Attached files
| file | filename |
|---|---|
| EX-3.1 - Arno Therapeutics, Inc | v201326_ex3-1.htm |
| EX-4.5 - Arno Therapeutics, Inc | v201326_ex4-5.htm |
| EX-5.1 - Arno Therapeutics, Inc | v201326_ex5-1.htm |
| EX-4.3 - Arno Therapeutics, Inc | v201326_ex4-3.htm |
| EX-4.4 - Arno Therapeutics, Inc | v201326_ex4-4.htm |
| EX-23.1 - Arno Therapeutics, Inc | v201326_ex23-1.htm |
| EX-23.2 - Arno Therapeutics, Inc | v201326_ex23-2.htm |
| EX-10.11 - Arno Therapeutics, Inc | v201326_ex10-11.htm |
| EX-10.13 - Arno Therapeutics, Inc | v201326_ex10-13.htm |
| EX-10.14 - Arno Therapeutics, Inc | v201326_ex10-14.htm |
| S-1 - Arno Therapeutics, Inc | v201326_s1.htm |
Exhibit
3.3
ARNO
THERAPEUTICS, INC.
SERIES A
CONVERTIBLE PREFERRED STOCK
CERTIFICATE
OF DESIGNATION
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
Arno
Therapeutics, Inc. (the “Corporation”), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, does hereby certify that pursuant to the authority vested in
the Board of Directors of the Corporation by its Certificate of Incorporation,
as amended, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors duly adopted
the following resolution on August 9, 2010, which resolution remains in full
force and effect as of the date hereof:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of the
Corporation (the “Board of Directors”)
by its certificate of incorporation, as amended, (hereinafter referred to as the
“Certificate of
Incorporation”), the Board of Directors does hereby create, authorize and
provide for the issuance of Series A Convertible Preferred Stock, par value
$0.0001 per share, consisting of Thirty Five Million (35,000,000) shares, having
the following designations, preferences and relative and other special rights,
qualifications, limitations and restrictions:
1. Designation.
Thirty Five Million (35,000,000) shares of the Corporation’s authorized but
unissued Preferred Stock, $0.0001 par value, are hereby designated as a series
of Preferred Stock (hereinafter referred to as “Series A Preferred
Stock”), which shall have the voting powers, limitations, rights and
preferences set forth herein.
2. Dividends. The
holders of shares of Series A Preferred Stock (each a “Series A Holder” and
collectively the “Series A Holders”)
shall be entitled to an annual per share cumulative dividend equal to 5% of the
Original Issuance Price (as defined below) for each share of the Series A
Preferred Stock (the “Dividend Preference
Amount”), payable upon the earlier of (i) such date in which the
corresponding shares of Series A Preferred Stock are converted to Common Stock
pursuant to Section 6.1 or 6.2 of this Agreement, unless the Corporation elects
to pay any such accrued Dividend Preference Amount in the form of Common Stock,
(ii) such date as determined by the Board of Directors in its sole and absolute
discretion and (iii) the occurrence of a Liquidation Event or Deemed Liquidation
(as defined herein). Without limiting the foregoing, the Board of
Directors shall not declare, pay or set aside any dividends on the Common Stock
unless (i) all accrued Dividend Preference Amounts have been distributed to all
holders of the Series A Preferred Stock and (ii) the Board of Directors shall
also declare and pay on the Series A Preferred Stock, at the same time that it
declares and pays such dividends to the holders of Common Stock, the dividends
which would have been declared and paid with respect to the Common Stock
issuable upon conversion of the Series A Preferred Stock, had all the
outstanding shares of Series A Preferred Stock been converted at the then
applicable Conversion Price for such shares immediately prior to the record date
for such dividend, or if no record date is fixed, the date as of which the
record holders of Common Stock entitled to receive such dividends is
determined.
3. Liquidation.
3.1. Preferred
Distribution. Upon the occurrence of a Liquidation Event, the
holders of shares of Series A Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its stockholders before any payment shall be made to the holders of Common Stock
by reason of their ownership thereof, an amount per share equal to the sum of:
(a) 1.5 times the Original Issuance Price (as defined below), subject to
adjustments for any Recapitalization Event (as defined below), (b) any dividends
accrued but unpaid thereon, whether or not declared and (c) an amount equal to
the Dividend Preference Amount calculated from the original issue date of the
applicable shares of Series A Preferred Stock, less any amount previously paid
to the Series A Holder on account of the Dividend Preference Amount (together,
the “Preferred
Distribution”). If upon the occurrence of a Liquidation Event,
the assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the full amount of the Preferred
Distribution, the Series A Holders shall share ratably in any distribution of
the assets available for distribution.
