Exhibit 3.2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SCRIPTGEN PHARMACEUTICALS, INC.
SCRIPTGEN PHARMACEUTICALS, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY AS FOLLOWS:
1. The name of the Corporation is SCRIPTGEN Pharmaceuticals, Inc. The
corporation was originally incorporated under the name ScripTech
Pharmaceuticals, Inc. and the original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of the State of Delaware on
September 17, 1992.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, this Amended and Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the Certificate of
Incorporation of the Corporation as heretofore supplemented or amended.
3. The text of the Amended and Restated Certificate of Incorporation as
heretofore amended or supplemented is hereby restated and further amended to
read in its entirety as follows:
ARTICLE FIRST: The name of the corporation is Scriptgen Pharmaceuticals,
Inc. (the "Corporation").
ARTICLE SECOND: The address of the registered office of the Corporation in
the State of Delaware shall be 1209 Orange Street, Wilmington, County of New
Castle, Delaware 19801 and the name of its registered agent at such address
shall be The Corporation Trust Company.
ARTICLE THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE FOURTH: The total number of shares which the Corporation shall
have authority to issue is (i) Thirty-Five Million (35,000,000) shares of Common
Stock, with a par value of one cent ($.01) per share (the "Common Stock"), and
(ii) Twenty- Seven Million Two Hundred Fifty Thousand (27,250,000) shares of
Preferred Stock, with a par value of one cent ($.01) per share (the "Preferred
Stock"). The Preferred Stock may be issued from time to time in one or more
series. All shares of any one series of Preferred Stock shall be identical in
all respects. Originally, Five Million Seven Hundred Fifty Thousand (5,750,000)
shares of Preferred Stock shall be designated as Series D Preferred Stock (the
"Series D Preferred Stock"), Five Million One Hundred Thousand (5,100,000)
shares of Preferred Stock shall be designated as Series C Preferred Stock (the
"Series C Preferred Stock"), Nine Million Seven Hundred Thousand (9,700,000)
shares of Preferred Stock shall be designated as Series B Preferred Stock (the
"Series B Preferred Stock") and Six Million Seven Hundred
Thousand (6,700,000) shares of Preferred Stock shall be designated as Series A
Preferred Stock (the "Series A Preferred Stock"). The rights, preferences,
privileges and restrictions granted to and imposed upon the Series D Preferred
Stock, the Series C Preferred Stock, the Series B Preferred Stock, the Series A
Preferred Stock and the Common Stock are set forth below in this ARTICLE FOURTH.
1. DIVIDENDS.
1.1. DIVIDENDS ON SERIES D PREFERRED STOCK. The holders of the Series
D Preferred Stock shall be entitled to receive dividends when, as and if
declared by the Board of Directors of the Corporation (the "Board of Directors")
out of funds legally available therefor.
1.2. DIVIDENDS ON SERIES C PREFERRED STOCK. The holders of the Series C
Preferred Stock shall be entitled to receive dividends when, as and if declared
by the Board of Directors of the Corporation (the "Board of Directors") out of
funds legally available therefor; PROVIDED, HOWEVER, that no dividend shall be
declared or paid on the Series C Preferred Stock unless the Corporation shall
simultaneously declare and pay an equal dividend on each outstanding share of
Series D Preferred Stock (as calculated by assuming the conversion of all shares
of Series D Preferred Stock and Series C Preferred Stock into shares of Common
Stock pursuant to the provisions of Section 4 of this ARTICLE FOURTH immediately
prior to the payment of such dividend).
1.3. DIVIDENDS ON SERIES B PREFERRED STOCK. The holders of the Series B
Preferred Stock shall be entitled to receive dividends when, as and if declared
by the Board of Directors out of funds legally available therefor; PROVIDED,
HOWEVER, that no dividend shall be declared or paid on the Series B Preferred
Stock unless the Corporation shall simultaneously declare and pay an equal
dividend on each outstanding share of Series D Preferred Stock and each
outstanding share of Series C Preferred Stock (as calculated by assuming the
conversion of all shares of Series D Preferred Stock, Series C Preferred Stock
and Series B Preferred Stock into shares of Common Stock pursuant to the
provisions of Section 4 of this ARTICLE FOURTH immediately prior to the payment
of such dividend).
1.4. DIVIDENDS ON SERIES A PREFERRED STOCK. The holders of the Series A
Preferred Stock shall be entitled to receive dividends when, as and if declared
by the Board of Directors out of funds legally available therefor; PROVIDED,
HOWEVER, that no dividend shall be declared or paid on the Series A Preferred
Stock unless the Corporation shall simultaneously declare and pay an equal
dividend on each outstanding share of Series D Preferred Stock, each outstanding
share of Series C Preferred Stock and each outstanding share of Series B
Preferred Stock (as calculated by assuming the conversion of all shares of
Series D Preferred Stock, Series C Preferred Stock, Series B Preferred Stock and
Series A Preferred Stock into shares of Common Stock pursuant to the provisions
of Section 4 of this ARTICLE FOURTH immediately prior to the payment of such
dividend).
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1.5. DIVIDENDS ON COMMON STOCK. The holders of the Common Stock shall be
entitled to receive dividends when, as and if declared by the Board of Directors
out of funds legally available therefor; PROVIDED, HOWEVER, that no dividend
shall be declared or paid on the Common Stock unless the Corporation shall
simultaneously declare and pay an equal dividend on each outstanding share of
Series D Preferred Stock, each outstanding share of Series D Preferred Stock,
Series C Preferred Stock, each outstanding share of Series B Preferred Stock and
each outstanding share of Series A Preferred Stock (as calculated by assuming
the conversion of all shares of Series D Preferred Stock, Series C Preferred
Stock, Series B Preferred Stock and Series A Preferred Stock into shares of
Common Stock pursuant to the provisions of Section 4 of this ARTICLE FOURTH
immediately prior to the payment of such dividend).
