EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
The undersigned, the President of VIMRx PHARMACEUTICALS INC., a
Delaware corporation (the "Corporation"), does hereby execute the following
Amended and Restated Certificate of Incorporation pursuant to Sections 242(b)
and 245 of the Delaware General Corporation Law:
1. The name of the Corporation is:
VIMRx PHARMACEUTICALS INC.
2. The Corporation was originally incorporated under the name
of "Cellular Immunology Corporation" and the original Certificate of
Incorporation of the Corporation was filed in the Office of the Secretary of
State of Delaware on December 30, 1986.
3. The Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirely as follows:
"FIRST: The name of the Corporation is:
VIMRx PHARMACEUTICALS INC.
SECOND: The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. 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 is to engage in any lawful act or activity for which corporations
may, now or hereafter, be organized under the Delaware General Corporation Law
("Delaware Law").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is Forty Million (40,000,000), all of
which shall be common stock with a par value of $.001.
FIFTH: Except to the extent otherwise specifically provided in
the Bylaws of the Corporation, the Board of Directors may adopt, amend or repeal
the Bylaws of the Corporation.
SIXTH: No election of directors of the Corporation need be by
written ballot unless the Bylaws of the Corporation so provide.
SEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be
amended and supplemented, or by any successor thereto, indemnify any and all
persons whom it shall have power to indemnify under said Section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said Section. The Corporation shall advance expenses to the
fullest extent permitted by said Section. Such right to indemnification and
advancement of expenses shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
EIGHTH: To the fullest extent that the General Corporation Law
of the State of Delaware, as it exists on the date hereof or as it may hereafter
be amended, permits the limitation or elimination of the liability of directors,
no director shall be personally liable to the Corporation or its stockholders
for any monetary damages for breach of fiduciary duty as a director.
Notwithstanding the foregoing, a director shall be liable to the extent provided
by applicable law (i) for any breach of such director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware, or (iv) for
any transaction from which such director derived an improper personal benefit.
NINTH: Neither the amendment or repeal of Articles SEVENTH or
EIGHTH, nor the adoption of any provision of this Certificate of Incorporation
inconsistent with such Articles shall adversely affect any right or protection
existing under such Articles at the time of such amendment, repeal or adoption."
4. The seven million nine hundred forty seven thousand seven
hundred twenty-four (7,947,724) shares of common stock, $.01 par value, of the
Corporation presently issued and outstanding are hereby converted and changed
into an aggregate of four million seven hundred sixty thousand four hundred
twenty-one (4,760,421) issued and outstanding shares of the new class of common
stock, $.001 par value, of the Corporation at the rate of .59896544 new shares
of $.001 par value for each outstanding share of $.01 par value, rounded up to
the next whole share with respect to the aggregate number of newly converted
shares to be issued to each holder of record of $.01 par value shares, all such
newly converted shares to be restricted from sale, assignment or transfer prior
to August 31, 1991, the certificates for such shares to be legended accordingly,
and any purported sale, assignment or transfer prior to such date to be void and
of no force or effect.
5. The foregoing amendment to the Certificate of Incorporation
of the Corporation was adopted by vote of the Board of Directors and the written
consent of the holders of a majority of the outstanding capital stock of the
Corporation in accordance with Sections 228, 242 and 245 of the Delaware Law.
Prompt notice thereof has been given to those stockholders who have not so
consented in writing, in accordance with
-2-
Section 228 of the Delaware Law.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day
of July, 1990.
/s/ Richard F. Maradie
-----------------------------------
Richard F. Maradie
President
Attest: /s/ Barbara Freides
-------------------------------
Barbara Freides
Assistant Secretary
-3-
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
VIMRx Pharmaceuticals Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc.
and the name under which the Corporation originally was incorporated is Cellular
Immunology Corporation.
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 30, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation as heretofore amended or supplemented, is hereby further amended by
striking out "Article FOURTH" and substituting in lieu thereof a new "Article
FOURTH" changing the authorized capital stock of the Corporation to read as
follows:
"FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is Sixty Million
(60,000,000), all of which shall be common stock with a par
value of $.001."
4. The amendment to the Amended and Restated Certificate of
Incorporation, herein certified has been duly adopted in the manner and by the
vote prescribed by Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed hereto and this certificate to be signed by its President and
attested by its Secretary this 12/th/ day of June, 1993.
VIMRx PHARMACEUTICALS INC.
By /s/ Richard I Podell
------------------------------
Richard I. Podell
President
Attest:
By: /s/ Lowell S. Lifschultz
-------------------------------
Lowell S. Lifschultz
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
VIMRx Pharmaceuticals Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), hereby certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc.
and the name under which the Corporation originally was incorporated is
"Cellular Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of Delaware on December 30, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH:
The authorized capitol stock of the Corporation shall consist of
one hundred twenty million (120,000,000) shares, consisting of one hundred
twenty million (120,000,000) shares of Common Stock, each having a par value of
$.001 (the "Common Stock")."
4. The amendment to the Certificate of Incorporation herein
certified has been duly adopted in the manner and by the vote prescribed by
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed hereto and this certificate to be signed by a duly authorized
officer of the Corporation and attested by its Secretary this 20th day of June,
1996.
VIMRx PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
----------------------------------
Richard L. Dunning, President
and Chief Executive Officer
Attest:
By: /s/ Lowell S. Lifschultz
--------------------------------
Lowell S. Lifschultz
Secretary
-2-
CERTIFICATE OF CHANGE OF REGISTERED AGENT
and
REGISTERED OFFICE
VIMRx PHARMACEUTICALS INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
The present registered agent of the corporation is The
Corporation Trust Company and the present registered office of the corporation
is in the county of New Castle.
The Board of Directors of VIMRx PHARMACEUTICALS INC. adopted the
following resolution on the 6th of February, 1997.
RESOLVED, that the registered office of the Corporation in the
State of Delaware be and it hereby is changed to 2751 Centerville
Road in the City of Wilmington, County of New Castle and the
authorization of the present registered agent of this corporation
be and the same is hereby withdrawn, and VIMRx PHARMACEUTICAL
INC. shall be and is hereby constituted and appointed the
registered agent of this corporation at the above address of its
registered office.
IN WITNESS WHEREOF, VIMRx PHARMACEUTICALS INC. has caused this statement to be
signed by Richard L. Dunning, its President this 10th day of March, 1997.
By: /s/ Richard L. Dunning
----------------------------------
Richard L. Dunning
President
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
______________________
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
______________________
VIMRx Pharmaceuticals Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc.
and the name under which the Corporation originally was incorporated was
"Cellular Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of Delaware on December 13, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH:
A. The authorized capital stock of the Corporation shall consist of
one hundred twenty million one hundred fifty thousand (120,150,000) shares,
consisting of one hundred twenty million (120,000,000) shares of Common Stock,
each having a par value of $.001 (the "Common Stock"), and one hundred fifty
thousand (150,000) shares of Preferred Stock, each having a par value of $.001
(the "Preferred Stock").
B. The Board of Directors hereby creates and establishes and
authorizes the issuance of a first series of preferred stock, such series to
consist of 150,000 shares of this Corporation's authorized and unissued
Preferred Stock, each share having a par value of $.001, and the Board of
Directors hereby fixes the designation of such series as "Series A Cumulative
Convertible Preferred Stock" (hereinafter referred to as the "Preferred Stock")
and fixes the number of shares constituting such series at 150,000, and hereby
determines the powers, preferences, rights, qualifications, limitations and
restrictions of such series as follows:
Section 1.
Dividends
(a) The holders of the Preferred Stock shall be entitled to receive
dividends thereon at the rate of 6% of the Liquidation Preference (as defined in
Section 2) per share per annum, (as
adjusted for any combinations, consolidations, stock distributions or stock
dividends with respect to such shares) as and when declared by the Board of
Directors, before any dividend or distribution shall be declared, set apart for,
or paid upon the Common Stock of the Corporation, which dividend shall be
payable in additional shares of Preferred Stock, each valued at their
Liquidation Preference. The dividends on the Preferred Stock shall be
cumulative, so that if the Corporation fails in any fiscal year to pay such
dividends on all of the issued and outstanding Preferred Stock, such deficiency
in the dividends shall be fully paid before any dividends or distributions shall
be paid on or set apart for the Common Stock. All dividends and distributions on
the Preferred Stock shall be made pro rata per share to all holders of Preferred
Stock; provided, however, that, notwithstanding the foregoing, until all
cumulative dividends on the Preferred Stock shall have been fully paid, all
dividends and distributions on the Preferred Stock shall be made ratably to the
holders thereof in proportion to the respective amounts that would be payable on
such shares if such dividend arrearages were paid in full. Such dividends shall
accrue annually on the anniversary of the Original Issuance Date (as defined in
Section 3(d)).
(b) For purposes of this Section 1, unless the context requires
otherwise, "distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase and other than redemptions in liquidation or dissolution of the
Corporation) for cash or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
Section 2.
Liquidation Rights
(a) Treatment at Liquidation, Dissolution or Winding Up.
(i) Except as otherwise provided in Section 2(b) below, in the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the holders of Preferred Stock
shall be entitled to be paid first out of the assets of the Corporation
available for distribution to holders of the Corporation's capital stock of all
classes, before payment or distribution of any of such assets to the holders of
any other class of the corporation's capital stock, an amount equal to $1,000
per share of Preferred Stock (the "Liquidation Preference,") which amount shall
be subject to equitable adjustment whenever there shall occur a stock dividend,
stock split, combination of shares, reclassification or other similar event
affecting such shares), and shall include any accrued but unpaid dividends.
(ii) After payment shall have been made in full to the holders
of Preferred Stock pursuant to Section 2(a)(i) hereof or funds necessary for
such payment shall have been set aside by the Corporation in trust for the
account of the holders of Preferred Stock to be available for such payment, the
remaining assets of the Corporation shall be distributed ratably to the holders
of Common Stock to the exclusion of the Preferred Stock.
