FORM OF
EXHIBIT 10.15
APOLLO BIOPHARMACEUTICS, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
WARRANT AGREEMENT
Dated as of May __, 1997
WARRANT AGREEMENT, dated the ___ day of May, 1997 (this
"Agreement"), between Apollo BioPharmaceutics, Inc., a Delaware corporation
(the "Company"), and American Stock Transfer and Trust Company, a Delaware
corporation, as Warrant Agent (the "Warrant Agent").
W I T N E S E T H:
WHEREAS, in connection with (i) the offering to the public by the
Company (the "Public Offering") of up to 500,000 units (the "Units"), each
Unit consisting of two shares of the Company's Common Stock (as defined
below), $0.02 par value per share (the "Common Stock"), and one redeemable
warrant, each such redeemable warrant entitling the registered holder thereof
to purchase one share of Common Stock upon the terms and subject to the
conditions set forth in this Agreement (collectively, the "Redeemable
Warrants"), (ii) the over-allotment option to purchase up to an additional
75,000 Units (the "Over-Allotment Option"), and (iii) the sale to Neidiger/
Tucker/ Bruner, Inc. and Westport Resources Investment Services, Inc., and
their respective successors and assigns (collectively, the "Representatives")
of warrants (the "Representatives' Warrants") to purchase up to 50,000 Units,
the Company will issue up to 625,000 Redeemable Warrants; and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Redeemable Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing to so act, in connection with
the issuance, registration, transfer and exchange of certificates
representing the Redeemable Warrants and the exercise of the Redeemable
Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms
and provisions of the Redeemable Warrants and the certificates representing
the Redeemable Warrants and the respective rights and obligations thereunder
of the Company, the Representatives, the holders of certificates representing
the Redeemable Warrants and the Warrant Agent, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall
have the following meanings:
(a) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(b) "Business Day" shall mean any day other than a Saturday or
Sunday on which banks in The City of New York are not authorized or required
to close.
(c) "Change of Shares" shall have the meaning ascribed to it in
Section 8(a)(i).
(d) "Commission" shall mean the Securities and Exchange Commission.
1
(e) "Convertible Securities" shall have the meaning ascribed to it
in Section 8(b).
(f) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its principal business in
New York, New York shall be administered, which office is located on the date
hereof at 40 Wall Street, New York, New York 10005.
(g) "Current Market Price" per share of Common Stock on any date
herein specified shall mean the average of the highest quoted daily closing
prices of the Common Stock for the ten Trading Days preceding such date. The
closing price of the Common Stock on each Trading Day shall be (A) the
average closing sale price for the Common Stock in the over-the- counter
market as reported by the National Association of Securities Dealers
Automated Quotation System or (B) the closing sale price on the primary
exchange on which the Common Stock is traded, if the Common Stock is traded
on a national securities exchange.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "Exercise Date" shall mean, subject to the provisions of
Section 5(b) hereof, as to any Redeemable Warrant, the date on which the
Warrant Agent shall have received both (i) the Warrant Certificate
representing such Redeemable Warrant, with the exercise form thereon duly
executed by the Registered Holder thereof or his attorney duly authorized in
writing, and (ii) payment in cash or by certified or bank check made payable
to the Company, of the amount in lawful money of the United States of America
equal to the applicable Exercise Price.
(j) "Exercise Price" shall mean, with respect to any Redeemable
Warrant, the purchase price per share of Common Stock that must be paid to
the Company as a condition precedent to the exercise of such Redeemable
Warrant, which amount shall initially be, subject to modification and
adjustment as provided in Section 8 hereof, $6.50 per share and further
subject, to the Company's right, in its sole discretion, to decrease the
Exercise Price for a period of not less than 30 days on not less than 30
days' prior written notice to the Registered Holders and the Representatives.
(k) "Initial Warrant Exercise Date" shall mean, with respect to
the Redeemable Warrants, May __, 1997 (the date of the Prospectus).
(l) "Initial Warrant Redemption Date" shall mean, with respect to
the Redeemable Warrants, May __, 1998 (12 months from the date of the
Prospectus).
(m) "Redemption Date" shall mean with respect to any Redeemable
Warrant, the date on which such Redeemable Warrant will be redeemed, as set
forth in a notice given with respect to such Redeemable Warrants pursuant to
Section 9.
(n) "Redemption Price" shall mean $0.25 per Redeemable Warrant.
2
(o) "Registered Holder" shall mean the person in whose name any
certificate representing the Redeemable Warrants shall be registered on the
books maintained by the Warrant Agent pursuant to Section 6 hereof.
