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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
METABOLIX, INC.
Metabolix, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is Metabolix, Inc. The original
certificate of incorporation of Metabolix, Inc. was filed with the Secretary of
State of the State of Delaware on September 1, 1998.
2. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Sections 242 and 245 of the
Delaware General Corporation Law (the "DGCL").
3. The text of the Certificate of Incorporation of this corporation be
hereby amended and restated in its entirety to provide as herein set forth in
full.
ARTICLE I
The name of the Corporation is Metabolix, Inc.
ARTICLE II
The address of the Corporation's registered office in the State of Delaware
is c/o The Corporation Trust Company, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the DGCL.
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ARTICLE IV
CAPITAL STOCK
The total number of shares of capital stock which the Corporation shall
have authority to issue is One Hundred Five Million (105,000,000) shares, of
which (i) Seventy-Nine Million One Hundred Thousand (79,100,000) shares shall be
a class designated as common stock, par value $.01 per share (the "Common
Stock"), (ii) Twenty Million Nine Hundred Thousand (20,900,000) shares shall be
a class designated as Preferred Stock, par value $.01 per share (the "pre-IPO
Preferred Stock"), and (iii) Five Million (5,000,000) shares shall be a class
designated as undesignated preferred stock, par value $.01 per share (the
"Undesignated Preferred Stock" and, together with the pre-IPO Preferred Stock,
the "Preferred Stock").
The number of authorized shares of the class of Undesignated Preferred
Stock may from time to time be increased or decreased (but not below the number
of shares outstanding) by the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote, without a vote of the
holders of the Preferred Stock (subject to the terms of the pre-IPO Preferred
Stock and except as otherwise provided in any certificate of designations of any
series of Undesignated Preferred Stock).
The powers, preferences and rights of, and the qualifications, limitations
and restrictions upon, each class or series of stock shall be determined in
accordance with, or as set forth below in, this Article IV.
At the time the filing of this Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware becomes
effective:
(a) Each outstanding share of Common Stock, par value $0.01 per share, of
the Corporation (the "Old Common Stock") shall be reclassified as and subdivided
into 0.8173 shares of Common Stock, par value $0.01 per share, of the
Corporation; (the "Reverse Stock Split") and
(b) All authorized but unissued shares of Old Common Stock shall be
eliminated and extinguished.
Upon the effective filing hereof with the Secretary of State of the State
of Delaware, the reclassification and subdivision of the issued and outstanding
shares of Old Common Stock into issued and outstanding shares of Common Stock
shall occur automatically without any further action by the holders of such
shares of Old Common Stock and whether or not the certificates representing the
shares of Old Common Stock are surrendered to the Corporation; provided,
however, that the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such reclassification and
subdivision unless certificates evidencing such shares of Old Common Stock which
have been reclassified and subdivided are either delivered to the Corporation as
hereinafter provided or the holder notifies the Corporation that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith.
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Upon the occurrence of the automatic reclassification and subdivision of
the Old Common Stock, the holders of Old Common Stock shall surrender the
certificates representing such shares at the office of the Corporation.
Thereupon there shall be issued and delivered to such holder at such office and
in the name shown on such surrendered certificate or certificates(s), a
certificate for the number of shares of Common Stock into which the surrendered
shares of Old Common Stock have been reclassified and subdivided, dated as of
the date on which such automatic reclassification and subdivision occurs.
A. COMMON STOCK
Subject to all the rights, powers and preferences of the Preferred
Stock and except as provided by law or in this Article IV (or in any certificate
of designations of any series of Undesignated Preferred Stock):
(a) the holders of the Common Stock shall have the exclusive
right to vote for the election of directors of the Corporation (the "Directors")
and on all other matters requiring stockholder action, each outstanding share
entitling the holder thereof to one vote on each matter properly submitted to
the stockholders of the Corporation for their vote; PROVIDED, HOWEVER, that,
except as otherwise required by law, holders of Common Stock, as such, shall not
be entitled to vote on any amendment to this Certificate (or on any amendment to
a certificate of designations of any series of Undesignated Preferred Stock)
that alters or changes the powers, preferences, rights or other terms of one or
more outstanding series of Undesignated Preferred Stock if the holders of such
affected series are entitled to vote, either separately or together with the
holders of one or more other such series, on such amendment pursuant to this
Certificate (or pursuant to a certificate of designations of any series of
Undesignated Preferred Stock) or pursuant to the DGCL;
(b) dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the Corporation
legally available for the payment of dividends, but only when and as declared by
the Board or any authorized committee thereof; and
(c) upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the net assets of the Corporation
shall be distributed pro rata to the holders of the Common Stock.
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B. PRE-IPO CONVERTIBLE PREFERRED STOCK
1. GENERAL. The pre-IPO Preferred Stock may be issued in one or
more series at such time or times and for such consideration or considerations
as a majority of the Board of Directors of the Corporation may determine. Each
series shall be so designated as to distinguish the shares thereof from the
shares of all other series and classes of capital stock. Except as otherwise
provided in this Certificate of Incorporation, different series of pre-IPO
Preferred Stock shall not be construed to constitute different classes of shares
for the purpose of voting by classes.
The Board of Directors of the Corporation is expressly authorized, by
a vote or written consent of at least a majority of the Board of Directors then
in office, to provide for the issuance of all or any shares of the pre-IPO
Preferred Stock in one or more series, each with such designations, preferences,
voting powers (or no voting powers), relative, participating, optional or other
special rights and privileges and such qualifications, limitations or
restrictions thereof as shall be stated in the resolution or resolutions adopted
by the Board of Directors of the Corporation to create such series, and a
Certificate of Designation of said resolution or resolutions shall be filed in
accordance with the General Corporation Law of the State of Delaware. The
authority of the Board of Directors of the Corporation with respect to each such
series shall include, without limitation of the foregoing, the right to provide
that the shares of each such series may:
(i) have such distinctive designation and consist of such number of
shares;
(ii) be subject to redemption at such time or times and at such
price or prices;
(iii) be entitled to the benefit of a retirement or sinking fund for
the redemption of such series on such terms and in such amounts;
(iv) be entitled to receive dividends (which may be cumulative or
non-cumulative) at such rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends payable on
any other class or classes or any other series;
(v) be entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation;
(vi) be convertible into, or exchangeable for, shares of any other
class or classes of capital stock, or of any other series of the same or
any other class or classes of stock of the Corporation at such price or
prices or at such rates of exchange and with such adjustments, if any;
(vii) be entitled to the benefit of such limitations, if any, on the
issuance of additional shares of such series or shares of any other series
of pre-IPO Preferred Stock; or
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(vii) be entitled to such other preferences, powers, qualifications,
rights and privileges, all as the Board of Directors of the Corporation may
deem advisable and as are not inconsistent with law and the provisions of
this Certificate of Incorporation.