(iii) If the assets of the Corporation shall be insufficient
to permit the payment in full to the holders of Preferred Stock of all amounts
distributable to them under Section 2(a)(i) hereof, then the entire assets of
the Corporation available for such distribution
2
shall be distributed ratably among the holders of Preferred Stock in proportion
to the full preferential amount each such holder is otherwise entitled to
receive.
(b) Treatment of Reorganizations, Consolidations, Mergers and Sales
of Assets. A consolidation or merger of the Corporation with or into another
unaffiliated corporation or a sale of all or substantially all of the assets of
the Corporation, shall not be regarded as a liquidation, dissolution or winding
up of the affairs of the Corporation for purposes of this Section 2, but shall
result in conversion of the Preferred Stock into Common Stock as set forth in
Section 3(c).
(c) Distributions Other Than Cash. The value of any distribution
provided for in this Section 2, or portion thereof, payable in property other
than cash shall be the fair value (as determined by the Board of Directors in
good faith) of such property at the time of such distribution.
Section 3.
Conversion
The holders of Preferred Stock shall have conversion rights (the
"Conversion Rights") and the Preferred Stock shall be subject to conversion, as
follows:
(a) Right to Convert; Conversion Price. Each share of Preferred Stock
shall be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after
eighteen (18) months after the Original Issuance Date (as defined in Section
3(d) below), at the office of the Corporation or any transfer agent for the
Preferred Stock, into such whole number of fully paid and nonassessable shares
of Common Stock as is determined by dividing $1,000 by the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. The
Conversion Price at which shares of Common Stock shall be deliverable upon
conversion without the payment of any additional consideration by the holder of
Preferred Stock (the "Conversion Price") shall initially be the highest average
of closing bid prices per share of Common Stock on the principal market on which
such Common Stock trades for any sixty (60) consecutive trading day period
commencing with the Original Issuance Date and ending on the date which is
eighteen (18) months from such date, but in no event shall such Conversion Price
be less than $5.50 or greater than $7.50. Such initial Conversion Price shall be
subject to adjustment, in order to adjust the number of shares of Common Stock
into which Preferred Stock is convertible, as hereinafter provided. The right of
conversion with respect to any shares of Preferred Stock which the Corporation
redeems pursuant to Section 5(a) hereof shall terminate at the close of business
on the Redemption Date (as defined in Section 5 of this Certificate of
Designations), unless the Corporation shall default in the payment of the
redemption price for such shares of Preferred Stock, in which case such
termination shall occur upon payment of the redemption price of such shares.
(b) Mechanics of Conversion; Dividends; Fractional Shares. Before any
holder of Preferred Stock shall be entitled to convert the same into shares of
Common Stock, such holder shall surrender the certificate or certificates
therefor, 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 that such holder elects to convert the same. At the time of each
conversion of shares of Preferred Stock, the Corporation shall also issue shares
of Common Stock in an amount equal to all dividends declared and unpaid on the
shares of Preferred Stock surrendered for conversion to the date upon which such
conversion is deemed to occur, valued at
3
the Conversion Price. In lieu of any fractional shares of Common Stock to which
the holder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then effective Conversion Price. The Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled as aforesaid,
together with cash in lieu of any fraction of a share. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.
(c) Automatic Conversion.
(i) Each share of Preferred Stock shall automatically be
converted into shares of Common Stock at the then effective Conversion Price:
(1) on the date which is seven (7) years after the Original
Issuance Date; or
(2) immediately prior to the effective time of any merger,
sale of assets, reorganization or like event in which the Corporation is not the
surviving entity (if such event occurs prior to eighteen months from the
Original Issuance Date, then the Conversion Price shall be equal to the fair
value of the consideration to be received by the holder of a share of Common
Stock, as determined in good faith by the Corporation's Board of Directors, but
in no event greater than $7.50), or
(3) upon the written election of the holders of not less
than a majority in voting power of the then outstanding shares of Preferred
Stock to require such mandatory conversion.
(ii) Upon the occurrence of an event specified in Section
3(c)(i) hereof, all shares of Preferred Stock shall be converted automatically
without any further action by any holder of such shares and whether or not the
certificate(s) representing such shares are surrendered to the Corporation or
the transfer agent for the Preferred Stock; provided, however, that the
Corporation shall not be obligated to issue a certificate or certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificate(s) evidencing such shares of Preferred Stock being converted are
either delivered to the Corporation or the transfer agent for the Preferred
Stock, or the holder notifies the Corporation or such transfer agent that such
certificate or certificates have been lost, stolen, or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith ("Indemnity Agreement"), except that
such holder shall not be required to provide any indemnity bond. Upon the
automatic conversion of Preferred Stock, each holder of Preferred Stock shall
surrender the certificate(s) representing such holder's shares of Preferred
Stock or the aforesaid Indemnity Agreement at the office of the Corporation or
of the transfer agent for the Preferred Stock. Thereupon, there shall be issued
and delivered to such holder, promptly at such office and in such holder's name
as shown on such surrendered certificate(s), a certificate or certificates for
the number of shares of Common Stock into which the shares of Preferred Stock
surrendered were convertible on the date on which such automatic conversion
occurred. No fractional shares of Common Stock shall be issued upon the
automatic conversion of Preferred Stock. In lieu of any fractional shares of
Common Stock to which the holder would
4
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then effective Conversion Price.
(d) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the date on which shares of the
Preferred Stock are first issued (the "Original Issuance Date") effect a
subdivision of the outstanding Common Stock, the Conversion Price in effect
immediately before that subdivision shall be proportionately decreased. If the
Corporation shall at any time or from time to time after the Original Issuance
Date combine the outstanding shares of Common Stock, the Conversion Price in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions.
(1) In the event the Corporation at any time or from time to
time after the Original Issuance Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock, then and in
each such event the Conversion Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:
(A) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(B) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(2) For the purposes of Section 3(e)(1) hereof, the total
number of shares of Common Stock deemed to be issued and outstanding shall
include (i) all shares of Common Stock issuable on conversion of all shares of
Preferred Stock outstanding and (ii) all shares of Common Stock issued and
outstanding and entitled to receive such dividend.
(f) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Original Issuance
Date shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, including a
cash dividend, then and in each such event provision shall be made so that the
holders of Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation
5
and/or cash that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, giving application to all adjustments called for herein during such
period.
(g) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets provided
for in Section 3(c), then and in each such event the holder of each such share
of Preferred Stock shall have the right thereafter to convert such share into
the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock into which such shares of
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.
(h) [INTENTIONALLY OMITTED]
(i) Adjustment of Conversion Price Upon Issuance of Additional Shares
of Common Stock.
(1) Subject always to Section 3(i)(5), in the event that at any
time or from time to time after the Original Issuance Date, through and
including the date which ends eighteen (18) months after the Original Issuance
Date, but not thereafter, the corporation shall issue any shares of Common Stock
or securities convertible into or exercisable to purchase shares of Common Stock
("Additional Shares of Common Stock") excluding shares issued upon a stock split
or combination as provided in Section 3(d) or as a dividend or distribution as
provided in Sections 3(e) or (f)), without consideration or for a consideration
per share less than the Conversion Price in effect on the date of, and
immediately prior to, the issuance or deemed issuance of such Additional Shares
of Common Stock, (which shall include the assumed conversion of all convertible
securities and the assumed exercise of all convertible securities or rights to
purchase shares of Common Stock in accordance with the terms of such convertible
securities or rights to purchase Common Stock), then and in such event, the
applicable Conversion Price then in effect shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction:
(A) the numerator of which shall be (x) the number of
shares of Common Stock outstanding immediately prior to such issue plus (y) the
number of shares of Common Stock which the aggregate consideration received or
deemed to have been received by the corporation for the total number of
Additional Shares of Common Stock so issued would purchase at the Conversion
Price in effect on the date of, and immediately prior to, the issuance or deemed
issuance of such Additional Shares of Common Stock, and
(B) the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issue plus the number of
such Additional Shares of Common Stock so issued or deemed to be issued.
6
(2) For the purposes of Section 3(i) (1) hereof, all shares of
Common Stock issuable upon conversion of shares of Preferred Stock outstanding
immediately prior to any issue of Additional Shares of Common Stock, or any
event with respect to which Additional Shares of Common Stock shall be deemed to
be issued, shall be deemed to be outstanding; and immediately after any
Additional Shares of Common Stock are deemed issued pursuant to Section 3(i)(l)
such Additional Shares of Common Stock shall be deemed to be outstanding.
(3) Notwithstanding anything to the contrary contained herein,
the applicable Conversion Price in effect at the time Additional Shares of
Common Stock are issued or deemed to be issued shall not be reduced pursuant to
Section 3(i)(1) hereof at such time if the amount of such reduction would be an
amount less than $. 01, but any such amount shall be carried forward and
reduction with respect thereto made at the time of and together with any
subsequent reduction which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $.01 or more.
(4) Determination of Consideration. For purposes of this
Section 3(i) , the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(i) Cash and Property: Such consideration shall:
(A) insofar as it consists of cash, be computed at the
aggregate amounts of cash received by the Corporation, excluding
amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue,
as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of
such consideration so received, computed as provided in clauses (A) and
(B) above, as determined in good faith by the Board of Directors.
