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EXHIBIT 4.12
NEOTHERAPEUTICS, INC.
Representatives' Warrant
No. __ __________ Shares of Common Stock
THIS CERTIFIES that, for receipt in hand of $__________ and other value
received, ____________________, ____________________, ____________________ (the
"Holder"), is entitled to subscribe for and purchase from NeoTherapeutics, Inc.,
a Delaware corporation (the "Company"), upon the terms and conditions set forth
herein, at any time or from time to time from and after _______________, 2000,
and before 5:00 p.m. Eastern Standard Time on ______________, 2004 (the
"Exercise Period"), __________ shares of common stock, $.001 par value per share
(the "Common Shares"), of the Company (as adjusted, the "Underlying Shares") at
an aggregate exercise price of $_____ per Common Share, subject to adjustment as
provided herein (the "Exercise Price"). The Underlying Shares are sometimes
collectively referred to herein as the "Underlying Securities."
This Representatives' Warrant is the warrant or one of the warrants
(collectively, including any warrants issued upon the exercise or transfer of
any such warrants in whole or in part, the "Representatives' Warrants") issued
pursuant to the Underwriting Agreement, dated July __, 1999 (the "Underwriting
Agreement"), among the Company, Joseph Charles & Assoc., Inc. and Millennium
Financial Group, Inc. as Representatives of the several Underwriters. As used
herein the term "this Representatives' Warrant" shall mean and include this
Representatives' Warrant and any Representatives' Warrant or Representatives'
Warrants hereafter issued as a consequence of the exercise or transfer of this
Representatives' Warrant in whole or in part. This Representatives' Warrant may
not be sold, transferred, assigned or hypothecated until _______________, 2000,
except that it may be transferred, in whole or in part, to (i) one or more
officers or partners of the Holder (or the officers or partners of any such
partner); (ii) any other underwriting firm or member of the selling group (or
the officers or partners of any such firm) which participated in the public
offering of __________ Common Shares of the Company pursuant to a Registration
Statement (Registration File Number 333-79935) on Form S-1 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"); (iii) a
successor to the Holder, or the officers or partners of such successor; (iv) a
purchaser of substantially all of the assets of the Holder; or (v) by operation
of law; and the term the "Holder" as used herein shall include any transferee to
whom this Representatives' Warrant has been transferred in accordance with the
above.
1. This Representatives' Warrant may be exercised during the Exercise
Period, as to the whole or any lesser number of whole Underlying Shares, by the
surrender of this Representatives' Warrant (with the election at the end hereof
duly executed) to the Company at its office at NeoTherapeutics, Inc., 157
Technology Drive, Irvine, California 92618, or at such other place as is
designated in writing by the Company, together with a certified or bank
cashier's
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check payable to the order of the Company in an amount equal to the Exercise
Price (as defined) multiplied by the number of Underlying Shares for which this
Representatives' Warrant is being exercised.
2. Upon each exercise of the Holder's rights to purchase Common Shares,
the Holder shall be deemed to be the holder of record of the Underlying Shares
issuable upon such exercise, notwithstanding that the transfer books of the
Company shall then be closed or certificates representing such Underlying Shares
shall not then have been actually delivered to the Holder. Promptly after each
such exercise of this Representatives' Warrant, the Company shall issue and
deliver, or shall cause the transfer agent for the Common Shares to issue and
deliver, to the Holder a certificate or certificates for the Underlying Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. The Company has reserved and authorized a number of Underlying Shares
sufficient for issuance and delivery upon exercise of the Representatives'
Warrants. In the event that the Company fails promptly to issue and deliver or
cause the issuance and delivery of certificates for Common Shares in accordance
with the second sentence of this Section, the Representative is hereby
irrevocably designated the Company's agent to so instruct the transfer agent for
the Common Shares to issue and deliver such certificates and to take any other
actions either of them deem necessary or appropriate in connection with such
issuance and delivery. If this Representatives' Warrant should be exercised in
part only, the Company shall, upon surrender of this Representatives' Warrant
for cancellation, execute and deliver a new Representatives' Warrant evidencing
the right of the Holder to purchase the balance of the Underlying Shares (or
portions thereof) subject to purchase hereunder.
