tenx_ex41






Exhibit 4.1










 



TENAX THERAPEUTICS, INC.


 



CERTIFICATE OF DESIGNATION OF PREFERENCES,



RIGHTS AND LIMITATIONS



OF



SERIES B CONVERTIBLE PREFERRED STOCK


 


PURSUANT
TO SECTION 151 OF THE


DELAWARE
GENERAL CORPORATION LAW


 


        The
undersigned, Michael B. Jebsen and Nancy Hecox, do hereby certify
that:


 


                1.
They are the President and Secretary, respectively, of Tenax
Therapeutics, Inc., a Delaware corporation (the “Corporation”).


 


                2.
The Corporation is authorized to issue 10,000,000 shares of
preferred stock.


 


                3.
The following resolutions were duly adopted by the board of
directors of the Corporation (the “Board of
Directors”):


 


        WHEREAS,
the certificate of incorporation of the Corporation provides for a
class of its authorized stock known as preferred stock, consisting
of 10,000,000 shares, $0.0001 par value per share, issuable from
time to time in one or more series;


 


        WHEREAS,
the Board of Directors is authorized to fix the dividend rights,
dividend rate, voting rights, conversion rights, rights and terms
of redemption and liquidation preferences of any wholly unissued
series of preferred stock and the number of shares constituting any
series and the designation thereof, of any of them;
and


 


        WHEREAS,
it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the
preferred stock, which shall consist of, except as otherwise set
forth in the Merger Agreement, up to 10,232 shares of the preferred
stock which the Corporation has the authority to issue, as
follows:


 


        NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or
exchange of other securities, rights or property and does hereby
fix and determine the rights, preferences, restrictions and other
matters relating to such series of preferred stock as
follows:


 




 








 






 



TERMS OF PREFERRED STOCK


 


Section 1. Definitions. For the purposes
hereof, the following terms shall have the following
meanings:


 


“Base Conversion Shares”
means initially 881.5 shares of Common Stock issuable upon
conversion of the shares of Preferred Stock in accordance with the
terms hereof, and delivered in accordance with Section 6(b)(i), and
subject to adjustment as provided herein.


 


“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.


 


“Buyer Stockholder
Approval” shall have the meaning set forth in the
Merger Agreement.


 


“Common Stock” means the
Corporation’s common stock, par value $0.0001 per share, and
stock of any other class of securities into which such securities
may hereafter be reclassified or changed.


 


“Common Stock Equivalents”
means any securities of the Corporation or its subsidiaries which
would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.


 


“Conversion Date” shall
have the meaning set forth in Section 6(a).


 


“Conversion Shares” shall
mean, collectively, the Base Conversion Shares and Holdback
Conversion Shares.


 


“Deemed Common Stock
Value” shall mean an amount initially equal to $1.78,
representing the closing price of the Corporation’s Common
Stock on January 14, 2021, which amount shall be subject
to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect
to the Common Stock.


 


“Holdback Conversion
Shares” means initially 118.5 shares of Common Stock
issuable upon conversion of the shares of Preferred Stock in
accordance with the terms hereof, and delivered in accordance with
Section 6(b)(ii), and subject to adjustment as provided
herein.


 




 

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“Holdback Release Date”
means the date that is twenty-four (24) months after the Original
Issue Date.


 


“Holder” shall have the
meaning given such term in Section 2.


 


“Joint Confirmation” means
a written certificate, executed and delivered by each of the
Corporation and the PHPM Representative, confirming that certain
events have occurred and/or actions should occur
hereunder.


 


“Liquidation” shall have
the meaning set forth in Section 5.


 


“Merger Agreement” means
the Agreement and Plan of Merger, dated January 15, 2021, by and
among the Corporation, Life Newco II, Inc., PHPrecisionMed Inc.,
and the Stockholder Representative, as amended, modified or
supplemented from time to time in accordance with its
terms.


 


“Original Issue Date”
means the date of the first issuance of any shares of the Preferred
Stock regardless of the number of transfers of any particular
shares of Preferred Stock and regardless of the number of
certificates which may be issued to evidence such Preferred
Stock.


 


“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.


