FORM OF
APOLLO BIOPHARMACEUTICS, INC.
AND
NEIDIGER, TUCKER, BRUNER, INC.
AND
WESTPORT RESOURCES INVESTMENT SERVICES, INC.
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REPRESENTATIVES'
WARRANT AGREEMENT
Dated as of , 1997
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REPRESENTATIVE'S WARRANT AGREEMENT, dated as of, 1997
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(this "Agreement"), between APOLLO
BIOPHARMACEUTICS, INC., a Delaware corporation (the
"Company"), NEIDIGER, TUCKER, BRUNER, INC. and WESTPORT
RESOURCES INVESTMENT SERVICES, INC. (the "Representatives").
W I T N E S E T H:
WHEREAS, the Representatives have agreed pursuant to
the underwriting agreement (the "Underwriting Agreement"),
dated , 1997, between the Representatives and
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the Company to act as the representatives of the
Underwriters listed in the Underwriting Agreement (the
"Underwriters") in connection with the Company's proposed
public offering of 500,000 Units, each Unit consisting of
two shares of Common Stock and one Redeemable Warrant to
purchase one share of Common Stock (each, a "Unit" and
collectively, the "Units");
WHEREAS, pursuant to the Underwriting Agreement, the
Company proposes to issue to the Representatives 50,000
warrants ("Representatives' Warrants"), each
Representatives' Warrant entitling the registered holder
thereof to purchase one Unit;
WHEREAS, the Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") a
registration statement, and a post effective amendment or
amendments thereto, on Form SB-2 (No. 333-18769) (the
"Registration Statement"), for the registration of the Units
and the underlying securities to be sold as part of the
Public Offering, the Representatives' Warrants and the
underlying Units and the securities underlying such Units
issuable upon exercise of the Representative's Warrants
under the Securities Act of 1933, as amended (the
"Securities Act"). Except as the context may otherwise
require, such registration statement, as amended, on file
with the Commission at the time such registration statement
becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents
filed as a part thereof or incorporated therein (including
without limitation those documents or information
incorporated by reference therein) and all information
deemed to be a part thereof as of such time pursuant to
paragraph (b) of Rule 430(A) under the Securities Act), is
hereinafter called the "Registration Statement"; and
WHEREAS, the Representatives' Warrants to be issued
pursuant to this Agreement will be issued on the Closing
Date (as such term is defined in the Underwriting Agreement)
by the Company to the Representatives in consideration for,
and as part of the Representatives' compensation in
connection with the Representatives acting as the
Representatives pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the
agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Grant. The Holder (as defined in Section 3.1
below) is hereby granted 50,000 Representatives' Warrants,
each Representatives' Warrant entitling the Holder the right
to
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purchase, at any time from , 1997
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until 5:00P.M., New York time, on , 2002
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(the "Exercise Period"), one Unit at an initial exercise price of $
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per Unit (subject to adjustment as provided in Section 8
hereof), subject to the terms and conditions of this
Agreement. Except as expressly set forth herein, the Units
issuable upon exercise of the Representatives' Warrants are
in all respects identical to the Units being purchased by
the Underwriters for resale to the public pursuant to the
terms and provisions of the Underwriting Agreement.
2. Warrant Certificates. The warrant certificates
evidencing the Representatives' Warrants (the "Warrant
Certificates") delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A attached hereto and made
a part hereof; with such appropriate insertions, omissions,
substitutions and other variations as required or permitted
by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Representatives'
Warrants initially are exercisable during the Exercise
Period at an initial exercise price (subject to adjustment
as provided in Section 8 hereof) per share of Common Stock
set forth in Section 6 hereof, payable to the Company by
certified or official bank check in New York Clearing House
funds. Upon surrender during the Exercise Period of a
Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the
Exercise Price (as hereinafter defined) for the Units
purchased, at the Company's principal offices in the United
States (presently located at One ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ 02139) the
registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased.