2. LIQUIDATION, REORGANIZATION AND DISTRIBUTIONS.
2.1. LIQUIDATION, DISSOLUTION AND WINDING-UP. In the event of any
liquidation, dissolution or winding up of the Corporation, either voluntary or
involuntary, distributions to the stockholders of the Corporation shall be made
in the following manner:
(a) The holders of the Series D Preferred Stock shall receive, prior
and in preference to any distribution of any of the assets of the
Corporation to the holders of the Common Stock, an amount equal to $3.50
per share of Series D Preferred Stock (which amounts shall be subject to
equitable adjustment as determined in good faith by the Board of Directors
whenever there shall occur a stock split, combination, reclassification or
other similar event involving the Series D Preferred Stock) held by each of
them, plus an amount equal to all declared but unpaid dividends on such
share of Series D Preferred Stock, if any, to and including the date full
payment of such preferential amount shall be tendered with respect to such
share of Series D Preferred Stock to the holder of such share of Series D
Preferred Stock, in connection with such liquidation, dissolution or
winding up (the "Series D Preferential Amount").
(b) The holders of the Series C Preferred Stock shall receive, prior
and in preference to any distribution of any of the assets of the
Corporation to the holders of the Common Stock, an amount equal to $1.80
per share of Series C Preferred Stock (which amounts shall be subject to
equitable adjustment as determined in good faith by the Board of Directors
whenever there shall occur a stock split, combination, reclassification or
other similar event involving the Series C Preferred Stock) held by each of
them, plus an amount equal to all declared but unpaid dividends on such
share of Series C Preferred Stock, if any, to and including the date full
payment of such preferential amount shall be tendered with respect to such
share of Series C Preferred Stock to the holder of such share of Series C
Preferred Stock, in connection with such liquidation, dissolution or
winding up (the "Series C Preferential Amount").
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(c) The holders of the Series B Preferred Stock shall receive, prior
and in preference to any distribution of any of the assets of the
Corporation to the holders of the Common Stock, an amount equal to $1.00
per share of Series B Preferred Stock (which amounts shall be subject to
equitable adjustment as determined in good faith by the Board of Directors
whenever there shall occur a stock split, combination, reclassification or
other similar event involving the Series B Preferred Stock) held by each of
them, plus an amount equal to all declared but unpaid dividends on such
share of Series B Preferred Stock, if any, to and including the date full
payment of such preferential amount shall be tendered with respect to such
share of Series B Preferred Stock to the holder of such share of Series B
Preferred Stock, in connection with such liquidation, dissolution or
winding up (the "Series B Preferential Amount").
(d) The holders of the Series A Preferred Stock shall receive, prior
and in preference to any distribution of any of the assets of the
Corporation to the holders of the Common Stock, an amount equal to $1.00
per share of Series A Preferred Stock (which amounts shall be subject to
equitable adjustment as determined in good faith by the Board of Directors
whenever there shall occur a stock split, combination, reclassification or
other similar event involving the Series A Preferred Stock) held by each of
them, plus an amount equal to all declared but unpaid dividends on such
share of Series A Preferred Stock, if any, to and including the date full
payment of such preferential amount shall be tendered with respect to such
share of Series A Preferred Stock to the holder of such share of Series A
Preferred Stock, in connection with such liquidation, dissolution or
winding up (the "Series A Preferential Amount").
(e) If the assets of the Corporation legally available for
distribution to the holders of the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred
Stock shall be insufficient to permit the payment in full to all such
holders of the full aforesaid preferential amounts, then the entire assets
of the Corporation legally available for such distribution shall be
distributed ratably among such holders in accordance with the aggregate
liquidation preference of the shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock held
by each of them.
(f) If payment has been made to the holders of the Series D Preferred
Stock, the holders of the Series C Preferred Stock, the holders of the
Series B Preferred Stock and the holders of the Series A Preferred Stock of
the full amount to which they shall be entitled pursuant to Sections
2.1(a), (b), (c) and (d) of this ARTICLE FOURTH, the holders of the Series
A, B, C and D Preferred Stock (each share of which shall be treated for
purposes of this Section 2.1(f) as the number of shares of Common Stock
into which such share could then be converted pursuant to Section 4 of this
ARTICLE FOURTH) and the holders of the Common Stock shall then be entitled
to share ratably in the
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Corporation's remaining assets, based on the number of shares of Common
Stock held (or deemed to be held) by each of them.
2.2. TREATMENT OF REORGANIZATIONS. In the event of any Reorganization (as
defined below) of the Corporation, each holder of the Corporation's capital
stock shall be entitled to receive for his, her or its shares of such capital
stock the following:
(a) The holders of the Series D Preferred Stock shall receive, prior
and in preference to any payment for any share of Common Stock, the Series
D Preferential Amount, the holders of the Series C Preferred Stock shall
receive, prior and in preference to any payment for any share of Common
Stock, the Series C Preferential Amount, the holders of the Series B
Preferred Stock shall receive, prior and in preference to any payment for
any share of Common Stock, the Series B Preferential Amount and the holders
of the Series A Preferred Stock shall receive, prior and in preference to
any payment for any share of Common Stock, the Series A Preferential
Amount. If the aggregate amount to be paid pursuant to this Section 2.2(a)
of this ARTICLE FOURTH shall be insufficient to permit the payment in full
to all such holders of the full aforesaid preferential amounts, then the
entire amount to be paid pursuant to the Reorganization shall be
distributed ratably among such holders in accordance with the aggregate
preferential amounts for the shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock held
by each of them.
(b) If payment has been made to the holders of the Series D Preferred
Stock, the holders of the Series C Preferred Stock, the holders of the
Series B Preferred Stock and the holders of the Series A Preferred Stock of
the full amount to which they shall be entitled pursuant to Section 2.2(a)
of this ARTICLE FOURTH, the holders of the Common Stock shall then be
entitled to share ratably in the remaining amount to be paid pursuant to
the Reorganization, based on the number of shares of Common Stock held by
each of them, up to an aggregate amount equal to $1,800,000. If such
remaining amount to be paid pursuant to the Reorganization shall be
insufficient to permit the payment in full to all such holders of the full
aforesaid amount of $1,800,000, the entire remaining amount to be paid
pursuant to the Reorganization shall be distributed ratably among such
holders.
