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Exhibit 99.9
CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND RIGHTS
OF
SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
OF
ATRIX LABORATORIES, INC.
(Pursuant to Section 151(g) of the Delaware General Corporation Law)
I, Brian G. Richmond, the Secretary of Atrix Laboratories,
Inc., a corporation organized and existing under the Delaware General
Corporation Law (the "Corporation"), in accordance with the provisions of
Section 151(g) thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation, the Board of Directors of the Corporation on July 18, 2000 adopted
the following resolution, pursuant to the Corporation's Certificate of
Incorporation and Section 151(g) of the Delaware General Corporation Law,
creating one series of shares of preferred stock designated as Series A
Convertible Exchangeable Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the
Board of Directors does hereby provide for the issuance of a series of
preferred stock, $.001 par value, of the Corporation, to be designated
"Series A Convertible Exchangeable Preferred Stock", initially
consisting of 20,000 shares, and to the extent that the designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series A
Convertible Exchangeable Preferred Stock are not stated and expressed
in the Certificate of Incorporation, the Board of Directors of the
Corporation does hereby fix and herein state and express such
designations, powers, preferences and relative and other special rights
and the qualifications, limitations and restrictions thereof, as
follows (all terms used herein which are defined in the Certificate of
Incorporation shall be deemed to have the meanings provided therein):
SERIES A PREFERRED STOCK
1. Designation. 20,000 shares of convertible exchangeable
preferred stock shall be designated and known as the "Series A Preferred Stock."
Such number of shares may be increased or decreased by resolution of the Board
of Directors of the Corporation after obtaining the consent of a majority in
interest of the holder(s) of the then-outstanding shares of Series A Preferred
Stock; provided that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares then outstanding plus
the number of such shares issuable upon exercise of outstanding rights, options
or warrants or upon conversion of outstanding securities issued by the
Corporation.
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2. Dividend Provisions.
(a) 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, par value $.001 per
share, of the Corporation (the "Common Stock"), the holders of the Series A
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 A Preferred Stock could then be converted pursuant to Section 4 hereof
(such number to be determined as of the record date for the determination of
holders of Common Stock entitled to receive such dividend).
(b) In addition to Section 2(a) above, each share of Series A
Preferred Stock, shall be entitled to receive a mandatory dividend equal to 7%
per year of the Original Issue Price (as defined below) thereof. Such dividend
shall be payable semi-annually on each succeeding 6 month anniversary of the
first issuance, solely by the issuance of additional shares of Series A
Preferred Stock, at a price per share equal to the Original Issue Price thereof,
and not in cash, compounding to commence six months after the original issuance.
Fractional shares of Series A Preferred Stock shall be issuable for all purposes
hereunder.
3. Seniority; Liquidation Preference.
(a) The Corporation may not issue any additional classes or
series of preferred stock with a liquidation preference, dividend or other
rights senior to or pari passu to the Series A Preferred Stock except pursuant
to Section 14 hereof.
(b) In the event of any liquidation, dissolution or winding-up
of the affairs of the Corporation, whether voluntary or involuntary,
(collectively, a "Liquidation"), before any payment of cash or distribution of
other property shall be made to the holders of the Common Stock or any other
class or series of stock subordinate in liquidation preference to the Series A
Preferred Stock, the holders of the Series A Preferred Stock shall be entitled
to receive out of the assets of the Corporation legally available for
distribution to its stockholders, the Original Issue Price per share (as
appropriately adjusted for any combinations or divisions or similar
recapitalizations affecting the Series A Preferred Stock after issuance) and
accrued and unpaid dividends thereon (the "Series A Liquidation Preference"). As
used herein, the "Original Issue Price" per share is $1,000.00.
(c) If, upon any Liquidation, the assets of the Corporation
available for distribution to its Stockholders shall be insufficient to pay the
holders of the Series A Preferred Stock the full amounts to which they shall be
entitled, the holders of the Series A Preferred Stock shall share ratably in any
distribution of assets in proportion to the respective amounts which would be
payable to them in respect of the shares held by them if all amounts payable to
them in respect of such were paid in full pursuant to Section 3(b).
(d) After the distributions described in Section 3(c) above
have been paid, subject to the rights of other series of preferred stock that
may from time to time come into existence, the remaining assets of the
Corporation available for distribution to stockholders shall
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be distributed among the holders of Common Stock pro rata based on the number of
shares of Common Stock held by each.