The purchase rights represented by each Warrant Certificate
are exercisable, at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the
Common Stock). In the case of the purchase of less than all
the shares of Common Stock under any Warrant Certificate
(whether pursuant to this Section 3.1 or Section 3.2
hereof), the Company shall cancel such Warrant Certificate
upon the surrender thereof and shall execute and deliver a
new Warrant Certificate of like tenor for the balance of the
shares of Common Stock purchasable thereunder.
3.2 Exercise by Surrender of Representatives'
Warrant. The method of payment set forth in Section 3.1
hereof is exclusive and no method of payment in lieu of cash
payment is permissible.
3.3 Definition of Market Price. As used herein
with respect to the Common Stock, the phrase "Market Price"
at any date shall be deemed to be the last reported sale
price of the Common Stock, or if no such reported sale takes
place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case
as officially reported by the principal securities exchange
on which the Common Stock is listed or admitted to trading
or by NASDAQ, or if such security is not listed or admitted
to trading on any such securities exchange or quoted by
NASDAQ, the average closing bid price as furnished by the
National Quotation Bureau or a similar organization if
NASDAQ is no longer reporting such information,
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or if such information is no longer being provided with respect to the
Common Stock, then as determined in good faith by written
resolution of the Board of Directors of the Company, based
on the best information available to it.
4. Issuance of Certificates. Upon the exercise of
the Representatives' Warrants, the issuance of certificates
for shares of Common Stock or other securities, property or
rights underlying such Representatives' Warrants, shall be
made forthwith (and in any event within three (3) business
days thereafter) without charge to the Holder thereof
including, without limitation, any tax that may be payable
in respect of the issuance thereof; and such certificates
shall (subject to the provisions of Sections 5 and 7 hereof)
be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than
that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the
person or persons requesting the issuance 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.
The Warrant Certificates and the certificates
representing the shares of Common Stock (and other
securities, property or rights issuable upon the exercise of
the Representatives' Warrants) shall be executed on behalf
of the Company by the manual or facsimile signature of the
then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company
under its corporate seal reproduced thereon, attested to by
the manual or facsimile signature of the then present
Secretary or Assistant Secretary of the Company. Warrant
Certificates and certificates representing the shares of
Common Stock shall be dated the date of execution by the
Company upon initial issuance, division, exchange,
substitution or transfer.
5. Restriction On Transfer of Representatives'
Warrants. The Holder of a Warrant Certificate, by its
acceptance thereof; covenants and agrees that the
Representatives' Warrants are being acquired as an
investment and not with a view to the distribution thereof;
that the Representatives' Warrants may not be sold,
transferred, assigned, hypothecated or otherwise disposed
of; in whole or in part, for a period of one (1) year after
the date hereof; except to (i) officers (who are also
stockholders or employees) of the Representatives; (ii) any
successor firm or corporation of the Representatives; or
(iii) in the case of an individual, pursuant to such
individual's last will and testament or the laws of descent
and distribution,
6. Exercise Price.
6.1 Initial and Adjusted Exercise Prices. Except
as otherwise provided in Section 8 hereof, the initial
exercise price of each Representatives' Warrant shall be
$ per Unit purchased thereunder. The adjusted
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exercise price of the Unit shall be the price that results
from time to time from any and all adjustments of the initial
exercise price in accordance with the provisions of Section 8
hereof.
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6.2 Exercise Price. The term "Exercise Price"
herein shall mean the initial exercise price or the adjusted
exercise price, depending upon the context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933.
(a) The Representatives' Warrants have been
registered under the Securities Act. If the registration
statement under which the Units underlying the
Representatives' Warrants and the other securities
underlying such Units issued or issuable upon exercise of
the Representatives' Warrants (collectively, the "Warrant
Securities") are registered ceases to be effective or the
prospectus contained in such registration statement ceases
to be current, then upon exercise, in part or in whole, the
Warrant Securities shall bear the following legend:
The securities represented by this
certificate have not been registered
under the Securities Act of 1933, as
amended "Securities Act"), and may not
be offered or sold except pursuant to
(i) an effective registration statement
under the Securities Act, (ii) to the
extent applicable, Rule 144 under the
Securities Act (or any similar rule
under such Securities Act relating to
the disposition of securities), or (iii)
an opinion of counsel, if such opinion
shall be reasonably satisfactory to
counsel to the issuer, that an exemption
from registration under such Securities
Act is available.
