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EXHIBIT 3.1
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ODYSSEY HEALTHCARE, INC.
ODYSSEY HEALTHCARE, INC., a corporation organized and existing under
the laws of the State of Delaware (the "CORPORATION"), hereby certifies as
follows:
The name of the Corporation is Odyssey HealthCare, Inc. The name under
which the Corporation was originally organized was CareFirst, Inc. The original
Certificate of Incorporation was filed with the Delaware Secretary of State on
August 29, 1995, which original Certificate of Incorporation was amended by the
Amended and Restated Certificate of Incorporation filed with the Delaware
Secretary of State on January 26, 1996; the Second Amended and Restated
Certificate of Incorporation filed with the Delaware Secretary of State on
February 12, 1997; the Third Amended and Restated Certificate of Incorporation
filed with the Delaware Secretary of State on March 31, 1998; and the Fourth
Amended and Restated Certificate of Incorporation filed with the Delaware
Secretary of State on June 30, 1998 (as so amended, the "ORIGINAL CERTIFICATE OF
INCORPORATION").
This Fifth Amended and Restated Certificate of Incorporation was duly
adopted by vote of the stockholders in accordance with the applicable provisions
of Sections 228, 242 and 245 of the Delaware General Corporation Law.
This Fifth Amended and Restated Certificate of Incorporation restates
and integrates and further amends the Original Certificate of Incorporation to
read in its entirety, as follows:
FIRST: The name of the Corporation is Odyssey HealthCare, Inc.
SECOND: The address of the principal office of the Corporation's
registered office in the State of Delaware, and the name of its registered agent
at such address, is:
The Corporation Trust Company
1209 Orange Street
New Castle County
Wilmington, Delaware 19802
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the Delaware General
Corporation Law.
FOURTH:
I. SHARES AUTHORIZED. The Corporation is authorized to issue two
classes of stock, designated, respectively, the "COMMON STOCK" and the
"PREFERRED STOCK." The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is shares,
consisting of _____ shares of Common Stock, $0.001 par value per share and _____
shares of Preferred Stock, $0.001 par value per share.
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II. CONVERSION. Effective at 4:30 p.m., Eastern time, on the date on
which this Fifth Amended and Restated Certificate of Incorporation is filed with
the Delaware Secretary of State (the "EFFECTIVE DATE"), each share of Common
Stock (the "CONVERTED COMMON STOCK") issued and outstanding immediately prior to
the Effective Date shall, without any action on the part of the holder thereof,
be converted into, and deemed for all purposes to immediately represent,
_________ shares of Common Stock. Any fraction of a share of Common Stock that
would otherwise result pursuant to the preceding sentence (after aggregating all
fractional shares held by each stockholder) shall automatically be eliminated
and, in lieu thereof, the holder thereof shall be entitled to receive a cash
adjustment in respect of such fraction of a share in an amount based upon a
value of the Common Stock equal to $____ per whole share. The executive officers
of the Corporation or their designees shall use the Effective Date as the record
date for determining the holders of record of the Converted Common Stock. From
and after the Effective Date, each certificate representing shares of Converted
Common Stock shall represent that number of shares of Common Stock determined in
accordance with the preceding sentences. Upon surrender of certificates
representing shares of Converted Common Stock to the Corporation, the executive
officers of the Corporation or their designees shall issue to such holders of
record a new certificate or certificates, endorsed with such legends as are
required or are appropriate, representing _________ shares of Common Stock for
every one share of the Converted Common Stock as shall be registered on the
Corporation's stock transfer records for such holder. The executive officers, or
their designees, shall enter the fact of the issuance of the new certificates
for Common Stock in the appropriate name or names of the holders of such shares
on the Corporation's stock records and transfer books.
III. GENERAL.
A. Subject to the provisions of this Fifth Amended and
Restated Certificate of Incorporation, the Corporation may issue shares
of its Common Stock or Preferred Stock from time to time for such
consideration (not less than the par value thereof) as may be fixed by
the Board of Directors of the Corporation (the "BOARD OF DIRECTORS"),
which is expressly authorized to fix the same in its absolute and
uncontrolled discretion. Shares so issued for which the consideration
shall have been paid or delivered to the Corporation shall be deemed
fully paid capital stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable
for any further payments in respect of such shares.
B. Subject to the provisions of this Fifth Amended and
Restated Certificate of Incorporation, the Corporation shall have
authority to create and issue rights and options entitling their
holders to purchase shares of the Corporation's capital stock of any
class or series or other securities of the Corporation, and such rights
and options shall be evidenced by instrument(s) approved by the Board
of Directors or a committee of the Board of Directors. The Board of
Directors or a committee of the Board of Directors shall be empowered
to set the exercise price, duration, times for exercise, and other
terms of such options or rights; provided, however, that the
consideration to be received for any shares of capital stock subject
thereto shall not be less than the par value thereof.
The designations, powers, preferences, rights, qualifications,
limitations and restrictions of the Preferred Stock and the Common
Stock are as follows:
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IV. PREFERRED STOCK
A. GENERAL.
1. The shares of Preferred Stock of the Corporation
may be issued from time to time in one or more classes or
series thereof, the shares of each class or series thereof to
have such voting powers, full or limited, or no voting powers,
and such designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as are
stated and expressed herein or in the resolution or
resolutions providing for the issue of such class or series,
adopted by the Board of Directors as hereinafter provided.
2. Authority is hereby expressly granted to and
vested in the Board of Directors, subject to the provisions of
this Subsection A, and to the limitations prescribed by the
Delaware General Corporation Law, to authorize the issuance of
the Preferred Stock from time to time in one or more classes
or series, and with respect to each such class or series to
fix by resolution or resolutions providing for the issue of
such class or series and the designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations and restrictions thereof. The
authority of the Board of Directors with respect to each class
or series thereof shall include, but not be limited to, the
determination or fixing of the following:
(i) whether or not the class or series is to
have voting rights, full, special or limited, or is
to be without voting rights, and whether or not such
class or series is to be entitled to vote as a
separate class either alone or together with the
holders of one or more other classes or series of
capital stock;
(ii) the number of shares to constitute the
class or series and the designations thereof;
(iii) the preferences and relative,
participating, optional or other special rights, if
any, and the qualifications, limitations or
restrictions thereof, if any, with respect to any
class or series;
(iv) whether or not the shares of any class
or series shall be redeemable at the option of the
Corporation or the holders thereof or upon the
happening of any specified event, and, if redeemable,
the redemption price or prices (which may be payable
in the form of cash, notes, securities or other
property) and the time or times at which, and the
terms and conditions upon which, such shares shall be
redeemable and the manner of redemption;
(v) whether or not the shares of a class or
series shall be subject to the operation of
retirement or sinking funds to be applied to the
purchase or redemption of such shares for retirement,
and, if such retirement or sinking fund or funds are
to be established, the annual
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amount thereof and the terms and provisions relative
to the operation thereof;
(vi) the dividend rate, whether dividends
are payable in cash, securities of the Corporation or
other property, the conditions upon which and the
times when such dividends are payable, the preference
to or the relation to the payment of dividends
payable on any other class or classes or series of
capital stock, whether or not such dividends shall be
cumulative or noncumulative and, if cumulative, the
date or dates from which such dividends shall
accumulate;
(vii) the preferences, if any, and the
amounts thereof which the holders of any class or
series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any
distribution of the assets of, the Corporation;
(viii) whether or not the shares of any
class or series, at the option of the Corporation or
the holder thereof or upon the happening of any
specified event, shall be convertible into or
exchangeable for the shares of any other class or
classes or of any other series of the same or any
other class or classes of capital stock, securities,
or other property of the Corporation or any other
entity and the conversion price or prices, ratio or
ratios, or the rate or rates at which such conversion
or exchange may be made, with such adjustments, if
any, as shall be stated and expressed or provided for
in such resolution or resolutions; and
(ix) such other special rights and
protective provisions with respect to any class or
series the Board of Directors may provide.
