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EXHIBIT 4.2
CERTIFICATE OF DETERMINATION OF PREFERENCES
OF
SERIES A PREFERRED STOCK
OF
CARDIOGENESIS CORPORATION
The undersigned, Michael J. Quinn and J. Stephen Wilkins, do hereby
certify that:
1. They are the Chief Executive Officer and the Chief Financial Officer,
respectively, of CardioGenesis Corporation, a California corporation (the
"Corporation").
2. Pursuant to authority given by the Corporation's Articles of
Incorporation and by Section 202(e) of the California Corporations Code, the
Board of Directors of the Corporation, at a meeting of the Board of Directors
held on June 15, 2001, approved and adopted the following resolution:
WHEREAS, the rights and privileges applicable to the Series A Preferred
Stock are specified in the following Certificate of Determination of Preferences
of the Series A Preferred Stock of CardioGenesis Corporation (the "Certificate
of Determination");
NOW, THEREFORE, BE IT
RESOLVED, that pursuant to the authority presently granted to and vested
in the Board of Directors of this Corporation under the provisions of the
Articles of Incorporation of the Corporation, as amended, and pursuant to the
provisions of Section 401 of the General Corporation Law of the State of
California, this Board of Directors hereby creates a series of Preferred Stock
to consist of 500,000 shares, and hereby fixes the powers, preferences,
relative, participating, voting, optional and other special rights, and the
qualifications, limitations and restrictions thereof, of the Series A Preferred
Stock which have not heretofore been set forth in the Articles of Incorporation
in accordance with the terms of the Certificate of Determination attached hereto
as Exhibit A.
3. The authorized number of shares of Preferred Stock of the Corporation
is 5,000,000, no par value per share. The number of shares constituting the
Series A Preferred Stock is 500,000, none of which shares have been issued.
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IN WITNESS WHEREOF, the undersigned officers hereby execute this
Certificate and declare, under penalty of perjury under the laws of the State of
California, that the statements set forth in this Certificate are true and
correct of their own knowledge.
Effective as of August 17, 2001.
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Michael J. Quinn
Chief Executive Officer
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J. Stephen Wilkins
Chief Financial Officer
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EXHIBIT A
CERTIFICATE OF DETERMINATION
OF
SERIES A PREFERRED STOCK
OF
CARDIOGENESIS CORPORATION
-----------------------------
PURSUANT TO SECTION 401 OF THE GENERAL
CORPORATION LAW OF THE STATE OF CALIFORNIA
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FIRST: The Articles of Incorporation of the Corporation, as amended,
authorizes the issuance of up to 5,000,000 shares of Preferred Stock, no par
value per share (the "Preferred Stock"), and further authorizes the Board of
Directors of the Corporation to fix by resolution or resolutions the
designations and the powers, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, and to fix the number of shares constituting any such series.
SECOND: On June 15, 2001, the Board of Directors of the Corporation
adopted the following resolution authorizing the creation and issuance of a
series of said Preferred Stock to be known as Series A Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its Articles
of Incorporation, as amended, a series of Preferred Stock of the Corporation be,
and hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
and restrictions thereof are as set forth in the Corporation's Articles of
Incorporation, as amended, and in this Certificate of Determination as follows:
1. DESIGNATION AND AMOUNT. The shares of such series of Preferred Stock
shall be designated as "Series A Preferred Stock" (the "Series A Preferred
Stock"), and the number of shares constituting such series shall be 500,000.
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
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of shares of Common Stock of the
Corporation, no par value per share (the "Common Stock"), and
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of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being 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 A Preferred Stock, in the amount (rounded to the nearest cent) of $.25
per share ($1.00 per annum); provided, however, that the amount of such dividend
shall be reduced by the amount of any dividend theretofore paid in the same
calendar quarter pursuant to clause (b) below.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate per share amount of each
cash dividend, and 100 times the aggregate per share amount (payable in kind) of
each non-cash dividend or other distribution, 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
first issuance of any share or fraction of a share of Series A 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 or
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 event the amount to which the holder of each share of Series A Preferred
Stock was 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 Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately prior to such event. Any dividend paid or distribution made with
respect to the Series A Preferred Stock pursuant to this Section 2(b) shall be
paid or made at the same time as the relevant dividend or distribution on the
Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A 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 event 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 A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment 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 cumulate but
shall not bear interest. Dividends paid on the shares of Series A 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 of
Directors may fix a record date for the determination of holders of shares of
Series A 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.
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3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 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 or
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 A
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 outstanding
immediately prior to such event.
(b) Except as otherwise provided herein, in the Corporation's Articles
of Incorporation, as amended (the "Charter"), in any other certificate of
determination creating a series of Preferred Stock or any similar stock or by
law, the holders of shares of Series A 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) Except as set forth herein, or as otherwise provided by law, holders
of Series A 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) to take any corporate action.
4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not authorized or declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not, directly or indirectly:
(i) authorize, declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) authorize, declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except dividends paid ratably on the Series A 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;
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(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 A Preferred Stock; provided, however,
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 to (either as to dividends or upon liquidation,
dissolution or winding up) the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, 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, directly or indirectly, 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.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and canceled 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 Charter, in
any other certificate of determination creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made to:
(i) the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received the greater of (A) $100.00 per share ($1.00 per one one-hundredth
of a share), plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(B) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share of Common Stock to holders thereof; or (ii) the holders of shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A 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. 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 or 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 event the
aggregate amount to which each holder of a share of Series A Preferred Stock was
entitled immediately prior to such event under clause (i) of the preceding
sentence shall be
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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 outstanding
immediately prior to such event.
7. CONSOLIDATION, MERGER OR OTHER. In the event 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 or otherwise changed, then in any
such event each share of Series A 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 100 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 or 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 event the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A 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
outstanding immediately prior to such event.
8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be
redeemable.
9. RANK. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series or
classes of the Corporation's Preferred Stock, whether issued before or after the
issuance of the Series A Preferred Stock.
10. AMENDMENT. The Charter shall not be amended in any manner that would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock, as set forth herein, so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a single
series.
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