3.2. Distribution of Remaining
Assets. Upon the occurrence of a Liquidation Event, after the full
payment is made of any Preferred Distribution, the remaining assets of the
Corporation available for distribution to its funds shall be distributed, pari passu, on an
as-converted basis, among the record owners of shares of Series A Preferred
Stock and Common Stock. The aggregate amount that a Series A Holder
is entitled to receive under Subsections 3.1 and 3.2 is hereinafter referred to
as the “Series A
Liquidation Amount.”
4. Deemed Liquidation
Events.
4.1. Definition. Each
of the following events, shall be considered a “Deemed Liquidation
Event” unless the holders of at least a majority of the outstanding
shares of Series A Preferred Stock elect otherwise by written notice sent to the
Corporation at least 10 days prior to the effective date of any such event: (i)
the sale or transfer of 50% of more of the outstanding voting capital stock of
the Corporation, (ii) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Corporation or any subsidiary of the Corporation of all or substantially all the
assets of the Corporation and its subsidiaries taken as a whole, or the sale or
disposition (whether by merger or otherwise) of one or more subsidiaries of the
Corporation if substantially all of the assets of the Corporation and its
subsidiaries taken as a whole are held by such subsidiary or subsidiaries,
except where such sale, lease, transfer, exclusive license or other disposition
is to a wholly owned subsidiary of the Corporation, or (iii) the consolidation,
merger or reorganization of the Corporation into any other entity, in which the
Corporation is not the surviving entity and in which the stockholders of the
Corporation existing prior to the transaction hold less than fifty percent (50%)
of the outstanding voting capital stock of the Corporation or the surviving
corporation, as applicable, immediately following such
transaction.
-2-
4.2. Effecting a Deemed
Liquidation Event. The Corporation shall not have the power to
effect a Deemed Liquidation Event referred to in Subsection 4.1 unless the
agreement effecting such transaction provides that the consideration payable to
the stockholders of the Corporation shall be allocated among the holders of
capital stock of the Corporation in accordance with Subsections 3.1 and
3.2.
(a)
In the event of a Deemed Liquidation Event referred to
in Subsection 4.1, if the Corporation does not effect a dissolution of the
Corporation under the General Corporation Law within 90 days after such Deemed
Liquidation Event, then (i) the Corporation shall send a written notice to each
Series A Holder no later than the 90th day after the Deemed Liquidation Event
advising such holders of their right (and the requirements to be met to secure
such right) pursuant to the terms of the following clause (ii) to
require the redemption of such shares of Series A Preferred Stock, and (ii) if
the holders of at least a majority of the then outstanding shares of Series A
Preferred Stock so request in a written instrument delivered to the Corporation
not later than 120 days after such Deemed Liquidation Event, the Corporation
shall use the consideration received by the Corporation in or for such Deemed
Liquidation Event, together with any other assets
of the Corporation available for distribution to its stockholders (the
“Available Proceeds”), to the
extent legally available therefor, on the 150th day after such Deemed
Liquidation Event, to redeem all outstanding shares of Series A Preferred Stock
at a price per share equal to the Series A Liquidation
Amount. Notwithstanding the foregoing, in the event of a redemption
pursuant to the preceding sentence, if the Available Proceeds are not sufficient
to redeem all outstanding shares of Series A Preferred Stock, the Corporation
shall redeem a pro rata portion of each holder’s shares of Series A Preferred
Stock to the fullest extent of such Available Proceeds, based on the respective
amounts which would otherwise be payable in respect of the shares to be redeemed
if the Available Proceeds were sufficient to redeem all such shares, and shall
redeem the remaining shares to have been redeemed as soon as practicable after
the Corporation has funds legally available therefor.
(b)
On or before the applicable redemption date,
each holder of shares of Series A Preferred Stock to be redeemed on such
redemption date shall surrender the certificate or certificates representing
such shares (or, if such registered holder alleges that such certificate has
been lost, stolen or destroyed, a lost certificate affidavit and agreement
reasonably acceptable to the Corporation to indemnify the Corporation against
any claim that may be made against the Corporation on account of the alleged
loss, theft or destruction of such certificate) to the Corporation, in the
manner and at the place designated in the redemption notice, and thereupon the
redemption price for such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner
thereof.