(ii) Options and Convertible Securities. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Section 3(i)(1) , relating to options,
warrants or rights to purchase Common Stock, and convertible securities, shall
be determined by dividing (W) the total amount, if any, received or receivable
by the Corporation as consideration for the issue of such options or convertible
securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such options or the conversion or exchange
of such convertible securities, or in the case of options for convertible
securities, the exercise of such options for convertible securities and the
conversion or exchange of such convertible securities, by (X) the maximum number
of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such options or the conversion or
exchange of such convertible securities. (5)Notwithstanding any other provision
of this Section 3(i), there shall be no deemed issuance of Additional Shares
7
of Common Stock upon (A) issuance of any shares of Preferred Stock as a dividend
on the Preferred Stock, (B) conversion of any Preferred Stock, (C) exercise of
any options or warrants issued and outstanding on the Original Issuance Date,
(D) grant or exercise of any options to purchase Common Stock pursuant to the
Corporation's Stock Option Plan as in effect on the Original Issuance Date or
any subsequent amendment thereof which is approved by the Corporation's
stockholders pursuant to Securities and Exchange Commission regulations, or (E)
the sale for cash of no more than 3,333,334 shares of Common Stock for aggregate
gross proceeds of no more than $10,000,000, at a gross per-share price of no
less than $3.00. In the event that the gross per-share sale price of a share of
Common Stock under Section 3(i)(5)(E) shall be less than $3.00, then the
difference between $3.00 and the actual gross per- share sale price shall be
subtracted from the Conversion Price utilized in the calculation set forth in
Section 3(i)(1)(A)(y).
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each affected
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any affected holder of Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of each share of Preferred
Stock.
(k) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to each
holder of Preferred Stock at least ten (10) days prior to such record date a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(l) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer
taxes payable in connection with the conversion of any shares of Preferred
Stock; provided, however, that the Corporation shall not be required to pay any
tax that may be payable in respect of any transfer to a name other than that of
the holder of such Preferred Stock.
Section 4.
Voting Rights
Except as otherwise required by law or by Section 7, the holders of
Preferred Stock shall not have the right to vote on any matter submitted to a
vote of the stockholders of the Corporation. With respect to all questions as to
which, under law, stockholders are entitled to vote by classes, the holders of
Preferred Stock shall vote together as a single class separately from the
holders of Common Stock.
8
Section 5.
No Reissuance Preferred Stock
No share or shares of Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued, and
all such shares shall be canceled, retired and eliminated from the shares which
the Corporation shall be authorized to issue.
Section 6.
Protective Covenant
The Corporation shall not, without the affirmative vote or written
consent of the holders of a majority of the then issued and outstanding shares
of Preferred Stock, amend its Certificate of Incorporation to provide for the
creation or issuance of any class or series of capital stock which shall rank
pari passu or senior to the Preferred Stock in priority to receive the
liquidation preference on the Preferred Stock."
4. The amendment to the Certificate of Incorporation herein
certified has been duly adopted in the manner and by the vote prescribed by
Section 242 of the General Corporation Law of the State of Delaware.
9
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Richard L. Dunning, its President, and attested by Lowell S.
Lifschultz, its Secretary, as of this 16th day of December, 1997.
VIMRx PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
----------------------------------------
Richard L. Dunning
President and Chief Executive Officer
Attest:
By: /s/ Lowell S. Lifschultz
-------------------------------
Lowell S. Lifschultz
Secretary
10
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRX PHARMACEUTICALS INC.
============================================
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
============================================
VIMRX Pharmaceuticals Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRX Pharmaceuticals Inc. and the
name under which the Corporation originally was incorporated was "Cellular
Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 13, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article I" and
substituting in lieu thereof a new "Article I" changing the name of the
Corporation to read as follows:
"FIRST: The name of the Corporation is:
Nexell Therapeutics Inc."
4. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH
A. The authorized capital stock of the Corporation shall consist of one
hundred sixty-one million, one hundred fifty thousand (161,150,000) shares,
consisting of one hundred sixty million (160,000,000) shares of Common Stock,
each having a par value of $.001 (the "Common Stock"), and one million, one
hundred fifty thousand (1,150,000) shares of Preferred Stock, each having a par
value of $.001 (the "Preferred Stock").
B. The Preferred Stock may be issued from time to time in one or more
series of any number of shares, provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preferred Stock hereinabove authorized. Each series of
Preferred Stock shall be distinctively designated by letter
or descriptive words. All series of Preferred Stock shall rank equally and be
identical in all respects except as provided by this Article FOURTH or in a
resolution of the Board of Directors providing for the issuance of any series of
Preferred Stock.
C. Authority is hereby expressly vested in the Board of Directors
from time to time to issue the Preferred Stock as Preferred Stock of any series
and in connection with the creation of each such series to fix by the resolution
or resolutions providing for the issue of shares thereof the designations,
preferences, limitations and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, to the full
extent now or hereafter permitted by this Certificate of Incorporation and the
laws of the State of Delaware, including, without limitation:
(1) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased (but
not above the total number of authorized shares of the Preferred Stock) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by a resolution or resolutions of the Board of Directors, all
subject to the conditions or restrictions set forth in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of any
series of Preferred Stock;
(2) the dividend rate payable on shares of such series, the
conditions and dates upon which such dividends shall be payable, the preferences
or relation which such dividend shall bear to the dividends payable on any other
class or classes or any other series of capital stock (except as otherwise
expressly provided in this Certificate of Incorporation), and whether such
dividends shall be cumulative or non-cumulative and, if cumulative, the date or
dates from which dividends shall accumulate;
(3) whether the shares of such series shall be subject to
redemption by the Corporation and, if made subject to redemption, the price or
prices at which, and the terms and conditions on which, the shares of such
series may be redeemed by the Corporation;
(4) the amount or amounts payable upon the shares of such series
in the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation and the preferences or relation which such payments shall
bear to such payments made on any other class or classes or any other series of
capital stock (except as otherwise expressly provided in this Certificate of
Incorporation);
(5) whether or not the shares of such series shall be made
convertible into, or exchangeable for, shares of any other class or classes of
capital stock of the Corporation, or any series thereof, or for any other series
of the same class of capital stock of the Corporation or for debt of the
Corporation evidenced by an instrument of indebtedness, and, if so convertible
or exchangeable, the conversion price or prices, or the rate or rates of
exchange, and the adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions of such conversion or
exchange;
(6) whether the holders of shares of such series shall have any
right or power to vote or to receive notice of any meeting of stockholders,
either generally or as a condition to specified corporate action; and
2
(7) any other preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof as
may be permitted by the laws of the State of Delaware and as shall not be
inconsistent with this Article FOURTH.
D. Shares of Preferred Stock which have been issued and reacquired in any
manner by the Corporation (excluding, until the Corporation elects to retire
them, shares which are held as treasury shares, but including shares redeemed,
shares purchased and retired and shares which have been converted into shares of
Common Stock) shall have the status of authorized but unissued shares of
Preferred Stock and may be reissued as a part of the series of which they were
originally a part or may be reissued as a part of another series of Preferred
Stock, all subject to the conditions or restrictions on issuance set forth in
the resolution or resolutions adopted by the Board of Directors providing for
the issuance of any series of Preferred Stock.
E. Except as otherwise provided by the resolution or resolutions
providing for the issuance of any series of Preferred Stock, or in subsection H
of this Article FOURTH, after payment shall have been made to the holders of
Preferred Stock of the full amount of dividends to which they shall be entitled
pursuant to the resolution or resolutions providing for the issuance of any
series of Preferred Stock, the holders of Common Stock shall be entitled, to the
exclusion of the holders of Preferred Stock of any and all series, to receive
such dividends as from time to time may be declared by the Board of Directors.
F. Except as otherwise provided by the resolution or resolutions
providing for the issuance of any series of Preferred Stock, in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of Preferred
Stock of the full amounts to which they shall be entitled pursuant to the
resolution or resolutions providing for the issuance of any series of Preferred
Stock, the holders of Common Stock shall be entitled, to the exclusion of the
holders of Preferred Stock of any and all series, to share, ratably according to
the number of shares of Common Stock held by them, in all remaining assets of
the Corporation available for distribution to its stockholders.
G. The holders of Preferred Stock shall not have any preemptive rights
except to the extent such rights shall be specifically provided for in the
resolution or resolutions providing for the issuance thereof adopted by the
Board of Directors.
H. The Board of Directors hereby creates and establishes and authorizes
the issuance of a first series of preferred stock, such series to consist of
150,000 shares of this Corporation's authorized and unissued Preferred Stock,
each share having a par value of $.001, and the Board of Directors hereby fixes
the designation of such series as "Series A Cumulative Convertible Preferred
Stock" (hereinafter referred to as the "Series A Preferred Stock") and fixes the
number of shares constituting such series at 150,000, and hereby determines the
powers, preferences, rights, qualifications, limitations and restrictions of
such series as follows:
SECTION 1.
DIVIDENDS
(a) The holders of the Series A Preferred Stock shall be entitled to
receive dividends thereon at the rate of 6% of the Liquidation Preference (as
defined in Section 2) per share per annum, (as adjusted for any combinations,
consolidations, stock distributions or stock dividends with respect to such
shares) as and when declared by the Board of Directors, before any dividend
3
or distribution shall be declared, set apart for, or paid upon the Common Stock
of the Corporation, which dividend shall be payable in additional shares of
Series A Preferred Stock, each valued at their Liquidation Preference. The
dividends on the Series A Preferred Stock shall be cumulative, so that if the
Corporation fails in any fiscal year to pay such dividends on all of the issued
and outstanding Series A Preferred Stock, such deficiency in the dividends shall
be fully paid before any dividends or distributions shall be paid on or set
apart for the Common Stock. All dividends and distributions on the Series A
Preferred Stock shall be made pro rata per share to all holders of Series A
Preferred Stock; provided, however, that, notwithstanding the foregoing, until
all cumulative dividends on the Series A Preferred Stock shall have been fully
paid, all dividends and distributions on the Series A Preferred Stock shall be
made ratably to the holders thereof in proportion to the respective amounts that
would be payable on such shares if such dividend arrearages were paid in full.
Such dividends shall accrue annually on the anniversary of the Original Issuance
Date (as defined in Section 3(d)).
