EXHIBIT 3.4
WARRANT TO PURCHASE COMMON STOCK
OF APOLLO GENETICS, INC.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, APOLLO GENETICS, INC. (the "Company") hereby grants unto
NEUROSCIENCE PARTNERS LIMITED PARTNERSHIP (the "holder"), subject to the
terms and conditions set forth herein, warrants (the "Warrants") to subscribe
for and to have issued to it, subject to adjustment as provided for herein,
150,000 shares of $.02 par value common stock ("Common Shares") in the
capital of the Company, as the same may be reorganized or reclassified
pursuant to any of the events set out herein, as fully paid and
non-assessable, for an exercise price of $131,250 or $.875 per Common Share,
(the "Exercise Price"). The Warrants may be exercised at any time in whole or
from time to time in part, in accordance with and subject to the provisions
hereof up to 5:00 p.m. (Boston time) on December 17, 2003 (the "Time of
Expiry"). If any of the Warrants have not been exercised by the Time of
Expiry all rights under any unexercised Warrants shall wholly cease and
terminate and such Warrants shall be void and of no value or effect.
The Warrants are being granted pursuant to a Royalty Purchase Agreement
between the Company and the holder dated the date hereof (the "Purchase
Agreement"). In the event of any conflict or inconsistency between the
provisions of the Warrants and the provisions of the Purchase Agreement, the
Purchase Agreement shall govern.
1. EXERCISE OF WARRANTS
(a) EXERCISE The Warrants may be exercised by the holder in
accordance with the provisions hereof by surrendering to the Company
at its principal office, in the City of Cambridge, Massachusetts,
or at such other address in the United States as the holder may be
notified in writing by the Company, at any time after the date
hereof up to the Time of Expiry this certificate, together with a
Subscription Form, substantially in the form attached hereto as
Schedule 1, duly completed and executed, and cash or a certified
cheque, money order or bank draft payable to or to the order of
the Company for the amount equal to the Exercise Price per Common
Share multiplied by the number of Common Shares subscribed for.
(b) PARTIAL EXERCISE The holder may subscribe for and have issued to
it a number of Common Shares less than the total number the
holder is entitled to pursuant to this warrant certificate. In the
event of any such subscription prior to the Expiry Time, the
holder shall be entitled to receive, without charge, a new warrant
certificate (containing the same terms and conditions as this
certificate) in respect of the balance of the Common Shares for
which holder was entitled to subscribe pursuant to this warrant
certificate and which were then not subscribed for.
(c) NET EXERCISE Provided that the Common Shares are: (i) listed and
posted for trading on a national securities exchange; or (ii)
qualified for unlisted trading privileges on a trade reporting and
quotation system for over-the-counter trading, the holder shall
have the right to require the Company to exchange the Warrants
(the "Exchange Option"), in whole or in part at any time or from
time to time prior to the Expiry Time, for Common Shares as
provided for in this Section. Upon exercise of the Exchange
Option, the Company shall deliver to the holder (without payment
by the holder of any kind) the number of Common Shares calculated
as follows:
Y(A-B)
X = --------
A
where: X = the number of Common Shares to be issued to the
holder upon the exercise of the Exchange Option.
Y = the maximum number of Common Shares issuable
pursuant to the Warrants immediately prior to
the exercise of the Exchange Option, provided
that if the holder requests exchange with
respect only to part of the Warrants, this
number shall be that number of Warrants for
which exchange has been requested.
A = the Current Market Price on the day immediately
preceding the receipt of the Warrant Certificate
and Subscription Form specifying that the holder
is exercising the Exchange Option.
B = the Exercise Price in effect immediately prior
to the exercise of the Exchange Option.
For the purposes of the Exchange Option, "Current Market Price" at any
date, means the weighted average of the closing prices per Common Share
for the 30 trading days immediately prior to such date at which the
Common Shares have traded on: (i) the principal national securities
exchange on which the Common Shares are listed and posted for trading;
or (ii) if the Common Shares are not listed and posted for trading on a
national securities exchange, on the trade reporting and quotation
system for over-the-counter trading on which the Common Shares
are qualified for unlisted trading privileges.
The Exchange Option may be exercised by the holder, in whole or in
part at any time or from time to time, by surrending or delivering
to the Company prior to the Expiry Time at the address specified in
Section 1(a) hereof with the Subscription Form, duly completed and
executed, specifying that the holder is exercising the Exchange Option
to acquire the number of Common Shares then issuable upon such
exchange pursuant to this Section.
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(d) SHARE CERTIFICATES Within 15 days after the date on which the Company
receives a duly completed and executed Subscription Form (the "Exercise
Date"), the Company shall (without payment by the holder of any kind,
other than as provided in Section 1(a) above) issue and deliver to the
address specified by the holder, registered in such name or names as
the holder may direct or if no such direction has been given, in the
name of the holder, a certificate or certificates for the number of
Common Shares issuable hereunder as a result of the delivery of the
Subscription Form. Such exercise shall be deemed to have been effected
as of the close of business on the Exercise Date and at such time the
rights of the holder with respect to the Warrants which have been
exercised as such shall cease, and the person or persons in whose name
or names any certificate or certificates for Common Shares shall then
be issuable upon such exercise or deemed exercise shall be deemed to
have become the holder or holders of record of the Common Shares
represented thereby.