3. Any Representatives' Warrants issued upon the transfer or exercise in
part of this Representatives' Warrant shall be numbered and shall be registered
in a Representatives' Warrant Register as they are issued. The Company shall be
entitled to treat the registered holder of any Representatives' Warrant on the
Representatives' Warrant Register as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Representatives' Warrant on the part of any other person, and shall not
be liable for any registration or transfer of Representatives' Warrants which
are registered or to be registered in the name of a fiduciary or the nominee of
a fiduciary unless made with the actual knowledge that a fiduciary or the
nominee is committing a breach of trust in requesting such registration or
transfer, or with the knowledge of such facts that its participation therein
amounts to bad faith. This Representatives' Warrant shall be transferable only
on the books of the Company upon delivery thereof duly endorsed by the Holder or
by his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment, or authority to transfer. In all cases of
transfer by an attorney, executor, administrator, guardian, or other legal
representative, duly authenticated evidence of his or its authority shall be
produced. Upon any registration of transfer, the Company shall deliver a new
Representatives' Warrant or Representatives' Warrants to the person entitled
thereto. This Representatives' Warrant may be exchanged, at the option of the
Holder thereof, for another Representatives' Warrant, or other Representatives'
Warrant of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Underlying Shares (or portions
thereof), upon
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surrender to the Company or its duly authorized agent. Notwithstanding the
foregoing, the Company shall have no obligation to cause Representatives'
Warrants to be transferred on its books to any person if, in the opinion of
counsel to the Company, such transfer does not comply with the provisions of the
Act, and the rules and regulations thereunder.
4. The Company shall at all times reserve and keep available for
issuance upon the exercise of the Representatives' Warrants a number of its
authorized and unissued Common Shares that will be sufficient to permit the
exercise in full of the Representatives' Warrants. The Company covenants that
all Common Shares issuable upon exercise of this Representatives' Warrant, upon
receipt by the Company of the full payment therefor, shall be validly issued,
fully paid, nonassessable, and free of preemptive rights.
5. (a) In case the Company shall at any time after the date hereof (i)
declare a dividend on the outstanding Common Shares payable in shares of its
capital stock, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Shares (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price, and the number of Underlying Shares issuable upon exercise of the
Representatives' Warrants in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination, or
reclassification, shall be proportionately adjusted so that the holders of the
Representatives' Warrants after such time shall be entitled to receive the
aggregate number and kind of shares which, if such Representatives' Warrants had
been exercised immediately prior to such time, such holders would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) All calculations under this Section 5 shall be made to the
nearest cent or to the nearest one-thousandth of a share, as the case may be.
(c) In any case in which this Section 5 shall require that an
adjustment in the number of Underlying Shares be made effective as of a record
date for a specified event the Company may elect to defer, until the occurrence
of such event, issuing to the Holder, if the Holder exercised this
Representatives' Warrant after such record date, the Common Shares, if any,
issuable upon such exercise over and above the number of Underlying Shares, if
any, issuable upon such exercise on the basis of the number of Underlying Shares
in effect prior to such adjustment; provided, however, that the Company shall
deliver to the Holder a due bill or other appropriate instrument evidencing the
Holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(d) Whenever there shall be an adjustment as provided in this Section
5, the Company shall promptly cause written notice thereof to be sent by
registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Representatives' Warrant Register, which notice shall be
accompanied by an officer's certificate setting forth the number of
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Underlying Shares issuable pursuant to such Representatives' Warrants and the
Exercise Price, after such adjustment and setting forth a brief statement of the
facts requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
(e) The Company shall not be required to issue fractions of Common
Shares or other capital stock of the Company upon the exercise of this
Representatives' Warrant. If any fraction of a share would be issuable on the
exercise of this Representatives' Warrant (or specified portions thereof), the
Company shall purchase such fraction for an amount in cash equal to the same
fraction of the Current Market Price (as hereinafter defined) of such Common
Share on the date of exercise of this Representatives' Warrant.
