Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
INTERCARDIA, INC.
The undersigned, being over the age of eighteen (18), in order to form
a corporation for the purposes hereinafter stated, under and pursuant to the
provisions of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
FIRST: The name of the corporation is
Intercardia, Inc.
SECOND: The registered office of the Corporation is to be located at
32 Loockerman Square, Suite L-100 in the City of Dover, in the County of Kent,
in the State of Delaware. The name of its registered agent at that address is
the Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall be authorized shall be authorized to issue is two hundred
(200) shares, all of which shall be designated Common Stock without a par value
(hereinafter called "Common Stock").
FIFTH: The name and address of the incorporator is MaryJoan A.
Floresta and her mailing address is c/o Bachner, Tally, Polevoy & Misher, 380
Madison Avenue, New York, New York 10017.
SIXTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the Corporation
and of its directors and stockholders:
(1) The election of directors need not be by written ballot, unless
the by-laws so provide.
(2) The Board of Directors shall have power without the assent or
vote of the stockholders to make, alter, amend, change, add to or repeal the By-
Laws of the Corporation.
SEVENTH: The Corporation shall indemnify and advance expenses to the
fullest extent permitted by Section 145 of the General Corporation Law of
Delaware, as amended from time to time, each person who is or was a director or
officer of the Corporation and the heirs, executors and administrators of such a
person.
EIGHTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware, may, on application in a summary way
of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or a class of stockholders of the Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
NINTH: The personal liability of directors of the Corporation is
hereby eliminated to the full extent permitted by Section 102(b)(7) of the
General Corporation Law of the State of Delaware as the same may be amended and
supplemented.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
IN WITNESS THEREOF, I have hereunto signed my name and affirm that the
statements made herein are true under the penalties of perjury, this 15/th/ day
of March 1994.
/s/ MaryJoan A. Floresta
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MaryJoan A. Floresta, Incorporator
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
INTERCARDIA, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Intercardia, Inc.
2. The Corporation hereby amends its Certificate of Incorporation as
follows:
Paragraph FOURTH of the Certificate of Incorporation relating to
the authorized number of shares of the Corporation, is hereby
deleted in its entirety and shall now read as follows:
"FOURTH: The total number of shares of stock which the
Corporation shall be authorized to issue is One Hundred Million
(100,000,000) shares of stock, with Ninety-Seven Million
(97,000,000) shares designated Common Stock, each share having
$.001 par value, and Three Million (3,000,000) shares of
Preferred Stock, each share having $.01 par value.
The Board of Directors may divide the Preferred Stock into any
number of series, fix the designation and number of shares of
each such series, and determine or change the designation,
relative rights, preferences, and limitations of any series of
Preferred Stock. The Board of Directors (within the limits and
restrictions of any resolutions adopted by it originally fixing
the number of shares of any series of Preferred Stock) may
increase or decrease the number of shares initially fixed for any
series, but no such decrease shall reduce the number below the
number of shares then outstanding and shares duly reserved for
issuance."
3. The amendment of the Certificate of Incorporation herein
certified has been duly adopted in accordance with provisions of Section 228 and
242 of the General Corporation Law of the State of Delaware. Prompt written
notice of the adoption of the amendment herein certified will be given to those
stockholders who have not consented in writing thereto, as provided in Section
228 of the General Corporation Law of the State of Delaware.
4. The effective time of the amendment herein certified shall be
upon the filing of this Certificate with the Secretary of State.
IN WITNESS WHEREOF, we have hereunto signed our names and affirm that
the statements herein are true under the penalties of perjury, as of the 31/st/
day of October 1994.
INTERCARDIA, INC.
By: /s/ Glenn L. Cooper
--------------------
Glenn L. Cooper, M.D., President
Attest:
/s/ Jill Cohen
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Jill M. Cohen, Secretary
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
INTERCARDIA, INC.
Pursuant to Section 242 of the
General Corporation Law of
The State of Delaware
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Intercardia, Inc.
2. The Corporation hereby amends its Certificate of Incorporation as
follows:
Paragraph FOURTH of the Certificate of Incorporation relating to
the total number of authorized shares of the Corporation, is
hereby deleted in its entirety and shall now read as follows:
"FOURTH: The total number of shares of stock which the
Corporation shall be authorized to issue is Forty Three Million
(43,000,000) shares of stock, with Forty Million (40,000,000)
shares designated Common Stock each share having $.001 par value
and Three Million (3,000,000) shares of Preferred Stock, each
share having $.01 par value.
The Board of Directors may divide the Preferred Stock into
any number of series, fix the designation and number of shares of
each such series, and determine or change the designation,
relative rights, preferences, and limitations or any series of
Preferred Stock. The Board of Directors (within the limits and
restrictions of any resolutions adopted by it originally fixing
the number of shares of any series of Preferred Stock) may
increase or decrease the number of shares initially fixed for any
series, but no such decrease shall reduce the number below the
number of shares then outstanding duly reserved for issuance."
3. This Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the St ate
of Delaware.
4. The effective time of the amendment herein certified shall be
upon the filing of this Certificate with the Secretary of State.
IN WITNESS WHEREOF, we have hereunto signed our names and affirm that
the statements herein are true under penalties of perjury, as of the 29/th/ day
of November, 1995.
INTERCARDIA, INC.
/s/ Clayton I. Duncan
---------------------
Clayton I. Duncan, President
Attest:
/s/ Richard W. Reichow
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Richard Reichow, Secretary
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
INCARA PHARMACEUTICAL CORP.
WITH AND INTO
INTERCARDIA, INC.
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Pursuant to Section 253 of the
General Corporation Law of the State of Delaware
- --------------------------------------------------------------------------------
Intercardia, Inc., a Delaware corporation (the "Company"), does hereby
certify to the following facts relating to the merger (the "Merger") of Incara
Pharmaceutical Corp., a Delaware corporation (the "Subsidiary"), with and into
the Company, with the Company remaining as the surviving corporation.
FIRST: The Company is incorporated pursuant to the General
Corporation Law of the State of Delaware (the "DGCL"). The Subsidiary is
incorporated pursuant to the DGCL.
SECOND: The Company owns all of the outstanding shares of each class
of capital stock of the Subsidiary.