(c)
Any dividends with respect to such shares of Series A
Preferred Stock shall cease to accrue after such redemption date and all rights
with respect to such shares shall forthwith after the redemption date terminate,
except only the right of the holders to receive the redemption price without
interest upon surrender of their certificate or certificates
therefor.
-3-
(d)
Prior to the
distribution or redemption provided for in this Subsection 4.2, the Corporation
shall not expend or dissipate the consideration received for such Deemed
Liquidation Event, except to discharge expenses incurred in connection with such
Deemed Liquidation Event or in the ordinary course of business.
4.3. Amount Deemed Paid or
Distributed. The amount deemed paid or distributed to the
holders of capital stock of the Corporation pursuant to this Section 4 shall be
the cash or the value of the property, rights or securities paid or distributed
to such holders by the Corporation or the acquiring person, firm or other
entity. The value of such property, rights or securities shall be
determined in good faith by the Board of Directors of the
Corporation.
5. Voting
Power.
5.1. General. Except
as otherwise expressly provided elsewhere in the Certificate of Incorporation
(as in existence on the date hereof or as amended with the requisite approval of
the holders of Series A Preferred Stock), this Series A Certificate of
Designation or as otherwise required by law, (a) each Series A Holder shall be
entitled to vote on all matters submitted to a vote of the stockholders of the
Corporation and shall be entitled to that number of votes equal to the largest
number of whole shares of Common Stock into which such holder’s shares of Series
A Preferred Stock could be converted, pursuant to the provisions of Section 6
hereof, at the record date for the determination of stockholders entitled to
vote on such matters or, if no such record date is established, at the date such
vote is taken or any written consent of stockholders is solicited, and (b) the
holders of shares of Preferred Stock and Common Stock shall vote together (or
tender written consents in lieu of a vote) as a single class on all matters
submitted to the stockholders of the Corporation, provided, however, that the
holders of Series A Preferred Stock shall vote as a separate class with respect
to any change in the rights of the Series A Preferred Stock, any amendment to
this Certificate, any increase in the number of shares of Series A Preferred
Stock or the authorization, creation or issuance of any class or series of
capital stock ranking senior or pari passu with the Series A
Preferred Stock as to distribution of assets on liquidation, the payment of
dividends, rights of redemption, conversion or voting rights, regardless of
whether the authorization, creation or issuance of such class or series of
preferred stock is otherwise required to be authorized by the vote or consent of
stockholders of the Corporation.
5.2. Election of Investor
Directors. The Co-Lead Investors shall each be entitled to
elect one (1) director of the Corporation (each a “Series A Director,”
and collectively, the “Investor Directors”).
Each Series A Director elected pursuant to the preceding sentence may be removed
without cause by, and only by, the Co-Lead Investor who initially elected the
Series A Director being removed. If any of the Co-Lead Investors
fails to elect their respective Series A Director, then any such directorship
position shall remain vacant until such time as that Co-Lead Investor elects a
person to fill such directorship in accordance with this Subsection 5.2; and no
such directorship may be filled by stockholders of the Corporation other than by
the Co-Lead Investors.
-4-
6. Conversion
Rights. The Series A
Holders shall have the following rights with respect to the conversion of shares
of Series A Preferred Stock into shares of Common Stock:
6.1. Right to
Convert. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the Original
Issue Date, into a certain number of fully-paid, nonassessable shares of Common
Stock determined by dividing the sum of (i) Original Issue Price and (ii) to the
extent that the Corporation elects to pay the Dividend Preference Amount in the
form of Common Stock, the amount of the Dividend Preference Amount accrued on
each share of Series A Preferred Stock by the then-effective Conversion Price
(as defined below). The number of shares of Common Stock into which each share
of Preferred Stock of a Series may be converted is referred to as the
“Conversion
Rate”. In the event that there is a decrease or increase in
the Conversion Price pursuant to this Section 6, then the Conversion
Rate shall increase or decrease correspondingly.