2. DESIGNATION. Of the 20,900,000 shares of pre-IPO Preferred
Stock which the Corporation has authority to issue, 1,033,000 shall be
designated and known as Series A Convertible Preferred Stock (the "Series A
Preferred"), 396,000 shall be designated and known as the Series B Convertible
Preferred Stock (the "Series B Preferred"), 785,000 shall be designated and
known as the Series C Convertible Preferred Stock (the "Series C Preferred"),
733,000 shall be designated and known as the Series D Convertible Preferred
Stock (the "Series D Preferred"); 420,751 shall be designated and known as the
Series E Convertible Preferred Stock (the "Series E Preferred"); 186,899 shall
be designated as the Series F Convertible Preferred Stock (the "Series F
Preferred"); 312,119 shall be designated as the Series G Convertible Preferred
Stock (the "Series G Preferred"); 192,147 shall be designated as the Series I-1
Convertible Preferred Stock (the "Series I-1 Preferred"); 2,000 shall be
designated as the Series J-1 Convertible Preferred Stock (the "Series J-1
Preferred"); 5,244,902 shall be designated as the Series 04 Convertible
Preferred Stock (the "Series 04 Preferred"); 5,244,902 shall be designated as
the Series 04-1 Convertible Preferred Stock (the "Series 04-1 Preferred");
2,920,000 shall be designated as the Series 05 Convertible Preferred Stock (the
"Series 05 Preferred"); and 2,920,000 shall be designated as the Series 05-1
Convertible Preferred Stock (the "Series 05-1 Preferred"). The Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred, Series E
Preferred, Series F Preferred and Series G Preferred shall be collectively
referred to herein as the "Junior Preferred".
3. DIVIDENDS. The holders of the then outstanding pre-IPO
Preferred Stock shall be entitled to receive, out of funds legally available
therefor, when and if declared by the Board of Directors, dividends at the same
rate as dividends (other than dividends paid in additional shares of Common
Stock) that are paid with respect to the Common Stock (treating each share of
pre-IPO Preferred Stock as being equal to the number of shares of Common Stock
(including fractions of a share) into which each such share of pre-IPO Preferred
Stock is then convertible).
4. LIQUIDATION, DISSOLUTION OR WINDING UP. All of the preferential
amounts to be paid to the holders of the pre-IPO Preferred Stock pursuant to
Section 4(a) of this Article FOURTH shall be paid or set apart for payment
before the payment or setting apart for payment of any amount for, or the
distribution of any assets of the Corporation to, the holders of the Common
Stock in connection with a liquidation, dissolution or winding up of the
Corporation.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of pre-IPO Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders before any payment
shall be made to the holders of Common Stock or any other class or series of
stock ranking on liquidation junior to the pre-IPO Preferred Stock by reason of
their ownership thereof, an amount equal to (i) One and 14/100 Dollars ($1.14)
per share of Series A Preferred, (ii) One and 60/100 Dollars ($1.60) per share
of Series B Preferred, (iii) Two and 40/100 Dollars ($2.40) per share of Series
C Preferred, (iv) Four and 60/100 Dollars ($4.60) per share of Series D
Preferred, (v) Ten and 80/100 Dollars ($10.80) per share of Series E
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Preferred, (vi) Ten and 80/100 Dollars ($10.80) per share of Series F Preferred,
(vii) Ten and 80/100 Dollars ($10.80) per share of Series G Preferred, (viii)
Ten and 80/100 Dollars ($10.80) per share of Series I-1 Preferred (the "Series
I-1 Preference"), (ix) Ten and 80/100 Dollars ($10.80) per share of Series J-1
Preferred (the "Series J-1 Preference"), (x) Five and 40/100 Dollars ($5.40) per
share of Series 04 Preferred (the "Series 04 Preference") and Five and 40/100
Dollars ($5.40) per share of Series 04-1 Preferred (the "Series 04-1
Preference"), and (xi) Six and 00/100 Dollars ($6.00) per share of Series 05
Preferred (the "Series 05 Preference") and Six and 00/100 Dollars ($6.00) per
share of Series 05-1 Preferred (the "Series 05-1 Preference") (each
appropriately adjusted for stock splits, stock dividends, reclassifications,
recapitalizations or other similar events affecting the pre-IPO Preferred
Stock). If upon any such liquidation, dissolution or winding up of the
Corporation the remaining assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of shares of
pre-IPO Preferred Stock the full amount to which they shall be entitled, the
assets of the Corporation shall first be distributed ratably to the holders of
shares of Series 05 Preferred and Series 04 Preferred in proportion to the
respective amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full until the Series 05 Preference and the Series 04
Preference are paid in full, then ratably to the holders of shares of Series
05-1 Preferred, Series 04-1 Preferred, Series J-1 Preferred and Series I-1
Preferred in proportion to the respective amounts which would otherwise be
payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full, until the
Series 05-1 Preference, Series 04-1 Preference, Series J-1 Preference and Series
I-1 Preference are paid in full, and then to the holders of shares of Junior
Preferred and any class or series of stock ranking on liquidation on a parity
with the Junior Preferred in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of pre-IPO Preferred Stock pursuant to Section 4(a) of
this Article FOURTH and any other class or series of stock of the Corporation
ranking on liquidation senior to or on a parity with the pre-IPO Preferred
Stock, upon the dissolution, liquidation or winding up of the Corporation, the
remaining net assets of the Corporation available for distribution shall be
distributed ratably among the holders of Series 05 Preferred, Series 05-1
Preferred, Series 04 Preferred, Series 04-1 Preferred, Series J-1 Preferred,
Series I-1 Preferred and Common Stock (with each share of Series 05 Preferred,
Series 05-1 Preferred, Series 04 Preferred, Series 04-1 Preferred, Series J-1
Preferred, and Series I-1 Preferred being deemed, for such purpose, to be equal
to the number of shares of Common Stock (including fractions of a share) into
which each such share is convertible immediately prior to the close of business
on the business day fixed for such distribution).
(c) The merger or consolidation of the Corporation into or
with another corporation which results in the exchange of outstanding shares of
the Corporation for securities or other consideration issued or paid or caused
to be issued or paid by such other corporation or an affiliate thereof, or the
sale of all or substantially all the assets of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the Corporation for purposes
of this Section 4, but only if, in the case of a merger, after giving effect to
such
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merger, the holders of the Corporation's securities immediately prior to such
merger own 50% or less of any surviving entity's voting securities. The amount
deemed distributed to the holders of pre-IPO Preferred Stock upon any such
merger or consolidation shall be the cash or the value of the property, rights
or securities distributed to such holders by the acquiring person, firm or other
entity. The value of such property, rights or other securities shall be
determined in good faith by the Board of Directors of the Corporation.