THIRD: The Board of Directors of the Company, by the following
resolutions duly adopted on July 15th, 1999, determined to merge the Subsidiary
with and into the Company pursuant to Section 253 of the DGCL:
WHEREAS, Intercardia, Inc., a Delaware corporation
(the "Company"), owns all of the outstanding
shares of the capital stock of Incara
Pharmaceutical Corp., a Delaware corporation
("Subsidiary"); and
WHEREAS, the Board of Directors of the Company has
deemed it advisable that the Subsidiary be merged
with and into the Company pursuant to Section 253
of the General Corporation Law of the State of
Delaware;
NOW, THEREFORE, BE IT AND IT HEREBY IS
RESOLVED, that the Subsidiary be merged with and
into the Company (the "Merger"); and its is
further
RESOLVED, that by virtue of the Merger and without
any action on the part of the holder thereof, each
then outstanding share of common stock of the
Company shall remain unchanged and continue to
remain outstanding as one share of common stock of
the Company, held by the person who was the holder
of such share of common stock of the Company
immediately prior to the Merger; and it is further
RESOLVED, that by virtue of the Merger and without
any action on the part of the holder thereof, each
then outstanding share of common stock of the
Subsidiary shall be canceled and no consideration
shall be issued in respect thereof; and it is
further
RESOLVED, that the proper officers of the Company
be and they hereby are authorized and directed to
make, execute and acknowledge, in the name and
under the corporate seal of the Company, a
certificate of ownership and merger for the
purpose of effecting the Merger and to file the
same in the office of the Secretary of State of
the State of Delaware, and to do all other acts
and things that may be necessary to carry out and
effectuate the purpose and intent of the
resolutions relating to the Merger; and it is
further
RESOLVED, that upon the filing of the Certificate
of Merger, Article FIRST of the Certificate of
Incorporation of the Company shall be amended in
its entirety to read as follows:
"The name of the corporation is Incara
Pharmaceuticals Corporation."
IN WITNESS WHEREOF, the Company has caused this Certificate of
Ownership and Merger to be executed by its duly authorized officer this 16th day
of July, 1999.
INTERCARDIA, INC.
/s/ Richard W. Reichow
----------------------
Name: Richard W. Reichow
Title: Executive Vice President and Chief
Financial Officer of Intercardia, Inc.
Execution Copy
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF
SERIES B CONVERTIBLE PREFERRED STOCK
AND SERIES C CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
OF
INCARA PHARMACEUTICALS CORPORATION
We, Clayton I. Duncan and Richard W. Reichow, the Chief Executive
Officer and the Secretary, respectively, of Incara Pharmaceuticals Corporation,
a Delaware corporation (the "Corporation"), pursuant to the provisions of
-----------
Section 151 of the General Corporation Law of the State of Delaware, hereby
makes this Certificate of Designations, Preferences and Rights and hereby state
and certify that pursuant to the authority expressly vested in the Board of
Directors of the Corporation (the "Board of Directors") by the Certificate of
------------------
Incorporation of the Corporation, as amended (the "Certificate of
--------------
Incorporation"), the Board of Directors duly adopted the following resolutions:
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RESOLVED, that, pursuant to the Certificate of
Incorporation, which authorizes 3,000,000 shares of
undesignated preferred stock, none of which shares have been
designated, issued or outstanding, the Board of Directors is
authorized, within the limitations and restrictions stated in
the Certificate of Incorporation, to fix by resolution or
resolutions the designation of each series of preferred stock
and the powers, preferences and relative participating,
optional, or other special rights, and qualifications,
limitations, and restrictions thereof; and
RESOLVED, that the Corporation hereby fixes the
designations and preferences and relative, participating,
optional, and other special rights, and qualifications,
limitations, and restrictions of the preferred stock consisting
of six hundred thousand (600,000) shares to be designated
Series B Convertible Preferred Stock, par value $0.01 per share
(the "Series B Preferred Stock"), and twenty thousand (20,000)
------------------------
shares to be designated Series C Convertible Exchangeable
Preferred Stock, par value $0.01 per share (the "Series C
--------
Preferred Stock"); and
---------------
RESOLVED, that the Series B Preferred Stock and the
Series C Preferred Stock are hereby authorized on the terms and
with the provisions herein set forth:
Article I.
Series B Preferred Stock
------------------------
1. Rank. The Series B Preferred Stock shall, with respect to dividend
----
rights and with respect to rights upon liquidation, winding up or dissolution,
rank pari passu with each class of Common Stock (as defined in Article IV
below).
2. Dividends.
---------
(a) Subject to prior and superior rights of holders of any shares of
Series C Preferred Stock and any other series or class of capital stock ranking
prior and superior to the Series B Preferred Stock with respect to dividends,
the holders of shares of Series B Preferred Stock shall be entitled to receive,
as, when and if declared by the Board of Directors, out of funds legally
available for the purpose, dividends or distributions in cash, stock or
otherwise.
(b) In addition to Section 2(a) above, from and after the date
hereof, when and if the Board of Directors of the Corporation shall declare a
dividend or distribution payable with respect to the then-outstanding shares of
Common Stock, the holders of Series B Preferred Stock shall be entitled to the
amount of dividends per share in the same form as such Common Stock dividends
that would be payable on the largest number of whole shares of Common Stock into
which a holder's aggregate shares of Series B Preferred Stock could then be
converted pursuant to Section 5 hereof (such number to be determined as of the
record date for the determination of holders of Common Stock entitled to receive
such dividend).
3. Liquidation. In any Liquidation Event (as defined in Article IV
-----------
below), whether voluntary or involuntary, the holders of Common Stock and the
holders of Series B Preferred Stock shall receive, subject to the rights of the
holders of Series C Preferred Stock (or any other senior class or series of
capital stock of the Corporation), the assets of the Corporation in proportion
to the number of shares of Common Stock held by each such holder, with the
holders of Series B Preferred Stock deemed to hold that number of shares of
Common Stock equal to the number of shares of Common Stock into which such
shares of Series B Preferred Stock are then convertible.
4. Voting.
------
(a) Except as provided in Section 4(b) below, the holders of Series B
Preferred Stock shall not be entitled to vote on matters submitted to the
holders of the Common Stock or any other class of capital stock of the
Corporation.
(b) Subject to the rights of any series of preferred stock that may from
time to time come into existence, so long as any shares of Series B
Preferred Stock are outstanding, the Corporation shall not without
first obtaining the approval (by vote or written consent, as provided
by law) of the holders of at least a majority of the then-outstanding
shares of Series B Preferred Stock, voting separately as a series:
(i) amend its Certificate of Incorporation so as to affect
adversely the shares of Series B Preferred Stock or any holder thereof
(including by creating any additional classes or series of senior and/or pari
passu capital stock of the Corporation); or
(ii) change the rights of the holders of the Series B Preferred
Stock in any other respect.
5. Conversion of Series B Preferred Stock into Common Stock.
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(a) Conversion Procedure.