(b) The Company shall use its best efforts
to keep current the Registration Statement (or other
appropriate form, including Form S-3) covering the Warrant
Securities for so long as any Representatives' Warrants
shall remain outstanding. In furtherance of and without
limiting the foregoing, the Company shall prepare and file
with the Commission such post-effective amendment or
amendments to the Registration Statement as may be
necessary, in the opinion of counsel to the Representatives
or the Holders, so as to permit a public offering and sale
of the Warrant Securities by the Representatives and any
other Holders of such securities and use its best efforts to
cause such post-effective amendment or amendments to become
effective on or prior to the time that the Representatives'
Warrants first become exercisable and shall prepare and file
with the Commission such amendments and supplements to the
Registration Statement, as so amended, and the prospectus
used in connection therewith, as may be necessary to keep
the Registration Statement, as so amended, effective and the
prospectus contained therein current, and to comply with the
provisions of the Securities Act with respect to the
disposition of all Warrant Securities covered by such
registration statement, for the period referred to in the
immediately preceding sentence.
7.2 Piggyback Registration. Without limitation
to Section 7.1(b) above, if at any time during the seven (7)
year period following the date hereof the Company proposes
to
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register any of its securities under the Securities Act
(other than on Form S-4 or in connection with an employee
benefit plan or similar plan registered on Form S-S (or a
similar special purpose form) or any dividend reinvestment
plan), it will give written notice by registered mail, at
least 30 days prior to the filing of each such registration
statement, to the Representatives and to all other Holders
of Representatives' Warrants and/or other Warrant Securities
of its intention to do so. If the Representatives or other
Holders of Representatives' Warrants and/or other Warrant
Securities notify the Company within 15 days after receipt
of any such notice of its or their desire to include any
such securities in such proposed registration statement, the
Company shall afford each of the Representatives and such
Holders of the Representatives' Warrants and/or other
Warrant Securities the opportunity to have any such Warrant
Securities registered under such registration statement,
subject to Section 7.2 of this Agreement.
7.3 Demand Registration. Without limitation to Section 7.1(b) above:
(a) At any time, the Holders of the
Representatives' Warrants and/or other Warrant Securities
representing a "Majority" (as hereinafter defined) of such
securities shall have the right (which right is in addition
to the registration rights under Section 7.2 hereof),
exercisable by written notice to the Company, to have the
Company prepare and file with the Commission, on one
occasion, a registration statement and such other documents,
including a prospectus, as may be necessary in the opinion
of both counsel for the Company and counsel for the
Representatives and Holders, in order to comply with the
provisions of the Securities Act, so as to permit a public
offering and sale of their respective Warrant Securities for
nine (9) consecutive months (or such shorter period which
shall terminate when all of the Warrant Securities covered
by such registration statement have been sold pursuant
thereto) by such Holders and any other Holders of the
Representatives' Warrants and/or other Warrant Securities
who notify the Company within 10 days after receiving notice
from the Company of such request; provided, however, that,
the Company shall not be obligated to file any such
registration statement pursuant to this Section 7.3(a) so
long as the Registration Statement (as it may hereafter be
amended) remains effective and the prospectus contained
therein remains current, provided such Registration
Statement (as it may hereafter be amended) covers the public
offering and sale of all of the Warrant Securities by the
Representatives and the other Holders, if any, of the
Representatives' Warrants and/or other Warrant Securities.
(b) The Company covenants and agrees to give
written notice of any registration request under this
Section 7.3 by any Holder or Holders to all other registered
Holders of Representatives' Warrants and/or other Warrant
Securities within 10 days from the date of the receipt of
any such registration request.
