RESTATED CERTIFICATE OF INCORPORATION
OF
CORTEX PHARMACEUTICALS, INC.,
a Delaware corporation
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that:
(1) The name of the corporation is Cortex Pharmaceuticals, Inc. (the
"Corporation"). The Corporation was originally incorporated under the name
X-Age, Inc., and the original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on February 10,
1987.
(2) This Restated Certificate of Incorporation restates and
integrates and does not further amend the provisions of the Certificate of
Incorporation of the Corporation, as heretofore amended or supplemented, and
there is no discrepancy between those provisions and the provisions of this
Restated Certificate of Incorporation.
(3) The text of the Restated Certificate of Incorporation, as
heretofore amended or supplemented, is hereby restated to read in its entirety
as follows:
"FIRST: The name of this corporation is Cortex Pharmaceuticals, Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered
agent at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: (A) (1) The aggregate number of shares which the Corporation
shall have authority to issue is 35,000,000, of which 5,000,000 shares of the
par value of $.001 per share shall be designated "Preferred Stock" and
30,000,000 shares of the par value of $.001 per share shall be designated
"Common Stock."
(2) Authority is hereby expressly granted to the Board of Directors
from time to time to issue the Preferred Stock as Preferred Stock of any series
and, in connection with the creation of each such series, to fix by the
resolution or resolutions providing for the issue of shares thereof, the number
of shares of such series and the designations, powers, preferences, rights,
qualifications, limitations, and restrictions of such series, to the full extent
now or hereafter permitted by the laws of the State of Delaware.
(B) 9% CUMULATIVE CONVERTIBLE PREFERRED STOCK
A series of Preferred Stock, consisting of 1,250,000 shares of the
authorized but unissued Preferred Stock of the Corporation is hereby created.
The designation, powers, preferences, rights, qualifications, limitations, and
restrictions of this series, are as follows:
(1) DESIGNATION OF SERIES. The designation of the series of
preferred stock created hereby shall be 9% Cumulative Convertible Preferred
Stock, par value .001 per share (the "9% Preferred Stock"). The shares of the
9% Preferred Stock shall be fully-paid and nonassessable.
The number of shares of 9% Preferred Stock may be decreased (but not
below the number of shares then outstanding) or increased by a certificate
executed, acknowledged, filed, and recorded in accordance with the General
Corporation Law of the State of Delaware setting forth a statement that a
specified decrease or increase, as the case may be, thereof had been authorized
and directed by a resolution or resolutions adopted by the Board of Directors
pursuant to authority expressly vested in it by the provisions of the
certificate of incorporation of the Corporation.
(2) DIVIDENDS. The fixed dividend rate for the 9% Preferred Stock
shall be $.09 per share per annum, and no more, and dividends shall be
cumulative from June 15, 1989 payable in equal semiannual amounts on the
fifteenth day of June and December in each year for the semiannual dividend
periods ending respectively on the dates immediately preceding such dates,
commencing on June 15, 1989.
(3) CONVERSION. The holders of shares of 9% Preferred Stock shall
have the right, at their option, to convert such shares into shares of Common
Stock at any time on the following terms and conditions:
(a) Each share of 9% Preferred Stock shall be convertible at the
option of the holder thereof at the office of the Corporation or at the office
of the transfer agent, if any, for the 9% Preferred Stock into shares of duly
authorized, fully paid, and non-assessable shares of Common Stock at the
conversion price of $1.50 per share of Common Stock (the "Conversion Rate"),
subject to adjustment as provided in Section (B)(3)(c) of this Article FOURTH.
The number of shares of Common Stock to be delivered upon conversion of the 9%
Preferred Stock shall be determined by dividing the liquidation amount ($1.00
per share) of the shares surrendered by the Conversion Rate at the time of
surrender, calculated to the nearest 1/100th of a share (fractions of less than
1/100 being disregarded). The Corporation shall make no payment or adjustment
on the account of any unpaid cumulative dividends on the shares of 9% Preferred
Stock surrendered for conversion or on account of any dividends on the Common
Stock. In case of the call for redemption by the Corporation of any shares of
9% Preferred Stock, such right of conversion shall cease and terminate, as to
the shares designated for redemption, from and after the dates specified for
redemption pursuant to the provisions of Section (B)(5) of this Article FOURTH.
(b) Before any holder of shares of 9% Preferred Stock shall be
entitled to convert the same into Common Stock, he shall surrender the
certificate or certificates therefor,
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duly endorsed, at the office of the Corporation or the transfer agent therefor,
if any, and shall give written notice to the Corporation that he elects to
convert all or part of the shares represented by the certificate or certificates
and shall state in writing therein the name or names in which he wishes the
certificate or certificates for Common Stock to be issued. The Corporation
will, as soon as practicable thereafter, issue and deliver to such holder of
shares of 9% Preferred Stock, or to his nominee or nominees, certificates for
the number of full shares of Common Stock to which he shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share as hereinafter
provided. If surrendered certificates for 9% Preferred Stock are converted only
in part, the Corporation will issue and deliver to the holder, or to his nominee
or nominees, a new certificate or certificates representing the aggregate of the
unconverted shares of 9% Preferred Stock. Shares of 9% Preferred Stock shall be
deemed to have been converted as of the date of the surrender of such shares for
conversion as provided above, and the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such Common Stock on such date.
(c) The Conversion Rate shall be subject to adjustment as
follows:
(i) In case the Corporation shall (w) pay a dividend or
make a distribution on its outstanding shares of Common Stock in shares of
its capital stock (whether shares of its Common Stock or of capital stock
of any other class), (x) subdivide its outstanding shares of Common Stock,
(y) combine its outstanding shares of Common Stock into a smaller number of
shares, or (z) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Corporation, the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the holder of
any shares of 9% Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of capital stock of the
Corporation which he would have owned immediately following such action had
such shares of 9% Preferred Stock been converted immediately prior thereto.
An adjustment made pursuant to this subsection (i) shall become effective
retroactively immediately after the record date in the case of a dividend
or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination, or reclassification.
(ii) In case the Corporation shall issue to holders of
shares of its outstanding Common Stock generally any rights, options, or
warrants entitling them to subscribe for or purchase (w) shares of its
Common Stock, (x) any assets of the Corporation, (y) any securities of the
Corporation (except its Common Stock) or of any corporation other than the
Corporation, or (z) any rights, options, or warrants entitling them to
subscribe for or to purchase any of the foregoing securities, whether or
not such rights, options, or warrants are immediately exercisable
(hereinafter collectively called a "Distribution on Common Stock"), the
Corporation shall issue to the holders of outstanding shares of 9%
Preferred Stock the Distribution on Common Stock to which they would have
been entitled if they had converted the shares of 9% Preferred Stock held
by them into Common Stock immediately prior to the record date for the
purpose of determining stockholders entitled to receive such Distribution
on Common Stock.
(d) DE MINIMUS CHANGES. No adjustment in the Conversion Rate
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the
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Conversion Rate; provided, however, that any adjustments which by reason of this
Section (B)(3)(d) of this Article FOURTH are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under Section (B)(3)(c) of this Article FOURTH shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may be.
(e) NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, as herein provided, the Corporation shall promptly cause a notice
setting forth the adjusted Conversion Rate to be mailed to the holders of the 9%
Preferred Stock.
(f) NO FRACTIONAL SHARES TO BE ISSUED. No fractional shares or
scrip representing fractional shares of Common Stock shall be issued upon
conversion of 9% Preferred Stock. Instead of any fractional share of Common
Stock which would otherwise be issuable upon conversion of 9% Preferred Stock
(or specified portions thereof), the Corporation shall pay in cash to the
holders of such 9% Preferred Stock in respect of such fraction of a share an
amount equal to the same fraction of the fair market value per share of Common
Stock as determined by the Board of Directors in its sole discretion.
(g) EFFECT OF SALE, MERGER, OR CONSOLIDATION. In the event of
any capital reorganization of the Corporation, or of any reclassification (other
than a change in par value) of the Common Stock, or of any conversion of the
Common Stock into securities of another corporation, or the consolidation of the
Corporation with, or the merger of the Corporation into, any other corporation
where the Corporation is not the surviving corporation or in the event of the
sale of all or substantially all of the properties and assets of the Corporation
to any other corporation (each such event hereinafter being referred to as a
"Capital Change"), a share of 9% Preferred Stock shall be convertible after such
Capital Change, upon the terms and conditions herein specified, for the number
of shares of stock or other securities or property of the Corporation, or of the
corporation into which shares of Common Stock are converted or resulting from
such consolidation or surviving such merger or to which such sale shall be made,
as the case may be, to which the shares of Common Stock issuable (at the time of
such Capital Change) upon conversion of such share of 9% Preferred Stock would
have been entitled upon such Capital Change. In any such case, if necessary,
the provisions set forth in this Section (B)(3) of Article FOURTH with respect
to the rights and interests thereafter of the holders of the 9% Preferred Stock
shall be appropriately adjusted so as to be reasonably applicable to any shares
of stock or other securities or property thereafter deliverable on the
conversion of the 9% Preferred Stock. The subdivision or combination of shares
of Common Stock at any time outstanding into a greater or lesser number of
shares of Common Stock shall not be deemed to be a reclassification of the
Common Stock for the purpose of this Section (B)(3)(g) of this Article FOURTH.