--------------------
(i) Subject to Article III below, from time to time after the
Issue Date (as defined in Article IV below), any holder of Series B Preferred
Stock may convert all or any portion of the Series B Preferred Stock held by
such holder into a number of validly issued, fully paid and non-assessable
shares of Conversion Stock (as defined in Article IV below) computed by
multiplying the number of shares to be converted by Series B Conversion Ratio
(as defined below) then in effect.
(ii) Each conversion of Series B Preferred Stock shall be
deemed to have been effected as of the close of business on the date on which
notice of election of such conversion is delivered to the Corporation by such
holder. Until the certificates representing the shares of Series B Preferred
Stock that are being converted have been surrendered and new certificates
representing shares of the Conversion Stock shall have been issued by the
Corporation, such certificate(s) evidencing the shares of Series B Preferred
Stock being converted shall be evidence of the issuance of such shares of
Conversion Stock. At such time as such conversion has been effected, the rights
of the holder of such Series B Preferred Stock as such holder shall cease and
the Person or Persons in whose name or names any certificate or certificates for
shares of Conversion Stock are to be issued upon such conversion shall be deemed
to have become the holder or holders of record of the shares of Conversion Stock
represented thereby.
(iii) As soon as practicable after a conversion has been
effected in accordance with clause (i) above, the Corporation shall deliver to
the converting holder: (A) a certificate or certificates representing, in the
aggregate, the number of shares of Conversion Stock issuable by reason of such
conversion, in the name or names and in such denomination or denominations as
the converting holder has specified; and (B) a certificate representing any
shares of Series B Preferred Stock which were represented by the certificate or
certificates delivered to the Corporation in connection with such conversion but
which were not converted.
(iv) The issuance of certificates for shares of Conversion
Stock upon conversion of Series B Preferred Stock shall be made without charge
to the holders of such Series B Preferred Stock for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Conversion Stock, except for
any transfer or similar tax payable as a result of issuance of a certificate to
other than the registered holder of the shares being converted.
(v) The Corporation shall not close its books against the
transfer of Series B Preferred Stock or of Conversion Stock issued or issuable
upon conversion of Series B Preferred Stock in any manner which interferes with
the timely conversion of Series B Preferred Stock. The Corporation shall assist
and cooperate with any holder of shares of Series B Preferred Stock required to
make any governmental filings or obtain any governmental approval prior to or in
connection with any conversion of shares hereunder (including, without
limitation, making any filings reasonably required to be made by the
Corporation).
(vi) No fractional shares of Conversion Stock or scrip
representing fractional shares shall be issued upon conversion of shares of
Series B Preferred Stock. If more than one share of Series B Preferred Stock
shall be surrendered for conversion at one time by the same record holder, the
number of full shares of Conversion Stock issuable upon the conversion thereof
shall be computed on the basis of the aggregate number of shares of Series B
Preferred Stock so surrendered by such record holder. Instead of any fractional
share of Conversion Stock otherwise issuable upon conversion of any shares of
Series B Preferred Stock, the number of shares of Conversion Stock to be issued
upon conversion of any shares of Series B Preferred Stock shall be rounded down
to the nearest whole share.
(vii) The Corporation shall use its best efforts at all times to
reserve and keep available out of its authorized but unissued shares of
Conversion Stock, solely for the purpose of issuance upon the conversion of
Series B Preferred Stock, such number of shares of Conversion Stock as are
issuable upon the conversion of all outstanding Series B Preferred Stock. All
shares of Conversion Stock which are so issuable shall, when issued, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges, other than those created or agreed to by the holder. The Corporation
shall use its best efforts to take all such actions as may be necessary to
assure that all such shares of Conversion Stock may be so issued without
violation of any applicable law or governmental regulation or any requirements
of any domestic securities exchange upon which shares of Conversion Stock may be
listed (except for official notice of issuance which shall be immediately
delivered by the Corporation upon each such issuance).
(b) Conversion Ratio.
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(i) "Series B Conversion Ratio" shall initially mean the
-------------------------
Initial Series B Conversion Ratio described in this Section 5, as the same may
be subsequently adjusted from time to time in accordance with this Section 5.
(ii) The "Initial Series B Conversion Ratio" shall be 10 shares
---------------------------------
of Common Stock for each one share of Series B Preferred Stock.
(c) Subdivision or Combination of Common Stock. If the Corporation
------------------------------------------
at any time subdivides (by any stock split, stock dividend, recapitalization or
any similar transaction) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, or if the Corporation at any time
combines (by reverse stock split, reclassification or any similar transaction)
one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Series B Conversion Ratio in
effect immediately prior to such subdivision or combination shall be
proportionately adjusted.
(d) Consolidation, Merger or Sale for Assets. Prior to the
----------------------------------------
consummation of any Significant Transaction (as defined in Article IV below),
and subject to applicable regulatory approvals the Corporation shall make
appropriate provisions to insure that each of the holders of Series B Preferred
Stock shall thereafter have the right to acquire and receive, in lieu of or in
addition to (as the case may be) the shares of Conversion Stock immediately
theretofore acquirable and receivable upon the conversion of such holder's
Series B Preferred Stock, such assets as such holder would have received in
connection with such Significant Transaction if such holder had converted its
Series B Preferred Stock into Conversion Stock immediately prior to such
Significant Transaction. The Corporation shall not effect any Significant
Transaction unless prior to the consummation thereof, the successor corporation
(if other than the Corporation) resulting from consolidation or merger or the
corporation purchasing such assets assumes by written instrument the obligation
to deliver to each such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
acquire.
(e) Notices.
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(i) Promptly upon any adjustment of the Series B Conversion
Ratio, the Corporation shall give written notice thereof to all holders of
Series B Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Corporation shall give written notice to all holders
of Series B Preferred Stock at least 10 days prior to the date on which the
Corporation closes its books or takes a record (A) with respect to any dividend
or distribution upon Common Stock, (B) with respect to any pro rata subscription
offer to holders of Common Stock, or (C) for determining rights to vote with
respect to any Significant Transaction or Liquidation Event.
(iii) The Corporation shall give written notice to the holders
of Series B Preferred Stock at least 10 days prior to the date on which any
Significant Transaction shall take place, which notice may be one and the same
as that required by (ii) above.
Article II.
Series C Preferred Stock
------------------------
1. Rank. The Series C Preferred Stock shall, with respect to dividend
----
rights and with respect to rights upon liquidation, winding up or dissolution,
rank senior and prior to (a) the Series B Preferred Stock, (b) the Common Stock,
(c) any series of preferred stock hereafter created and (d) any other equity
interests (including, without limitation, warrants, stock appreciation rights,
phantom stock rights, profit participation rights in debt instruments or other
rights with equity features, calls or options exercisable for or convertible
into such
capital stock or equity interests) in the Corporation that by its terms rank
junior to the Series C Preferred Stock.