(b) For purposes of this Section 1, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase and other than redemptions in liquidation or dissolution of the
Corporation) for cash or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
SECTION 2.
LIQUIDATION RIGHTS
(a) Treatment at Liquidation, Dissolution or Winding Up.
(i) Except as otherwise provided in Section 2(b) below, in the event
of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of Series A Preferred Stock shall
be entitled to be paid first out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
before payment or distribution of any of such assets to the holders of any other
class of the corporation's capital stock, an amount equal to $1,000 per share of
Series A Preferred Stock (the "Liquidation Preference"), which amount shall be
subject to equitable adjustment whenever there shall occur a stock dividend,
stock split, combination of shares, reclassification or other similar event
affecting such shares), and shall include any accrued but unpaid dividends.
(ii) After payment shall have been made in full to the holders of
Series A Preferred Stock pursuant to Section 2(a)(i) hereof or funds necessary
for such payment shall have been set aside by the Corporation in trust for the
account of the holders of Series A Preferred Stock to be available for such
payment, the remaining assets of the Corporation shall be distributed ratably to
the holders of Common Stock to the exclusion of the Series A Preferred Stock.
(iii) If the assets of the Corporation shall be insufficient to permit
the payment in full to the holders of Series A Preferred Stock of all amounts
distributable to them under Section 2(a)(i) hereof, then the entire assets of
the Corporation available for such
4
distribution shall be distributed ratably among the holders of Series A
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
(b) Treatment of Reorganizations, Consolidations, Mergers and Sales of
Assets. A consolidation or merger of the Corporation with or into another
unaffiliated corporation or a sale of all or substantially all of the assets of
the Corporation, shall not be regarded as a liquidation, dissolution or winding
up of the affairs of the Corporation for purposes of this Section 2, but shall
result in conversion of the Series A Preferred Stock into Common Stock as set
forth in Section 3(c).
(c) Distributions Other Than Cash. The value of any distribution provided
for in this Section 2, or portion thereof, payable in property other than cash
shall be the fair value (as determined by the Board of Directors in good faith)
of such property at the time of such distribution.
SECTION 3.
CONVERSION
The holders of Series A Preferred Stock shall have conversion rights (the
"Conversion Rights") and the Series A Preferred Stock shall be subject to
conversion, as follows:
(a) Right to Convert; Conversion Price. Each share of Series A Preferred
Stock shall be convertible, without the payment of any additional consideration
by the holder thereof and at the option of the holder thereof, at any time after
June 17, 1999, at the office of the Corporation or any transfer agent for the
Series A Preferred Stock, into such whole number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1,000 by the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The Conversion Price at which shares of Common Stock shall be deliverable upon
conversion without the payment of any additional consideration by the holder of
Series A Preferred Stock (the "Conversion Price") shall initially be $2.75. Such
initial Conversion Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which Series A Preferred Stock is
convertible, as hereinafter provided. The right of conversion with respect to
any shares of Series A Preferred Stock which the Corporation redeems pursuant to
Section 5(a) hereof shall terminate at the close of business on the Redemption
Date (as defined in Section 5 of this Certificate of Designations), unless the
Corporation shall default in the payment of the redemption price for such shares
of Series A Preferred Stock, in which case such termination shall occur upon
payment of the redemption price of such shares.
(b) Mechanics of Conversion; Dividends; Fractional Shares. Before any
holder of Series A Preferred Stock shall be entitled to convert the same into
shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred Stock, and shall give written notice
to the Corporation at such office that such holder elects to convert the same.
At the time of each conversion of shares of Series A Preferred Stock, the
Corporation shall also issue shares of Common Stock in an amount equal to all
dividends declared and unpaid on the shares of Series A Preferred Stock
surrendered for conversion to the date upon which such conversion is deemed to
occur, valued at the Conversion Price. In lieu of any fractional shares of
Common Stock to which the holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the then effective
Conversion Price. The Corporation shall, as soon as practicable
5
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid, together with
cash in lieu of any fraction of a share. Such conversion shall be deemed to have
been made immediately prior to the close of business on 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 shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.
(c) Automatic Conversion.
(i) Each share of Series A Preferred Stock shall automatically be
converted into shares of Common Stock at the then effective Conversion Price on
the earliest of:
(1) December 17, 2004; or
(2) immediately prior to the effective time of any merger, sale
of assets, reorganization or like event in which the Corporation is not the
surviving entity (if such event occurs prior to June 17, 1999, then the
Conversion Price shall be equal to the fair value of the consideration to be
received by the holder of a share of Common Stock, as determined in good faith
by the Corporation's Board of Directors, but in no event greater than $2.75), or
(3) upon the written election of the holders of not less than a
majority in voting power of the then outstanding shares of Series A Preferred
Stock to require such mandatory conversion.
(ii) Upon the occurrence of an event specified in Section 3(c)(i)
hereof, all shares of Series A Preferred Stock shall be converted automatically
without any further action by any holder of such shares and whether or not the
certificate(s) representing such shares are surrendered to the Corporation or
the transfer agent for the Series A Preferred Stock; provided, however, that the
Corporation shall not be obligated to issue a certificate or certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificate(s) evidencing such shares of Series A Preferred Stock being
converted are either delivered to the Corporation or the transfer agent for the
Series A Preferred Stock, or the holder notifies the Corporation or such
transfer agent that such certificate or certificates have been lost, stolen, or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith ("Indemnity
Agreement"), except that such holder shall not be required to provide any
indemnity bond. Upon the automatic conversion of Series A Preferred Stock, each
holder of Series A Preferred Stock shall surrender the certificate(s)
representing such holder's shares of Series A Preferred Stock or the aforesaid
Indemnity Agreement at the office of the Corporation or of the transfer agent
for the Series A Preferred Stock. Thereupon, there shall be issued and delivered
to such holder, promptly at such office and in such holder's name as shown on
such surrendered certificate(s), a certificate or certificates for the number of
shares of Common Stock into which the shares of Series A Preferred Stock
surrendered were convertible on the date on which such automatic conversion
occurred. No fractional shares of Common Stock shall be issued upon the
automatic conversion of Series A Preferred Stock. In lieu of any fractional
shares of Common Stock to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.
6
(d) Adjustment for Stock Splits and Combinations. If the Corporation shall
at any time or from time to time after December 17, 1997 (the "Original Issuance
Date") effect a subdivision of the outstanding Common Stock, the Conversion
Price in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Original Issuance Date combine the outstanding shares of Common Stock, the
Conversion Price in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) Adjustment for Certain Dividends and Distributions.
(1) In the event the Corporation at any time or from time to
time after the Original Issuance Date shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock, then and in
each such event the Conversion Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:
(A) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date, and
(B) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such
dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(2) For the purposes of Section 3(e)(1) hereof, the total number
of shares of Common Stock deemed to be issued and outstanding shall include (i)
all shares of Common Stock issuable on conversion of all shares of Series A
Preferred Stock outstanding and (ii) all shares of Common Stock issued and
outstanding and entitled to receive such dividend.
(f) Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Original Issuance Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, including a
cash dividend, then and in each such event provision shall be made so that the
holders of Series A Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities of the Corporation and/or cash that they would have
received had their Series A Preferred Stock been converted into Common Stock on
the date of such event and had they thereafter, during the period from the date
of such event to and including the conversion date, retained such securities
7
receivable by them as aforesaid during such period, giving application to all
adjustments called for herein during such period.
(g) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Series A Preferred Stock shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for above, or a reorganization, merger, consolidation, or sale of assets
provided for in Section 3(c), then and in each such event the holder of each
such share of Series A Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of Common Stock into which
such shares of Series A Preferred Stock might have been converted immediately
prior to such reorganization, reclassification, or change, all subject to
further adjustment as provided herein.
(h) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Price pursuant to this Section 3, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each affected
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any affected holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the Conversion Price at the time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of each share of Series
A Preferred Stock.
(i) Notices of Record Date. In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Corporation shall mail to each holder of
Series A Preferred Stock at least ten (10) days prior to such record date a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(j) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all Series A Preferred Stock.
(k) Certain Taxes. The Corporation shall pay any issue or transfer taxes
payable in connection with the conversion of any shares of Series A Preferred
Stock; provided, however, that the Corporation shall not be required to pay any
tax that may be payable in respect of any transfer to a name other than that of
the holder of such Series A Preferred Stock.
8
SECTION 4.
VOTING RIGHTS
Except as otherwise required by law or by Section 7, the holders of
Series A Preferred Stock shall not have the right to vote on any matter
submitted to a vote of the stockholders of the Corporation. With respect to all
questions as to which, under law, stockholders are entitled to vote by classes,
the holders of Series A Preferred Stock shall vote together as a single class
separately from the holders of Common Stock.
SECTION 5.
NO REISSUANCE OF SERIES A PREFERRED STOCK
No share or shares of Series A Preferred Stock acquired by the Corporation
by reason of redemption, purchase, conversion or otherwise shall be reissued,
and all such shares shall be canceled, retired and eliminated from the shares
which the Corporation shall be authorized to issue.
SECTION 6.
PROTECTIVE COVENANT
The Corporation shall not, without the affirmative vote or written consent
of the holders of a majority of the then issued and outstanding shares of
Series A Preferred Stock, amend its Certificate of Incorporation or adopt a
resolution of the Board of Directors to provide for the creation or issuance of
any class or series of capital stock which shall rank pari passu or senior to
the Series A Preferred Stock in priority to receive the liquidation preference
on the Series A Preferred Stock."
5. The amendment to the Certificate of Incorporation herein
certified has been duly adopted in the manner and by the vote prescribed by
Section 242 of the General Corporation Law of the State of Delaware.
9
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this certificate signed by its President and Chief Executive
Officer and attested by its Secretary this 25th day of May, 1999.