3. The shares of each class or series of Preferred
Stock may vary from the shares of any other class or series
thereof in any or all of the foregoing respects. The Board of
Directors may increase the number of shares of the Preferred
Stock designated for any existing class or series by a
resolution adding to such class or series authorized and
unissued shares of the Preferred Stock not designated for any
other class or series. The Board of Directors may decrease the
number of shares of the Preferred Stock designated for any
existing class or series by a resolution subtracting from such
class or series authorized and unissued shares of the
Preferred Stock designated for such existing class or series,
and the shares so subtracted shall become authorized, unissued
and undesignated shares of the Preferred Stock.
4. The number of authorized shares of Preferred Stock
may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock without a vote
of a majority of the holders of the Preferred Stock, or any
class or series thereof, unless a vote of any such holders is
otherwise required pursuant to this Section IV.
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5. Holders of Preferred Stock shall not be entitled
to receive notice of any meeting of stockholders at which they
are not entitled to vote.
B. DESIGNATIONS. Of the shares of Preferred Stock which the
Corporation is authorized to issue hereby, 7,009,091 shares are
designated as the Series A Convertible Preferred Stock (the "SERIES A
CONVERTIBLE PREFERRED STOCK"), 6,519,993 shares are designated as the
Series B Convertible Preferred Stock (the "SERIES B CONVERTIBLE
PREFERRED STOCK") and 2,857,137 shares are designated as the Series C
Convertible Preferred Stock (the "SERIES C CONVERTIBLE PREFERRED Stock"
and collectively with the Series A Convertible Preferred Stock and the
Series B Convertible Preferred Stock, the "CONVERTIBLE PREFERRED
STOCK"). Immediately after a Qualified Public Offering (as defined in
Section IV, Subsection G, Paragraph 15 of this Section IV), all
authorized and unissued shares of Convertible Preferred Stock shall be
returned to the status of authorized, unissued and undesignated shares
of Convertible Preferred Stock. The preferences, limitations, voting
rights, and relative rights of the Convertible Preferred Stock shall be
as set forth below, and no distinction between the various series of
Convertible Preferred Stock shall be made except as specifically
provided for below.
C. VOTING.
1. GENERAL. Except as may be otherwise provided in
these terms of the Convertible Preferred Stock or by law, the
Convertible Preferred Stock shall vote together with all other
classes and series of stock of the Corporation as a single
class on all actions to be taken by the stockholders of the
Corporation. Each share of Convertible Preferred Stock shall
entitle the holder thereof to such number of votes per share
on each such action as shall equal the number of shares of
Common Stock (including fractions of a share) into which each
share of Convertible Preferred Stock is then convertible.
2. BOARD SEATS. The holders of all series of the
Convertible Preferred Stock, voting as a single, separate
class, shall be entitled to elect four (4) directors of the
Corporation. At any meeting (or pursuant to a written consent
in lieu thereof) held for the purpose of electing directors,
the presence in person or by proxy (or the written consent) of
the holders of a majority of the shares of Convertible
Preferred Stock then outstanding shall constitute a quorum of
the Convertible Preferred Stock for the election of directors
to be elected solely by the holders of the Convertible
Preferred Stock. A vacancy in any directorship elected by the
holders of the Convertible Preferred Stock shall be filled
only by vote or written consent of the holders of the
Convertible Preferred Stock. An additional one (1) director
shall be elected by the vote of (i) a majority of the total
outstanding shares of Convertible Preferred Stock voting as a
single, separate class and (ii) a majority of the total
outstanding shares of Common Stock voting separately as a
class. A vacancy in the foregoing directorship shall be
elected by the holders of the Convertible Preferred Stock and
the Common Stockholders voting separately as two classes.
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D. DIVIDENDS. The holders of the Series A Convertible
Preferred Stock shall be entitled to receive, out of funds legally
available therefor, when and if declared by the Board of Directors,
quarterly dividends at the rate per annum of $0.04 per share. The
holders of the Series B Convertible Preferred Stock shall be entitled
to receive, out of funds legally available therefor, when and if
declared by the Board of Directors, quarterly dividends at the rate per
annum of $0.10 per share. The holders of the Series C Convertible
Preferred Stock shall be entitled to receive, out of funds legally
available therefor, when and if declared by the Board of Directors,
quarterly dividends at the rate per annum of $0.14 per share. All such
dividends on the Convertible Preferred Stock (the "ACCRUING DIVIDENDS")
shall accrue from day to day, whether or not earned or declared, and
shall be cumulative. Such Accruing Dividends shall be deemed to have
been declared by the Board of Directors and shall be payable upon each
Redemption Date, as defined in Subsection H, Paragraph 2 of this
Section IV, or upon any liquidation, dissolution or winding up of the
Corporation within the meaning of Subsection E, Paragraph 3 of this
Section IV. Notwithstanding the foregoing, no Accruing Dividends shall
be deemed to have been declared by the Board of Directors nor shall
such be deemed payable in the event of a mandatory conversion of the
Convertible Preferred Stock pursuant to the provisions of Subsection G,
Paragraph 15 of this Section IV. No dividends on the Common Stock shall
be paid unless all Accruing Dividends have been paid.
E. LIQUIDATION. Upon any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the holders of
the shares of Convertible Preferred Stock shall first be entitled to
receive a preference among the various series, before any distribution
or payment is made upon any stock ranking on liquidation junior to the
Convertible Preferred Stock, including, without limitation, the Common
Stock, of the amounts set forth in this Subsection E.
1. The holders of the Series A Convertible Preferred
Stock shall be paid an amount per share equal to the amount
paid to the Corporation for such share upon its initial
issuance (the "INITIAL SERIES A PRICE"), the holders of the
Series B Convertible Preferred Stock shall be paid an amount
per share equal to $1.25 (the "INITIAL SERIES B PRICE") and
the holders of the Series C Convertible Preferred Stock shall
be paid an amount per share equal to $1.75 (the "INITIAL
SERIES C PRICE"), plus for each share of each series of
Convertible Preferred Stock an amount equal to all Accruing
Dividends unpaid thereon (whether or not declared) and any
other dividends declared but unpaid thereon such series,
computed to the date payment thereof is made available, such
amount payable with respect to one share of such series of
Convertible Preferred Stock being sometimes referred to as the
"LIQUIDATION PREFERENCE PAYMENT" and with respect to all
shares of Convertible Preferred Stock being sometimes referred
to as the "LIQUIDATION PREFERENCE PAYMENTS." If upon the
occurrence of any liquidation, dissolution, or winding up of
the Corporation, whether voluntary or involuntarily, the
assets and funds thus distributed among the holders of the
Convertible Preferred Stock shall be insufficient to permit
the payment to such holders of the full aforesaid Liquidation
Preference Payments, then the entire assets and funds of the
Corporation legally available for distribution to the holders
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of Convertible Preferred Stock shall be distributed ratably
among the holders of each series of Convertible Preferred
Stock pro rata in proportion to the Liquidation Preference
Payment each such series is otherwise entitled to receive.