4. Conversion. The holders of the Series A Preferred Stock
shall have conversion rights, through and including the Conversion Termination
Date (as defined below), as follows (the "Conversion Rights"):
(a) Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time that is two years
after the issuance thereof, at the office of the Corporation or any transfer
agent for such stock, into such number of fully paid and non-assessable shares
of Common Stock (or successor securities) as is determined by dividing (x) the
sum of the Original Issue Price of such share of Series A Preferred Stock (and
any accrued but unpaid dividends thereon) by (y) the Series A Conversion Price
(as defined below). The "Series A Conversion Price" shall be $18.00; provided
the Series A Conversion Price shall be subject to adjustment as set forth below
in this Section 4(a)). Notwithstanding the above, the Series A Preferred Stock,
in the event that there shall occur a merger or consolidation of the Corporation
with or into another entity as a consequence of which Elan International
Services, Ltd. ("EIS") shall own 50% or less of the equity of the survivor of
such merger or consolidation than EIS did of the Corporation prior thereto or
the sale of the Corporation's Common Stock in a firm commitment underwritten
public offering, then, in any such event, the outstanding shares of the Series A
Preferred Stock then held by the original holder of the Series A Preferred Stock
or any of its affiliates shall, immediately prior to the consummation thereof,
be at the option of the Corporation converted into the same number of shares of
Common Stock into which such shares are convertible pursuant to this Section
4(a) (a "Required Conversion"); provided, further, in the event of a Required
Conversion, the Common Stock delivered upon such conversion shall have the
benefit of the Exchange Right identical to that with respect to the Series A
Preferred Stock so converted; provided, further, that upon exercise of the
Conversion Right if EIS' ownership exceeds 19.9% of the issued and outstanding
shares of Common Stock on a fully diluted basis, EIS shall to the extent of such
excess be entitled to receive non-voting securities of the Corporation.
(b) Before any holder of Series A Preferred Stock shall be
entitled to convert such shares 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 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 A 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 set forth
above. 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 such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date.
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(c) If the Corporation shall issue any additional shares of
Common Stock (excluding shares issued pursuant to Section 4(d)) without
consideration or for a consideration per share less than the Fair Market Value
(as defined below) per share on such date, the Series A Conversion Price for
such series in effect immediately prior to each such issuance shall forthwith
(except as otherwise provided in this Section be adjusted to a price equal to a
price determined by multiplying such Series A Conversion Price by a fraction,
the numerator of which shall be the sum of (w) the number of shares of Common
Stock deemed outstanding (as defined below) immediately prior to such issuance
and (x) the number of shares of Common Stock that the aggregate consideration
received or to be received by the Corporation for such issuance would purchase
at such Series A Conversion Price; and the denominator of which shall be the sum
of (y) the number of shares of Common Stock deemed outstanding (as defined
below) immediately prior to such issuance and (z) the number of additional
shares of such Common Stock so issued. For purposes of this Certificate of
Designations, "Common Stock deemed outstanding" as of a given date shall be the
sum of (A) the number of shares of Common Stock actually outstanding, (B) the
number of shares of Common Stock into which the then outstanding shares of
preferred stock could be converted if fully converted on the day immediately
preceding the given date, and (C) the number of shares of Common Stock which
could be obtained through the exercise or conversion of all other rights,
options and convertible securities outstanding on the day immediately preceding
the given date. For purposes of this Certificate of Designations, "Fair Market
Value" shall mean (x) the average of the closing prices on the 20 trading days
prior to such determination on the principal national securities exchange on
which the Common Stock is traded, if any, (y) the average of the last quoted
prices on the 20 trading days prior to such determination if the Common Stock is
traded on the Nasdaq National Market or Nasdaq SmallCap Market, or (z) if the
Common Stock is not listed on a national securities exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, then as determined in good
faith by the Corporation's Board of Directors and reasonably agreed to by the
holders of a majority of the Series A Preferred Stock; provided, however, that
the Corporation may issue, without triggering the foregoing provisions of this
paragraph (A) shares of Common Stock upon conversion of its preferred stock; (B)
securities or rights or options issued to employees, consultants or directors in
accordance with plans approved by the Corporation's Board of Directors, (C)
securities or rights or options under the Atrix Employee Stock Purchase Plan,
and (D) shares of Common Stock upon conversion of 7% Convertible Subordinated
Notes due 2004.
(d) In the event the Corporation should at any time fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or property or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock or other securities or property (hereinafter referred to
as "Common Stock Equivalents") without payment of any consideration by such
holder for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock or other securities or property
issuable upon conversion or exercise thereof) then with respect to each share of
Series A Preferred Stock the Conversion Right shall be for, in addition to the
number of shares of the Common Stock otherwise deliverable upon exercise of the
Conversion Right, and without adjustment to the Series A Conversion Price, the
amount of such additional shares of Common Stock and any Common Stock
Equivalents that the holder of such
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share of Series A Preferred Stock would have received or become entitled to
receive on the same terms and conditions as if such holder had been a holder of
record of such Common Stock as shall have been deliverable immediately prior to
such record date pursuant to the terms of this Section 4 unless such record date
is fixed and such dividend is not paid or if such distribution, split or
subdivision is not fully made on the date fixed therefor.