5. VOTING.
(a) Each holder of outstanding shares of pre-IPO Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of pre-IPO Preferred Stock held by
such holder are then convertible (as adjusted from time to time pursuant to
Section 7 of this Article FOURTH), at each meeting of stockholders of the
Corporation (and written actions of stockholders in lieu of meetings) with
respect to any and all matters presented to the stockholders of the Corporation
for their action or consideration. Except as provided by law, by the provisions
of this Certificate of Incorporation or by the provisions establishing any other
series of pre-IPO Preferred Stock, holders of any outstanding series of pre-IPO
Preferred Stock shall vote together with the holders of Common Stock as a single
class on all actions to be taken by the stockholders of the Corporation,
including actions amending this Certificate of Incorporation to increase the
number of authorized shares of Common Stock.
(b) For this purpose, without limiting the generality of the
foregoing (but subject to the provisions of Section 5(d) of this Article FOURTH)
the authorization or issuance of any series of pre-IPO Preferred Stock which is
on a parity with or has preference or priority over the Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, Series E Preferred,
Series F Preferred, Series G Preferred, Series I-1 Preferred, Series J-1
Preferred, Series 04 Preferred, Series 04-1 Preferred, Series 05 Preferred or
Series 05-1 Preferred (the "Existing pre-IPO Preferred Stock") as to the right
to receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall not be deemed to affect
adversely the Existing pre-IPO Preferred Stock. The number of authorized shares
of pre-IPO Preferred Stock of any series may be increased or decreased (but not
below the number of shares then outstanding) by the affirmative vote of the
holders of a majority of the then outstanding shares of the Common Stock, the
Existing pre-IPO Preferred Stock and all other classes or series of stock of the
Corporation entitled to vote thereon, voting as a single class.
(c) In addition to any other rights provided by law, by the
provisions of this Certificate of Incorporation or by the provisions
establishing any other series of pre-IPO Preferred Stock, so long as at least
750,000 shares of pre-IPO Preferred Stock are outstanding (appropriately
adjusted for stock splits, stock contributions, stock dividends and
recapitalizations of the pre-IPO Preferred Stock), the Corporation shall not,
without first obtaining the affirmative vote or written consent of the holders
of a majority of the shares of pre-IPO Preferred Stock then outstanding, voting
together as a single class:
(i) enter into any sale, consolidation, merger,
reorganization or conversion of the Corporation, or liquidate the
Corporation;
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(ii) declare or pay any dividend on any class of capital stock
or repurchase any shares of any class of capital stock, except for
repurchases of stock issued under any stock or option plan approved by
the Board of Directors, from any person or entity pursuant to an
agreement approved by the Board of Directors and repurchases in
accordance with the exchange rights set forth in that certain Series
04 Preferred Stock Purchase Agreement by and among the Corporation and
certain investors dated April 2, 2004, as amended from time to time
(the "Series 04 Purchase Agreement"), that certain 2005 Series 04
Preferred Stock Purchase Agreement by and among the Corporation and
certain investors dated March 2, 2005, as amended from time to time
(the "2005 Series 04 Purchase Agreement" and together with the Series
04 Purchase Agreement, the "Series 04 Purchase Agreements"), that
certain Series 04 Preferred Stock Exchange Agreement by and among the
Corporation and certain investors dated April 2, 2004, as amended from
time to time (the "Series 04 Exchange Agreement") or that certain
Series 05 Preferred Stock Purchase Agreement by and among the
Corporation and certain investors dated January 19, 2006, as amended
from time to time (the "Series 05 Purchase Agreement") or in
accordance with Section 9 of this Article FOURTH;
(iii) effect any recapitalization or reclassification of any
shares of pre-IPO Preferred Stock;
(iv) sell, lease, transfer, license or pledge all, or
substantially all of its assets;
(v) file or consent to the filing of a petition under federal
or state bankruptcy, insolvency, reorganization or similar laws with
respect to the Corporation;
(vi) increase the size of the Corporation's Board of Directors
to a number greater than seven (7); or
(vii) amend this Section 5(c).
(d) In addition to any other rights provided by law, by the
provisions of this Certificate of Incorporation or by the provisions
establishing any other series of pre-IPO Preferred Stock, so long as Vertical
Fund I, L.P. and Vertical Fund II, L.P. (collectively, "Vertical") together with
their Affiliates (as defined in Section 9 of this Article FOURTH) continue to
hold at least 50% of the aggregate shares of (i) Series 04 Preferred issued to
Vertical pursuant to the Series 04 Purchase Agreements and the Series 04
Exchange Agreement and (ii) Series 05 Preferred issued pursuant to the Series 05
Purchase Agreement (appropriately adjusted for stock splits, stock
contributions, stock dividends and recapitalizations of the Series 05 Preferred
and the Series 04 Preferred), the Corporation shall not, without first obtaining
the affirmative vote or written consent of the holders of a majority of the
aggregate shares of Series
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05 Preferred and Series 04 Preferred then outstanding, voting as a single class
(which vote or consent must include the vote or consent of Vertical):
(i) issue any securities (including debt securities) ranking
senior to the Series 04 Preferred or the Series 05 Preferred as to
dividends, interest, redemption or as to the distribution of assets on
the liquidation, dissolution or winding up of the Corporation or,
except to the extent required by law, having the right to vote as a
separate class on any matter to be presented to the stockholders; or
(ii) amend this Certificate of Incorporation in a manner
materially adverse to the holders of Series 05 Preferred or Series 04
Preferred or amend any provisions of Section 4 (Liquidation,
Dissolution or Winding Up), Section 5 (Voting), Section 7(d)
(Adjustment of Series 04 and/or Series 05 Conversion Price Upon
Issuance of Common Stock) or Section 9 (Pay to Play Provision) of this
Article FOURTH which affects the rights of the Series 05 Preferred or
Series 04 Preferred. For the avoidance of doubt, the provisions of
this Section 5(d)(ii) shall not apply to any amendments to this
Certificate of Incorporation, the purpose of which is to authorize a
series of capital stock the rights and preferences of which are
pari-passu with or junior to those of the Series 05 Preferred or
Series 04 Preferred with respect to dividends, interest, redemptions
or as to distribution of assets on the liquidation, dissolution or
winding up of the Corporation.