(c) In addition to the registration rights
under Section 7.2 hereof and subsection (a) of this Section
7.3, at any time, any Holders of Representatives' Warrants
and/or other Warrant Securities representing a Majority of
such securities shall have the right, exercisable by written
request to the Company, to have the Company prepare and
file, on one occasion, with the Commission a registration
statement so as to permit a public offering and sale for
nine (9) consecutive months (or such shorter period which
shall terminate when all of the
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Warrant Securities covered by such registration statement have been sold
pursuant thereto) by any such Holder of its Warrant Securities;
provided, however, that the provisions of Section 7.4(b)
hereof shall not apply to any such registration request and
registration and all costs incident thereto shall be at the
expense of the Holder or Holders making such request.
7.4 Covenants of the Company With Respect to
Registration. In connection with any registration under
Section 7.2 or 7.3 hereof, the Company covenants and agrees
as follows:
(a) The Company shall use its best efforts
to file a registration statement within 45 days of receipt
of any demand therefor in connection with any registration
under Section 7.3, shall use its best efforts to have any
registration statements declared effective at the earliest
possible time, and shall furnish each Holder desiring to
sell Warrant Securities such number of prospectuses as shall
reasonably be requested.
(b) The Company shall pay all costs
(excluding fees and expenses of Holder(s)' counsel and any
underwriting or selling commissions), fees and expenses in
connection with all registration statements filed pursuant
to Sections 7.2 and 7.3(a) hereof including, without
limitation, the Company's legal and accounting fees,
printing expenses and blue sky fees and expenses. The
Holder(s) shall pay all costs, fees and expenses in
connection with any registration statement filed pursuant to
Section 7.3(c) hereof. If the Company shall fail to comply
with its obligations under Section 7.4(a), the Holder(s)
shall be entitled to seek equitable or other relief
available to the Holder(s).
(c) The Company shall take all necessary
action that may be required in qualifying or registering the
Warrant Securities included in a registration statement for
offering and sale under the securities or blue sky laws of
such states as reasonably are requested by the Holder(s),
provided that the Company shall not be obligated to execute
or file any general consent to service of process or to
qualify as a foreign corporation to do business under the
laws of any such jurisdiction.
(d) The Company shall indemnify and hold
harmless the Holder(s) of the Warrant Securities to be sold
pursuant to any registration statement and each person, if
any, who controls such Holder(s) within the meaning of
Section 15 of the Securities Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all loss, claim, damage,
expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against
any claim whatsoever including, without limitation, the fees
and expenses of legal counsel) to which any of them may
become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement, but
only to the same extent and with the same effect as the
provisions contained in Section 7(a) of the Underwriting
Agreement pursuant to which the Company has agreed to
indemnify each of the Underwriters.
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(e) The Holder(s) of the Warrant Securities
to be sold pursuant to a registration statement, and their
successors and assigns, shall severally, and not jointly,
indemnify the Company and its officers and directors and
each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, from and against any and all loss,
claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending
against any claim whatsoever including, without limitation,
the fees and expenses of legal counsel) to which they may
become subject under the Securities Act, the Exchange Act or
otherwise, arising from information furnished in writing by
or on behalf of such Holders or their successors or assigns,
specifically for inclusion in such registration statement,
but only to the same extent and with the same effect as the
pursuant to which the Underwriters have agreed to indemnify
the Company contained in Section 7(b) of the Underwriting
Agreement.
(f) Nothing contained in this Agreement
shall be construed as requiring the Holder(s) to exercise
their Representatives' Warrants prior to the initial filing
of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the
inclusion of any securities other than the Warrant
Securities to be included in any registration statement
filed pursuant to Section 7.3 hereof or permit any other
registration statement to be or remain effective during the
effectiveness of the registration statement filed pursuant
to Section 7.3 hereof without the prior written consent of
the Holders of the Representatives' Warrants and the other
Warrant Securities representing a Majority of such
securities.