 


“Preferred Stock” shall
have the meaning set forth in Section 2.


 


“Purchase Rights” shall
have the meaning set forth in Section 8(b).


 


“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


 


“Senior Preference” means
the stated value of all outstanding Senior Securities, plus any
other fees, liquidated damages or dividends then due and owing
thereon.


 


“Senior Securities” means
shares of the Corporation’s Series A Convertible Preferred
Stock.


 


“Stockholder
Representative” shall have the meaning ascribed
thereto in the Merger Agreement.


 


Section 2. Designation, Amount and Par
Value. The series of preferred stock shall be designated as
its Series B Convertible Preferred Stock (the “Preferred Stock”) and the
number of shares so designated shall be up to 10,232 (which shall
not be subject to increase without the written consent of all of
the holders of the Preferred Stock (each, a “Holder” and collectively,
the “Holders”)). Each share of
Preferred Stock shall have a par value of $0.0001 per
share.


 






 

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Section 3. Dividends. Holders shall be
entitled to receive, and the Corporation shall pay, dividends on
shares of Preferred Stock equal (on an
as-if-converted-to-Common-Stock basis) to and in the same form as
dividends (other than dividends in the form of Common Stock)
actually paid on shares of the Common Stock when, as and if such
dividends (other than dividends in the form of Common Stock) are
paid on shares of the Common Stock. Other than as set forth in the
previous sentence, no other dividends shall be paid on shares of
Preferred Stock; and the Corporation shall pay no dividends (other
than dividends in the form of Common Stock) on shares of the Common
Stock unless it simultaneously complies with the previous
sentence.


 


Section 4. Voting Rights. On any matter presented to the stockholders of the
Corporation for their action or consideration (other than the Buyer
Stockholder Approval (as defined in the Merger Agreement)) at any
meeting of stockholders of the Corporation (or by written consent
of stockholders in lieu of meeting), each holder of outstanding
shares of Preferred Stock shall be entitled to cast a number of
votes determined in accordance with the following
formula:


 



V = PH x ( ( MV – CV ) ÷ PI )


 


Where:


 


“V” shall mean the number of votes a Holder of Preferred
Stock is entitled to cast on a matter presented to the stockholders
of the Corporation for their action or consideration at any meeting
of stockholders of the Corporation (or by written consent of
stockholders in lieu of meeting); provided,
however,
that V shall be deemed to equal zero (0) with respect to the Buyer
Stockholder Approval;


 


“PH”
shall mean the number of shares of Preferred Stock held by such
Holder as of the record date for determining stockholders entitled
to vote on such matter;


 


“MV”
shall mean 19.99% of the number of shares of Common Stock
outstanding as of immediately prior to Closing (as defined in the
Merger Agreement) (as adjusted for any subsequently effective stock
split, reverse stock split, or share dividend);


 


“CV”
shall mean the aggregate number of shares of TENX Common Stock
included in the Purchase Price pursuant to and as defined in the
Merger Agreement (as adjusted for any subsequently effective stock
split, reverse stock split, or share dividend); and


 


“PI”
shall mean the aggregate number of shares of Preferred Stock issued
pursuant to the Merger Agreement.


 




 

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Fractional
votes shall not be permitted and any fractional voting rights
available after application of the foregoing formula shall be
rounded down to the nearest whole number. Except as otherwise
provided herein or as otherwise required by law, holders of
Preferred Stock shall, after application of the foregoing formula,
vote together with the holders of Common Stock as a single class
and shall be entitled, notwithstanding any provision hereof, to
notice of any stockholders’ meeting in accordance with the
Bylaws of the Corporation. In addition, as long as any shares of
Preferred Stock are outstanding, the Corporation shall not, without
the affirmative vote of the Holders of a majority of the then
outstanding shares of the Preferred Stock, (a) alter or change
adversely the powers, preferences or rights given to the Preferred
Stock or alter or amend this Certificate of Designation, (b) amend
its certificate of incorporation or other charter documents in any
manner that adversely affects any rights of the Holders, (c)
increase the number of authorized shares of Preferred Stock, or (d)
enter into any agreement with respect to any of the
foregoing.


