Attached files
| file | filename |
|---|---|
| EX-21.1 - SUBSIDIARIES OF THE REGISTRANT - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex21-1.htm |
| EX-32.2 - CERTIFICATION - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex32-2.htm |
| EX-32.1 - CERTIFICATION - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex32-1.htm |
| EX-31.2 - CERTIFICATION - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex31-2.htm |
| EX-31.1 - CERTIFICATION - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex31-1.htm |
| EX-24.1 - POWER OF ATTORNEY - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex24-1.htm |
| EX-23.2 - CONSENTS OF EXPERTS AND COUNSEL - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex23-2.htm |
| EX-23.1 - CONSENTS OF EXPERTS AND COUNSEL - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_ex23-1.htm |
| 10-K - NAVIDEA BIOPHARMACEUTICALS FORM 10-K - NAVIDEA BIOPHARMACEUTICALS, INC. | navb_10k.htm |
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
NAVIDEA BIOPHARMACEUTICALS, INC.
(as corrected February 18, 1994, and as amended June 27,
1994,
July 25, 1995, June 3, 1996, March 17, 1999, May 9, 2000, June 13, 2003, July 29, 2004, June 22, 2005, November 20, 2006, December 26, 2007, April 30 2009, July 27, 2009, August 2, 2010, January 5, 2012, June 26, 2013 and August 18, 2016)
July 25, 1995, June 3, 1996, March 17, 1999, May 9, 2000, June 13, 2003, July 29, 2004, June 22, 2005, November 20, 2006, December 26, 2007, April 30 2009, July 27, 2009, August 2, 2010, January 5, 2012, June 26, 2013 and August 18, 2016)
(Article One was amended to
change the Company’s legal name to “Navidea
Biopharmaceuticals, Inc.” pursuant to the filing on December
16, 2011, of a Certificate of Ownership in Delaware to effect a
merger of the Company’s wholly owned subsidiary, Neoprobe
Name Change, Inc., with and into the Company on January 5, 2012, at
12:01 a.m. eastern time. Pursuant to Section 253 of the General
Corporation Law of Delaware, the merger had the effect of amending
the Company’s Amended and Restated Certificate of
Incorporation to reflect the new legal name of the
Company.)
ARTICLE ONE
The
name of the corporation is Navidea Biopharmaceuticals,
Inc.
ARTICLE TWO
The
address of the corporation's registered office in the State of
Delaware is the Corporation Trust Center, 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 THREE
The
nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of
Delaware.
(Article Four was amended to
increase the total number of authorized shares from 22,000,000 to
55,000,000, the total number of shares of Common Stock from
20,000,000 to 50,000,000 and the total number of shares of
Preferred Stock from 2,000,000 to 5,000,000 by a resolution duly
adopted by the Board of Directors on March 3, 1994 and duly
adopted by the stockholders on May 26, 1994. It was again
amended to increase the number of authorized shares to 80,000,000,
consisting of 75,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock, by resolution duly adopted by the Board
of Directors on April 15, 2003, and duly adopted by the
stockholders on June 12, 2003. It was further amended to
increase the number of authorized shares to 105,000,000, consisting
of 100,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, by resolution duly adopted by the Board of
Directors on April 16, 2004, and duly adopted by the stockholders
on July 27, 2004.
Article Four was
again amended to increase the number of authorized shares to
155,000,000, consisting of 150,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock, by resolution duly adopted by
the Board of Directors on March 15, 2005, and duly adopted by the
Stockholders on June 13, 2005, and was further amended to increase
the number of authorized shares to 205,000,000, consisting of
200,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, by resolution duly adopted by the Board of
Directors on May 12, 2010, and duly adopted by the Stockholders on
July 16, 2010. It was further amended to increase the number of
authorized shares to 305,000,000, consisting of 300,000,000 shares
of Common Stock and 5,000,000 shares of Preferred Stock by
resolution duly adopted by the Board of Directors on June 14, 2016,
and duly adopted by the Stockholders on August 11,
2016.)
ARTICLE FOUR
4.1 Authorized
Shares. The total number of shares of capital stock
which the Corporation has authority to issue is 305,000,000 shares,
consisting of:
(a) 300,000,000
shares of Common Stock, par value $.001 per share (the "Common
Stock");
(b) 5,000,000
shares of Preferred Stock, par value $.001 per share (the
"Preferred Stock").
4.2 Common
Stock.
(a) Subject
to such voting rights of any other class or series of securities as
may be granted from time to time pursuant to this certificate of
incorporation, any amendment thereto, or the provisions of the laws
of the State of Delaware governing corporations, voting rights
shall be vested exclusively in the holders of Common Stock. Each
holder of Common Stock shall have one vote in respect of each share
of such stock held.
(b) Subject
to the rights of any other class or series of stock, the holders of
shares of Common Stock shall be entitled to receive, when and as
declared by the board of directors, out of the assets of the
Corporation legally available therefor, such dividends as may be
declared from time to time by the board of directors.