(h) The Company shall cause to be furnished
to each Holder participating in the offering and to each
underwriter, if any, a signed counterpart, addressed to such
Holder or underwriter, of (i) an opinion of counsel to the
Company, dated the effective date of such registration
statement (or if such registration includes an underwritten
public offering, an opinion dated the date of the closing
under the underwriting agreement), and (ii) a "cold comfort"
letter dated the effective date of such registration
statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the
closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on
the Company's financial statements included in such
registration statement, 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.
(i) The Company shall as soon as practicable
after the effective date of the registration statement, 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
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Act and covering a period of at least 12 consecutive months beginning after
the effective date of the registration statement.
(j) The Company shall deliver promptly to
each Holder participating in the offering requesting the
correspondence and memoranda described below and to the
managing underwriters, copies of all correspondence between
the Commission and the Company, its counsel or auditors and
all memoranda relating to discussions with the Commission or
its staff with respect to the registration statement and
permit each Holder and underwriter to do such investigation,
upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as
it deems reasonably necessary to comply with applicable
securities laws or the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD"). Such
investigation shall include access to books, records and
properties and opportunities to discuss the business of the
Company with its officers and independent auditors, all to
such reasonable extent and at such reasonable times and as
often as any such Holder or underwriter shall reasonably
request.
(k) With respect to a registration under
Section 7.3 hereto the Company shall enter into an
underwriting agreement with the underwriters selected for
such underwriting by the Holders of a Majority of the
Warrant Securities requesting such registration, which may
be the Representatives. Such agreement shall be reasonably
satisfactory in form and substance to the Company, each
Holder and such managing underwriters, and shall contain
such representations, warranties and covenants by the
Company and such other terms and conditions as are
customarily contained in agreements of the type used by the
managing underwriter. The Holders shall be parties to any
underwriting agreement relating to an underwritten sale of
their Warrant Securities and may, at their option, require
that any or all the representations, warranties and
covenants of the Company to or for the benefit of such
underwriters shall also be made to and for the benefit of
such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the
Company or the underwriters except as they may relate to
such Holders and their intended methods of distribution.
(l) In addition to the Warrant Securities,
upon the written request therefor by any Holder(s), the
Company shall include in the registration statement any
other securities of the Company held by such Holder(s) or
issuable upon conversion or exercise or in exchange for
securities held by such Holder(s) as of the date of filing
of such registration statement.
(m) For purposes of this Agreement, the term
"Majority" or "66-2/3%" in reference to the Holders of
Representatives' Warrants and/or other Warrant Securities,
shall mean in excess of 50%, in the former case, and
66-2/3%, in the latter case, of the shares of Common Stock
issued or issuable upon exercise of all then outstanding
Representatives' Warrants and/or Warrant Securities
(assuming the exercise of all of the Representatives'
Warrants) that (i) are not held by the Company, an
affiliate, officer, creditor, employee, or agent thereof or
any of their respective affiliates, members of their family,
persons acting as nominees or in conjunction therewith, and
(ii) have not been resold to the public.
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7.5 Underwriters. In connection with an
underwritten offering pursuant to Section 7.2, the Company
shall (together with all Holders, directors, officers and
other stockholders proposing to distribute their securities
(the "Other Stockholders")) enter into an underwriting
agreement in customary form with the representatives of the
underwriter or underwriters selected for such underwriting
by a majority in interest of the Holders and reasonably
acceptable to the Company. If the managing underwriter of
such underwritten offering advises the Company, the Holders
and the Other Stockholders in writing that the inclusion of
the Warrant Securities would materially adversely effect the
proposed offering, the number of securities that may be
included in such a registration shall be allocated among all
security holders who wish to include their securities in
such registration in , as nearly as practicable, to
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the respective amounts of securities which would
otherwise be included in such registration held by such
security holders at the time of the filing of the related
registration statement.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the
Company shall at any time subdivide or combine the
outstanding shares of Common Stock, the Exercise Price shall
forthwith be proportionately decreased in the case of a
subdivision or increased in the case of a combination.