6. [Intentionally Omitted]
7. OPTIONAL CONVERSION. The holders of the pre-IPO Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of pre-IPO Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Adjusted Purchase Price (as defined
below) for the series of pre-IPO Preferred Stock being converted by the
applicable Conversion Price (as defined below) in effect at the time of
conversion. The Adjusted Purchase Price and the Conversion Price shall initially
be (i) One and 14/100 Dollars ($1.14) per share of Series A Preferred, (ii) One
and 60/100 Dollars ($1.60) per share of Series B Preferred, (iii) Two and 40/100
Dollars ($2.40) per share of Series C Preferred, (iv) Four and 60/100 Dollars
($4.60) per share of Series D Preferred, (v) Ten and 80/100 Dollars ($10.80) per
share of Series E Preferred, (vi) Ten and 80/100 Dollars ($10.80) per share of
Series F Preferred, (vii) Ten and 80/100 Dollars ($10.80) per share of Series G
Preferred, (viii) Ten and 80/100 Dollars ($10.80) per share of Series I-1
Preferred, (ix) Ten and 80/100 Dollars ($10.80) per share of Series J-1
Preferred, (x) Five and 40/100 Dollars ($5.40) per share of Series 04 Preferred,
(xi) Five and 40/100 Dollars ($5.40) per share of Series 04-1 Preferred, (xii)
Six and 00/100 Dollars ($6.00) per share of Series 05 Preferred and (xiii) Six
and 00/100 Dollars ($6.00) per share of Series 05-1 Preferred. Such Conversion
Price, and the rate at which shares of pre-IPO Preferred Stock may be converted
into shares of Common Stock, shall be subject to adjustment as provided below.
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In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate immediately prior to the payment of any amounts distributable on
liquidation to the holders of pre-IPO Preferred Stock.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the pre-IPO Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the market price
per share of Common Stock (as determined in good faith by the Board of
Directors) on the close of business on the date of such conversion. The
determination of the number of fractional shares shall be based on the total
number of shares of pre-IPO Preferred Stock being converted at any one time by
any holder thereof, not upon each share of pre-IPO Preferred Stock being
converted.
(c) MECHANICS OF CONVERSION.
(i) In order for a holder of pre-IPO Preferred Stock to
convert shares of pre-IPO Preferred Stock into shares of Common Stock,
such holder shall surrender the certificate or certificates for such
shares of pre-IPO Preferred Stock, at the office of the transfer agent
for the pre-IPO Preferred Stock (or at the principal office of the
Corporation if the Corporation serves as its own transfer agent),
together with written notice that such holder elects to convert all or
any number of the shares of the pre-IPO Preferred Stock represented by
such certificate or certificates. Such notice shall state such
holder's name or the names of the nominees in which such holder wishes
the certificate or certificates for shares of Common Stock to be
issued. If required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly
executed by the registered holder or his or its attorney duly
authorized in writing. The date of receipt of such certificates and
notice by the transfer agent (or by the Corporation if the Corporation
serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable
after the Conversion Date, issue and deliver to such holder of pre-IPO
Preferred Stock, or to his or its nominees, a certificate or
certificates for the full number of shares of Common Stock issuable on
such conversion in accordance with the provisions hereof and cash as
provided in Section 7(b) of this Article FOURTH in respect of any
fraction of a share of Common Stock otherwise issuable upon such
conversion.
(ii) The Corporation shall at all times when pre-IPO Preferred
Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the
conversion of the pre-IPO Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of
pre-IPO Preferred Stock. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value of
the shares of Common Stock issuable upon conversion of the pre-IPO
Preferred Stock, the Corporation
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will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the Conversion
Price shall be made for any accrued and unpaid dividends on the
pre-IPO Preferred Stock surrendered for conversion or on the Common
Stock delivered upon conversion.
(iv) All shares of pre-IPO Preferred Stock which shall have
been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Conversion Date, except only
the right of the holders thereof to receive shares of Common Stock in
exchange therefor and payment of any accrued and unpaid dividends
thereon. Any shares of pre-IPO Preferred Stock so converted shall be
retired and canceled and shall not be reissued, and the Corporation
may from time to time take such appropriate action as may be necessary
to reduce the authorized shares of pre-IPO Preferred Stock
accordingly.
(v) If the conversion is in connection with an underwritten
offer of securities registered pursuant to the Securities Act of 1933,
as amended, the conversion may at the option of any holder tendering
pre-IPO Preferred Stock for conversion, be conditioned upon the
closing with the underwriter of the sale of securities pursuant to
such offering, in which event the person(s) entitled to receive the
Common Stock issuable upon such conversion of the pre-IPO Preferred
Stock shall not be deemed to have converted such pre-IPO Preferred
Stock until immediately prior to the closing of the sale of
securities.
(d) ADJUSTMENT OF SERIES 04 AND/OR SERIES 05 CONVERSION PRICE
UPON ISSUANCE OF COMMON STOCK. Except as provided in Section 7(e) or Section 9
of this Article FOURTH, if the Corporation shall, at any time, or from time to
time, after the date on which this Certificate of Incorporation is filed with
the Secretary of State of the State of Delaware (the "Applicable Issue Date")
and while there are shares of Series 04 Preferred and/or Series 05 Preferred
outstanding, issue or sell, or is, in accordance with Section 7(d)(1) through
(5) of this Article FOURTH, deemed to have issued or sold, any shares of Common
Stock for a consideration per share less than the Conversion Price of such
series of pre-IPO Preferred Stock in effect immediately prior to the time of
such issue or sale (the "Effective Conversion Price"), then, forthwith upon such
issue or sale, the Effective Conversion Price for such series of pre-IPO
Preferred Stock shall be reduced to the price determined by dividing (i) an
amount equal to the sum of (a) the number of shares of Common Stock outstanding
or deemed outstanding, determined on a fully diluted basis assuming the
exercise, conversion and exchange (as the case may be) of all outstanding shares
of Convertible Securities and Options (each as defined below) immediately prior
to such issue or sale multiplied by the then existing per share Effective
Conversion Price for such series of pre-IPO Preferred Stock and (b) the
consideration, if any, received by the Corporation upon such issue or sale, by
(ii) the total number of shares of
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Common Stock outstanding or deemed outstanding determined on a fully diluted
basis assuming the exercise, conversion and exchange (as the case may be) of all
outstanding shares of Convertible Securities and Options immediately after such
issue or sale. For the avoidance of doubt, for purposes of the calculation in
(ii) above, the number of shares of Common Stock deemed issuable upon conversion
or exchange of any series of pre-IPO Preferred Stock shall not take into account
the issuance of any additional shares of Common Stock as a result of any
adjustment to the Effective Conversion Price of any series of pre-IPO Preferred
Stock as a result of the then applicable calculation. With respect to any issue
or sale (deemed or otherwise) by the Corporation of shares of Common Stock, the
application of this Section 7(d) may be waived with respect to all shares of
Series 05 Preferred and Series 04 Preferred, upon the affirmative vote or
written consent of the holders of a majority of the shares of the aggregate of
Series 05 Preferred and Series 04 Preferred then outstanding (which vote or
consent must include the vote or consent of Vertical, so long as Vertical
together with its Affiliates continues to hold at least 50% of the aggregate
shares of Series 05 Preferred and Series 04 Preferred on an as-converted to
Common Stock basis issued to Vertical, together with its Affiliates pursuant to
the Series 05 Purchase Agreement, the Series 04 Purchase Agreements and the
Series 04 Exchange Agreement, appropriately adjusted for stock splits, stock
contributions, stock dividends and recapitalizations of the Series 05 Preferred
and Series 04 Preferred).