(c) Subject
to such rights of any other class or series of securities as may be
granted from time to time, the holders of shares of Common Stock
shall be entitled to receive all the assets of the Corporation
available for distribution to shareholders in the event of the
voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation, ratably, in proportion to the number of shares of
Common Stock held by them. Neither the merger or consolidation of
the Corporation into or with any other corporation, nor the merger
or consolidation of any other corporation into or with the
Corporation, nor the sale, lease, exchange or other disposition
(for cash, shares of stock, securities, or other consideration) of
all or substantially all the assets of the Corporation, shall be
deemed to be a dissolution, liquidation, or winding up, voluntary
or involuntary, of the Corporation.
4.3 Preferred
Stock. Shares of Preferred Stock may be issued from time
to time in one or more series. The board of directors of the
Corporation is hereby authorized to determine and alter all rights,
preferences, and privileges and qualifications, limitations, and
restrictions thereof (including, without limitation, voting rights
and the limitation and exclusion thereof) granted to or imposed
upon any wholly unissued series of Preferred Stock and the number
of shares constituting any such series and the designation thereof,
and to increase or decrease (but not below the number of shares of
such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series then outstanding.
In case the number of shares of any series is so decreased, the
shares constituting such reduction shall resume the status which
such shares had prior to the adoption of the resolution originally
fixing the number of shares of such series.
ARTICLE FIVE
The
business and affairs of the Corporation shall be managed by or
under the direction of the board of directors, and the directors
need not be elected by ballot unless required by the by-laws of the
Corporation. In furtherance and not in limitation of the powers
conferred by statute, the board of directors of the Corporation is
expressly authorized to adopt, amend, or repeal the by-laws of the
Corporation.
ARTICLE SIX
Action
shall be taken by the stockholders of the Corporation only at
annual or special meetings of stockholders, and stockholders may
not act by written consent. Special meetings of the Corporation may
be called only as provided in the by-laws.
ARTICLE SEVEN
Meetings
of the stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books
of the Corporation may be kept 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. The board
of directors shall from time to time decide whether and to what
extent and at what times and under what conditions and requirements
the accounts and books of the Corporation, or any of them, except
the stock book, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect
any books or documents of the Corporation except as conferred by
the laws of the State of Delaware or as authorized by the board of
directors.
(Article Eight was amended in its entirety by a resolution duly
adopted by the Board of Directors on January 18, 1996 and duly
adopted by the stockholders at the Annual Meeting of Stockholders
held on May 30, 1996).
ARTICLE EIGHT
Notwithstanding
any other provision set forth in the Certificate of Incorporation
of the Corporation or its By-laws, the board of
directors shall be divided into three classes; the term of office
of those of the first class to expire at the annual meeting next
ensuing; of the second class one year thereafter; of the third
class two years thereafter; and at each annual election held after
the initial classification of the board of directors and election
of directors to such classes, directors shall be chosen for a full
term of three years, as the case may be, to succeed those whose
terms expire. The total number of directors constituting the full
board of directors and the number of directors in each class shall
be fixed by, or in the manner provided in the by-laws, but the
total number of directors shall not exceed seventeen (17) nor shall
the number of directors in any class exceed six (6). Subject to the
foregoing, the classes of directors need not have the same number
of members. No reduction in the total number of directors or in the
number of directors in any class shall be effective to remove any
director or to reduce the term of any director. If the board of
directors increases the number of directors in a class, it may fill
the vacancy created thereby for the full remaining term of a
director in that class even though such term may extend beyond the
next annual election. The board of directors may fill any vacancy
occurring for any other reason for the full remaining term of the
director whose death, resignation or removal caused the vacancy,
even though such term may extend beyond the next annual
election.
ARTICLE NINE
(a) The
Corporation shall, to the fullest extent permitted by the General
Corporation Law of the State of Delaware as the same exists or may
hereafter be amended, indemnify all persons whom it may indemnify
pursuant hereto.
(b) To
the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a
director of this Corporation shall not be personally liable for the
Corporation or its Stockholders for monetary damages for breach of
fiduciary duty as a director. The modification or repeal of this
Article Nine shall not affect the restriction hereunder of a
director's personal liability for any breach, act, or omission
occurring prior to such modification or repeal.
ARTICLE TEN
The
Corporation is to have perpetual existence.