(f) The "Current Market Price" per Common Share on any date shall be
defined as the average of the daily closing prices for the 30 consecutive
trading days immediately preceding the date in question. The closing price for
each day shall be the last reported sales price regular way or, in case no such
reported sale takes place on such day, the closing bid price regular way, in
either case on the principal national securities exchange (including, for
purposes hereof, The Nasdaq National Market system or The Nasdaq SmallCap
Market) on which the Common Shares are listed or admitted to trading or, if the
Common Shares are not listed or admitted to trading on any national securities
exchange, the highest reported bid price for the Common Shares as furnished by
the National Association of Securities Dealers, Inc. through The Nasdaq Stock
Market, Inc. or a similar organization if The Nasdaq Stock Market, Inc. is no
longer reporting such information. If on any such date the Common Shares are not
listed or admitted to trading on any national securities exchange and are not
quoted by The Nasdaq Stock Market, Inc. or any similar organization, the fair
value of the Common Shares on such date, as determined in good faith by the
Board of Directors of the Company, whose determination shall be conclusive
absent manifest error, shall be used.
6. (a) In case of any consolidation with or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may be, shall (i)
execute with the Holder an agreement providing that the Holder shall have the
right thereafter to receive upon exercise of this Representatives' Warrant
solely the kind and amount of Common Shares and other securities, property,
cash, or any combination thereof receivable upon such consolidation, merger,
sale, lease, or conveyance by a holder of the number of Common Shares for which
this Representatives' Warrant might have been exercised immediately prior to
such consolidation, merger, sale, lease, or conveyance and (ii) make effective
provision in its certificate or articles of incorporation or otherwise, if
necessary, to effect such agreement. Such agreement shall provide for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 5 hereof.
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(b) In case of any reclassification or change of the Common Shares
issuable upon exercise of this Representatives' Warrant (other than a change in
par value or from no par value to a specified par value, or as a result of a
subdivision or combination, but including any change in the shares into two or
more classes or series of shares), or in case of any consolidation or merger of
another corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the Common Shares
(other than a change in par value, or from no par value to a specified par
value, or as a result of a subdivision or combination, but including any change
in the shares into two or more classes or series of shares), the Holder shall
have the right thereafter to receive upon exercise of this Representatives'
Warrant solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the number of
Common Shares for which this Representatives' Warrant might have been exercised
immediately prior to such reclassification, change, consolidation, or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Section 5 hereof.
(c) The above provisions of this Section 6 shall similarly apply to
successive reclassifications and changes of Common Shares and to successive
consolidations, mergers, sales, leases, or conveyances.
7. In case at any time the Company shall propose:
(a) to pay any dividend or make any distribution on Common Shares in
Common Shares or make any other distribution (other than regularly scheduled
cash dividends which are not in a greater amount per share than the most recent
such cash dividend) to all holders of Common Shares; or
(b) to issue any rights, warrants, or other securities to all holders
of Common Shares entitling them to purchase any additional Common Shares or any
other rights, warrants, or other securities; or
(c) to effect any reclassification or change of outstanding Common
Shares, or any consolidation, merger, sale, lease, or conveyance of property,
described in Section 6(b); or
(d) to effect any liquidation, dissolution, or winding up of the
Company;
then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Representatives' Warrant Register,
mailed at least 15 days prior to (i) the date as of which the holders of record
of Common Shares to be entitled to receive any such dividend, distribution,
rights, warrants, or other securities are to be determined, or (ii) the date on
which any such reclassification, change of outstanding Common Shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding up is expected to become effective,
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and the date as of which it is expected that holders of record of Common Shares
shall be entitled to exchange their shares for securities or other property, if
any, deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding up. Any such notice shall be deemed delivered on the
date of actual delivery as shown by the certification receipt or at the
expiration of the tenth (10th) business day after the date of mailing, whichever
is earlier in time.