(e) FRACTIONAL SHARES No fractional shares shall be issued upon exercise of
the Warrants.
(f) CORPORATE CHANGES If the Company shall be a party to any reorganization,
merger, amalgamation, dissolution or sale of all or substantially all
of its assets (an "Event"), whether or not the Company is the surviving
entity, the number of Warrants shall be adjusted so as to apply to the
number of securities to which the holder of that number of Common Shares
subject to the unexercised Warrants immediately prior
to the Event would have been entitled by reason of such Event. If the
number of securities to which the holder is entitled following an Event
is greater than the number of unexercised Warrants immediately prior to
the Event, then the Exercise Price per share in effect immediately prior
to such Event shall be reduced by the reciprocal of the multiple required
to be used to arrive at the new number of securities. If the number of
securities to which the holder is entitled following an Event is
less than the number of unexercied Warrants immediately prior to the
Event, then the Exercise Price per share in effect immediately prior to
such Event shall be increased by the reciprocal of the fraction required
to be used to arrive at the new number of securities.
(g) SUBDIVISION OR CONSOLIDATION OF SHARES In the event the Company shall
subdivide its outstanding Common Shares into a greater number of Common
Shares, the number of Common Shares that the holder shall thereafter be
entitled to subscribe for and have issued to it hereunder shall be
proportionately increased and the Exercise Price per share in effect
immediately prior to such subdivision shall be reduced by the reciprocal
of the multiple used to arrive at the new number of Common Shares.
Conversely, in the event the Company shall consolidate its outstanding
Common Shares into a lesser number of Common Shares, the number of Common
Shares that the holder shall thereafter be entitled to subscribe for and
have issued to it hereunder shall be
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proportionately decreased and the Exercise Price per share in effect
immediately prior to such consolidation shall be increased by the
reciprocal of the fraction used to arrive at the new number of Common
Shares.
(h) STOCK DIVIDENDS OR DISTRIBUTIONS In the event the Company: (i) issues
Common Shares or securities exchangeable for or convertible into Common
Shares to all or substantially all the holders of the Common Shares as a
stock dividend; or (ii) makes a distribution on its outstanding Common
Shares payable in Common Shares or securities exchangeable for or
convertible into Common Shares, the number of Common Shares that the holder
shall thereafter be entitled to subscribe for and have issued to it
hereunder shall be increased in proportion to the increase in the number of
outstanding Common Shares (on a fully diluted basis) as a result of the
stock dividend or distribution and the Exercise Price per share in effect
immediately prior to such stock dividend or distribution shall be reduced
by the reciprocal of the multiple used to arrive at the new number of
Common Shares.
(i) OTHER DISTRIBUTIONS In the event the Company makes a distribution (a
"Distribution") on its outstanding Common Shares payable in: (i) shares
of the Company of any class other than Common Shares; (ii) rights,
options or warrants to acquire shares or securities exchangeable for or
convertible into shares or property or other assets of the Company;
(iii) evidence of indebtedness; or (iv) any property or other assets of
the Company, the Exercise Price per share in effect immediately prior
to such Distribution shall be reduced by a fraction that is equal to
the ratio of the aggregate fair market value of the Company immediately
following the Distribution to the fair market value immediately prior
to the Distribution.
(j) CHANGE OR RECLASSIFICATION OF SHARES In the event the Company shall
change or reclassify its outstanding Common Shares into a different
class of securities, the Warrants shall be adjusted so as to apply to
the number of the successor class of securities to which the holder of
that number of Common Shares subject to the unexercised Warrants
immediately prior to the change or reclassification would have been
entitled to by reason of such change or reclassification. If the number
of securities to which the holder is entitled to subscribe for and have
issued to it hereunder following a change or reclassification is
greater than the number of unexercised Warrants immediately prior to
the change or reclassification, then the Exercise Price per share in
effect immediately prior to such change or reclassification shall be
reduced by the reciprocal of the multiple required to be used to arrive
at the new number of securities. If the number of securities to which
the holder is entitled to subscribe for and have issued to it hereunder
following a change or reclassification is less than the number of
unexercised Warrants immediately prior to the change or
reclassification, then the Exercise Price per share in effect
immediately prior to such change or reclassification shall be increased
by the reciprocal of the fraction required to be used to arrive at the
new number of securities.
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(k) ADDITIONAL SUBSCRIPTIONS If at any time the Company grants to its
shareholders the right to subscribe for and purchase pro rata
additional securities of the Company or of any other corporation or
entity, the Company shall grant to the holder the right to subscribe
for and purchase the same securities on the same terms and conditions
as being granted to its shareholders pro rata as if the holder was the
shareholder of that number of Common Shares subject to the unexercised
Warrants.