6.2. Automatic
Conversion. Immediately upon the Effective Date, all shares of
Series A Preferred Stock for which the underlying shares of Common
Stock issuable upon conversion of such Series A Preferred Stock are covered by
such Registration Statement, and, to the extent that the Corporation elects to
pay the Dividend Preference Amount on such shares of Series A Preferred Stock in
the form of Common Stock, any amount of Dividend Preference Amount accrued on
each such share of Series A Preferred Stock, shall automatically convert into
shares of Common Stock at the Conversion Rate then in
effect. Notwithstanding anything to the contrary contained herein,
any automatic conversion provided for in this Subsection 6.2 shall occur without
any further action by the Series A Holders and whether or not the certificates
representing such shares of Series A Preferred Stock are surrendered to the
Corporation or its transfer agent.
6.3. Mechanics of
Conversion. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of a share of Common Stock as determined by the Board of
Directors. For such purpose, all shares of Series A Preferred Stock
held by each Series A Holder shall be aggregated, and any resulting fractional
share of Common Stock shall be paid in cash. Before any Series A
Holder shall be entitled to convert the same into full shares of Common Stock
pursuant to Subsection 6.1 hereof, and to receive certificates representing such
shares of Common Stock (whether converted pursuant to Subsection 6.1 or 6.2),
he/she shall either (a) surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent, as
applicable, for the Series A Preferred Stock or (b) notify the Corporation or
its transfer agent, as applicable, that such certificates have been lost, stolen
or destroyed and execute an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates, and shall give written notice to the Corporation at such office
that such holder elects to convert the same.
-5-
The
Corporation shall, as soon as practicable after such delivery, or after such
agreement and indemnification, issue and deliver at such office to such Series A
Holder, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid and a check payable to the holder in
the amount of any cash amounts payable as the result of a conversion into
fractional shares of Common Stock, plus the amount of any Dividend Preference
Amount which the Corporation did not elect to pay in shares of Common
Stock. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of
Series A Preferred Stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
7. Adjustments to Series A
Conversion Price
7.1. Conversion Price
Adjustment. In the event the Corporation shall at any
time after the Original Issue Date and prior to the Effective Date issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 7.2), other than Exempt
Issuances, without consideration or for a consideration amount per share less
than the applicable Conversion Price in effect immediately prior to such issue,
then the Conversion Price shall be reduced, concurrently with such issue, to the
consideration per share received by the Corporation for such issue or deemed
issue of the Additional Shares of Common Stock; provided that if the
aggregate of any such issuances or deemed issuances exceed 100,000 shares of
Additional Common Stock and were without consideration, then the Company shall
be deemed to have received an aggregate of $.0001 of consideration for all such
Additional Shares of Common Stock issued or deemed to be issued.
7.2. Deemed Issuance of
Additional Shares of Common Stock.
(a)
If the Corporation at any time or from time
to time after the Original Issue Date shall issue any Options or Convertible
Securities (excluding Options or Convertible Securities which are themselves
Exempt Issuances) or shall fix a record date for the determination of holders of
any class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of Common Stock (as set forth in
the instrument relating thereto, assuming the satisfaction of any conditions to
exercisability, convertibility or exchangeability but without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date.
-6-
(b)
If the terms of any Option or Convertible
Security, the issuance of which resulted in an adjustment to the Conversion
Price pursuant to the terms of Subsection 7.1, are revised as a result of an
amendment to such terms or any other adjustment pursuant to the provisions of
such Option or Convertible Security (but excluding automatic adjustments to such
terms pursuant to anti-dilution or similar provisions of such Option or
Convertible Security) to provide for either (1) any increase or decrease in the
number of shares of Common Stock issuable upon the exercise, conversion and/or
exchange of any such Option or Convertible Security or (2) any increase or
decrease in the consideration payable to the Corporation upon such exercise,
conversion and/or exchange, then, effective upon such increase or decrease
becoming effective, the Conversion Price computed upon the original issue of
such Option or Convertible Security (or upon the occurrence of a record date
with respect thereto) shall be readjusted to such Conversion Price as would have
obtained had such revised terms been in effect upon the original date of
issuance of such Option or Convertible Security. Notwithstanding the
foregoing, no readjustment pursuant to this clause (b)
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price in effect immediately prior to the
original adjustment made as a result of the issuance of such Option or
Convertible Security, or (ii) the Conversion Price that would have resulted from
any issuances of Additional Shares of Common Stock (other than deemed issuances
of Additional Shares of Common Stock as a result of the issuance of such Option
or Convertible Security) between the original adjustment date and such
readjustment date.