8. The issuance of any shares or other securities upon the exercise of
this Representatives' Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
9. (a) If, at any time during the four-year period commencing one year
after the effective date of the Registration Statement (the "Effective Date"),
the Company shall file a registration statement (other than on Form S-4, Form
S-8, or any successor form) with the Securities and Exchange Commission (the
"Commission") while this Representatives' Warrant or any of the Representatives'
Securities (as hereinafter defined) are outstanding, the Company shall give all
the then holders of the Representatives' Warrants or any Representatives'
Securities (collectively, the "Eligible Holders") at least 45 days' prior
written notice of the filing of such registration statement. If requested by any
Eligible Holder in writing within 20 days after receipt of any such notice, the
Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Eligible Holders and the underwriting
discounts, if any, payable in respect of the Representatives' Securities sold by
any Eligible Holder), register or qualify all or, at each Eligible Holder's
option, any portion of the Representatives' Securities of any Eligible Holder
who shall have made such request, concurrently with the registration of such
other securities, all to the extent requisite to permit the public offering and
sale of the Representatives' Securities through the facilities of all
appropriate securities exchanges and the over-the-counter market, and will use
its best efforts through its officers, directors, auditors, and counsel to cause
such registration statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if the managing underwriter of any such offering
shall advise the Company in writing that, in its opinion, the distribution of
all or a portion of the Representatives' Securities requested to be included in
the registration concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such securities by
the Company for its own account, then any Eligible Holder who shall have
requested registration of his or its Representatives' Securities shall delay the
offering and sale of such Representatives' Securities (or the portions thereof
so designated by such managing underwriter) for such period, not to exceed 90
days (the "Delay Period"), as the managing underwriter shall request, provided
that no such delay shall be required as to any Representatives' Securities if
any securities of the Company are included in such registration statement and
eligible for sale during the Delay Period
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for the account of any person other than the Company and any Eligible Holder
unless the securities included in such registration statement and eligible for
sale during the Delay Period for such other person shall have been reduced pro
rata to the reduction of the Representatives' Securities which were requested to
be included and eligible for sale during the Delay Period in such registration.
As used herein, "Representatives' Securities" shall mean the Underlying
Securities (including any shares of capital stock or other securities issued or
issuable pursuant to Sections 5, 6 and 7 hereof) which have not been previously
sold pursuant to a registration statement or Rule 144 promulgated under the Act.
(b) If, at any time during the four-year period commencing one year
after the Effective Date, the Company shall receive a written request (a
"Request"), from Eligible Holders who in the aggregate own (or upon exercise of
all Representatives' Warrants then outstanding would own) a majority of the
total number of Common Shares then included (or which upon such exercises would
be included) in the Representatives' Securities (the "Majority Holders"), to
register the sale of all or part of such Representatives' Securities, the
Company shall, as promptly as practicable, prepare and file with the Commission
a registration statement sufficient to permit the public offering and sale of
the Representatives' Securities through the facilities of all appropriate
securities exchanges and the over-the-counter market, and will use its best
efforts through its officers, directors, auditors, and counsel to cause such
registration statement to become effective as promptly as practicable; provided;
however, that the Company shall only be obligated to register Representatives'
Securities on one occasion pursuant to this Section 9(b). All expenses incurred
in connection with such registration (other than the fees and disbursements of
counsel for the Eligible Holders and underwriting discounts, if any, payable in
respect of the Representatives' Securities sold by the Eligible Holders) shall
be borne by the Company. Within ten (10) business days after receiving any
request contemplated by this Section 9(b), the Company shall give written notice
to all the other Eligible Holders, advising each of them that the Company is
proceeding with such registration and offering to include therein all or any
portion of any such other Eligible Holder's Representatives' Securities,
provided that the Company receives a written request to do so from such Eligible
Holder within 30 days after receipt by him or it of the Company's notice.
Notwithstanding anything contained in this Section 9(b) to the contrary: (i) no
person may make a Request that the Company file, nor shall the Company be
obligated to file, a Registration Statement on any date that is within 90 days
of the effective date of any registration statement filed by the Company and
pursuant to which such person was given full "piggyback" registration rights in
accordance with Section 9(a) hereof including, without limitation, the ability
to include a portion of Representatives' Securities requested to be included
therein; and (ii) the Company may delay the registration of the securities to
which a Request relates if upon receipt of such Request (A) the Company notifies
the person making the Request that it is contemplating filing a Registration
Statement within 90 days of such Request, or (B) the Company notifies the person
making the Request that the Board of Directors of the Company has determined
that a material event has occurred that has not been publicly disclosed and
which if disclosed would have a material adverse effect on the Company; provided
that (x) in the case of clause (ii)(A) of this paragraph, the Company shall, as
soon as practical, upon the first to occur of the abandonment of such
contemplated Registration Statement or the expiration of such 90 day period,
register the securities to which the Request
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relates unless such Request is withdrawn; and (y) in the case of clause (ii)(B)
of this paragraph, the Company may not delay the filing of the Registration
Statement for more than 60 days from the date of the Request unless such Request
is withdrawn.