(c) If payment has been made to the holders of the Series D Preferred
Stock, the holders of the Series C Preferred Stock, the holders of the
Series B Preferred Stock and the holders of the Series A Preferred Stock of
the full amount to which they shall be entitled pursuant to Section 2.2(a)
of this ARTICLE FOURTH, and if payment has been made to the holders of the
Common Stock of the full amount to which they shall be entitled pursuant to
Section 2.2(b) of this ARTICLE FOURTH, the holders of the Series A, B, C
and D Preferred Stock (each share of which shall be treated for purposes of
this Section 2.2(c) as the number of shares of Common Stock into which such
share
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could then be converted pursuant to Section 4 of this ARTICLE FOURTH) and
the holders of the Common Stock shall then be entitled to share ratably in
the final remaining amount to be paid pursuant to the Reorganization, based
on the number of shares of Common Stock held (or deemed to be held) by each
of them.
(d) For purposes of this Section 2.2, "Reorganization" shall mean any
merger or consolidation of the Corporation into or with any other
corporation or entity or any sale, lease or exchange of all or
substantially all of the assets of the Corporation, unless the stockholders
of the Corporation immediately prior thereto shall, immediately thereafter,
hold as a group the right to cast not less than 51% of the votes of all
holders of voting securities of the resulting or surviving corporation or
entity on any matter on which any such holders of voting securities shall
be entitled to vote, in which case, such event shall not be deemed to be a
Reorganization for the purposes of this Section 2.2.
2.3. DISTRIBUTION OTHER THAN CASH. Whenever the distribution provided for
in this Section 2 shall be payable in property other than cash, the value of
such distribution shall be the fair market value of such property as determined
in good faith by the Board of Directors.
3. VOTING.
3.1.GENERAL. Except as otherwise expressly provided in Section 3.2 of this
ARTICLE FOURTH, or as required by law, (a) each holder of Common Stock shall be
entitled to vote on all matters and shall be entitled to one vote for each share
of Common Stock standing in such holder's name on the books of the Corporation,
(b) each holder of Series D Preferred Stock, each holder of Series C Preferred
Stock, each holder of Series B Preferred Stock and each holder of Series A
Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the number of whole shares of Common Stock into
which such holder's shares of Preferred Stock could then be converted as of the
record date for the determination of stockholders entitled to vote on such
matters (or, if no record date is established, at the date such vote is taken or
written consent solicited) and pursuant to Section 4 of this ARTICLE FOURTH.
Except as otherwise expressly provided herein, or as required by law, the
holders of shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock shall vote together
as a single class on all matters.
3.2. CERTAIN TRANSACTIONS.
(a) The Corporation shall not, without the written consent or affirmative
vote of the holders of at least 75% of the then outstanding shares of Series C
Preferred Stock, given in writing or by vote at a meeting, consenting or voting
(as the case may be) separately as a class:
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(i) Amend, alter or repeal the preferences, special rights or
other powers of the Series C Preferred Stock;
(ii) Amend, alter or repeal the preferences, special rights or
other powers of the Series A Preferred Stock or the Series B Preferred Stock, or
otherwise amend, alter or repeal any provision of the Amended and Restated
Certificate of Incorporation or the Corporation's By-Laws, in either such case
so as to affect adversely the Series C Preferred Stock; and
(iii) Reclassify any shares of Common Stock into shares having
preference to or special rights and other powers superior to the Series C
Preferred Stock.
(b) The Corporation shall not, without the written consent or affirmative
vote of the holders of at least 75% of the then outstanding shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock, given in writing or by vote at a meeting, consenting or voting
(as the case may be), voting separately as a single class:
(i) Authorize, reclassify, issue or enter into any agreement
providing for the issuance (contingent or otherwise) of any securities having
equity features and which rank on a parity with or senior to any of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock or
the Series D Preferred Stock with respect to the payment of dividends or upon
liquidation or other distribution of assets, or with a conversion price lower
than that of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock, or having other terms more
favorable than those of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock;
(ii) Merge with or into or consolidate with any other
corporation, or sell, lease, license or otherwise dispose of all or
substantially all of its properties or assets;
(iii) Change the size or the election procedure for the Board of
Directors; and
(iv) Directly or indirectly redeem, purchase or otherwise
acquire any of the Corporation's equity securities, other than pursuant to
Section 6 of this ARTICLE FOURTH, or pursuant to any stock option or agreement
entered into by the Corporation and approved by a majority of the Corporation's
directors designated by the holders of Preferred Stock.
(c) The Corporation shall not, without the written consent or affirmative
vote of the holders of at least 75% of the then outstanding shares of Series D
Preferred Stock, given in writing or by vote at a meeting, consenting or voting
(as the case may
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be) separately as a class, amend, alter or repeal the preferences, special
rights or other powers of the Series D Preferred Stock, or otherwise amend,
alter or repeal any provision of the Amended and Restated Certificate of
Incorporation or the Corporation's By-Laws, in either such case so as to affect
adversely the Series D Preferred Stock, or reclassify any shares of Common Stock
into shares having preference to or special rights and other powers superior to
the Series D Preferred Stock.
4. CONVERSION.
4.1. OPTIONAL CONVERSION. The holders of Preferred Stock shall have
conversion rights as follows:
(a) RIGHT TO CONVERT.
(i) Each share of Series D Preferred Stock shall be convertible,
at the option of the holder thereof, at any time and from time to time into the
number of fully paid and nonassessable shares of Common Stock of the Corporation
as is determined by dividing $3.50 by the Current Conversion Price (as defined
in paragraph (c) below) in effect at the time of conversion. Each share of
Series C Preferred Stock shall be convertible, at the option of the holder
thereof, at any time and from time to time into the number of fully paid and
nonassessable shares of Common Stock of the Corporation as is determined by
dividing $1.80 by the Current Conversion Price (as defined in paragraph (c)
below) in effect at the time of conversion. Each share of Series A Preferred
Stock and each share of Series B Preferred Stock shall be convertible, at the
option of the holder thereof, at any time and from time to time into the number
of fully paid and nonassessable shares of Common Stock of the Corporation as is
determined by dividing $1.00 by the Current Conversion Price (as defined in
paragraph (c) below) in effect at the time of conversion. The conversion price
at which shares of Common Stock shall be deliverable upon conversion of Series D
Preferred Stock without the payment of additional consideration by the holder
thereof shall initially be $3.50, subject to adjustment as provided in paragraph
(c) below. The conversion price at which shares of Common Stock shall be
deliverable upon conversion of Series C Preferred Stock without the payment of
additional consideration by the holder thereof shall initially be $1.80, subject
to adjustment as provided in paragraph (c) below. The conversion price at which
shares of Common Stock shall be deliverable upon conversion of Series B
Preferred Stock and Series A Preferred Stock without the payment of additional
consideration by the holder thereof shall initially be $1.00, subject to
adjustment as provided in paragraph (c) below.