For purposes of this Section 7(d) only, the following Sections 7(d)(1) to
7(d)(5) shall also be applicable:
(1) ISSUANCE OF RIGHTS OR OPTIONS. In case at any time the
Corporation shall in any manner grant (whether directly or by
assumption in a merger or otherwise) any warrants or other rights to
subscribe for or to purchase or any options for the purchase of Common
Stock or any stock or security convertible into or exchangeable for
Common Stock (such warrants, rights or options being called "Options"
and such convertible or exchangeable stock or securities being called
"Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities (determined by dividing (i)
the total amount, if any, received or receivable by the Corporation as
consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the
Corporation upon the exercise of all such Options, plus, in the case
of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion
or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options) shall be less than the Effective
Conversion Price of either the Series 04 Preferred or the Series 05
Preferred, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have
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been issued for such price per share as of the date of granting of
such Options or the issuance of such Convertible Securities and
thereafter shall be deemed to be outstanding. Except as otherwise
provided in Section 7(d)(3) of this Article FOURTH no adjustment of
the Effective Conversion Price of the Series 04 Preferred or the
Series 05 Preferred shall be made upon the actual issue of such Common
Stock or of such Convertible Securities upon exercise of such Options
or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.
(2) ISSUANCE OF CONVERTIBLE SECURITIES. In case the
Corporation shall in any manner issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert any such
Convertible Securities are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (i) the total amount received or
receivable by the Corporation as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Corporation upon the
conversion or exchange thereof, by (ii) the total maximum number of
shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Effective
Conversion Price of either the Series 04 Preferred or the Series 05
Preferred, then the total maximum number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for such price per
share as of the date of the issue or sale of such Convertible
Securities and thereafter shall be deemed to be outstanding, provided
that (a) except as otherwise provided in Section 7(d)(3) of this
Article FOURTH, no adjustment of the Effective Conversion Price of the
Series 04 Preferred or the Series 05 Preferred shall be made upon the
actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities and (b) if any such issue or sale of such
Convertible Securities is made upon exercise of any Options to
purchase any such Convertible Securities for which adjustments of the
Effective Conversion Price of either the Series 04 Preferred or the
Series 05 Preferred has been or is to be made pursuant to other
provisions of this Section 7(d), no further adjustment of such
Effective Conversion Price shall be made by reason of such issue or
sale.
(3) CHANGE IN OPTION PRICE OR CONVERSION RATE. Upon the
happening of any of the following events, namely, if the purchase
price provided for in any Option referred to in Section 7(d)(1) of
this Article FOURTH, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred
to in Section 7(d)(1) or 7(d)(2) of this Article FOURTH, or the rate
at which Convertible Securities referred to in Section 7(d)(1) or
7(d)(2) of this Article FOURTH are convertible into or exchangeable
for Common Stock shall change at any time (including, but not limited
to, changes under or by reason of provisions designed to protect
against dilution), the Effective Conversion Price of the Series 04
Preferred and the Series 05 Preferred
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shall forthwith be readjusted to the Conversion Price of such series
which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold. On the
expiration or termination of any Option or any right to convert or
exchange any Convertible Security, the Effective Conversion Price of
the Series 04 Preferred and the Series 05 Preferred shall be increased
to the Conversion Price of such series which would have been in effect
at the time of such expiration or termination had such Option or
Convertible Security, to the extent outstanding as of such termination
or expiration, never been issued.
(4) CONSIDERATION FOR STOCK. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor, without deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in connection
therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Corporation shall be deemed to be the fair value of such consideration
as determined in good faith by the Board of Directors of the
Corporation, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the
Corporation in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities of
the Corporation, together comprising one integral transaction in which
no specific consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued for such
consideration as determined in good faith by the Board of Directors of
the Corporation.
(5) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held
by or for the account of the Corporation, and the disposition of any
such shares shall be considered an issue or sale of Common Stock for
the purpose of this Section 7(d).
(e) CERTAIN ISSUES OF COMMON STOCK EXCEPTED. Anything herein
to the contrary notwithstanding, the Corporation shall not be required to make
any adjustment to the Effective Conversion Price of the Series 04 Preferred or
the Series 05 Preferred upon any issuance of (A) shares of capital stock of the
Corporation (including securities convertible into or exercisable for capital
stock of the Corporation) under any stock or option plan approved by a majority
of the Corporation's Board of Directors, (B) Common Stock upon conversion of any
shares of pre-IPO Preferred Stock of the Corporation outstanding on the date
hereof or issued any date hereafter, (C) shares of capital stock of the
Corporation (including securities convertible into or exchangeable for capital
stock of the Corporation) issued in connection with the acquisition of another
corporation by the Corporation by merger, purchase of substantially all assets
or other reorganization whereby the Corporation owns, upon consummation of such
acquisition, greater than fifty percent (50%) of the voting power to elect the
directors of such
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corporation, (D) shares of capital stock of the Corporation (including
securities convertible into or exercisable for capital stock of the Corporation)
to financial institutions and leasing companies in connection with borrowing or
lease financing arrangements of the Corporation, or to landlords or service
companies, (E) capital stock of the Corporation (including securities
convertible into or exercisable for capital stock of the Corporation) to acquire
technology or licenses, (F) shares of capital stock of the Corporation
(including securities convertible into or exchangeable for capital stock of the
Corporation) issued pursuant to Section 3 of the Series 04 Purchase Agreements,
(G) shares of capital stock of the Corporation (including securities convertible
into or exchangeable for capital stock of the Corporation) issued pursuant to
Section 3 of the Series 04 Exchange Agreement, (H) shares of capital stock of
the Corporation (including securities convertible into or exchangeable for
capital stock of the Corporation) issued pursuant to Section 3 of the Series 05
Purchase Agreement; (I) shares of capital stock of the Corporation issued
pursuant to the provisions of Section 9 of this Article FOURTH; (J) securities
issued upon exercise, conversion or exchange of any of the securities described
in (A)-(I) above (and securities issued upon exercise, conversion or exchange of
any of those securities); and (K) with respect to the Series 05 Preferred only,
any shares of capital stock of the Corporation (including securities convertible
into or exchangeable for capital stock of the Corporation) issued pursuant to
Section 1 of the Series 05 Purchase Agreement after the date hereof (and
securities issued upon the conversion or exchange of any of those securities).
