-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J9oXhUaGS+UnMFKrMh8gLadR2vMnynQtgcHpyQ0eDk8O/F7JoawArVLQjBPeDuDD WYkAe/Jb/2OveRXB/QkcUw== 0000815094-96-000007.txt : 19961027 0000815094-96-000007.hdr.sgml : 19961027 ACCESSION NUMBER: 0000815094-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961024 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABIOMED INC CENTRAL INDEX KEY: 0000815094 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 042743260 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09585 FILM NUMBER: 96647392 BUSINESS ADDRESS: STREET 1: 33 CHERRY HILL DR CITY: DANVERS STATE: MA ZIP: 01923 BUSINESS PHONE: 5087775410 MAIL ADDRESS: STREET 1: 33 CHERRY HILL DRIVE CITY: DANVERS STATE: MA ZIP: 01923 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9585 ABIOMED, INC. (Exact name of registrant as specified in its charter) DELAWARE 04-2743260 (State of incorporation) (I.R.S. Employer No.) 33 CHERRY HILL DRIVE DANVERS, MASSACHUSETTS 01923 (Address of principal executive offices, including zip code) (508) 777-5410 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of September 30, 1996, there were 6,972,138 shares outstanding of the registrant's Common Stock, $.01 par value. ABIOMED, INC. AND SUBSIDIARIES TABLE OF CONTENTS
Page No. Part I - Financial Information: Item 1. Financial Statements Consolidated Balance Sheets September 30, 1996 and March 31, 1996 3-4 Consolidated Statements of Operations Three and Six Months Ended September 30, 1996 and September 30, 1995 5 Consolidated Statements of Cash Flows Six Months Ended September 30, 1996 and September 30, 1995 6 Notes to Consolidated Financial Statements 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13 Part II - Other Information 14-15 Signatures 16
ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS ASSETS
September 30, 1996 March 31, 1996 (unaudited) (audited) Current Assets: Cash and cash equivalents (Note 6) $7,304,349 $2,938,332 Short-term marketable securities (Note 6) 3,189,452 7,709,110 Accounts receivable, net 2,943,575 2,606,289 Inventories (Note 3) 1,818,103 1,653,512 Prepaid expenses and other current assets 204,353 92,280 Total current assets 15,459,832 14,999,523 Property and equipment, at cost: Machinery and equipment 2,598,755 2,378,851 Furniture and fixtures 181,841 156,048 Leasehold improvements 665,174 378,998 3,445,770 2,913,897 Less: Accumulated depreciation and amortization 2,452,236 2,331,145 993,534 582,752 Other assets, net (Note 7) 556,077 627,154 $17,009,443 $16,209,429
The accompanying notes are an integral part of these consolidated financial statements. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED BALANCE SHEETS (continued) LIABILITIES AND STOCKHOLDERS' INVESTMENT
September 30, 1996 March 31, 1996 (unaudited) (audited) Current Liabilities: Accounts payable $926,875 $777,943 Accrued expenses 1,234,546 1,486,981 Total current liabilities 2,161,421 2,264,924 Stockholders' Investment (Note 4): Class B Preferred Stock, $.01 par value- Authorized 1,000,000 shares Issued and outstanding-none - - - - Common Stock, $.01 par value- Authorized 25,000,000 shares at September 30, 1996 Issued and Outstanding- 6,972,138 shares at September 30, 1996 and 5,518,054 shares at March 31, 1996 69,721 55,180 Class A Common Stock $.01 par value Authorized - 2,346,000 shares Issued and Outstanding - 0 shares at September 30, 1996 and 1,428,000 shares at March 31, 1995 - - 14,280 Additional paid-in capital 36,891,361 36,625,221 Accumulated deficit (22,113,060) (22,750,176) Total stockholders' investment 14,848,022 13,944,505 $17,009,443 $16,209,429
The accompanying notes are an integral part of these consolidated financial statements. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Six Months Ended Three Months Ended September 30, 1996 September 30, 1995 September 30, 1996 September 30, 1995 Revenues: Products $5,759,555 $4,394,792 $2,891,206 $2,270,351 Contracts 1,753,849 1,455,297 936,926 836,248 7,513,404 5,850,089 3,828,132 3,106,599 Costs and expenses: Cost of products 2,122,853 1,822,769 1,074,154 907,876 Research and development 1,780,737 1,519,037 916,762 860,178 Selling, general and administrative 3,229,235 2,631,499 1,709,642 1,414,585 7,132,825 5,973,305 3,700,558 3,182,639 Net income (loss) from operations 380,579 (123,216) 127,574 (76,040) Interest and other income 256,537 255,725 126,313 124,488 Net income $637,116 $132,509 $253,887 $48,448 Net income per common share (Note 5): $0.09 $0.02 $0.04 $0.01 Weighted average number of common and dilutive common equivalent shares outstanding 7,196,343 6,967,191 7,199,239 6,972,429
The accompanying notes are an integral part of these consolidated financial statements. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (continued) CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
Six Months Ended September 30, 1996 September 30. 1995 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $637,116 $132,509 Adjustments to reconcile net income to net cash provided by (used in) operating activities- Depreciation and amortization 192,168 165,751 Changes in assets and liabilities- Accounts receivable (337,286) (565,037) Inventories (164,591) 155,929 Prepaid expenses and other current assets (112,073) (186,024) Accounts payable 148,932 504,055 Accrued expenses (252,435) 2,177 Net cash provided by operating activities 111,831 209,360 CASH FLOWS FROM INVESTING ACTIVITIES: Maturities of investments, net 4,519,658 264,303 Purchases of property and equipment and improvements (531,873) (100,458) Purchases of Abiomed Limited Partnership units from limited partners (Note 7) - - (770,000) Net cash provided by (used in) investing activities 3,987,785 (606,155) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options and stock issued under employee stock purchase plan 266,401 116,479 Net cash provided by financing activities 266,401 116,479 NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS, EXCLUDING INVESTMENTS 4,366,017 (280,316) CASH AND CASH EQUIVALENTS, EXCLUDING INVEST- MENTS, AT BEGINNING OF PERIOD 2,938,332 614,091 CASH AND CASH EQUIVALENTS , EXCLUDING INVEST- MENTS, AT END OF PERIOD $7,304,349 $333,775
The accompanying notes are an integral part of these consolidated financial statements. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Preparation The unaudited consolidated financial statements of ABIOMED, Inc. (the Company), presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest audited financial statements, which are contained in the Company's Form 10-K for the year ended March 31, 1996, which was filed with the Securities and Exchange Commission. In the opinion of management, the accompanying consolidated financial statements include all adjustments (consisting only of normal, recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. The results of operations for the six months ended September 30, 1996 may not be indicative of the results that may be expected for the full fiscal year. 2. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, ABIOMED Cardiovascular, Inc., ABIOMED R&D Inc., ABIODENT, Inc., Abiomed Research and Development, Inc., ABD Holding Company, Inc., and the accounts of its majority-owned subsidiary Abiomed Limited Partnership (see Note 7). All significant intercompany accounts and transactions have been eliminated in consolidation. 3. Inventories Inventories include raw materials, work-in-process, and finished goods and are priced at the lower of cost (first-in, first-out) or market and consist of the following:
September 30, 1996 March 31, 1996 Raw Materials $788,948 $799,548 Work-in-Process 365,595 428,287 Finished Goods 663,560 425,677 TOTAL $1,818,103 $1,653,512
Finished goods and work-in-process inventories consist of direct material, labor and overhead. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 1: FINANCIAL STATEMENTS (continued) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited, continued) 4. Stockholders' Investment Effective July 31, 1996, in accordance with the rights for the Class A Common Stock, 1,428,000 shares of Class A Common Stock $0.01 par value were converted into an equal number of shares of the Company's $0.01 par value Common Stock. During the second quarter of fiscal 1997, options to purchase 172,485 shares of Common Stock were granted at an exercise price of $12.50 per share. Options to purchase 2,500 shares were canceled during the quarter. Options to purchase 6,500 shares were exercised in the second quarter at exercise prices ranging from $5.75 to $11.25 per share. During the second quarter of fiscal 1997, 372 shares of Common Stock were issued under the Employee Stock Purchase Plan. 5. Net Income Per Common Share Net income per common and common equivalent share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period using the treasury stock method. 6. Cash and Cash Equivalents The Company classifies any marketable security with a maturity date of 90 days or less at the time of acquisition to be a cash equivalent. Securities, including marketable securities, with original maturities of greater than 90 days are classified as investments. Such investments are classified as long- term investments when their maturities are greater than one year from the balance sheet date. The Company reports investments at cost plus accrued interest. As of September 30, 1996, the Company had no long-term investments. 7. Other Assets Other assets represent the purchase of the majority interest of the Abiomed Limited Partnership. This amount is being amortized over five years, its estimated useful life. Abiomed Limited Partnership (the Partnership) was formed in March 1985 and provided initial funding for the design and development of certain of the Company's products. Through August 3, 2000, the Company owes a royalty to the Partnership of 5.5% of certain revenues from these products. Because the Company owns 61.7% of the Partnership, the net royalty expense to the Company is approximately 2.1% of these product revenues. This royalty formula is subject to certain maximum amounts and to certain additional adjustments in the event that the Company sells the technology. The Partnership is inactive except with respect to receiving and distributing proceeds from these royalty rights. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS NET INCOME Net income and income per share for the three months ended September 30, 1996, were approximately $254,000 and $0.04 per share, respectively. These earnings compare to net income and income per share of approximately $48,000 and $0.01 per share, respectively, in the same period of the previous year. Net income and income per share for the six months ended September 30, 1996, were approximately $637,000 and $0.09 per share, respectively. These earnings compare to net income and income per share of approximately $133,000 and $0.02 per share in the same period of the previous year. REVENUES In the three months ended September 30, 1996, total revenues were approximately $3,828,000, 23% higher than total revenues of approximately $3,107,000 in the same period of the previous year. Product revenues were approximately $2,891,000, 27% higher than product revenues of approximately $2,270,000 in the same period of the previous year. These results primarily reflected increased domestic unit sales of the disposable BVS blood pump and related accessories to an expanded installed customer base, increased units sales of the BVS console and increased average selling prices of these products. More than 90% of total product revenues in the quarter were derived from domestic sources. Revenues from Research and Development (R&D) contracts and grants for this quarter were approximately $937,000, 12% higher than total revenues of approximately $836,000 reported in the same quarter of the previous year. This increase primarily reflected timing of scheduled activities under existing contracts and grants. In the six months ended September 30, 1996, total revenues were approximately $7,513,000, 28% higher than total revenues of approximately $5,850,000 in the same period of the previous year. Product sales for the first six months of fiscal 1997 were approximately $5,760,000 compared with approximately $4,395,000 for the same period of the previous year, an increase of 31%. This growth primarily reflected increased unit sales of the disposable BVS blood pump and related accessories to an expanded installed customer base, increased unit sales of the BVS console and increased average selling prices of these products. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued) REVENUES (continued) Revenues from R&D contracts and grants for the six months ended September 30, 1996 were approximately $1,754,000, 20% higher than in the same period of the prior year. The increase primarily reflected the timing of scheduled activities under existing contracts and grants. In aggregate, as of September 30, 1996, the Company's backlog of research and development contracts and grants totaled approximately $12,600,000 compared to a backlog of approximately $5,500,000 as of March 31, 1996. The majority of this increase was due to a four year cost-plus-fixed- fee extension of approximately $8,500,000 to the Company's contract from the National Heart, Lung and Blood Institute (NHLBI) to continue development of the Company's battery-powered implantable total artificial heart (TAH). Included in the September 30, 1996 backlog was approximately $8,400,000 from this TAH contract and approximately $3,800,000 for continued research and development of an implantable Heart Booster. All such contracts contain provisions making them terminable at the convenience of the government. Product revenues from the Company's dental subsidiary, ABIODENT, Inc., represented less than 10% of total revenues. Dental products revenues, compared to the corresponding periods of the prior fiscal year, were relatively unchanged for the three months ended September 30, 1996 and increased approximately 35% for the six months ended September 30, 1996. COSTS AND EXPENSES Total costs and expenses for the three months ended September 30, 1996, were approximately $3,701,000, 16% higher than total costs and expenses of approximately $3,183,000 in the same fiscal quarter of the previous year. The majority of this increase reflected expenses incurred to support higher revenues. Cost of products sold as a percentage of product revenues improved to approximately 37% in the first three months of fiscal 1997 from approximately 40% in the same quarter of the previous year. This decrease in cost as a percentage of revenues primarily reflected a change in product mix, increased production volumes and increased operational efficiencies. Total research and development costs increased during the second fiscal quarter of 1997 to approximately $917,000, a 6% increase over research and development costs of approximately $860,000 incurred during the same fiscal period of the previous year. The increase primarily reflected the timing of scheduled expenditures under cost-plus fixed-fee contracts and grants. The Company anticipates that its research and development costs will increase, particularly in connection with the TAH. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued) COSTS AND EXPENSES (continued) Selling, general and administrative expenses for the three months ended September 30, 1996, increased to approximately $1,710,000, 21% higher than selling, general and administrative expenses in the same fiscal quarter of the previous year. This increase primarily reflected increased sales and marketing expenses, particularly increased personnel and sales commissions, related to the increase in product revenues. Total costs and expenses for the six months ended September 30, 1996 increased to $7,133,000, 19% higher than total costs and expenses of approximately $5,973,000 for the first six months of last year. The increase was primarily attributable to higher revenue levels attained during the first six months of fiscal 1997. Cost of products sold as a percentage of product revenues improved to approximately 37% in the first six months of fiscal 1997 from approximately 41% in the same six month period of the previous fiscal year. This decrease in cost as a percentage of revenues primarily reflected a change in product mix, increased production volumes and increased operational efficiencies. Total research and development costs increased to approximately $1,781,000 for the six months ended September 30, 1996. This represents a 17% increase over the $1,519,000 reported for the same period in the previous fiscal year. The increase primarily reflected the timing of scheduled expenditures under cost-plus fixed-fee contracts and grants. Selling, general and administrative expenses for the six months ended September 30, 1996 increased to approximately $3,229,000, 23% higher than selling, general and administrative expenses in the six month period ended September 30, 1995. This increase primarily reflected increased sales and marketing expenses, particularly increased personnel and sales commissions, related to the increase in product revenues. INTEREST AND OTHER For the three months ended September 30, 1996, interest and other income was approximately $126,000 and approximately even with interest and other income in the corresponding quarter of the prior year. For the six months ended September 30, 1996, interest and other income was approximately $256,000 and approximately even with interest and other income in the corresponding quarter of the prior year. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued) INTEREST AND OTHER (continued) Income taxes incurred during these periods were not material and the Company continues to have significant net tax operating loss carryforwards and tax credit carryforwards. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1996, the Company's balance sheet included $10,494,000 in cash and short-term investments, a decrease of approximately $154,000 from March 31, 1996. This decrease primarily reflected approximately $532,000 of cash used for equipment purchases and leasehold improvements partially offset by approximately $112,000 in positive cash flow from operations and approximately $266,000 in proceeds from the exercise of employee stock options and stock purchased under the Employee Stock Purchase Plan. The September 30, 1996 balance included approximately $7,304,000 in cash, and $3,189,000 in short-term investments. The Company also has a $3,000,000 line of credit from a bank that expires on December 1, 1996, and which was entirely available at September 30, 1996. For the six months ended September 30, 1996, net cash provided by operating activities included net income of approximately $637,000, including depreciation and amortization expenses of $192,000, and an increase in accounts payable of approximately $149,000. These sources of cash were partially offset by an increase in accounts receivable of $337,000, an increase in inventory of $165,000, an increase in prepaid expenses of $112,000 and a decrease in accrued expenses of approximately $252,000. Net cash provided by investing activities included approximately $4,520,000 of net maturities of short-term investments offset by approximately $532,000 of purchases and improvements of property and equipment. During the first six months of fiscal 1997, the Company received proceeds of approximately $262,000 from the exercise of stock options under the 1992 Combination Stock Option Plan and proceeds of approximately $4,000 from stock purchased under the Employee Stock Purchase Plan. Although the Company does not currently have significant capital commitments, the Company believes that it will continue to make significant investments in the coming years to support the development and commercialization of its products under development. The Company believes that its revenues and existing resources are sufficient to meet its current needs but that additional funding will be necessary to accelerate development and potential commercialization of such products under development, particularly the TAH. ABIOMED, INC. AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION (continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued) HEALTH CARE REFORM Private and government proposals for significant health care reform are expected to continue to affect healthcare expenditures in the United States as well as internationally where the company sells or plans to sell its products. The Company cannot assess at this time the potential impact that healthcare trends may have on future results because of uncertainties surrounding any unforseeable changes. *** ABIOMED, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders At the Company's annual meeting of shareholders held on August 14, 1996, the stockholders approved the following: a) Elected two persons to serve as Class I directors as follows:
Director Votes For Votes Withheld Dr. David M. Lederman 19,112,995 43,049 Desmond H. O'Connell, Jr. 4,816,226 59,808
b) A proposal to amend of certificate of incorporation and by- laws to provide that stockholders may not take action by written consent. The proposal received 15,531,669 votes for and 665,823 votes against. There were 56,235 abstentions and 2,902,307 non-voting. c) A proposal to amend the Company's 1992 Combination Stock Option Plan to increase the number of shares that may be issued under that plan by 250,000 shares. The proposal received 18,284,522 votes for and 600,175 votes against. There were 35,357 abstentions and 235,980 non-voting. ABIOMED, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a) Exhibits 3.01 Certificate of Incorporation, as amended 3.02 By-laws of ABIOMED, Inc., as amended and restated. 10.01 NHLBI Implantable Total Artificial Contract Extension. b) Reports on Form 8-K Form 8-K dated July 31, 1996. ABIOMED, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ABIOMED, Inc. Date: October 24, 1996 /s/ David M. Lederman David M. Lederman CEO and President Date: October 24 ,1996 /s/ John F. Thero John F. Thero Vice President Finance and Administration; and Treasurer Chief Financial Officer Principal Accounting Officer 16 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Consolidated Income Statement, Consolidated Balance Sheet and Consolidated Statement of Cash Flows and is qualified in its entirety by reference to Form 10-Q for the period ended September 30, 1996. 6-MOS MAR-31-1997 SEP-30-1996 7304349 3189452 2943575 119000 1818103 15459832 3445770 2452236 17009443 2161421 0 0 0 69721 14778301 17009443 7513404 7513404 3903590 3903590 0 0 (256537) 0 0 637116 0 0 0 637116 .09 .09
EX-3.01 3 CERT. OF INCORPORATION, AS AMENDED CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION ABIOMED, Inc. ABIOMED, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), pursuant to Section 242 of the Delaware General Corporation Law, hereby certifies as follows: 1. The Board of Directors of the Corporation, at a meeting duly held on May 22, 1996, at which a quorum was present and acting throughout, and in accordance with the provisions of Section 242 of the Delaware General Corporation Law, approved the following amendment to the Corporation's Certificate of Incorporation: To add to the end of paragraph (a) of Section 4.2.2 of Article 4 of the Corporation's Certificate of Incorporation the following provision: "No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken by stockholders without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied." 2. The foregoing amendment to the Certificate of Incorporation was duly adopted by the stockholders at a meeting duly held, at which a quorum was present and acting throughout and in accordance with the provisions of Section 242 of the General Corporation Law of Delaware, on August 14, 1996. IN WITNESS WHEREOF, ABIOMED, Inc. has caused this Certificate of Amendment of its Certificate of Incorporation to be signed by David M. Lederman, its President, and attested to by Philip J. Flink, its Secretary, this 17th day of August, 1996. ABIOMED, Inc. By: /s/ David M. Lederman David M. Lederman, President ATTEST: By: /s/ Philip J. Flink Philip J. Flink, Secretary CERTIFICATE OF INCORPORATION OF ABIOMED, Inc. The undersigned, a natural person, for the purposes of organizing a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and supplemental hereto, and generally known as the "Delaware General Corporation Law"), hereby certifies that: 1. NAME. The name of the corporation is ABIOMED, Inc. 2. REGISTERED OFFICE. The address, including street, number, city, and county, of the registered office of the corporation in the State of Delaware is c/o The Prentice-Hall Corporation System, Inc., 229 South State Street, Dover, Kent County, Delaware 19901; and the name of the registered agent of the corporation in the State of Delaware at such address is The PrenticeHall Corporation System, Inc. 3. PURPOSE. The nature of the business and the purposes to be conducted and promoted by the corporation shall be (a) to engage in the research, development, manufacturing, marketing and sale of medical and biomedical devices and instrumentation and medical products, and (b) any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. 4. CAPITAL STOCK. A statement of the designations and powers, preferences and rights, and the qualifications, limitations or restrictions of the classes of capital stock of the corporation shall be as follows: PART 4.1 - DESIGNATION AND NUMBERS. The total number of shares of capital stock which the corporation shall have authority to issue shall be divided into four classes as follows: (i) 10,000,000 shares of Common Stock, par value $.01 per share; (ii) 2,346,000 shares of Class A Common Stock, par value $.01 per share; (iii) 150,000 shares of Class A Preferred Stock, par value $.01 per share; and (iv) 1,000,000 shares of Class B Preferred Stock, par value $.01 per share. PART 4.2 - COMMON STOCK AND CLASS A COMMON STOCK Except as otherwise provided in this Part 2 of Article 4, the Common Stock and the Class A Common Stock shall have the same rights and privileges and shall rank equally, share ratably and be identical in all respects as to all matters. 4.2.1. Dividends and Other Distributions. Subject to the limitations, if any, prescribed in the provisions of any class or series of stock having a preference over the Common Stock and Class A Common Stock, holders of shares of Common Stock and holders of shares of Class A Common Stock shall be entitled to receive, when and as declared by the board of directors out of the assets or funds of the corporation which are by law available therefor, dividends payable in cash or in property (other than shares of Common Stock or shares of Class A Common Stock) or in any combination thereof, and such dividends shall be paid at the same time on both such classes, and not on either one of them without the other, but the dividend rate on each share of the Common Stock shall always be 105% of the dividend rate per share on Class A Common Stock, except in the case of a stock dividend. Holders of shares of Common Stock and holders of shares of Class A Common Stock shall be entitled to receive, when and as declared by the Board of Directors out of the assets or funds of the corporation which are by law available therefor, dividends payable in shares of Common Stock and shares of Class A Common Stock; provided, however, that any such dividend payable in respect of the Common Stock shall be payable only in shares of Common Stock and any such dividend payable with respect to shares of Class A Common Stock shall be payable only in shares of Class A Common Stock; and provided, further, that no such dividend shall be paid on either class unless (i) there shall be declared and paid at the same time a dividend at the same rate on the other class or (ii) the relative rights and privileges of the two classes are adjusted in accordance with Section 4.2.6. 4.2.2. Voting Rights and Powers. (a) Except as specified hereafter, and except as otherwise required by law, with respect to all matters upon which stockholders are entitled to vote or give consent, the holders of the outstanding shares of the Common Stock and the holders of the outstanding shares of the Class A Common Stock shall vote together as a single class, and every holder of the outstanding shares of the Common Stock shall be entitled to cast thereon one (1) vote in person or by proxy for each share of the Common Stock standing in his or her name, and every holder of outstanding shares of the Class A Common Stock shall be entitled to cast thereon ten (10) votes in person or by proxy for each share of Class A Common Stock standing in his or her name. (b) Subject to paragraph (f) below, the holders of the Common Stock, voting as aseparate class, shall be entitled to elect that number of directors which constitutes 25% of the total number of the directors, and if such 25% is not a whole number, then the holders of Common Stock will be entitled to elect the nearest higher whole number of directors which constitutes 25% of such membership. The remaining directors will be elected in accordance with paragraph (a). (c) The holders of the Common Stock will be entitled to vote as a separate class on the removal, with or without cause, of any director elected by the holders of Common Stock voting as a separate class. The remaining directors may be removed with or without cause by the stockholders voting in accordance with paragraph (a). Any director may be removed for cause by the Board of Directors. (d) Any vacancy in the office of a director who was elected by the holders of Common Stock, voting as a separate class, may be filled by a vote of such holders, voting as a separate class. In the absence of a stockholder vote, in the case of a vacancy in the office of a director such vacancy may be filled by the remaining directors elected by the same class or classes as the vacant directorship, and in the absence of any directors so elected, by all the remaining directors. Any director elected by the Board of Directors to fill a vacancy shall serve until the next annual meeting of stockholders, and until his or her successor has been chosen and has been qualified. If permitted by the By- Laws, the Board of Directors may increase the number of directors and any vacancy so created may be filled by the Board of Directors; provided, however, that unless the conditions set forth in this paragraph (d) exist in respect of the next annual meeting of stockholders, the Board of Directors may be so enlarged by the Board of Directors only to the extent that twenty-five percent (25%) of the enlarged Board of Directors consists of the directors elected by the holders of the Common Stock or by persons appoointed to fill vacancies created by the death, resignation or removal of persons elected by the holders of the Common Stock (e) The holders of Common Stock shall be entitled to vote as a separate class on such other matters as may be required by law to be voted upon by them as a separate class. (f) The holders of the Common Stock shall not be entitled to separately vote as set forth in paragraphs (b) - (d) above if on the date for taking a record for any stockholder meeting at which directors are to be elected, the number of issued and outstanding shares of Common Stock (exclusive of any shares held in the corporations's treasury) is less than ten percent (10%) of the aggregate number of issued and outstanding shares of both Common Stock and Class A Common Stock (exclusive of shares held in the Corporation's treasury). In such case, all directors to be elected shall be elected by holders of Common Stock and Class A Common Stock voting together as a single class in accordance with paragraph (a) above. (g) This Certificate of Incorporation may be amended to change the powers, preferences, relative voting power or special rights of the shares of the Common Stock or the Class A Common Stock so as to affect either class adversely relative to the other, but any proposal to do so shall require the approval of a majority of the votes entitled to be cast by the holders of the class adversely affected by the proposed amendment, voting separately as a class, in addition to the approval of a majority of the votes entitled to be cast by the holders of the Common Stock and the Class A Common Stock voting together as a single class as hereinbefore provided. 4.2.3. Conversion of Class A Common Stock into Common Stock. (a) Each share of Class A Common Stock may at any time at the option of the holder be converted into one fully paid and nonassessable share of Common Stock. Such right shall be exercised by the surrender to the corporation of the certificate representing such share of Class A Common Stock to be converted at the principal executive offices of the corporation, or if an agent for the registration of transfer of shares of Class A Common Stock is then duly appointed and acting (said agent being hereinafter referred to as the "Transfer Agent"), then at the office of the Transfer Agent, accompanied by a written notice of election by the holder thereof to convert and (if so required by the corporation or the Transfer Agent) by instruments of transfer, in form satisfactory to the corporation and the Transfer Agent, duly executed by such holder or his duly authorized attorney, and by transfer tax stamps or funds therefor, if required pursuant to paragraph (e) below. (b) As promptly as practicable after any such exercise of a holder's election to convert, the corporation will deliver, or cause to be delivered at the office of the Transfer Agent, to or upon the written order of the holder of such certificate, a certificate or certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class A Common Stock, and all rights of the holder of such shares as such holder shall cease at such time and the person in whose name a certificate representing the shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time. (c) Upon the conversion of any share of Class A Common Stock, no adjustment shall be made with respect to any dividends on Common Stock the record date for which preceded the date of conversion specified in paragraph (b) above. However, exercise of the election to convert shall not deprive a holder of Class A Common Stock of the right to receive any dividend or distribution in the respect of such stock payable to holders of record prior to the effective date of conversion. (d) The corporation will at all times reserve and keep available from authorized but unissued shares or from treasury shares or from any combination thereof, solely for the purpose of issuance upon conversion of the outstanding shares of Class A Common Stock, such number of shares of Common Stock as shall be issuable upon the conversion of all such outstanding shares. (e) The issuance of a certificate for shares of Common Stock upon conversion of shares of Class A Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance except that if any such certificate is to be issued in a name other than that of the holder of the shares of Class A Common Stock converted, the person requesting the issuance thereof shall pay to the corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the corporation that such tax has been paid. (f) All shares of Class A Common Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall forthwith cease and terminate except only the right of the holders thereof to receive shares of Common Stock in exchange therefor and payment of any accrued and unpaid dividends thereon. Any shares of Class A Common Stock so converted shall be retired and cancelled, and shall not be reissued, and the corporation may from time to time take such appropriate action as may be necessary to reduce the authorized Class A Common Stock accordingly. (g) The holders of Class A Common Stock, voting as a separate class, by the vote of a two-thirds majority of the votes entitled to be cast, may at any time vote to convert all of the outstanding Class A Common Stock into Common Stock. 