(ii) No fractional shares of Common Stock shall be issued upon
conversion of shares of Preferred Stock. In lieu of any fractional share to
which the holder would otherwise be entitled after determination of the
aggregate full number of shares of Common Stock issuable in respect of the
Preferred Stock then being converted, the Corporation shall pay cash equal to
such fraction multiplied by the then Current Conversion Price.
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(b) MECHANICS OF CONVERSION.
(i) In order for a holder of Preferred Stock to convert shares
of Preferred Stock into shares of Common Stock, such holder shall surrender the
certificate or certificates for such shares of Preferred Stock, at the office of
the transfer agent for the 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 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, her 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 (the "Conversion Date"). The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of Preferred Stock, or to his, her or its nominees, a certificate or
certificates for the number of whole shares of Common Stock (and any shares of
Preferred Stock represented by the certificate or certificates delivered to the
Corporation by the holder thereof which are not converted into Common Stock)
issuable upon such conversion in accordance with the provisions hereof, together
with cash in lieu of fractional shares calculated in accordance with
subparagraph (ii) of paragraph (a) above. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of certificates of Preferred Stock to be converted, and the person or
persons entitled to receive shares of Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on that date.
(ii) The Corporation shall at all times when the 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 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
Preferred Stock. Before taking any action which would cause Common Stock, upon
the conversion of Preferred Stock, to be issued below the then par value of the
shares of Common Stock, the Corporation 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 to the holders of Preferred Stock. The Corporation will not close its
books against the transfer of the Preferred Stock or of Common Stock issued or
issuable upon conversion of the Preferred Stock in any manner which interferes
with the timely conversion of the Preferred Stock.
(iii) All shares of 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
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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 declared and unpaid
dividends thereon. On and as of the Conversion Date, the shares of Common Stock
issuable upon such conversion shall be deemed to be outstanding, and the holder
thereof shall be entitled to exercise and enjoy all rights with respect to such
shares of Common Stock, including the rights, if any, to receive notices and to
vote. All certificates representing shares of Preferred Stock, from and after
the Conversion Date, shall be deemed to have been retired and canceled and shall
not be reissued, and the Corporation may thereafter take such appropriate action
as may be necessary to reduce accordingly the authorized number of shares of
Preferred Stock.
(c) ADJUSTMENTS TO CONVERSION PRICE. The initial conversion prices
as stated in subparagraph (i) of paragraph (a) above shall be subject to
adjustment from time to time and such conversion prices as adjusted shall
likewise be subject to further adjustment, all as hereinafter set forth. The
term "Current Conversion Price" shall mean, as of any time, the conversion price
of the Series D Preferred Stock, the Series C Preferred Stock or the Series A or
B Preferred Stock, as the case may be, at that time, as specified in paragraph
(a) above in case no adjustment shall have been required, or such conversion
price as adjusted pursuant to this paragraph (c), as the case may be.
(i) If at any time after the date of issuance of the Preferred
Stock the Corporation shall issue (x) any shares of Common Stock other than (A)
Excluded Stock (as defined in subparagraph (vii) below), (B) Common Stock issued
or issuable upon conversion of the Preferred Stock or (C) by way of dividend or
other distribution on shares of Common Stock referred to in the foregoing
clauses (A) and (B), or (y) any shares of a class or series convertible into
Common Stock, other than the Preferred Stock (collectively, with the Common
Stock, such "Securities"), for a consideration per share (the consideration in
each case to be determined in the manner provided in (E) and (F) of subparagraph
(ii) below) less than the Current Conversion Price in effect immediately prior
to the issuance of such Securities, the Current Conversion Price in effect
immediately prior to each such issuance shall forthwith (except as provided in
subparagraph (ii) below) be adjusted to a Current Conversion Price obtained by
dividing an amount equal to the sum of
(x) the total number of shares of Common Stock outstanding (including
the number of shares of Common Stock into which the outstanding
shares of Preferred Stock and other securities convertible into
Preferred Stock are then directly or indirectly convertible)
immediately prior to such issuance multiplied by the Current
Conversion Price in effect immediately prior to such issuance,
plus
(y) the consideration received by the Corporation upon such issuance,
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by
(z) the total number of shares of Common Stock outstanding (including
the number of shares of Common Stock into which the outstanding
shares of Preferred Stock or other securities convertible into
Preferred Stock are then directly or indirectly convertible)
immediately after such issuance (including the number of shares
of Common Stock into which such newly issued Securities are then
convertible).
(ii) For the purpose of any adjustment of the conversion price
pursuant to subparagraph (c)(i) above, the following provisions shall be
applicable:
(A) In the case of the issuance of options or warrants to purchase or
rights to subscribe for Common Stock other than Excluded Stock
(collectively, "Rights"), the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such Rights shall be deemed
to have been issued at the time such Rights were issued, for a
consideration equal to the consideration (determined in the manner
provided in (E) and (F) below), if any, received by the Corporation on
the issuance of such Rights, plus the minimum purchase price provided
in such Rights for the Common Stock covered thereby; provided that
such shares of Common Stock deliverable upon the exercise of such
Rights shall not be deemed to have been issued unless such
consideration per share would be less than the Current Conversion
Price in effect on the date of and immediately prior to such issue.
No further adjustment of the Current Conversion Price adjusted upon
the issuance of such Rights shall be made as a result of the actual
issuance of shares of Common Stock deliverable upon exercise of such
Rights.