(p) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to
elect a majority of the Board of Directors of such corporation (regardless of
whether or not at the time stock of any other class or classes of such
corporation shall have or may have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the Company
or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
(q) "Trading Day" shall mean any day other than a Saturday or
Sunday on which the principal market on which Common Stock is traded is open
for trading.
(r) "Transfer Agent" shall mean American Stock Transfer and Trust
Company, New York, New York, or its authorized successor.
(s) "Underwriting Agreement" shall mean the underwriting agreement
dated May __, 1997 (the date of the Prospectus) between the Company and the
Representatives, as representative of the several underwriters, relating to
the purchase for resale to the public of shares of Common Stock and
Redeemable Warrants.
(t) "Warrant Agent" shall have the meaning specified in the
introduction.
(u) "Warrant Certificates" shall mean in the case of Redeemable
Warrants, certificates representing each of the Redeemable Warrants
substantially in the form annexed hereto as Exhibit A.
(v) "Warrant Expiration Date" shall mean, with respect to the
Redeemable Warrants, 5:00 p.m. (New York time) on May __, 2002, or, if such
date shall not be a Business Day, then 5:00 p.m. (New York time) on the next
following Business Day, subject to the Company's right, prior to the Warrant
Expiration Date, in its sole discretion, to extend such Warrant Expiration
Date on five Business Days' prior written notice to the Registered Holders.
SECTION 2. REDEEMABLE WARRANTS AND ISSUANCE OF WARRANT
CERTIFICATES. (a) One Redeemable Warrant shall initially entitle the
Registered Holder of the Warrant Certificate representing such Redeemable
Warrant to purchase at the Exercise Price therefor from the Initial Warrant
Exercise Date until the Warrant Expiration Date, one share of Common Stock
upon the exercise thereof, subject to modification and adjustment as provided
in Section 8 hereof.
(b) Upon execution of this Agreement, Warrant Certificates
representing 500,000 Redeemable Warrants to purchase up to an aggregate of
500,000 shares of Common Stock (subject to modification and adjustment as
provided in Section 8 hereof) shall be executed by the Company and delivered
to the Warrant Agent.
3
(c) Upon exercise of the Over-Allotment Option, in whole or in
part, Warrant Certificates representing up to 75,000 Redeemable Warrants to
purchase up to an aggregate of 75,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8) shall be executed by
the Company and delivered to the Warrant Agent.
(c) Upon exercise of the Representatives' Warrant, in whole or in
part, Warrant Certificates representing up to 50,000 Redeemable Warrants to
purchase up to an aggregate of 50,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8) shall be executed by
the Company and delivered to the Warrant Agent.
(d) From time to time, up to the Warrant Expiration Date, as the
case may be, the Warrant Agent shall countersign and deliver Warrant
Certificates in required denominations of one or whole number multiples
thereof to the person entitled thereto in connection with any transfer or
exchange permitted under this Agreement. No Warrant Certificates shall be
issued except (i) Warrant Certificates initially issued hereunder, (ii)
Warrant Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7 hereof and (iv) at the
option of the Company, Warrant Certificates in such form as may be approved
by its Board of Directors, to reflect any adjustment or change in the
Exercise Price, the number of shares of Common Stock purchasable upon
exercise of the Redeemable Warrants or the Redemption Price therefor made
pursuant to Section 8 hereof.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES. (a) The
Warrant Certificates representing Redeemable Warrants shall be substantially
in the form annexed hereto as EXHIBIT A (the provisions of which are hereby
incorporated herein). All of such Warrant Certificates may have such
letters, numbers or other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed or engraved thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Redeemable Warrants may be
listed, or to conform to usage. The Warrant Certificates shall be dated the
date of issuance thereof (whether upon initial issuance, transfer, exchange
or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates).
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President and by
its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary, by manual signatures or by facsimile signatures printed thereon,
and shall have imprinted thereon a facsimile of the Company's seal. Warrant
Certificates shall be manually countersigned by the Warrant Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Warrant Certificates shall cease
to be such officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent, issued and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company.