2. If, upon any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
assets to be distributed among the Stockholders of the
Corporation shall be more than the Liquidation Preference
Payments, immediately after the holders of Convertible
Preferred Stock shall have been paid in full the amounts set
forth above, the remaining net assets of the Corporation
available for distribution shall be distributed ratably among
the holders of Common Stock. Written notice of such
liquidation, dissolution or winding up, stating a payment date
and the place where said payments shall be made, shall be
given by mail, postage prepaid, or by telex to non-U.S.
residents, not less than twenty (20) days prior to the payment
date stated therein, to the holders of record of Convertible
Preferred Stock, such notice to be addressed to each such
holder at its address as shown by the records of the
Corporation.
3. The following events shall be deemed to be a
liquidation, dissolution or winding up of the Corporation
within the meaning of the provisions of this Subsection E: (i)
the reorganization, consolidation or merger of the Corporation
into or with any other entity or entities which results in (a)
the exchange of outstanding shares of the Corporation for
securities or other consideration issued or paid or caused to
be issued or paid by any such entity or affiliate thereof or,
(b) the issuance by the Corporation of shares of capital
stock, where such issuance results in either (x) all the
holders of voting stock of the Corporation, prior to the
consolidation or merger, holding less than a majority of the
voting stock of the Corporation after the consolidation or
merger, or (y) all the holders of voting stock of the
Corporation, prior to the merger, no longer being assured of
their ability collectively, to elect a majority of the Board
of Directors of the Corporation; and (ii) the sale, transfer
or disposition by the Corporation of all or substantially all
of its assets. For purposes hereof, the Common Stock shall
rank on liquidation junior to the Convertible Preferred Stock.
4. In the case of any of the events described in
Paragraph 3 of this Subsection E, if the consideration
received by the Corporation is other than cash, its value will
be deemed its fair market value. Any securities shall be
valued as follows:
(i) Securities not subject to investment
letter or other similar restrictions on free
marketability covered by (ii) below: (a) if traded on
a securities exchange or through the Nasdaq National
Market (or any successor thereto), the value shall be
deemed to be the average of the closing prices of the
securities on such exchange or market over the
thirty-day period ending three (3) days prior to the
closing; (b) if actively traded over-the-counter, the
value shall be deemed to be the average of the
closing bid or sale prices (whichever is applicable)
over the thirty-day period ending three (3) days
prior to the closing; and (c) if there is no
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active public market, the value shall be the fair
market value thereof, as mutually determined by the
Corporation and the holders of at least a majority of
the voting power of all then outstanding shares of
Convertible Preferred Stock.
(ii) The method of valuation of securities
subject to investment letter or other restrictions on
free marketability (other than restrictions arising
solely by virtue of a shareholder's status as an
affiliate or former affiliate) shall be to make an
appropriate discount from the market value determined
as above in (i) (a), (b) or (c) to reflect the
approximate fair market value thereof, as mutually
determined by the Corporation and the holders of at
least a majority of the voting power of all then
outstanding shares of Convertible Preferred Stock.
5. In the event the requirements of this Subsection E
are not complied with, this Corporation shall forthwith
either:
(i) Cause such closing to be postponed until
such time as the requirements of this Subsection E
have been complied with; or
(ii) Cancel such transaction, in which event
the rights, preferences and privileges of the holders
of the Convertible Preferred Stock shall revert to
and be the same as such rights, preferences and
privileges existing immediately prior to the date of
the first notice referred to in Paragraph 6 of this
Subsection E.
6. The Corporation shall give each holder of record
of Convertible Preferred Stock written notice of such
impending transaction not later than twenty (20) days prior to
the stockholders' meeting called to approve such transaction,
or twenty (20) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in
writing of the final approval of such transaction. The first
of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of
this Subsection E, and the Corporation shall thereafter give
such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty
(20) days after the Corporation had given the first notice
provided for herein or sooner than ten (10) days after the
Corporation has given notice of any material provided for
herein; provided, however, that such periods may be shortened
upon the written consent of the holders of Convertible
Preferred Stock that are entitled to such notice rights or
similar notice rights and that represent at least a majority
of the voting power of all then outstanding shares of such
Convertible Preferred Stock.
F. RESTRICTIONS. At any time when shares of Convertible
Preferred Stock are outstanding, except where the vote or written
consent of the holders of a greater number of shares of the Corporation
is required by law or by this Fifth Amended and Restated Certificate of
Incorporation, and in addition to any other vote required by law or
this Fifth
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Amended and Restated Certificate of Incorporation, without the approval
of the holders of at least two-thirds of the then total outstanding
shares of all series of the Convertible Preferred Stock as a single,
separate class, given in writing or by vote at a meeting, consenting or
voting (as the case may be), the Corporation will not:
1. (i) Alter, change or repeal the preferences of the
Convertible Preferred Stock, (ii) create or authorize the
creation of any additional class or series of shares or
increase the authorized number of shares of stock unless the
same ranks junior to the Convertible Preferred Stock as to
voting, dividends, the distribution of assets on the
liquidation, dissolution or winding up of the Corporation,
(iii) increase or decrease the authorized amount of
Convertible Preferred Stock, (iv) increase, authorize, issue
or obligate itself to issue any security, including any other
security convertible into or exercisable for any equity
security having a preference over or in parity with the
Convertible Preferred Stock as to voting, dividends, the
distribution of assets on the liquidation, dissolution or
winding up of the Corporation, or (v) increase or authorize
any obligation or security convertible into shares of
Convertible Preferred Stock or into shares of any other class
or series of stock unless the same ranks junior to the
Convertible Preferred Stock as to voting, dividends, the
distribution of assets on the liquidation, dissolution or
winding up of the Corporation, whether any such creation,
authorization or increase shall be by means of amendment to
this Fifth Amended and Restated Certificate of Incorporation,
or by merger, consolidation or otherwise;
2. Consent to any liquidation, dissolution or winding
up of the Corporation or consolidate or merge into or with any
other entity or entities or sell, transfer, or dispose of all
or substantially all its assets or enter into any other
transaction or series of transactions the effect of which
shall be the transfer of more than a majority of the
outstanding voting securities of the Corporation;
3. Amend, alter or repeal this Fifth Amended and
Restated Certificate of Incorporation;
4. Redeem, purchase or otherwise acquire (or pay into
or set aside for a fund for such purpose) any shares of the
Convertible Preferred Stock except as expressly authorized in
Section IV, Subsection H of this Section IV or pursuant to a
purchase offer made pro rata to all holders of the shares of
Convertible Preferred Stock on the basis of the aggregate
number of outstanding shares of Convertible Preferred Stock
then held by each such holder, provided that the outstanding
principal balance of the 12.0% Senior Subordinated Notes (the
"NOTES") issued to Capital Resource Lenders III, L.P. and CRP
Investment Partners III, L.P. (collectively, "CAPITAL RESOURCE
PARTNERS") pursuant to that certain Senior Subordinated Note
and Warrant Purchase Agreement (the "NOTE PURCHASE AGREEMENT")
among the Corporation, certain of its subsidiaries and Capital
Resource Partners, together with all interest and premium, if
any, has been repaid in full;
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5. Redeem or otherwise acquire any shares of the
Common Stock (except for (i) repurchases from directors,
employees, and consultants not exceeding $25,000 in the
aggregate in any twelve (12) month period and (ii) the
repurchase or redemption of the common stock purchase warrants
issued by the Corporation to Capital Resource Partners (the
"NOTE WARRANTS") pursuant to the Note Purchase Agreement or
the shares of Common Stock issued or issuable upon exercise of
such Note Warrants); declare or pay dividends on or make any
distributions on account of the Common Stock; or permit any
subsidiary of the Corporation to sell its stock to any third
person; or
6. Change the authorized number of directors of the
Corporation.