(c)
If the terms of any Option or
Convertible Security (excluding Options or Convertible Securities which are
themselves Exempt Issuances), the issuance of which did not result in an
adjustment to the Conversion Price pursuant to the terms of Subsection 7.1
(either because the consideration per share of the Additional Shares of Common
Stock subject thereto was equal to or greater than the Conversion Price then in
effect, or because such Option or Convertible Security was issued before the
Original Issue Date), are revised after the Original Issue Date as a result of
an amendment to such terms or any other adjustment pursuant to the provisions of
such Option or Convertible Security (but excluding automatic adjustments to such
terms pursuant to anti-dilution or similar provisions of such Option or
Convertible Security) to provide for either (1) any increase in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange of any
such Option or Convertible Security or (2) any decrease in the consideration
payable to the Corporation upon such exercise, conversion or exchange, then such
Option or Convertible Security, as so amended or adjusted, and the Additional
Shares of Common Stock subject thereto (determined in the manner provided in
Subsection 7.2(a)) shall be deemed to have been issued effective upon such
increase or decrease becoming effective.
(d)
Upon the expiration or
termination of any unexercised Option or unconverted or unexchanged Convertible
Security (or portion thereof) which resulted (either upon its original issuance
or upon a revision of its terms) in an adjustment to the Conversion Price
pursuant to the terms of Subsection 7.1, the Conversion Price shall be
readjusted to such Conversion Price as would have obtained had such Option or
Convertible Security (or portion thereof) never been issued.
-7-
(e)
If the number
of shares of Common Stock issuable upon the exercise, conversion and/or exchange
of any Option or Convertible Security, or the consideration payable to the
Corporation upon such exercise, conversion and/or exchange, is calculable at the
time such Option or Convertible Security is issued or amended but is subject to
adjustment based upon subsequent events, any adjustment to the Conversion Price
provided for in this Subsection 7.2 shall be effected at the time of such
issuance or amendment based on such number of shares or amount of consideration
without regard to any provisions for subsequent adjustments (and any subsequent
adjustments shall be treated as provided in clauses (b) and (c) of this
Subsection 7.2). If the number of shares of Common Stock issuable
upon the exercise, conversion and/or exchange of any Option or Convertible
Security, or the consideration payable to the Corporation upon such exercise,
conversion and/or exchange, cannot be calculated at all at the time such Option
or Convertible Security is issued or amended, any adjustment to the Conversion
Price that would result under the terms of this Subsection 7.2 at the time of
such issuance or amendment shall instead be effected at the time such number of
shares and/or amount of consideration is first calculable (even if subject to
subsequent adjustments), assuming for purposes of calculating such adjustment to
the Conversion Price that such issuance or amendment took place at the time such
calculation can first be made.
7.3. Reservation of Common
Stock. From and after the Original Issuance Date, the
Corporation shall reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Convertible Preferred Stock (including any
shares of Series A Preferred Stock issuable upon the exercise, conversion or
exchange of any options, warrants, purchase rights or convertible securities),
and, if at any time after the Original Issuance Date the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series A Preferred Stock
(including any shares of Series A Preferred Stock issuable upon the exercise,
conversion or exchange of any options, warrants, purchase rights or convertible
securities), the Corporation shall take all commercially reasonable actions 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.
7.4. Adjustment for Stock
Dividends. In the event the Corporation at any time or from
time to time after the Original Issuance Date shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable on the Common Stock in
Additional Shares of Common Stock, then and in each such event the Conversion
Price in effect immediately before such event shall be decreased as of the time
of such issuance or, in the event such a record date shall have been fixed, as
of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:
(a) the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and
(b) the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of Additional Shares of Common
Stock issuable in payment of such dividend or distribution.
-8-
Notwithstanding
the foregoing, (i) no adjustment shall be made to the Conversion Price as a
result of such dividend or distribution if the holders of the shares of Series A
Preferred Stock are entitled to, and do, receive such dividend or distribution
in accordance with Section 2 above; and (ii) if any adjustment is made to the
Conversion Price as a result of the declaration of a dividend and such dividend
is not effected, the Conversion Price shall be appropriately readjusted to the
Conversion Price in effect had such dividend not been declared.