The Corporation shall not effect any consolidation, merger, or sale resulting in
a Capital Change, unless prior to or simultaneously with the consummation
thereof, any successor corporation or corporation purchasing such assets shall
assume, by written instrument, the obligation to deliver to the holder of each
share of 9% Preferred Stock such shares of stock, securities, or assets as the
holders of 9% Preferred Stock may be entitled to receive upon exercise of the 9%
Preferred Stock in accordance with the foregoing provisions, and the other
obligations of the Corporation hereunder.
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(h) NOTICE OF RECLASSIFICATION OR RECAPITALIZATION, ETC.
In case:
(i) the Corporation shall authorize the issuance to all
holders of Common Stock of rights or warrants to subscribe for or purchase
shares of its capital stock or of any other right;
(ii) the Corporation shall authorize the distribution to
all holders of Common Stock of evidences of its indebtedness or assets or
the change or adoption of a dividend policy;
(iii) of any subdivision, combination, or reclassification
of Common Stock, or of any consolidation or merger to which the Corporation
is a party and for which approval of any stockholders of the Corporation is
required, or of the sale or transfer of all or substantially all of the
assets of the Corporation; or
(iv) of the voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation;
then the Corporation shall mail to the holders of 9% Preferred Stock at least 10
days prior to the applicable record date hereinafter specified in clauses (x)
and (y) below, a notice stating (x) the date as of which the holders of Common
Stock of record to be entitled to receive any such rights, warrants, or
distribution are to be determined, or (y) the date on which any such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up, or other action is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property, if any, deliverable upon such subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up, or other action. The failure to give the notice
required by this Section (B)(3)(h) of this Article FOURTH or any defect therein
shall not affect the legality or validity of any distribution, right, warrant,
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up, or other action, or the vote
upon any of the foregoing.
(i) RESERVATION OF SHARES FOR ISSUANCE UPON CONVERSION. The
Corporation covenants that it will at all times reserve and keep available out
of its authorized Common Stock, free from preemptive rights, solely for the
purpose of issuance upon conversion of the 9% Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the conversion of all outstanding shares of the 9% Preferred Stock. The
Corporation covenants that all shares of Common Stock which shall be so issuable
upon conversion of the 9% Preferred Stock as herein provided shall, when issued,
be duly authorized, validly issued, and fully paid and nonassessable, free of
all liens and charges and not subject to preemptive rights and that, upon
conversion of the 9% Preferred Stock, the appropriate capital stock accounts of
the Corporation shall be duly credited.
(j) PAYMENT OF TAXES ON SHARES ISSUED UPON CONVERSION. The
issuance of certificates for shares of Common Stock upon the conversion of
shares of the 9%
5
Preferred Stock shall be made without charge to the converting holders for any
tax in respect of the issuance of such certificates and such certificates shall
be issued in the respective names of, or in such names as may be directed by,
the holders of the shares of the 9% Preferred Stock converted; provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the shares of the 9% Preferred
Stock converted, and the Corporation shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Corporation the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
(4) REDEMPTION OF 9% PREFERRED STOCK BY HOLDERS
(a) RIGHT TO REDEEM 9% PREFERRED STOCK. Subject to and upon
compliance with the provisions of this Section (B)(4) of this Article FOURTH, at
any time during the six-month period following the date of the written notice
referred to in Section (B)(4)(c) of this Article FOURTH, the holder of shares of
9% Preferred Stock shall have the option, but not the obligation, to require the
Corporation to redeem his shares of 9% Preferred Stock at a price of $1.00 per
share of 9% Preferred Stock to be redeemed. A holder of shares of 9% Preferred
Stock wishing to require the Corporation to redeem such shares shall surrender
the shares which are to be so redeemed to the Corporation or to such agent as
may be appointed by the Corporation for such purpose at any time during such
six-month period during usual business hours accompanied by a written notice of
election to redeem and, if so required by the Corporation, by a written
instrument or instruments of transfer in form satisfactory to the Corporation
duly executed by the holder or his attorney duly authorized in writing.
(b) PAYMENT OF REDEMPTION PRICE. As promptly as practicable
after the surrender, as herein provided, of shares of 9% Preferred Stock for
redemption, the Corporation shall pay or cause to be paid to or upon the written
order of the holder of the shares of 9% Preferred Stock so surrendered an amount
equal to $1.00 multiplied by the number of shares so surrendered in accordance
with the provisions of Section (B)(4)(a) of this Article FOURTH. Such
redemption shall be deemed to have occurred at the time that such shares of 9%
Preferred Stock shall have been surrendered for redemption in accordance
herewith and the rights of the holder of such shares of 9% Preferred Stock as a
holder of 9% Preferred Stock shall cease at such time. In the case of any
shares of 9% Preferred Stock which are redeemed in part only, upon such
redemption the Corporation shall execute and deliver to the holder thereof, as
requested by such holder, a new certificate for shares of 9% Preferred Stock of
authorized denominations equal to the unredeemed portion of such shares of 9%
Preferred Stock.
(c) NOTICE OF RIGHT OF REDEMPTION. Within 30 days after the
Corporation determines that, as of the last day of any calendar quarter, the
total stockholders' equity of the Corporation exceeds $5,000,000 (as determined
in accordance with generally accepted accounting principles applied in a
consistent manner with prior periods), the Corporation shall give notice thereof
to the holders of the 9% Preferred Stock. Such notice shall specify the
redemption price and the period of time during which holders of 9% Preferred
Stock may cause such shares to be redeemed by the Corporation as described in
Section (B)(4) of this Article FOURTH.
6
(5) REDEMPTION OF 9% PREFERRED STOCK BY THE CORPORATION
(a) RIGHT TO REDEEM 9% PREFERRED STOCK. The 9% Preferred Stock
may be redeemed, at the option of the Corporation, in whole or in part, at any
time at a price of $1.00 per share. If the Corporation desires to redeem the
shares of 9% Preferred Stock, the Corporation shall give the holders thereof
notice of such redemption, which notice shall set forth the number of shares to
be redeemed and the place and date fixed for redemption, which date shall be not
less than 30 nor more than 60 days after the date of such notice. On the date
fixed for redemption, the holders of shares of 9% Preferred Stock shall
surrender the certificates therefor against payment of the redemption amount.
If the shares of 9% Preferred Stock are to be redeemed in part, each such
redemption shall be applied pro rata to the shares of 9% Preferred Stock then
outstanding.
(b) PAYMENT OF REDEMPTION PRICE. As promptly as practicable
after the surrender, as herein provided, of shares of 9% Preferred Stock for
redemption, the Corporation shall pay or cause to be paid to or upon the written
order of the holder of the shares of 9% Preferred Stock so surrendered an amount
equal to $1.00 multiplied by the number of shares so surrendered in accordance
with the provisions of Section (B)(5)(a) of this Article FOURTH. Such
redemption shall be deemed to have occurred at the time that such shares of 9%
Preferred Stock shall have been surrendered for redemption in accordance
herewith and the rights of the holder of such shares of 9% Preferred Stock as a
holder of 9% Preferred Stock shall cease at such time. In the case of any
shares of 9% Preferred Stock which are redeemed in part only, upon such
redemption the Corporation shall execute and deliver to the holder thereof, as
requested by such holder, a new certificate for shares of 9% Preferred Stock of
authorized denominations equal to the unredeemed portion of such shares of 9%
Preferred Stock.
(6) VOTING. Other than any voting rights created by applicable law,
the holders of shares of 9% Preferred Stock shall not be entitled to vote at any
election of directors or any other matter upon which holders of the Common Stock
have the right to vote or to receive notice of any meeting of stockholders.
(7) PREFERENCE ON LIQUIDATION, ETC. In the event of any voluntary or
involuntary liquidation, distribution of all or substantially all of the assets,
dissolution, or winding-up of the Corporation (any such event being hereinafter
referred to as a "Liquidation Transaction"), any payment or distribution of the
assets of the Corporation (whether capital or surplus), or the proceeds thereof,
shall be made to or set apart in the following order of preference: (i) the
holders of shares of 9% Preferred Stock shall be entitled to receive payment of
$1.00 per share of 9% Preferred Stock held by them, plus any accrued and unpaid
dividends on the 9% Preferred Stock, if any (and no more), and, if the assets of
the Corporation shall be insufficient to pay in full the preferential amounts
set forth in this clause (i), then such assets shall be distributed among such
holders ratably in accordance with the respective amounts which would be payable
on such shares if all amounts payable thereon were paid in full; and (ii) after
payment in full of the preferential amounts set forth in clause (i) above, the
holders of shares of Common Stock shall be entitled to receive ratably payment
or distribution of the remaining assets per share of Common Stock.
FIFTH: Election of directors need not be by written ballot.
7
SIXTH: The Board of Directors is authorized to adopt, amend, or repeal
By-Laws of the Corporation, except as and to the extent provided in the By-Laws.