 


Section 5. Liquidation. In the event of
any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, after the payment in full of the Senior
Preference, the holders of shares of Preferred Stock then
outstanding shall share, together with the holders of Common Stock,
in any distribution of the remaining funds and assets available for
distribution to the stockholders to the Corporation, pro rata based
on the number of shares of Common Stock such holders would have
received had the conversion of such Preferred Stock occurred
immediately prior to such liquidation, dissolution or winding
up.


 


Section 6.


 

a) Automatic Conversion. Each
share of Preferred Stock shall be automatically converted on the
business day immediately following the date the Buyer Stockholder
Approval is obtained (such date, the “Conversion Date”) into
the Base Conversion Shares and the Holdback Conversion Shares per
share of Preferred Stock. The Corporation shall provide to each
Holder prompt written notice of the occurrence of the Conversion
Date, whereupon such Holder shall deliver the certificate
representing such shares of Preferred Stock promptly following
receipt of such notice. Shares of Preferred Stock converted into
Common Stock in accordance with the terms hereof shall be canceled
and shall not be reissued.


 




b)


Mechanics of Conversion






 

i. Delivery of Base Conversion Shares
Upon Conversion. Not later than ten (10) Business Days after
the Conversion Date, the Corporation shall deliver, or cause to be
delivered, to such Holder a certificate or certificates
representing the number of Base Conversion Shares being acquired
upon the conversion of the Preferred Stock, which Base Conversion
Shares shall contain or be subject to, as applicable, the
restrictive legends, and transfer restrictions described in the
Merger Agreement.


 




 

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ii. Delivery of Holdback Conversion Shares
Upon Conversion. Not later than ten (10) Business Days after
the later of (i) the Conversion Date and (ii) the Holdback Release
Date, the Corporation shall deliver, or cause to be delivered, to
such Holder a certificate or certificates representing the number
of Holdback Conversion Shares (determined as of the Holdback
Release Date) being acquired upon the conversion of the Preferred
Stock, which Holdback Conversion Shares shall contain or be subject
to, as applicable, the restrictive legends, and transfer
restrictions set forth in the Merger Agreement.


 

iii. Reservation
of Shares Issuable Upon Conversion. The Corporation
covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock for the sole
purpose of issuance upon conversion of the Preferred Stock as
herein provided, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holder (and
the other holders of the Preferred Stock), not less than such
aggregate number of shares of the Common Stock as shall be issuable
(taking into account the adjustments of Section 7 and Section 8)
upon the conversion of the then outstanding shares of Preferred
Stock hereunder. The Corporation covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and
nonassessable.


 

iv. Fractional Shares. No
fractional shares or scrip representing fractional shares shall be
issued upon the conversion of the Preferred Stock, and instead the
number of shares issued shall be rounded down to the next whole
share.


 

v. Transfer Taxes and Expenses.
The issuance of Conversion Shares on conversion of this Preferred
Stock shall be made without charge to any Holder for any
documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such Conversion Shares, provided that
the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and
delivery of any such Conversion Shares upon conversion in a name
other than that of the Holders of such shares of Preferred Stock
and the Corporation shall not be required to issue or deliver such
Conversion Shares 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
Corporation that such tax has been paid.


 


Section
7.                                Adjustment
to Holdback Conversion Shares.


 

a) Post-Closing Adjustment. Upon
the completion of a Joint Confirmation stating that there has been
a final determination of the Post-Closing Adjustment, if any, to be
paid pursuant to Section 2.11(d) of the Merger Agreement, the
then-current number of Holdback Conversion Shares shall be adjusted
in accordance with the formula set forth in Section 7(c) by the
amount of the Post-Closing Adjustment.


 




 

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b) Indemnification-Related Claims.
At any time and from time to time on or prior to the Holdback
Release Date, if any Loss (as defined in the Merger Agreement) is
payable by the Sellers pursuant to and in accordance with the
Merger Agreement and a Joint Confirmation is delivered with respect
thereto and as provided therein, the then-current number of
Holdback Conversion Shares shall be automatically reduced pursuant
to the formula in Section 7(c) by the amount of the Loss set forth
in such Joint Confirmation.