G. CONVERSIONS. The holders of shares of Convertible Preferred
Stock shall have the following conversion rights:
1. RIGHT TO CONVERT. Subject to the terms and
conditions of this Subsection G, the holder of any share or
shares of Convertible Preferred Stock shall have the right, at
its option at any time, to convert any such shares of
Convertible Preferred Stock (except that upon any liquidation
of the Corporation the right of conversion shall terminate at
the close of business on the business day preceding the day
fixed for payment of the amount of the distribution on the
Convertible Preferred Stock) into such number of fully paid
and nonassessable shares of Common Stock as is obtained: (a)
in the case of Series A Convertible Preferred Stock, by (i)
multiplying the number of shares of Series A Convertible
Preferred Stock so to be converted by the Initial Series A
Price applicable for such shares, and (ii) dividing the
results by the Initial Series A Price applicable for such
shares, or, in case an adjustment of such price has taken
place pursuant to the further provisions of this Subsection G,
then by the conversion price as last adjusted and in effect at
the date any share or shares of Series A Convertible Preferred
Stock are surrendered for conversion (such price, or such
price as last adjusted, being referred to as the "SERIES A
CONVERSION PRICE"); (b) in the case of Series B Convertible
Preferred Stock, by (i) multiplying the number of shares of
Series B Convertible Preferred Stock so to be converted by the
Initial Series B Price, and (ii) dividing the result by the
Initial Series B Price, or in case an adjustment of such price
has taken place pursuant to the further provisions of this
Subsection G, then by the conversion price for Series B
Convertible Preferred Stock as last adjusted and in effect at
the date any share or shares of Series B Convertible Preferred
Stock are surrendered for conversion (such price, or such
price as last adjusted, being referred to as the "SERIES B
CONVERSION PRICE"); and (c) in the case of the Series C
Convertible Preferred Stock, by (i) multiplying the number of
shares of Series C Convertible Preferred Stock so to be
converted by the Initial Series C Price, and (ii) dividing the
result by the Initial Series C Price, or in case an adjustment
of such price has taken place pursuant to the further
provisions of this Subsection G, then by the conversion price
for Series C Convertible Preferred Stock last adjusted and in
effect at the date any share or shares of Series C Convertible
Preferred Stock are surrendered for conversion (such price, or
such price as last adjusted, being referred to as the "SERIES
C
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CONVERSION PRICE" and collectively with the Series A
Conversion Prices and the Series B Conversion Price all such
conversion prices are referred to as "CONVERSION PRICES").
Such rights of conversion shall be exercised by the holder
thereof by giving written notice that the holder elects to
convert a stated number of shares of Convertible Preferred
Stock (specifying the numbers of shares of each series of
Convertible Preferred Stock to be converted) into Common Stock
by surrender of a certificate or certificates for the shares
so to be converted to the Corporation at its principal office
(or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holder
of the Convertible Preferred Stock) at any time during its
usual business hours on the date set forth in such notice,
together with a statement of the name or names (with address)
in which the certificate or certificates for shares of Common
Stock shall be issued.
2. ISSUANCE OF CERTIFICATES; TIME CONVERSION
EFFECTED. Promptly after the receipt of the written notice
referred to in Paragraph 1 of this Subsection G and surrender
of the certificate or certificates for the share or shares of
Convertible Preferred Stock to be converted, the Corporation
shall issue and deliver, or cause to be issued and delivered,
to the holder, registered in such name or names as such holder
may direct, a certificate or certificates for the number of
whole shares of Common Stock issuable upon the conversion of
such share or shares of Convertible Preferred Stock. To the
extent permitted by law, such conversion shall be deemed to
have been effected and the applicable Conversion Price shall
be determined as of the close of business on the date on which
such written notice shall have been received by the
Corporation and the certificate or certificates for such share
or shares shall have been surrendered as aforesaid, and at
such time the rights of the holder of such share or shares of
Convertible Preferred Stock shall cease, and the person or
persons in whose names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record
of the shares represented thereby.
3. FRACTIONAL SHARES; DIVIDENDS; PARTIAL CONVERSION.
No fractional shares shall be issued upon conversion of
Convertible Preferred Stock into Common Stock and no payment
or adjustment shall be made upon any conversion on account of
any cash dividends on the Common Stock issued upon such
conversion. In case the number of shares of Convertible
Preferred Stock represented by the certificate or certificates
surrendered pursuant to Paragraph 1 of this Subsection G
exceeds the number of shares converted, the Corporation shall,
upon such conversion, execute and deliver to the holder, at
the expense of the Corporation, a new certificate or
certificates for the number of shares of Convertible Preferred
Stock represented by the certificate or certificates
surrendered which are not to be converted. If any fractional
share of Common Stock would, except for the provisions of the
first sentence of this Paragraph 3, be delivered upon such
conversion, the Corporation, in lieu of delivering such
fractional share, shall pay to the holder surrendering the
Convertible Preferred
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Stock for conversion an amount in cash equal to the current
market price of a fractional shares as determined in good
faith by the Board of Directors.
4. ADJUSTMENT OF PRICE UPON ISSUANCE OF COMMON STOCK.
Except as provided in Paragraph 5 of this Subsection G, if and
whenever the Corporation shall issue or sell, or is, in
accordance with Subparagraphs (1) through (7) of this
Paragraph 4, deemed to have issued or sold, any shares of
Common Stock for a consideration per share less than the
applicable Conversion Prices in effect immediately prior to
the time of such issue or sale, then, forthwith upon such
issue or sale, the applicable Conversion Prices shall be
reduced to the price determined by dividing (i) an amount
equal to the sum of (a) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied
by the then existing applicable Conversion Price, and (b) the
consideration, if any, received by the Corporation upon such
issue or sale, by (ii) the total number of shares of Common
Stock outstanding immediately after such issue or sale (in all
cases assuming the conversion of all Convertible Securities,
as defined in Subparagraph (1), into Common Stock and the
exercise of all outstanding Options). Notwithstanding the
foregoing or any other provisions of this Paragraph 4, no
adjustment to the Series A Conversion Price of any shares of
Series A Convertible Preferred Stock shall be made with
respect to the initial issuance by the Corporation of the
Series A Convertible Preferred Stock, despite the fact that
there may be more than one Initial Series A Price in the
initial issuance.
For purposes of this Paragraph 4, the following Subparagraphs
(1) to (7) shall also be applicable.
