
dividend rights, liquidation rights and conversion rights of
the holder of the shares of the Redeemable Convertible
Preferred Stock, the provisions for redemption of the shares
of Redeemable Convertible Preferred Stock, and all other
preferences and relative rights in respect of shares of
Redeemable Convertible Preferred Stock, shall be as set forth
on Schedule 1 attached to these resolutions.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by Mark A. Samuels, its Chairman/CEO, and
attested by Thomas H. Muller, Jr., its Secretary, this 23rd day of
November, 1999.
SPECTRX, INC.
By: /s/ Mark A. Samuels
------------------------------
CEO
Mark A. Samuels, CEO
ATTEST:
By: /s/ T.H. Muller, Jr.
------------------------
EVP, CFO, Secretary
T.H. Muller, Jr.
(Corporate Seal)
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Schedule 1
DESIGNATIONS, PREFERENCES AND RIGHTS OF
REDEEMABLE CONVERTIBLE PREFERRED STOCK OF
SPECTRX, INC.
Pursuant to authority granted in the certificate of incorporation, as
amended, of SpectRx, Inc. (the "Corporation"), the Board of Directors of the
Corporation has been authorized to issue in series shares of preferred stock and
to designate by resolution the relative preferences and rights of each series
established. By resolution of the Corporation's Board of Directors, the
Corporation has established and fixed the relative preferences and rights of
525,000 shares of preferred stock designated the "Redeemable Convertible
Preferred Stock," each of $0.001 par value.
For the purposes of this statement,
"Board of Directors" shall mean the board of directors of the
Corporation.
"Common Stock" shall mean the common stock, $0.001 par value, of the
Corporation.
"Corporation" shall mean SpectRx, Inc.
"Holder" means a holder of record of shares of Preferred Stock.
"Issue Date" as to any share of Preferred Stock shall mean the date of
issuance of such share.
"Invested Amount" per share of Preferred Stock shall mean $10.00 (as
adjusted for changes in the Preferred Stock by stock split, stock dividend, or
the like occurring after the Original Issue Date).
"Junior Stock" means shares of any class of capital stock of the
Corporation ranking subordinate to the Preferred Stock as to both dividends and
distribution of assets upon liquidation.
"Original Issue Date" shall mean the initial Issue Date, when shares of
Preferred Stock are first issued.
"Preferred Stock" shall mean the 526,000 shares of Redeemable
Convertible Preferred Stock, $0.001 par value, hereby designated.
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The rights, preferences, privileges and restrictions granted to and
imposed upon the Preferred Stock are as follows:
(a) Dividend Rights. The Holders shall be entitled when and if
declared by the Board of Directors to receive dividends out of assets of the
Corporation legally available therefor at an annual rate of $0.60 per share of
Preferred Stock (as adjusted for changes in the Preferred Stock by stock split,
stock dividend, or the like occurring after the Original Issue Date). Such
dividends shall be cumulative and shall accrue whether or not declared by the
Board of Directors of the Corporation. So long as any shares of Preferred Stock
shall be outstanding, the Corporation shall not declare or pay on any Junior
Stock any dividend whatsoever, whether in cash, property or otherwise, nor shall
the Corporation make any distribution on any Junior Stock, nor shall any Junior
Stock be purchased or redeemed by the Corporation, nor shall any monies be paid
or made available for a sinking fund for the purpose of redemption of Junior
Stock, unless all dividends declared or accrued on any outstanding shares of
Preferred Stock shall have been paid or declared and a sum of money sufficient
for the payment thereof set apart.
(b) Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, before any payment
or distribution of the assets of the Corporation shall be made to or set apart
for the holders of Junior Stock, the Holders shall be entitled to receive in
respect of their shares of Preferred Stock payment out of assets of the
Corporation of Ten Dollars ($10.00) per share, plus all accrued but unpaid
dividends to the date of final distribution.
(c) Conversion. The Holders shall have conversion rights in respect of
these shares of Preferred Stock as follows (the "Conversion Rights"):
1. Conversion Rate. The shares of Preferred Stock shall be
convertible, at the times and under the conditions described in this Section (c)
hereafter, at the rate (the "Conversion Rate") of one share of Preferred Stock
into the number of shares of Common Stock that equals the quotient obtained by
dividing the Invested Amount by the Conversion Price (defined hereinafter).