 

c) Adjustment Formula. Any
adjustment to be made to the then-current number of Holdback
Conversion Shares pursuant to this Section 7 shall be made in
accordance with the following formula:


 


H1
= H0 - ( A ÷ ( B x C )
)


 


Where:


 


“H1”
means the number of Holdback Conversion Shares immediately after
giving effect to the applicable adjustment under this Section 7;
provided,
however, that if
the application of the foregoing formula results in H1 being less
than zero (0), H1 shall be deemed to equal zero (0);


 


“H0”
means the number of Holdback Conversion Shares immediately prior to
giving effect to the applicable adjustment under this Section
7;


 


“A”
means the U.S. Dollar amount of the adjustment to be made pursuant
to this Section 7 which, for the avoidance of doubt, may not be a
negative number;


 


“B”
means the Deemed Common Stock Value;


 


“C”
means the number of outstanding shares of Preferred Stock plus any
shares of Preferred Stock previously converted pursuant to Section
6;


 

d) Calculations. All calculations
under this Section 7 shall be made to the nearest 1/100th of a
share.


 


Section 8. Certain Other
Adjustments.


 

a) Stock Dividends and Stock
Splits. If the Corporation, at any time while this Preferred
Stock is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions payable in shares of Common Stock
on shares of Common Stock or any other Common Stock Equivalents
(which shall not include any shares of Common Stock issued as
dividends on or upon the conversion of any Senior Securities), (ii)
subdivides outstanding shares of Common Stock into a larger number
of shares, (iii) combines (including by way of a reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues, in the event of a reclassification of
shares of the Common Stock, any shares of capital stock of the
Corporation, then the number of Conversion Shares shall be
multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding immediately after such event,
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately before such event. Any
adjustment made pursuant to this Section 8(a) shall become
effective (1) with respect to a dividend or distribution,
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and
(2) with respect to a subdivision, combination or
re-classification, immediately after the effective date of such
event.


 




 

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b) Subsequent Rights Offerings.
In addition to any adjustments
pursuant to Section 7(a) above, if at any time the Corporation
grants, issues or sells any Common Stock Equivalents or rights to
purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder
will, upon the conversion of such Holder’s shares of
Preferred Stock, be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the
Holder would have acquired had such conversion occurred immediately
before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase
Rights.


 

c) Adjustment for Merger or
Consolidation. If there shall occur any consolidation or
merger involving the Corporation in which the Common Stock (but not
a series of the Corporation’s preferred stock) is converted
into or exchanged for securities, cash, or other property (other
than a transaction covered by Sections 8(a) or 8(b)), then,
following any such consolidation or merger, provision shall be made
that each share of Preferred Stock shall thereafter be convertible,
in lieu of the Common Stock into which it was convertible prior to
such event, into the kind and amount of securities, cash or other
property which a holder of the number of shares of Common Stock of
the Corporation issuable upon conversion of one share of Preferred
Stock immediately prior to such consolidation or merger would have
been entitled to receive pursuant to such transaction; and, in such
case, appropriate adjustment (as determined in good faith by the
Board of Directors) shall be made in the application of the
provisions in this Section 8 with respect to the rights and
interests thereafter of the holders of the Preferred Stock, to the
end that the provisions set forth in this Section 8 shall
thereafter be applicable, as nearly as reasonably may be, in
relation to any securities or other property thereafter deliverable
upon the conversion of the Preferred Stock.


 

d) Adjustments After Conversion But Prior
to Full Delivery. To the extent that a transaction covered
by Section 8(a), 8(b) and/or 8(c) shall occur after the delivery of
the Base Conversion Shares but prior to the delivery of the
Holdback Conversion Shares, appropriate adjustment (as determined
in good faith by the Board of Directors) shall be made in the
application of the provisions in this Section 8 with respect to the
rights and interests thereafter of the holders of the Preferred
Stock, to the end that the provisions set forth in this Section 8
shall thereafter be applicable, as nearly as reasonably may be, in
relation only to the Holdback Conversion Shares.