* * *
(A Certificate of Correction was filed to correct a failure to set
forth in the Restated Certificate of Incorporation filed with the
Secretary of State of Delaware on November 9, 1992, the following
resolutions duly adopted by the Board and duly approved by the
stockholders):
WHEREAS,
the Board of Directors of the Corporation deems it to be advisable
and in the best interests of the Corporation that the Corporation
effectuates a reverse split of its common stock, par value $0.001
per share (the "Common Stock"), to cause the total number of issued
and outstanding shares of Common Stock to be 5,162,762 prior to a
contemplated public offering of the securities of the Corporation;
it is therefore:
RESOLVED,
that, subject to approval by the Corporation's stockholders, there
is hereby declared a one-for-two reverse split of the issued and
outstanding shares of Common Stock, effective immediately prior to
the effective time of the contemplated public offering (the
"Conversion Time"), pursuant to which each issued and outstanding
share of Common Stock shall automatically be converted into
one-half of the one share of Common Stock, and each stockholder of
record at the Conversion Time shall receive one or more
certificates representing the number of fully-paid and
nonassessable shares of Common Stock equal to the number of shares
held after the Conversion Time as a result of the foregoing reverse
split;
RESOLVED,
FURTHER, that the shares of Common Stock that cease to be
outstanding as a result of the reverse stock split shall be
authorized but unissued shares;
RESOLVED, FURTHER, that fractions of a share
existing after the reverse stock split shall not be issued to the
stockholders, and that such fractions shall be paid in cash at
their pro
rata fair value, which the
Board of Directors hereby determines, after due consideration, to
be $6.00 per share as of the Conversion Time;
RESOLVED,
FURTHER, that appropriate adjustment shall be made to the
applicable conversion or other ratios of the Corporation's
outstanding warrants, options or other convertible securities to
take account of the change in the outstanding Common Stock
resulting from the reverse stock split; and
RESOLVED,
FURTHER, that the Conversion Time for the one-for-two reverse split
of the issued and outstanding shares of Common Stock as authorized
on July 22, 1992, and approved by the Corporation's
stockholders, shall be at the close of business on Monday,
November 9, 1992.
* * *
(The Board of Directors provided for a series of Preferred Stock on
July 18, 1995 by the addition to the Certificate of
Incorporation of provisions which were incorporated in a
Certificate of Designations, Preferences and Rights of Series A
Junior Participating Preferred Stock filed on July 25, 1995, which
were later removed by a Certificate of Elimination filed on
November 20, 2006.)
* * *
(The Board of Directors provided for a series of Preferred Stock on
December 21, 2007 by the addition to the Certificate of
Incorporation of the following provisions which were incorporated
in a Certificate of Designations, Voting Powers, Preferences,
Limitations, Restrictions and Relative Rights of Series A 8%
Cumulative Convertible Preferred Stock filed on December 26, 2007,
which were later amended and restated by a Certificate of Amendment
filed on April 30 2009, and further amended and restated by a
Certificate of Amendment filed July 27,2009. These provisions were
later removed by a Certificate of Elimination filed on August 2,
2010.)
* * *
(The Board of Directors provided for an additional series of
Preferred Stock on June 18, 2010 by the addition to the Certificate
of Incorporation of the following provisions which were
incorporated in a Certificates of Designations, Voting Powers,
Preferences, Limitations, Restrictions and Relative Rights of
Series B Convertible Preferred Stock filed on June 22, 2010
and further amended and restated by a Certificate of Amendment
filed on June 24, 2013.)
* * *
(The Board of Directors provided for an additional series of
Preferred Stock on June 18, 2010 by the addition to the Certificate
of Incorporation of the following provisions which were
incorporated in a Certificates of Designations, Voting Powers,
Preferences, Limitations, Restrictions and Relative Rights of
Series C Convertible Preferred Stock filed on June 22,
2010. These provisions were later removed by a Certificate of
Elimination filed on June 26, 2013.)
1. Designation and Rank.
(a)
Designation. The designation of such series of the Preferred Stock
shall be the Series B Convertible Preferred Stock, par value $.001
per share (the “Series B Preferred Stock”). The maximum
number of shares of Series B Preferred Stock shall be Twelve
Thousand (12,000) Shares.
(b)
Rank. The Series B Preferred Stock shall rank prior to the common
stock, par value $.001 per share (the “Common Stock”),
and to all other classes and series of equity securities of the
Company which by their terms do not rank on a parity with or senior
to the Series B Preferred Stock (“Junior Stock”). The
Series B Preferred Stock shall be subordinate to and rank junior to
all indebtedness of the Company now or hereafter
outstanding.
2. Dividends. Whenever the Board of Directors declares a dividend
on the Common Stock, each holder of record of a share of Series B
Preferred Stock, or any fraction of a share of Series B Preferred
Stock, on the date set by the Board of Directors to determine the
owners of the Common Stock of record entitled to receive such
dividend (the “Record Date”) shall be entitled to
receive, out of any assets at the time legally available therefore,
an amount equal to such dividend declared on one share of Common
Stock multiplied by the number of shares of Common Stock into which
such share, or such fraction of a share, of Series B Preferred
Stock could be converted on the Record Date, without regard to
Section 7 hereof.