(1) ISSUANCE OF RIGHTS OR OPTIONS. In case
at any time after the initial issuance of any
Convertible Preferred Stock the Corporation shall in
any manner grant (whether directly or by assumption
in a merger or otherwise) any warrants or other
rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable
for Common Stock (such warrants, rights or options
being called "OPTIONS" and such convertible or
exchangeable stock or securities being called
"CONVERTIBLE SECURITIES") whether or not such Options
or the right to convert or exchange any such
Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon
the conversion or exchange of such Convertible
Securities (determined by dividing (i) the total
amount, if any, received or receivable by the
Corporation as consideration for the granting of such
Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation
upon the exercise of all such Options, plus, in the
case of such Options which relate to convertible
Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon
the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock
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<PAGE> 13
issuable upon such Options or upon the issue or sale
of such Convertible Securities and upon the
conversion or exchange of all such Convertible
Securities issuable upon the exercise of such
Options) shall be less than any Conversion Price in
effect immediately prior to the time of the granting
of such Options, then the total maximum number of
shares of Common Stock issuable upon the exercise of
such Options or upon conversion or exchange of the
total maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share
as of the date of granting of such Options or the
issuance of such Convertible Securities and
thereafter shall be deemed to be outstanding. Except
as otherwise provided in Subparagraph (3), no further
adjustment of any Conversion Price shall be made upon
the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such Options
or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible
Securities.
(2) ISSUANCE OF CONVERTIBLE SECURITIES. In
case the Corporation shall in any manner issue
(whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any
such Convertible Securities are immediately
exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange
(determined by dividing (i) the total amount received
or receivable by the Corporation as consideration for
the issue or sale of such Convertible Securities,
plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation
upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than any
Conversion Price in effect immediately prior to the
time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for
such price per share as of the date of the issue or
sale of such Convertible Securities and thereafter
shall be deemed to be outstanding, provided that (a)
except as otherwise provided in Subparagraph (3) of
this Paragraph 4, no further adjustment of any
Conversion Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of
such Convertible Securities, (b) if any such issue or
sale of such Convertible Securities is made upon
exercise of any Options to purchase any such
Convertible Securities for which adjustments of any
Conversion Price have been or are to be made pursuant
to other provisions of this Paragraph 4, no further
adjustment of such Conversion Price shall be made by
reason of such issue or sale.
(3) CHANGE IN OPTION PRICE OR CONVERSION
RATE. Upon the happening of any of the following
events, namely, if the purchase price provided for in
any Option referred to in Subparagraph (1) of this
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<PAGE> 14
Paragraph 4, the additional consideration, if any,
payable upon the conversion or exchange of any
Convertible Securities referred to in Subparagraph
(1) or (2) of this Paragraph 4, or the rate at which
Convertible Securities referred to in Subparagraph
(1) or (2) of this Paragraph 4 are convertible into
or exchangeable for Common Stock shall change at any
time (including, but not limited to, changes under or
by reason of provisions designed to protect against
dilution), the Conversion Prices in effect at the
time of such event shall forthwith be readjusted to
the Conversion Prices which would have been in effect
at such time had such Options or Convertible
Securities still outstanding been exercised or
converted, as the case may be, immediately prior to
the event providing such changed purchase price,
additional consideration or conversion rate, as the
case may be, but only if as a result of such
adjustment each particular Conversion Price then in
effect hereunder is thereby reduced; and on the
expiration of any such Option or the termination of
any such right to convert or exchange such
Convertible Securities, all Conversion Prices then in
effect hereunder shall forthwith be increased to the
Conversion Prices which would have been in effect at
the time of such expiration or termination had such
Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or
termination, never been issued.
(4) STOCK DIVIDENDS. In case the Corporation
shall declare a dividend or make any other
distribution upon any stock of the Corporation
payable in Common Stock, Options or Convertible
Securities, any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to
have been issued or sold without consideration.
(5) CONSIDERATION FOR STOCK. In case any
shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be
the amount received by the Corporation therefor,
without deduction therefrom of any expenses incurred
or any underwriting commissions or concessions paid
or allowed by the Corporation in connection
therewith. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount
of the consideration other than cash received by the
Corporation shall be deemed to be the fair value of
such consideration as determined in good faith by the
Board of Directors, without deduction of any expenses
incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in
connection therewith. In case any Options shall be
issued in connection with the issue and sale of other
securities of the Corporation, together comprising
one integral transaction in which no specific
consideration is allocated to such Options by the
parties thereto, such Options shall be deemed to have
been issued for such consideration as determined in
good faith by the Board of Directors.
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<PAGE> 15
(6) RECORD DATE. In case the Corporation
shall take a record of the holders of its Common
Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in
Common Stock, Options or Convertible Securities or
(ii) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record
date, to the extent permitted by law, shall be the
date the shares of Common Stock are deemed to have
been issued or sold upon the declaration of such
dividend or the making of such other distribution or
the date of the granting of such right of
subscription or purchase, as the case may be.
(7) TREASURY SHARES. The number of shares of
Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of
the Corporation, and the disposition of any such
shares shall be considered an issue or sale of Common
Stock for the purpose of this Paragraph 4.
5. CERTAIN ISSUES OF STOCK EXCEPTED. Anything herein
to the contrary notwithstanding, the Corporation shall not be
required to make any adjustment of any Conversion Price in the
case of (i) the issuance of up to an aggregate of 2,278,000
shares (appropriately adjusted to reflect the occurrence of
any event described in Paragraph 6 of this Subsection G) of
Common Stock pursuant to a plan approved by a majority of the
Board of Directors to directors, consultants, officers or
employees of the Corporation in connection with their service
to or their employment by the Corporation, (ii) the issuance
of the Note Warrants, (iii) the issuance of up to an aggregate
of 1,943,520 shares (subject to adjustment as provided in the
Note Warrants) of Common Stock upon exercise of the Note
Warrants, (iv) the issuance of the warrants (the "PREFERRED
WARRANTS") pursuant to that certain Promissory Note and
Warrant Purchase Agreement dated as of May 22, 1998 (the
"BRIDGE NOTE AGREEMENT") among the Corporation and the
Purchasers (as such term is defined in the Bridge Note
Agreement), (v) the issuance of up to an aggregate of 119,993
shares (the "PREFERRED WARRANT SHARES") of Series B Preferred
Stock issuable upon exercise of the Preferred Warrants, and
(vi) the issuance of the Common Stock upon conversion of the
Preferred Warrant Shares.
6. SUBDIVISION OR COMBINATION OF COMMON STOCK. In
case the Corporation shall at any time subdivide (by any stock
split, stock dividend or otherwise) its outstanding shares of
Common Stock into a greater number of shares, the applicable
Conversion Prices in effect immediately prior to such
subdivision shall be proportionately reduced, and, conversely,
in case the outstanding shares of Common Stock shall be
combined into a smaller number of shares, the applicable
Conversion Prices in effect immediately prior to such
combination shall be proportionately increased.
7. REORGANIZATION OR RECLASSIFICATION. If any capital
reorganization or reclassification of the capital stock of the
Corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities
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<PAGE> 16
or assets with respect to or in exchange for Common Stock,
then, as a condition of such reorganization or
reclassification, lawful and adequate provisions shall be made
whereby each holder of a share or shares of Convertible
Preferred Stock shall thereupon have the right to receive upon
conversion, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the conversion of such
share or shares of Convertible Preferred Stock, such shares of
stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares
of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore receivable upon such
conversion had such reorganization or reclassification not
taken place, and in any such case appropriate provisions shall
be made with respect to the rights and interests of such
holder to the end that the provisions hereof (including
without limitation provisions for adjustments of each of the
applicable Conversion Prices) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise
of such conversion rights.