(B) In the case of the issuance of securities by their terms convertible
into or exchangeable for Common Stock other than Excluded Stock
(collectively, "Convertible Securities"), or options or warrants to
purchase or rights to subscribe for securities by their terms
convertible or exchangeable for Common Stock other than Excluded Stock
(collectively, "Related Rights"), the aggregate maximum number of
shares of Common Stock deliverable upon conversion, exchange or
exercise of any such Convertible Securities or such Related Rights
shall be deemed to have been issued at the time such Convertible
Securities or such Related Rights were issued and for a consideration
equal to the consideration received by the Corporation upon issuance
of such Convertible Securities or such Related Rights (excluding any
cash received on account of accrued interest or accrued dividends),
plus the additional consideration, if any, to be received by the
Corporation upon the conversion, exchange or exercise of such
Convertible Securities or Related Rights (the consideration in each
case to be determined in the manner provided in (E) and (F) below);
provided that such shares of
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Common Stock deliverable upon such conversion, exchange or exercise of
such Convertible Securities or Related Rights shall not be deemed to
have been issued unless such consideration per share would be less
than the Current Conversion Price in effect on the date of and
immediately prior to such issue. No further adjustment of the Current
Conversion Price adjusted upon the issuance of such Related Rights
shall be made as a result of the actual issuance of such Convertible
Securities deliverable upon exercise of such Related Rights.
(C) On any change in the number of shares of Common Stock deliverable upon
the exercise of such Rights or Related Rights or upon the conversion,
exchange or exercise of such Convertible Securities or on any change
in the minimum purchase price of such Rights, Related Rights or
Convertible Securities other than a change resulting from the
anti-dilution provisions of such Rights, Related Rights or Convertible
Securities, the Conversion Price shall forthwith be readjusted to such
Current Conversion Price as would have been obtained had the
adjustment made upon the issuance of such Rights, Related Rights or
Convertible Securities not converted, exchanged or exercised prior to
such change, been made upon the basis of such change.
(D) On the expiration of any such Rights, Related Rights or Convertible
Securities, the Current Conversion Price shall forthwith be readjusted
to such Current Conversion Price as would have obtained had the
adjustment made upon the issuance of such Rights or Related Rights or
the conversion, exchange or exercise of any such Convertible
Securities been made upon the basis of the issuance of only the number
of shares of Common Stock actually issued upon the exercise of such
Rights or Related Rights or the conversion, exchange or exercise of
any such Convertible Securities.
(E) In the case of the issuance of such Securities for cash, the
consideration shall be deemed to be the amount of cash paid therefor
(excluding amounts paid for accrued interest or accrued dividends).
(F) In the case of the issuance of such Securities for a consideration in
whole or in part other than cash, the consideration other than cash
shall be deemed to be the fair value thereof as determined in good
faith by the Board of Directors of the Corporation.
(iii) If the Corporation declares a dividend or other
distribution payable in such Securities or subdivides its outstanding shares of
Common Stock into a larger number or combines its outstanding shares of Common
Stock into a smaller number, then the Current Conversion Price in effect
immediately prior to such dividend, other distribution, subdivision or
combination, as the case may be, shall forthwith be adjusted to that price
determined by multiplying the Current Conversion
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Price by a fraction (x) the numerator of which shall be the total number of
outstanding shares of such Securities immediately prior to such dividend, other
distribution, subdivision or combination and (y) the denominator of which shall
be the total number of outstanding shares of such Securities immediately after
such dividend, other distribution, subdivision or combination.
(iv) In case the Corporation shall declare a dividend or
otherwise distribute to the holders of its Common Stock shares of its capital
stock (other than such Securities), stock or other securities of other persons,
evidences of indebtedness issued by the Corporation or other persons, assets
(excluding cash dividends) or options, warrants or rights (excluding such Rights
or Related Rights), then, in each such case, immediately following the record
date fixed for the determination of the holders of Common Stock entitled to
receive such dividend or distribution, the Current Conversion Price in effect
thereafter shall be determined by multiplying the Current Conversion Price in
effect immediately prior to such record date by a fraction (A) the numerator of
which shall be an amount equal to the remainder of (x) the Current Market Price
(as defined in subparagraph (viii) below) determined immediately prior to such
distribution of one share of Common Stock less (y) the fair value (as determined
in good faith by the Corporation's Board of Directors) of the stock, securities,
evidences of indebtedness, assets, options, warrants or rights so dividended or
distributed in respect of one share of Common Stock, as the case may be, and (B)
the denominator of which shall be the Current Market Price of one share of
Common Stock determined immediately prior to such dividend or distribution.
Such adjustment shall be made on the date such dividend or distribution is made,
and shall become effective at the opening of business on the business day
following the record date for the determination of stockholders entitled to such
dividend or distribution.
(v) In the event the Corporation is in arrears with respect to
the payment of any dividend or portion thereof declared but unpaid on shares of
Preferred Stock, at the time a holder elects to convert such shares of Preferred
Stock, the Current Conversion Price in effect immediately prior to such
conversion shall forthwith be reduced (but only with respect to the shares of
Preferred Stock being so converted) by an amount equal to the quotient of (x)
the aggregate arrearage per share of Preferred Stock being converted, divided by
(y) the number of shares of Common Stock into which such share of Preferred
Stock being converted is then convertible; provided, however, that the
application of the foregoing shall not reduce the Current Conversion Price below
$.01.
(vi) Whenever the Current Conversion Price shall be adjusted as
provided in this Section 4, the Corporation shall forthwith file, at the office
of the transfer agent for the Preferred Stock, at the principal office of the
Corporation or at such other place as may be designated by the Corporation, a
statement, certified by the chief financial officer of the Corporation, showing
in detail the facts requiring such adjustment and the Current Conversion Price
that shall be in effect after such adjustment. The Corporation shall also cause
a copy of such statement to be sent by
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first class mail, postage prepaid, to each holder of record of Preferred Stock
at such holder's address as shown in the records of the Corporation.
(vii) As used in this paragraph (c), "Excluded Stock" shall mean
up to 4,850,000 shares (such amount to be appropriately adjusted in the event of
any stock dividend, stock split or combination, or similar recapitalization
affecting the Common Stock) of Common Stock or options for the purchase thereof
issued, sold or granted, in the past or future, by the Corporation to its
employees, directors or consultants pursuant to bona fide employee stock
purchase, option or similar benefit plans or other incentive programs or
compensation arrangements approved by the Board of Directors of the Corporation,
as more fully detailed in Section 7.14 of the Series A Stock Purchase Agreement.