(f) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall at any time or from time to time after the Applicable Issue
Date effect a subdivision of the outstanding Common Stock, the Conversion Price
then in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Applicable Issue Date for the pre-IPO Preferred Stock combine the outstanding
shares of Common Stock, the Conversion Price then in effect immediately before
the combination shall be proportionately increased. For avoidance of doubt,
the Conversion Price in effect immediately prior to the Reverse Stock Split
shall be proportionally adjusted in order to give effect to such Reverse
Stock Split. Any adjustment under this paragraph shall become effective
at the close of business on the date the subdivision or combination
becomes effective.
(g) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In
the event the Corporation at any time, or from time to time after the Applicable
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
Conversion Price for such pre-IPO Preferred Stock then in effect shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the Conversion Price for such pre-IPO Preferred Stock then in effect
by a fraction:
(1) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date,
and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the
time of such
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issuance or the close of business on such record date plus the number
of shares of Common Stock issuable in payment of such dividend or
distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price for such pre-IPO Preferred Stock shall be
re-computed accordingly as of the close of business on such record date and
thereafter the Conversion Price for such pre-IPO Preferred Stock shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(h) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after the Applicable
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of such
pre-IPO Preferred Stock shall receive upon conversion thereof in addition to the
number of shares of Common Stock receivable thereupon, the amount of securities
of the Corporation that they would have received had their pre-IPO Preferred
Stock been converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and including the
conversion date, retained such securities receivable by them as aforesaid during
such period giving application to all adjustments called for during such period,
under this paragraph with respect to the rights of the holders of the pre-IPO
Preferred Stock.
(i) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE, OR
SUBSTITUTION. If, any time after the Applicable Issue Date, the Common Stock
issuable upon the conversion of the pre-IPO Preferred Stock shall be changed
into the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of each such share of pre-IPO Preferred
Stock shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
shares of Common Stock into which such shares of pre-IPO Preferred Stock might
have been converted immediately prior to such reorganization, reclassification,
or change, all subject to further adjustment as provided herein.
(j) NO IMPAIRMENT. The Corporation will not, by amendment of
this Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
pre-IPO Preferred Stock against impairment.
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(k) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this Section
7, the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
pre-IPO 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 pre-IPO Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of pre-IPO Preferred Stock.
(l) NOTICE OF RECORD DATE. In the event:
(i) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or of the sale of all or
substantially all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the pre-IPO Preferred Stock, and shall cause to
be mailed to the holders of the pre-IPO Preferred Stock at their last addresses
as shown on the records of the Corporation or such transfer agent, at least ten
days prior to the record date specified in (A) below or twenty days before the
date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution or winding up.
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8. MANDATORY CONVERSION.
(a) All shares of pre-IPO Preferred Stock then outstanding
shall convert into shares of Common Stock at the then effective conversion rate
pursuant to Section 7 of this Article FOURTH, at the closing of the sale of
shares of Common Stock in a fully underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
(in the event of which offering, the person(s) entitled to receive Common Stock
issuable upon such conversion of the pre-IPO Preferred Stock shall not be deemed
to have converted until immediately prior to the closing of such offering).
(b) All holders of record of shares of pre-IPO Preferred
Stock will be given written notice of the date fixed and the place designated
for mandatory conversion of all such shares of pre-IPO Preferred Stock pursuant
to this Section 8. Such notice will be sent by first class or registered mail,
postage prepaid, to each record holder of pre-IPO Preferred Stock at such
holder's address last shown on the records of the transfer agent for the pre-IPO
Preferred Stock (or the records of the Corporation, if it serves as its own
transfer agent). On or before the date fixed for conversion, each holder of
shares of pre-IPO Preferred Stock shall surrender his or its certificate or
certificates for all such shares to the Corporation at the place designated in
such notice, and shall thereafter receive certificates for the number of shares
of Common Stock to which such holder is entitled pursuant to this Section 8. On
the date fixed for conversion, all rights with respect to the pre-IPO Preferred
Stock so converted, including the rights, if any, to receive notices and vote,
will terminate, except for the rights of the holders thereof, upon surrender of
their certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such pre-IPO Preferred Stock has
been converted, and payment of any accrued but unpaid dividends thereon. If so
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly authorized in writing. As soon as
practicable after the date of such mandatory conversion and the surrender of the
certificate or certificates for pre-IPO Preferred Stock, the Corporation shall
cause to be issued and delivered to each holder, or to his or its nominees, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Section 7(b) of this Article FOURTH in respect of any fraction of a
share of Common Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of pre-IPO Preferred
Stock which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the date such certificates are so
required to be surrendered, be deemed to have been retired and canceled and the
shares of pre-IPO Preferred Stock represented thereby converted into Common
Stock for all purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates on or prior to such date. The Corporation
may thereafter take such appropriate action as may be necessary to reduce the
authorized shares of pre-IPO Preferred Stock accordingly.
9. PAY TO PLAY PROVISION. In the event that the Corporation issues any
securities which would result in the reduction (whether or not such reduction is
waived as provided in Section 7(d)) of (i) the Effective Conversion Price of the
Series 04 Preferred (a "Series 04
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Dilutive Equity Financing"), and/or (ii) the Effective Conversion Price of the
Series 05 Preferred (a "Series 05 Dilutive Equity Financing" and, together with
the Series 04 Dilutive Equity Financing, a "Dilutive Equity Financing"), the
Corporation shall, after the initial closing of such Dilutive Equity Financing,
provide notice to each holder of (x) Series 04 Preferred, in the event of a
Series 04 Dilutive Equity Financing, and/or (y) Series 05 Preferred, in the
event of a Series 05 Dilutive Equity Financing, that did not purchase or agree
to purchase (in the case of a Dilutive Issuance structured in a manner in which
an investment is made in the Corporation in more than one tranche) its
Participation Amount (as defined below) of the securities issued in such
Dilutive Equity Financing (the "Pay to Play Notice"). If such holder does not
purchase or agree to purchase, as the case may be, its Participation Amount of
the securities issued in such Dilutive Equity Financing, by the close of
business on the 15th day after delivery of the Pay to Play Notice, then, as of
such date, such holder shall be deemed to be a "Non-Participating Holder." Upon
being deemed to be a Non-Participating Holder, all of the shares of Series 04
Preferred and/or Series 05 Preferred, as the case may be, owned by the
Non-Participating Holder shall automatically and without further action on the
part of such holder be converted in accordance with the remaining provisions of
this Section 9, with such conversion to be effective as of the date of the
initial closing of the applicable Dilutive Equity Financing. Any notice to be
delivered by the Corporation in accordance with this Section 9 will be sent by
overnight courier or first class or registered mail, postage prepaid, to a
holder at such holder's address last shown on the records of the Corporation's
transfer agent (or the records of the Corporation, if it serves as its own
transfer agent), and shall be deemed to be delivered one day after being sent by
courier or two days after being sent by mail.