Thus, the number of shares of Common Stock to which a Holder shall be entitled
upon any conversion provided for in this Section (c) shall be the product
obtained by multiplying the Conversion Rate by the number of shares of Preferred
Stock being converted. Such conversion shall be deemed to have been made on the
Conversion Effective Date (defined hereinafter), and such conversion shall be
effected in accordance with the procedures described in Subsection(c)(3) below.
Upon conversion of any shares of Preferred Stock, the Company shall pay all
declared or accrued but unpaid dividends as to such shares to the Holders
thereof to and through the Conversion Effective Date; provided, however, that
the Corporation may, at its option, in lieu of making a full cash payment of all
such declared or accrued but unpaid dividends, make payment thereof in that
number of whole shares of Common Stock calculated by dividing the total of such
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declared or accrued but unpaid dividends due such Holders by the Conversion
Price. The "Conversion Price" shall be equal to the greater of (i) $9.388 or
(ii) the average of the closing sales price of the Common Stock as reported by
the NASDAQ Stock Market for each day of the thirty (30)-day trading period that
begins on the trading day that is fifteen (15) trading days prior to the date
of the receipt by the Corporation of the Conversion Notice (defined
hereinafter).
2. Conversion Right. Each share of Preferred Stock shall be
convertible, at the option of the Holder thereof and without payment of
additional consideration, at any time after the first (1st) anniversary of the
Issue Date in respect of such share at the office of the Corporation or any
transfer agent for the Preferred Stock, into Common Stock at the then effective
Conversion Rate; provided, however, that if on or prior to such first
anniversary, the Corporation shall effect a merger or consolidation wherein
shares of Common Stock are exchanged for securities of another corporation or
for other consideration, then each of the Holders will be afforded reasonable
prior notice of such merger or consolidation and permitted, if such Holder so
chooses, to convert its shares of Preferred Stock into Common Stock at the then
effective Conversion Rate to be effective immediately prior to the
effectiveness of such merger or consolidation.
3. Automatic Conversion. Each outstanding share of Preferred Stock
shall automatically be converted into Common Stock on and as of December 31,
2004, at the then effective Conversion Rate. Such conversion shall be
automatic, without need for any further action by the Holders and regardless of
whether the certificates representing such shares are surrendered to the
Corporation or its transfer agent; provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion or to pay the dividends payable upon such
conversion unless certificates evidencing such shares of the Preferred Stock
are surrendered to the Corporation in accordance with the procedures described
in Subsection (c)(5) below. Upon the conversion of the Preferred Stock pursuant
to this Subsection (c)(3), the Corporation shall promptly send notice thereof
to each Holder, which notice shall state that certificates evidencing shares of
Preferred Stock must be surrendered at the office of the Corporation (or of its
transfer agent for the Common Stock, if applicable) in the manner described in
Subsection (c)(5) below.
4. Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of Preferred Stock, and any shares of Preferred Stock
surrendered for conversion that would otherwise result in a fractional share of
Common Stock shall be redeemed at the then effective Conversion Price per
share, payable as promptly as possible when funds are legally available
therefor.
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5. Mechanics of Conversion. Before any Holder shall be entitled to
receive certificates representing the shares of Common Stock into which shares
of Preferred Stock are converted in accordance with Subsections (c)(2) or (c)(3)
above, such Holder shall surrender the certificate or certificates for such
shares of Preferred Stock, duly endorsed, at the office of the Corporation or of
any transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in which such Holder wishes the
certificate or certificates for shares of Common Stock to be issued, if
different from the name shown on the books and records of the Corporation. Said
conversion notice ("Conversion Notice") shall also contain such representations
of the Holder as may reasonably be required by the Corporation to the effect
that the shares to be received upon conversion are not being acquired and will
not be transferred in any way that might violate the then applicable securities
laws. In the case of a conversion pursuant to Subsection (c)(2) hereof, the
Corporation shall, on the seventy-fifth (75th) day succeeding receipt by the
Corporation of the Conversion Notice, unless the Corporation elects to redeem
such shares of Preferred Stock in accordance with the provisions of Subsection
(d)(2) hereof, issue and deliver at such office to such Holder, or to the
nominee or nominees of such Holder as provided in the Conversion Notice, a
certificate or certificates for the number of shares of Common Stock to which
such Holder shall be entitled as aforesaid. Such date for issuance and delivery
of the shares of Common Stock received upon conversion of Preferred Stock
pursuant to Subsection (c)(2) hereof is hereafter referred to as the Conversion
Effective Date. The person or persons entitled to receive the shares of Common
Stock issuable upon a conversion pursuant to Subsection (c)(2) hereof shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of the Conversion Effective Date. All certificates issued upon
the exercise or occurrence of the conversion shall contain a legend governing
restrictions upon such shares imposed by law or agreement of the Holder or his
or its predecessors.