(c) In the event of a registration pursuant to the provisions of this
Section 9, the Company shall use its best efforts to cause the Representatives'
Securities so registered to be registered or qualified for sale under the
securities or Blue Sky Laws of such jurisdictions as the Holder or such holders
may reasonably request; provided, however, that the Company shall not be
required to qualify to do business in any state by reason of this Section 9(c)
in which it is not otherwise required to qualify to do business.
(d) The Company shall keep effective any registration or
qualification contemplated by this Section 9 and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document, and communication until the earlier of
the conclusion of the period required to permit the Eligible Holders to complete
the offer and sale of the Representatives' Securities covered thereby and 270
days from the effective date of the Registration Statement; provided, however,
that, if the Company is required to keep any such registration or qualification
in effect with respect to securities other than the Representatives' Securities
beyond such period, the Company shall keep such registration or qualification in
effect as it relates to the Representatives' Securities for so long as such
registration or qualification remains or is required to remain in effect in
respect of such other securities.
(e) In the event of a registration pursuant to the provisions of this
Section 9, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other documents, as any Eligible Holder may reasonably request to
facilitate the disposition of the Representatives' Securities included in such
registration.
(f) In the event of a registration pursuant to the provisions of this
Section 9, the Company and each Eligible Holder who includes Representatives'
Securities in such registration shall enter into a cross-indemnity agreement and
a contribution agreement, each in customary form, with each underwriter, if any,
and, if requested, enter into an underwriting agreement containing conventional
representations, warranties, allocation of expenses, and customary closing
conditions, including, but not limited to, opinions of counsel and accountants'
cold comfort letters, with any underwriter who acquires any Representatives'
Securities.
(g) The Company agrees that until all the Representatives' Securities
have been sold under a registration statement or pursuant to Rule 144 under the
Act, it shall keep current in filing all reports, statements and other materials
required to be filed with the Commission to permit holders of the
Representatives' Securities to sell such securities under Rule 144.
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(h) So long as any Representatives' Securities are outstanding, the
Company will not enter into any agreement requiring the registration of any
securities of the Company which is in conflict with the terms of this Section 9.
10.(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Eligible Holder, its officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of the Act or Section 20(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 10, but not be
limited to, attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, relating to the sale of
any of the Representatives' Securities, or (B) in any application or other
document or communication (in this Section 10 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Representatives' Securities under the
securities or Blue Sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, unless
such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company with respect to such Eligible
Holder by or on behalf of such Person expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Representatives' Warrant. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise have,
including liabilities arising under this Representatives' Warrant.
If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "Indemnified Party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Indemnified Party or Parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability other than pursuant to this Section 10) and the
Company shall promptly assume the defense of such action, including the
employment of counsel and payment of expenses. Such Indemnified Party or Parties
shall have the right to employ its or their own
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counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such action or the Company shall not have promptly employed
counsel reasonably satisfactory to such Indemnified Party or Parties to have
charge of the defense of such action or such Indemnified Party or Parties shall
have reasonably concluded that there may be one or more legal defenses available
to it or them or to other Indemnified Parties which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the Indemnified Party or
Parties. Anything in this Section 10 to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which shall not be unreasonably withheld.
The Company shall not, without the prior written consent of each Indemnified
Party that is not released as described in this sentence, settle or compromise
any action, or permit a default or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any Indemnified Party is
a party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each Indemnified Party from all liability
in respect of such action. The Company agrees promptly to notify the Eligible
Holders of the commencement of any litigation or proceedings against the Company
or any of its officers or directors in connection with the sale of any
Representatives' Securities or any preliminary prospectus, prospectus,
registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Representatives' Securities.
(b) The Holder agrees to indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who shall have signed
any registration statement covering Representatives' Securities held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their
respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 10(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information furnished to the Company with respect to the
Holder by or on behalf of the Holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be. If
any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against the Holder pursuant to
this Section 10(b), the Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the Indemnified Parties, by the provisions of Section
10(a).