4
SECTION 4. EXERCISE. (a) Redeemable Warrants in denominations of
one or whole number multiples thereof may be exercised commencing at any time
on or after the Initial Warrant Exercise Date, but not after the Warrant
Expiration Date, upon the terms and subject to the conditions set forth
herein (including the provisions set forth in Sections 5 and 9 hereof) and in
the applicable Warrant Certificate. A Redeemable Warrant shall be deemed to
have been exercised immediately prior to the close of business on the
Exercise Date, PROVIDED that the Warrant Certificate representing such
Redeemable Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing,
together with payment in cash or by certified or bank check made payable to
the Company, of an amount in lawful money of the United States of America
equal to the applicable Exercise Price has been received in good funds by the
Warrant Agent. The person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the holder of such
securities as of the close of business on the Exercise Date. If Redeemable
Warrants in denominations other than one or whole number multiples thereof
shall be exercised at one time by the same Registered Holder, the number of
full shares of Common Stock or Units, as the case may be, which shall be
issuable upon exercise thereof shall be computed on the basis of the
aggregate number of full shares of Common Stock or Units, as the case may be,
issuable upon such exercise. As soon as practicable on or after the Exercise
Date and in any event within five Business Days after such date, if one or
more Redeemable Warrants have been exercised, the Warrant Agent on behalf of
the Company shall cause to be issued to the person or persons entitled to
receive the same a Common Stock certificate or certificates for the shares of
Common Stock or Units, as the case may be, deliverable upon such exercise,
and the Warrant Agent shall deliver the same to the person or persons
entitled thereto. Upon the exercise of any one or more Redeemable Warrants,
the Warrant Agent shall promptly notify the Company in writing of such fact
and of the number of securities delivered upon such exercise and, subject to
subsection (b) below, shall cause all payments of an amount, in cash or by
check made payable to the order of the Company, equal to the Exercise Price
for such Redeemable Warrants less any amount payable to the Representatives
under Section 4(b) below, to be deposited promptly in the Company's bank
account.
(b) At any time upon the exercise of any one or more Redeemable
Warrants occurring on or after the first anniversary of the Initial Warrant
Exercise Date, the Warrant Agent shall, on a daily basis, within five
Business Days after such exercise, notify the Representatives, its successors
or assigns of the exercise of any such Redeemable Warrants and shall, on a
weekly basis (subject to collection of funds constituting the tendered
Exercise Price, but in no event later than five Business Days after the last
day of the calendar week in which such funds were tendered), remit to the
Representatives an amount equal to five percent of the Exercise Price of such
Redeemable Warrants being then exercised; PROVIDED, HOWEVER, that the Warrant
Agent shall not be obligated to pay any amounts pursuant to this Section 4(b)
during any week that such amounts payable are less than $1,000 and the
Warrant Agent's obligation to make such payments to the Representatives shall
be suspended until the amount payable aggregates $1,000; and PROVIDED,
FURTHER, that, in any event, any such payment (regardless of amount) shall be
made not less frequently than monthly; and provided, further, that such
remittance to the Representatives shall not be made with respect to any
exercise of any Redeemable Warrant (i) that has an Exercise Price greater
than the Current Market Price on the date of exercise, (ii) if such
Redeemable Warrant is held in a discretionary account at the time of exercise
and prior specific
5
approval for exercise is not received from the Registered Holder thereof, or
(iii) if the exercise of such Redeemable Warrant was not solicited by the
Representatives.
(c) The Company shall not be obligated to issue any fractional
share interests or fractional warrant interests upon the exercise of any
Redeemable Warrant or Redeemable Warrants, but instead shall pay cash in lieu
of fractional interests based upon the current market value of any fractional
shares.
(d) The Warrant Agent shall retain for a period of two years from
the date of exercise any Warrant Certificate received by it upon such
exercise.
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of Redeemable Warrants and conversion of the Units, such number
of shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Redeemable Warrants. The Company covenants that all shares of
Common Stock which shall be issuable upon exercise of the Redeemable Warrants
shall, at the time of delivery thereof against payment of the Exercise Price
therefor, be duly and validly issued and fully paid and nonassessable and
free from all preemptive or similar rights, taxes, liens and charges with
respect to the issue thereof, and that upon issuance such shares shall be
listed on each securities exchange or approved for quotation on any automated
quotation system, if any, on which the other shares of outstanding Common
Stock of the Company are then listed or quoted.
(b) The Company covenants that if any securities to be reserved
for the purpose of exercise of Redeemable Warrants hereunder require
registration with, or approval of, any governmental authority under any
federal securities law before such securities may be validly issued or
delivered upon such exercise, then the Company shall file a registration
statement under the federal securities laws or a post-effective amendment,
use its reasonable efforts to cause the same to become or remain effective
and to keep such registration statement current while any of the Redeemable
Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Securities Act, to the Registered Holder exercising
the Redeemable Warrant (except, if in the opinion of counsel to the Company,
such registration is not required under the federal securities law or if the
Company receives a letter from the staff of the Commission stating that it
would not take any enforcement action if such registration is not effected).