7.5. Adjustments for Other
Dividends and Distributions. If the Corporation, at any time
or from time to time after the date hereof, shall declare or make, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities or other
property of the Corporation other than shares of Common Stock, then and in each
such event provision shall be made so that the holders of the outstanding shares
of Series A Preferred Stock shall receive upon conversion thereof, in addition
to the number of shares of Common Stock receivable thereupon, the amount of such
other securities of the Corporation or the value of such other property that
they would have received had the Series A Preferred Stock been converted into
Common Stock on the date of such event and had such holders thereafter, during
the period from the date of such event to and including the conversion date,
retained such securities or other property receivable by them during such period
giving application to all adjustments called for during such period under this
Section 7 with respect to the rights of the holders of the outstanding shares of
Series A Preferred Stock; and, provided, further, however, that no such
adjustment shall be made if the holders of Series A Preferred Stock
simultaneously receive a dividend or other distribution of such securities or
other property in an amount equal to the amount of such securities or other
property as they would have received if all outstanding shares of Series A
Preferred Stock had been converted into Common Stock on the date of such
event.
7.6. Adjustments for Subdivision
or Combination of Common Stock. If the Corporation shall
at any time or from time to time after the Original Issue Date effect a
subdivision of the outstanding Common Stock, the Conversion Price of the Series
A Preferred Stock in effect immediately before that subdivision shall be
proportionately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be increased in proportion to
such increase in the aggregate number of shares of Common Stock
outstanding. If the Corporation shall at any time or from time to
time after the Original Issue Date combine the outstanding shares of Common
Stock, the Conversion Price of the Series A Preferred Stock in effect
immediately before the combination shall be proportionately increased so that
the number of shares of Common Stock issuable on conversion of each share of
such series shall be decreased in proportion to such decrease in the aggregate
number of shares of Common Stock outstanding. Any adjustment under
this subsection shall become effective at the close of business on the date the
subdivision or combination becomes effective.
-9-
7.7. Adjustments for
Reorganization or Reclassification. If after the date hereof
any capital reorganization or reclassification of the Common Stock of the
Corporation, or consolidation or merger of the Corporation with another
corporation, or the sale of all or substantially all of its assets to another
corporation or other similar event (each, a “Fundamental Transaction”)
shall be effected, then, as a condition of such Fundamental Transaction, lawful
and fair provision shall be made whereby each Series A Holder shall thereafter
have the right to receive, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock of the Corporation
immediately theretofore receivable upon the conversion of such share or shares
of Series A Preferred Stock, as the case may be, such shares of stock,
securities, or assets as may be issued or payable with respect to or in exchange
for the number of outstanding shares of such Common Stock equal to the number of
shares of such Common Stock immediately theretofore receivable upon the
conversion of the Series A Preferred Stock, had such Fundamental Transaction not
taken place and in such event appropriate provision shall be made with respect
to the rights and interests of the Series A Holder to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Conversion Price) shall thereafter be applicable, as nearly as may be in
relation to any share of stock, securities, or assets thereafter deliverable
upon the exercise of such conversion rights. The
Corporation shall not effect any such Fundamental Transaction unless prior to
the consummation thereof the successor corporation (if other than the
Corporation) resulting from such Fundamental Transaction, or the corporation
purchasing such assets in a Fundamental Transaction, shall assume by written
instrument executed and delivered to the Series A Holders the obligation to
deliver to the Series A Holders such shares of stock, securities, or assets as,
in accordance with the foregoing provisions, such holders may be entitled to
purchase.
7.8. If
any capital reorganization or reclassification of the capital stock of the
Corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization or
reclassification, lawful and adequate provisions shall be made whereby each
holder of a share or shares of Series A Preferred Stock shall thereupon have the
right to receive, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore
receivable upon the conversion of such share or shares of Series A Preferred
Stock, as the case may be, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such Common Stock
immediately theretofore receivable upon such conversion had such reorganization
or reclassification not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of such holder to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Conversion Price) shall thereafter be applicable, as nearly
as may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights.
7.9. Issue
Taxes. The Corporation shall pay all issue taxes (other than
any taxes measured by the income of any person other than the Corporation), if
any, incurred in respect of the issuance of shares of Common Stock upon a
conversion of shares of Series A Preferred Stock. If a holder of
shares surrendered for conversion specifies that the shares of Common Stock to
be issued upon conversion are to be issued in a name or names other than the
name or names in which such surrendered shares stand (which shall be subject to
compliance with the applicable provisions of federal and state securities laws),
the Corporation shall not be required to pay any transfer or other taxes
incurred by reason of the issuance of such shares of Common Stock to the name of
another, and if the appropriate transfer taxes shall not have been paid to the
Corporation or the transfer agent for the Series A Preferred Stock at the time
of surrender of the shares involved, the shares of Common Stock issued upon
conversion thereof may be registered in the name or names in which the
surrendered shares were registered without any liability to the Corporation,
despite the instructions to the contrary.