2. Dividends.
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(a) Mandatory Dividends. The holders of Series C Preferred Stock
-------------------
shall be entitled to receive a mandatory dividend equal to 7.0 % per year,
compounded annually on each succeeding 12 month anniversary of the first
issuance. Such dividend shall be cumulative and shall be payable annually on
each succeeding 12 month anniversary of the Issue Date and shall be payable, at
the option of the Corporation by the issuance of additional shares of Series C
Preferred Stock at a price per share equal to the Series C Original Issue Price;
provided, that such dividend shall not be declared or paid to any holder without
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the consent of such holder.
(b) Discretionary Dividends. In addition to any mandatory dividends
-----------------------
pursuant to Section 2(b) above, from and after the date hereof, when and if the
Board of Directors of the Corporation shall declare a dividend or distribution
payable with respect to the holders of either Series B Preferred Stock or Common
Stock, or both, the holders of Series C Preferred Stock shall be entitled to the
amount of dividends per share in the same form as such dividends or
distributions that would be payable on the largest number of whole shares of
Series B Preferred Stock (or, if such dividends are declared only with respect
to the holders of Common Stock, the largest number of whole shares of Common
Stock) into which a holder's aggregate shares of Series C Preferred Stock could
then be converted pursuant to Section 5 of this Article III (and, if such
dividends are declared only with respect to the holders of Common Stock,
subsequently pursuant to Section 5 of Article II), in either instance, such
number to be determined as of the record date for the determination of holders
of the Series B Preferred Stock or Common Stock entitled to receive such
dividend.
(c) Dividend Preference. From and after the date hereof, when and if
-------------------
the Board of Directors of the Corporation shall declare a dividend or
distribution payable with respect to (i) the Common Stock, Series B Preferred
Stock, or any other capital stock or security issued by the Corporation which
shall be junior to the Series C Preferred Stock as to such dividends and
distributions, such dividend or distribution shall not be paid until the payment
of all Series C Preferred Stock dividends accrued or to be accrued through that
date, or (ii) the then-outstanding capital stock of the Corporation that is pari
passu to the Series C Preferred Stock as to such dividends or distributions,
such dividends shall not be paid unless an equivalent payment is made to the
holders of the Series C Preferred Stock, pro-rata, on the accrued and unpaid
dividends payable to the Series C Preferred Stock as of the date of such
payment.
3. Liquidation Preference.
----------------------
(a) In any Liquidation Event, whether voluntary or involuntary,
before any payment of cash or distribution of other property shall be made to
the holders of the Common Stock, the Corporation's Series B Preferred Stock or
any other class or series of stock subordinate in liquidation preference to the
Series C Preferred Stock, the holders of the Series C
Preferred Stock shall be entitled to receive out of the assets of the
Corporation legally available for distribution to its shareholders, the Original
Series C Issue Price (as defined below) as adjusted to reflect any and all
subdivisions (by stock split, stock dividend, recapitalization or any similar
transaction) or combination or consolidations (by reverse stock split,
reclassification or any similar transaction) (the "Series C Liquidation
--------------------
Preference").
- ----------
(b) If, upon any Liquidation Event, the assets of the Corporation
available for distribution to its shareholders shall be insufficient to pay the
holders of the Series C Preferred Stock the full amounts to which they shall be
entitled, the holders of the Series C Preferred Stock shall share ratably in any
distribution of assets in proportion to the aggregate liquidation preferential
amounts owed to such holders.
4. Voting.
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(a) Except as provided in Section 4(b) below, the holders of Series C
Preferred Stock shall not be entitled to vote on matters submitted to the
holders of the Common Stock or any other class of capital stock of the
Corporation.
(b) Subject to the rights of any series of preferred stock that may
from time to time come into existence, so long as any shares of Series C
Preferred Stock are outstanding, the Corporation shall not without first
obtaining the approval (by vote or written consent, as provided by law) of the
holders of at least a majority of the then-outstanding shares of Series C
Preferred Stock, voting separately as a series:
(i) amend its Certificate of Incorporation so as to affect
adversely the shares of Series C Preferred Stock or any holder thereof
(including by creating any additional classes or series of senior and/or
pari passu capital stock of the Corporation); or
(ii) change the rights of the holders of the Series C Preferred
Stock in any other respect.
5. Conversion of Series C Preferred Stock into Series B Preferred Stock.
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(a) Conversion at Election of Holders of Series C Preferred Stock.
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(i) Subject to Article III below, from time to time after the
second anniversary after the Issue Date, and subject to receipt of all
applicable regulatory approvals, any holder of Series C Preferred Stock may
convert all or any portion of the Series C Preferred Stock, including shares of
Series C Preferred Stock issuable as accrued and unpaid dividends, held by such
holder into a number of shares validly issued, fully paid and non-assessable
shares of Series B Conversion Stock (as defined in Article IV below) computed by
multiplying the number of shares to be converted by the Original Series C Issue
Price (as defined below) and dividing the result by the Series C Conversion
Price (as defined below) then in effect.
(ii) Each conversion of Series C Preferred Stock shall be
deemed to have been effected as of the close of business on the date on which
notice of election of such conversion is delivered to the Corporation by such
holder. Until the certificates representing
the shares of Series C Preferred Stock that are being converted have been
surrendered and new certificates representing shares of the Series B Conversion
Stock shall have been issued by the Corporation, such certificate(s) evidencing
the shares of Series C Preferred Stock being converted shall be evidence of the
issuance of such shares of Series B Conversion Stock. At such time as such
conversion has been effected, the rights of the holder of such Series C
Preferred Stock as such holder shall cease and the Person or Persons in whose
name or names any certificate or certificates for shares of Series B Conversion
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Series B Conversion Stock
represented thereby.
(iii) As soon as practicable after a conversion has been
effected in accordance with clause (i) above, the Corporation shall deliver to
the converting holder: (A) a certificate or certificates representing, in the
aggregate, the number of shares of Series B Conversion Stock issuable by reason
of such conversion, in the name or names and in such denomination or
denominations as the converting holder has specified; and (B) a certificate
representing any shares which were represented by the certificate or
certificates delivered to the Corporation in connection with such conversion but
which were not converted.
(iv) The issuance of certificates for shares of Series B
Conversion Stock upon conversion of Series C Preferred Stock shall be made
without charge to the holders of such Series C Preferred Stock for any issuance
tax in respect thereof or other cost incurred by the Corporation in connection
with such conversion and the related issuance of shares of Series B Conversion
Stock, except for any transfer or similar tax payable as a result of issuance of
a certificate to other than the registered holder of the shares being converted.