6. Adjustment for Subdivisions or Combinations of Common Stock. In the
event the Corporation at any time or from time to time after the Original Issue
Date effects a subdivision or combination of the outstanding Common Stock into
a greater or lesser number of shares without a proportionate and corresponding
subdivision or combination of the outstanding Preferred Stock, then and in each
such event the Conversion Price (and the corresponding Conversion Rate) shall
be increased or decreased proportionately.
7. No Impairment. The Corporation shall not, by amendment of its
Certificate of Incorporation or Bylaws or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Corporation, but shall at all times in good faith assist in the
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carrying out of all the provisions of this Section (c) and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the Holders against impairment.
8. Reservation of Stock Issuable Upon Conversion. 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 the Preferred Stock such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall be insufficient to
effect the conversion of all then outstanding shares of the Preferred Stock,
the Corporation shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(d) Redemption. The Preferred Stock shall be subject to redemption
as follows:
1. Optional Redemption at Election of Holders. In the event
the Holders elect, by a vote of the Holders of a majority of the issued and
outstanding shares of Preferred Stock, to cause the redemption of the
outstanding shares of Preferred Stock, then such Holders shall so notify the
Corporation by delivery of a written notice to the Corporation on or prior to
the later to occur of (i) September 30, 2002 or (ii) sixty (60) days subsequent
to the date upon which the Company gives the Holders notice (which notice the
Company undertakes to timely issue) of its right to cause such redemption
(which notice may not be given prior to June 1, 2002). Should such election be
timely made, then all shares of Preferred Stock shall be redeemed in accordance
with the following provisions of this Subsection (d)(1). The Corporation shall,
on December 31, 2002, redeem one-half (1/2) of all of the then outstanding
shares of Preferred Stock held by each Holder of Preferred Stock at a price per
share equal to the Redemption Price (hereinafter defined). If the Corporation
has achieved the Revenue Threshold (defined hereinafter), then the Corporation
shall, as soon as reasonably practicable after the determination of whether the
Corporation has met the Revenue Threshold, but in any event on or prior to
January 31, 2004, redeem all of the then outstanding shares of Preferred Stock
at a price per share equal to the Redemption Price. If the Corporation has not
achieved the Revenue Threshold, it shall, no later than the time for redemption
indicated in the immediately prior sentence, redeem one-half (1/2) of the then
outstanding shares of Preferred Stock held by each Holder of Preferred Stock at
a price per share equal to the Redemption Price, and it shall, on December 31,
2004, redeem all of the then remaining outstanding shares of Preferred Stock at
a price per share equal to the Redemption Price. Notwithstanding the foregoing,
the date for notification of the election of the Holders to cause a redemption
as provided herein, and the dates for redemption provided herein, may be
extended
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by written agreement of the Corporation and the Holders of a majority of the
outstanding shares of Preferred Stock.
2. Optional Redemption Upon Conversion Notice. In addition to
the foregoing provisions governing mandatory redemption, the Corporation may at
its option redeem any shares of Preferred Stock which any Holder has elected to
convert to Common Stock by the issuance of a Conversion Notice by redeeming any
or all of such shares at a price per share equal to the Redemption Price. If the
Corporation elects to so redeem any such shares of Preferred Stock, it shall, by
the issuance of a notice to the Holders whose shares are to be so redeemed,
schedule a date for redemption, which date must be prior to the Conversion
Effective Date which would apply to such shares in accordance with the
provisions of Subsection (c)(4) were they to be converted to Common Stock
pursuant thereto. On or before each date scheduled for redemption, each Holder
of shares to be redeemed shall surrender the certificate representing such
shares to the Corporation and shall receive payment of the Redemption Price
therefor in cash. If fewer than all of the shares represented by a surrendered
certificate are redeemed, the Corporation shall issue a new certificate
representing the unredeemed shares.