(e) If the number of shares of Common Stock outstanding at any
time is decreased by a combination of the outstanding shares of Common Stock,
then, following the record date of such combination, the Series A Conversion
Price for the Series A Preferred Stock shall be appropriately increased so that
the number of shares of Common Stock issuable on conversion of each share of
such series shall be decreased in proportion to such decrease in outstanding
shares.
(f) The following provisions shall apply for purposes of this
Section 4:
(i) The aggregate maximum number of shares of Common
Stock or other securities or property deliverable upon conversion or
exercise of Common Stock Equivalents (assuming the satisfaction of any
conditions to convertibility or exercisability, including, without
limitation, the passage of time, but without taking into account
potential antidilution adjustments) shall be deemed to have been issued
at the time such Common Stock Equivalents were issued.
(ii) In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to
the Corporation upon conversion or exercise of such Common Stock
Equivalents including, but not limited to, a change resulting from the
antidilution provisions thereof, the Series A Conversion Price of the
Series A Preferred Stock, to the extent in any way affected by or
computed using such Common Stock Equivalents, shall be recomputed to
reflect such change, but no further adjustment shall be made for the
actual issuance of Common Stock or any payment of such consideration
upon the exercise of any such options or rights or the conversion or
exchange of such securities.
(iii) Upon the termination or expiration of the
convertibility or exercisability of any such Common Stock Equivalents,
the Series A Conversion Price of the Series A Preferred Stock, to the
extent in any way affected by or computed using such Common Stock
Equivalents, shall be recomputed to reflect the issuance of only the
number of shares of Common Stock (and Common Stock Equivalents which
remain convertible or exercisable) actually issued upon the conversion
or exercise of such Common Stock Equivalents.
5. Exchange Right. The original purchaser (or any of its
affiliates) of the Series A Preferred Stock shall have the right to exchange all
of the shares of Series A Preferred Stock but not any accrued and unpaid
dividends thereon (the "Exchange Right") of the Corporation for 3,612 shares of
convertible preferred shares ("Preferred Shares") (as adjusted for any
combinations or divisions or similar recapitalizations) of ATRIX NEWCO, LTD., a
Bermuda exempted limited liability company ("Newco") held by the Corporation
convertible into 30.1% of Newco's common shares on a fully diluted basis (or, if
the Preferred Shares have been
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converted by the Corporation pursuant to the terms thereof, the common shares of
Newco issued upon such conversion); provided, however that if the Exchange Right
is exercised during the first two years after the issuance of the Series A
Preferred Stock, the original purchaser of the Series A Preferred Stock shall
have the right to exchange for 3,612 shares of non-voting convertible preferred
stock of Newco.
Upon exercise of the Exchange Right, all shares of Series A
Preferred Stock originally purchased from the Corporation, excluding accrued and
unpaid dividends thereon, shall be canceled and shall no longer be entitled to
any rights in the Corporation.
Other than in the case of a Required Conversion, if any shares
of the Series A Preferred Stock are converted pursuant to Section 4(a), to
shares of Common Stock, the Exchange Right with respect to the shares of Series
A Preferred Stock originally purchased from the Corporation shall be canceled
and shall no longer be entitled to any rights in the Corporation.
In order to exercise the Exchange Right, the holders shall
provide written notice thereof to the Corporation, setting forth (a) the fact
that such holders intend to exercise the Exchange Right, and (b) the proposed
date for such exercise (the "Exercise Date"), which shall be between 10 and 30
days after the delivery of such notice; provided, however, that if the
Corporation shall deliver the holders a written request to delay the date for
such exercise by no more than 45 days, the Exercise Date will be as set forth in
that request. On the Exercise Date, (y) the holders shall tender their shares of
Series A Preferred Stock to the Corporation for cancellation free and clear of
encumbrances of any type or nature, and (z) the Corporation shall cause to be
delivered to EIS, acting on behalf of such holders, such shares of Newco free
and clear of encumbrances of any type or nature. The holders and the Corporation
shall take all other necessary or appropriate actions in connection with or to
effect such closing.