(c) To provide for just and equitable contribution, if (i) an
Indemnified Party makes a claim for indemnification pursuant to Section 10(a) or
10(b) (subject to the limitations
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thereof) but it is found in a final judicial determination, not subject to
further appeal, that such indemnification may not be enforced in such case, even
though this agreement expressly provides for indemnification in such case, or
(ii) any Indemnified Party or indemnifying party seeks contribution under the
Act, the Exchange Act or otherwise, then the Company (including for this purpose
any contribution made by or on behalf of any director of the Company, any
officer of the Company who signed any such registration statement, any
controlling person of the Company, and its or their respective counsel), as one
entity, and the Eligible Holders of the Representatives' Securities included in
such registration in the aggregate (including for this purpose any contribution
by or on behalf of an Indemnified Party), as a second entity, shall contribute
to the losses, liabilities, claims, damages, and expenses whatsoever to which
any of them may be subject, on the basis of relevant equitable considerations
such as the relative fault of the Company and such Eligible Holders in
connection with the facts which resulted in such losses, liabilities, claims,
damages, and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, omission, or
alleged omission relates to information supplied by the Company or by such
Eligible Holders, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company and the Holder agree that
it would be unjust and inequitable if the respective obligations of the Company
and the Eligible Holders for contribution were determined by pro rata or per
capita allocation of the aggregate losses, liabilities, claims, damages, and
expenses (even if the Holder and the other Indemnified Parties were treated as
one entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 10(c). In no
case shall any Eligible Holder be responsible for a portion of the contribution
obligation imposed on all Eligible Holders in excess of its pro rata share based
on the number of Common Shares owned (or which would be owned upon exercise of
all Representatives' Warrants) by it and included in such registration as
compared to the number of Common Shares owned (or which would be owned upon
exercise of all Representatives' Warrants) by all Eligible Holders and included
in such registration. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation. For purposes
of this Section 10(c), each person, if any, who controls any Eligible Holder
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and each officer, director, partner, employee, agent, and counsel of each such
Eligible Holder or control person shall have the same rights to contribution as
such Eligible Holder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 10(c). This Section 10(c)
is intended to supersede any right to contribution under the Act, the Exchange
Act or otherwise.
11. Unless registered pursuant to the provisions of Section 9 hereof,
the certificate or certificates evidencing such securities shall bear the
following legend:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. HOWEVER, SUCH SHARES MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION
STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR
(iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
12. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Representatives' Warrant (and, in the
case of loss, theft or destruction of the Representatives' Warrant, upon
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company, or upon surrender of any Representatives' Warrant if
mutilated), and upon reimbursement of the Company's reasonable incidental
expenses, the Company shall exercise and deliver to the Holder thereof a new
Representatives' Warrant of like date, tenor, and denomination.
13. The Holder of any Representatives' Warrant shall not have, solely
on account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representatives' Warrant.
14. This Representatives' Warrant shall be construed in accordance
with the laws of the State of Delaware.
15. The Company irrevocably consents to the jurisdiction of the
courts of the State of Florida and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this
Representatives' Warrant, any document or instrument delivered pursuant to, in
connection with or simultaneously with this Representatives' Warrant, or a
breach of this Representatives' Warrant or any such document or instrument. In
any such action or proceeding, the Company waives personal service of any
summons, complaint or other process. Within 30 days after such service, or such
other time as may be mutually agreed upon in writing by the attorneys for the
parties to such action or proceeding, the Company shall appear to answer such
summons, complaint or other processes.
Dated: ________________, 1999
WITNESS: NEOTHERAPEUTICS, INC.
By: /s/ DR. ALVIN J. GLASKY
- --------------------------------- -------------------------------------
Secretary Dr. Alvin J. Glasky,
President and Chief Executive Officer
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Representatives' Warrant.)
FOR VALUE RECEIVED, _______________________ hereby sells, assigns, and
transfers unto ____________________________ a Representatives' Warrant to
purchase ____________ Common Shares of NeoTherapeutics, Inc., a Delaware
corporation (the "Company"), together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint _________________
attorney to transfer such Representatives' Warrant on the books of the Company,
with full power of substitution.
Dated: _________________
_____________________________
Signature
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ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase
__________ Shares covered by the within Representatives' Warrant and tenders
payment herewith in the amount of $______________ in accordance with the terms
thereof, and requests that certificates for such securities be issued in the
name of, and delivered to:
________________________________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Underlying Shares shall not be all the Underlying Shares
covered by the within Representatives' Warrant, requests that a new
Representatives' Warrant for the balance of the Underlying Shares covered by the
within Representatives' Warrant be registered in the name of, and delivered to,
the undersigned at the address stated below.
Dated:______________________ Name: __________________________________
(Print)
Address:
Signature: _____________________________
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