SEVENTH: Any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (whether or not by or
in the right of the Corporation) by reason of the fact that he is or was a
director, officer, incorporator, employee, or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
incorporator, employee, partner, trustee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise (including an employee
benefit plan), shall be entitled to be indemnified by the Corporation to the
full extent then permitted by law against expenses (including attorneys' fees),
judgments, fines (including excise taxes assessed on a person with respect to an
employee benefit plan), and amounts paid in settlement incurred by him in
connection with such action, suit, or proceeding. Such right of indemnification
shall inure whether or not the claim asserted is based on matters which antedate
the adoption of this Article SEVENTH. Such right of indemnification shall
continue as to a person who has ceased to be a director, officer, incorporator,
employee, partner, trustee, or agent and shall inure to the benefit of the heirs
and personal representatives of such a person. The indemnification provided by
this Article SEVENTH shall not be deemed exclusive of any other rights which may
be provided now or in the future under any provision currently in effect or
hereafter adopted by the By-Laws, by any agreement, by vote of stockholders, by
resolution of disinterested directors, by provision of law, or otherwise.
EIGHTH: No director of the Corporation shall be liable to the Corporation
or any of its stockholders for monetary damages, for breach of fiduciary duty as
a director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.
NINTH: 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 three-fourths in value 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 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,
8
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."
(4) The foregoing Restated Certificate of Incorporation has been duly
adopted in accordance with the applicable provisions of Section 245 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has
been signed under the seal of the Corporation by Harold R. Hutchings, M.D., its
President and Chief Executive Officer, and attested to by D. Scott Hagen, its
Assistant Secretary, this 7th day of April, 1989.
CORTEX PHARMACEUTICALS, INC.
By: /s/ HAROLD R. HUTCHINGS
---------------------------------------------
Harold R. Hutchings, M.D.,
[SEAL] President and Chief Executive
Officer
ATTEST:
By: /s/ D. SCOTT HAGEN
-----------------------
D. Scott Hagen,
Assistant Secretary
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORTEX PHARMACEUTICALS, INC.
(Pursuant to Sections 228 and 242 of the
General Corporation Law of the State of Delaware)
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify:
FIRST: That the Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on February 10, 1987 and
was amended on March 17, 1988, May 11, 1988, August 30, 1988 and April 5, 1989,
respectively, and was restated on April 11, 1989.
SECOND: That at a meeting of the Board of Directors of the Corporation
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable and directing said amendment to be submitted to the stockholders of
the Corporation entitled to vote thereon for adoption by written consent. The
resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of the corporation be
amended by changing paragraph (B)(4) of Article FOURTH so that, as amended,
paragraph (B)(4) of Article FOURTH shall read as follows:
(4) REDEMPTION OF 9% PREFERRED STOCK BY HOLDERS
(a) RIGHT TO REDEEM 9% PREFERRED STOCK. Subject to and upon
compliance with the provisions of this Section (B)(4) of this Article FOURTH,
during the six-month period (the "Election Period") following the date of the
Notice (as defined in Section (B)(4)(c) of this Article FOURTH) each holder of
shares of 9% Preferred Stock shall have the option, but not the obligation, to
require the Corporation to redeem his shares of 9% Preferred Stock at a price of
$1.00 per share (the "Redemption Price"). A holder of shares of 9% Preferred
Stock wishing to require the Corporation to redeem such shares shall surrender
the shares which are to be so redeemed to the Corporation or to such agent as
may be appointed by the Corporation for such purpose at any time during the
Election Period during usual business hours accompanied by a written notice of
election to redeem and, if so required by the Corporation, by a written
instrument or instruments of transfer in form satisfactory to the Corporation
duly executed by the holder or his attorney duly authorized in writing.
(b) REDEMPTION PROCEDURE; PAYMENT OF REDEMPTION PRICE. Within
ten (10) business days after the expiration of the Election Period, the
Corporation shall pay or cause to be paid to or upon the written order of each
holder of shares of 9% Preferred Stock
surrendered for redemption in accordance with the provisions of Section
(B)(4)(a) of this Article FOURTH an amount equal to the Redemption Price
multiplied by the number of shares so surrendered. If the funds of the
Corporation legally available for redemption of shares of 9% Preferred Stock as
of the last day of the Election Period are insufficient to redeem the total
number of shares of 9% Preferred Stock surrendered for redemption as provided
herein, those funds which are legally available shall be used to redeem the
maximum possible number of shares of 9% Preferred Stock which are so surrendered
for redemption. In the event a greater number of shares of 9% Preferred Stock
are surrendered for redemption according to Section (B)(4) of this Article
FOURTH than may lawfully be purchased by the Corporation on the last day of the
Election Period, the shares of 9% Preferred Stock so surrendered for redemption
shall be redeemed pro rata, according to the number of shares of 9% Preferred
Stock duly surrendered for redemption by each holder of shares of 9% Preferred
Stock. Such redemption shall be deemed to have occurred as of the last day of
the Election Period, and from and after such date the shares of 9% Preferred
Stock so redeemed shall be deemed to be no longer outstanding, each surrendered
certificate shall be cancelled and retired, and the holders thereof shall cease
to be stockholders with respect to such shares and shall have no rights with
respect thereto, except the rights to receive from the Corporation payment of
the Redemption Price of such shares, without interest. In the case of any
shares of 9% Preferred Stock which are redeemed in part only, upon such
redemption the Corporation shall execute and deliver to the holder thereof, as
requested by such holder, a new certificate for shares of 9% Preferred Stock of
authorized denominations equal to the unredeemed portion of such shares of 9%
Preferred Stock.
(c) NOTICE OF RIGHT OF REDEMPTION. Within thirty (30) days
after the last day of the first calendar quarter with respect to which the
Corporation determines that, as of the last day of such calendar quarter, the
total stockholders' equity of the Corporation exceeds $5,000,000 (as determined
in accordance with generally accepted accounting principles applied in a
consistent manner with prior periods), the Corporation shall give a notice (the
"Notice") thereof to the holders of the 9% Preferred Stock. Such Notice shall
state the Redemption Price and the period of time during which holders of shares
of 9% Preferred Stock may elect to have such shares redeemed by the Corporation
as described in Section (B)(4) of this Article FOURTH.
(d) WITHDRAWAL RIGHTS. Any holder of 9% Preferred Stock who,
during the Election Period, duly elects to require the Corporation to redeem
some or all of his shares of 9% Preferred Stock and surrenders the certificate
or certificates representing such shares for redemption may withdraw such
election at any time during the Election Period by giving written notice by
mail, postage-prepaid, to the Corporation at its principal executive office.
The Corporation shall, as soon as practicable thereafter, return the certificate
or certificates representing the shares of 9% Preferred Stock which such holder
shall have surrendered for redemption to the holder at his address as it appears
on the records of the Corporation, and such shares shall remain outstanding and
entitled to all the rights and preferences provided herein.
THIRD: The foregoing amendment to the Certificate of Incorporation was
duly adopted by the stockholders of the Corporation by written consent given in
accordance with the applicable provisions of Sections 228 and 242 of the General
Corporation Law of the State of Delaware and written notice of such action has
been given as provided in Section 228 of the General Corporation Law of the
State of Delaware.
2
FOURTH: This amendment to the Certificate of Incorporation shall be
effective on and as of the date of filing of this Certificate of Amendment with
the Office of the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by Harold R. Hutchings, M.D., its President, and
attested to by D. Scott Hagen, its Assistant Secretary, this 26th day of June,
1989.
CORTEX PHARMACEUTICALS, INC.
[SEAL]
By: /s/ HAROLD R. HUTCHINGS
----------------------------------------------
Harold R. Hutchings, President
ATTEST:
By: /s/ D. SCOTT HAGEN
---------------------------
D. Scott Hagen,
Assistant Secretary
3
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CORTEX PHARMACEUTICALS, INC.
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that, pursuant to the authority contained in Article Fourth, Section
(A)(2) of its Restated Certificate of Incorporation, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, its Board of Directors has adopted the following resolution creating a
series of its Preferred Stock designated as Series B Convertible Preferred
Stock:
RESOLVED, that a series of the class of authorized Preferred Stock of the
Corporation be, and hereby is, created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, are as follows:
(1) DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock") and the number of shares constituting such series shall be 3,750,000.
The number of shares of Series B Preferred Stock may be decreased (but not below
the number of shares then outstanding) or increased by a certificate executed,
acknowledged, filed, and recorded in accordance with the General Corporation Law
of the State of Delaware setting forth a statement that a specified decrease or
increase, as the case may be, thereof had been authorized and directed by a
resolution or resolutions adopted by the Board of Directors pursuant to
authority expressly vested in it by the provisions of the Certificate of
Incorporation of the Corporation.
(2) CONVERSION. The holders of shares of Series B Preferred Stock
shall have the right, at their option, to convert such shares into shares of
Common Stock at any time on the following terms and conditions:
(a) Each share of Series B Preferred Stock shall be convertible
at the option of the holder thereof at the office of the Corporation or at the
office of the transfer agent, if any, for the Series B Preferred Stock into
shares of duly authorized, fully paid, and non-assessable shares of Common Stock
at the conversion price of $1.345 per share of Common Stock (the "Conversion
Rate"), subject to adjustment as provided in subsection (2)(c) below. The
number of shares of Common Stock to be delivered upon conversion of the Series B
Preferred Stock shall be determined by dividing the liquidation amount ($0.6667
per share) of the shares surrendered by the Conversion Rate at the time of
surrender, calculated to the nearest 1/100th of a share (fractions of less than
1/100 being disregarded). The Corporation shall make no payment
or adjustment on the account of any declared but unpaid dividends on the shares
of Series B Preferred Stock surrendered for conversion or on account of any
dividends on the Common Stock.