3. Voting Rights.
(a)
Class Voting Rights. The Series B Preferred Stock shall have the
following class voting rights. The Company shall not, without the
affirmative vote or consent of the holders of at least a majority
of the shares of the Series B Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a
meeting, in which the holders of the Series B Preferred Stock vote
separately as a class, amend, alter or repeal the provisions of the
Series B Preferred Stock so as to adversely affect any right,
preference, privilege or voting power of the Series B Preferred
Stock. So long as at least 25% of the shares of the Series B
Preferred Stock remain outstanding, the Company shall not, without
the affirmative vote or consent of the holders of at least a
majority of the shares of the Series B Preferred Stock outstanding
at the time, given in person or by proxy, either in writing or at a
meeting, in which the holders of the Series B Preferred Stock vote
separately as a class: (i) repurchase, redeem or pay dividends on
(whether in cash, in kind, or otherwise), shares of the Company's
Junior Stock; (ii) effect any distribution with respect to any
Junior Stock, or (iii) issue any Common Stock or Common Stock
equivalent for a per Common Stock share effective price less than
$1.35, other than (1) issuances of securities upon the exercise or
exchange of or conversion of any securities exercisable or
exchangeable for or convertible into shares of Common Stock issued
and outstanding on the Issuance Date, provided that such securities
have not been amended since the Issuance Date to increase the
number of such securities or to decrease the exercise, exchange or
conversion price of any such securities; (2) securities issued
pursuant to acquisitions or strategic transactions approved by a
majority of the disinterested directors, but not including a
transaction with an entity whose primary business is investing in
securities or a transaction, the primary purpose of which is to
raise capital; or (3) issuances, pursuant to employee equity
compensation plans approved by the Company's shareholders, of
options, restricted stock or other forms of equity compensation to
employees, officers or directors of the Company, approved by a
majority of the non-employee members of the Board of Directors of
the Company or a majority of the members of a committee of
nonemployee directors established for such purpose. For purposes of
clause (iii) above, the “per Common Stock share effective
price” in the case of any Common Stock equivalent shall be
determined by dividing (X) the total amount received or receivable
by the Company as consideration for the issue or sale of such
Common Stock equivalents, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exercise thereof, by (Y) the total maximum number of
shares of Common Stock issuable upon the conversion or exercise of
all such Common Stock equivalents.
(b)
General Voting Rights. Except with respect to transactions upon
which the Series B Preferred Stock shall be entitled to vote
separately as a class pursuant to Section 3(a) above, the Series B
Preferred Stock shall have no voting rights. The Common Stock into
which the Series B Preferred Stock is convertible shall, upon
issuance, have all of the same voting rights as other issued and
outstanding Common Stock of the Company.
4. Liquidation Preference.
(a)
In the event of the liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, after
payment or provision for payment of the debts and other liabilities
of the Company, the holders of shares of the Series B Preferred
Stock then outstanding shall be entitled to receive, out of the
assets of the Company, whether such assets are capital or surplus
of any nature, before any payment shall be made or any assets
distributed to the holders of the Common Stock or any other Junior
Stock, an amount per share of Series B Preferred Stock calculated
by taking the total amount available for distribution to holders of
all the Company’s outstanding Common Stock before deduction
of any preference payments for the Series B Preferred Stock,
divided by the total of (x) all of the then outstanding shares of
the Company’s Common Stock plus (y) all of the shares of the
Company’s Common Stock into which all of the outstanding
shares of the Series B Preferred Stock can be converted, and then
(z) multiplying the sum so obtained by the number of shares of
Common Stock into which such share of Series B Preferred Stock
could then be converted (the “Liquidation Preference
Amount”). The liquidation payment with respect to each
outstanding fractional share of Series B Preferred Stock shall be
equal to a ratably proportionate amount of the liquidation payment
with respect to each outstanding share of Series B Preferred Stock.
All payments for which this Section 4(a) provides shall be in cash,
property (valued at its fair market value as determined by an
independent appraiser reasonably acceptable to the holders of a
majority of the Series B Preferred Stock), or a combination
thereof; provided, however, that no cash shall be paid to holders
of Junior Stock unless each holder of the outstanding shares of
Series B Preferred Stock has been paid in cash the full Liquidation
Preference Amount to which such holder is entitled as provided
herein. After payment of the full Liquidation Preference Amount to
which each holder is entitled, such holders of shares of Series B
Preferred Stock will not be entitled to any further participation
as such in any distribution of the assets of the
Company.
(b)
A consolidation or merger of the Company with or into any other
corporation or corporations, or a sale of all or substantially all
of the assets of the Company, or the effectuation by the Company of
a transaction or series of transactions in which more than 50% of
the voting shares of the Company is disposed of or conveyed, shall
be, at the election of the holders of a majority of the Series B
Preferred Stock, deemed to be a liquidation, dissolution, or
winding up within the meaning of this Section 4; provided, however,
that any such transaction shall not be deemed to be a liquidation,
dissolution or winding up unless such transaction is approved by
the Board of Directors of the Company and the holders of the Series
B Preferred Stock do not control the Board of Directors. In the
event of the merger or consolidation of the Company with or into
another corporation that is not treated as a liquidation pursuant
to this Section 4(b), the Series B Preferred Stock shall maintain
its relative powers, designations and preferences provided for
herein (including any adjustment required under Section 5(c)(v)
hereof) and no merger shall result inconsistent
therewith.
(c)
Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a
payment date and the place where the distributable amounts shall be
payable, shall be given by mail, postage prepaid, no less than
forty-five (45) days prior to the payment date stated therein, to
the holders of record of the Series B Preferred Stock at their
respective addresses as the same shall appear on the books of the
Company.