(a) CONVERSION OF SERIES 04 PREFERRED. In connection with the
first Series 04 Dilutive Equity Financing to occur after the Applicable Issue
Date, (the "First Series 04 Dilutive Equity Financing"), each share of Series 04
Preferred held by a Non-Participating Holder shall be converted into one share
of Series 04-1 Preferred. In connection with any Series 04 Dilutive Equity
Financing to occur after the First Series 04 Dilutive Equity Financing (a
"Subsequent Series 04 Dilutive Equity Financing"), each share of Series 04
Preferred held by a Non-Participating Holder shall be converted into one share
of a newly created series of pre-IPO Preferred Stock (having such number of
shares as the Board of Directors may by resolution fix), which series shall be
identical in all respects to the Series 04-1 Preferred, except that the
Conversion Price of the newly created series of pre-IPO Preferred Stock shall be
equal to the Effective Conversion Price of the Series 04 Preferred immediately
prior to the applicable Subsequent Series 04 Dilutive Equity Financing and shall
be subject to no further adjustments similar to those adjustments set forth in
Section 7(d) of this Article FOURTH.
(b) CONVERSION OF SERIES 05 PREFERRED. In connection with the
first Series 05 Dilutive Equity Financing to occur after the Applicable Issue
Date, ( the "First Series 05 Dilutive Equity Financing"), each share of Series
05 Preferred held by a Non-Participating Holder shall be converted into one
share of Series 05-1 Preferred. In connection with any Series 05 Dilutive Equity
Financing to occur after the First Series 05 Dilutive Equity Financing (a
"Subsequent Series 05 Dilutive Equity Financing" and, together with any
Subsequent Series 04 Dilutive Equity Financing, sometimes referred to herein as
a "Subsequent Dilutive Equity Financing"), each share of Series 05 Preferred
held by a Non-Participating Holder shall be converted into one share of a newly
created series of pre-IPO Preferred Stock (having such number of shares as the
Board of Directors may by resolution fix), which series shall be identical
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in all respects to the Series 05-1 Preferred, except that the Conversion Price
of the newly created series of pre-IPO Preferred Stock shall be equal to the
Effective Conversion Price of the Series 05 Preferred immediately prior to the
applicable Subsequent Series 05 Dilutive Equity Financing and shall be subject
to no further adjustments similar to those adjustments set forth in Section 7(d)
of this Article FOURTH.
(c) Upon the occurrence of a Subsequent Dilutive Equity
Financing, the Board of Directors shall take all necessary actions to designate
each new series of pre-IPO Preferred Stock required to be designated in
accordance with Sections 9(a) and 9(b) of this Article FOURTH. Upon the
conversion of shares of Series 04 Preferred or Series 05 Preferred in accordance
with this Section 9, the shares of Series 04 Preferred and/or Series 05
Preferred so converted shall be cancelled and not subject to reissuance. As used
in this Section 9, the term Participation Amount shall mean the amount of
securities issued in the applicable Dilutive Equity Financing that such holder
of Series 04 Preferred and/or Series 05 Preferred has the right to purchase
pursuant to Article III of the Fifth Amended and Restated Stockholders'
Agreement by and among the Corporation and certain stockholders of the
Corporation dated as of January 19, 2006, as the same may be amended from time
to time, and as such Participation Amount may be waived or amended in accordance
with the terms and conditions of such agreement; provided that in the event that
Vertical purchases less than 100% of its Participation Amount of the securities
issued in the applicable Dilutive Equity Financing, the Participation Amount of
each holder of Series 04 Preferred and/or Series 05 Preferred (including
Vertical) shall be reduced to such percentage of such holder's Participation
Amount as is equal to the percentage of Vertical's Participation Amount that
Vertical purchases in the offering. In determining any such holder's
Participation Amount, the holder shall be deemed to have owned immediately prior
to such Dilutive Equity Financing all equity securities of the Corporation
(including warrants, but excluding any outstanding options issued under any
stock or option plan approved by the Company's Board of Directors) then owned in
the aggregate by such holder and all persons, firms or entities that control,
are controlled by, or are under common control with, such holder (hereinafter,
"Affiliate") and to have purchased in such Dilutive Equity Financing all
securities purchased in the aggregate in such Dilutive Equity Financing by such
holder and all of its Affiliates.
(d) The holder of any shares of Series 04 Preferred and/or
Series 05 Preferred converted pursuant to Sections 9(a) or 9(b) of this Article
FOURTH shall deliver to the Corporation during regular business hours at the
office of the transfer agent for the pre-IPO Preferred Stock (or at the
principal office of the Corporation if the Corporation serves as its own
transfer agent), the certificate or certificates for the shares so converted,
duly endorsed or assigned in blank to the Corporation. As promptly as
practicable thereafter, the Corporation shall issue and deliver to such holder
or its nominees, at the place designated by such holder, a certificate or
certificates for the number of full shares of (i) Series 04-1 Preferred, if such
conversion is pursuant to the First Series 04 Dilutive Equity Financing, (ii)
Series 05-1 Preferred, if such conversion is pursuant to the First Series 05
Dilutive Equity Financing, or (iii) the new series of pre-IPO Preferred Stock,
if such conversion is pursuant to a Subsequent Dilutive Equity Financing, to
which such holder is entitled. The stockholder in whose name such certificates
are to be issued shall be deemed to have become a holder of record thereof on
the date of the initial closing of the applicable Dilutive Equity Financing,
unless the transfer books of the Corporation
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are closed on that date, in which event such stockholder shall be deemed to have
become a holder thereof on the next succeeding date on which the transfer books
are open.
(f) No Non-Participating Holder may convert any shares of
Series 04 Preferred or Series 05 Preferred into Common Stock after the initial
closing of any Dilutive Equity Financing.
C. UNDESIGNATED PREFERRED STOCK
The Board of Directors or any authorized committee thereof is
expressly authorized, to the fullest extent permitted by law, to provide for the
issuance of the shares of Undesignated Preferred Stock in one or more series of
such stock, and by filing a certificate pursuant to applicable law of the State
of Delaware, to establish or change from time to time the number of shares of
each such series, and to fix the designations, powers, including voting powers,
full or limited, or no voting powers, preferences and the relative,
participating, optional or other special rights of the shares of each series and
any qualifications, limitations and restrictions thereof.