8. NOTICE OF ADJUSTMENT. Upon any adjustment of any
of the Conversion Prices then and in each such case the
Corporation shall give written notice thereof, by first class
mail, postage prepaid, or by telecopy or telex to non-U.S.
residents, addressed to each holder of shares of Convertible
Preferred Stock at the address of such holder as shown on the
books of the Corporation, which notice shall state the
Conversion Prices resulting from such adjustment, setting
forth in reasonable detail the method upon which such
calculation is based.
9. OTHER NOTICES. In case at any time:
(1) the Corporation shall declare any
dividend upon its Common Stock payable in cash or
stock or make any other distribution to the holders
of its Common Stock;
(2) the Corporation shall offer for
subscription pro rata to the holders of its Common
Stock any additional shares of stock of any class or
other rights;
(3) there shall be any capital
reorganization or reclassification of the capital
stock of the Corporation, or a consolidation or
merger of the Corporation with or into, or a sale of
all or substantially all its assets to, another
entity or entities; or
(4) there shall be a voluntary or
involuntary dissolution, liquidation or winding up of
the Corporation;
then, in any one or more of said cases, the Corporation shall
give, by first class mail, postage prepaid, or by telecopy to
non-U.S. residents, addressed to each holder of any shares of
Convertible Preferred Stock at the address of such holder
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<PAGE> 17
as shown on the books of the Corporation, (a) at least 20
days' prior written notice of the date on which the books of
the Corporation shall close or a record shall be taken for
such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up and (b) in the case of
any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the
same shall take place. Such notice in accordance with the
foregoing clause (a) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date
on which the holders of Common Stock shall be entitled thereto
and such notice in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
10. STOCK TO BE RESERVED. The Corporation will at all
times reserve and keep available out of its authorized Common
Stock, solely for the purpose of issuance upon the conversion
of Convertible Preferred Stock as herein provided, such number
of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Convertible Preferred
Stock. The Corporation covenants that all shares of Common
Stock which shall be so issued shall be duly and validly
issued and (subject to payment of any promissory notes given
as payment or partial payment for the original issuance of the
Convertible Preferred Stock being so converted) fully paid and
nonassessable and free from all taxes, liens and charges with
respect to the issue thereof. The Corporation will take all
such action as may be necessary to assure that all such shares
of Common Stock may be so issued without violation of any
applicable law or regulation, or of any requirement of any
national securities exchange upon which the Common Stock may
be listed. The Corporation will not take any action which
results in any adjustment of the Conversion Price if the total
number of shares of Common Stock issued and issuable after
such action upon conversion of the Convertible Preferred Stock
would exceed the total number of shares of Common Stock then
authorized by this Fifth Amended and Restated Certificate of
Incorporation, as amended.
11. NO REISSUANCE OF CONVERTIBLE PREFERRED STOCK. In
case any shares of Convertible Preferred Stock are converted
into shares of Common Stock as provided herein, the shares so
converted shall be returned to the status of authorized,
unissued and undesignated shares of Preferred Stock and all
such shares shall no longer be governed by this Section IV.
12. ISSUE TAX. The issuance of certificates for
shares of Common Stock upon conversion of Convertible
Preferred Stock shall be made without charge to the holders
thereof for any issuance tax in respect thereof, provided that
the Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a
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name other than that of the holder of the Convertible
Preferred Stock which is being converted.
13. CLOSING OF BOOKS. The Corporation will at no time
close its transfer books against the transfer of any
Convertible Preferred Stock or of any shares of Common Stock
issued or issuable upon the conversion of any shares of
Convertible Preferred Stock in any manner which interferes
with the timely conversion of such Convertible Preferred
Stock, except as may otherwise be required to comply with
applicable securities laws.
14. DEFINITION OF COMMON STOCK. As used in this
Subsection G, the term "COMMON STOCK" shall mean and include
the Corporation's authorized Common Stock, par value $0.001
per share, as constituted on the date of filing of this Fifth
Amended and Restated Certificate of Incorporation, and shall
also include any capital stock of any class of the Corporation
thereafter authorized which shall neither be limited to a
fixed sum or percentage of par value in respect of the rights
of the holders thereof to participate in dividends nor
entitled to a preference in the distribution of assets upon
the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; provided that the shares of
Common Stock receivable upon conversion of shares of
Convertible Preferred Stock shall include only shares
designated as Common Stock of the Corporation on the date of
filing of this Fifth Amended and Restated Certificate of
Incorporation, or in case of any reorganization or
reclassification of the outstanding shares thereof, the stock
securities or assets provided for in Paragraph 7 of this
Subsection G.
15. MANDATORY CONVERSION. If at any time (i) the
Corporation shall effect a firm commitment underwritten public
offering of shares of Common Stock in which the aggregate
price paid for such shares by the public is equal to or
greater than $20,000,000 at a per share price of at least
$3.00 (adjusted appropriately for any stock splits, stock
dividends, or stock combinations) (a "QUALIFIED PUBLIC
OFFERING"), (ii) the holders of two-thirds of the outstanding
Convertible Preferred Stock deliver notice in writing
requesting conversion of said shares into Common Stock, or
(iii) in the event the holders of the majority of the
Convertible Preferred Stock vote affirmatively for any
transaction defined in Subsection F, Paragraph 2 of this
Section IV and if the total consideration to be received by
all the holders of Convertible Preferred Stock (calculated on
a fully diluted as converted basis including any previously
paid dividends on such shares) exceeds the Liquidation
Preference payments then, effective immediately prior to
completion of the Qualified Public Offering, but contingent
upon the closing of the sale of such shares of Common Stock by
the Corporation pursuant to such Qualified Public Offering set
forth in (i) above, the delivery of such notice set forth in
(ii) above, or simultaneously with the consummation of such
transaction set forth in (iii) above, as applicable, all
outstanding shares of Convertible Preferred Stock shall
automatically convert to shares of Common Stock, and, in the
event of a transaction defined in Subsections E and F of this
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Section IV, all previously paid dividends to such holders
shall be deemed part of the consideration such holders receive
in such transaction.
H. REDEMPTION. The shares of Convertible Preferred Stock shall
be redeemed as follows:
1. REDEMPTION AT THE REQUEST OF HOLDERS. At the date
specified herein, if the holders of at least two-thirds of the
outstanding shares of all series of Convertible Preferred
stock give notice (the "INITIAL NOTICE") (calculated on the
basis of the number of shares of Common Stock into which all
such shares would be converted as of the date notice is given)
of the election to require the Corporation to redeem such
shares of the Convertible Preferred Stock, the Corporation
shall redeem such shares of the Convertible Preferred Stock as
provided for herein. Initial Notice must be delivered in
writing at least thirty (30) days prior to September 30, 2005,
and must set forth, for each holder giving Initial Notice, the
number of shares of convertible Preferred Stock held by the
holder that are subject to the demand for redemption.