5. Conversion. The holders of Series B Preferred Stock shall
have the following conversion rights (the “Conversion
Rights”):
(a)
Right to Convert. At any time on or after the date of issuance of
the Series B Preferred Stock (the “Issuance Date”), the
holder of any such shares of Series B Preferred Stock may, at such
holder’s option, subject to the limitations set forth in
Section 7 herein, elect to convert (a “Voluntary
Conversion”) all or any portion of the shares of Series B
Preferred Stock held by such person into a number of fully paid and
nonassessable shares of Common Stock at a conversion rate of Three
Thousand Two Hundred Seventy (3,270) shares of Common Stock for
each share of Preferred Stock (subject to adjustments set forth in
Section 5(c) herein, the “Conversion Rate”). The
Company shall keep written records of the conversion of the shares
of Series B Preferred Stock converted by each holder. A holder
shall be required to deliver the original certificates representing
the shares of Series B Preferred Stock upon any conversion of the
Series B Preferred Stock as provided in Section 5(b)
below.
(b)
Mechanics of Voluntary Conversion. The Voluntary Conversion of
Series B Preferred Stock shall be conducted in the following
manner:
(i)
Holder's Delivery Requirements. To convert Series B Preferred Stock
into full shares of Common Stock on any date (the “Voluntary
Conversion Date”), the holder thereof shall (A) transmit by
facsimile (or otherwise deliver), for receipt on or prior to 5:00
p.m., Eastern Time on such date, a copy of a fully executed notice
of conversion in the form attached hereto as Exhibit I (the
“Conversion Notice”), to the Company, and (B) with
respect to the final conversion of shares of Series B Preferred
Stock held by any holder, such holder shall surrender to a common
carrier for delivery to the Company as soon as practicable
following such Conversion Date but in no event later than six (6)
business days after such date the original certificates
representing the shares of Series B Preferred Stock being converted
(or an indemnification undertaking with respect to such shares in
the case of their loss, theft or destruction) (the “Preferred
Stock Certificates”).
(ii)
Company's Response. Upon receipt by the Company of a facsimile copy
of a Conversion Notice, the Company shall immediately send, via
facsimile, a confirmation of receipt of such Conversion Notice to
such holder and the Company or its designated transfer agent (the
“Transfer Agent”), as applicable, shall, within five
(5) business days following the date of receipt by the Company of
the certificate representing the shares of Series B Preferred Stock
being converted, (x) issue and deliver to the Depository Trust
Company (“DTC”) account on the holder’s behalf
via the Deposit Withdrawal Agent Commission System
(“DWAC”) as specified in the Conversion Notice,
registered in the name of the holder or its designee, for the
number of shares of Common Stock to which the holder shall be
entitled, and (y) if the certificate so surrendered represents more
shares of Series B Preferred Stock than those being converted,
issue and deliver to the holder a new certificate for such number
of shares of Series B Preferred Stock represented by the
surrendered certificate which were not converted.\
(iii)
Record Holder. The person or persons entitled to receive the shares
of Common Stock issuable upon a conversion of the Series B
Preferred Stock shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Conversion
Date.
(iv)
Company's Failure to Timely Convert. If within five (5) business
days of the Company's receipt of the Conversion Notice (the
“Share Delivery Period”) the Company shall fail to
issue and deliver to a holder the number of shares of Common Stock
to which such holder is entitled upon such holder's conversion of
the Series B Preferred Stock (a “Conversion Failure”),
in addition to all other available remedies which such holder may
pursue hereunder, the Company shall pay additional damages to such
holder on each business day after such fifth (5th) business day
that such conversion is not timely effected in an amount equal to
0.5% of the product of (A) the sum of the number of shares of
Common Stock not so issued to the holder on a timely basis pursuant
to Section 5(b)(ii) and to which such holder is entitled and (B)
the closing bid price of the Common Stock on the last possible date
which the Company could have issued such Common Stock to such
holder without violating Section 5(b)(ii). If the Company fails to
pay the additional damages set forth in this Section 5(b)(iv)
within five (5) business days of the date incurred, then such
payment shall bear interest at the rate of 2% per month (pro rated
for partial months) until such payments are made.
(c)
Adjustments of Conversion Rate.
(i)
Adjustments for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the Issuance Date, effect a
stock split of the outstanding Common Stock, the Conversion Rate
shall be proportionately increased. If the Company shall at any
time or from time to time after the Issuance Date, combine the
outstanding shares of Common Stock, the Conversion Rate shall be
proportionately decreased. Any adjustments under this Section
5(c)(i) shall be effective at the close of business on the date the
stock split or combination occurs.
(ii)
Adjustments for Certain Dividends and Distributions. If the Company
shall at any time or from time to time after the Issuance Date,
make or issue or set a record date for the determination of holders
of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, and in each
event, the Conversion Rate shall be increased as of the time of
such issuance or, in the event such record date shall have been
fixed, as of the close of business on such record date, by
multiplying, as applicable, the Conversion Rate then in effect by a
fraction:
(A)
the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately following the time
of such issuance or the close of business on such record date;
and
(B)
the denominator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time
of such issuance.