(b) Before any holder of shares of Series B Preferred Stock
shall be entitled to convert the same into Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or the transfer agent therefor, if any, and shall give written
notice to the Corporation that he elects to convert all or part of the shares
represented by the certificate or certificates and shall state in writing
therein the name or names in which he wishes the certificate or certificates for
Common Stock to be issued. The Corporation will, as soon as practicable
thereafter, issue and deliver to such holder of shares of Series B Preferred
Stock, or to his nominee or nominees, certificates for the number of full shares
of Common Stock to which he shall be entitled as aforesaid, together with cash
in lieu of any fraction of a share as hereinafter provided. If surrendered
certificates for Series B Preferred Stock are converted only in part, the
Corporation will issue and deliver to the holder, or to his nominee or nominees,
a new certificate or certificates representing the aggregate of the unconverted
shares of Series B Preferred Stock. Shares of Series B Preferred Stock shall be
deemed to have been converted as of the date of the surrender of such shares for
conversion as provided above, and the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such Common Stock on such date.
(c) The Conversion Rate shall be subject to adjustment as
follows:
(i) In case the Corporation shall (w) pay a dividend or
make a distribution on its outstanding shares of Common Stock in shares of
its capital stock (whether shares of its Common Stock or of capital stock
of any other class), (x) subdivide its outstanding shares of Common Stock,
(y) combine its outstanding shares of Common Stock into a smaller number of
shares, or (z) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Corporation, the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the holder of
any shares of Series B Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of capital
stock of the Corporation which he would have owned immediately following
such action had such shares of Series B Preferred Stock been converted
immediately prior thereto. An adjustment made pursuant to this subsection
(i) shall become effective retroactively immediately after the record date
in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination, or reclassification.
(ii) In case the Corporation shall issue to holders of
shares of its outstanding Common Stock generally any rights, options, or
warrants entitling them to subscribe for or purchase (w) shares of its
Common Stock, (x) any assets of the Corporation, (y) any securities of the
Corporation (except its Common Stock) or of any corporation other than the
Corporation, or (z) any rights, options, or warrants entitling them to
subscribe for or to purchase any of the foregoing securities, whether or
not such rights, options, or warrants are immediately exercisable
(hereinafter collectively called a "Distribution on Common Stock"), the
Corporation shall issue to the holders of
2
outstanding shares of Series B Preferred Stock the Distribution on Common
Stock to which they would have been entitled if they had converted the
shares of Series B Preferred Stock held by them into Common Stock
immediately prior to the record date for the purpose of determining
stockholders entitled to receive such Distribution on Common Stock.
(d) DE MINIMUS CHANGES. No adjustment in the Conversion Rate
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Rate; provided, however, that any adjustments
which by reason of this subsection (2)(d) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under subsection (2)(c) above shall be made to the nearest cent or
to the nearest one hundredth of a share, as the case may be.
(e) NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, as herein provided, the Corporation shall promptly cause a notice
setting forth the adjusted Conversion Rate to be mailed to the holders of the
Series B Preferred Stock.
(f) NO FRACTIONAL SHARES TO BE ISSUED. No fractional shares or
scrip representing fractional shares of Common Stock shall be issued upon
conversion of Series B Preferred Stock. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of Series B
Preferred Stock (or specified portions thereof), the Corporation shall pay in
cash to the holders of such Series B Preferred Stock in respect of such fraction
of a share an amount equal to the same fraction of the fair market value per
share of Common Stock as determined by the Board of Directors in its sole
discretion.
(g) EFFECT OF SALE, MERGER, OR CONSOLIDATION. In the event of
any capital reorganization of the Corporation, or of any reclassification (other
than a change in par value) of the Common Stock, or of any conversion of the
Common Stock into securities of another corporation, or the consolidation of the
Corporation with, or the merger of the Corporation into, any other corporation
where the Corporation is not the surviving corporation or in the event of the
sale of all or substantially all of the properties and assets of the Corporation
to any other corporation (each such event hereinafter being referred to as a
"Capital Change"), a share of Series B Preferred Stock shall be convertible
after such Capital Change, upon the terms and conditions herein specified, for
the number of shares of stock or other securities or property of the
Corporation, or of the corporation into which shares of Common Stock are
converted or resulting from such consolidation or surviving such merger or to
which such sale shall be made, as the case may be, to which the shares of Common
Stock issuable (at the time of such Capital Change) upon conversion of such
share of Series B Preferred Stock would have been entitled upon such Capital
Change. In any such case, if necessary, the provisions set forth in this
subsection (2) with respect to the rights and interests thereafter of the
holders of the Series B Preferred Stock shall be appropriately adjusted so as to
be reasonably applicable to any shares of stock or other securities or property
thereafter deliverable on the conversion of the Series B Preferred Stock. The
subdivision or combination of shares of Common Stock at any time outstanding
into a greater or lesser number of shares of Common Stock shall not be deemed to
be a reclassification of the Common Stock for the purpose of this subsection
(2)(g). The Corporation shall not effect any consolidation, merger, or sale
resulting in a Capital Change, unless prior to or simultaneously with the
consummation thereof, any successor corporation or
3
corporation purchasing such assets shall assume, by written instrument, the
obligation to deliver to the holder of each share of Series B Preferred Stock
such shares of stock, securities, or assets as the holders of Series B Preferred
Stock may be entitled to receive upon exercise of the Series B Preferred Stock
in accordance with the foregoing provisions, and the other obligations of the
Corporation hereunder.
(h) NOTICE OF RECLASSIFICATION OR RECAPITALIZATION, ETC.
In case:
(i) the Corporation shall authorize the issuance to all
holders of Common Stock of rights or warrants to subscribe for or purchase
shares of its capital stock or of any other right;
(ii) the Corporation shall authorize the distribution to
all holders of Common Stock of evidences of its indebtedness or assets or
the change or adoption of a dividend policy;
(iii) of any subdivision, combination, or reclassification
of Common Stock, or of any consolidation or merger to which the Corporation
is a party and for which approval of any stockholders of the Corporation is
required, or of the sale or transfer of all or substantially all of the
assets of the Corporation; or
(iv) of the voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation;
then the Corporation shall mail to the holders of Series B Preferred Stock at
least 10 days prior to the applicable record date hereinafter specified in
clauses (x) and (y) below, a notice stating (x) the date as of which the holders
of Common Stock of record to be entitled to receive any such rights, warrants,
or distribution are to be determined, or (y) the date on which any such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up, or other action is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property, if any, deliverable upon such subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up, or other action. The failure to give the notice
required by this subsection (2)(h) or any defect therein shall not affect the
legality or validity of any distribution, right, warrant, subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation, winding up, or other action, or the vote upon any of
the foregoing.
(i) RESERVATION OF SHARES FOR ISSUANCE UPON CONVERSION. The
Corporation covenants that it will at all times reserve and keep available out
of its authorized Common Stock, free from preemptive rights, solely for the
purpose of issuance upon conversion of the Series B Preferred Stock as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the conversion of all outstanding shares of the Series B Preferred Stock. The
Corporation covenants that all shares of Common Stock which shall be so issuable
upon conversion of the Series B Preferred Stock as herein provided shall, when
issued, be duly
4
authorized, validly issued, and fully paid and nonassessable, free of all liens
and charges and not subject to preemptive rights and that, upon conversion of
the Series B Preferred Stock, the appropriate capital stock accounts of the
Corporation shall be duly credited.
(j) PAYMENT OF TAXES ON SHARES ISSUED UPON CONVERSION. The
issuance of certificates for shares of Common Stock upon the conversion of
shares of the Series B Preferred Stock shall be made without charge to the
converting holders for any tax in respect of the issuance of such certificates
and such certificates shall be issued in the respective names of, or in such
names as may be directed by, the holders of the shares of the Series B Preferred
Stock converted; provided, however, that the Corporation shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the
shares of the Series B Preferred Stock converted, and the Corporation shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
(3) VOTING. Other than any voting rights created by applicable law,
the holders of shares of Series B Preferred Stock shall not be entitled to vote
at any election of directors or any other matter upon which holders of the
Common Stock have the right to vote or to receive notice of any meeting of
stockholders.
(4) PREFERENCE ON LIQUIDATION, ETC. In the event of any voluntary or
involuntary liquidation, distribution of all or substantially all of the assets,
dissolution, or winding-up of the Corporation (any such event being hereinafter
referred to as a "Liquidation Transaction"), any payment or distribution of the
assets of the Corporation (whether capital or surplus), or the proceeds thereof,
shall be made to or set apart in the following order of preference: (i) the
holders of shares of 9% Cumulative Convertible Preferred Stock of the
Corporation shall be entitled to receive the preferential amounts set forth in
Article Fourth, Section (B)(7) of the Corporation's Restated Certificate of
Incorporation; (ii) after payment in full of the preferential amounts with
respect to the 9% Cumulative Convertible Preferred Stock and prior to and in
preference to any distribution of any assets of the Corporation to the holders
of the Common Stock, the holders of shares of Series B Preferred Stock shall be
entitled to be paid, by reason of their ownership thereof, the amount of $0.6667
per share of Series B Preferred Stock, plus any declared and unpaid dividends on
the Series B Preferred Stock, if any (and no more), and, if the assets of the
Corporation then available for distribution shall be insufficient to pay in full
the preferential amounts set forth in this clause (ii), then such assets shall
be distributed ratably among the holders of Series B Preferred Stock in
accordance with the respective amounts which would be payable on such shares if
all amounts payable thereon were paid in full; and (iii) after payment in full
of the preferential amounts set forth in clauses (i) and (ii) above, the holders
of shares of Common Stock shall be entitled to receive ratably payment or
distribution of the remaining assets of the Corporation available for
distribution.