8.2 Stock Dividends and Distributions. 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
shall forthwith be proportionately decreased. An adjustment
made pursuant to this Section 8.2 shall be made as of the
record date for the subject stock dividend or distribution.
8.3 Adjustment in Number of Securities. Upon
each adjustment of the Exercise Price per shares of Common
Stock purchasable hereunder pursuant to the provisions of
this Section 8, the respective numbers of shares of Common
Stock issuable upon the exercise of each Representatives'
Warrant shall be adjusted to the nearest full amount by
multiplying a number equal to the Exercise Price per share
of Common Stock purchasable hereunder in effect immediately
prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of the Representatives'
Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price per
share of Common Stock purchasable hereunder.
8.4 Definition of Common Stock. For the purpose
of this Agreement, the term "Common Stock" shall mean (i)
the class of stock designated as Common Stock in the
Certificate of Incorporation of the Company as may be
amended as of the date hereof or (ii) any other class of
stock resulting from successive changes or reclassifications
of such shares of Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no
par value to par value.
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8.5 Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company
with, or merger of the Company into, another corporation
(other than a consolidation or merger that does not result
in any reclassification or change of the outstanding share
of Common Stock), the corporation formed by such
consolidation or surviving such merger shall execute and
deliver to the Holder a supplemental warrant agreement
providing that the Holder of each Representatives' Warrant
outstanding immediately prior to the effective time of such
consolidation or merger shall have the right thereafter
(until the expiration of such Representatives' Warrant) to
receive, upon exercise of such Representatives' Warrant, the
kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a
Holder of the number of shares of Common Stock of the
Company for which such Representatives' Warrant might have
been exercised immediately prior to such consolidation or
merger. Such supplemental warrant agreement shall provide
for adjustments that shall be identical to the adjustments
provided in Section 8. The above provision of this
subsection shall similarly apply to successive
consolidations or mergers.
9. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense,
upon the surrender thereof by the registered Holder at the
principal executive office of the Company, for a new Warrant
Certificate or Warrant Certificates of like tenor and date
representing in the aggregate the right to purchase the same
number of shares of Common Stock in such denominations as
shall be designated by the Holder thereof at the time of
such surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or
mutilation of any Warrant Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender
and cancellation of the Representatives' Warrants, if
mutilated, the Company shall execute and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company
shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the
Representatives' Warrants, but instead shall pay cash in
lieu of fractional interests, based on the market value of a
share of Common Stock.
11. Reservation and Listing of Securities. The
Company shall at all times reserve and keep available out of
its authorized shares of Common Stock, solely for the
purpose of issuance upon the exercise of the
Representatives' Warrants, such number of shares of Common
Stock or other securities, property or rights as shall be
issuable upon the exercise thereof, The Company covenants
and agrees that, upon exercise of the Representatives'
Warrants in the manner provided herein and therein and
payment of the Exercise Price herein and/or the exercise
price therein, as the case may be, all shares of Common
Stock and other securities issuable upon the exercise of the
Representatives' Warrants shall be duly and validly issued,
fully paid, non-assessable and not subject to the preemptive
rights of any stockholder or other person or entity. As
long as the Representatives' Warrants shall be outstanding,
the Company shall use
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its best efforts to cause all shares of Common Stock issuable upon the exercise
of the Representatives' Warrants to be listed (subject to official
notice of issuance) on all securities exchanges and/or
quoted in such inter-dealer quotation systems on which the
Common Stock issued to the public in connection with the
Public Offering may then be listed and/or quoted.