6. Termination Date. The rights of the holders to convert the
shares of Series A Preferred Stock into shares of Common Stock or to exercise
the Exchange Rights, shall terminate and be of no further force and effect on
the date that is six years after the date of the first issuance of any shares of
Series A Preferred Stock hereunder (the "Termination Date"). On the Termination
Date, the Corporation shall, at its option, either (i) redeem their shares of
Series A Preferred Stock in cash in an amount equal to the Series A Liquidation
Preference or (ii) redeem their shares of Series A Preferred Stock in shares of
Common Stock having a then Fair Market Value equal to the Series A Liquidation
Preference.
7. Other Distributions. In the event the Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by the Corporation or other persons, assets, cash (excluding
cash dividends declared out of retained earnings) or options or rights not
referred to in Section 4, then, in each such case for the purpose of this
Section 7, the holders of the Series A Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock of the Corporation into which their shares
of Series A Preferred Stock would be convertible as of the record date fixed for
the determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
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8. Recapitalizations. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets provided for in Section 3 or Section 4
hereof) provision shall be made so that the holders of the Series A Preferred
Stock shall thereafter be entitled to receive upon conversion of the Series A
Preferred Stock the number of shares of stock or other securities or property of
the Corporation or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
Section 4 with respect to the rights of the holders of the Series A Preferred
Stock after the recapitalization to the end that the provisions of Section 4
(including adjustment of the Series A Conversion Price then in effect and the
number of shares purchasable upon conversion of the Series A Preferred Stock)
shall be applicable after that event as nearly equivalent as may be practicable.
9. No Impairment. 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 the Series A
Conversion Rights and Exchange Right of the holders of the Series A Preferred
Stock against impairment.
10. No Fractional Shares and Certificate as to Adjustments.
(a) No fractional shares shall be issued upon the conversion
of any share or shares of the Series A Preferred Stock, and the number of shares
of Common Stock to be issued shall be rounded to the next lower whole number of
shares. Whether or not fractional shares are issuable upon such conversion shall
be determined on the basis of the aggregate number of shares of Series A
Preferred Stock each holder is at the time converting into Common Stock and the
aggregate number of shares of Common Stock issuable to each such holder upon
such conversion.
(b) Upon the occurrence of each adjustment or readjustment of
the Series A Conversion Price pursuant to Section 4, the Corporation, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each holder of shares 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 holder
of Series A Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustment and readjustment, (ii) the
Series A 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 a share of Series A Preferred Stock.
11. Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock, such number of its
shares of Common Stock that shall from time to time be sufficient to effect
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the conversion of all outstanding shares of the Series A Preferred Stock; and if
at any time the number of authorized but unissued shares of Common Stock not
otherwise reserved for issuance shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A Preferred Stock, the Corporation
will take such corporate action that may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes, including without
limitation, engaging in reasonable best efforts to obtain the requisite
stockholder approval of any necessary amendment to its Certificate of
Incorporation.
12. Notices. Any notice required by the provisions hereof to
be given to the holders of shares of Series A Preferred Stock shall be deemed
given on the date of service if served personally on the party to whom notice is
to be given, or on the date of transmittal of services by facsimile transmission
to the party to whom notice is to be given, and addressed to each holder of
record at his address appearing on the books of the Corporation.
13. Voting Rights. Subject to Section 14 below, holders of
Series A Preferred Stock shall not be entitled to vote together with the holders
of the Common Stock, including with respect to the election of directors of the
Corporation.
14. Protective Provisions. Subject to the rights of any series
of preferred stock that may from time to time come into existence, 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 A Preferred Stock, voting separately as a
series:
(a) amend its Certificate of Incorporation to alter or change
the voting powers, preferences, or other special rights or privileges, or
restrictions of the Series A Preferred Stock so as to affect adversely the
shares of Series A Preferred Stock; or
(b) change the rights of the holders of the Series A Preferred
Stock in any other respect; or
(c) amend its Certificate of Incorporation so as to create any
additional classes or series of preferred stock with a liquidation preference,
dividend or other rights senior to the Series A Preferred Stock.
15. Status of Converted Stock. In the event any shares of
Series A Preferred Stock shall be converted pursuant to Section 4 or exchanged
pursuant to Section 5 hereof, the shares so converted or exchanged shall be
canceled and shall not be reissuable by the Corporation. The Certificate of
Incorporation of the Corporation shall be appropriately amended to effect the
corresponding reduction in the Corporation's authorized capital stock.
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IN WITNESS WHEREOF, said Atrix Laboratories, Inc. has caused
this Certificate of Designations to be signed by its Secretary this 18th day of
July 2000, who affirms that the statements made herein are true and correct.
ATRIX LABORATORIES, INC.
By: /s/ BRIAN G. RICHMOND
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Name: Brian G. Richmond
Title: Secretary