(5) DIVIDENDS. Subject to the provisions of Article Fourth, Section
(B)(2), of the Corporation's Restated Certificate of Incorporation with respect
to the 9% Cumulative Convertible Preferred Stock, the holders of shares of
Series B Preferred Stock shall be entitled to
5
receive cash dividends as, if and when declared by the Board of Directors of the
Corporation, out of any assets of the Corporation legally available therefor.
(6) REDEMPTION BY THE CORPORATION.
(a) RIGHT TO REDEEM. The Series B Preferred Stock may be
redeemed, at the option of the Corporation, in whole or in part, at any time
after the fifth anniversary date of the Original Issue Date (as such term is
defined below) of the Series B Preferred Stock at a price of $0.6667 per share.
If the Corporation desires to redeem the shares of Series B Preferred Stock, the
Corporation shall give the holders thereof notice of such redemption, which
notice shall set forth the number of shares to be redeemed and the place and
date fixed for redemption, which date shall be not less than 30 nor more than 60
days after the date of such notice. On the date fixed for redemption, the
holders of shares of Series B Preferred Stock shall surrender the certificates
therefor against payment of the redemption amount. If the shares of Series B
Preferred Stock are to be redeemed in part, each such redemption shall be
applied pro rata to the shares of Series B Preferred Stock then outstanding. As
used in this Section (6)(a), the term "Original Issue Date" shall refer to the
first date on which any shares of Series B Preferred Stock are issued by the
Corporation.
(b) PAYMENT OF REDEMPTION PRICE. As promptly as practicable
after the surrender, as herein provided, of shares of Series B Preferred Stock
for redemption, the Corporation shall pay or cause to be paid to or upon the
written order of the holder of the shares of Series B Preferred Stock so
surrendered an amount equal to $0.6667 multiplied by the number of shares so
surrendered in accordance with the provisions of Section (6)(a)above. Such
redemption shall be deemed to have occurred at the time that such shares of
Series B Preferred Stock shall have been surrendered for redemption in
accordance herewith and the rights of the holder of such shares of Series B
Preferred Stock as a holder of Series B Preferred Stock shall cease at such
time. In the case of any shares of Series B Preferred Stock which are redeemed
in part only, upon such redemption the Corporation shall execute and deliver to
the holder thereof, as requested by such holder, a new certificate for shares of
Series B Preferred Stock of authorized denominations equal to the unredeemed
portion of such shares of Series B Preferred Stock.
6
IN WITNESS WHEREOF, CORTEX PHARMACEUTICALS, INC. has caused this
Certificate of Designation, Preferences and Rights of Series B Convertible
Preferred Stock to be duly executed by its President and Chief Executive Officer
and attested to by its Assistant Secretary and has caused its corporate seal to
be affixed hereto this 29th day of April, 1991.
CORTEX PHARMACEUTICALS, INC.
By: /s/ VAUGHAN H. J. SHALSON
----------------------------------------------
Vaughan H. J. Shalson,
President and Chief
Executive Officer
(Corporate Seal)
ATTEST:
/s/ D. SCOTT HAGEN
- -----------------------------------
D. Scott Hagen
Assistant Secretary
7
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CORTEX PHARMACEUTICALS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
CORTEX PHARMACEUTICALS, INC.
2. The Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock of the corporation, which was filed by the Secretary
of State of Delaware on April 29, 1991, is hereby corrected.
3. The defect to be corrected in said instrument is as follows:
The conversion price of $1.345 per share listed at line 6 of
subparagraph (a) of paragraph (2), CONVERSION, at page 2 of the Certificate
of Designation, Preferences and Rights of Series B Convertible Preferred
Stock shall be corrected to read as follows: $1.359.
4. Subparagraph (a) of paragraph (2) in corrected form is as follows:
" (a) Each share of Series B Preferred Stock shall be convertible at
the option of the holder thereof at the office of the Corporation or at the
office of the transfer agent, if any, for the Series B Preferred Stock into
shares of duly authorized, fully paid, and non-assessable shares of Common
Stock at the conversion price of $1.359 per share of Common Stock (the
"Conversion Rate"), subject to adjustment as provided in subsection (2)(c)
below. The number of shares of Common Stock to be delivered upon
conversion of the Series B Preferred Stock shall be determined by dividing
the liquidation amount ($0.6667 per share) of the shares surrendered by the
Conversion Rate at the time of surrender, calculated to the nearest 1/100th
of a share (fractions of less than 1/100 being disregarded). The
Corporation shall make no payment or adjustment on the account of any
declared but unpaid dividends on the shares of Series B Preferred Stock
surrendered for conversion or on account of any dividends on the Common
Stock."
Signed and attested to on April 30, 1991.
/S/ VAUGHAN H. J. SHALSON
----------------------------------------------
Vaughan H. J. Shalson, President and Chief
Executive Officer
/S/ D. SCOTT HAGEN
- ----------------------------
D. Scott Hagen, Assistant
Secretary
2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CORTEX PHARMACEUTICALS, INC.
(Pursuant to Section 151(g) of the General Corporation
Law of the State of Delaware)
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that, pursuant to the authority contained in Article Fourth,
Section (A)(2) of its Restated Certificate of Incorporation, Paragraph (1) of
its Certificate of Designation, Preferences and Rights of Series B Convertible
Preferred Stock and in accordance with the provisions of Section 151(g) of the
General Corporation Law of the State of Delaware, its Board of Directors has
duly adopted the following resolution decreasing the number of shares of the
Series B Convertible Preferred Stock from 3,750,000 to 3,200,000:
RESOLVED, that the number of shares constituting the Series
B Convertible Preferred Stock be decreased from 3,750,000 to
3,200,000.
IN WITNESS WHEREOF, CORTEX PHARMACEUTICALS, INC. has caused this
Certificate of Decrease of Number of Shares of Series B Convertible Preferred
Stock to be duly executed by its President and Chief Executive Officer and
attested to by its Assistant Secretary and has caused its corporate seal to be
affixed hereto this 22nd day of May, 1991.
CORTEX PHARMACEUTICALS, INC.
By: /s/ VAUGHAN H. J. SHALSON
-----------------------------------------
Vaughan H. J. Shalson,
President and Chief
Executive Officer
[Corporate Seal]
ATTEST:
/s/ D. SCOTT HAGEN
- ------------------------------
D. Scott Hagen,
Assistant Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORTEX PHARMACEUTICALS, INC.
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify:
FIRST: That at a meeting of the Board of Directors of the Corporation
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable and directing said amendment to be submitted to the stockholders of
the Corporation at its Annual Meeting. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that Article Fourth, paragraph (A)(1) of the Certificate of
Incorporation of the Corporation be amended to read in its entirety:
The aggregate number of shares which the Corporation shall have the
authority to issue is 55,000,000, of which 5,000,000 shares of the par
value of $.001 per share shall be designated "Preferred Stock" and
50,000,000 of the par value $.001 per share shall be designated "Common
Stock."
SECOND: That thereafter, pursuant to resolution of the Board of Directors,
the Annual Meeting of the stockholders of the Corporation was duly called and
held, upon notice in accordance with Section 222 of the Delaware General
Corporation Law, at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment
to be executed by Jay D. Glass, Ph.D., its President, and attested to by
D. Scott Hagen, its Secretary, this 30th day of October, 1992.
CORTEX PHARMACEUTICALS, INC.
[SEAL]
By: /s/ JAY D. GLASS
-----------------------------------------
Jay D. Glass, President
ATTEST:
By: /s/ D. SCOTT HAGEN
---------------------------
D. Scott Hagen, Secretary
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CORTEX PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
(Pursuant to Section 242 of the Delaware General Corporation Law)
CORTEX PHARMACEUTICALS, INC., a corporation organized and existing under
and by virtue of the Delaware General Corporation Law (the "Corporation"), does
hereby certify that:
FIRST: At a duly held meeting of the Board of Directors of the
Corporation, the Board of Directors of the Corporation duly adopted resolutions
setting forth amendments to the Restated Certificate of Incorporation of the
Corporation, declaring said amendments to be advisable and directing that said
amendments be submitted to the stockholders of the Corporation for consideration
thereof. The resolutions setting forth the proposed amendments are as follows:
"RESOLVED, that the Restated Certificate of Incorporation of the
Corporation be amended to add ARTICLE TENTH, which shall read in its
entirety as follows:
'TENTH--REVERSE SPLIT. On the effective date of this
amendment to the Restated Certificate of Incorporation (the
"Effective Date"), the Common Stock of the Corporation will
be reverse split on a one-for-five basis so that each
authorized share of Common Stock immediately prior to the
Effective Date shall automatically be converted into and
reconstituted as one-fifth of a share of Common Stock (the
"Reverse Split"). No fractional shares will be issued by
the Corporation as a result of the Reverse Split. In lieu
thereof, each Stockholder whose shares of Common Stock are
not evenly divisible by five will receive a cash payment to
be calculated by multiplying the fraction of a share by the
equivalent of the average of the last sale prices for one
share of the Common Stock, as reported by Nasdaq, for the
ten (10) trading days immediately preceding the Effective
Date.'