The Company will use its reasonable efforts to obtain appropriate approvals
or registrations under state "blue sky" securities laws for the purpose of
enabling the exercise of the Redeemable Warrants, provided, that the Company
shall not be required to qualify as a foreign corporation or file a general
or limited consent to service of process in any such jurisdiction, or to make
any changes in its capital structure or in any other material aspect of its
business or to enter into any material agreement with any state securities
authority, including any agreements to escrow any shares of its capital
stock. With respect to any such securities, however, Redeemable Warrants may
not be exercised by, or shares of Common Stock issued to, any Registered
Holder in any state in which such exercise would be unlawful.
6
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with respect to the
issuance of Redeemable Warrants, or the issuance or delivery of any shares of
Common Stock upon exercise of the Redeemable Warrants; PROVIDED, HOWEVER,
that if shares of Common Stock are to be delivered in a name other than the
name of the Registered Holder of the Warrant Certificate representing any
Redeemable Warrant being exercised, then no such delivery shall be made
unless the person requesting the same has paid to the Warrant Agent the
amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the
Transfer Agent to requisition from time to time certificates representing
shares of Common Stock or other securities required upon exercise of the
Redeemable Warrants, and the Company will comply with all such requisitions.
(e) Prior to the exercise of any Redeemable Warrant, the
Registered Holder thereof, as such, shall not be entitled to any rights of a
stockholder of the Company, including without limitation the right to vote or
to receive dividends or other distributions, and shall not be entitled to
receive any notice of proceedings of the Company except as required by
applicable law or provided herein and the Underwriting Agreement.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER. (a) Warrant
Certificates may be exchanged for other Warrant Certificates representing an
equal aggregate number of Redeemable Warrants or may be transferred in whole
or in part. Warrant Certificates to be so exchanged shall be surrendered to
the Warrant Agent at its Corporate Office, and the Company shall execute and
the Warrant Agent shall countersign, issue and deliver in exchange therefor
the Warrant Certificate or Certificates which the Registered Holder making
the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the
Company shall execute and the Warrant Agent shall issue and deliver to the
transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Redeemable Warrants.
(c) With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the assignment or
exercise form, as the case may be, on the reverse thereof shall be duly
endorsed or be accompanied by a written instrument or instruments of transfer
and subscription, in form satisfactory to the Company and the Warrant Agent,
duly executed by the Registered Holder thereof or the Registered Holder's
agent duly authorized in writing.
(d) No service charge shall be made for any exchange or
registration of transfer of Warrant Certificates. However, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
7
(e) All Warrant Certificates surrendered for exercise or for
exchange shall be promptly cancelled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof of each Redeemable
Warrant represented thereby (notwithstanding any notations of ownership or
writing thereon made) for all purposes and shall not be affected by any
notice to the contrary.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and the
loss, theft, destruction or mutilation of any Warrant Certificate and (in the
case of loss, theft or destruction) of indemnity satisfactory to them, and
(in case of mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall countersign and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Redeemable
Warrants. Applicants for a substitute Warrant Certificate shall also comply
with such other reasonable regulations and pay such other reasonable charges
as the Warrant Agent may prescribe.
SECTION 8. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES OF
COMMON STOCK. (a) In case the Company shall at any time subdivide or combine
the outstanding shares of Common Stock, the Exercise Price for Redeemable
Warrants shall forthwith be proportionately decreased in the case of a
subdivision or increased in the case of a combination.
(b) In case the Company shall pay a dividend in, or make a
distribution of, shares of Common Stock or of the Company's capital stock
convertible into shares of Common Stock, the Exercise Price for Redeemable
Warrants shall forthwith be proportionately decreased. An adjustment made
pursuant to this Section 8(b) shall be made as of the record date for the
subject stock dividend or distribution.