3. Certain Definitions. As used herein, "Redemption Price"
means $10.00 per share on Preferred Stock (as adjusted for changes in the
Preferred Stock by stock split, stock dividend, or the like occurring after the
Original Issue Date), plus all accrued but unpaid dividends in respect of such
share of Preferred Stock. "Revenue Threshold" shall mean the recognition of
Twenty Million Dollars ($20,000,000) or more of revenue by the Corporation on a
consolidated basis as reflected on the regularly prepared income statements of
the Corporation for the twelve (12) months ended December 31, 2003.
(e) Voting Rights. Except as set forth in this Section (e), the
Holders shall have no voting rights in respect of the Preferred Stock except
that Holders shall have the right to vote on those matters which, under the
Delaware General Corporation Law, voting by classes of stock is required.
So long as any shares of Preferred Stock are outstanding, the
Corporation shall not, without the unanimous consent (given by vote in person
or by proxy at a meeting called for the purpose, or by written consent) of the
Holders of the shares of Preferred Stock then outstanding:
(i) alter or change the annual dividend rate on the Preferred
Stock;
(ii) alter or change the cumulative nature of the annual
dividend rate on the Preferred Stock or the date from which such dividends are
cumulative;
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(iii) alter or change the amounts which the Holders shall be
entitled to receive on the liquidation, dissolution or winding up of the
Corporation;
(iv) alter or change the terms relating to time of payment or
price to be paid in connection with the redemption of Preferred Stock by the
Corporation;
(v) alter or change the terms relating to conversion of
Preferred Stock to shares of Common Stock;
(vi) allocate any earned surplus, whether now existing or
hereafter arising, to capital, in accordance with Delaware law, if the effect
thereof would be to reduce the legally available funds for payment of dividends
or for redemption of the Preferred Stock; or
(vii) create or authorize any shares of any class of capital
stock of the Corporation having any preference or priority as to either
dividends or distribution or assets upon liquidation superior to any such
preference or priority of the shares of Preferred stock or reclassify any
securities into shares of such superior stock.
(f) Registration of Transfer. The Corporation shall keep at its
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of Preferred Stock. Upon the surrender of any
certificate representing Preferred Stock at such place, the Corporation shall,
at the request of the record Holder of such certificate, execute and deliver
(at the Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares represented by the
surrendered certificate, and the Corporation forthwith shall cancel such
surrendered certificate. Each such new certificate will be registered in such
name and shall represent such number of shares as is requested by the Holder of
the surrendered certificate and will be substantially identical in form to the
surrendered certificate, and dividends shall accrue on the Preferred Stock
represented by such new certificate from the date to which dividends have been
fully paid on such Preferred Stock represented by the surrendered certificate.
The issuance of new certificates shall be made without charge to the Holders of
the surrendered certificates.
(g) Replacement. Upon receipt of evidence reasonably satisfactory to
the Corporation (an affidavit of the registered Holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing shares of Preferred Stock, and in the case of any such
loss, theft or destruction, upon receipt of indemnity reasonably satisfactory
to the Corporation (provided that if the Holder is a financial institution,
other institutional investor or executive officer of the Corporation, such
Holder's own agreement
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shall be satisfactory), or, in the case of any such mutilation upon surrender of
such certificate, the Corporation shall (at its expense) execute and deliver in
lieu of such certificate a new certificate of like kind representing the number
of shares represented by such lost, stolen, destroyed or mutilated certificate
and dated the date of such lost, stolen, destroyed or mutilated certificate, and
dividends shall accrue on the Preferred Stock represented by such new
certificate from the date to which dividends have been fully paid on such lost,
stolen, destroyed or mutilated certificate.
(h) Notices. Any notice required by the provisions hereof to be
given to the Corporation or Holders shall be deemed given if deposited in the
United States Postal Service, postage prepaid, and addressed to the Corporation
at its then principal executive office, or to each Holder at the address of
such Holder appearing on the books of the Corporation.
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