RESOLVED, that ARTICLE FOURTH (A)(1) of the Restated Certificate
of Incorporation of the Corporation be amended and restated in its
entirety to read as follows:
'FOURTH: (A)(1)-AUTHORIZED CAPITAL. (A) The total number
of shares of capital stock which the Company has the authority to
issue is 25,000,000 consisting of 20,000,000 shares of Common
Stock, $0.001 par value per share (the "Common Stock"), and
5,000,000 shares of Preferred Stock, $0.001 par value per share
(the "Preferred Stock").' "
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, the Annual Meeting of the Stockholders of the Corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: Said amendments were duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, CORTEX PHARMACEUTICALS, INC. has caused this
Certificate of Amendment to be signed by D. Scott Hagen, its duly authorized
Vice President and Chief Financial Officer, this 5th day of January, 1995.
CORTEX PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ D. SCOTT HAGEN
---------------------------------------------
D. Scott Hagen,
Vice President and Chief Financial Officer
2
CERTIFICATE OF DESIGNATION, NUMBER, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL, AND OTHER SPECIAL RIGHTS AND THE
QUALIFICATIONS, LIMITATIONS, RESTRICTIONS,
AND OTHER DISTINGUISHING CHARACTERISTICS OF
SERIES C PREFERRED STOCK
OF
CORTEX PHARMACEUTICALS, INC.
It is hereby certified that:
1. The name of the Corporation (hereinafter called the "Corporation") is
Cortex Pharmaceuticals, Inc., a Delaware corporation.
2. The articles of incorporation of the Corporation authorizes the
issuance of Five Million (5,000,000) shares of Preferred Stock of a par value of
one one-hundredth of one cent ($.001) each and expressly vests in the Board of
Directors of the Corporation the authority provided therein to issue any or all
of said shares in one or more Series and by resolution or resolutions to
establish the designation, number, full or limited voting powers, or the denial
of voting powers, preferences and relative, participating, optional, and other
special rights and the qualifications, limitations, restrictions, and other
distinguishing characteristics of each Series to be issued.
3. The Board of Directors of the Corporation, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series C issue of Preferred Stock:
RESOLVED, that One Hundred and Sixty (160) of the Five Million (5,000,000)
authorized shares of Preferred Stock of the Corporation shall be designated
Series C Preferred Stock, $.001 par value per share, and shall possess the
rights and privileges set forth below:
Section 1. DESIGNATION AND AMOUNT. The shares of such Series shall be
designated as "Series C Preferred Stock" (the "Series C Preferred Stock") and
the number of shares constituting the Series C Preferred Stock shall be 160.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series C Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants to acquire shares of Series C Preferred
Stock or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series C Preferred Stock.
Section 2. RANK. The Series C Preferred Stock shall rank: (i) on
parity with all of the Corporation's Series B Convertible Preferred Stock, (ii)
junior to all of the Corporation's 9% Cumulative Convertible Preferred Stock,
and any other class or series of capital stock of the Corporation hereafter
created specifically ranking by its terms senior to the Series C Preferred Stock
(collectively, the "Senior Securities"); (iii) prior to all of the Corporation's
Common Stock par value $001 per share ("Common Stock"); (iv) prior to any class
or series of capital stock of
the Corporation hereafter created specifically ranking by its terms junior to
any Series C Preferred Stock of whatever subdivision (collectively, with the
Common Stock, "Junior Securities"); (v) on parity with any class or series of
capital stock of the Corporation hereafter created specifically ranking by its
terms on parity with the Series C Preferred Stock ("Parity Securities") in each
case as to distributions of assets upon liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary (all such distributions
being referred to collectively as "Distributions").
Section 3. DIVIDENDS. The Series C Preferred Stock will bear no
dividends, and the holders of the Series C Preferred Stock ("Holders") shall not
be entitled to receive dividends on the Series C Preferred Stock.
Section 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the Holders of shares of Series C
Preferred Stock shall be entitled to receive, immediately after any
distributions to Senior Securities required by the Corporation's Certificate of
Incorporation or any certificate of designation of preferences, and prior and in
preference to any distribution to Junior Securities but in parity with any
distribution of Parity Securities, an amount per share equal to the sum of (i)
$25,000 for each outstanding share of Series C Preferred Stock (the "Original
Series C Issue Price") and (ii) an amount equal to 10% of the Original Series C
Issue Price per annum for the period that has passed since the date of issuance
of any Series C Preferred Stock (such amount being referred to herein as the
"Premium"). If upon the occurrence of such event, and after payment in full of
the preferential amounts with respect to the Senior Securities, the assets and
funds thus distributed among the Holders of the Series C Preferred Stock and
Parity Securities shall be insufficient to permit the payment to such Holders of
the full preferential amounts due to the Holders of the Series C Preferred Stock
and the Parity Securities, respectively, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
Holders of the Series C Preferred Stock and the Parity Securities, pro rata,
based on the respective liquidation amounts to which each such series of stock
is entitled by the Corporation's Certificate of Incorporation and any
certificate of designation of preferences.
(b) Upon the completion of the distribution required by subsection 4(a),
if assets remain in this Corporation, they shall be distributed to holders of
Junior Securities in accordance with the Corporation's Certificate of
Incorporation including any duly adopted certificate(s) of designation of
preferences.
(c) A sale, conveyance or disposition of all or substantially all of the
assets of the Corporation or the effectuation by the Corporation of a
transaction or series of related transactions in which more than 50% of the
voting power of the Corporation is disposed of shall be deemed to be a
liquidation, dissolution or winding up within the meaning of this Section 4;
provided that, a consolidation or merger of the Corporation with or into any
other corporation or corporations shall not be treated as a liquidation,
dissolution or winding up within the meaning of this Section 4, but instead
shall be treated pursuant to Section 5 hereof.
Section 5. CONVERSION. The record Holders of this Series C Preferred
Stock shall have conversion rights as follows (the "Conversion Rights"):
2
(a) RIGHT TO CONVERT. Each record Holder of Series C Preferred Stock
shall be entitled, commencing on the date of the last closing of a purchase and
sale of Series C Preferred Stock that occurs pursuant to the offering of the
Series C Preferred Stock by the Corporation (the "Last Closing Date"), which is
expected to be December 6, 1995, but in no event later than December 15, 1995
and at any time thereafter, subject to the Corporation's right of redemption set
forth in Section 6(a) and Section 6(b), at the option of the Holder, at the
office of the Corporation or any transfer agent for the Series C Preferred
Stock, to convert shares of Series C Preferred Stock held by such Holder (but
only in multiples of $25,000), into that number of fully-paid and non-
assessable shares of Common Stock at the Conversion Rate, as defined below.
Each record Holder of Series C Preferred Stock additionally shall be entitled
(at the times and in the amounts set forth below), and, subject to the
Corporation's right of redemption set forth in Section 6(a) and Section 6(b), at
the office of the transfer agent for the Series C Preferred Stock (the "Transfer
Agent"), to convert portions of the Series C Preferred Stock held by such Holder
(but only in multiples of $25,000) into that number of fully-paid and non-
assessable shares of Common Stock at the Conversion Rate, as defined below.
Each record Holder of Series C Preferred Stock shall be entitled to convert up
to one-third of the shares of Series C Preferred Stock held by such Holder
beginning 45 days following the Last Closing Date and an additional one-third of
the shares of Series C Preferred Stock held by such Holder beginning 75 days
following the Last Closing Date, and may convert any remaining Series C
Preferred Stock beginning 105 days following the Last Closing Date, at the
office of the Corporation or any Transfer Agent for the Series C Preferred
Stock, into that number of fully-paid and non-assessable shares of Common Stock
of the Corporation calculated in accordance with the following formula (the
"Conversion Rate"):
Number of shares issued upon conversion of one share of Series C Preferred Stock
=((.10) (N/365) (25,000) + 25,000) DIVIDED BY Conversion Price
where,
DEG. N = the number of days between (i) the Last Closing Date, as defined
herein, and (ii) the applicable date of conversion for the shares of Series
C Preferred Stock for which conversion is being elected, and
DEG. CONVERSION PRICE = the lesser of (x) the average Closing Bid Price, as
that term is defined below, for the five trading days ending on December 1,
1995, which amounts to $2.8250 (the "Fixed Conversion Price"), or (y) X
times the average Closing Bid Price, as that term is defined below, of the
Corporation's Common Stock for the five (5) trading days immediately
preceding the Date of Conversion, as defined below, where X shall equal .85
+ (1- (the average Closing Bid Price of the Corporation's Common Stock for
the five (5) trading days immediately preceding the Date of Conversion, as
that term is defined below, divided by the average Closing Bid Price of the
Corporation's Common Stock for the ten (10) trading days immediately
preceding the Date of Conversion)); provided that, in no event shall X be
less than .85 or greater than 1.0.