(c) In case of any reclassification or change of outstanding
shares of Common Stock issuable upon exercise of the Redeemable Warrants
(other than a change in par value, or from par value to no par value, or from
no par value to par value or as a result of a subdivision or combination), or
in case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of
the then outstanding shares of Common Stock or other capital stock issuable
upon exercise of the Redeemable Warrants (other than a change in par value,
or from par value to no par value, or from no par value to par value or as a
result of subdivision or combination)) or in case of any sale or conveyance
to another corporation of all or substantially all of the assets or property
of the Company that is effected in such a way that holders of the securities
issuable upon exercise of the Redeemable Warrants shall be entitled to
receive securities or other property with respect to or in exchange for the
securities issuable upon exercise of the Redeemable Warrants, then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company, or such successor or purchasing corporation, as the
case may be, shall make lawful and adequate provision whereby the Registered
Holder of each Redeemable Warrant then outstanding shall have the right
thereafter to receive on exercise of such Redeemable Warrant the kind and
amount of securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance, by a
8
holder of the number of securities issuable upon exercise of such Redeemable
Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance and shall forthwith file at the Corporate Office
of the Warrant Agent a statement signed by its President or a Vice President
and by its Treasurer or an Assistant Treasurer or its Secretary or an
Assistant Secretary evidencing such provision. The above provisions of this
Section 8(c) shall similarly apply to successive reclassifications and
changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances.
(d) Irrespective of any adjustments or changes in the Exercise
Price or the number of shares of Common Stock purchasable upon exercise of
the Redeemable Warrants, the Warrant Certificates theretofore and thereafter
issued shall, unless the Company shall exercise its option to issue new
Warrant Certificates pursuant to Section 2(e) hereof, continue to express the
Exercise Price per share and the number of shares purchasable thereunder as
the Exercise Price per share and the number of shares purchasable thereunder
were expressed in the Warrant Certificates when the same were originally
issued.
(e) After each adjustment of the Exercise Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Redeemable Warrant, after such adjustment,
and (iii) a brief statement of the facts accounting for such adjustment. The
Company will promptly file such certificate with the Warrant Agent and cause
a brief summary thereof to be sent by ordinary first class mail to each
Registered Holder at his last address as it shall appear on the registry
books of the Warrant Agent. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity thereof except as
to the holder to whom the Company failed to mail such notice, or except as to
the holder whose notice was defective. The affidavit of an officer of the
Warrant Agent or the Secretary or an Assistant Secretary of the Company that
such notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(f) Redeemable Warrant holders shall not be entitled to cash
dividends paid by the Company prior to the exercise of any Redeemable Warrant
or Warrants held by them.
SECTION 9. REDEMPTION.
(a) Commencing on the Initial Warrant Redemption Date, the Company
may, on not less than 30 days' prior written notice (which may be given
before the Initial Warrant Redemption Date) redeem all or a portion (pro rata
among all Registered Holders) of the Redeemable Warrants at the Redemption
Price, PROVIDED, HOWEVER, that before any such call for redemption of
Redeemable Warrants can take place, (A) the average closing sale price for
the Common Stock in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System or (B) the
closing sale price on the primary exchange on which the Common Stock is
traded, if the Common Stock is traded on a national securities exchange,
shall have for 20 consecutive Trading Days ending within ten days prior to
the date on which the notice contemplated by (b) and (c) below is given,
equaled or exceeded
9
$10.00 per share (subject to adjustment in the event of any stock splits or
other similar events as provide in Section 8 hereof).
(b) If the Company shall exercise its right to redeem any or all
of the Redeemable Warrants, it shall give or cause to be given notice to the
Registered Holders of the Redeemable Warrants, by mailing to such Registered
Holders a notice of redemption, first class, postage prepaid, at their last
address as shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have
been duly given in accordance with Section 12 whether or not the Registered
Holder receives such notice. Not less than five Business Days prior to the
mailing to the Registered Holders of the Redeemable Warrants of the notice of
redemption, the Company shall deliver or cause to be delivered to the
Representatives a similar notice telephonically and confirmed in writing
together with a list of the Registered Holders (including their respective
addresses and number of Redeemable Warrants beneficially owned) to whom such
notice of redemption has been or will be given and the number of Redeemable
Warrants to be redeemed from each such Registered Holder.
(c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the date fixed for redemption, which shall in no event be less
then thirty (30) days after the date of mailing of such notice, (iii) the
number of Redeemable Warrants to be redeemed from the recipient Registered
Holder, (iv) the place where the Warrant Certificate shall be delivered and
the Redemption Price shall be paid, and (v) that the right to exercise the
Redeemable Warrants to which the notice of redemption applies shall terminate
at 5:00 p.m. (New York time) on the Business Day immediately preceding the
date fixed for redemption. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a Registered Holder (a) to whom
notice was not mailed or (b) whose notice was defective. An affidavit of the
Warrant Agent or the Secretary or Assistant Secretary of the Company that
notice of redemption has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
(d) Any right to exercise a Redeemable Warrant shall terminate at
5:00 p.m. (New York time) on the Business Day immediately preceding the
Redemption Date fixed for such Redeemable Warrant. The Redemption Price
payable to the Registered Holders shall be mailed to such persons at their
addresses of record.