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8. Notices.
8.1. Notices of Record
Date. In the event of (a) the giving of any notice to the
holders of Common Stock or Series A Preferred Stock (b) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividends or other distribution, or any right to subscribe for, purchase or
otherwise acquire any capital stock of the Corporation or other property; (c)
any capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation, or any sale or disposition of all or
substantially all of the assets of the Corporation to any other person or
persons; or (d) any voluntary or involuntary dissolution, liquidation, winding
up or bankruptcy of the Corporation (each, a “Record Event”), then
and in each such Record Event the Corporation shall give each Series A Holder a
notice specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and a description of such
dividend, distribution or right; (ii) the date on which any such reorganization,
reclassification, recapitalization, sale, disposition, merger, consolidation,
dissolution, liquidation, winding up or bankruptcy is expected to become
effective; and (iii) the time, if any, that is to be fixed as to when the
holders of record of Common Stock or Series A Preferred Stock shall be entitled
to exchange their shares of Common Stock or Series A Preferred Stock for cash,
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, sale, disposition, merger, consolidation,
dissolution, liquidation, winding up or bankruptcy. In each such
Record Event, the notice required by this Subsection 8.1 shall be delivered at
least 10 days prior to the date specified in such notice.
8.2. Notices in
General. Whenever a notice is required to be given to a Series
A Holder pursuant to this Series A Certificate of Designation (including,
without limitation, any notice required by Subsection 8.1 above), such notice
shall be delivered in person, sent by nationally recognized overnight delivery
service specifying next day delivery, mailed by certified or registered mail,
postage prepaid and return receipt requested, or sent by telecopier, telex,
facsimile, email/pdf or similar transmission, with confirmation of receipt, to
such holder’s address of record as shown on the books of the
Corporation.
9. Definitions
and Constructions.
9.1. Definitions. As
used in this Series A Certificate of Designation, the following terms shall have
the following respective meanings:
“Additional Shares of Common
Stock” shall mean all shares of Common Stock issued (or, pursuant to
Subsection 7.2, deemed to be issued) by the Corporation after the Original Issue
Date, including all shares of Common Stock, all Convertible Securities (other
than Series A Preferred Stock issued pursuant to the Purchase Agreement,
including Series A Preferred Stock issued pursuant to exercise of the Warrants
(as defined in the Purchase Agreement)), and all Options, all on an as converted
and as-exercised basis, regardless of whether then currently convertible or
exercisable as of the date of calculation.
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“Affiliates” shall
mean any person directly or indirectly controlled by, controlling or under
common control with another person, where the term “control,” for purposes of
this definition, means the power to direct the management of the person in
question.
“Certificate of
Incorporation” shall mean the Certificate of Incorporation of the
Corporation, as amended from time to time, including the Series A Certificate of
Designation.
“Co-Lead Investor”
shall have the meaning prescribed to such term in the Purchase
Agreement.
“Common Stock” shall
mean the Corporation’s common stock, par value $0.001 per share.
“Common Stock
Equivalents” shall mean and include any Convertible Securities or
warrant, Option or other right to subscribe for or purchase any shares of Common
Stock or any Convertible Security.
“Corporation” shall
mean Arno Therapeutics, Inc., a Delaware corporation.
“Conversion Price”
shall initially be $1.00 per share of Series A Preferred Stock.
“Conversion Rate”
means the number of shares of Common Stock into which each share of Series A
Preferred Stock may be converted pursuant to Subsection 6.1 of this Series A
Certificate of Designation.
“Convertible
Securities” shall mean any evidences of indebtedness, shares of stock or
other securities or rights which are or may be at any time directly or
indirectly convertible into or exercisable or exchangeable for Common
Stock.
“Deemed Liquidation
Event” shall have the meaning specified in Subsection 4.1.
“Effective Date” shall
mean the date and time at which that certain Registration Statement (as defined
in the Purchase Agreement) is declared effective by the Securities and Exchange
Commission.