(v) The Corporation shall not close its books against
the transfer of Series C Preferred Stock or of Series B Conversion Stock issued
or issuable upon conversion of Series C Preferred Stock in any manner which
interferes with the timely conversion of Series C Preferred Stock. The
Corporation shall assist and cooperate with any holder of shares of Series C
Preferred Stock required to make any governmental filings or obtain any
governmental approval prior to or in connection with any conversion of shares
hereunder (including, without limitation, making any filings reasonably required
to be made by the Corporation).
(vi) No fractional shares of Series B Conversion Stock or
scrip representing fractional shares shall be issued upon conversion of shares
of Series C Preferred Stock. If more than one share of Series C Preferred Stock
shall be surrendered for conversion at one time by the same record holder, the
number of full shares of Series B Conversion Stock issuable upon the conversion
thereof shall be computed on the basis of the aggregate number of shares of
Series C Preferred Stock so surrendered by such record holder. Instead of any
fractional share of Series B Conversion Stock otherwise issuable upon conversion
of any shares of the Series C Preferred Stock, the number of shares of Series B
Conversion Stock upon conversion of Series C Preferred Stock to be issued shall
be rounded down to the nearest whole share.
(vii) The Corporation shall use its best efforts at all
times to reserve and keep available out of its authorized but unissued shares of
Series B Conversion Stock, solely for the purpose of issuance upon the
conversion of Series C Preferred Stock, such number of shares of Series B
Conversion Stock as are issuable upon the conversion of all outstanding Series C
Preferred Stock. All shares of Series B Conversion Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges, other than those created or agreed to by
the holder. The Corporation shall use its best efforts to take all such actions
as may be necessary to assure that all such shares of Series B Conversion Stock
may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon which
shares of Series B Conversion Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance).
(b) Conversion Price.
----------------
(i) "Series C Conversion Price" for the Series C
-------------------------
Preferred Stock shall initially mean U.S.$64.90, as the same may be subsequently
adjusted from time to time in accordance with this Section 5.
(ii) The "Original Series C Issue Price" shall be
-----------------------------
U.S.$1,000.00 per share.
(c) Conversion upon Occurrence of Significant Transaction. Upon
-----------------------------------------------------
the occurrence of a Significant Transaction, the Corporation and any holder of
Series C Preferred Stock may convert all or any portion of the Series C
Preferred Stock held by such holder into a number of shares of Series B
Conversion Stock in the same manner as provided in subsection (a) above, and
then, into a number of shares of Common Stock in the same manner as provided in
Article I, Section 5 hereof.
(d) Subdivision or Combination of Common Stock. If the
------------------------------------------
Corporation at any time (i) subdivides (by any stock split, stock dividend,
recapitalization or) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, then the Series C Conversion Price in
effect immediately prior to such subdivision or combination shall be
proportionately decreased, or (ii) combines (by reverse stock split,
reclassification or any similar transaction) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, then the
Series C Conversion Price in effect immediately prior to such subdivision or
combination shall be proportionately increased.
(e) Consolidation, Merger or Sale for Assets. Subject to
----------------------------------------
applicable regulatory approvals, prior to the consummation of any Significant
Transaction, the Corporation shall make appropriate provisions to insure that
each of the holders of Series C Preferred Stock shall thereafter have the right
to acquire and receive, in lieu of or in addition to (as the case may be) the
shares of Series B Conversion Stock immediately theretofore acquirable and
receivable upon the conversion of such holder's Series C Preferred Stock, such
assets as such holder would have received in connection with such Significant
Transaction if
such holder had converted its Series C Preferred Stock into Series B Conversion
Stock (and such holder had the opportunity to convert such Series B Preferred
Stock into Common Stock) immediately prior to such Significant Transaction. The
Corporation shall not effect any Significant Transaction unless prior to the
consummation thereof, the successor corporation (if other than the Corporation)
resulting from consolidation or merger or the corporation purchasing such assets
assumes by written instrument the obligation to deliver to each such holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire.
(f) Notices.
-------
(i) Promptly upon any adjustment of the Series C
Conversion Price, the Corporation shall give written notice thereof to all
holders of Series C Preferred Stock, setting forth in reasonable detail and
certifying the calculation of such adjustment.
(ii) The Corporation shall give written notice to all
holders of Series C Preferred Stock at least 10 days prior to the date on which
the Corporation closes its books or takes a record (A) with respect to any
dividend or distribution upon Series B Preferred Stock or Common Stock or (B)
for determining rights to vote with respect to any Significant Transaction or
Liquidation Event.
(iii) The Corporation shall give written notice to the
holders of Series C Preferred Stock at least 10 days prior to the date on which
any Significant Transaction shall take place, which notice may be one and the
same as that required by (ii) above.
6. Redemption of Series C Preferred Stock.
--------------------------------------
(a) Mandatory Redemption. On the sixth anniversary after the
--------------------
Issue Date (the "Redemption Date"), the Corporation shall redeem all then issued
---------------
and outstanding shares of Series C Preferred Stock, including shares of Series C
Preferred Stock issuable as accrued and unpaid dividends (the "Series C
--------
Mandatory Redemption") in accordance with this Section 6. The Corporation shall
- --------------------
effect the Series C Mandatory Redemption on the Redemption Date, by paying, in
the sole discretion of the Corporation, either (i) cash in exchange for each
share of Series C Preferred Stock to be redeemed on the Redemption Date in an
amount equal to the Series C Outstanding Amount (as defined below), or (ii)
shares of either (A) Common Stock or, at the option of a majority of the holders
of Series C Preferred Stock or (B) Series B Preferred Stock (the "Redemption
----------
Shares"), each having a then Fair Market Value (as defined in Article IV below)
- ------
equal to the Series C Outstanding Amount (either, the "Series C Redemption
-------------------
Price"). Any redemption effected pursuant to this Section 6 shall be made pro
- -----
rata on the basis of the number of shares then held by each holder of Series C
Preferred Stock. If any date fixed for redemption of shares pursuant to this
paragraph is a Saturday, Sunday or legal holiday, then such redemption shall
occur on the first business day thereafter.
(b) Mechanics of Redemption. Not less than 15 days nor more than
-----------------------
30 days prior to the Redemption Date, the Corporation shall give written notice
by first class mail, postage prepaid, to each holder of record (at the close of
business on the business day next
preceding the day on which notice is given) of the Series C Preferred Stock, at
the address of such holder last shown on the records of the Corporation,
notifying such holder of the redemption to be effected, specifying the number of
shares to be redeemed from such holder on the Redemption Date, whether payment
will be made in cash or in Redemption Shares the place at which payment may be
obtained and calling upon such holder to surrender to the Corporation in the
manner and at the place designated, its certificate or certificates representing
the shares of Series C Preferred Stock to be redeemed on the Redemption Date. On
the Redemption Date, each holder of Series C Preferred Stock shall surrender to
the Corporation the certificate or certificates representing such shares, in the
manner and at the place designated in such notice, and thereupon the Series C
Redemption Price of such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner thereof and
each surrendered certificate shall be canceled.