For purposes hereof, the term "Closing Bid Price" shall mean the closing
bid price on the over-the-counter market as reported by NASDAQ, or if then
traded on a national securities
3
exchange or the National Market System, the mean of the high and low prices on
the principal national securities exchange or the National Market System on
which it is so traded.
(b) MECHANICS OF CONVERSION. In order to convert Series C Preferred
Stock into full shares of Common Stock, the Holder shall (i) fax a copy of the
fully executed notice of conversion in the form attached hereto ("Notice of
Conversion") to the Corporation at such office that he elects to convert the
same, which notice shall specify the number of shares of Series C Preferred
Stock to be converted and shall contain a calculation of the Conversion Rate
(together with a copy of the first page of each certificate to be converted) to
the Corporation or its designated transfer agent prior to Midnight, New York
City time (the "Conversion Notice Deadline") on the date of conversion specified
on the Notice of Conversion and (ii) surrender the original certificate or
certificates therefor, duly endorsed, and the original Notice of Conversion by
either overnight courier or 2-day courier, to the office of the Corporation or
of any transfer agent for the Series C Preferred Stock; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless either the
certificates evidencing such Series C Preferred Stock are delivered to the
Corporation or its transfer agent as provided above, or the Holder notifies the
Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed. Upon receipt by the Corporation of evidence of the loss, theft,
destruction or mutilation of this a certificate of certificates ("Stock
Certificates") representing shares of Series C Preferred Stock, and (in the
case of loss, theft or destruction) of indemnity or security reasonably
satisfactory to the Corporation, and upon surrender and cancellation of the
Stock Certificate(s), if mutilated, the Corporation shall execute and deliver
new Stock Certificate(s) of like tenor and date. No fractional shares of Common
Stock shall be issued upon conversion of this Series C Preferred Stock. If any
conversion of the Series C Preferred Stock would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares of Common Stock
issuable upon conversion shall be the next higher number of shares. In the
case of a dispute as to the calculation of the Conversion Rate, the
Corporation's calculation shall be deemed conclusive absent manifest error.
The Corporation shall use all reasonable efforts to issue and deliver
within three (3) business days after delivery to the Corporation of such
certificates, or after such agreement and indemnification, to such Holder of
Series C Preferred Stock at the address of the Holder on the books of the
Corporation, a certificate or certificates for the number of shares of Common
Stock to which the Holder shall be entitled as aforesaid. The date on which
conversion occurs (the "Date of Conversion") shall be deemed to be the date
set forth in such Notice of Conversion, provided (i) that the advance copy
of the Notice of Conversion is faxed to the Corporation before midnight, New
York City time, on the Date of Conversion, and (ii) that the original Stock
Certificates representing the shares of Series C Preferred Stock to be
converted are surrendered by depositing such certificates by either overnight
courier or 2-day courier, as provided above, and received by the transfer
agent or the Corporation within five business days thereafter. 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. If the original Stock
Certificates representing the Series C Preferred Stock to be converted are
not received by the transfer agent or the Corporation within five business
days after the Date of Conversion or if the facsimile of the Notice of
Conversion is not received by the Corporation or its designated transfer
agent prior to the Conversion Notice Deadline, the Notice of Conversion, at
the Corporation's option, may be declared null and void.
4
Following conversion of shares of Series C Preferred Stock, such shares of
Series C Preferred Stock will no longer be outstanding.
(c) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series C Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding
Series C Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of Series C Preferred Stock, the Corporation will
use its best efforts to take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(d) AUTOMATIC CONVERSION. Each share of Class C Preferred Stock
outstanding on December 6, 1997 automatically shall be converted into Common
Stock on such date at the Conversion Price then in effect (calculated in
accordance with the formula in Section 5(a) above) and December 6, 1997 shall be
deemed the Date of Conversion with respect to such conversion.
(e) ADJUSTMENT TO CONVERSION RATE.
(i) If, prior to the conversion of all of the Series C Preferred
Stock, the number of outstanding shares of Common Stock is increased by a stock
split, stock dividend, or other similar event, the Conversion Rate shall be
proportionately adjusted, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares, or other similar
event, the Conversion Rate shall be proportionately adjusted.
(ii) If, prior to the conversion of all Series C Preferred Stock,
there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Corporation shall be changed into the same or a different number of
shares of the same or another class or classes of stock or securities of the
Corporation or another entity, or other property then the Holders of Series C
Preferred Stock shall thereafter have the right to purchase and receive upon
conversion of Series C Preferred Stock, upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such shares of stock and/or
securities or other property as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
purchasable and receivable upon the conversion of Series C Preferred Stock held
by such Holders had such merger, consolidation, exchange of share,
recapitalization or reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the Holders of the Series C Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the
Conversion Rate and of the number of shares issuable upon conversion of the
Series C Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities thereafter
deliverable upon the exercise hereof. The Corporation shall not effect any
transaction described in this subsection 5(e) unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written instrument the
obligation to deliver to the Holders of the Series C Preferred Stock such shares
of stock and/or securities or other property as, in accordance with the
foregoing provisions, the
5
Holders of the Series C Preferred Stock may be entitled to receive upon
conversion of the Series C Preferred Stock.
(iii) If any adjustment under this Section 5(e) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon conversion shall be the next higher number
of shares.
Section 6. CASH REDEMPTION BY CORPORATION.
(a) CORPORATION'S RIGHT TO REDEEM UPON RECEIPT OF NOTICE OF CONVERSION.
The Corporation shall have the right, in its sole discretion, upon receipt of a
Notice of Conversion pursuant to Section 5, to redeem in whole or in part any
Series C Preferred Stock submitted for conversion, immediately prior to
conversion. If the Corporation elects to redeem some, but not all, of the
Series C Preferred Stock submitted for conversion, the Corporation shall redeem
from among the Series C Preferred Stock submitted by the various Holders thereof
for conversion on the applicable date, a pro-rata amount from each Holder so
submitting Series C Preferred Stock for conversion. The Corporation shall
effect each such redemption by giving notice ("Notice of Redemption Upon Receipt
of Notice of Conversion") of its election to redeem, by facsimile within one
business day following receipt of a Notice of Conversion from a Holder, with a
copy by 2-day courier, to the Holders of Series C Preferred Stock selected for
redemption, at the address and facsimile number of such Holder appearing in the
Corporation's register for the Series C Preferred Stock and (B) the
Corporation's transfer agent. Such Notice of Redemption Upon Receipt of Notice
of Conversion shall indicate the number of shares of Holder's Series C Preferred
Stock that have been selected for redemption, the Date of Redemption Upon
Receipt of Notice of Conversion (as defined below) and the applicable Redemption
Price Upon Receipt of Notice of Conversion, as defined below. If the Notice of
Redemption Upon Receipt of Notice of Conversion is not received within the
times specified above or does not meet the conditions specified above, the
Notice of Redemption Upon Receipt of Notice of Conversion shall become null and
void (unless otherwise agreed in writing by the Holder). The Corporation shall
not be entitled to send any Notice of Redemption Upon Receipt of Notice of
Conversion and begin the redemption procedure unless it has (x) the full amount
of the Redemption Price Upon Receipt of Notice of Conversion, in cash, available
in a demand or other immediately available account in a bank or similar
financial institution or (y) immediately available credit facilities, in the
full amount of the Redemption Price Upon Receipt of Notice of Conversion, with
a bank or similar financial institution on the date the Notice of Redemption
Upon Receipt of Notice of Conversion is sent to the applicable Holder.
The Redemption Price Upon Receipt of Notice of Conversion per share of
Series C Preferred Stock shall equal the Closing Bid Price on the Date of
Conversion, multiplied by the number of shares of Common Stock that would
otherwise have been issuable had the shares of Series C Preferred Stock redeemed
been converted on the Date of Conversion as to such shares.
For the purposes of the above formula, "N", "Closing Bid Price" and
"Conversion Price" shall have the meanings set forth in Section 5(a) and "Date
of Redemption Upon Notice of Conversion" shall be deemed to be the Conversion
Date (as that term is defined in Section 5(b) above).
6
The Redemption Price Upon Receipt of Notice of Conversion shall be paid to
the Holder of Series C Preferred Stock redeemed within 10 business days of the
delivery of the Notice of Redemption Upon Receipt of Notice of Conversion to
such Holder; provided, however, that the Corporation shall not be obligated to
deliver any portion of the Redemption Price Upon Receipt of Notice of Conversion
unless either the certificates evidencing the Series C Preferred Stock redeemed
are delivered to the Transfer Agent as provided in Section 5(b), or the Holder
notifies the Transfer Agent that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection with such
certificates. Notwithstanding the foregoing, in the event that the certificates
evidencing the Series C Preferred Stock redeemed are not delivered to the
Transfer Agent as provided in Section 5(b), the redemption of the Series C
Preferred Stock pursuant to this Section 6(a) shall still be deemed effective as
of the Date of Redemption Upon Receipt of Notice of Conversion.