(iii)
Adjustment for Other Dividends and Distributions. If the Company
shall at any time or from time to time after the Issuance Date,
make or issue or set a record date for the determination of holders
of Common Stock entitled to receive a dividend or other
distribution payable in securities of the Company other than shares
of Common Stock, then, and in each event, an appropriate revision
to the applicable Conversion Rate shall be made and provision shall
be made (by adjustments of the Conversion Rate or otherwise) so
that the holders of Series B Preferred Stock shall receive upon
conversions thereof, in addition to the number of shares of Common
Stock receivable thereon, the number of securities of the Company
which they would have received had their Series B Preferred Stock
been converted into Common Stock on the date of such event (without
regard to Section 7 hereof) and had thereafter, during the period
from the date of such event to and including the Conversion Date,
retained such securities (together with any distributions payable
thereon during such period), giving application to all adjustments
called for during such period under this Section 5(c)(iii) with
respect to the rights of the holders of the Series B Preferred
Stock.
(iv)
Adjustments for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon conversion of the Series B Preferred
Stock at any time or from time to time after the Issuance Date
shall be changed to the same or different number of shares of any
class or classes of stock, whether by reclassification, exchange,
substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends provided for in Sections
5(c)(i), (ii) and (iii), or a reorganization, merger,
consolidation, or sale of assets provided for in Section 5(c)(v)),
then, and in each event, an appropriate revision to the Conversion
Rate shall be made and provisions shall be made so that the holder
of each share of Series B Preferred Stock shall have the right
thereafter to convert such share of Series B Preferred Stock into
the kind and amount of shares of stock and other securities
receivable upon reclassification, exchange, substitution or other
change, by holders of the number of shares of Common Stock into
which such share of Series B Preferred Stock might have been
converted immediately prior to such reclassification, exchange,
substitution or other change (without giving effect to the
limitations set forth in Section 7 hereof), all subject to further
adjustment as provided herein.
(v)
Adjustments for Reorganization, Merger, Consolidation or Sales of
Assets. If at any time or from time to time after the Issuance Date
there shall be a capital reorganization of the Company (other than
by way of a stock split or combination of shares or stock dividends
or distributions provided for in Section 5(c)(i), (ii) and (iii),
or a reclassification, exchange or substitution of shares provided
for in Section 5(c)(iv)), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties or assets to any
other person that is not deemed a liquidation pursuant to Section
4(b) (an “Organic Change”), then as a part of such
Organic Change an appropriate revision to the Conversion Rate shall
be made and provision shall be made so that the holder of each
share of Series B Preferred Stock shall have the right thereafter
to convert such share of Series B Preferred Stock into the kind and
amount of shares of stock and other securities or property of the
Company or any successor corporation resulting from the Organic
Change as the holder would have received as a result of the Organic
Change and if the holder had converted its Series B Preferred Stock
(without regard to Section 7 hereof) into the Company’s
Common Stock prior to the Organic Change.
(vi)
Record Date. In case the Company shall take record of the holders
of its Common Stock or any other Preferred Stock for the purpose of
entitling them to subscribe for or purchase Common Stock or
Convertible Securities, then the date of the issue or sale of the
shares of Common Stock shall be deemed to be such record
date.
(d)
No Impairment. The Company shall not, by amendment of its
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 Company, but will at all
times in good faith, assist in the carrying out of all the
provisions of this Section 5 and in the taking of all such action
as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series B Preferred Stock
against impairment. In the event a holder shall elect to convert
any shares of Series B Preferred Stock as provided herein, the
Company cannot refuse conversion based on any claim that such
holder or anyone associated or affiliated with such holder has been
engaged in any violation of law, unless an injunction from a court,
on notice, restraining and/or adjoining conversion of all or of
said shares of Series B Preferred Stock shall have been
issued.
(e)
Certificates as to Adjustments. Upon occurrence of each adjustment
or readjustment of the Conversion Rate or number of shares of
Common Stock issuable upon conversion of the Series B Preferred
Stock pursuant to this Section 5, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with
the terms hereof and furnish to each holder of such Series B
Preferred Stock a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon
written request of the holder of such affected Series B Preferred
Stock, at any time, furnish or cause to be furnished to such holder
a like certificate setting forth such adjustments and
readjustments, the Conversion Rate in effect at the time, and the
number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon the
conversion of a share of such Series B Preferred Stock.
Notwithstanding the foregoing, the Company shall not be obligated
to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent (1%) of such adjusted
amount.
(f)
Issue Taxes. The Company shall pay any and all issue and other
taxes, excluding federal, state or local income taxes, that may be
payable in respect of any issue or delivery of shares of Common
Stock on conversion of shares of Series B Preferred Stock pursuant
thereto; provided, however, that the Company shall not be obligated
to pay any transfer taxes resulting from any transfer requested by
any holder in connection with any such conversion.