(e) The Company shall indemnify the Representatives and each
person, if any, who controls the Representatives within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act against
all loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, arising from the registration
statement or prospectus referred to in Section 5(b) hereof to the same extent
and with the same effect (including the provisions regarding contribution) as
the provisions pursuant to which the Company has agreed to indemnify the
Representatives contained in Section 7 of the Underwriting Agreement.
10
(f) If and to the extent reasonably requested by the
Representatives, five Business Days prior to the Redemption Date, the Company
shall furnish to the Representatives (i) an opinion of counsel to the
Company, dated such date and addressed to the Representatives, and (ii) a
"cold comfort" letter dated such date addressed to the Representatives,
signed by the independent public accountants who have issued a report on the
Company's financial statements included in the registration statement, if
any, of the Company in connection with such redemption, in each case covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities, including, without limitation, those matters covered
in Sections 6(k) and (l) of the Underwriting Agreement.
(g) The Company shall as soon as practicable after the Redemption
Date, and in any event within 15 months thereafter, make "generally available
to its security holders" (within the meaning of Rule 158 under the Securities
Act) an earnings statement (which need not be audited) complying with Section
11(a) of the Securities Act and covering a period of at least 12 consecutive
months beginning after the Redemption Date.
SECTION 10. CONCERNING THE WARRANT AGENT. (a) The Warrant Agent
acts hereunder as agent and in a ministerial capacity for the Company, and
its duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not, by issuing and delivering Warrant Certificates or by any
other act hereunder, be deemed to make any representations as to the validity
or value or authorization of the Warrant Certificates or the Redeemable
Warrants represented thereby or of any securities or other property delivered
upon exercise of any Redeemable Warrant or whether any stock issued upon
exercise of any Redeemable Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Exercise Price provided in this Agreement, or to
determine whether any fact exists which may require any such adjustment, or
with respect to the nature or extent of any such adjustment, when made, or
with respect to the method employed in making the same. It shall not (i) be
liable for any recital or statement of fact contained herein or for any
action taken, suffered or omitted by it in reliance on any Warrant
Certificate or other document or instrument believed by it in good faith to
be genuine and to have been signed or presented by the proper party or
parties, (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement
or in any Warrant Certificate, or (iii) be liable for any act or omission in
connection with this Agreement except for its own gross negligence, bad faith
or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken, suffered or omitted by it
in good faith in accordance with the opinion or advice of such counsel.
11
(d) Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument
signed by the Chairman of the Board of Directors, President, any Vice
President, or the Treasurer (unless other evidence in respect thereof is
herein specifically prescribed). The Warrant Agent shall not be liable for
any action taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction, order or demand.
(e) The Company has agreed in a separate agreement to pay the
Warrant Agent reasonable compensation or its services hereunder and to
reimburse it for its reasonable expenses hereunder. The Company further
agrees to indemnify the Warrant Agent and save it harmless against any and
all losses, expenses and liabilities, including judgments, costs and counsel
fees, for anything done or omitted by the Warrant Agent in the execution of
its duties and powers hereunder except losses, expenses and liabilities
arising as a result of the Warrant Agent's gross negligence, bad faith or
willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own gross negligence, bad faith or willful
misconduct), after giving 30 days' prior written notice to the Company. At
least 15 days prior to the date such resignation is to become effective, the
Warrant Agent shall cause a copy of such notice of resignation to be mailed
to the Registered Holder of each Warrant Certificate at the Company's
expense. Upon such resignation the Company shall appoint in writing a
successor Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then the Registered Holder of any
Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a successor Warrant Agent. Any successor Warrant Agent,
whether appointed by the Company or by such a court, shall be a bond or trust
company having a capital and surplus, as shown by its last published report
to its stockholders, of not less than $10,000,000 or a stock transfer company
doing business in New York, New York. After acceptance in writing of such
appointment by the successor Warrant Agent is received by the Company, such
successor Warrant Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named herein as the Warrant
Agent, without any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent may be converted
or merged, any corporation resulting from any consolidation to which the
Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent shall be the Warrant Agent
under this Agreement without any further act, provided that such corporation
is eligible for appointment as successor to the Warrant Agent under the
provisions of the preceding paragraph. Any such successor Warrant Agent shall
promptly cause notice of its succession, and a written consent agreeing to
act hereunder, as Warrant Agent to be mailed to the Company and to the
Registered Holders of each Warrant Certificate.