2. REDEMPTION NOTICE. At least twenty (20) but not
more than thirty (30) days prior to each of September 30,
2005, September 30, 2006, and September 30, 2007 (the
"REDEMPTION DATES"), written notice (the "REDEMPTION NOTICE")
shall be given by the Corporation by mail, postage prepaid, or
by telex to non-U.S. residents, to each holder of record (at
the close of business on the business day next preceding the
day on which the Redemption Notice is given) of shares of
Convertible Preferred Stock notifying such holder of the
redemption and specifying the applicable Redemption Prices (as
defined herein), the Redemption Date and the place where said
Redemption Prices shall be payable. The Redemption Notice
shall be addressed to each holder at the holder's address as
shown by the records of the Corporation. Any holder of
Convertible Preferred Stock who did not give Initial Notice
may elect to join in with respect to the redemption by giving
written notice ("SECONDARY NOTICE") to the Company no later
than 10 days after the Company issues the Redemption Notice
with respect to the September 30, 2005 redemption. The
Secondary Notice must set forth how many shares of Convertible
Preferred Stock of the holder are subject to the demand for
redemption.
3. REDEMPTION PRICE AND AMOUNT. The Convertible
Preferred Stock to be redeemed on any Redemption Date shall be
redeemed by paying an amount, per share, equal to the
applicable Liquidation Preference Payment. The respective
amounts to be paid hereunder to the holders of the Convertible
Preferred Stock are collectively referred to as the
"REDEMPTION PRICES." Such payment shall be made in full on any
Redemption Date to the holders entitled thereto. The number of
shares of Convertible Preferred Stock to be redeemed shall
equal: (i) on September 30, 2005, 33.3% of the shares subject
to demand for redemption on September 30, 2005, pursuant to
Initial Notice or Secondary Notice; (ii) on September 30,
2006, 66.6% of the shares subject to demand for redemption on
September 30, 2005, pursuant to Initial Notice or Secondary
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Notice, less the number of shares previously redeemed; and
(iii) on September 30, 2007, 100% of the shares subject to
demand for redemption on September 30, 2005, pursuant to
Initial Notice or Secondary Notice, less the number of shares
previously redeemed.
4. POST-REDEMPTION DATE MECHANICS. From and after the
close of business on any Redemption Date, unless there shall
have been a default in the payment of the Redemption Prices,
all rights of holders of shares of Convertible Preferred Stock
being redeemed (except the right to receive the Redemption
Prices) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the
Corporation or be deemed to be outstanding for any purpose
whatsoever. If the funds of the Corporation legally available
for redemption of shares of Convertible Preferred Stock on any
Redemption Date are insufficient to redeem the total number of
outstanding shares of Convertible Preferred Stock, the holders
of shares of Convertible Preferred Stock shall share ratably
in any funds legally available for redemption of such shares
according to the respective amounts which would be payable
with respect to the full number of shares owned by them if all
such shares to be redeemed were redeemed in full. The shares
of Convertible Preferred Stock not redeemed shall remain
outstanding and entitled to all rights and preferences
provided herein. At any time thereafter when additional funds
of the Corporation are legally available for the redemption of
such shares of Convertible Preferred Stock, such funds will be
used, at the end of the next succeeding fiscal quarter, to
redeem the balance of such shares, or such portion thereof for
which funds are then legally available, on the basis set forth
above.
5. REDEEMED OR OTHERWISE ACQUIRED SHARES TO BE
RETIRED. Any shares of Convertible Preferred Stock redeemed
pursuant to this Subsection H or otherwise acquired by the
Corporation in any manner whatsoever shall be canceled and
shall not under any circumstances be reissued, and the
Corporation may from time to time take such appropriate
corporation action as may be necessary to reduce accordingly
the number of authorized shares of Convertible Preferred
Stock.
I. AMENDMENTS. No provision of these terms of the Convertible
Preferred Stock may be amended, modified or waived without the written
consent or affirmative vote of the holders of at least two-thirds of
the then outstanding shares of all series of Convertible Preferred
Stock, voting as a single, separate class.
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V. COMMON STOCK
A. GENERAL. Except as otherwise provided herein or as
otherwise provided by applicable law, all shares of Common Stock shall
have identical rights and privileges in every respect.
B. RELATIVE RIGHTS OF PREFERRED STOCK AND COMMON STOCK. All
preferences, voting powers, relative, participating, optional or other
special rights and privileges, and qualification, limitations, or
restrictions of the Common Stock are expressly made subject and
subordinate to those that may be fixed with respect to any shares of
any series of the Preferred Stock and any series of the Convertible
Preferred Stock.
C. VOTING RIGHTS.
1. Except as otherwise required by law or this Fifth
Amended and Restated Certificate of Incorporation, each holder
of Common Stock shall have one vote in respect of each share
of stock held by him of record on the books of the Corporation
on all matters submitted to a vote for stockholders of the
Corporation. Holders of Common Stock are not entitled to
cumulate votes in the election of any directors.
2. Until the completion of a Qualified Public
Offering,
(1) with respect to the election of
directors, the holders of the Common Stock, voting
separately as a class, shall be entitled to elect
three (3) directors of the Corporation;
(2) at any meeting (or pursuant to a written
consent in lieu thereof) held for the purpose of
electing directors, the presence in person or by
proxy (or written consent) of the holders of a
majority of the Shares of Common Stock then
outstanding shall constitute a quorum of the Common
Stock for the election of directors to be elected
solely by the holders of the Common Stock;
(3) A vacancy in any directorship elected by
the holders of the Common Stock shall be filled only
by vote or written consent of the holders of the
Common Stock; and
(4) an additional one (1) director shall be
elected by the Convertible Preferred Stock and Common
Stock holders voting separately as two classes as
referred to in Article Fourth, Section IV, Subsection
C, Paragraph 2 of this Article Fourth.
After the completion of a Qualified Public Offering, this Paragraph 2
shall be of no further force or effect.
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D. DIVIDENDS. Subject to the prior rights and preferences, if any,
applicable to shares of Preferred Stock, the holders of shares of Common Stock
shall be entitled to receive, when and if declared by the Board of Directors,
out of the assets of the Corporation which are by law available therefor,
dividends payable either in cash, in property or in shares of capital stock.
Dividends payable under this Subsection D shall be paid to the holders
of record of outstanding Common Stock as their names shall appear on the stock
register of the Corporation on the record date fixed by the Board of Directors
in advance of the declaration and payment of each dividend. Any shares of Common
Stock issued as a dividend pursuant to this Subsection D shall, when so issued,
be duly authorized, validly issued, fully paid and non-assessable, and free of
all liens and charges. The Corporation shall not issue fractions of shares of
Common Stock on payment of such dividend but shall issue a whole number of
shares to such holder of Common Stock rounded up or down in the Corporation's
sole discretion to the nearest whole number, without compensation to the
stockholder whose fractional share has been rounded down or from any stockholder
whose fractional share has been rounded up.
E. DISSOLUTION, LIQUIDATION OR WINDING-UP. In the event of any
voluntary or involuntary liquidation, dissolution, or winding-up of the
Corporation, after all creditors of the Corporation shall have been paid in full
and after payment of all sums payable in respect of Preferred Stock, if any, the
holders of the Common Stock shall share ratably on a share-for-share basis in
all distributions of assets pursuant to such voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation. For the purpose of
this Subsection E, neither the merger nor the consolidation of the Corporation
into or with another entity or the merger or consolidation of any other entity
into or with the Corporation, or the sale, transfer or other disposition of all
or substantially all the assets of the Corporation, shall be deemed to be a
voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation.
F. RESERVATION OF SHARES. The Corporation shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock, or
out of shares of Common Stock held in its treasury, the full number of shares of
Common Stock into which all shares of any series of Preferred Stock having
conversion privileges from time to time outstanding are convertible.