(g)
Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and
shall be effective (i) upon hand delivery, telecopy or facsimile at
the address or number designated in the Exchange Agreement (if
delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (ii) on the
second business day following the date of mailing by express
overnight courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall
first occur. The Company will give written notice each holder of
Series B Preferred Stock at least ten (10) days prior to the date
on which the Company takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to
any pro rata subscription offer to holders of Common Stock or (C)
for determining rights to vote with respect to any Organic Change,
dissolution, liquidation or winding-up and in no event shall such
notice be provided to such holder prior to such information being
made known to the public. Subject to Section 4(c), the Company will
also give written notice to each holder of Series B Preferred Stock
at least ten (10) days prior to the date on which any Organic
Change will take place and in no event shall such notice be
provided to such holder prior to such information being made known
to the public
(h)
Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series B Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be
entitled, the Company shall at its option either (i) pay cash equal
to the product of such fraction multiplied by the average of the
closing bid prices of the Common Stock for the five (5) consecutive
trading days immediately preceding the Voluntary Conversion Date,
as applicable, or (ii) in lieu of issuing such fractional shares
issue one additional whole share to the holder.
(i)
Reservation of Common Stock. The Company shall, so long as any
shares of Series B Preferred Stock are outstanding, reserve and
keep available out of its authorized and unissued Common Stock,
solely for the purpose of effecting the conversion of the Series B
Preferred Stock, such number of shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all of
the Series B Preferred Stock then outstanding (without regard to
the limitations on conversion set forth in Section 7
hereof).
(j)
Retirement of Series B Preferred Stock. Conversion of Series B
Preferred Stock shall be deemed to have been effected on the
applicable Voluntary Conversion Date. The Company shall keep
written records of the conversion of the shares of Series B
Preferred Stock converted by each holder. A holder shall be
required to deliver the original certificates representing the
shares of Series B Preferred Stock upon complete conversion of the
Series B Preferred Stock represented by such certificates. A
delivery of original certificates pursuant to Section 5(b)(i) shall
be deemed to comply with the requirements of this Section
5(j).
(k)
Regulatory Compliance. If any shares of Common Stock to be reserved
for the purpose of conversion of Series B Preferred Stock require
registration or listing with or approval of any governmental
authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares
may be validly issued or delivered upon conversion, the Company
shall, at its sole cost and expense, in good faith and as
expeditiously as possible, endeavor to secure such registration,
listing or approval, as the case may be.
6. No Preemptive Rights. Except as provided in Section 5 hereof, no
holder of the Series B Preferred Stock shall be entitled to rights
to subscribe for, purchase or receive any part of any new or
additional shares of any class, whether now or hereinafter
authorized, or of bonds or debentures, or other evidences of
indebtedness convertible into or exchangeable for shares of any
class, but all such new or additional shares of any class, or any
bond, debentures or other evidences of indebtedness convertible
into or exchangeable for shares, may be issued and disposed of by
the Board of Directors on such terms and for such consideration (to
the extent permitted by law), and to such person or persons as the
Board of Directors in their absolute discretion may deem
advisable.
7. Conversion Restriction. Notwithstanding anything to the contrary
set forth in Section 5 of this Certificate of Designation, at no
time may a holder of shares of Series B Preferred Stock convert
shares of the Series B Preferred Stock if the number of shares of
Common Stock to be issued pursuant to such conversion would exceed,
when aggregated with all other shares of Common Stock owned by such
holder at such time, the number of shares of Common Stock which
would result in such holder owning (as determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules thereunder) more than 9.99% of all of the
Common Stock outstanding at such time; provided, however, that upon
a holder of Series B Preferred Stock providing the Company with
sixty-one (61) days notice (pursuant to Section 5(g) hereof) (the
“Waiver Notice”) that such holder would like to waive
Section 7 of this Certificate of Designation with regard to any or
all shares of Common Stock issuable upon conversion of Series B
Preferred Stock, this Section 7 shall be of no force or effect with
regard to those shares of Series B Preferred Stock referenced in
the Waiver Notice.
8. Inability to Fully Convert.
(a)
Holder's Option if Company Cannot Fully Convert. If, upon the
Company's receipt of a Conversion Notice, the Company cannot issue
shares of Common Stock for any reason, including, without
limitation, because the Company (i) does not have a sufficient
number of shares of Common Stock authorized and available, or (ii)
is otherwise prohibited by applicable law or by the rules or
regulations of any stock exchange, interdealer quotation system or
other self-regulatory organization with jurisdiction over the
Company or its securities from issuing all of the Common Stock
which is to be issued to a holder of Series B Preferred Stock
pursuant to a Conversion Notice, then the Company shall issue as
many shares of Common Stock as it is able to issue in accordance
with such holder's Conversion Notice, and with respect to the
unconverted Series B Preferred Stock (the “Unconverted
Preferred Stock”), the holder, solely at such holder's
option, can elect to, at any time after receipt of notice from the
Company that there is Unconverted Preferred Stock, to void the
holder’s Conversion Notice as to the number of shares of
Common Stock the Company is unable to issue and retain or have
returned, as the case may be, the certificates for the shares of
the Unconverted Preferred Stock.