VIMRX PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
-------------------------------
Richard L. Dunning
President and Chief Executive
Officer
Attest:
By: /s/ Lowell S. Lifschultz
--------------------------------------
Lowell S. Lifschultz
Secretary
10
Certificate of Designation
---------------------
Setting Forth "Resolution Designating
Series B Cumulative Convertible Preferred Stock
and Fixing Preferences and Rights Thereof"
Adopted By The Board Of Directors of
Nexell Therapeutics Inc.
Pursuant to the Provisions of Section 151 of the
General Corporation Law of the State of Delaware, as amended
We, the undersigned, L. William McIntosh and William A. Albright, Jr.,
respectively the President and Secretary of Nexell Therapeutics Inc., a Delaware
corporation (hereinafter sometimes referred to as the "Corporation"), hereby
certify as follows:
First: That under the provisions of Article Fourth of the Certificate
of Incorporation of the Corporation the total number of shares which the
Corporation may issue is 160,000,000 shares of Common Stock, par value
$0.001 per share and 1,150,000 shares of Preferred Stock, par value $0.001
per share, of which 150,000 shares have been previously designated Series A
Cumulative Convertible Preferred Stock and under said Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), authority
is expressly vested in the Board of Directors from time to time to issue
the Preferred Stock by series and in connection with the creation of each
such series to fix by the resolution or resolutions providing for the issue
of shares thereof the designations, preferences, limitations and relative
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, to the full extent permitted by the
Certificate of Incorporation and the laws of the State of Delaware.
Second: That the Board of Directors of the Corporation pursuant to the
authority so vested in it by Article Fourth of the Certificate of
Incorporation, and in accordance with the provisions of Section 151 of the
Delaware General Corporation Law, as amended, adopted on November 9, 1999
the following resolution creating a series of Preferred Stock of 80,000
shares designated as "Series B Cumulative Convertible Preferred Stock,"
which resolution has not been amended, modified, rescinded or revoked and
is in full force and effect on the date hereof.
"Resolution of The Board of Directors Of
Nexell Therapeutics Inc. Designating
`Series B Cumulative Convertible Preferred Stock'
and Fixing Preferences and Rights Thereof"
Be It Resolved, that, pursuant to authority expressly granted to and vested
in the Board of Directors of Nexell Therapeutics Inc., hereinafter called the
"Corporation", by the provisions of the Certificate of Incorporation the Board
of Directors of the Corporation hereby fixes the number of shares, the
designation, voting powers, rights on liquidation or dissolution, and other
preferences and rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the designations,
preferences and relative rights, and the qualifications, limitations or
restrictions thereof, set forth in the Certificate of Incorporation which are
applicable to the Series B Preferred Stock) as follows:
Section 1. Designation and Number; Classification. The series of Preferred
Stock established hereby shall be designated as the Series B Cumulative
Convertible Preferred Stock (herein called the "Series B Preferred Stock") which
shall have a par value of $0.001 per share and the authorized number of the
shares of such series shall be 80,000, which authorized number shall not be
subject to increase. The Series B Preferred Stock is the second series of
preferred stock of the Corporation and shall rank equally with the Series A
Preferred Stock as to preference in payment of dividends and in distributions of
assets in liquidation, dissolution and winding-up. The Series A Preferred Stock
and the Series B Preferred Stock shall be of the same class.
Section 2. Dividends. Except in the case of distributions in liquidation,
dissolution or winding up of the affairs of the Corporation provided for in
Section 3 below, the holders of the Series B Preferred Stock shall be entitled
to receive cumulative cash dividends at the rate of 3% of the Liquidation
Preference provided in Section 3 hereof per annum (computed on the basis of a
360-day year of twelve 30-day months) per share, such dividends to be payable
semi-annually on each November 24 and May 24 in each year commencing May 24,
2000 (each such semi-annual dividend period being hereinafter referred to as a
"Dividend Period" and each such dividend payment date being hereinafter referred
to as a "Dividend Payment Date") and shall accrue on a daily basis whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
If the Corporation shall fail to pay in cash the accrued dividends payable on or
within 10 business days after any Dividend Payment Date, to the extent permitted
by applicable law, an additional amount shall thereafter accrue on such accrued
but unpaid dividends which shall be computed at the rate of 6% per annum on the
amount of such accrued but unpaid dividends from the Dividend Payment Date on
which the Corporation shall have failed to pay such accrued but unpaid dividends
to the date on which such accrued but unpaid dividends shall be paid in full in
cash. In addition, the holders of the Series B Preferred Stock shall be entitled
to receive cash dividends in the amount per share determined by multiplying the
amount per share at any time distributed in cash on shares of Common Stock by
the number of shares of Common Stock at the time issuable upon
2
conversion of a share of Series B Preferred Stock (such distribution being
hereinafter referred to as the "Common Equivalent Dividend"), payable on the
date that distributions shall be paid or set apart for any shares of Common
Stock. In no event shall any dividend be paid or declared, nor shall any
distribution be made on the Corporation's Common Stock, Series A Preferred Stock
or preferred stock of any other class or series unless (i) all dividends on the
Series B Preferred Stock for all past periods shall have been paid or declared
and a sum sufficient for the payment thereof set apart for payment, and (ii)
Common Equivalent Dividends as set forth above are declared and paid on the
Series B Preferred Stock at or prior to such time. In addition, upon any
conversion of shares of Series B Preferred Stock in accordance with the
provisions of Section 6, all accrued dividends and other amounts, if any,
payable on the Series B Preferred Stock shall be paid in cash, including
dividends for the portion of any Dividend Period in which such conversion shall
have occurred. The Corporation covenants and agrees that dividends on the Series
B Preferred Stock shall be declared at the annual rate of 3% of the Liquidation
Preference per share and shall be paid in cash on each Dividend Payment Date
unless the Corporation is prevented by operation of law from the declaration or
payment of such dividend.
Section 3. Preference in Liquidation, Dissolution or Winding-Up. In
the event of any liquidation, dissolution or winding up of the Corporation,
either voluntary or involuntary, the holders of Series B Preferred Stock shall
be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders ratably with the holders of the Series A
Preferred Stock, before any payment or declaration and setting apart for payment
of any amount shall be made in respect of the Common Stock or stock of any other
class an amount equal to $1,000.00 per share of Series B Preferred Stock (as
adjusted to reflect stock splits, dividends, combinations, reclassifications,
reorganizations and similar events) (the "Liquidation Preference") plus an
amount equal to any accrued but unpaid dividends on such share of Series B
Preferred Stock and other amounts, if any, payable thereon. If, upon such
liquidation, dissolution or winding-up, the assets of the Corporation
distributable as aforesaid among the holders of the Series A Preferred Stock and
the Series B Preferred Stock shall be insufficient to permit the payment to such
holders of said amount, the entire assets shall be distributed ratably among the
holders of Series A Preferred Stock and Series B Preferred Stock in proportion
to their respective interests. Thereafter, the assets shall be distributed
ratably among the holders of Common Stock, Series A Preferred Stock and Series B
Preferred Stock, all in proportion to the number of shares of Common Stock owned
by each such holder and, in the case of the Series A Preferred Stock and the
Series B Preferred Stock, to which such holder would then be entitled upon
conversion of such stock owned by such holder.
Section 4. Voting Rights. Except as otherwise required by law and as
set forth in Section 5 below, the holders of the Series B Preferred Stock shall
not have the right to vote on any matter submitted to a vote of the stockholders
of the Corporation. With respect to all matters as to which, under law, the
holders of the Series B Preferred Stock are entitled to vote, the affirmative
vote of the holders of at least 66-2/3% of the shares of Series B Preferred
Stock voting as a separate series shall be required to approve any such matter.
3
Section 5. Restrictions on Corporate Action. (a) In addition to any
rights provided by law, so long as any shares of Series B Preferred Stock remain
outstanding, the consent of the holders of at least 66-2/3% of the shares of the
Series B Preferred Stock outstanding at the time shall be necessary to permit,
effect or validate any one or more of the following:
(i) the creation, authorization or issuance of any shares of
any class of Prior Stock or Parity Stock (excluding the Baxter Exchange
Securities), including the issuance of any indebtedness, stock or other
Security convertible into any class or series of Prior Stock or Parity
Stock, or increase in the number of authorized shares of Series A
Preferred Stock or Series B Preferred Stock; or
(ii) the increase of the authorized number of shares of any
class or series of shares of Prior Stock or Parity Stock of the
Corporation, including the increase in aggregate principal amount or
authorized number of shares of any indebtedness, stock or other
Security convertible into any class or series of Prior Stock or Parity
Stock; or
(iii) the declaration or payment of any dividend or the making
of any other distribution on any shares of Prior Stock, Parity Stock or
Junior Stock (other than (A) dividends payable solely in the same class
or series of Prior Stock, Parity Stock or Junior Stock, as the case may
be, to the holders thereof and (B) subject to compliance with Section 2
hereof, the payment of regular dividends on the Series A Preferred
Stock); or
(iv) the purchase, redemption or other acquisition for
consideration of any shares of Prior Stock, Parity Stock or Junior
Stock other than the repurchase of shares of Common Stock from
employees, officers, directors, consultants or other persons performing
services for the Corporation or pursuant to agreements existing on
November 24, 1999 under which the Corporation has the option to
repurchase such shares upon the occurrence of certain events, such as
the termination of employment, so long as the total amount applied to
all permitted repurchases of shares of Common Stock pursuant to this
clause (iv) shall not exceed $2,000,000 during any twelve-month period;
or
(v) the execution and delivery of any contract, indenture,
agreement, instrument, note, debenture, bond or other Security which by
its terms expressly would restrict or limit the ability of the
Corporation to make the dividend payments to the holders of the Series
B Preferred Stock in the amount set forth in Section 2; or
(vi) the amendment, alteration or repeal, of any of the
provisions of this Certificate of Designation, if such amendment,
alteration or repeal would adversely affect any privilege, preference,
right or power of the Series B Preferred Stock or the holders thereof;
or
4
(vii) the amendment or change of its certificate of
incorporation or by-laws (each as currently amended and/or restated) if
such amendment or change would adversely affect any privilege,
preference, right or power of the Series B Preferred Stock or the
holders thereof; or
(viii) the merger, consolidation or amalgamation of the
Corporation with or into any other Person or the sale of all or
substantially all of the assets of the Corporation, if (A) such
transaction constitutes a Significant Transaction requiring the consent
of such holders of Series B Preferred Stock pursuant to Section 4.13 of
the Securities Agreement or (B) such transaction would by its terms
adversely affect any privilege, preference, right or power of the
Series B Preferred Stock.