4.2.4. Limitations on Transfer of Class A Common Stock. (a) For purposes of this Section 4.2.4, a transfer includes any conveyance of Class A Common Stock, whether by sale, assignment, gift, devise, bequest, appointment, operation of law or otherwise. All transfers of Class A Common Stock shall be classified as either (i) involuntary transfers by reason of death, disability, legal incapacity, involuntary petition in bankruptcy, or order or decree of court (collectively an "Involuntary Transfer"), or (ii) any transfer which is not involuntary (a "Voluntary Transfer"). (b) No holder of shares of Class A Common Stock may make any transfer, whether a Voluntary Transfer or Involuntary Transfer, except to the extent expressly permitted by paragraph (c). Any purported transfer, other than one expressly permitted by paragraph (c), shall constitute the irrevocable election by the holder to convert such shares into Common Stock and to transfer to the transferee such shares of Common Stock. The sole right of the transferee upon presentation of certificates representing such Class A Common Stock for registration of transfer shall be to receive certificates representing the requisite number of shares of Common Stock upon delivery to the corporation or the Transfer Agent of the documentation and payment (if any) called for by paragraph (a) of Section 4.2.3 hereof. Until such delivery to the corporation or the Transfer Agent, neither the shares of Class A Common Stock represented by such certificates surrendered for registration of transfer nor the shares of Common Stock into which such shares are to be converted shall carry any voting right, and dividends or other distributions with respect thereto shall be withheld until such delivery has been completed. (c) The present holders of the Class A Common Stock are David M. Lederman("Lederman"), Param I. Singh ("Singh") and Eli Lilly and Company ("Lilly"). The consequences of any purported transfer of any Class A Common Stock by a present holder shall be as follows: (i) Involuntary Transfers. (A) In the case of an Involuntary Transfer by Singh or Lilly, the shares subject to the Involuntary Transfer shall be converted into Common Stock in accordance with paragraph (b) of this Section 4.2.4, but such conversion shall have no effect on any other shares of Class A Common Stock outstanding. (B) In the case of an Involuntary Transfer by Lederman, other than as provided in the next sentence, all outstanding Class A Common Stock, regardless of by whom held, shall automatically be converted into Common Stock as of the time of such Involuntary Transfer. If the transferee in any Involuntary Transfer by Lederman is Singh or a trust controlled by Singh (regardless of who the beneficiaries of such trust are), the transfer is permitted, but any subsequent transfer of the shares of Class A Common Stock so transferred shall be deemed a voluntary transfer subject to paragraph (ii)(A). (ii) Voluntary Transfers. (A) Lederman may make a Voluntary Transfer only to a trust controlled by one or both of Lederman and Singh. If Lederman makes a Voluntary Transfer to any person other than such a trust, all Class A Common Stock outstanding, regardless of by whom held, shall be automatically converted into Common Stock as of the time of such Voluntary Transfer. (B) Singh may make a Voluntary Transfer to a trust controlled by one or both of Lederman and Singh and Lilly may make a Voluntary Transfer to any corporation controlled by it. If Singh or Lilly makes a transfer to any person other than those permitted by the preceding sentence, then the shares subject to the Voluntary Transfer shall be converted into Common Stock in accordance with paragraph (b), but such conversion shall have no effect on any other shares of Class A Common Stock outstanding. (d) For purposes of paragraph (c) above, control shall mean in the case of a trust the ability, as trustee or by contract, to control decisions to vote or dispose of the shares of Class A Common Stock held by such trust, and shall mean in the case of a corporation the power to elect a majority of the board of directors of such corporation. If any transfer is permitted under paragraph (c) above by virtue of the fact that it is to a controlled person or entity, at such time as the person(s) required to have control cease to have control, then a new transfer will be deemed to have occurred at the time of such loss of control and such transfer shall be deemed a Voluntary Transfer by the person last controlling the person or entity, and shall be governed by the provisions of paragraph (c)(ii) above. (e) Notwithstanding anything to the contrary set forth herein, any of Lederman, Singh or Lilly may pledge such holder's shares of Class A Common Stock to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee; provided, however, that such shares shall not be transferred to, or registered in the name of, the pledgee and shall remain subject to the provisions of this Section 4.2.4. In the event of foreclosure or other similar action by the pledgee, such pledged shares of Class A Common Stock may not be transferred to the pledgee and may only be converted into shares of Common Stock for transfer to the pledgee. (f) Each certificate representing shares of Class A Common Stock Stock shall be registered in the actual name of the owner thereof and not in the "street name" or in any nominee name. (g) The corporation shall note on the certificates representing the shares of Class A Common Stock the restrictions on transfer and registration of transfer imposed by this Section 4.2.4. 4.2.5. Liquidation. In the event the corporation shall be liquidated, dissolved or wound up, whether voluntarily or involuntarily, after there shall have been paid or set aside the full preferential amounts to which the holder of any class or series having a preference over the Common Stock and Class A Common Stock are entitled, the holders of the Class A Common Stock and the holders of Common Stock shall be entitled to share in the remaining net assets of the corporation, with the holders of Common Stock receiving an amount per share which shall be 105% of the amount per share received by the holders of Class A Common Stock. A merger or consolidation of the corporation with or into any other corporation or a sale or conveyance of all or any part of the assets of the corporation which shall not in fact result in the liquidation of the corporation and the distribution of assets to stockholders shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the corporation within the meaning of this Section 4.2.5. 4.2.6 Certain Adjustments. In the event that the corporation at any time or from time to time after the date of first issuance of Class A Common Stock shall declare or pay any dividend on Common Stock payable in Common Stock, or effect a stock split or other subdivision, or a reverse stock split, of the Common Stock without declaring and paying a dividend of Class A Common Stock payable in Class A Common Stock or engaging in a stock subdivision or reverse split or combination at the same rate, then concurrently with the payment date of such dividend division, or combination, (i) the number of votes per share of the Class A Common Stock shall be proportionately adjusted, (ii) the amount of any dividend, other than a stock dividend, payable per share on the Class A Common Stock in relation to dividends payable per share on the Common Stock shall be proportionately adjusted, (iii) the amount payable per share on Class A Common Stock upon liquidation in relation to the amount payable per share on Common Stock on liquidation shall be proportionately adjusted, and (iv) the number of shares of Common Stock into which each share of Class A Common Stock is convertible under Section 4.2.3 shall be proportionately adjusted, (increased in each case in the case of a stock dividend or subdivision, and decreased in each case in the case of a reverse stock split or stock combination) so that the relative voting, dividend, liquidation and conversion rights of the Class A Common Stock as compared to the Common Stock are not adversely affected by the payment of such stock dividend or such stock subdivision or combination. PART 4.3 - CLASS A PREFERRED STOCK 4.3.1. Definitions. (a) For the purposes of this Part 3 of Article 4, the following definitions shall apply: (i) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 4.3.5(e), deemed to be issued) by the corporation after the Original Issue Date, other than shares of Common Stock issued or issuable: (A) upon conversion of shares of Class A Preferred Stock; (B) as a dividend or distribution on Preferred Stock; (C) by way of a dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock by the foregoing clauses (A), (B) or this clause (C); or (D) to employees, advisors or consultants to the corporation or to directors pursuant to (1) a stock option plan, whether or not qualified as an incentive stock option plan, (2) a stock purchase plan or plans, or (3) by grant or sale, up to a maximum of 450,000 shares. (ii) "Board of Directors" shall mean the Board of Directors of this corporation. (iii) "Common Stock" for purposes of this Part 4.3 only, shall except as otherwise expressly provided, mean both the Common Stock, $.01 par value, and the Class A Common Stock, $0.1 par value, of this corporation. (iv) "Conversion Price" shall mean the amount set forth in Section 4.3.4(a), as adjusted pursuant to Section 4.3.5. (v) "Convertible Securities" shall mean any evidences of indebtedness, shares (other than Common Stock or the Preferred Stock) or other securities convertible into or exchangeable for Common Stock. (vi) "Junior Shares" shall mean all shares of Common Stock of this corporation or any other stock ranking junior to the Class A Preferred Stock in dividends or liquidation rights. (vii) "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities. (viii) "Original Issue Date" shall mean the date on which a share of Class A Preferred Stock was first issued. (ix) "Subsidiary" shall mean any corporation at least 50% of whose outstanding voting shares shall at the time be owned directly or indirectly by this corporation or by one or more subsidiaries, or by this corporation and one or more subsidiaries. 4.3.2. Dividend Rights. (a) Dividend Amount. Commencing October 1, 1987, the holders of the Class A Preferred Stock shall be entitled to receive dividends, out of any funds legally available therefor, at the rate of $1.60 per share (adjusted to reflect any stock split stock dividend, combination, recapitalization or reorganization), in each fiscal year of the corporation and no more, payable annually on October 1, in preference and priority to any payment of any dividend on the shares of the Junior Shares. (b) Dividends Cumulative. Dividends on the Class A Preferred Stock shall be cumulative, i.e., as long as any shares of the Class A Preferred Stock are outstanding, the corporation shall not declare of pay any dividend or make any other distribution upon any Junior Shares (except dividends or distributions payable in stock of the corporation ranking junior to the Class A Preferred Stock as to dividends and ranking junior to the Class A Preferred Stock in liquidation), and, except with the written consent of the holders of 60% of the outstanding Class A Preferred Stock, voting as a single class, the corporation shall not directly or indirectly purchase or redeem or otherwise acquire for value, or set apart any amount for a sinking fund for the purchase or redemption of, any Junior Shares unless in each instance all dividends for a previous dividend period shall have been paid or (if payment is not required) reserved on all outstanding shares of the Class A Preferred Stock and the dividend for the then current annual dividend period on the Class A Preferred Stock shall have been declared and set aside. In the event that the corporation shall declare and pay less than the aggregate dividends at any time required to be paid by paragraph 4.3.2(a) above on shares of Class A Preferred Stock, dividends actually paid will be paid first on Class A Preferred Stock to each holder thereof in proportion to the total dividends at the time payable to each. Subject to the provisions of the preceding sentences, the corporation may declare and pay, out of funds legally available for the purpose, dividends on Junior Shares. 4.3.3. Liquidation Preference. (a) Preference. In the event of any liquidation, dissolution or winding up of the affairs of the corporation, voluntarily or involuntarily, the holders of each share of Class A Preferred Stock, prior to any distribution to the holders of Junior Shares, shall be entitled to receive pro rata a preferential amount equal to $20.00 per share plus declared but unpaid dividends (adjusted to reflect any stock split, stock dividend, combination, recapitalization or reorganization) of Class A Preferred Stock held by them (the "Class A Preferred Stock Liquidation Preference"). After payment or setting apart for payment of the Class A Preferred Stock Liquidation Preference, the remaining assets of the corporation, if any, shall be distributed among the holders of the Junior Shares. If upon such liquidation, dissolution or winding up, the assets of the corporation are insufficient (after payment of the liquidation preference of any class of preferred stock ranking senior on liquidation to the Class A Preferred Stock) to provide for the payment of the Class A Preferred Stock Liquidation Preference for each share of Class A Preferred Stock outstanding, such assets as are available shall be paid out pro rata among the shares of Class A Preferred Stock. (b) Merger or Acquisition. A consolidation or merger of the corporation with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the corporation, shall not be deemed to be a liquidation, dissolution or winding up within the meaning of this Section 4.3.3. 4.3.4. Conversion of Class A Preferred Stock. The holders of the Class A Preferred Stock shall have conversion rights in accordance with the following provisions: (a) Right to Convert and Conversion Price. Each share of Class A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the corporation or any transfer agent for the Class A Preferred Stock, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing $20.00 by the Conversion Price, determined and adjusted as hereafter provided, in effect at the time of conversion. The initial Conversion Price shall be $6.667, and it shall be subject to adjustment as provided in Section 4.3.5. Sixty-eight (68) percent of the share(s) of Common Stock to be issued upon conversion of a share of Class A Preferred Stock shall be Class A Common Stock and 32 percent of the share(s) to be issued upon conversion of a share of Class A Preferred Stock shall be of the class of common stock designated as Common Stock; provided, however, that any shares of Common Stock issuable as a result of an adjustment in the Conversion Price required under Section 4.3.5(e) or (f) hereof shall be of the class of common stock designated as Common Stock. (b) Mandatory Conversion. Each share of Class A Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Conversion Price upon the closing of a public offering pursuant to an effective registration statement under the Securities Act of 1933 covering the offer and sale of Common Stock to the public at a gross sale price not less than fifteen (15) percent above the then effective Conversion Price, resulting in not less than $5,000,000 of gross proceeds to the corporation; provided that the provisions of Section 4.3.5 hereof shall apply with respect to the Common Stock sold in such public offering. All holders of record of shares of Class A Preferred Stock will be given written notice of the effective date of such registration statement and at least four days' prior written notice of the proposed date and place designated for mandatory conversion of the Class A Preferred Stock and the event which will result in the automatic conversion of the Class A Preferred Stock into Common Stock. Such notice shall be sent by certified mail, postage prepaid, or by telecopy with a confirmation by overnight mail such as Federal Express, to each record holder of Class A Preferred Stock at such holder's address appearing on the stock register of the corporation. On or before the date so fixed for conversion, each holder of shares of Class A Preferred Stock shall surrender his, her or its certificate or certificates for all such shares to the corporation at the place designated for the number of shares of Common Stock to which such holder is entitled. The mechanics for conversion and other provisions relating to conversion of Class A Preferred Stock into Common Stock and payments in lieu of fractions set forth elsewhere in this Section 4.3.4 shall apply to the mandatory conversion of the Class A Preferred Stock. (c) Effect of Merger or Acquisition on Class A Preferred Stock. In the event of a sale by the corporation of all or substantially all of its assets or a merger or consolidation of the corporation with or into another corporation or entity, and in the case of successive such sales, mergers and consolidations, thereafter the shares of Class A Preferred Stock then outstanding shall be convertible into the number and kind of securities of the acquiring or surviving corporation (or such other entity whose securities are delivered in exchange for the Common Stock of the corporation) to which the holders of the Class A Preferred Stock would have been entitled if such holders had converted their Class A Preferred Stock into Common Stock or the common stock of any successor to the corporation upon the consummation of such sale, merger or consolidation; and such shares shall thereafter be subject to adjustment in the manner and to the extent set forth herein. (d) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Class A Preferred Stock. In lieu of any fractional share to which a holder of Class A Preferred Stock would otherwise be entitled, the corporation shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, the holder shall surrender the certificate or certificates therefor, duly endorsed for transfer, at the office of the corporation or of any transfer agent for the Class A Preferred Stock, and shall give written notice to the corporation at such office that he elects to convert the same. The corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Class A Preferred Stock a certificate or certificates for the number of shares of Common Stock to which he or she shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable in order to avoid a conversion into fractional shares of Common Stock. Except as provided in paragraphs (b) and (c), such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Class A Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. (e) No Impairment. The corporation will 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 corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4.3.4 and in taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Class A Preferred Stock against impairment. (f) Notices of Record Date, etc. In the event that the corporation shall propose at any time: (i) to declare any dividend or distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus; (ii)to offer for subscription pro rata to the holders of any class of its stock any additional shares of stock of any class or other rights; (iii) to subdivide or combine its outstanding Common Stock; (iv) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or (v) to merge or consolidate with or into any other corporation, or sell, lease or convey all or substantially all of its property or business, or to liquidate, dissolve or wind up;then, in connection with each such event, the corporation shall send to the holders of the Class A Preferred Stock: (1) at least 20 days' prior written notice of the date on which a record shall be taken for such dividend, distribution, subscription rights, subdivision or combination (and specifying the date on which the holders of Common Stock shall be entitled thereto) or for determining rights to vote in respect of the matters referred to in clauses (iv) and (v) above; and (2) in the case of the matters referred to in clauses (iv) and (v) above, at least 20 days' prior written notice of the date when the same shall take place (specifying the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event). Each such written notice shall be given by certified mail, postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the corporation. (g) Reservation of Common Stock. The corporation shall, at all times when the Class A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of the Class A Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Class A Preferred Stock. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Class A Preferred Stock, the corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the corporation may validly and legally issue fully paid and nonassessable shares of such Common Stock at such adjusted Conversion Price. (h) Cancellation of Class A Preferred Stock. All shares of Class A Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall forthwith cease and terminate except only the right of the holders thereof to receive shares of Common Stock in exchange therefor and payment of any accrued and unpaid dividends thereon. Any shares of Class A Preferred Stock so converted shall be retired and cancelled, and shall not be reissued, and the corporation may from time to time take such appropriate action as may be necessary to reduce the authorized Class A Preferred Stock accordingly. 4.3.5. Adjustment of Conversion Price on Class A Preferred Stock. (a) Adjustment of Conversion Price. The Conversion Price on Class A Preferred Stock shall be adjusted as set forth in this Section 4.3.5 with the intent that the rights of holder of such Class A Preferred Stock to convert shall not be impaired. (b) Situations Where No Adjustment Required. No adjustment in the Conversion Price of a particular share of Class A Preferred Stock shall be made in respect of the issuance of Additional Shares of Common Stock unless the consideration per share for an Additional Share of Common Stock issued or deemed to be issued by the corporation is less than the Conversion Price in effect on the date of, and immediately prior to, such issue. (c) Adjustments for Combination or Consolidation of Common Stock. In the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the conversion Price in effect immediately prior to such combination or consolidation shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. (d) Adjustment Upon Issuance of Additional Shares of Common Stock. In the event the corporation shall issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to paragraph (e) of this Section 4.3.5) without consideration or for a consideration per share less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, such Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the corporation for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common Stock so issued. For the purposes of this paragraph (d), all shares of Common Stock issuable upon conversion of outstanding Convertible Securities shall be deemed to be outstanding, and immediately after any Additional Shares of Common Stock are deemed issued pursuant to paragraph (e), such Additional Shares of Common Stock shall be deemed to be outstanding. (e) Deemed Issue of Additional Shares of Common Stock. (i) Options and Convertible Securities. In the event the corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options in accordance with (B) below or, in the case of Convertible Securities, the maximum number of shares of Common Stock into which they are convertible in accordance with (B) below, shall be deemed to be Additional Shares of Common Stock issued as of the time such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to paragraph (f) hereof) of such Additional Shares of Common Stock would be less than the Conversion price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common Stock are deemed to be issued: (A) except as provided in (B) below, no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the corporation or for any decrease in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof, or for the termination of the right to exercise or convert such Options or Convertible Securities, then the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase, decrease or termination becoming effective, be recomputed to reflect such increase, decrease or termination insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities and upon termination such Options or Convertible Securities shall no longer be deemed to be outstanding; and (C) no readjustment pursuant to sub-clause (B) above shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (1) the Conversion Price on the original adjustment date, or (2) the Conversion Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date. (f) Determination of Consideration. For purposes of this Section 4.3.5, the consideration received by the corporation for the issue of any Additional Shares of Common Stock shall be computed as follows: (i) Cash and Property. Such consideration shall: (A) insofar as it consists of cash, be computed at the aggregate amount of cash received by the corporation, excluding amounts paid or payable for accrued interest or accrued dividends; (B) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board of Directors; and (C) in the event Additional Shares of Common Stock are issued together with other shares of securities or other assets of the corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Directors. (ii) Options and Convertible Securities. The consideration per share received by the corporation for Additional Shares of Common Stock deemed to have been issued pursuant to paragraph (e)(i), relating to Options and Convertible Securities, shall be determined by dividing (A) the total amount, if any, received or receivable by the corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by (B) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (iii) Stock Dividends and Stock Subdivisions. Any Additional Shares of Common Stock deemed to have been issued, relating to stock dividends and stock subdivisions, shall be deemed to have been issued for no consideration. (g) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4.3.5, the corporation at its expense shall promptly computed such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Class A Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The corporation shall, upon the written request at any time of any holder of Class A Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Class A Preferred Stock. 4.3.6. Voting Rights of Class A Preferred Stock. (a) General. The Class A Preferred Stock shall vote as a separate class on all matters affecting Class A Preferred Stock to the extent required by law and each share of Class A Preferred Stock issued and outstanding shall have one vote on all such matters. PART 4.4 - CLASS B PREFERRED STOCK 4.4.1. General. The Class B Preferred Stock may consist of one or more series. The Board of Directors may, from time to time, establish and designate the different series and the variations in the preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions as between the different series provided in Section 4.4.2 hereof, but in all other respects all shares of the Class B Preferred Stock shall be identical. In the event that at any time the Board of Directors shall have established and designated one or more series of Class B Preferred Stock consisting of a number of shares less than all of the authorized number of shares of Class B Preferred Stock, the remaining authorized shares of Class B Preferred Stock shall be deemed to be shares of an undesignated series of Class B Preferred Stock until designated by the Board of Directors as being a part of a series previously established or a new series then being established by the Board of Directors. 4.4.2. Establishment of a Series. Subject to the provisions of this Article Fourth, the Board of Directors is authorized to establish one or more series of Class B Preferred Stock and, to the extent now or hereafter permitted by the laws of the State of Delaware, to fix and determine the preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of each series, including, but not limited to: (a) the number of shares to constitute such series and the distinctive designation such series; (b) the dividend rate on the shares of such series and preferences, if any, and the special and relative rights of such shares of such series as to dividends; (c) whether or not the shares of such series shall be redeemable, and, if redeemable, the price, terms and manner of redemption; (d) the preferences, if any, and the special and relative rights of the shares of such series upon liquidation of the corporation; (e) whether or not the shares of such series shall be subject to the operation of a sinking or purchase fund and, if so, the terms and provisions of such fund; (f) whether or not the shares of such series shall be convertible into shares of any other class or of any other series of the same or any other class of stock of the corporation and, if so, the conversion price or ratio and other conversion rights; (g) the conditions under which the shares of such series shall have separate voting rights or no voting rights; and (h) such other designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions of such series to the full extent now and hereafter permitted by the laws of the State of Delaware. Notwithstanding the fixing of the number of shares constituting a particular series, the Board of Directors may at any time thereafter by resolution authorize the increase or decrease in the number of shares of the same series, subject to the limitations of Section 151(g) of the Delaware General Corporation Law. 4.4.3. Dividends. Holders of Class B Preferred Stock shall be entitled to receive, when, if and as declared by the Board of Directors, but only out of funds legally available for the payment of dividends, and after payment of any accrued dividend on the Class A Preferred Stock in accordance with Part III hereof, cash dividends at the rates fixed by the Board of Directors for the respective series, payable on such dates in each year as the Board of Directors shall fix for the respective series as provided in Section 4.4.2 (hereinafter referred to as "dividend dates"). Until all accrued dividends on each series of Class B Preferred Stock shall have been paid through the last preceding dividend date of each such series, no dividend or distribution shall be made to holders of Common Stock other than a dividend payable in Common Stock of the corporation. Dividends on shares of any cumulative series of Class B Preferred Stock shall accumulate from and after the day on which such shares are issued, but arrearages in the payment thereof shall not bear interest. Nothing hereincontained shall be deemed to limit the right of the corporation to purchase or otherwise acquire at any time any shares of its capital stock. For purposes of this Part 4.4 the amount of dividends "accrued" on any shares of any cumulative series of Class B Preferred Stock as at any dividend date shall be deemed to be the amount of any unpaid dividends accumulated thereon to and including such dividend date, whether or not earned or declared. The amount of dividends "accrued" on any noncumulative series of Class B Preferred Stock shall mean only those dividends declared by the Board of Directors, unless otherwise specified for such series by the Board of Directors pursuant to Section 4.2.2. 4.4.4. Liquidation. Upon the voluntary or involuntary liquidation of the corporation, after payments of the Class A Preferred Stock Liquidation Preference but before any payment or distribution of the assets of the corporation shall be made to or set apart for any other class of stock, the holders of Class B Preferred Stock shall be entitled to payment of the amount of the preference payable upon such liquidation of the corporation fixed by the Board of Directors for the respective series as provided in Section 4.4.2. If, upon any such liquidation, the assets of the corporation shall be insufficient to pay in full to the holders of the Class B Preferred Stock the preferential amount aforesaid, then such assets, or the proceeds thereof, shall be distributed among the holders of each series of Class B Preferred Stock ratably in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. The voluntary sale, conveyance, exchange or transfer of all or substantially all of the property and assets of the corporation, the merger or consolidation of the corporation into or with any other corporation, or the merger of any other corporation into it, shall not be deemed to be a liquidation of the corporation for the purpose of this Section 4.4.4. 4.4.5. Retirement. Any shares of Class B Preferred Stock which shall at any time have been redeemed, or which shall at any time have been surrendered for conversion or exchange or for cancellation pursuant to any sinking or purchase fund provisions with respect to any series of Class B Preferred Stock, shall be retired and shall thereafter have the status of authorized and unissued shares of Class B Preferred Stock undesignated as to series. 4.4.6. Voting Rights. The Board of Directors shall, at the time any series of Class B Preferred Stock is established, determine whether or not the shares of such series shall be entitled to vote. The Board of Directors, in establishing a series of Class B Preferred Stock and fixing the voting rights thereof, may determine that the voting power of each share of such series may be greater or less than the voting power of each share of the Common Stock or of other series of Class B Preferred Stock notwithstanding that the shares of such series of Class B Preferred Stock may vote as a single class with the shares of other series of Class B Preferred Stock and/or with the shares of Common Stock. 5. INCORPORATOR. The name and the mailing address of the incorporator is as follows: NAME ADDRESS David M. Lederman c/o ABIOMED,Inc. 33 Cherry Hill Drive Danvers, MA 01421 6. DIRECTORS. The name and the mailing address of the directors, each of whom shall serve until the next annual meeting of shareholders and until his or her successor is elected and qualified are as follows: NAME MAILING ADDRESS David M. Lederman c/o ABIOMED, Inc. 33 Cherry Hill Drive Danvers, MA 01421 Param I. Singh c/o ABIOMED,Inc. 33 Cherry Hill Drive Danvers, MA 01421 Francis M. Galasso c/o ABIOMED,Inc. 33 Cherry Hill Drive Danvers, MA 01421 W. Gerald Austen Massachusetts General Hospital Boston, MA 01421 William G. Davis 3532 Bay Road, South Drive Indianapolis,IN 46240 Paul Fireman c/o Reebok International,Ltd. 15 Royall Street Canton,MA 02021 Henri A. Termeer c/o Genzyme Corporation 75 Kneeland Street Boston, MA 02111 7. EXISTENCE. The corporation shall have perpetual existence. 8. CERTAIN SETTLEMENTS. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing threefourths in value of the creditors or class of creditors, and/or of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this 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 this corporation, as the case may be, and also on this corporation. 9. POWERS OF DIRECTORS. For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation and regulation of the powers of the corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that: a. The business of the corporation shall be conducted by the officers of the corporation under the supervision of the Board of Directors. b. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the ByLaws. No election of Directors need be by written ballot. c. The Board of Directors of the corporation may adopt, amend or repeal the By-Laws of the corporation at any time after the original adoption of the By-Laws according to Section 109 of the Delaware General Corporation Law; provided, however, that any amendment to provide for the classification of Directors of the corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the Delaware General Corporation Law shall be set forth in an amendment to this Certificate of Incorporation, in an initial By-Law, or in a By-Law adopted by the stockholders of the corporation entitled to vote. 10. LIMITATION OF LIABILITY. No director shall be personally liable to the corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director, notwithstanding any other provision of law to the contrary. However, a director shall be liable to the extent required by applicable law (i) for 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) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article 10 shall deprive a director of the benefits hereof with respect to any acts or omissions of such director occurring prior to such amendment or repeal. 11. INDEMNIFICATION. The corporation may, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section, to the full extent provided in the corporation's ByLaws, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which a person indemnified may be entitled under any agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. 12. AMENDMENT. From time to time any of the provisions of this Certificate of Incorporation may be amended, altered or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the corporation by this Certificate of Incorporation are granted subject to the provisions of this Article 12. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Incorporation on this 29th day of May, 1987. This Certificate of Incorporation is to be filed with the Secretary of State of Delaware and Recorded with the Recorder of Deeds of Kent County, Delaware, pursuant to Section 103 and 245 of the Delaware General Corporation Law. /s/ David M. Lederman David M. Lederman, Incorporator AGREEMENT OF MERGER AGREEMENT OF MERGER entered into this 5th day of June, 1987 between Applied Biomedical Corporation, a Massachusetts corporation ("Parent"), and ABIOMED, Inc., a Delaware corporation ("Subsidiary"). RECITALS: WHEREAS, the authorized capital stock of Parent consists of: 1,360,000 shares of Class A Common Stock, $.01 par value per share ("Parent Class A Common Stock"), 680,000 of which are issued and outstanding as of the date hereof; 640,000 shares of Class B Common Stock, $.01 par value per share ("Parent Class B Common Stock"), 320,250 of which are issued and outstanding as of the date hereof; and 150,000 shares of Preferred Stock, $.01 par value per share ("Parent Preferred Stock"), all of which are issued and outstanding as of the date hereof; and WHEREAS, the authorized capital stock of Subsidiary consists of: 10,000,000 shares of Common Stock, $.01 par value per share ("Subsidiary Common Stock"), 100 of which are issued and outstanding and held by Parent as of the date hereof; 2,346,000 shares of Class A Common Stock, $.01 par value per share ("Subsidiary Class A Common Stock"), none of which are issued and outstanding on the date hereof; 150,000 shares of Class A Preferred Stock, $.01 par value per share ("Subsidiary A Preferred Stock"), none of which are issued and outstanding as of the date hereof; and 1,000,000 shares of Class B Preferred Stock, $.01 par value per share ("Subsidiary B Preferred Stock"), none of which are issued and outstanding as of the date hereof; and WHEREAS, the parties deem it advisable and in the best interests of such corporations and their stockholders that Parent be merged with and into Subsidiary (the "Merger") in accordance with the provisions of the Massachusetts Business Corporation Law, ("MBCL") and the Delaware General Corporation Law ("DGCL") and desire to state herein the mode of carrying the same into effect and certain other details and provisions of the Merger; NOW, THEREFORE, in consideration of the premises and the agreements herein contained, the parties agree as follows: 1. Constituent Corporations and Merger. The names of the corporations proposing to merge are Applied Biomedical Corporation and ABIOMED, Inc., and Applied Biomedical Corporation shall be merged into ABIOMED, Inc., which shall be the surviving corporation (the "Surviving Corporation"). 2. Surviving Corporation. (a) The name by which the Surviving Corporation shall be known is: ABIOMED, Inc. (b) The corporate purposes of the Surviving Corporation shall be the purposes set forth in the Certificate of Incorporation of Subsidiary, as amended to date. (c) The Certificate of Incorporation and By-Laws of the Surviving Corporation shall be the Certificate of Incorporation and By-Laws of Subsidiary, as amended to date. (d) The officers and directors of the Surviving Corporation shall be those of Subsidiary on the date hereof, and shall be set forth in the Articles of Merger filed with the Secretary of State of the Commonwealth of Massachusetts. 3. Effective Time. The Merger shall be effective on the date on which both of the following have been accomplished (i) the Articles of Merger have been filed with the Secretary of State of the Commonwealth of Massachusetts pursuant to the applicable provisions of the MBCL, and (ii) this Agreement of Merger has been filed with the Secretary of State of Delaware pursuant to the applicable provisions of the DGCL (the "Effective Time"). 4. Effect of Merger. From and after the Effective Time, the effect of the Merger shall be as provided in Section 80 of the MBCL and Sections 252 and 259 of the DGCL. 5. Conversion of Shares. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, (i) each share of Parent Class A Common Stock issued and outstanding shall be converted into and be deemed to become three (3) shares of Subsidiary Class A Common Stock; (ii) each share of Parent Class B Common Stock issued and outstanding shall be converted into and be deemed to become three (3) shares of Subsidiary Common Stock; and (iii) each share of Parent Preferred Stock issued and outstanding shall be converted into and be deemed to become one (1) share of Subsidiary A Preferred Stock, in each case fully paid and nonassessable. In addition, each presently outstanding option or warrant to purchase Parent Class B Common Stock shall be converted into an option or warrant to purchase three (3) shares of Subsidiary Common Stock at an exercise price per share equal to one-third the exercise price of the option or warrant on Parent Class B Common Stock and otherwise shall be on the same terms and conditions. (b) After the Effective Time, each certificate theretofore representing shares of issued and outstanding Parent Class A Common Stock, Class B Common Stock and Preferred Stock (other than dissenter's shares) shall, upon surrender to Subsidiary, entitle the holder to receive in exchange therefor a certificate or certificates representing the number of whole shares of Subsidiary capital stock into which the stock theretofore represented by the certificate so surrendered shall have been converted in accordance with the paragraph above, plus cash in lieu of any fractional share interest. From and after the Effective Time, until so surrendered, each certificate theretofore representing Parent capital stock shall be deemed for all corporate purposes to evidence the number of whole shares of Subsidiary capital stock into which such shares shall have been converted, plus cash in lieu of any fractional share interest. (c) Each share, if any, of capital stock held in Parent's treasury at the Effective Time shall automatically be cancelled. (d) At the Effective Time, the 100 shares of Subsidiary Common Stock presently issued and outstanding and held by Parent shall be cancelled. 6. Dissenter's Rights. Any holder of record of shares of Parent's capital stock who shall, at or before the taking of the vote of Parent stockholders to adopt this Agreement of Merger and the Merger contemplated hereby, have filed with Seller written objection and not have voted for the Merger and who shall have, after the taking of such vote, properly demanded payment for such shares in accordance with Section 89 of the MBCL, shall not thereafter have any rights as a stockholder except as provided in Section 96 of MBCL. IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Agreement of Merger effective as of the date first above written. Applied Biomedical Corporation By: /s/ David M. Lederman David M. Lederman, President A T T E S T: /s/ Donald E. Paulson Donald E. Paulson, Clerk ABIOMED, Inc. By: /s/ David M. Lederman David M. Lederman, President A T T E S T: /s/ Donald E. Paulson Donald E. Paulson, Secretary CERTIFICATE OF CLERK OF APPLIED BIOMEDICAL CORPORATION The undersigned, being the Clerk of Applied Biomedical Corporation, does hereby certify that 1. The foregoing Agreement of Merger was submitted to the stockholders entitled to vote of said corporation at a special meeting thereof for the purpose of acting on the Agreement of Merger. Due notice of the time, place, and purpose of said meeting was mailed to each stockholder of said corporation at least 20 days prior to the date of the meeting. At said meeting, the Agreement of Merger was considered by the stockholders entitled to vote of the corporation, and, a vote having been taken for the adoption or rejection by them of the Agreement of Merger, at least a majority of the outstanding stock entitled to vote of the corporation was voted for the adoption of the Agreement of Merger. Dated: June 5, 1987. /s/ Donald E. Paulson Donald E. Paulson, Clerk of Applied Biomedical Corporation CERTIFICATE OF SECRETARY OF ABIOMED, Inc. The undersigned, being the Secretary of ABIOMED, Inc., does hereby certify that 1. The holder of all of the outstanding stock of said corporation dispensed with a meeting and vote of stockholders, and the sole stockholder entitled to vote consented in writing, pursuant to the provisions of Section 228 of the General Corporation Law of the State of Delaware, to the adoption of the foregoing Agreement of Merger. Dated: June 5, 1987. /s/ Donald E. Paulson Donald E. Paulson, Secretary of ABIOMED, Inc. CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION ABIOMED, Inc. ABIOMED, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), pursuant to Section 242 of the Delaware General Corporation Law, hereby certifies as follows: 1. The Board of Directors of the Corporation, at a meeting duly held on June 15, 1995, at which a quorum was present and acting throughout and in accordance with the provisions of Section 242 of the Delaware General Corporation Law, approved the following amendments to the Corporation's Certificate of Incorporation: i. To increase the number of authorized shares of Common Stock, $.01 par value, from 10,000,000 to 25,000,000 shares, such that paragraph (i) of Section 4.1 of Article 4 shall be amended to read as follows: The total number of shares of capital stock which the corporation shall have authority to issue shall be divided into four classes as follows: (i) 25,000,000 shares of Common Stock, par value $.01 per share; ii. Paragraphs (c), (d) and (g) of Section 4.2.2 of Article 4 shall be amended to read in their entirety as follows: (c) Any director elected by the holders of Common Stock voting as a separate class under paragraph (b) above may only be removed for cause by the holders of the Common Stock voting as a separate class. The remaining directors may be removed only for cause by the stockholders voting in accordance with paragraph (a). (d) So long as there is any Class A Common Stock outstanding, any vacancy in the office of a director electable by the holders of Common Stock voting as a separate class may be filled by a vote of such holders voting as a separate class, and in the absence of such a stockholder vote, such vacancy may be filled by the remaining directors elected by the Common Stock voting as a separate class, and in the absence of any directors so elected, by all the remaining directors. So long as there is any Class A Common Stock outstanding, any vacancy in the office of a director electable by the holders of both classes of common stock voting as a single class shall be filled by the remaining directors elected by both classes, and in the absence of any directors so elected, by the holders of both classes of common stock voting as a single class. At such time as there is no longer any Class A Common Stock outstanding, any vacancy in the office of director shall be filled by the remaining directors, and in the absence of any directors, by the stockholders. Unless the conditions set forth in paragraph (f) exist in respect of the next annual meeting of stockholders, the Board of Directors may be enlarged by the Board of Directors only to the extent that twentyfive percent (25%) of the enlarged Board of Directors consists of directors either (i) elected by the holders of the Common Stock or (ii) appointed by directors elected by the holders of Common Stock voting as a separate class. (g) This Certificate of Incorporation may be amended to change the powers, preferences, relative voting power or special rights of the shares of the Common Stock or the Class A Common Stock so as to affect either class adversely relative to the other, but any proposal to do so shall require the approval of a majority of the votes entitled to be cast by the holders of the class adversely affected by the proposed amendment, voting separately as a class, in addition to the approval of a majority of the votes entitled to be cast by the holders of the Common Stock and the Class A Common Stock voting together as a single class as hereinbefore provided. In addition, this Section 4.2.2 shall not be amended, altered or repealed except by the affirmative vote of eighty percent (80%) of the votes entitled to be cast by the stockholders voting in accordance with paragraph (a). iii. Article 13 shall be added to read in its entirety as follows: 13. CLASSIFIED BOARD OF DIRECTORS (a) The number of directors of the corporation shall be the number, not less than 3 nor more than 12, fixed from time to time by the Board of Directors. The Board of Directors may be enlarged only by vote of a majority of the directors then in office. (b) Commencing at the annual meeting of the stockholders in 1995, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one third of the number of directors constituting the entire Board of Directors. At the annual meeting of the stockholders held in 1995, Class I directors shall be elected for a one year term, Class I directors shall be elected for a two year term, and Class III directors shall be elected for a three year term, and in each case until their successors are duly elected and qualified. Commencing in 1996, at each annual meeting of the stockholders successors to the class of directors whose terms expire at that annual meeting of stockholders shall be elected by stockholders for a three year term and until their successors are duly elected and qualified. If the number of directors constituting the entire Board of Directors shall be changed as provided in paragraph (a) of this Article 13, the increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. (c) Any director elected to fill a vacancy resulting from an increase in any class or from the removal from office, death, disability, resignation or disqualification of a director or other cause shall hold office for the remaining term of the class to which such director is elected. No decrease in the size of the Board ofDirectors shall have the effect of removing or shortening the term of any incumbent director. (d) Whenever the holders of any series of Preferred Stock issued pursuant to the provisions of Part 4.4 of Article 4 of this certificate of incorporation shall have the right, voting as a separate class, to elect directors, the election, term of office, filling of vacancies and other terms of such directorships shall be governed by the terms of this certificate of incorporation applicable to such series or by the resolution or resolutions of the Board of Directors providing for such series, as the case may be, and such directorships shall not be divided into classes or otherwise subject to this Article 13 unless expressly so provided therein. (e) This Article 13 shall not be amended, altered or repealed except by the affirmative vote of eighty percent (80%) of the votes entitled to be cast by stockholders voting in accordance with Section 4.2.2(a) of Article 4. iv. Article 14 shall be added to read in its entirety as follows: 14. CONSIDERATION OF RELEVANT FACTORS IN BUSINESS COMBINATIONS. The Board of Directors of the corporation, when evaluating any offer of another party to (i) purchase or exchange any securities or property for any outstanding equity securities of the corporation, (ii) merge or consolidate the corporation with another corporation, or (iii) purchase or otherwise acquire all or substantially all of the properties and assets of the corporation, shall, in connection with the exercise of its judgment in determining what is in the best interests of the corporation and its stockholders, give due consideration to all relevant factors, including without limitation: (a) not only the price or other consideration being offered in relation to the then current market price of the corporation's outstanding shares of capital stock, but also the Board of Directors' estimate of the future value of the corporation as an independent going concern and the unrealized value of its property and assets; (b) the financial and managerial resources and future prospects of the other party; and (c) the possible social, legal, environmental and economic effects of the transaction on the business of the corporation and its subsidiaries and on the employees, customers, suppliers and creditors of the corporation and its subsidiaries and the effects on the communities in which the corporation's facilities are located. In evaluating any such offer on the basis of the foregoing factors, the directors shall be deemed to be performing their duly authorized duties and acting in good faith and in the best interests of the corporation within the meaning of Section 145 of the General Corporation Law of Delaware, as it may be amended from time to time. 2. The foregoing amendments to the Certificate of Incorporation were duly adopted by the stockholders at a meeting duly held, at which a quorum was present and acting throughout and in accordance with the provisions of Section 242 of the General Corporation Law of Delaware, on August 9, 1995. IN WITNESS WHEREOF, ABIOMED, Inc. has caused this Certificate of Amendment of its Certificate of Incorporation to be signed by David M. Lederman, its President, and attested to by Donald E. Paulson, its Secretary, this 25th day of October, 1995. ABIOMED, Inc. By: __/s/ David M. Lederman________ David M. Lederman, President ATTEST: By: __/s/ Donald E. Paulson______________ Donald E. Paulson, Secretary CERTIFICATE OF OWNERSHIP AND MERGER of ABIOMED SECURITIES CORPORATION (A Massachusetts corporation) into ABIOMED, INC. (A Delaware corporation) It is hereby certified that: 1. ABIOMED, Inc. (hereinafter sometimes referred to as the "Corporation") is a business corporation of the State of Delaware. 2. The Corporation is the owner of all the outstanding shares of the Common Stock of Abiomed Securities Corporation, a Massachusetts corporation (hereinafter sometimes referred to as the "Subsidiary"). 3. The laws of the jurisdiction of organization of the corporations listed above permit the merger of a business corporation of that jurisdiction with a business corporation of another jurisdiction. 4. The Corporation hereby merges the Subsidiary into the Corporation. 