(c) Series C Outstanding Amount. The "Series C Outstanding
--------------------------- --------------------
Amount" shall be an amount equal to the aggregate Series C Liquidation
- ------
Preference on the Redemption Date, plus an amount equal to all accrued but
unpaid dividends.
7. Exchange of Series C Preferred Stock.
------------------------------------
(a) The holder of all of the then issued and outstanding Series
C Preferred Stock, including shares of Series C Preferred Stock issuable as
accrued and unpaid dividends, which shall not be declared payable and shall not
be due, may exchange all, but only all, of the Series C Preferred Stock held by
such holder into a number of shares of IDL Conversion Stock (as defined in
Article IV below) equal to 30.1% of the aggregate shares of IDL (as defined in
Article IV below) issued on the Issue Date (as defined in Article IV below).
(b) The exchange of Series C Preferred Stock hereunder shall be
deemed to have been effected as of the close of business on the date on which
notice of election of such exchange is delivered to the Corporation by such
holder. Until the certificates representing the shares of Series C Preferred
Stock which are being exchanged have been surrendered and new certificates
representing shares of the IDL Conversion Stock shall have been issued by IDL,
such certificate(s) evidencing the shares of Series C Preferred Stock being
exchanged shall be evidence of the issuance of such shares of IDL Conversion
Stock. At such time as such exchange has been effected, the rights of the holder
of such Series C Preferred Stock as such holder shall cease and the Person or
Persons in whose name or names any certificate or certificates for shares of IDL
Conversion Stock are to be issued upon such conversion shall be deemed to have
become the holder or holders of record of the shares of IDL Conversion Stock
represented thereby. The Series C Preferred Stock so exchanged shall no longer
be redeemable or convertible into Series B Preferred Stock and all such rights
of conversion under Section 5 shall terminate upon the date of exchange.
(c) The right of exchange provided hereunder shall expire upon
the election by the holder of the Series C Preferred Stock to convert the Series
C Preferred Stock into Series B Preferred Stock pursuant to Section 5 above.
(d) The right of exchange provided hereunder shall also apply to
all, but only all, of the shares of the Series B Conversion Stock into
which the Series C Preferred Stock is to be converted pursuant to Section 5
above upon the occurrence of a Significant Transaction, provided that the
exchange must occur on the date that the conversion would have occurred,
and provided further that the right of exchange under this subsection (d)
shall expire simultaneously with such conversion if this right of exchange
is not exercised as provided in this subsection (d).
Article III.
Limitations on Rights of Conversion and Exchange
------------------------------------------------
1. In the event that any exercise of the rights of conversion and
exchange under Articles I and II by the holders of the Series B Preferred Stock
or the Series C Preferred Stock would result in the holders owning, directly or
indirectly, in the aggregate more that 9.9% of the Common Stock on a fully
converted basis, then all or a portion of the Common Stock into which the Series
B Preferred Stock (both owned or issuable upon conversion of the Series C
Preferred Stock) would convert shall automatically be converted into shares of
Series B Preferred Stock to the extent that the holders of the Series B
Preferred Stock and the Series C Preferred Stock do not own more than 9.9% of
the then outstanding Common Stock, after such conversion.
2. The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issuance 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 the
provisions hereof and in the taking of all such action as may be necessary or
appropriate in order to protect against impairment both the conversion rights of
the Series B Preferred Stock and the conversion, redemption and exchange rights
of the Series C Preferred Stock.
Article IV.
Certain Definitions
-------------------
The following terms, as used throughout Articles I through III of
this Certificate of Incorporation, shall have the meanings specified below:
1. Affiliate. The term "Affiliate" shall mean (i) any Person directly
---------
or indirectly controlling, controlled by or under direct or indirect common
control with the Corporation (or other specified Person), (ii) any Person who is
a beneficial owner of at least 10% of the then outstanding voting capital stock
(or options, warrants or other securities which, after giving effect to the
exercise thereof, would entitle the holder thereof to hold at least 10% of the
then
outstanding voting capital stock) of the Corporation (or other specified
Person), (iii) any director or executive officer of the Corporation (or other
specified Person) or Person of which the Corporation (or other specified Person)
shall, directly or indirectly, either beneficially or of record, own at least
10% of the then outstanding equity securities of such Person, and (iv) in the
case of Persons specified above who are individuals, Family Members of such
Person; provided, however, that no holder of preferred stock nor any of their
designated members of the Board of Directors shall be an Affiliate of the
Corporation for purposes hereof.
2. Common Stock. The term "Common Stock" shall mean the common stock,
------------
par value $0.001 per share, of the Corporation.
3. Conversion Stock. The term "Conversion Stock" shall mean the
----------------
shares of Common Stock issuable upon conversion of shares of Series B Preferred
Stock; provided that if there is a change such that the securities issuable upon
conversion of the Series B Preferred Stock are issued by an entity other than
the Corporation or there is a change in the class of securities so issuable,
then the term "Conversion Stock" shall mean shares of the security issuable upon
conversion of the Series B Preferred Stock if such security is issuable in
shares, or shall mean the smallest unit in which such security is issuable if
such security is not issuable in shares.
4. Fair Market Value. The "Fair Market Value" of any one share of
-----------------
Common Stock or Series B Preferred Stock (on an as converted to Common Stock
basis) shall be deemed to be (i) the average of the closing sale price of the
Common Stock of the Corporation as traded on the Nasdaq National Market, the
Nasdaq SmallCap Market, or any other securities exchange (collectively, the
"Exchange") for the 10-day period (or such shorter period for which closing sale
--------
prices are available if the Common Stock commenced trading during such period)
ending three (3) days prior to the date of exercise of redemption pursuant to
Article III hereof; provided, that, if the Common Stock ceases to be traded on
--------
the Exchange, the Fair Market Value shall be reasonably determined by the Board
of Directors in good faith and certified in a board resolution (taking into
account the most recently or concurrently completed arm's length transaction
between the Corporation and an unaffiliated third party the closing of which
occurs within the six months preceding or on the date of such calculation, if
any).