(viii) For the purpose of any computation pursuant to,
subparagraph (iv) above, the "Current Market Price" at any date of one share of
Common Stock shall be deemed to be the average of the daily closing prices for
the 30 consecutive business days ending 15 business days before the date in
question (as adjusted for any stock splits, stock dividends, combinations or
recapitalization that took effect during such 30 business-day period). The
closing price for each day shall be the last reported sales price on such day on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or if not listed or admitted to trading national
securities exchange, the average of the last reported bid and asked prices as
reported by the National Association of Securities Dealers Automated Quotation
System, Inc., all as adjusted for stock splits, stock dividends, combinations or
similar recapitalization that took effect during such 30 business-day period;
PROVIDED, HOWEVER, that if the Common Stock is not traded in such a manner that
the quotations referred to in this subparagraph (viii) are available for the
period required hereunder, the Current Market Price shall be deemed to be the
fair value of such Common Stock as determined in good faith by the Board of
Directors of the Corporation.
(ix) If any event occurs of the type contemplated by the
provisions of this Section 4 but not expressly provided for by such provisions,
then the Directors will make an appropriate adjustment in the Current Conversion
Price as to protect the rights of the holders of the Preferred Stock; provided
that no such adjustment will increase the Current Conversion Price except as
otherwise permitted pursuant to subparagraph (iii) above or subparagraph
(c)(ii)(D) of this Section 4 or decrease the number of shares of Common Stock
issuable upon conversion.
4.2. MANDATORY CONVERSION.
(a) Upon the earlier to occur of (i) the closing of an underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale by the
Corporation of Common Stock to the public at a minimum price per share of $7.00
resulting in aggregate gross proceeds to the Corporation of not less than
$10,000,000, and (ii) the written consent or affirmative vote of the holders of
not less than 85% of the then outstanding shares of
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Preferred Stock, given in writing or by vote at a meeting, all shares of Series
D Preferred Stock then outstanding shall automatically be converted into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing $3.50 by the Current Conversion Price then in effect pursuant to
Section 4.1 of this ARTICLE FOURTH, subpart (b), all shares of Series C
Preferred Stock then outstanding shall automatically be converted into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing $1.80 by the Current Conversion Price then in effect pursuant to
Section 4.1 of this ARTICLE FOURTH, subpart (b) and all shares of Series A
Preferred Stock and Series B Preferred Stock then outstanding shall
automatically be converted into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1.00 by the Current
Conversion Price then in effect pursuant to Section 4.1 of this ARTICLE FOURTH,
subpart (b).
(b) No fractional shares of Common Stock shall be issued upon
conversion of shares of Preferred Stock. In lieu of any fractional share to
which the holder would otherwise be entitled after determination of the
aggregate full number of shares of Common Stock issuable in respect of the
Preferred Stock then being converted, the Corporation shall pay cash equal to
such fraction multiplied by the then Current Conversion Price.
(c) All holders of record of shares of Preferred Stock will be given
at least 10 but not more than 30 days' prior written notice of the date fixed
(the "Mandatory Conversion Date") and the place designated for mandatory
conversion of all shares of Preferred Stock pursuant to this Section 4.2. Such
notice will be sent by first class or registered mail, postage prepaid, to each
record holder of Preferred Stock at such holder's address last shown on the
records of the transfer agent for the Preferred Stock (or the records the
Corporation if it serves as its own transfer agent). On or before the Mandatory
Conversion Date, each holder of shares of Preferred Stock shall surrender his,
her or its certificate or certificates for all such shares to the Corporation at
the place designated in such notice. 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, her or its attorney
duly authorized in writing. On and after the Mandatory Conversion Date, all
rights with respect to the Preferred Stock, including the rights, if any, to
receive notices and vote, will terminate, except only 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
Preferred Stock has been converted and payment of any declared but unpaid
dividends thereon. As soon as practicable after the Mandatory Conversion Date
and upon the surrender of the certificate or certificates representing shares of
Preferred Stock, the Corporation shall issue and deliver to such holder, or on
his, her or its written order, a certificate or certificates for the number of
whole shares of Common Stock issuable under such conversion in accordance with
the provisions hereof, together with cash as provided in subparagraph (b) of
this Section 4.2 in respect of any fraction of a share of Common Stock otherwise
issuable upon such conversion.
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(d) All certificates evidencing shares of Preferred Stock which are
required to be surrendered in accordance with this Section 4.2, from and after
the Mandatory Conversion Date, shall be deemed to have been retired and
canceled, and the shares of Preferred Stock represented thereby, converted into
Common Stock, notwithstanding the failure of the holder or holders thereof to
surrender such certificates on or prior to such date, The Corporation may then
take such appropriate action as may be necessary to reduce accordingly the
authorized number of shares of Preferred Stock.
5. REDEMPTION. The shares of Preferred Stock shall be redeemed as follows:
5.1. MANDATORY REDEMPTION. On January 15th in each of the years 2004
and 2005 (each a "Redemption Date"), the Corporation shall redeem 50% of the
then outstanding shares of Preferred Stock at a per share price of $3.50 for
each share of Series D Preferred Stock, $1.80 for each share of Series C
Preferred Stock and $1.00 for each share of Series A Preferred Stock and Series
B Preferred Stock, plus an amount equal to all declared but unpaid dividends on
such shares (the "Redemption Price") up to and including the date such shares
are redeemed, unless such redemption is waived by the holders of 75% of the then
outstanding shares of Preferred Stock.