5. The following is a copy of the resolutions adopted on October 7, 1988, by the Board of Directors of the Corporation to merge said Subsidiary into the Corporation: VOTED: That Abiomed Securities Corporation (hereinafter sometimes referred to as the "Subsidiary") be merged with and into this Corporation, that the effective date of such merger be the date of filing of the Certificate of Ownership and Merger with the Delaware Secretary of State, and the Articles of Merger with the Massachusetts Secretary of State, and that the President and Assistant Secretary be, and each of them hereby is, authorized and directed to execute and deliver the Certificate of Ownership and Merger and the Articles of Merger and such other documents and instruments as may be necessary in order to effectuate the merger of the Subsidiary with and into this Corporation. VOTED: That this Corporation cause to be executed and filed and/or recorded the documents prescribed by the laws of the State of Delaware, by the laws of the jurisdiction of organization of the Subsidiary, and by the laws of any other appropriate jurisdiction, and that it cause to be performed all necessary acts within the jurisdiction of organization of the Subsidiary and of this Corporation and in any other appropriate jurisdiction necessary or proper to effect this merger. Signed and attested to on October 7 , 1988. ABIOMED, INC. By: /s/David M. Lederman David M. Lederman, President Attest: /s/ Robert T.V. Kung Robert T.V. Kung, Assistant Secretary COMMONWEALTH OF MASSACHUSETTS ) ) ) SS: COUNTY OF SUFFOLK ) BE IT REMEMBERED that, on October 7, 1988, before me, a Notary Public duly authorized by law to take acknowledgement of deeds, personally came David M. Lederman and Robert T.V. Kung, the President and Assistant Secretary, respectively, of ABIOMED, Inc., who duly signed the foregoing instrument before me and acknowledged that such instrument as executed is the act and deed of said corporation, that his signing is his act and deed, and that the facts stated therein are true. GIVEN my hand on October 7, 1988. /s/ Bobbie A. O'Brien Notary Public [SEAL] My Commission Expires: 12/2/92 - -2- EX-3.02 4 AMENDED AND RESTATED BY-LAWS AMENDED AND RESTATED BY-LAWS of ABIOMED, Inc. A Delaware Corporation Adopted: June 4, 1987 Amended: July 2, 1990, June 18, 1993 June 15, 1995, August 9, 1995 Amended and Restated: August 14, 1996 ______________________ Secretary BY-LAWS TABLE OF CONTENTS Page ARTICLE I. - STOCKHOLDERS 1 SECTION 1.1. ANNUAL MEETING 1 SECTION 1.2. SPECIAL MEETINGS 1 SECTION 1.3. NOTICE OF MEETING 1 SECTION 1.4. QUORUM 2 SECTION 1.5. VOTING AND PROXIES 2 SECTION 1.6. ACTION AT MEETING 2 SECTION 1.7. ACTION WITHOUT MEETING 2 SECTION 1.8. VOTING OF SHARES OF CERTAIN HOLDERS 2 SECTION 1.9. STOCKHOLDER LISTS 3 ARTICLE II. - BOARD OF DIRECTORS 3 SECTION 2.1. POWERS 3 SECTION 2.2. NUMBER OF DIRECTORS; QUALIFICATIONS 4 SECTION 2.3. NOMINATION OF DIRECTORS 4 SECTION 2.4. ELECTION AND TERM OF OFFICE 4 SECTION 2.5. VACANCIES; REDUCTION OF THE BOARD 5 SECTION 2.6. ENLARGEMENT OF THE BOARD 5 SECTION 2.7. RESIGNATION 5 SECTION 2.8. REMOVAL 5 SECTION 2.9. MEETINGS 5 SECTION 2.10. NOTICE OF MEETING 5 SECTION 2.11. AGENDA 6 SECTION 2.12. QUORUM 6 SECTION 2.13. ACTION AT MEETING 6 SECTION 2.14. ACTION WITHOUT MEETING 6 SECTION 2.15. COMMITTEES 6 ARTICLE III. - OFFICERS 7 SECTION 3.1. ENUMERATION 7 SECTION 3.2. ELECTION 7 SECTION 3.3. QUALIFICATION 7 SECTION 3.4. TENURE 7 SECTION 3.5. REMOVAL 7 SECTION 3.6. RESIGNATION 7 SECTION 3.7. VACANCIES 7 SECTION 3.8. CHAIRMAN OF THE BOARD 7 SECTION 3.9. PRESIDENT 8 SECTION 3.10. EXECUTIVE VICE-PRESIDENT; VICE-PRESIDENT(S)8 SECTION 3.11. TREASURER AND ASSISTANT TREASURERS 8 SECTION 3.12. SECRETARY AND ASSISTANT SECRETARIES 8 SECTION 3.13. OTHER POWERS AND DUTIES 9 ARTICLE IV. - CAPITAL STOCK 9 SECTION 4.1. STOCK CERTIFICATES 9 SECTION 4.2. TRANSFER OF SHARES 9 SECTION 4.3. RECORD HOLDERS 9 SECTION 4.4. RECORD DATE 10 SECTION 4.5. TRANSFER AGENT AND REGISTRAR FOR SHARES OF CORPORATION 10 SECTION 4.6. LOSS OF CERTIFICATES 11 SECTION 4.7. RESTRICTIONS ON TRANSFER 11 SECTION 4.8. MULTIPLE CLASSES OF STOCK 11 ARTICLE V. - DIVIDENDS 11 SECTION 5.1. DECLARATION OF DIVIDENDS 11 SECTION 5.2. RESERVES 11 ARTICLE VI. - POWERS OF OFFICERS TO CONTRACT WITH THE CORPORATION 12 ARTICLE VII - INDEMNIFICATION 12 SECTION 7.1. DEFINITIONS 12 SECTION 7.2. RIGHT TO INDEMNIFICATION IN GENERAL 14 SECTION 7.3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION 14 SECTION 7.4. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION 14 S SECTION 7.5. INDEMNIFICATION OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL 15 SECTION 7.6. INDEMNIFICATION FOR EXPENSES OF A WITNESS 15 SECTION 7.7. ADVANCEMENT OF EXPENSES 16 SECTION 7.8. NOTIFICATION AND DEFENSE OF CLAIM 16 SECTION 7.9. METHOD OF DETERMINATION 17 SECTION 7.10. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS 17 SECTION 7.11. NON-EXCLUSIVITY 18 SECTION 7.12. INSURANCE 18 SECTION 7.13. NO DUPLICATIVE PAYMENT 18 SECTION 7.14. SEVERABILITY 18 ARTICLE VIII. - MISCELLANEOUS PROVISIONS 19 SECTION 8.1. CERTIFICATE OF INCORPORATION 19 SECTION 8.2. FISCAL YEAR 19 SECTION 8.3. CORPORATE SEAL 19 SECTION 8.4. EXECUTION OF INSTRUMENTS 19 SECTION 8.5. VOTING OF SECURITIES 19 SECTION 8.6. EVIDENCE OF AUTHORITY 19 SECTION 8.7. CORPORATE RECORDS 19 SECTION 8.8. CHARITABLE CONTRIBUTIONS 20 ARTICLE IX. - AMENDMENTS 20 SECTION 9.1. AMENDMENT BY STOCKHOLDERS 20 SECTION 9.2. AMENDMENT BY BOARD OF DIRECTORS 20 BY-LAWS OF ABIOMED, Inc. (A Delaware Corporation) ARTICLE I. Stockholders Section 1.1. Annual Meeting. The annual meeting of the stockholders of the corporation shall be held on the second Wednesday of August in each year, at such time and place within or without the State of Delaware as may be designated in the notice of meeting. If the day fixed for the annual meeting shall fall on a legal holiday, the meeting shall be held on the next succeeding day not a legal holiday. If the annual meeting is omitted on the day herein provided, a special meeting may be held in place thereof, and any business transacted at such special meeting in lieu of annual meeting shall have the same effect as if transacted or held at the annual meeting. Section 1.2. Special Meetings. Special meetings of the stockholders may be called at any time by the chairman of the board of directors, the president or by the board of directors. Special meetings of the stockholders shall be held at such time, date and place within or outside of the State of Delaware as may be designated in the notice of such meeting. Section 1.3. Notice of Meeting. A written notice stating the place, date, and hour of each meeting of the stockholders, and, in the case of a special meeting, the purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting, and to each stockholder who, under the Certificate of Incorporation or these By-laws, is entitled to such notice, by delivering such notice to such person or leaving it at their residence or usual place of business, or by mailing it, postage prepaid, and addressed to such stockholder at his address as it appears upon the books of the corporation, at least ten (10) days and not more than sixty (60) before the meeting. Such notice shall be given by the secretary, an assistant secretary, or any other officer or person designated either by the secretary or by the person or persons calling the meeting. The requirement of notice to any stockholder may be waived by a written waiver of notice, executed before or after the meeting by the stockholder or his attorney thereunto duly authorized, and filed with the records of the meeting, or if communication with such stockholder is unlawful, or by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice. A waiver of notice of any regular or special meeting of the stockholders need not specify the purposes of the meeting. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place are announced at the meeting at which the adjournment is taken, except that if the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.4. Quorum. The holders of a majority in interest of all stock issued, outstanding and entitled to vote at a meeting shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present. Section 1.5. Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the books of the corporation, unless otherwise provided by law or by the Certificate of Incorporation. Stockholders may vote either in person or by written proxy, but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies shall be filed with the secretary of the meeting, or of any adjournment thereof. Except as otherwise limited therein, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one of them. Section 1.6. Action at Meeting. When a quorum is present at any meeting, a plurality of the votes properly cast for election to any office shall elect to such office, and a majority of the votes properly cast upon any question other than election to an office shall decide such question, except where a larger vote is required by law, the Certificate of Incorporation or these by- laws. No ballot shall be required for any election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. Section 1.7. Action Without Meeting. No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken by stockholders without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. Section 1.8. Voting of Shares of Certain Holders. Shares of stock of the corporation standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such corporation may determine. Shares of stock of the corporation standing in the name of a deceased person, a minor ward or an incompetent person, may be voted by his administrator, executor, court-appointed guardian or conservator without a transfer of such shares into the name of such administrator, executor, court appointed guardian or conservator. Shares of capital stock of the corporation standing in the name of a trustee may be voted by him. Shares of stock of the corporation standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed. A stockholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares. Section 1.9. Stockholder Lists. The secretary (or the corporation's transfer agent or other person authorized by these By-laws or by law) shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. ARTICLE II. Board of Directors Section 2.1. Powers. Except as reserved to the stockholders by law, by the Certificate of Incorporation or by these By-laws, the business of the corporation shall be managed under the direction of the board of directors, who shall have and may exercise all of the powers of the corporation. In particular, and without limiting the foregoing, the board of directors shall have the power to issue or reserve for issuance from time to time the whole or any part of the capital stock of the corporation which may be authorized from time to time to such person, for such consideration and upon such terms and conditions as they shall determine, including the granting of options, warrants or conversion or other rights to stock. Section 2.2. Number of Directors; Qualifications. The board of directors shall consist of such number of directors, not less than 3 nor more than 12, as shall be fixed initially by the incorporator(s) and thereafter by the board of directors. No director need be a stockholder. Section 2.3. Nomination of Directors. (a) Nominations for the election of directors may be made by the board of directors or by any stockholder entitled to vote for the election of directors. Nominations by stockholders shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the secretary of the corporation not less than 45 days nor more than 60 days prior to any meeting of the stockholders called for the election of directors. (b) Each notice under subsection (a) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, and (iii) the number of shares of stock of the corporation which are beneficially owned by each such nominee. (c) The chairman of the meeting of stockholders may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Section 2.4. Election and Term of Office . (a) Commencing at the annual meeting of the stockholders in 1995, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one third of the number of directors constituting the entire Board of Directors. At the annual meeting of the stockholders held in 1995, Class I directors shall be elected for a one year term, Class II directors shall be elected for a two year term, and Class III directors shall be elected for a three year term, and in each case until their successors are duly elected and qualified. Commencing in 1996, at each annual meeting of the stockholders, successors to the class of directors whose terms expire at that annual meeting of stockholders shall be elected by stockholders for a three year term and until their successors are duly elected and qualified. If the number of directors constituting the entire Board of Directors shall be changed, the increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. (b) Any director elected to fill a vacancy resulting from an increase in any class or from the removal from office, death, disability, resignation or disqualification of a director or other cause shall hold office for the remaining term of the class to which such director is elected. No decrease in the size of the Board of Directors shall have the effect of removing or shortening the term of any incumbent director. (c) Whenever the holders of any series of Preferred Stock issued pursuant to the provisions of the Certificate of Incorporation of the Corporation shall have the right, voting as a separate class, to elect directors, the election, term of office, filling of vacancies and other terms of such directorships shall be governed by the terms of the Certificate of Incorporation applicable to such series, as the case may be, and such directorships shall not be divided into classes unless expressly so provided therein. Section 2.5. Vacancies . Any vacancy in the board of directors, however occurring, including a vacancy resulting from the enlargement of the board of directors, may be filled in the manner provided in the Certificate of Incorporation of the corporation. Section 2.6. Enlargement of the Board. The board of directors may be enlarged in the manner provided in the Certificate of Incorporation of the corporation. Section 2.7. Resignation. Any director may resign by delivering or mailing postage prepaid a written resignation to the corporation at its principal office or to the chairman of the board of directors, president, secretary or assistant secretary, if any. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Section 2.8. Removal. A director, whether elected by the stockholders or directors, may be removed from office in the manner provided in the Certificate of Incorporation of the corporation. Section 2.9. Meetings. Regular meetings of the board of directors may be held without call or notice at such times and such places within or without the State of Delaware as the Board may, from time to time, determine, provided that notice of the first regular meeting following any such determination shall be given to directors absent from such determination. A regular meeting of the board of directors shall be held without notice immediately after, and at the same place as, the annual meeting of the stockholders or the special meeting of the stockholders held in place of such annual meeting, unless a quorum of the directors is not then present. Special meetings of the board of directors may be held at any time and at any place designated in the call of the meeting when called by the president, treasurer, or one or more directors. Members of the board of directors or any committee elected thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at the meeting. Section 2.10. Notice of Meeting. It shall be sufficient notice to a director to send notice by mail at least seventy-two (72) hours before the meeting addressed to such person at his usual or last known business or residence address or to give notice to such person in person or by telephone at least twenty- four (24) hours before the meeting. Notice shall be given by the secretary, assistant secretary, if any, or by the officer or directors calling the meeting. The requirement of notice to any director may be waived by a written waiver of notice, executed by such person before or after the meeting or meetings, and filed with the records of the meeting, or by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice. A notice or waiver of notice of a directors' meeting need not specify the purposes of the meeting. Section 2.11. Agenda. Any lawful business may be transacted at a meeting of the board of directors, notwithstanding the fact that the nature of the business may not have been specified in the notice or waiver of notice of the meeting. Section 2.12. Quorum. At any meeting of the board of directors, a majority of the directors then in office shall constitute a quorum for the transaction of business. Any meeting may be adjourned by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. Section 2.13. Action at Meeting. Any motion adopted by vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, except where a different vote is required by law, by the Certificate of Incorporation or by these By-laws. The assent in writing of any director to any vote or action of the directors taken at any meeting, whether or not a quorum was present and whether or not the director had or waived notice of the meeting, shall have the same effect as if the director so assenting was present at such meeting and voted in favor of such vote or action. Section 2.14. Action Without Meeting. Any action by the directors may be taken without a meeting if all of the directors consent to the action in writing and the consents are filed with the records of the directors' meetings. Such consent shall be treated for all purposes as a vote of the directors at a meeting. Section 2.15. Committees. The board of directors may, by the affirmative vote of a majority of the directors then in office, appoint an executive committee or other committees consisting of one or more directors and may by vote delegate to any such committee some or all of their powers except those which by law, the Certificate of Incorporation or these By-laws they may not delegate. Unless the board of directors shall otherwise provide, any such committee may make rules for the conduct of its business, but unless otherwise provided by the board of directors or such rules, its meetings shall be called, notice given or waived, its business conducted or its action taken as nearly as may be in the same manner as is provided in these By-laws with respect to meetings or for the conduct of business or the taking of actions by the board of directors. The board of directors shall have power at any time to fill vacancies in, change the membership of, or discharge any such committee at any time. The board of directors shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect. ARTICLE III. Officers Section 3.1. Enumeration. The officers shall consist of a chairman of the board of directors, president, executive vice- president, a treasurer, a secretary and such other officers and agents (including one or more additional vice-presidents, assistant treasurers and assistant secretaries), as the board of directors may, in their discretion, determine. Section 3.2. Election. The chairman of the board of directors, president, executive vice-president, treasurer and secretary shall be elected annually by the directors at their first meeting following the annual meeting of the stockholders or any special meeting held in lieu of the annual meeting. Other officers may be chosen by the directors at such meeting or at any other meeting. Section 3.3. Qualification. An officer may, but need not, be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the directors may determine. The premiums for such bonds may be paid by the corporation. Section 3.4. Tenure. Except as otherwise provided by the Certificate of Incorporation or these By-laws, the term of office of each officer shall be for one year or until his successor is elected and qualified or until his earlier resignation or removal. Section 3.5. Removal. Any officer may be removed from office, with or without cause, by the affirmative vote of a majority of the directors then in office; provided, however, that an officer may be removed for cause only after reasonable notice and opportunity to be heard by the board of directors prior to action thereon. Section 3.6. Resignation. Any officer may resign by delivering or mailing postage prepaid a written resignation to the corporation at its principal office or to the chairman of the board of directors, president, secretary, or assistant secretary, if any, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some event. Section 3.7. Vacancies. A vacancy in any office arising from any cause may be filled for the unexpired portion of the term by the board of directors. Section 3.8. Chairman of the Board. The chairman of the board of directors shall be the chief executive officer of the corporation and shall have such duties and powers as are commonly incident to such office, and shall have such other duties and powers as the board of directors may from time to time determine. He shall preside at all meetings of the board of directors. Section 3.9. President. The president shall be the chief operating officer of the corporation. Except as otherwise voted by the board of directors, the president shall preside at all meetings of the stockholders, and at meetings of the board of directors in the absence of the chairman of the board. The president shall have such duties and powers as are commonly incident to the office of chief operating officer and such duties and powers as the board of directors shall from time to time designate. Section 3.10. Executive Vice-President; Vice-President(s). In the absence of either the chairman of the board of directors or the president, the executive vice president shall have and may exercise all of the powers of the officer who is absent. The executive vice- president and any additional vice-presidents, shall have such other powers and perform such duties as the board of directors may from time to time determine. Section 3.11. Treasurer and Assistant Treasurers. The treasurer, subject to the direction and under the supervision and control of the board of directors, shall have general charge of the financial affairs of the corporation. The treasurer shall have custody of all funds, securities and valuable papers of the corporation, except as the board of directors may otherwise provide. The treasurer shall keep or cause to be kept full and accurate records of account which shall be the property of the corporation, and which shall be always open to the inspection of each elected officer and director of the corporation. The treasurer shall deposit or cause to be deposited all funds of the corporation in such depository or depositories as may be authorized by the board of directors. The treasurer shall have the power to endorse for deposit or collection all notes, checks, drafts, and other negotiable instruments payable to the corporation. The treasurer shall perform such other duties as are incidental to the office, and such other duties as may be assigned by the board of directors. Assistant treasurers, if any, shall have such powers and perform such duties as the board of directors may from time to time determine. Section 3.12. Secretary and Assistant Secretaries. The secretary shall record, or cause to be recorded, all proceedings of the meetings of the stockholders and directors (including committees thereof) in the book of records of this corporation. The record books shall be open at reasonable times to the inspection of any stockholder, director, or officer. The secretary shall notify the stockholders and directors, when required by law or by these By-laws, of their respective meetings, and shall perform such other duties as the directors and stockholders may from time to time prescribe. The secretary shall have the custody and charge of the corporate seal, and shall affix the seal of the corporation to all instruments requiring such seal, and shall certify under the corporate seal the proceedings of the directors and of the stockholders, when required. In the absence of the secretary at any such meeting, a temporary secretary shall be chosen who shall record the proceedings of the meeting in the aforesaid books. Assistant secretaries, if any, shall have such powers and perform such duties as the board of directors may from time to time designate. Section 3.13. Other Powers and Duties. Subject to these By- laws and to such limitations as the board of directors may from time to time prescribe, the officers of the corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the board of directors. ARTICLE IV. Capital Stock Section 4.1. Stock Certificates. Each stockholder shall be entitled to a certificate representing the number of shares of the capital stock of the corporation owned by such person in such form as shall, in conformity to law, be prescribed from time to time by the board of directors. Each certificate shall be signed by the chairman of the board of directors, the president or any vicepresident and by the secretary, assistant secretary or treasurer or assistant treasurer, or such other officers designated by the board of directors from time to time as permitted by law, shall bear the seal of the corporation, and shall express on its face its number, date of issue, class, the number of shares for which, and the name of the person to whom, it is issued. The corporate seal and any or all of the signatures of corporation officers may be facsimile if the stock certificate is manually counter-signed by an authorized person on behalf of a transfer agent or registrar other than the corporation or its employee. If an officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed on, a certificate shall have ceased to be such before the certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the time of its issue. Section 4.2. Transfer of Shares. Title to a certificate of stock and to the shares represented thereby shall be transferred only on the books of the corporation by delivery to the corporation or its transfer agent of the certificate properly endorsed, or by delivery of the certificate accompanied by a written assignment of the same, or a properly executed written power of attorney to sell, assign or transfer the same or the shares represented thereby. Upon surrender of a certificate for the shares being transferred, a new certificate or certificates shall be issued according to the interests of the parties. Section 4.3. Record Holders. Except as otherwise may be required by law, by the Certificate of Incorporation or by these By- laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-laws. It shall be the duty of each stockholder to notify the corporation of his post office address. Section 4.4. Record Date. In order that the corporation may determine the stockholders entitled to receive notice of or to vote at any meeting of stockholders or any adjournments thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty days prior to any other action. In such case only stockholders of record on such record date shall be so entitled notwithstanding any transfer of stock on the books of the corporation after the record date. If no record date is fixed: (i) the record date for determining stockholders entitled to receive notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 4.5. Transfer Agent and Registrar for Shares of Corporation. The board of directors may appoint a transfer agent and a registrar of the certificates of stock of the corporation. Any transfer agent so appointed shall maintain, among other records, a stockholders' ledger, setting forth the names and addresses of the holders of all issued shares of stock of the corporation, the number of shares held by each, the certificate numbers representing such shares, and the date of issue of the certificates representing such shares. Any registrar so appointed shall maintain, among other records, a share register, setting forth the total number of shares of each class of shares which the corporation is authorized to issue and the total number of shares actually issued. The stockholders' ledger and the share register are hereby identified as the stock transfer books of the corporation; but as between the stockholders' ledger and the share register, the names and addresses of stockholders, as they appear on the stockholders' ledger maintained by the transfer agent shall be the official list of stockholders of record of the corporation. The name and address of each stockholder of record, as they appear upon the stockholders' ledger, shall be conclusive evidence of who are the stockholders entitled to receive notice of the meetings of stockholders, to vote at such meetings, to examine a complete list of the stockholders entitled to vote at meetings, and to own, enjoy and exercise any other property or rights deriving from such shares against the corporation. Stockholders, but not the corporation, its directors, officers, agents or attorneys, shall be responsible for notifying the transfer agent, in writing, of any changes in their names or addresses from time to time, and failure to do so will relieve the corporation, its other stockholders, directors, officers, agents and attorneys, and its transfer agent and registrar, of liability for failure to direct notices or other documents, or pay over or transfer dividends or other property or rights, to a name or address other than the name and address appearing in the stockholders' ledger maintained by the transfer agent. Section 4.6. Loss of Certificates. In case of the loss, destruction or mutilation of a certificate of stock, a replacement certificate may be issued in place thereof upon such terms as the board of directors may prescribe, including, in the discretion of the board of directors, a requirement of bond and indemnity to the corporation. Section 4.7. Restrictions on Transfer. Every certificate for shares of stock which are subject to any restriction on transfer, whether pursuant to the Certificate of Incorporation, the By-laws or any agreement to which the corporation is a party, shall have the fact of the restriction noted conspicuously on the certificate and shall also set forth on the face or back either the full text of the restriction or a statement that the corporation will furnish a copy to the holder of such certificate upon written request and without charge. Section 4.8. Multiple Classes of Stock. The amount and classes of the capital stock and the par value, if any, of the shares, shall be as fixed in the Certificate of Incorporation. At all times when there are two or more classes of stock, the several classes of stock shall conform to the description and the terms and have the respective preferences, voting powers, restrictions and qualifications set forth in the Certificate of Incorporation and these By-laws. Every certificate issued when the corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either (i) the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued, or (ii) a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. ARTICLE V. Dividends Section 5.1. Declaration of Dividends. Except as otherwise required by law or by the Certificate of Incorporation, the board of directors may, in its discretion, declare what, if any, dividends shall be paid from the surplus or from the net profits of the corporation upon the stock of the corporation; provided, however, that no dividend shall be declared or paid the payment of which would diminish the amount of the paid-in capital of the corporation. Dividends may be paid in cash, in property, in shares of the corporation's stock, or in any combination thereof. Dividends shall be payable upon such dates as the board of directors may designate. Section 5.2. Reserves. Before the payment of any dividend and before making any distribution of profits, the board of directors, from time to time and in its absolute discretion, shall have power to set aside out of the surplus or net profits of the corporation such sum or sums as the board of directors deems proper and sufficient as a reserve fund to meet contingencies or for such other purpose as the board of directors shall deem to be in the best interests of the corporation, and the board of directors may modify or abolish any such reserve. ARTICLE VI. Powers of Officers to Contract With the Corporation Any and all of the directors and officers of the corporation, notwithstanding their official relations to it, may enter into and perform any contract or agreement of any nature between the corporation and themselves, or any and all of the individuals from time to time constituting the board of directors of the corporation, or any firm or corporation in which any such director may be interested, directly or indirectly, whether such individual, firm or corporation thus contracting with the corporation shall thereby derive personal or corporate profits or benefits or otherwise; provided, that (i) the material facts of such interest are disclosed or are known to the board of directors or committee thereof which authorizes such contract or agreement; (ii) if the material facts as to such person's relationship or interest are disclosed or are known to the stockholders entitled to vote thereon, and the contract is specifically approved in good faith by a vote or the stockholders; or (iii) the contract or agreement 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. Any director of the corporation who is interested in any transaction as aforesaid may nevertheless be counted in determining the existence of a quorum at any meeting of the board of directors which shall authorize or ratify any such transaction. This Article shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common or statutory law applicable thereto. ARTICLE VII Indemnification Section 7.1. Definitions. For purposes of this Article VII the following terms shall have the meanings indicated: (a)"Code of Conduct" means the corporation's Code of Conduct for Directors, Officers and Employees as in effect from time to time. (b) "Corporate Status" describes the status of a person who is was a director, officer, employee, agent, trustee or fiduciary of theCorporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which such person is or was serving at the express written request of the corporation. (c) "Court" means the Court of Chancery of the State of Delaware, the court in which the Proceeding in respect of which indemnification is sought by a Covered Person shall have been brought or is pending, or another court having subject jurisdiction and personal jurisdiction over the parties. (d) "Covered Person" means a person who is a present or former director or officer of the corporation and shall include such person's legal representatives, heirs, executors and administrators. (e) "Disinterested Director" means a director of the corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by a Covered Person. (f) "Enterprise" shall mean the corporation and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which a Covered Person is or was serving at the express written request of the corporation as a director, officer, employee, agent, trustee or fiduciary. (g) "Expenses" shall include, without limitation, all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in a Proceeding. (h) "Good Faith" shall mean a Covered Person having acted in good faith and in a manner such Covered Person reasonably believed to be in or not opposed to the best interests of the corporation or, in the case of an Enterprise which is an employee benefit plan, the best interests of the participants or beneficiaries of said plan, as the case may be, and, with respect to any Proceeding which is criminal in nature, having had no reasonable cause to believe such Covered Person's conduct was unlawful. (i)"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and may include law firms or members thereof that are regularly retained by the corporation but not any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the standards of professional conduct then prevailing and applicable to such counsel, would have a conflict of interest in representing either the corporation or Covered Person in an action to determine Covered Person's rights under this Article. (j) "Proceeding" includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any internal corporate investigation), administrative hearing or any other actual, threatened or completed proceeding whether civil, criminal, administrative or investigative, other than one initiated by the Covered Person. For purposes of the foregoing sentence, a "Proceeding" shall not be deemed to have been initiated by the Covered Person where such Covered Person seeks to enforce such Covered Person's rights under this Article. Section 7.2. Right to Indemnification in General. (a) Covered Persons. In connection with any Proceeding, the corporation shall indemnify, and advance Expenses, to each Covered Person as provided in this Article and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The indemnification provisions in this Article shall be deemed to be a contract between the corporation and each Covered Person who serves in any such Corporate Status at any time while these provisions as well as the relevant provisions of the Delaware General Corporation Law are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any Proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a "contract right" may not be modified retroactively without the consent of such Covered Person. (b) Employees and Agents. The corporation may, to the extent authorized from time to time by the board of directors, grant indemnification and the advancement of Expenses to any employee or agent of the corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of Expenses of Covered Person. Section 7.3. Proceedings Other Than Proceedings by or in the Right of the Corporation. Each Covered Person shall be entitled to the rights of indemnification provided in this Section 7.3 if, by reason of such Covered Person's Corporate Status, such Covered Person is, or is threatened to be made, a party to or is otherwise involved in any Proceeding, other than a Proceeding by or in the right of the corporation. Each Covered Person shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlements, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding or any claim, issue or matter therein, if such Covered Person did not violate the corporation's Code of Conduct and acted in Good Faith. Notwithstanding the foregoing, if such Covered Person shall have been found to have violated the corporation's Code of Conduct then in effect, the corporation may, to the extent authorized by the board of directors, indemnify such Covered Person against Expenses, judgments, penalties, fines and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf. Section 7.4. Proceedings by or in the Right of the Corporation. (a) Each Covered Person shall be entitled to the rights of indemnification provided in this Section 7.4 if, by reason of such Covered Person's Corporate Status, such Covered Person is, or is threatened to be made, a party to or is otherwise involved in any Proceeding brought by or in the right of the corporation to procure a judgment in its favor. Such Covered Person shall be indemnified against Expenses, judgments, penalties, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding if such Covered Person acted in Good Faith. Notwithstanding the foregoing, no such indemnification shall be made in respect of any claim, issue or matter in such Proceeding as to which such Covered Person shall have been adjudged to be liable to the corporation if applicable law prohibits such indemnification; provided, however, that, if applicable law so permits, indemnification shall nevertheless be made by the corporation in such event if and only to the extent that the Court which is considering the matter shall determine. (b) Notwithstanding any provision to the contrary in this Section, if the board of directors, Independent Counsel or the stockholders, as the case may be, making the determination with respect to indemnification as provided under Section 7.9 hereof, or the Court considering the matter determines that the act or omission which forms the basis for the claim which is the subject of the Proceeding violated the corporation's Code of Conduct then in effect, then, notwithstanding that fact, the corporation may, to the extent authorized by the board of directors, indemnify such Covered Person against all Expenses, judgments, penalties and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such proceeding if such Covered Person acted in Good Faith. Section 7.5. Indemnification of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Article, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a party to or is otherwise involved in and is successful, on the merits or otherwise, in any Proceeding, such Covered Person shall be indemnified to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection therewith. If such Covered Person is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the corporation shall indemnify such Covered Person to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 7.5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. Section 7.6. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Article, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a witness in any Proceeding, such Covered Person shall be indemnified against all Expenses actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection therewith. Section 7.7. Advancement of Expenses. Notwithstanding any provision to the contrary in this Article, the corporation (acting through the chairman of the board, president, executive vice president or any vice president of the corporation) shall advance all reasonable Expenses which, by reason of a Covered Person's Corporate Status, were incurred by or on behalf of such Covered Person in connection with any Proceeding, within twenty (20) days after the receipt by the corporation of a statement or statements from such Covered Person requesting such advance or advances, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by the Covered Person and shall include or be preceded or accompanied by an undertaking by or on behalf of the Covered Person to repay any Expenses if it shall ultimately be determined that such Covered Person is not entitled to be indemnified against such Expenses. Any advance and undertakings to repay pursuant to this Section 7.7 shall be unsecured and interest free. Advancement of Expenses pursuant to this Section 7.7 shall not require approval of the board of directors or the stockholders of the corporation, or of any other person or body. The Secretary of the corporation shall promptly advise the Board in writing of the request for advancement of Expenses, of the amount and other details of the advance and of the undertaking to make repayment pursuant to this Section 7.7. Section 7.8. Notification and Defense of Claim. Promptly after receipt by an Covered Person of notice of the commencement of any Proceeding, such Covered Person shall, if a claim is to be made against the corporation under this Article, notify the corporation of the commencement of the Proceeding. The omission so to notify the corporation will not relieve it from any liability which it may have to such Covered Person otherwise than under this Article. With respect to any such Proceedings to which such Covered Person notifies the corporation: (a) The corporation will be entitled to participate in the defense at its own expense. (b) Except as otherwise provided below, the corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense with counsel reasonably satisfactory to the Covered Person. After notice from the corporation to the Covered Person of its election to assume the defense of a suit, the corporation will not be liable to the Covered Person under this Article for any legal or other expenses subsequently incurred by the Covered Person in connection with the defense of the Proceeding other than reasonable costs of investigation or as otherwise provided below. The Covered Person shall have the right to employ his own counsel in such Proceeding but the fees and expenses of such counsel incurred after notice from the corporation of its assumption of the defense shall be at the expense of the Covered Person unless (i) the employment of counsel by the Covered Person has been authorized by the corporation, (ii) the Covered Person shall have concluded reasonably that there may be a conflict of interest between the corporation and the Covered Person in the conduct of the defense of such action and such conclusion is confirmed in writing by the corporation's outside counsel regularly employed by it in connection with corporate matters, or (iii) the corporation shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel shall be at the expense of the corporation. The corporation shall not be entitled to assume the defense of any Proceeding brought by or in the right of the corporation or as to which the Covered Person shall have made the conclusion provided for in (ii) above and such conclusion shall have been so confirmed by the corporation's said outside counsel. (c) Notwithstanding any provision of this Article to the contrary, the corporation shall not be liable to indemnify the Covered Person under this Article for any amounts paid in settlement of any Proceeding or claim effected without its written consent. The corporation shall not settle any Proceeding or claim in any manner which would impose any penalty, limitation or disqualification of the Covered Person for any purpose without such Covered Person's written consent. Neither the corporation nor the Covered Person will unreasonably withhold their consent to any proposed settlement. (d) If it is determined that the Covered Person is entitled to indemnification not covered by defense of the claim afforded under subparagraph (b) above, payment to the Covered Person of the additional amounts to be indemnified shall be made within ten (10) days after determination. Section 7.9. Method of Determination. A determination (if required by applicable law in the specific case) with respect to a Covered Person's entitlement to indemnification shall be made (a) by the board of directors by a majority vote of a quorum consisting of Disinterested Directors, or (b) in the event that a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the board of directors, a copy of which shall be delivered to the Covered Person seeking indemnification, or (c) by the holders of a majority of the votes of the outstanding stock at the time entitled to vote on matters other than the election or removal of directors, voting as a single class, including the stock of the Covered Person seeking indemnification. Section 7.10. Presumptions and Effect of Certain Proceedings. (a) Burden of Proof. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Covered Person is entitled to indemnification under this Article if such Covered Person has submitted a request for indemnification including such documentation and information as is reasonably available to such Covered Person and is reasonably necessary to determine whether and to what extent such Covered Person is entitled to indemnification and the corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. (b) Effect of Other Proceedings. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty or of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Article) of itself adversely affect the right of an Covered Person to indemnification or create a presumption that an Covered Person violated the corporation's Code of Conduct or did not act in Good Faith. (c) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, employee, agent, trustee or fiduciary of the Enterprise shall not be imputed to a Covered Person for purposes of determining the right to indemnification under this Article. Section 7.11. Non-Exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Article shall not be deemed exclusive of any other rights to which a Covered Person may at any time be entitled under applicable law, the Certificate of Incorporation, these By-Laws, any agreement, a vote of stockholders or a resolution of the board of directors, or otherwise. No amendment, alteration, rescission or replacement of this Article or any provision hereof shall be effective as to an Covered Person with respect to any action taken or omitted by such Covered Person in such Covered Person's Corporate Status prior to such amendment, alteration, rescission or replacement. Section 7.12. Insurance. The corporation may maintain, at its expense, an insurance policy or policies to protect itself and any Covered Person, officer, employee or agent of the corporation or another Enterprise against liability arising out of this Article or otherwise, whether or not the corporation would have the power to indemnify any such person against such liability under the Delaware General Corporation Law. Section 7.13. No Duplicative Payment. The corporation shall not be liable under this Article to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that a Covered Person has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. Section 7.14. Severability. If any provision or provisions of this Article shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article (including without limitation, each portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article(including, without limitation, each portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. ARTICLE VIII. Miscellaneous Provisions Section 8.1. Certificate of Incorporation. All references in these By-laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time. Section 8.2. Fiscal Year. Except as from time to time otherwise provided by the board of directors, the fiscal year of the corporation shall end on the 31st day of March of each year. Section 8.3. Corporate Seal. The board of directors shall have the power to adopt and alter the seal of the corporation. Section 8.4. Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes, and other obligations authorized to be executed by an officer of the corporation on its behalf shall be signed by the chairman of the board of directors, the president or the treasurer except as the board of directors may generally or in particular cases otherwise determine. Section 8.5. Voting of Securities. Unless the board of directors otherwise provides, the chairman of the board of directors, the president or the treasurer may waive notice of and act on behalf of this corporation, or appoint another person or persons to act as proxy or attorney in fact for this corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by this corporation. Section 8.6. Evidence of Authority. A certificate by the secretary or any assistant secretary as to any action taken by the stockholders, directors or any officer or representative of the corporation shall, as to all persons who rely thereon in good faith, be conclusive evidence of such action. The exercise of any power which by law, by the Certificate of Incorporation, or by these By-laws, or under any vote of the stockholders or the board of directors, may be exercised by an officer of the corporation only in the event of absence of another officer or any other contingency shall bind the corporation in favor of anyone relying thereon in good faith, whether or not such absence or contingency existed. Section 8.7. Corporate Records. The original, or attested copies, of the Certificate of Incorporation, By-laws, records of all meetings of the incorporators and stockholders, and the stock transfer books (which shall contain the names of all stockholders and the record address and the amount of stock held by each) shall be kept in Delaware at the principal office of the corporation, or at an office of the corporation, or at an office of its transfer agent or of the secretary or of the assistant secretary, if any. Said copies and records need not all be kept in the same office. They shall be available at all reasonable times to inspection of any stockholder for any purpose but not to secure a list of stockholders for the purpose of selling said list or copies thereof or for using the same for a purpose other than in the interest of the applicant, as a stockholder, relative to the affairs of the corporation. Section 8.8. Charitable Contributions. The board of directors from time to time may authorize contributions to be made by the corporation in such amounts as it may determine to be reasonable to corporations, trusts, funds or foundations organized and operated exclusively for charitable, scientific or educational purposes, no part of the net earning of which inures to the private benefit of any stockholder or individual. ARTICLE IX. Amendments Section 9.1. Amendment by Stockholders. Prior to the issuance of stock, these By-laws may be amended, altered or repealed by the incorporator(s) by majority vote. After stock has been issued, these By-laws may be amended altered or repealed by the stockholders at any annual or special meeting by vote of a majority of all shares outstanding and entitled to vote, except that where the effect of the amendment would be to reduce any voting requirement otherwise required by law, the Certificate of Incorporation or these By-laws, such amendment shall require the vote that would have been required by such provision. Notice and a copy of any proposal to amend these Bylaws must be included in the notice of meeting of stockholders at which action is taken upon such amendment. Section 9.2. Amendment by Board of Directors. These By-laws may be amended or altered by the board of directors at a meeting duly called for the purpose by majority vote of the directors then in office, except that directors shall not amend the By-laws in a manner which: (a) changes the stockholder voting requirements for any action; (b) alters or abolishes any preferential right or right of redemption applicable to a class or series of stock with shares already outstanding; (c) alters the provisions of this Article IX hereof; or (d) permits the board of directors to take any action which under law, the Certificate of Incorporation, or these By-laws is required to be taken by the stockholders. Any amendment of these By-laws by the board of directors may be altered or repealed by the stockholders at any annual or special meeting of stockholders. EX-10.01 5 NHLBI IMPLANTABLE TAH CONTRACT EXT. DEPARTMENT OF HEALTH AND HUMAN SERVICES Public Health Service National Institutes of Health National Heart, Lung and Blood Institute Bethesda, Maryland,20892 September 12, 1996 Dr. Robert Kung ABIOMED, Inc. 24 Cherry Hill Drive Danvers, MA 01923 Subject: Contract No. N01-HV-38128 Dear Dr. Kung: The review of all technical proposals for Phase II of the Phased Readiness Testing of Implantable Total Artificial Hearts (TAH) has been completed. The review was conducted by a peer review committee of experts and by the NHLBI staff members and was based on the evaluation criteria that I provided to you in my letter dated March 4, 1996. I am pleased to advise you that, as a result of this evaluation, you will be allotted funds for Phase II as currently scheduled under Article B.2 of your contract. As required by your contract this letter documents approval for you to begin Phase II as of September 30, 1996. If requested in writing, a written technical debriefing will be provided to you which will outline your proposals strengths and weaknesses based on the technical evaluation factors for continuation into Phase II. Status of the TAH program has been enclosed to provide your institution with press release information. If you have any questions, please call me at (301) 435-0340. Sincerely yours, /s/ Sharon M.Kraft Sharon M. Kraft Contracting Officer HLVDContracts Section Enclosure -----END PRIVACY-ENHANCED MESSAGE-----