(l) NOTICE OF ADJUSTMENT Upon any adjustment of the number of Common
Shares and the Exercise Price per share subject to these Warrants then
and in each case the Company shall give written notice thereof to the
holder, which notice shall state the number of Common Shares or other
securities subject to the unexercised Warrants and the Exercise Price
per share resulting from such adjustment, and shall upon receipt of the
written request of the holder set forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
(m) ADJUSTMENTS CUMULATIVE The adjustments provided for herein are
cumulative and will: (i) in the case of adjustments to the Exercise
Price, be computed to the nearest one-tenth of one percent; (ii) in the
case of adjustments to the number of Common Shares which may be
subscribed for and purchased hereunder, be computed to two decimal
places and rounded up or down, as appropriate, to the nearest whole
number; and (iii) be made successively whenever an event referred to
herein occurs. For certainty, no adjustment in the Exercise Price is
required to be made unless such adjustment would result in a change of
at least one percent (1%) in the prevailing Exercise Price; provided,
however, that any adjustments which, except for the provisions of this
Subsection, would otherwise have been required to be made, will be carried
forward and taken into account in any subsequent adjustments.
(n) SHARES TO BE RESERVED The Company will at all times keep available,
and reserve out of its authorized Common Shares, solely for the purpose
of issue upon the exercise of the Warrants, such number of Common
Shares as shall then be issuable upon the exercise or deemed exercise
of the Warrants. The Company covenants and agrees that all Common
Shares which shall be so issuable will, upon issuance, be duly authorized
and issued as fully paid and non-assessable. The Company will take all
such actions as may be possible to ensure that all such Common Shares
may be so issued without violation of any applicable requirements of
any stock exchange upon which the Common Shares may be listed or in
respect of which the Common Shares are qualified for unlisted trading
privileges and without violation of any applicable law. The Company
acknowledges that the Common Shares issuable upon due exercise of the
warrants are subject to the Registration Rights Agreement between the
parties of even date herewith.
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2. REPLACEMENT
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this warrant certificate, the Company will issue
to the holder a replacement certificate (containing the same terms and
conditions as this certificate).
3. EXPIRY DATE
The Warrants shall expire and all rights to subscribe for Common Shares
hereunder shall cease and become null and void at the Time of Expiry.
4. SATURDAYS, SUNDAYS AND HOLIDAYS
If any action is required to be taken pursuant hereto on or by a specified
date which is a Saturday, Sunday or a civic or statutory holiday in Boston,
Massachusetts or Toronto, Ontario, then such action shall be valid if taken
on or by the next succeeding day that is not a Saturday, Sunday or a civic or
statutory holiday in Boston, Massachusetts or Toronto, Ontario.
5. GOVERNING LAW
This Agreement shall be governed by, and interpreted and enforced in
accordance with, the laws in force in the Commonwealth of Massachusetts. The
Parties irrevocably submit to the non-exclusive jurisdiction of the courts of
the Commonwealth of Massachusetts with respect to any matter arising
hereunder or related hereto.
6. AMENDMENT
These Warrants and the terms hereof may be amended or supplemented only by a
written agreement signed by the Company and the holder.
7. SUCCESSORS
Subject to the terms hereof, these Warrants and the terms hereof shall enure
to the benefit of and be binding upon the holder and the Company and their
respective successors and assigns.
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IN WITNESS WHEREOF the Company has caused this certificate to be signed by
its duly authorized officers.
DATED December 18, 1996.
APOLLO GENETICS, INC.
/s/ Katherine Gordon
---------------------------------------
Name: Katherine Gordon
Title: President
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SCHEDULE 1
Subscription Form
TO: APOLLO GENETICS, INC. (the "Company")
RE: Warrants to purchase 150,000 shares of $.02 par value common stock in the
capital of the Company dated December 17, 1996 (the "Warrants").
The undersigned holder hereby irrevocably elects to exercise ____ of the
Warrants and hereby subscribes for ____ shares (or other property or
securities contemplated in the Warrants) and herewith:
X / / encloses cash or a certified cheque, money order or bank draft payable
to the order of the Company in payment of the Exercise Price therefor on
the terms and conditions set out in the certificate representing the
Warrants (the "Warrant Certificate"); or
X / / elects, pursuant to Section 1(c) of the Warrant Certificate, to exchange
the Warrants for the Common Shares and, subject to the issuance to the
holder of a certificate for the warrants not being exchanged pursuant
hereto, surrenders the Warrant Certificate to the Company and all right,
title and interest to the Warrants being exchanged hereby.
If any Warrants represented by this certificate are not being exercised or
exchanged, a new warrant certificate is to be issued and delivered to the
holder.
Terms not otherwise defined herein shall have the meanings assigned thereto
in the Warrant Certificate.
DATED this ____ day of _______________, _____.
[THE HOLDER]
By: ____________________________________
Name:
Title:
DIRECTION AS TO REGISTRATION
Name of Registered Holder: _______________________________________________
Address of Registered Holder: _______________________________________________
_______________________________________________
DIRECTIONS AS TO DELIVERY
Address of Delivery _______________________________________________
_______________________________________________
Attention: _______________________________________________