5.2. PAYMENT OF REDEMPTION PRICE. On each Redemption Date, the
Corporation will pay to the holders of the Preferred Stock outstanding at the
time of the redemption an amount equal to the Redemption Price with respect to
each of the shares of Preferred Stock redeemed on such date. If on a Redemption
Date the funds of the Corporation legally available for redemption of shares of
Preferred Stock are insufficient to redeem the number of the outstanding shares
of Preferred Stock that are to be redeemed on such date, those funds which are
legally available will be used to redeem, at the Redemption Price, the maximum
possible number of shares of Preferred Stock on a pro rata basis among the
holders thereof based upon the number of shares of Common Stock into which such
shares of Preferred Stock would be converted. At any time thereafter when
additional funds of the Corporation become legally available for the redemption
of Preferred Stock, such funds will immediately be used to redeem the balance of
the shares of Preferred Stock which the Corporation has become obligated to
redeem but which it has not so redeemed. In addition, any redemption of
Preferred Stock shall be made out of any surplus or any capital whether or not a
reduction of capital is thereby involved, and to the extent provided by law, the
Corporation shall take all necessary action to effect a reduction of capital if
such reduction is necessary to provide funds legally available for any required
redemption of Preferred Stock.
5.3. EQUITABLE ADJUSTMENT. The Redemption Price set forth in this
Section 5 shall be subject to equitable adjustment whenever there shall occur a
stock split, combination, reclassification or other similar event involving the
Preferred Stock.
5.4. SURRENDER OF CERTIFICATES. Not less than 60 days before each
Redemption Date, the Corporation shall mail written notice (the "Redemption
Notice"), postage prepaid, to each holder of record of Preferred Stock at such
holder's address
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as shown on the records of the Corporation; provided, however, that the
Corporation's failure to give such Redemption Notice shall in no way affect its
obligation to redeem the Preferred Stock as provided in Section 5.1 of this
ARTICLE FOURTH. The Redemption Notice shall contain the following information:
(i) The number of shares of Preferred Stock held by the holder
which shall be redeemed by the Corporation on such Redemption Date pursuant to
the provisions of Sections 5.1 and 5.2 of this ARTICLE FOURTH.
(ii) The Redemption Date for the shares to be redeemed.
(iii) The address at which the holder may surrender to the
Corporation its certificate or certificates representing shares of Preferred
Stock to be redeemed.
Each holder of shares of Preferred Stock to be redeemed shall
surrender the certificate or certificates representing such shares to the
Corporation at the place specified in the Redemption Notice on or prior to the
Redemption Date designated in the Redemption Notice, and thereupon an amount
equal to the applicable Redemption Price shall be paid to the order of the
person whose name appears on such certificate or certificates. Each surrendered
certificate shall be cancelled and retired.
5.5. DIVIDENDS AND CONVERSION AFTER REDEMPTION. From and after the
date on which the Corporation shall have paid in full the Redemption Price with
respect to any shares of Preferred Stock, such shares of Preferred Stock thereby
redeemed shall not be entitled to any further dividends pursuant to Section 1 of
this ARTICLE FOURTH or to the conversion provisions set forth in Section 4 of
this ARTICLE FOURTH.
6. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of Common Stock or Preferred Stock, and in the
case of any such loss, theft or destruction, upon receipt of indemnity and bond
reasonably satisfactory to the Corporation (provided that if the holder is an
institutional investor its own agreement will be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation will
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
ARTICLE FIFTH: The Corporation is to have perpetual existence.
ARTICLE SIXTH: In addition to, and not by way of limitation of, the
powers granted to the Board of Directors by the General Corporation Law of the
State
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of Delaware, the Board of Directors of the Corporation is expressly authorized
to adopt, amend or repeal all or any of the by-laws of the Corporation.
ARTICLE SEVENTH: Elections of directors need not be by written ballot
unless the by-laws of the Corporation shall so provide.
ARTICLE EIGHTH: Meetings of stockholders may be held within or without
the State of Delaware, as the by-laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated from time to time
by the Board of Directors or in the by-laws of the Corporation.
ARTICLE NINTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for the Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholder or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
ARTICLE TENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of incorporation,
in the manner now or hereafter prescribed by statute and by this Amended and
Restated Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ARTICLE ELEVENTH: To the fullest extent permitted by the General
Corporation Law of the State of Delaware as it now exists or may hereafter be
amended, no director of the Corporation shall be personally liable to the
Corporation, any of its stockholders or any other person or entity for monetary
damages for breach of fiduciary duty owed to the Corporation, its stockholders
or such other person or entity owing to such director's position as a director
of the Corporation. Any repeal or modification of this ARTICLE ELEVENTH by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal
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liability of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE TWELFTH:
1. ACTIONS, SUITS AND PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF
THE CORPORATION. The Corporation shall indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any benefit plan) (all such persons being referred
to hereafter as an "Indemnitee"), or by reason of any action alleged to have
been taken or omitted to have been taken in such capacity, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her or on his or her behalf in
connection with such action, suit or proceeding and any appeal therefrom, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful. Notwithstanding anything to the contrary in this ARTICLE
TWELFTH, except as set forth in Section 6 below, the Corporation shall not
indemnify an Indemnitee seeking indemnification in connection with a proceeding
(or part thereof) initiated by the Indemnitee unless the initiation thereof was
approved by the Board of Directors of the Corporation.
2. ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted to have been taken in such
capacity, against all expenses (including attorneys' fees) and amounts paid in
settlement actually and reasonably incurred by him or her or on his or her
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any
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claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses (including attorneys' fees)
which the Court of Chancery of Delaware or such other court shall deem proper.
3. INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this ARTICLE TWELFTH, to the extent that
an Indemnitee has been successful, on the merits or otherwise, in defense of any
action, suit or proceeding referred to in Sections 1 and 2 of this ARTICLE
TWELFTH, or in defense of any claim, issue or matter therein, or on appeal from
any such action, suit or proceeding, he shall be indemnified against all
expenses (including attorneys' fees) actually and reasonably incurred by him or
her or on his or her behalf in connection therewith. Without limiting the
foregoing, if any action, suit or proceeding is disposed of, on the merits or
otherwise including a disposition, without prejudice), without (i) the
disposition being adverse to the Indemnitee, (ii) an adjudication that the
Indemnitee was liable to the Corporation, (iii) a plea of guilty or NOLO
CONTENDERE by the Indemnitee, (iv) an adjudication that the Indemnitee did not
act in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, and (v) with respect to any criminal
proceeding, an adjudication that the Indemnitee had reasonable cause to believe
his or her conduct was unlawful, the Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.