12
(h) The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell Redeemable
Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effect as
though it were not Warrant Agent. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or any other legal
entity.
SECTION 11. MODIFICATION OF AGREEMENT. The Warrant Agent and the
Company may by supplemental agreement make any changes or corrections in this
Agreement (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; or (ii) that they may deem necessary or desirable and which
shall not adversely affect the interest of the holders of Warrant
Certificates; PROVIDED, HOWEVER, that this Agreement shall not otherwise be
modified, supplemented or altered in any respect except with the consent in
writing of the Registered Holders representing not less than two-thirds of
the Redeemable Warrants then outstanding; provided, further, that no change
in the number or nature of the securities purchasable upon the exercise of
any Redeemable Warrant, or to increase the Exercise Price therefor, shall be
made without the consent in writing of the Registered Holders representing
not less than two-thirds of the Redeemable Warrants then outstanding, other
than such changes as are presently specifically prescribed by this Agreement
as originally executed.
SECTION 12. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first-class postage prepaid, or delivered to a
telegraph office for transmission, if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at One Kendall Square,
Building 200, Suite 2200, Cambridge, Massachusetts 02139, Attention: Vice
President of Finance, Chief Financial Officer and Treasurer, or at such other
address as may have been furnished to the Warrant Agent in writing by the
Company; and if to the Warrant Agent, at its Corporate Office. Copies of an
notice delivered to the Representatives pursuant to this Agreement shall be
delivered to Neidiger, Tucker, Bruner, Inc., Barclay Plaza, 1675 Larimer
Street #300, Denver, CO 80202, Attention Anthony B. Petrelli, or at such
other address as may have been furnished to the Company and the Warrant Agent
in writing.
SECTION 13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
SECTION 14. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the Company, the Warrant Agent and their
respective successors and assigns and the Registered Holders from time to
time of Warrant Certificates or any of them. Except as hereinafter stated,
nothing in this Agreement is intended or shall be construed to confer upon
any other person any right, remedy or claim or to impose upon any other
person any duty, liability or obligation. The Representatives are, and shall
at all times irrevocably be deemed to be, a third-party beneficiaries of this
Agreement, with full power, authority and standing to enforce the rights
granted to it hereunder.
13
SECTION 15. COUNTERPARTS. This Agreement may be executed in several
counterparts each with the same effect. Any single counterpart or set of
counterparts signed, in either case, by all the parties shall constitute a
full and original document for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
[SEAL]
APOLLO BIOPHARMACEUTICS, INC. AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By:________________________ By:___________________________
Name: Name:
Title: Title:
14
EXHIBIT A
No. W_____ VOID AFTER MAY_____, 2002
______________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO
PURCHASE COMMON STOCK
____________________________
CUSIP___
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of
the number of Redeemable Warrants (the "Warrants") specified
above. Each Warrant initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this
Certificate and the Warrant Agreement (as hereinafter defined),
one fully paid and nonassessable share of Common Stock, $0.02 par
value, of Apollo BioPharmaceutics, Inc., a Delaware corporation
(the "Company"), at any time from May ____, 1997 (the date of the
Prospectus) (the "Initial Warrant Exercise Date"), and prior to
the Expiration Date (as hereinafter defined), upon the
presentation and surrender of this Warrant Certificate with the
Exercise Form on the reverse hereof duly executed, at the
corporate office of American Stock Transfer and Trust Company, as
Warrant Agent, or its successor (the "Warrant Agent"),
accompanied by payment of $6.50, subject to adjustment (the
"Exercise Price"), in lawful money of the United States of
America in cash or by certified or bank check made payable to the
Company.
This Warrant Certificate and each Warrant represented
hereby are issued pursuant to and are subject in all respects to
the terms and conditions set forth in the Warrant Agreement (the
"Warrant Agreement"), dated May _____, 1997 (date of the
Prospectus), by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in
the Warrant Agreement, the Exercise Price and the number of
shares of Common Stock subject to purchase upon the exercise of
each Warrant represented hereby are subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the
option of the Registered Holder, but no fractional interests will
be issued. In the case of the exercise of less than all the
Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the
1
surrender hereof and shall execute and deliver a new Warrant Certificate
or Warrant Certificates of like tenor, which the Warrant Agent shall
countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New
York time) on May _____, 2002 (the date which is the fifth
anniversary of the Initial Warrant Exercise Date). If such date
shall in the City of Boston be a Saturday or Sunday or a day on
which banks are authorized or required to close (a "Business
Day"), then the Expiration Date shall mean 5:00 p.m. (Boston
time) the next following Business Day.