ARTICLE V
STOCKHOLDER ACTION
1. ACTION WITHOUT MEETING. Except as otherwise provided herein, any
action required or permitted to be taken by the stockholders of the Corporation
at any annual or special meeting of stockholders of the Corporation must be
effected at a duly called annual or special meeting of stockholders and may not
be taken or effected by a written consent of stockholders in lieu thereof.
2. SPECIAL MEETINGS. Except as otherwise required by statute and subject
to the rights, if any, of the holders of any series of Undesignated Preferred
Stock, special meetings of the stockholders of the Corporation may be called
only by the Board of Directors acting pursuant to a resolution approved by the
affirmative vote of a majority of the Directors then in office. Only those
matters set forth in the notice of the special meeting may be considered or
acted upon at a special meeting of stockholders of the Corporation.
ARTICLE VI
DIRECTORS
1. GENERAL. The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors except as otherwise provided
herein or required by law.
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2. ELECTION OF DIRECTORS. Election of Directors need not be by written
ballot unless the By-laws of the Corporation (the "By-laws") shall so provide.
3. NUMBER OF DIRECTORS; TERM OF OFFICE. The number of Directors of the
Corporation shall be fixed solely and exclusively by resolution duly adopted
from time to time by the Board of Directors. The Directors, other than those who
may be elected by the holders of any series or class of Preferred Stock, shall
be classified, with respect to the term for which they severally hold office,
into three classes, as nearly equal in number as reasonably possible. The
initial Class I Directors of the Corporation shall be Edward M. Muller and Simon
F. Williams, Ph.D.; the initial Class II Directors of the Corporation shall be
Jack W. Lasersohn, Jay Kouba, Ph.D., and Oliver P. Peoples, Ph.D.; and the
initial Class III Directors of the Corporation shall be Edward M. Giles, Anthony
J. Sinskey, Sc.D., and James J. Barber, Ph.D. The initial Class I Directors
shall serve for a term expiring at the annual meeting of stockholders to be held
in 2007, the initial Class II Directors shall serve for a term expiring at the
annual meeting of stockholders to be held in 2008, and the initial Class III
Directors shall serve for a term expiring at the annual meeting of stockholders
to be held in 2009. At each annual meeting of stockholders, Directors elected to
succeed those Directors whose terms expire shall be elected for a term of office
to expire at the third succeeding annual meeting of stockholders after their
election. Notwithstanding the foregoing, the Directors elected to each class
shall hold office until their successors are duly elected and qualified or until
their earlier resignation or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate, the holders of any one or more series or class
of Preferred Stock shall have the right, voting separately as a series or
together with holders of other such series, to elect Directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate and any certificate of designations applicable
thereto.
4. VACANCIES. Subject to the rights, if any, of the holders of any series
or class of Preferred Stock to elect Directors and to fill vacancies in the
Board of Directors relating thereto, any and all vacancies in the Board of
Directors, however occurring, including, without limitation, by reason of an
increase in size of the Board of Directors, or the death, resignation,
disqualification or removal of a Director, shall be filled solely and
exclusively by the affirmative vote of a majority of the remaining Directors
then in office, even if less than a quorum of the Board of Directors, and not by
the stockholders. Any Director appointed in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
Directors in which the new directorship was created or the vacancy occurred and
until such Director's successor shall have been duly elected and qualified or
until his or her earlier resignation or removal. Subject to the rights, if any,
of the holders of any series or class of Preferred Stock to elect Directors,
when the number of Directors is increased or decreased, the Board of Directors
shall, subject to Article VI.3 hereof, determine the class or classes to which
the increased or decreased number of Directors shall be apportioned; PROVIDED,
HOWEVER, that no decrease in the number of Directors shall shorten the term of
any incumbent Director.
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5. REMOVAL. Subject to the rights, if any, of any series or class of
Preferred Stock to elect Directors and to remove any Director whom the holders
of any such stock have the right to elect, any Director (including persons
elected by Directors to fill vacancies in the Board of Directors) may be removed
from office (i) only with cause and (ii) only by the affirmative vote of the
holders of 75% or more of the shares then entitled to vote at an election of
Directors. At least forty-five (45) days prior to any meeting of stockholders at
which it is proposed that any Director be removed from office, written notice of
such proposed removal and the alleged grounds thereof shall be sent to the
Director whose removal will be considered at the meeting.
ARTICLE VII
LIMITATION OF LIABILITY
A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (a) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the DGCL or (d) for any transaction
from which the Director derived an improper personal benefit. If the DGCL is
amended after the effective date of this Certificate to authorize corporate
action further eliminating or limiting the personal liability of Directors, then
the liability of a Director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so amended.
Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.
ARTICLE VIII
AMENDMENT OF BY-LAWS
1. AMENDMENT BY DIRECTORS. Except as otherwise provided by law, the
By-laws of the Corporation may be amended or repealed by the Board of Directors
by the affirmative vote of a majority of the Directors then in office.
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2. AMENDMENT BY STOCKHOLDERS. The By-laws of the Corporation may be
amended or repealed at any annual meeting of stockholders, or special meeting of
stockholders called for such purpose as provided in the By-laws, by the
affirmative vote of at least 75% of the outstanding shares entitled to vote on
such amendment or repeal, voting together as a single class; PROVIDED, HOWEVER,
that if the Board of Directors recommends that stockholders approve such
amendment or repeal at such meeting of stockholders, such amendment or repeal
shall only require the affirmative vote of the majority of the outstanding
shares entitled to vote on such amendment or repeal, voting together as a single
class.
ARTICLE IX
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal this Certificate in
the manner now or hereafter prescribed by statute and this Certificate, and all
rights conferred upon stockholders herein are granted subject to this
reservation. Whenever any vote of the holders of voting stock is required to
amend or repeal any provision of this Certificate, and in addition to any other
vote of holders of voting stock that is required by this Certificate or by law,
such amendment or repeal shall require the affirmative vote of the majority of
the outstanding shares entitled to vote on such amendment or repeal, and the
affirmative vote of the majority of the outstanding shares of each class
entitled to vote thereon as a class, at a duly constituted meeting of
stockholders called expressly for such purpose; PROVIDED, HOWEVER, that the
affirmative vote of not less than 75% of the outstanding shares entitled to vote
on such amendment or repeal, and the affirmative vote of not less than 75% of
the outstanding shares of each class entitled to vote thereon as a class, shall
be required to amend or repeal any provision of Article V, Article VI, Article
VII, Article VIII or Article IX of this Certificate.
[End of Text]
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THIS AMENDED AND RESTATED CERTIFICATE OF INCORPORATION is executed as of
this ____ day of __________, 2006.
METABOLIX, INC.
------------------------------------------
By: James Barber
Its: Chief Executive Officer and President
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