4. NOTIFICATION AND DEFENSE OF CLAIM. As a condition precedent to
his or her right to be indemnified, the Indemnitee must notify the Corporation
in writing as soon as practicable of any action, suit, proceeding or
investigation involving him for which indemnity will or could be sought. With
respect to any action, suit, proceeding or investigation of who the Corporation
is so notified, the Corporation will be entitled to participate therein at its
own expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as video below in this Section 4. The Indemnitee shall have the
right to employ his or her own counsel in connection with such claim, but the
fees and expenses of such counsel incurred after notice from the Corporation of
its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee, shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of an
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this ARTICLE TWELFTH. The Corporation shall
not
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be entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. ADVANCE OF EXPENSES. Subject to the provisions of Section 6
below, in the event that the Corporation does not assume the defense pursuant to
Section 4 of this ARTICLE TWELFTH of any action, suit, proceeding or
investigation of which the Corporation receives notice under this ARTICLE
TWELFTH, any expenses (including attorneys' fees) incurred by an Indemnitee in
defending a civil or criminal action, suit, proceeding or investigation or any
appeal therefrom shall be paid by the Corporation in advance of the final
disposition of such matter, provided, however, that the payment of such expenses
incurred by an Indemnitee in advance of the final disposition of such matter
shall be made only upon receipt of an undertaking by or on behalf of the
Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined what the Indemnitee is not entitled to be indemnified
by the Corporation as authorized in this ARTICLE TWELFTH. Such undertaking may
be accepted without reference to the financial ability of such person to make
such repayment.
6. PROCEDURE FOR INDEMNIFICATION. In order to obtain
indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of
this ARTICLE TWELFTH, the Indemnitee shall submit to the Corporation a written
request, including in such request such documentation and information as is
reasonably available to the Indemnitee and is reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification or
advancement of expenses. Any such indemnification or advancement of expenses
shall be made promptly, and in any event within 60 days after receipt by the
Corporation of the written request of the Indemnitee, unless with respect to
requests under Section 1, 2 or 5 the Corporation determines, by clear and
convincing evidence, within such 60-day period, that the Indemnitee did not meet
the applicable standard of conduct set forth in Section 1 or 2, as the case may
be. Such determination shall be made in each instance by (a) a majority vote of
a quorum of the directors of the Corporation consisting of persons who are not
at that time parties to the action, suit or proceeding in question
("disinterested directors"), (b) if no such quorum is obtainable, a majority
vote of a committee of two or more disinterested directors, (c) a majority vote
of a quorum of the outstanding shares of stock of all classes entitled to vote
for directors voting as a single class, which quorum shall consist of
stockholders who are not at that time parties to the action, suit or proceeding
in question, (d) independent legal counsel (who may be regular legal counsel to
the Corporation) or (e) a court of competent jurisdiction.
7. REMEDIES. The right to indemnification or advances as granted by
this ARTICLE TWELFTH shall be enforceable by the Indemnitee in any court of
competent jurisdiction if the Corporation denies such request, in whole or in
part, or if no disposition thereof is made within the 60-day period referred to
above in Section 6. Unless otherwise provided by law, the burden of proving
that the Indemnitee is not entitled to indemnification or advancement of
expenses under this ARTICLE
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TWELFTH shall be on the Corporation. Neither the failure of the Corporation to
have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Section 6 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such proceeding shall also be indemnified by the Corporation.
8. SUBSEQUENT AMENDMENT. No amendment termination or repeal of this
ARTICLE TWELFTH or of the relevant provisions of the General Corporation Law of
the State of Delaware or any other applicable laws shall affect or diminish in
any way the rights of any Indemnitee to indemnification under the provisions
hereof with respect to an action, suit, proceeding or investigation arising out
of or relating to any actions, transactions or facts occurring prior to the
final adoption of such amendment, termination or repeal.
9. OTHER RIGHTS. The indemnification and advancement of expenses
provided by this ARTICLE TWELFTH shall not be deemed exclusive of any other
rights to which an Indemnitee seeking indemnification or advancement of expenses
may be entitled under any law (common or statutory), agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in any other capacity while holding
office for the Corporation, and shall continue as to an Indemnitee who has
ceased to be a director or officer, and shall inure to the benefit of the
estate, heirs, executors and administrators of the Indemnitee. Nothing contained
in this ARTICLE TWELFTH shall be deemed to prohibit, and the Corporation is
specific authorized to enter into, agreements with officers and directors
providing indemnification rights and procedures different from those set forth
in this ARTICLE TWELFTH. In addition, the Corporation may, to the extent
authorized from time to time by its Board of Directors, grant indemnification
rights to other employees or agents of the Corporation or other persons serving
the Corporation and such rights may be equivalent to, or greater or less than,
those set forth in this ARTICLE TWELFTH.
10. PARTIAL INDEMNIFICATION. If an Indemnitee is entitled under any
provision of this ARTICLE TWELFTH to indemnification by the Corporation for some
or a portion of the expenses (including attorney's fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by him or her or on
his or her behalf in connection with any action, suit, proceeding or
investigation and any appeal therefrom but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the
portion of such expenses (including attorneys' fees), judgments, fines, or
amounts paid settlement to which the Indemnitee is entitled.
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11. INSURANCE. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent
of the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any benefit plan) against any expense, liability or
loss incurred by him in any such capacity, or arising out of his or her status
as such, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the General Corporation Law
of the State of Delaware.
12. MERGER OR CONSOLIDATION. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this ARTICLE TWELFTH with respect to any action, suit,
proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring prior to the date of such merger or
consolidation.
13. SAVINGS CLAUSE. If this ARTICLE TWELFTH or any portion here shall
be invalidated on any ground by any Court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
ARTICLE TWELFTH that shall not have be invalidated and to the fullest extent
permitted by applicable law.
14. DEFINITIONS. Terms used herein and defined in Section 145(h)
Section 145(i) of the General Corporation Law of the State of Delaware shall
have respective meanings assigned to such terms in such Section 145(h) and
Section 145(i).
15. SUBSEQUENT LEGISLATION. If the General Corporation Law of the
State of Delaware is amended after adoption of this ARTICLE TWELFTH to expand
further the indemnification permitted to Indemnitees, then the Corporation shall
indemnify such persons to the fullest extent permitted by the General
Corporation of State of Delaware, as so amended.
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