 

e) Calculations. All calculations
under this Section 8 shall be made to the nearest 1/100th of a
share. For purposes of this Section 8, the number of shares of
Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding
any treasury shares of the Corporation) issued and
outstanding.


 




 

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Section 9.  Miscellaneous.


 

a) Notices. Any and all notices or
other communications or deliveries to be provided by the Holders
hereunder shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier
service, addressed to the Corporation, at the address set forth
above Attention: Michael B. Jebsen, facsimile
number (919) 855-2133, or such other facsimile number or address as
the Corporation may specify for such purposes by notice to the
Holders delivered in accordance with this Section 9. Any and all
notices or other communications or deliveries to be provided by the
Corporation hereunder shall be in writing and delivered personally,
by facsimile, or sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile number or address
of such Holder appearing on the books of the Corporation, or if no
such facsimile number or address appears on the books of the
Corporation, at the principal place of business of such Holder, as
set forth in the Merger Agreement.


 

b) Lost or Mutilated Preferred Stock
Certificate. If a Holder’s Preferred Stock certificate
shall be mutilated, lost, stolen or destroyed, the Corporation
shall execute and deliver, in exchange and substitution for and
upon cancellation of a mutilated certificate, or in lieu of or in
substitution for a lost, stolen or destroyed certificate, a new
certificate for the shares of Preferred Stock so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the
ownership hereof reasonably satisfactory to the
Corporation.


 

c) Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Certificate of Designation shall be governed
by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of
conflict of laws thereof. Each of the Corporation and each Holder
irrevocably submits to the exclusive jurisdiction of (a) the Court
of Chancery of the State of Delaware, and (b) the United States
District Court sitting in New Castle County in the State of
Delaware, for the purposes of any action arising out of this
Certificate of Designation or any transaction contemplated hereby.
Each party agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions
contemplated hereby shall be commenced either in the Court of
Chancery of the State of Delaware or if such Action may not be
brought in such court for jurisdictional reasons, in the United
States District Court sitting in New Castle County in the State of
Delaware. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Certificate of Designation and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by
applicable law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to
this Certificate of Designation or the transactions contemplated
hereby. If any party shall commence an action or proceeding to
enforce any provisions of this Certificate of Designation, then the
prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys’ fees and other costs
and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.


 




 

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d) Waiver. Any of the rights,
powers, privileges and other terms of the Preferred Stock set forth
in this Certificate of Designation may be waived prospectively or
retrospectively on behalf of all holders of Preferred Stock by the
affirmative written consent or vote of the Holders of a majority of
the then outstanding shares of the Preferred Stock.


 

e) Severability. If any provision
of this Certificate of Designation is invalid, illegal or
unenforceable, the balance of this Certificate of Designation shall
remain in effect, and if any provision is inapplicable to any
Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any
interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.


 

f) Next Business Day. Whenever any
payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next
succeeding Business Day.


 

g) Headings. The headings
contained herein are for convenience only, do not constitute a part
of this Certificate of Designation and shall not be deemed to limit
or affect any of the provisions hereof.


 

h) Status of Converted or Redeemed
Preferred Stock. Shares of Preferred Stock may only be
issued pursuant to the Merger Agreement. If any shares of Preferred
Stock shall be converted, redeemed or reacquired by the
Corporation, such shares shall resume the status of authorized but
unissued shares of preferred stock and shall no longer be
designated as Series B Convertible Preferred Stock.


 


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RESOLVED,
FURTHER, that the Chairman, the president or any vice-president,
and the secretary or any assistant secretary, of the Corporation be
and they hereby are authorized and directed to prepare and file
this Certificate of Designation of Preferences, Rights and
Limitations in accordance with the foregoing resolution and the
provisions of Delaware law.


 


        IN
WITNESS WHEREOF, the undersigned have executed this Certificate
this 15th day of January, 2021.


 


 


	

     /s/
Michael Jebsen______________


     Name:
Michael B. Jebsen


     Title:
President


 

	

      /s/
Nancy Hecox__________________


     Name:
Nancy Hecox


     Title:
Corporate Secretary


 







 


 


 


 


 


 


 


 


 


 




 

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