FIFTH: The number, classification and terms of the Board of Directors
of the Corporation and the procedures to elect directors and to remove directors
shall be as follows:
1. Except as otherwise fixed by or pursuant to the provisions of this
Fifth Amended and Restated Certificate of Incorporation relating to the rights
of the holders of any class or series of Preferred Stock to elect directors
under specified circumstances, the number of directors constituting the Board of
Directors shall be no less than one, as fixed from time to time exclusively by
the Board of Directors pursuant to a resolution adopted by a majority of the
then authorized number of directors of the Corporation (as determined in
accordance with the bylaws of the Corporation (the "BYLAWS")). No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director. No director need be a stockholder.
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2. Subject to the rights of holders of any subsequently issued class or
series of Preferred Stock, upon the completion of a Qualified Public Offering,
the directors of the Corporation shall be divided by the Board of Directors into
three classes (the "CLASSIFIED DIRECTORS") with the first class ("CLASS I"),
second class ("CLASS II") and third class ("CLASS III") each to consist as
nearly as practicable of an equal number of directors. The term of office of the
Class I directors shall expire at the 2002 annual meeting of stockholders, the
term of office of the Class II directors shall expire at the 2003 annual meeting
of stockholders, and the term of office of the Class III directors shall expire
at the 2004 annual meeting of stockholders, with each director to hold office
until his or her successor shall have been duly elected and qualified. At each
annual meeting of stockholders, Classified Directors elected to succeed those
Classified Directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders
following their election.
3. The directors of the Corporation need not be elected by written
ballot unless the Bylaws otherwise provide.
4. After the completion of a Qualified Public Offering, a director of
the Corporation may be removed only for cause. For purposes of removal of a
director of the Corporation, "cause" shall mean (a) a final conviction of a
felony involving moral turpitude or (b) willful misconduct that is materially
and demonstrably injurious economically to the Corporation. For purposes of this
definition of "cause," no act, or failure to act, by a director shall be
considered "willful" unless committed in bad faith and without a reasonable
belief that the act or failure to act was in the best interest of the
Corporation or any Affiliate of the Corporation. "Cause" shall not exist unless
and until the Corporation has delivered to the director a written notice of the
act or failure to act that constitutes "cause" and such director shall not have
cured such act or omission within 90 days after the delivery of such notice. As
used in this Fifth Amended and Restated Certificate of Incorporation,
"Affiliate" has the meaning given such term under Rule 12b-2 of the Securities
Exchange Act of 1934, as amended.
SIXTH: 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 the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under 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
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
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SEVENTH: Meetings of the stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. After the completion of a
Qualified Public Offering, a special meeting of the stockholders may be called,
and business to be considered at any such meeting may be proposed, at any time
exclusively by a majority of the members of the Board of Directors, and no
stockholder of the Corporation shall require the Board of Directors to call a
special meeting of stockholders or to propose business at a special meeting of
stockholders. The books of the Corporation may be kept (subject to any provision
contained in the statute) 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
Bylaws.
EIGHTH: After the completion of a Qualified Public Offering, (i) no
action required to be taken or that may be taken at any meeting of holders of
Common Stock may be taken without a meeting and (ii) the power of holders of
Common Stock to consent in writing, without a meeting, to the taking of any
action is specifically denied.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Fifth Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon the stockholders of the Corporation herein are granted
subject to this reservation.
TENTH: No contract or transaction between the Corporation and one or
more of its directors, officers, or stockholders or between the Corporation and
any Person (as hereinafter defined) in which one or more of its directors,
officers, or stockholders are directors, officers, or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the Board of Directors or committee which authorizes the contract or
transaction, or solely because his vote is counted for such purpose, if: (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; (ii) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved, or
ratified by the Board of Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction. "Person" as used herein means any corporation,
partnership, limited liability company, association, firm, trust, joint venture,
political subdivision or instrumentality.
ELEVENTH: The Corporation shall indemnify any Person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he (i) is or was a director or officer of the Corporation or
(ii) while a director or officer of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, to the fullest extent permitted
under the Delaware General Corporation Law, as the
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same exists or may hereafter be amended. Such right shall be a contract right
and as such shall run to the benefit of any director or officer who is elected
and accepts the position of director or officer of the Corporation or elects to
continue to serve as a director or officer of the Corporation while this Article
Eleventh is in effect. Any repeal or amendment of this Article Eleventh shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Corporation with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Eleventh. Such
right shall include the right to be paid by the Corporation expenses incurred in
investigating or defending any such proceeding in advance of its final
disposition to the maximum extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense is not permitted under the
Delaware General Corporation Law, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors or any committee thereof, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual determination by the
Corporation (including its Board of Directors or any committee thereof,
independent legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any Person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any Person may have or
hereafter acquire under any statute, bylaw, resolution of stockholders or
directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
Without limiting the generality of the foregoing, to the extent
permitted by then applicable law, the grant of mandatory indemnification
pursuant to this Article Eleventh shall extend to proceedings involving the
negligence of such Person.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
TWELFTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law
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or (iv) for any transaction from which the director derived an improper personal
benefit. Any repeal or amendment of this Article Twelfth by the stockholders of
the Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation arising
from an act or omission occurring prior to the time of such repeal or amendment.
In addition to the circumstances in which a director of the Corporation is not
personally liable as set forth in the foregoing provisions of this Article
Twelfth, a director shall not be liable to the Corporation or its stockholders
to such further extent as permitted by any law hereafter enacted, including
without limitation any subsequent amendment to the Delaware General Corporation
Law.
THIRTEENTH: All of the power of the Corporation, insofar as it may be
lawfully vested by this Fifth Amended and Restated Certificate of Incorporation
in the Board of Directors, is hereby conferred upon the Board of Directors. In
furtherance of and not in limitation of that power or the powers conferred by
law, a majority of directors then in office (or such higher percentage as may be
specified in the Bylaws with respect to any provision thereof) shall have the
power to adopt, amend and repeal the Bylaws of the Corporation. Notwithstanding
any other provisions of this Fifth Amended and Restated Certificate of
Incorporation or any provision of law that might otherwise permit a lesser or no
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the capital stock of the Corporation required by law or by
this Fifth Amended and Restated Certificate of Incorporation, the affirmative
vote of the holders of not less than eighty percent of the outstanding shares of
the Corporation then entitled to vote upon the election of directors, voting
together as a single class, shall be required for the alteration, amendment, or
repeal of the Bylaws or adoption of new Bylaws by the stockholders of the
Corporation.
FOURTEENTH: Notwithstanding any other provisions of this Fifth Amended
and Restated Certificate of Incorporation or any provision of law that might
otherwise permit a lesser or no vote, but in addition to any affirmative vote of
the holders of any particular class or series of the capital stock of the
Corporation required by law or by this Fifth Amended and Restated Certificate of
Incorporation, the affirmative vote of the holders of not less than eighty
percent of the outstanding shares of the Corporation then entitled to vote upon
the election of directors, voting together as a single class, shall be required
to amend or repeal, or to adopt any provision inconsistent with, Article Fifth,
Article Seventh, Article Eighth, Article Thirteenth or this Article Fourteenth
of this Fifth Amended and Restated Certificate of Incorporation.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, said Corporation has duly caused this certificate
to be signed by Richard R. Burnham, its President, this ____ day of _____, 2001.
By:
------------------------------------
Richard R. Burnham, President
[SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF ODYSSEY HEALTHCARE, INC.]