The Company shall not be obligated to deliver any
securities pursuant to the exercise of this Warrant unless a
registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to such securities
is effective or unless, in the opinion of counsel to the Company,
an exemption thereunder is available. The Company has covenanted
and agreed that if any securities to be reserved for the purpose
of exercise of the Warrants represented hereby require
registration with, or approval of, any governmental authority
under any federal securities law before such securities may be
validly issued or delivered upon such exercise, then the Company
will file a registration statement under the federal securities
laws or a post-effective amendment, use its reasonable efforts to
cause the same to become or remain effective and to keep such
registration statement current while any of the Warrants are
outstanding, and deliver a prospectus that complies with Section
10(a)(3) of the Securities Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by
a Registered Holder in any state where such exercise would be
unlawful.
This Warrant Certificate is exchangeable, upon the
surrender hereof by the Registered Holder at the corporate office
of the Warrant Agent, for a new Warrant Certificate or Warrant
Certificates of like tenor representing an equal aggregate number
of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon the presentment and
payment of any tax or other charge imposed in connection
therewith or incident thereto, for registration of transfer of
this Warrant Certificate at such office, a new Warrant
Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the
Warrant Agreement.
Prior to the exercise of any Warrant represented
hereby, the Registered Holder, as such, shall not be entitled to
any rights of a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of
any proceedings of the Company, except as provided in the Warrant
Agreement.
Subject to the provisions of the Warrant Agreement,
this Warrant may be redeemed at the option of the Company, at a
redemption price of $0.25 per Warrant, at any time commencing
after the Initial Warrant Exercise Date, PROVIDED that (i) the
average closing bid price for the Company's Common Stock in the
over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System, or (ii) the
closing sale price on the primary exchange on which the Common
Stock is traded, if the Common Stock is traded on a national
securities exchange, shall have for 20 consecutive days on which
such market is open for trading ending within ten days prior to
the Notice of Redemption, as defined below,
2
equaled or exceeded $10.00 per share (subject to adjustment in the event of
any stock splits or other similar events). Notice of redemption (the "Notice
of Redemption") shall be given by the Company not later than the thirtieth
day before the date fixed for redemption, all as provided in the Warrant
Agreement. On and after the date fixed for redemption, the Registered Holder
shall have no right with respect to this Warrant except to receive the $0.25
per Warrant upon surrender of this Certificate.
Under certain circumstances described in the Warrant Agreement,
Neidiger/ Tucker/ Bruner, Inc. shall be entitled to receive as a solicitation
fee an aggregate of five percent (5%) of the Exercise Price of the Warrants
represented hereby.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in
the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed, manually or in facsimile by two of its officers
thereunto duly authorized and a facsimile of its corporate seal to be
imprinted hereon.
Dated May _____, 1997
SEAL APOLLO BIOPHARMACEUTICS, INC.
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
3
COUNTERSIGNED:
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
as Warrant Agent
By: ___________________________
Authorized Officer
4
EXERCISE FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably
elects to exercise __________ Warrants represented by this
Warrant Certificate, and to purchase the securities issuable upon
the exercise of such Warrants, and requests that certificates for
such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
_______________________________
_______________________________
_______________________________
_______________________________
(please print or type name and address)
and be delivered to
_______________________________
_______________________________
_______________________________
_______________________________
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Warrant
Certificate for the balance of such Warrants be registered in the
name of, and delivered to, the Registered Holder at the address
stated below.
5
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was
solicited by Neidiger/ Tucker/
Bruner, Inc. unless the following
box is checked.
2. The exercise of this Warrant was
solicited by
____________________________________
3. If the exercise of this Warrant was
not solicited, please check the
following box.
Dated: _____________________________ X __________________________
__________________________
__________________________
Address
__________________________
Social Security or Taxpayer
Identification Number
___________________________
Signature Guaranteed
6
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED,___________________, hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
_______________________________
_______________________________
_______________________________
_______________________________
(please print or type name and address)
____________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
_____________________________ as its/his/her attorney-in-fact to
transfer this Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Dated: _____________________________ X __________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE EXERCISE FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION ON OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED BY A
BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER
ENTITY WHICH IS A MEMBER IN GOOD STANDING OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM.
7