“Exempt Issuances”
shall mean the issuance of (i) an aggregate number of shares of Common Stock or
Common Stock Equivalents, not to exceed in the aggregate after any issuance, ten
percent (10%) of the then issued and outstanding shares of Common Stock and
Common Stock Equivalents held by all persons, to employees, officers and/or
independent directors pursuant to the Corporation’s 2005 Stock Option Plan or
such other equity incentive plan approved by the Corporation’s stockholders,
provided, in
either case, such issuances are approved by the Corporation’s Board of
Directors, including approval of at least 50% of the Corporation’s independent
directors and all three Investor Directors; (ii) shares of Common Stock or
Common Stock Equivalents issued as part of the purchase consideration in mergers
or acquisitions of businesses or assets, provided, such
issuances are approved by the Corporation’s Board of Directors, including
approval of all three Investor Directors; (iii) shares of Common Stock issuable
upon the exercise or conversion of Common Stock Equivalents outstanding as of
the Original Issuance Date; (iv) Common Stock issued to the Corporation’s
stockholders upon any stock split, stock dividend or similar event with respect
to the Common Stock; (v) up to 500,000 shares of Common Stock or Common Stock
Equivalents issued to banks, equipment lessors or other financial institutions,
or to real property lessors, pursuant to a debt financing, equipment leasing or
real property leasing transaction approved by the Board of Directors, provided, such
issuances are approved by the Corporation’s Board of Directors, including
approval of all three Investor Directors; (vi) shares of Common Stock or Common
Stock Equivalents issued as a dividend or distribution on Series A Preferred
Stock; or (vii) shares of Common Stock actually issued upon the
exercise, conversion or exchange of Common Stock Equivalents, in each case
provided such issuance is pursuant to the terms of such Common Stock Equivalents
and that an adjustment to the Conversion Price was either made or not required
to be made in accordance with Subsection 7.1 hereof.
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“Liquidation Event”
shall mean (i) the voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, (ii) the voluntary or involuntary commencement of any
bankruptcy or insolvency proceeding under any bankruptcy, insolvency or similar
law, by or against the Corporation, (iii) the appointment of a receiver or
liquidator to manage or liquidate all or substantially all of the Corporation’s
assets or (iv) the execution of an assignment for the benefit of
creditors.
“Option” shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
Common Stock or Convertible Securities.
“Original Issuance
Date” shall mean the date on which the first share of Series A
Preferred Stock was issued.
“Original Issue Price”
shall means $1.00 per each share of the Series A Preferred Stock.
“Person” shall mean
any individual, partnership, limited liability Corporation, corporation,
business trust, trust, unincorporated association, joint venture or other entity
of whatever nature.
“Preferred
Distribution” shall have the meaning specified in Subsection
3.1.
“Preferred Stock”
shall mean the Corporation’s preferred stock, par value $0.0001 per
share.
“Purchase Agreement”
shall mean that certain Securities Purchase and Registration Rights Agreement,
dated September 3, 2010, by and among the Corporation, the Co-Lead Investors,
and the purchasers listed on Schedule 1 attached thereto.
“Recapitalization
Event” shall mean any stock dividend, stock split, combination of shares,
reorganization, recapitalization, reclassification or other similar
event.
“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Series A Certificate of
Designation” shall mean this Certificate of Designation, Preferences and
Rights of Series A Convertible Preferred Stock, as the same may be amended from
time to time.
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“Series A Holders”
shall have the meaning specified in Section 2.
9.2. Construction. Whenever
the context requires, the gender of any word used in this Series A Certificate
of Designation includes the masculine, feminine or neuter, and the number of any
word includes the singular or plural. Unless the context otherwise
requires, all references to sections refer to sections of this Series A
Certificate of Designation, and all references to schedules are to schedules
attached hereto, each of which is made a part hereof for all
purposes.
9.3. Headings. The
headings and subheadings in this Series A Certificate of Designation are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this Series
A Certificate of Designation or any provision hereof.
Remainder
of page left intentionally blank.
Signature
page follows.
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IN WITNESS WHEREOF, Arno Therapeutics,
Inc. has caused this certificate to be signed on its behalf by David M. Tanen,
its Chief Executive Officer, this 3rd day of September, 2010.
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ARNO
THERAPEUTICS, INC.
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By:
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/s/ David M. Tanen
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Name:
David M. Tanen
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Title:
Chief Executive
Officer
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