5. Family Members. The term "Family Members" shall mean, as applied
--------------
to any individual, any spouse, child, grandchild, parent, brother or sister
thereof or any spouse of any of the foregoing, and each trust created for the
benefit of one or more of such Persons (other than any trust administered by an
independent trustee) and each custodian of property of one or more such Persons.
6. IDL. The term "IDL" shall mean Incara Development, Ltd., a Bermuda
---
corporation.
7. IDL Conversion Stock. The term "IDL Conversion Stock" shall mean
--------------------
the shares of preferred stock of IDL issuable upon exchange of shares of Series
C Preferred Stock; provided that if there is a change such that the securities
issuable upon exchange of the Series C Preferred Stock are issued by an entity
other than the Corporation or there is a change in the
class of securities so issuable, then the term "IDL Conversion Stock" shall mean
shares of the security issuable upon exchange of the Series C Preferred Stock if
such security is issuable in shares, or shall mean the smallest unit in which
such security is issuable if such security is not issuable in shares.
8. Issue Date. The term "Issue Date" shall mean December 21, 2000,
----------
the date on which a share of Series C Preferred Stock was first issued by the
Corporation.
9. Liquidation Event. The term "Liquidation Event" means an event
-----------------
occasioned by, and including, (i) the liquidation, dissolution, bankruptcy or
winding-up of the affairs of the Corporation, (ii) the Corporation's sale of all
or substantially all of its assets or stock, or (iii) any transaction or series
of related transactions (including, without limitation, any reorganization,
merger or consolidation) which will result in the holders of the outstanding
equity securities of the Corporation immediately prior to such transaction or
series of related transactions holding securities representing less than 25% of
the outstanding equity securities ( on an as converted to common stock basis) of
the surviving entity immediately following such transaction or series of related
transactions.
10. Person. The term "Person" shall mean an individual, corporation,
------
partnership, association, trust, joint venture or unincorporated organization or
any government, governmental department or any agency or political subdivision
thereof.
11. Public Offering. The term "Public Offering" shall mean any
---------------
offering by the Corporation of its equity securities to the public pursuant to
an effective registration statement under the Securities Act or any comparable
statement under any similar federal statute then in force, other than an
offering in connection with an employee benefit plan.
12. Securities Act. The term "Securities Act" shall mean the
--------------
Securities Act of 1933, as amended, or any successor federal statute, and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder, all as the same shall be in effect from time to time.
13. Series B Conversion Stock. The term "Series B Conversion Stock"
-------------------------
shall mean the shares of Series B Preferred Stock issuable upon conversion of
shares of Series C Preferred Stock; provided that if there is a change such that
the securities issuable upon conversion of the Series C Preferred Stock are
issued by an entity other than the Corporation or there is a change in the class
of securities so issuable, then the term "Series B Conversion Stock" shall mean
shares of the security issuable upon conversion of the Series C Preferred Stock
if such security is issuable in shares, or shall mean the smallest unit in which
such security is issuable if such security is not issuable in shares.
14. Significant Transaction. The term "Significant Transaction" shall
-----------------------
mean any consolidation, merger, sale of all or substantially all of the
Corporation's assets to another Person or other transaction which is effected in
such a manner that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) assets other than Conversion Stock with
respect to or in exchange for Common Stock.
15. Subsidiary. The term "Subsidiary" shall mean any Person of which
----------
the Corporation shall at the time own, directly or indirectly through another
Subsidiary, 50% or more of the outstanding voting capital stock (or other shares
of beneficial interest with voting rights), or which the Corporation shall
otherwise control.
IN WITNESS WHEREOF, Incara Pharmaceuticals Corporation has caused
this certificate to be signed by its duly authorized officer as of the 18th day
of January, 2001.
INCARA PHARMACEUTICALS CORPORATION
By: /s/ Clayton I. Duncan
-------------------------------
Name: Clayton I. Duncan
Title: Chief Executive Officer
Attest:
By: /s/ Richard W. Reichow
--------------------------------
Name: Richard W. Reichow
Title: Secretary
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF
SERIES B CONVERTIBLE PREFERRED STOCK
AND SERIES C CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
OF
INCARA PHARMACEUTICALS CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, Clayton I. Duncan and Richard W. Reichow, the Chief Executive Officer
and the Secretary, respectively, of Incara Pharmaceuticals Corporation, a
Delaware corporation (the "Corporation"), pursuant to the provisions of Section
-----------
151 of the General Corporation Law of the State of Delaware, do hereby make this
Certificate of Amendment of the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock and Series Convertible
Exchangeable Preferred Stock, originally filed with the office of the Secretary
of State of the State of Delaware on January 19, 2001, (the "Certificate of
--------------
Designations"), and do hereby state and certify that pursuant to the authority
- ------------
expressly vested in the Board of Directors of the Corporation by its Certificate
of Incorporation, as amended, originally filed with the office of the Secretary
of State of the State of Delaware on March 15, 1994, the Board of Directors of
the Corporation duly adopted the following resolutions:
RESOLVED, THAT THE CERTIFICATE OF DESIGNATIONS IS HEREBY AMENDED AS
FOLLOWS:
1. By striking Article I Section 3 in its entirety and
substituting the following:
"3. Liquidation. In the event of any Wind-up or Asset
-----------
Sale (each as defined in clauses (i) and (ii), respectively, of the
definition of Liquidation Event in Article IV below), whether
voluntary or involuntary, the holders of Series B Preferred Stock
shall have the right to receive, pari passu with the holders of the
Common Stock and subject to the rights of the holders of Series C
Preferred Stock and any other senior class or series of capital
stock of the Corporation, the assets of the Corporation in
proportion to the number of shares of Common Stock held by each
such holder (assuming, for such purposes, the holders of Series B
Preferred Stock are deemed to hold that number of shares of Common
Stock equal to the number of shares of Common Stock into which such
shares of Series B Preferred Stock are then convertible)."
2. By striking Article I Section 5(e)(ii) in its entirety and
substituting the following:
"(ii) The Corporation shall give written notice to all
holders of Series B Preferred Stock at least 10 days prior to the
date on which the Corporation closes its books or takes a record
(A) with respect to any dividend or distribution upon Common Stock,
(B) with respect to any pro rata subscription offer to holders of
Common Stock, or (C) for determining rights with respect to any
Significant Transaction or Liquidation Event."