(b) In addition to any rights provided by law, so long as any shares
of Series B Preferred Stock remain outstanding, the consent of the holders of at
least 75% of the shares of the Series B Preferred Stock outstanding at the time
shall be necessary to permit, effect or consummate any Approved Significant
Transaction pursuant to Section 4.13 of the Securities Agreement.
(c) The Corporation shall not issue any shares of Series B Preferred
Stock other than pursuant to the Securities Agreement and the Side Letter
Agreement.
Section 6. Conversion. (a) (i) Optional Conversion. Each share of the
Series B Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
the Corporation or any transfer agent for the Series B Preferred Stock, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the Liquidation Preference of such share by the
Conversion Price then in effect. The Conversion Price at which shares of Common
Stock shall be delivered upon conversion of each share of Series B Preferred
Stock without the payment of any additional consideration by the holder thereof
shall initially be $2.75 per share (the "Conversion Price"). Such initial
Conversion Price shall be subject to adjustment as set forth in subparagraph (c)
of this Section 6.
(ii) Automatic Conversion. (A) On November 24, 2006 (the
"Automatic Conversion Date") all (but not less than all) of the shares
of Series B Preferred Stock shall be converted into shares of Common
Stock of the Corporation. Each holder of Series B Preferred Stock so
converted will be entitled to receive such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Liquidation Preference of such share by the Conversion Price then in
effect.
(B) On the Automatic Conversion Date, the outstanding
shares of the Series B Preferred Stock to be converted shall be
converted without any further action by the holders of such
shares and whether or not the certificates representing such
shares are surrendered to the Corporation or its transfer agent;
provided, however, (1) that such conversion will not
5
violate any legal requirements (such as compliance with the Hart-
Scott-Rodino Antitrust Improvement Act of 1976) and (2) that the
Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of the
Series B Preferred Stock being converted are delivered to either
the Corporation or any transfer agent, as hereinafter provided,
or the holder notifies the Corporation or any transfer agent, as
hereinafter provided, that such certificates have been lost,
stolen, or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith. Upon the automatic
conversion of the Series B Preferred Stock, the holders of such
Series B Preferred Stock shall surrender the certificates
representing such shares at the office of the Corporation or of
any transfer agent for the Common Stock. Thereupon, there shall
be issued and delivered to such holder, promptly at such office
and in such holder's name as shown on such surrendered
certificate or certificates, a certificate or certificates for
the number of shares of Common Stock into which the shares of the
Series B Preferred Stock surrendered were convertible on the
Automatic Conversion Date.
(b) Mechanics of Conversion; Fractional Shares. (i) The shares of
Common Stock issued to the holders of Series B Preferred Stock pursuant to this
Section 6 will be shares of the Corporation's voting Common Stock. Before any
holder of Series B Preferred Stock shall be entitled to convert the same into
shares of Common Stock pursuant to subparagraph (a)(i) of this Section 6, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of any transfer agent for the Series B
Preferred Stock, and shall give written notice by mail, postage prepaid, to the
Corporation at its principal corporate office of the election to convert the
same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation shall
as soon as practicable thereafter, issue and deliver at such office to such
holder of Series B Preferred Stock, or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid. Such conversion shall be
deemed to have been made immediately prior to the close of business on 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 shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act of 1933, the conversion may, at the option of any holder
tendering the Series B Preferred Stock for conversion, be conditioned upon the
closing with the underwriter of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the Common Stock
issuable upon such conversion of the Series B Preferred Stock shall not be
deemed to have converted such Series B Preferred Stock until immediately prior
to the closing of such sale of securities.
6
(ii) No fractional shares of Common Stock shall be issued
upon conversion of Series B Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one
share of Series B Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion would
result in the issuance of any fractional share. If, after such
aggregation, the conversion would result in the issuance of a fraction
of a share of Common Stock, the Corporation shall, in lieu of issuing
any fractional share, pay the holder otherwise entitled to such
fraction a sum in cash equal to the fair market value of such fraction
on the date of conversion (as determined in good faith by the Board of
Directors). In lieu of any fractional share to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then effective Conversion Price.
(iii) All shares of Series B Preferred Stock which have been
converted, either optionally or automatically, shall be deemed
extinguished and no shares of Series B Preferred Stock shall be issued
or issuable in replacement thereof.
(c) Conversion Price Adjustments of Series B Preferred Stock. The
Conversion Price shall be subject to adjustment from time to time as follows:
(i) Stock Dividends, Subdivisions and Combinations. In case
after the original date on which the Series B Preferred Stock is issued
the Corporation shall:
(A) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend
payable in, or other distribution of, Common Stock, or
(B) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(C) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock,
then the Conversion Price shall be adjusted to that rate
determined by multiplying the Conversion Price in effect
immediately prior to such event by a fraction (1) the
numerator of which shall be the total number of outstanding
shares of Common Stock of the Corporation immediately prior to
such event, and (2) the denominator of which shall be the
total number of outstanding shares of Common Stock of the
Corporation immediately after such event. In the event that
the dividend or distribution referenced in subparagraph
(c)(i)(A) above is lawfully abandoned, the Conversion Price
shall be appropriately readjusted.
(ii) Issuance of Additional Shares of Common Stock at Less
Than Conversion Price. In case after the original date on which the
Series B Preferred
7
Stock is issued the Corporation shall (except as hereinafter provided)
issue any Additional Shares of Common Stock for a consideration per share
which is less than the Conversion Price per share, then the per share
Conversion Price upon each such issuance shall be adjusted to that price
determined by multiplying the per share Conversion Price in effect
immediately prior to such event by a fraction:
(x) the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of
such Additional Shares of Common Stock plus the number of full
shares of Common Stock which the aggregate consideration for the
total number of such Additional Shares of Common Stock so issued
would purchase at the per share Conversion Price, and
(y) the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of
such Additional Shares of Common Stock plus the number of such
Additional Shares of Common Stock so issued.
The provisions of this subparagraph (c)(ii) shall not apply to any
Additional Shares of Common Stock which are distributed to holders of
Common Stock as a stock dividend or subdivision, for which an adjustment is
provided for under subparagraph (c)(i) above. No adjustment of the per
share Conversion Price shall be made under this subparagraph (c)(ii) upon
the issuance of any Additional Shares of Common Stock that are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights or pursuant to the exercise of any conversion or exchange rights in
any Convertible Securities, if any such adjustment shall previously have
been made upon the issuance of such warrants or other rights or upon the
issuance of such Convertible Securities (or upon the issuance of any
warrants or other rights therefor) pursuant to subparagraph (c)(iii) below.
(iii) Issuance of Warrants, Other Rights or Convertible Securities.
In case the Corporation shall issue any options, warrants or other rights
to subscribe for or purchase any Additional Shares of Common Stock or issue
Convertible Securities (other than Series A Preferred Stock issued as a
dividend on the Series A Preferred Stock in accordance with Section 2) and
the consideration per share for which Additional Shares of Common Stock may
at any time thereafter be issuable pursuant to such options, warrants or
other rights or pursuant to the terms of such Convertible Securities shall
be less than the Conversion Price, then the per share Conversion Price
shall be adjusted as provided in subparagraph (c)(ii) above.
For purposes of adjustments in the Conversion Price pursuant to this
subparagraph (c)(iii), the number of shares of Common Stock outstanding
shall be deemed to include the maximum number of Additional Shares of
Common Stock
8
issuable pursuant to all outstanding options, warrants or other rights or
necessary to effect the conversion or exchange of all such outstanding
Convertible Securities of the Corporation. All such options, warrants,
other rights or Convertible Securities shall be deemed to have been issued
as of, and the date as of which the Conversion Price per share of Common
Stock shall be computed shall be, the earlier of (A) the date on which the
Corporation shall enter a firm contract or commitment for the issuance of
such options, warrants, other rights or Convertible Securities or (B) the
date of actual issuance of such options, warrants, other rights or
Convertible Securities.
No adjustment of the per share Conversion Price shall be made under
this subparagraph (c)(iii) upon the issuance of any Convertible Securities
which are issued pursuant to the exercise of any options, warrants or other
subscription or purchase rights therefor if any such adjustment shall
previously have been made upon the issuance of such options, warrants or
other rights pursuant to said paragraph.