(b)
Mechanics of Fulfilling Holder's Election. The Company shall
immediately send via facsimile to a holder of Series B Preferred
Stock, upon receipt of a facsimile copy of a Conversion Notice from
such holder which cannot be fully satisfied as described in Section
8(a) above, a notice of the Company's inability to fully satisfy
such holder's Conversion Notice (the “Inability to Fully
Convert Notice”). Such Inability to Fully Convert Notice
shall indicate (i) the reason why the Company is unable to fully
satisfy such holder's Conversion Notice, and (ii) the number of
shares of Series B Preferred Stock which cannot be
converted.
9. Automatic Conversion.
(a)
Automatic Conversion Events. All outstanding shares of Series B
Preferred Stock shall be automatically converted into Common Stock
at the Conversion Rate upon the earlier to occur of (i) the closing
of a firm commitment underwritten public offering of Common Stock
of the Company pursuant to an effective registration statement
under Section 5 of the Securities Act in which the gross cash
proceeds to the Company (before underwriting discounts, commissions
and fees) from such public offering are at least $10,000,000, or
(ii) December 31, 2012 (each, an “ Automatic Conversion Event
”).
(b)
Mechanics of Automatic Conversion. Upon the occurrence of an
Automatic Conversion Event, the outstanding Series B Preferred
Stock shall be converted into Common Stock automatically without
any further action by the holders of such shares and whether or not
the certificates representing such shares are surrendered to the
Company or its transfer agent; provided, however , that the Company
shall not be obligated to issue certificates evidencing the Common
Stock issuable upon such conversion unless the certificates
evidencing such Series B Preferred Stock are either delivered to
the Company or its transfer agent as provided below, or the holder
certifies to the Company or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with such certificates. Upon
surrender by any holder of the certificates formerly representing
shares of Series B Preferred Stock to the Company or the transfer
agent, there shall be issued and delivered to such holder promptly
in its name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of
shares of Common Stock into which the shares of Series B Preferred
Stock surrendered were converted on the date on which such
automatic conversion occurred, and the Company shall promptly pay
in cash (at the fair market value per share of Common Stock
determined by the Board of Directors as of the date of conversion)
the value of any fractional share of Common Stock otherwise
issuable to any holder of shares of Series B Preferred Stock being
converted. Until surrendered as provided above, each certificate
formerly representing Series B Preferred Stock shall be deemed for
all corporate purposes to represent the number of shares of Common
Stock resulting from such automatic conversion.
(c)
Inability to Convert. Notwithstanding the provisions of Section
9(a) if, upon the occurrence of an Automatic Conversion Event, the
Company cannot issue shares of Common Stock to fully effect the
conversion for any reason, including, without limitation, because
the Company (i) does not have a sufficient number of shares of
Common Stock authorized and available, (ii) is otherwise prohibited
by applicable law or by the rules or regulations of any stock
exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Company or its securities
from issuing all of the Common Stock which is to be issued to a
holder of Series B Preferred Stock, or (iii) the conversion would
be prohibited by the provisions of Section 7 hereof and such
prohibition has not been waived by the holder, then the Company
shall issue as many shares of Common Stock as it is able to issue,
and with respect to the unconverted Series B Preferred Stock (the
“ Unconverted Preferred Stock ”), deliver to the holder
a certificate for the shares of the Unconverted Preferred Stock. In
the event that the Company is thereafter able to convert the
Unconverted Preferred Stock, it shall so notify the holder in
writing, and such notice shall be deemed to be an Automatic
Conversion Event for purposes of this Section 9.
10. Vote to Change the Terms of Preferred Stock. The affirmative
vote at a meeting duly called for such purpose, or the written
consent without a meeting, of the holders of not less than a
majority of the then outstanding shares of Series B Preferred
Stock, shall be required for any change to this Certificate of
Designation or the Company’s Certificate of Incorporation
that would amend, alter, change or repeal any of the powers,
designations, preferences and rights of the Series B Preferred
Stock.
11. Lost or Stolen Certificates. Upon receipt by the Company of
evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of any certificates representing the
shares of Series B Preferred Stock, and, in the case of loss, theft
or destruction, of any indemnification undertaking by the holder to
the Company and, in the case of mutilation, upon surrender and
cancellation of such certificate(s), the Company shall execute and
deliver new preferred stock certificate(s) of like tenor and
date.
12. Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in this Certificate of
Designation shall be cumulative and in addition to all other
remedies available under this Certificate of Designation, at law or
in equity (including a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy
and nothing herein shall limit a holder's right to pursue actual
damages for any failure by the Company to comply with the terms of
this Certificate of Designation. Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the
computation thereof) shall be the amounts to be received by the
holder thereof and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the
holders of the Series B Preferred Stock and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the
holders of the Series B Preferred Stock shall be entitled, in
addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic
loss and without any bond or other security being
required.
13. Specific Shall Not Limit General; Construction. No specific
provision contained in this Certificate of Designation shall limit
or modify any more general provision contained herein.
14. Failure or Indulgence Not Waiver. No failure or delay on the
part of a holder of Series B Preferred Stock in the exercise of any
power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.