(b) CORPORATION'S RIGHT TO REDEEM AT ITS ELECTION. Commencing 45 days
after the Last Closing Date, the Corporation shall have the right, in its sole
discretion, to redeem, from time to time, any or all of the Series C Preferred
Stock; provided that, the Corporation shall only be entitled to redeem shares of
Series C Preferred Stock with an aggregate Stated Value (as defined below) of at
least One Million Dollars ($1,000,000) on the first such redemption. If the
Corporation elects to redeem some, but not all, of the Series C Preferred Stock,
the Corporation shall redeem a pro-rata amount from each Holder of Series C
Preferred Stock. The Corporation shall effect each such redemption by giving at
least 30 days prior written notice ("Notice of Redemption At Corporation's
Election") to (A) the Holders of Series C Preferred Stock selected for
redemption, at the address and facsimile number of such Holder appearing in the
Corporation's register for the Series C Preferred Stock and (B) the Transfer
Agent, which Notice of Redemption At Corporation's Election shall be deemed to
have been delivered three (3) business days after the Corporation's mailing (by
overnight courier, with a copy by facsimile) of such Notice of Redemption At
Corporation's Election. Such Notice of Redemption At Corporation's Election
shall indicate the number of shares of Holder's Series C Preferred Stock that
have been selected for redemption, the date which such redemption is to become
effective (the "Date of Redemption At Corporation's Election") and the
applicable Redemption Price At Corporation's Election, as defined below. The
Corporation shall not be entitled to send any Notice of Redemption At
Corporation's Election and begin the redemption procedure unless it has (x) the
full amount of the Redemption Price At Corporation's Election, in cash,
available in a demand or other immediately available account in a bank or
similar financial institution or (y) immediately available credit facilities, in
the full amount of the Redemption At Corporation's Election, with a bank or
similar financial institution on the date the Notice of Redemption At
Corporation's Election is delivered to the applicable Holder. Notwithstanding
the above, the Holder may convert any or all of its Series C Preferred Stock
that is eligible for conversion, which would otherwise be subject to redemption
under this Section 6(b), by submitting a Notice of Conversion prior to the Date
of Redemption At Corporation's Election.
For purposes of this Section 6(b), "Stated Value" shall mean the Original
Series C Issue Price of the shares of Series C Preferred Stock redeemed pursuant
to this Section 6(b), as defined in Section 4(a), together with the accrued but
unpaid Premium (as defined in Section 4(a)) on such shares of Series C Preferred
Stock, as of the Date of Redemption At Corporation's Election.
7
The Redemption Price At Corporation's Election shall be calculated as a
percentage of Stated Value of the shares of Series C Preferred Stock redeemed
pursuant to this Section 6(b), which percentage shall vary depending on the date
of Delivery of the Notice of Redemption at Corporation's Election, and shall be
determined as follows:
Date of Delivery of Notice of
Redemption at Corporation's Election % of Stated Value
- ------------------------------------ -----------------
45 days to 6 months following Last Closing Date 130%
6 months and 1 day to 12 months following Last Closing Date 125%
12 months and 1 day to 18 months following Last Closing Date 120%
18 months and 1 day to 24 months following Last Closing Date 115%
The Redemption Price At Corporation's Election shall be paid to the Holder of
Series C Preferred Stock redeemed within 10 business days of the Date of
Redemption At Corporation's Election; provided, however, that the Corporation
shall not be obligated to deliver any portion of the Redemption Price At
Corporation's Election unless either the certificates evidencing the Series C
Preferred Stock redeemed are delivered to the Transfer Agent prior to the 10th
business day following the Date of Redemption At Corporation's Election, or the
Holder notifies the Transfer Agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates. Notwithstanding the foregoing, in the event that the certificates
evidencing the Series C Preferred Stock redeemed are not delivered to the
Transfer Agent prior to the 10th business day following the Date of Redemption
At Corporation's Election, the redemption of the Series C Preferred Stock
pursuant to this Section 6(b) shall still be deemed effective as of the Date of
Redemption At Corporation's Election and the Redemption Price At Corporation's
Election shall be paid to the Holder of Series C Preferred Stock redeemed within
5 business days of the date the certificates evidencing the Series C Preferred
Stock redeemed are actually delivered to the Transfer Agent.
Section 7. ADVANCE NOTICE OF REDEMPTION
(a) HOLDER'S RIGHT TO ELECT TO RECEIVE NOTICE OF CASH REDEMPTION BY
CORPORATION. Holder shall have the right to require Corporation to provide
advance notice stating whether Corporation will elect to redeem Holder's shares
in cash, pursuant to Corporation's redemption rights discussed in Section 6.
(b) MECHANICS OF HOLDER'S ELECTION NOTICE. Holder shall send notice
("Election Notice") to Corporation and such other person(s) as the Corporation
may designate, by facsimile, stating Holder's intention to require Corporation
to disclose that if Holder were to exercise his, her or its right of conversion
(pursuant to section 5) whether Corporation would elect to redeem Holder's
convertible Security for cash in lieu of issuing Common Stock. Corporation is
required to disclose to Holder what action Corporation would take over the
subsequent five ten day period, including the date Corporation receives such
Election Notice.
(c) CORPORATION'S RESPONSE. Corporation must respond within one business
day of receipt of Holder's Election Notice (1) via facsimile and (2) via
overnight courier. If Corporation does not respond to Holder within one
business day via facsimile and overnight courier, Corporation shall be required
to issue to Holder Common Stock upon Holder's conversion within the subsequent
five day period.
8
Section 8. VOTING RIGHTS. Except as otherwise provided by the Delaware
Business Corporation Act ("Delaware Law"), the holders of the Series C Preferred
Stock shall have no voting power whatsoever, and no holder of Series C Preferred
Stock shall vote or otherwise participate in any proceeding in which actions
shall be taken by the Corporation or the stockholders thereof or be entitled to
notification as to any meeting of the stockholders.
To the extent that under Delaware Law the vote of the holders of the Series
C Preferred Stock, voting separately as a class, is required to authorize a
given action of the Corporation, the affirmative vote or consent of the holders
of at least a majority of the shares of the Series C Preferred Stock represented
at a duly held meeting at which a quorum is present or by written consent of a
majority of the shares of Series C Preferred Stock (except as otherwise may be
required under Delaware Law) shall constitute the approval of such action by the
class. To the extent that under Delaware Law the holders of the Series C
Preferred Stock are entitled to vote on a matter with holders of Common Stock,
voting together as one class, each share of Series C Preferred Stock shall be
entitled to a number of votes equal to the number of shares of Common Stock into
which it is then convertible using the record date for the taking of such vote
of stockholders as the date as of which the Conversion Price is calculated.
Holders of the Series C Preferred Stock shall be entitled to notice of all
stockholder meetings or written consents with respect to which they would be
entitled to vote, which notice would be provided pursuant to the Corporation's
by-laws and applicable statutes.
Section 9. PROTECTIVE PROVISIONS. So long as shares of Series C
Preferred Stock are outstanding, the Corporation shall not without first
obtaining the approval (by vote or written consent, as provided by Delaware Law)
of the holders of at least a majority of the then outstanding shares of Series C
Preferred Stock:
(a) alter or change the rights, preferences or privileges of the shares of
Series C Preferred Stock or any Senior Securities so as to affect adversely the
Series C Preferred Stock;
(b) create any new class or series of stock having a preference over the
Series C Preferred Stock with respect to Distributions (as defined in Section 2
above); or
(c) do any act or thing not authorized or contemplated by this Designation
which would result in taxation of the holders of shares of the Series C
Preferred Stock under Section 305 of the Internal Revenue Code of 1986, as
amended (or any comparable provision of the Internal Revenue Code as hereafter
from time to time amended).
Section 10. STATUS OF REDEEMED OR CONVERTED STOCK. In the event any
shares of Series C Preferred Stock shall be redeemed or converted pursuant to
Section 5 or Section 6 hereof, the shares so converted or redeemed shall be
canceled, shall return to the status of authorized but unissued Preferred Stock
of no designated series, and shall not be issuable by the Corporation as Series
C Preferred Stock.
Section 11. PREFERENCE RIGHTS. Nothing contained herein shall be
construed to prevent the Board of Directors of the Corporation from issuing one
or more series of Preferred Stock with dividend and/or liquidation preferences
equal to or junior to the dividend and liquidation preferences of the Series C
Preferred Stock.
9
FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the said Series C Preferred Stock and
fixing the number, powers, preferences and relative, optional, participating,
and other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said Series, be deemed to be included in and be a part of the certificate of
incorporation of the Corporation pursuant to the provisions of the Delaware
Business Corporation Act.
Signed on December 7, 1995
/s/ D. Scott Hagen
----------------------------------
D. Scott Hagen, Acting President
Attest:
/s/ D. Scott Hagen
- ----------------------------------
D. Scott Hagen, Secretary
10
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Preferred Stock)
The undersigned hereby irrevocably elects to convert ___ shares of Series C
Preferred Stock, represented by stock certificate No(s). (the "Preferred Stock
Certificates") into shares of common stock ("Common Stock") of Cortex
Pharmaceuticals, Inc., (the "Corporation") according to the conditions of the
Certificate of Designation of Series C Preferred Stock, as of the date written
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any.
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Series C Preferred Stock shall be made in compliance with
Regulation S, pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the "Act") or pursuant to an exemption from
registration under the Act.
Date of Conversion:_____________________
Applicable Conversion Price:____________
Signature:______________________________
Name:___________________________________
Address: _______________________________
* No shares of Common Stock will be issued until the original Series C
Preferred Stock Certificate(s) to be converted and the Notice of Conversion
are received by the Transfer Agent.
11