(iv) Other Provisions Applicable to Adjustments Under This
Subparagraph. The following provisions shall be applicable to the making of
adjustments to the Conversion Price hereinbefore provided in this
subparagraph (c):
(A) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Convertible Securities or any
options, warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities shall
be issued for a cash consideration, the consideration received by the
Corporation therefor shall be deemed to be the amount of the cash
received by the Corporation therefor, or, if such Additional Shares of
Common Stock or Convertible Securities or options, warrants or other
rights are offered by the Corporation for subscription, the
subscription price, or, if such Additional Shares of Common Stock or
Convertible Securities or options, warrants or other rights are sold
to underwriters or dealers for public offering without a subscription
offering, the initial public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or
accrued dividends and without deduction of any compensation, discounts
or expenses paid or incurred by the Corporation for and in the
underwriting thereof, or otherwise in connection with the issue
thereof. To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided,
the amount of such consideration shall be deemed to be the fair value
of such consideration at the time of such issuance as determined in
good faith by the Board of Directors of the Corporation. The
consideration for any Additional Shares of Common Stock issuable
pursuant to any options, warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the
Corporation
9
for issuing such options, warrants or other rights, plus the
additional consideration payable to the Corporation upon the
exercise of such options, warrants or other rights. The
consideration for any Additional Shares of Common Stock
issuable pursuant to the terms of any Convertible Securities
shall be the consideration received by the Corporation for
issuing any options, warrants or other rights to subscribe for
or purchase such Convertible Securities plus the consideration
paid or payable to the Corporation in respect of the
subscription for or purchase of such Convertible Securities,
plus the additional consideration, if any, payable to the
Corporation upon the exercise of the right of conversion or
exchange in such Convertible Securities. In case of the
issuance at any time of any Additional Shares of Common Stock
or Convertible Securities in payment or satisfaction of any
dividend upon any class of equity securities other than Common
stock, the Corporation shall be deemed to have received for
such Additional Shares of Common Stock or Convertible
Securities a consideration equal to the amount of such
dividend so paid or satisfied.
(B) Readjustment of Conversion Price. Upon expiration
of the right of exercise, conversion or exchange of any
Convertible Securities, or upon the expiration of any rights,
options or warrants, or upon the termination of any firm
contract or commitment for the issuance of such rights,
options, warrants or Convertible Securities, or upon any
increase in the minimum consideration receivable by the
Corporation for the issuance of Additional Shares of Common
Stock pursuant to such Convertible Securities, rights, options
or warrants, if any such Convertible Securities shall not have
been converted or exchanged, or if any such rights, options or
warrants shall not have been exercised, the number of shares
of Common Stock deemed to be issued and outstanding by reason
of the fact that they were issuable upon conversion or
exchange of any such Convertible Securities or upon exercise
of any such rights, options or warrants shall no longer be
computed as set forth above, and the Conversion Price shall
forthwith be readjusted and thereafter be the rate which it
would have been (but reflecting any other adjustments in the
Conversion Price made pursuant to the provisions of this
Section 6 after the issuance of such Convertible Securities,
rights, options or warrants) had the adjustment of the
Conversion Price made upon the issuance or sale of such
Convertible Securities or the issuance of such rights, options
or warrants been made on the basis of the issuance only of the
number of Additional Shares of Common Stock actually issued
upon conversion or exchange of such Convertible Securities or
upon the exercise of such rights, options or warrants, or upon
the basis of such increased minimum consideration, as the case
may be, and thereupon only the number of Additional Shares of
Common Stock actually so issued plus the number thereof then
issuable upon the basis of such increased minimum
consideration shall be deemed to have been issued and only the
10
consideration actually received plus such increased minimum
consideration receivable by the Corporation (computed as in
subparagraph (c)(iv)(A) of this Section 6) shall be deemed to
have been received by the Corporation.
(C) No Rounding of Conversion Price. Any determination
of the Conversion Price hereunder shall be expressed in United
States Dollars, cents and portions of cents and shall not be
subject to rounding.
(v) Common Equivalent Dividends. In case the Corporation
shall declare, to the extent otherwise permitted herein, a dividend
upon its Common Stock (except a dividend payable in shares of Common
Stock referred to in subparagraph (c)(i) of this Section 6) or a
dividend payable in warrants, rights or Convertible Securities referred
to in subparagraph (c)(iii) of this Section 6 payable otherwise than
out of earnings or surplus (other than revaluation surplus or paid-in
surplus), the Corporation shall simultaneously declare a dividend, in
cash, upon the Series B Preferred Stock equal to, in the case of a cash
dividend, the amount of the per share dividend declared upon the Common
Stock times the number of shares of Common Stock to be received by the
holders of the Series B Preferred Stock upon conversion at the
Conversion Price then in effect and, in the case of a dividend payable
other than in cash, the fair value of such dividend declared upon the
Common Stock as determined by the Board of Directors of the
Corporation. For the purposes of the foregoing, a dividend payable
other than in cash shall be considered payable out of earnings or
surplus (other than revaluation surplus or paid-in surplus) only to the
extent that such earnings or surplus are charged an amount equal to the
fair value of such dividend as determined by the Board of Directors of
the Corporation.
(vi) Additional Adjustments, etc. If any other transaction
or event shall occur (excluding any transaction or event explicitly
referred to in this Section 6, but including, without limitation, any
issuance repurchase, redemption, or other distribution in respect of
any shares or capital stock or other securities of the Corporation or
of any other person) as to which the other provisions of this Section 6
are not strictly applicable but the failure to make any adjustment to
the Conversion Price of the Series B Preferred Stock would not fairly
protect the conversion rights and other rights of any share of the
Series B Preferred Stock, then, and as a condition to the consummation
of any such transaction or event, and in each such case, the Board of
Directors shall promptly determine the adjustment, if any, on a basis
consistent with the essential intent and principles established in this
Section 6, which is necessary to preserve, without dilution, the
conversion rights of each share of the Series B Preferred Stock and,
promptly following such determination, the Corporation shall furnish to
each holder of the Series B Preferred Stock a certificate setting forth
such adjustment and showing in detail the facts upon which such
adjustment is based. The adjustment set forth in such certificate shall
be binding upon the Corporation and the holders of the Series B
Preferred Stock unless, within 30 days following receipt of such
11
certificate, the holders of 20% or more of the outstanding shares of
Series B Preferred Stock shall notify the Corporation of their
disagreement with such adjustment, in which event such adjustment shall
be determined at the expense of the Corporation by its independent
auditors (so long as such auditors' accounting firm ranks among the
five largest national accounting firms) or by an independent investment
banking firm or other professional of recognized national standing
selected by the Corporation and, in all such cases (including the
Corporation's selection of its auditors), reasonably satisfactory to
the holders of 66-2/3% or more of the outstanding shares of Series B
Preferred Stock, which shall give its opinion as to the adjustment, if
any, on a basis consistent with the essential intent and principles
established in this Section 6, which is necessary to preserve, without
dilution, the conversion rights of each share of Series B Preferred
Stock. The opinion of any such auditor, banking firm or other
professional shall be conclusive evidence of the correctness of any
computation made under this Section 6. The Corporation shall pay all
fees and expenses in connection with any such opinion. Upon receipt of
such opinion, the Corporation will promptly deliver a copy thereof to
each holder of any share of Series B Preferred Stock and the
Corporation shall (subject to obtaining necessary director and
stockholder actions), take all actions necessary or appropriate under
the laws of the State of Delaware and the Certificate of Incorporation
consistent with such opinion to effect the intent and principles
hereof.
(vii) Minimum Adjustment. Except as hereinafter provided, no
adjustment of the Conversion Price hereunder shall be made if such
adjustment results in a change of the Conversion Price then in effect
of less than two cents ($0.02). Any adjustment of less than two cents
($0.02) of any Conversion Price shall be carried forward and shall be
made at the time of and together with any subsequent adjustment that,
together with adjustment or adjustments so carried forward, amounts to
two cents ($0.02) of the Conversion Price then in effect or more.
However, upon the conversion of any share of the Series B Preferred
Stock, the Corporation shall make all necessary adjustments not
theretofore made to the Conversion Price up to and including the date
upon which the conversion is exercised.
(viii) Notice of Adjustments. Whenever the Conversion Price
shall be adjusted pursuant to this subparagraph (c), the Corporation at
its expense shall promptly prepare a certificate signed by the Chief
Financial Officer or the Chief Operating Officer and by the Treasurer
or an Assistant Treasurer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the
adjusted Conversion Price, the method by which such adjustment was
calculated (including a description of the basis on which the Board of
Directors of the Corporation made any determination hereunder), and
shall promptly cause copies of such certificate to be mailed (by first
class mail postage prepaid) to each of the holders of the Series B
Preferred Stock. The adjustments set forth in such certificate shall be
binding upon the Corporation and the holders of the Series B Preferred
Stock unless, within 30 days following receipt of such
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Certificate, the holders of 20% or more of the outstanding shares of
Series B Preferred Stock shall notify the Corporation of their
disagreement with such adjustments, in which event, such adjustments
shall be determined at the expense of the Corporation by its
independent auditors (so long as such auditors' accounting firm ranks
among the five largest national accounting firms) or by an independent
investment banking firm or other professional of recognized national
standing selected by the Corporation and, in all such cases (including
the Corporation's selection of its auditors), reasonably satisfactory
to the holders of 66-2/3% or more of the outstanding shares of Series B
Preferred Stock, such determination to be set forth in a separate
report from such auditor, banking firm or other professional delivered
promptly to the Corporation and the holders of the Series B Preferred
Stock following the such determination. The Corporation shall, upon the
written request made at any time by any holder of Series B Preferred
Stock, furnish to such holder a certificate setting forth (A) all
adjustments that shall have been made with respect to the Series B
Preferred Stock pursuant to this Section 6, (B) the Conversion Price at
the time in effect and (C) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received
upon the conversion of the then outstanding shares of Series B
Preferred Stock.
(ix) Special Limitation on Adjustments to Conversion Price. No
adjustment to the Conversion Price required by this Section 6 shall be
made to a Conversion Price below the greater of the book value or the
market value of the Common Stock on the date the Series B Preferred
Stock was originally issued (the "Issue Date Price") unless stockholder
approval is obtained in accordance with The Nasdaq Marketplace Rules,
provided that such stockholder approval shall only be so required if
The Nasdaq Market Marketplace Rules require such stockholder approval
at the time such adjustment is required hereunder. If such stockholder
approval is required by The Nasdaq Market Marketplace Rules, the
Corporation shall take all actions which are necessary or appropriate
to seek to obtain such stockholder approval. If such approval is not
obtained, an adjustment to the Conversion Price shall be made to a
Conversion Price which equals the Issue Date Price.
