Exhibit 4.1
NAVIDEA BIOPHARMACEUTICALS, INC.
AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS,
VOTING POWERS,
PREFERENCES, LIMITATIONS, RESTRICTIONS,
AND RELATIVE
RIGHTS OF SERIES B CONVERTIBLE PREFERRED
STOCK
It is hereby certified
that:
I. The
name of the corporation is Navidea Biopharmaceuticals, Inc. (the “
Corporation
”), a Delaware corporation.
II. Set
forth hereinafter is a statement of the voting powers, preferences, limitations, restrictions, and relative rights of shares of
Series B Convertible Preferred Stock hereinafter designated as contained in a resolution of the Board of Directors of the Corporation
pursuant to a provision of the Certificate of Incorporation of the Corporation permitting the issuance of said Series B Preferred
Stock by resolution of the Board of Directors:
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 either of the following (each, an “
Automatic Conversion Event
”):
(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) one hundred eighty (180) days following the first
Trading Date upon which the Trigger Price per share of the Common Stock equals or exceeds $7.00 per share, but excluding from such
180 day period any Trading Day on which the Trigger Price is less than $5.00 per share.
(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.
(d)
Certain
Definitions
. For purposes of this Section 9, the following capitalized terms shall have the following meanings:
“
Trigger Price
” means the average
VWAP for any thirty (30) consecutive Trading Days.
“
Trading Day
” means (a) a day on
which the Common Stock is traded on the NYSE MKT (or other national securities exchange, if applicable), or (b) if the Common Stock
is not listed or traded on a national securities exchange, a day on which the Common Stock is quoted on the OTC Bulletin Board
(or any similar organization or agency succeeding its functions of reporting prices).
“
VWAP
” means, for any date, (i)
the daily volume weighted average price of the Common Stock for such date on the NYSE MKT (or other national securities exchange,
if applicable) as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern
Time); or (ii) if the Common Stock is not then listed or quoted on a national securities exchange, and if prices for the Common
Stock are then reported on the OTC Bulletin Board (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported.
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.
IN WITNESS WHEREOF, the undersigned has executed and subscribed
this Certificate and does affirm the foregoing as true this __ day of June, 2013.
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NAVIDEA BIOPHARMACEUTICALS, INC.
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By:
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/s/ Brent L. Larson
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Brent L. Larson
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Its:
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Senior Vice President/CFO
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EXHIBIT I
NAVIDEA BIOPHARMACEUTICALS, INC.
CONVERSION NOTICE
Reference is made to
the Certificate of Designation of the Relative Rights and Preferences of the Series B Preferred Stock of Neoprobe Corporation (the
“
Certificate of Designation
”). In accordance with and pursuant to the Certificate of Designation, the undersigned
hereby elects to convert the number of shares of Series B Preferred Stock, par value $.001 per share (the “
Preferred Shares
”),
of Navidea Biopharmaceuticals, Inc., a Delaware corporation (the “
Company
”), indicated below into shares of
Common Stock, par value $.001 per share (the “
Common Stock
”), of the Company, by tendering the stock certificate(s)
representing the share(s) of Preferred Shares specified below as of the date specified below.
Date of Conversion:
________________________
Number of Preferred Shares to be converted:
________________________
Stock certificate no(s). of Preferred Shares to be converted:
________________________
The Common Stock has been sold: YES ___ NO
___
Please confirm the following information:
Conversion Rate: ________________________
Number of shares of Common Stock
to be issued: ________________________
Number of shares of Common Stock beneficially owned or deemed
beneficially owned by the Holder on the Date of Conversion determined in accordance with Section 16 of the Securities Exchange
Act of 1934, as amended:
________________________
Please issue the Common Stock into which the Preferred Shares
are being converted and, if applicable, any check drawn on an account of the Company in the following name and to the following
address:
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Issue to:
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Facsimile Number:
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Authorization:
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By:
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Title:
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Dated:
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