3. By striking Article II Section 5(c) in its entirety and
substituting the following:
"(c) Conversion upon Occurrence of Significant
-----------------------------------------
Transaction. Upon the occurrence of a Significant Transaction, the
-----------
Corporation and any holder of Series C Preferred Stock may convert
all or any portion of the Series C Preferred Stock held by such
holder into a number of shares of Series B Conversion Stock in the
same manner as provided in subsection (a) above, and then, into a
number of shares of Common Stock in the same manner as provided in
Article I, Section 5 hereof, provided that if the Significant
Transaction results in the holders of the outstanding equity
securities of the Corporation immediately prior to such Significant
Transaction holding securities representing less than 25% of the
outstanding equity securities (on an as converted common stock
basis) of the surviving entity immediately following the
Significant Transaction, then, notwithstanding the provisions of
Article II, Section 5(b)(i) hereof, the Series C Conversion Price
shall be equal to the Fair Market Value (on an as converted to
common stock basis), provided further that the Series C Conversion
Price shall not be less than the Share Price Floor (as defined in
Article II Section 6(a) hereof) (on an as converted to common stock
basis) or greater than the Series C Conversion Price set forth in
Article II, Section 5(b)(i) hereof (as might be adjusted as
provided in Article II, Section 5(d) hereof)."
4. By striking Article II Section 6(a) in its entirety and
substituting the following:
"(a) Mandatory Redemption. On the sixth anniversary
--------------------
after the Issue Date (the "Redemption Date"), the Corporation shall
---------------
redeem all then issued and outstanding shares of Series C Preferred
Stock, including shares of Series C Preferred Stock issuable as
accrued and unpaid dividends (the "Series C Mandatory Redemption")
-----------------------------
in accordance with this Section 6. The Corporation shall effect the
Series C Mandatory Redemption on the Redemption Date, by paying, in
the sole discretion of the Corporation, either (the "Series C
--------
Redemption Price"):
----------------
(i) cash in exchange for each share of Series C
Preferred Stock to be redeemed on the Redemption
Date in an amount equal to the Series C
Outstanding Amount (as defined below), or
(ii) shares of, at the option of a majority of the holders
of Series C Preferred Stock, (A) Common Stock, (B) Series B
Preferred Stock or (C) a combination of Common Stock and Series B
Preferred Stock (collectively, the "Redemption Shares"), in each
-----------------
case, having an aggregate then Fair Market Value (as defined in
Article IV below) equal to the Series C Outstanding Amount;
provided that, in the event redemption is made in shares of Common
--------
Stock or Series B Preferred Stock (or, at the option of a majority of
the holders of Series C Preferred Stock, a combination of Common Stock
and Series B Preferred Stock), (x) the number of shares of Common Stock
to be issued in connection with the redemption shall not exceed the
relevant portion of the Series C Redemption Price attributable to the
Common Stock divided by U.S.$1.30 (subject to adjustment pursuant to
the immediately subsequent sentence, the "Share Price Floor") and (x)
-----------------
the number of shares of Series B Preferred Stock to be issued in
connection with the redemption shall not exceed a number of shares of
Series B Preferred Stock convertible, as of the date of issuance, into
a number of shares of Common Stock equal to the relevant portion of the
Series C Redemption Price attributable to the Series B Preferred Stock
divided by the applicable Share Price Floor. The "Share Price Floor"
-----------------
shall be proportionately adjusted for any stock split, stock
combination or similar event affecting the Common Stock. Any redemption
effected pursuant to this Section 6 shall be made pro rata on the basis
of the number of shares then held by each holder of Series C Preferred
Stock. If any date fixed for redemption of shares pursuant to this
paragraph is a Saturday, Sunday or legal holiday, then such redemption
shall occur on the first business day thereafter."
5. By striking Article IV Section 9 in its entirety and substituting
the following:
"9. Liquidation Event. The term "Liquidation Event" means an
-----------------
event occasioned by, and including, (i) the liquidation, dissolution,
bankruptcy or winding-up of the affairs of the Corporation (each, a
"Wind-Up"), (ii) the sale of all or substantially all of the
-------
Corporation's assets (an "Asset Sale"), or (iii) the issuance by the
----------
Corporation of equity securities in a transaction or series of related
transactions which results in the holders of the outstanding equity
securities of the Corporation immediately prior to such to such
transaction or series of related transactions holding securities
representing less than 25% of the outstanding equity securities (on an
as converted common stock basis) of the Corporation immediately
following such transaction or series of related transactions."
The aforesaid Resolution was duly adopted by the written consent of the
holders of majority of the outstanding shares of Series B and Series C Preferred
Stock, in accordance with
Section 242 of the General Corporation Law of the State of Delaware and Article
II Section 4 of the Certificate of Designations.
IN WITNESS WHEREOF, Clayton I. Duncan and Richard W. Reichow, the Chief
Executive Officer and the Secretary, respectively, of the Corporation, under
penalties of perjury, do hereby declare and certify that this is the act and
deed of the Corporation and the facts stated herein are true and accordingly has
signed this Certificate of Amendment to the Certificate of Designations as of
this 27/th/ day of March 2001.
INCARA PHARMACEUTICALS CORPORATION
By: /s/ Clayton I. Duncan
-----------------------------------------
Name: Clayton I. Duncan
Title: Chief Executive Officer
Attest:
By: /s/ Richard W. Reichow
--------------------------------
Name: Richard W. Reichow
Title: Secretary
CERTIFICATE OF ELIMINATION
OF
INCARA PHARMACEUTICALS CORPORATION
Incara Pharmaceuticals Corporation (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors a resolution was duly
adopted which identified shares of the capital stock of the Corporation which
were no longer issued or outstanding and which have been authorized by the Board
of Directors to be eliminated.
SECOND: The shares of capital stock of the Corporation which are no longer
issued or outstanding and will not be issued are identified as being one million
five hundred thousand (1,500,000) shares of Series A Preferred Stock with a par
value of one tenth of a cent ($.01) per share, which Series A Preferred Stock
was authorized pursuant to the Corporation's Certificate of Designations
Establishing Series A Preferred Stock previously filed with the Delaware
Secretary of State on December 30, 1994.
THIRD: That at a meeting of the Board of Directors a resolution was duly
adopted which provided that no shares of Series A Preferred Stock will be issued
subject to the Certificate of Designations Establishing Series A Preferred
Stock.
FOURTH: That, pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, upon the effective date of the filing
of this certificate as herein provided, all matters with respect to the one
million five hundred thousand (1,500,000) shares, being the total number of
shares authorized, with a par value of one tenth of one cent ($.01) per share,
of the Series A Preferred Stock will be eliminated from the Certificate of
Incorporation of the Corporation.
IN WITNESS WHEREOF, Incara Pharmaceuticals Corporation has caused this
certificate to be signed by Richard W. Reichow, its authorized officer, this
10/th/ day of April 2001.
INCARA PHARMACEUTICALS CORPORATION
By: /s/ Richard W. Reichow
---------------------------------
Name: Richard W. Reichow
Title: Executive Vice President and
Chief Financial Officer