(d) Mergers, Consolidations, Sales, Reorganization or
Reclassification. In the case of any consolidation or merger of the Corporation
with another entity (regardless of whether the Corporation is the surviving
entity), or the sale of all or substantially all of its assets to another
entity, or any reorganization, recapitalization or reclassification of the
Common Stock or other equity securities of the Corporation (except a split-up or
combination, provision for which is made in subparagraph (c)(i) of this Section
6), then, as a condition of such consolidation, merger, sale, reorganization,
recapitalization or reclassification, lawful and adequate provision shall be
made whereby the holders of the Series B Preferred Stock shall thereafter have
the right to receive upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore
receivable hereunder, such shares of stock, securities or assets as may (by
virtue of such consolidation, merger, sale, reorganization, recapitalization or
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reclassification) be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of shares of
Common Stock immediately theretofore so receivable hereunder had such
consolidation, merger, sale, reorganization, recapitalization or
reclassification not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the holders of the
Series B Preferred Stock to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the Conversion Price) shall
thereafter be applicable as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon conversion of such
Series B Preferred Stock.
(e) Dissolution or Liquidation. In the event of any proposed distribution
of the assets of the Corporation in dissolution or liquidation (except under
circumstances when the foregoing subparagraph (d) of this Section 6 shall be
applicable) the Corporation shall mail notice thereof to the holders of the
Series B Preferred Stock and shall make no distribution to stockholders until
the expiration of 30 days from the date of mailing of the aforesaid notice, and
in any such case, the holders of the Series B Preferred Stock may exercise the
conversion rights with respect to the Series B Preferred Stock within 30 days
from the date of mailing such notice and all rights herein granted not so
exercised within such 30-day period shall thereafter become null and void.
(f) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
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 will at all times in good faith assist in the carrying out of
all of the provisions of this Section 6 and in the taking of all such action as
may be necessary or appropriate in order to protect the conversion rights of the
holders of the Series B Preferred Stock against impairment.
(g) Fully Paid Stock; Taxes. The shares of stock represented by each and
every certificate for its Common Stock to be delivered on the exercise of the
conversion rights herein provided for shall, at the time of such delivery, be
validly issued and outstanding and be fully paid and nonassessable. The
Corporation shall pay when due and payable any and all federal and state taxes
(other than taxes in respect of income) which may be payable in respect of the
Series B Preferred Stock or any Common Stock or certificates therefor upon the
exercise of the conversion rights herein provided for pursuant to the provisions
hereof. The Corporation shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the transfer and delivery of
stock certificates in the name other than that of the holder of the Series B
Preferred Stock converted, and any such tax shall be paid by such holder at the
time of presentation.
(h) Closing of Transfer Books. The right to convert any of the Series B
Preferred Stock shall not be suspended during any period while the stock
transfer books of the Corporation for its Common Stock may be closed. The
Corporation shall not be required, however, to deliver certificates of its
Common Stock upon such exercise while such books are duly closed for any
purpose, but the Corporation may postpone the
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delivery of the certificate for such Common Stock until the opening of such
books, and they shall, in such case, be delivered forthwith upon the opening
thereof, or as soon as practicable thereafter.
(i) Reservation of Common Stock. The Corporation will at all times reserve
and keep available such number of authorized shares of its Common Stock solely
for the purpose of issue upon the conversion of the Series B Preferred Stock as
herein provided for, as shall then be issuable upon the conversion of all
outstanding shares of Series B Preferred Stock and such shares of Common Stock
shall at no time have a par value which is in excess of the Conversion Price
then in effect.
Section 7. Definitions. In addition to the terms defined elsewhere in this
Designation of Series B Cumulative Convertible Preferred Stock, the following
terms have the following respective meanings:
The term "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Corporation on and after the original date on
which the Series B Preferred Stock was issued, except:
(A) Common Stock issued upon conversion of the Series B
Preferred Stock at the Conversion Price and Common Stock issued upon
exercise of the Corporation's Class A Warrants or Class B Warrants;
(B) Common Stock issued to officers, directors, employees and
members of the Scientific Advisory Board of the Corporation and
Common Stock issued pursuant to employee stock option or stock
purchase plans approved by the Board of Directors, provided that the
aggregate number of shares of Common Stock issued and/or issuable to
such persons and pursuant to all such plans and agreements shall not
in the aggregate at any time exceed 9,000,000 shares (as such number
of shares shall be appropriately adjusted by the Board of Directors
for stock splits, dividends, combinations and other similar events),
it being understood that the shares of Common Stock excluded pursuant
to this clause (B) are in addition to shares excluded pursuant to
clause (D);
(C) Common Stock issued in connection with a corporate
collaboration, development agreement, or commercial relationship
which is not primarily for the purpose of obtaining financing,
approved by the Board of Directors and for consideration equal to or
greater than the fair market value of such shares of Common Stock at
the time of issue;
(D) Up to 16,560,176 shares of Common Stock issued upon
conversion or exercise of convertible securities, options and
warrants outstanding on November 24, 1999 (as such number of shares
shall be appropriately adjusted by the Board of Directors for stock
splits, dividends, combinations and other similar events);
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(E) Common Stock issued upon conversion of the Series A
Preferred Stock;
(F) Common Stock valued at up to $10,000,000 issued as
consideration in connection with a single acquisition transaction to
be made by the Corporation on or before December 31, 2000 involving a
medical therapeutics company consistent with the Corporation's
business plan;
(G) Up to 250,000 shares of Common Stock issued substantially
concurrently with the initial issuance of the Series B Preferred
Stock to holders of the Corporation's warrants existing at such time
and resulting from the operation of dilution protection provisions in
such warrants arising principally from the issuance of the Class A
Warrants; and
(H) Common Stock issued with the affirmative vote or written
consent of the holders of at least 66-2/3% of the outstanding shares
of Series B Preferred Stock.
The term "Baxter Exchange Securities" shall mean securities of any
class or classes which are convertible into shares of Common Stock and for
which the Corporation exchanges any shares of Series B Preferred Stock
pursuant to the Side Letter Agreement.
The term "Class A Warrants" shall mean the Class A Warrants to
purchase Common Stock of the Company issued concurrently with the initial
issuance of the Series B Preferred Stock.
The term "Class B Warrants" shall mean the Class B Warrants to
purchase Common Stock of the Company issued concurrently with the initial
issuance of the Series B Preferred Stock.
The term "Common Stock" shall mean (i) the Corporation's Common Stock,
$0.001 par value, authorized on the date of issuance of the Series B
Preferred Stock and (ii) any other class of capital stock of the
Corporation hereafter authorized the right of which to share in
distributions either of earnings or assets of the Corporation is without
limit as to any amount or percentage as and to the extent no amounts
payable on or in respect of such Common Stock and no rights arising in
connection therewith have preference over any other Common Stock upon
dissolution, liquidation or winding up of the Corporation; provided that
the shares to be received by the holders of the Series B Preferred Stock
upon conversion shall be the Common Stock authorized on the date of
issuance of the Series B Preferred Stock.
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The term "Conversion Price" shall have the meaning set forth in
Section 6(a)(i) hereof.
The term "Convertible Securities" shall mean evidences of
indebtedness, shares of stock or other securities which are convertible
into or exchangeable for Additional Shares of Common Stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event, including, without limitation, the Baxter Exchange
Securities.
The term "Junior Stock" shall mean all Common Stock and all other
shares of stock of any other class of the Corporation, whether or not
presently authorized, ranking as to both payment of dividends and
distribution of assets upon liquidation, dissolution or winding-up junior
to the Series B Preferred Stock, and junior to the Series B Preferred
Stock.
The term "Parity Stock" shall mean all Series A Preferred Stock and
all other capital stock of the Corporation, whether or not presently
authorized, ranking, as to distribution of assets upon liquidation,
dissolution or winding-up, on a parity with the Series B Preferred Stock;
provided that in no event shall any such Parity Stock be issued under and
pursuant to the Certificate of Incorporation, except in compliance with the
provisions of Section 5.
The term "Preferred Stock" shall have the meaning set forth in Article
FOURTH of the Certificate of Incorporation of the Corporation.
The term "Prior Stock" shall mean all stock ranking, either as to
payment of dividends, liquidation, redemption, sinking fund or distribution
of assets upon liquidation, dissolution or winding-up, prior to the Series
B Preferred Stock; provided that in no event shall any such Prior Stock be
issued under and pursuant to the Certificate of Incorporation, except in
compliance with the provisions of Section 5.
The term "Securities Agreement" shall mean the Securities Agreement
dated as of November 24, 1999 between the Corporation and the original
institutional investors named therein and pursuant to which the Series B
Preferred Stock was originally issued and sold.
The term "Side Letter Agreement" shall mean the Side Letter Agreement
dated as of November 24, 1999 between the Corporation and Baxter
International Inc. relating to the Series B Preferred Stock.
This resolution shall be known and may be referred to as "A Resolution of
the Board of Directors of Nexell Therapeutics Inc. Designating Series B
Cumulative Convertible Preferred Stock and Fixing Preferences and Rights
Thereof."
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Resolved, Further, that following the consent of the holder of the
Corporation's Series A Preferred Stock to the creation and issuance of the
Series B Preferred Stock the appropriate officers of the Corporation are hereby
authorized and directed to execute and acknowledge a certificate setting forth
these resolutions and to cause such certificate to be filed and recorded, all in
accordance with the requirements of Section 242 of the General Corporation Law
of the State of Delaware, as amended."
Third: The number of shares of Series B Preferred Stock that may be
issued by the Corporation pursuant to said resolution is 80,000.
In Witness Whereof, this Certificate has been made under the seal of said
Nexell Therapeutics Inc., and has been signed by the undersigned said L. William
McIntosh, President and said William A. Albright, CFO & Treasurer, this 24th day
of November, 1999.
NexelL Therapeutics Inc.
/s/
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(Corporate Seal)
_______________________________
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