12. Notices to Warrant Holders. Nothing contained in
this Agreement shall be construed as conferring upon the
Holders the right to vote or to consent or to receive notice
as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as
having any rights whatsoever as a stockholder of the
Company. If; however, at any time prior to the expiration
of the Representatives' Warrants and their exercise, any of
the following events shall occur:
(a) the Company shall take a record of the
holders of its shares of Common Stock for the purpose of
entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of earned surplus, as indicated
by the accounting of such dividend or
-----------------
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of
its Common Stock any additional shares of capital stock of
the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding-up of
the Company (other than in connection with a consolidation
or merger) or a sale of all or substantially all of its
property, assets and business as an entirety shall be
proposed;
then, in any one or more of said events, the Company shall
give written notice of such event at least 15 days prior to
the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders
entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation,
winding-up or sale. Such notice shall specify such record
date or the date of closing the transfer books, as the case
may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in
connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or
any proposed dissolution, liquidation, winding-up or sale.
13. Notices.
All notices, requests, consents and other
communications hereunder shall be in writing and shall be
deemed to have been duly made and sent when delivered, or
mailed by registered or certified mail, return receipt
requested:
12
(a) If to the registered Holder of Representatives' Warrants,
to the address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth
in Section 3 hereof or to such other address as the Company
may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the
Representatives may from time to time supplement or amend
this Agreement without the approval of any holders of
Warrant Certificates (other than the Representatives) in
order to cure any ambiguity, to correct or supplement any
provision contained herein that may be defective or
inconsistent with any provisions herein, or to make any
other provisions in regard to matters or questions arising
hereunder which the Company and the Representatives may deem
necessary or desirable and that the Company and the
Representatives deem shall not adversely affect the
interests of the Holders of Warrant Certificates; provided,
however, that this Agreement shall not otherwise be
modified, supplemented or altered in any respect (including,
without limitation, any decrease in the number or any change
in the nature of the securities purchasable upon the
exercise of any Representatives' Warrant, or any increase in
the Exercise Price there for, other than such changes as are
prescribed in this Agreement as originally executed) except
with the consent in writing of the registered Holders
representing no less than 66-2/3% of the Warrant Securities
(as defined in Section 7.4(m) hereof).
15. Successors. All the covenants and provisions of
this Agreement shall be binding upon and inure to the
benefit of the Company, the Holders and their respective
successors and assigns hereunder.
16. Termination. This Agreement shall terminate at
5:00 p.m. New York time on the close of business on
,2002. Notwithstanding the foregoing, the
----------------
indemnification provisions of Section 7 hereof shall survive
such termination until the close of business on
, 2007.
-----------------
17. Governing Law; Submission to Jurisdiction. This
Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect
to the rules of said State governing the conflicts of laws.
The Company and the Representatives hereby agree that
any action, proceeding or claim against it arising out of,
or relating in any way to, this Agreement shall be brought
and enforced in the courts of the State of New York or of
the United States of America for the Eastern District of New
York, and irrevocably submit to such jurisdiction, which
jurisdiction shall be exclusive. The Company and the
Representatives hereby irrevocably waive any objection to
such exclusive jurisdiction or inconvenient forum.
Any such process or summons to be served upon the
Company or the Representatives (at the option of the party
bringing such action, proceeding or claim) may be served by
transmitting
13
a copy thereto by registered or certified mail,
return receipt requested, postage prepaid, addressed to it
at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and
binding upon the ▇▇▇▇▇ so served in any action, proceeding
or claim. The Company and the Representatives agree that
the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all
of its/their reasonable legal costs and expenses relating to
such action or proceeding and/or incurred in connection with
the preparation therefor.
18. Entire Agreement; Modification. This Agreement
(including the Underwriting Agreement to the extent portions
thereof are referred to herein) contains the entire
understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended
except as provided in Section 15 hereof.
19. Severability. If any provision of this Agreement
shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other
provision of this Agreement. The parties agree, however,
that in the event any provision of this Agreement shall be
declared invalid or unenforceable, the parties shall
negotiate a new provision achieving to the extent possible
the purpose of the invalid provision.
20. Captions. The caption headings of the Sections
of this Agreement are for convenience of reference only and
are not intended, nor should they be construed as, a part of
this Agreement and shall be given no substantive effect.
21. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or
corporation other than the Company and the Representatives
and any other registered Holder(s) of the Warrant
Certificates or Warrant Securities any legal or equitable
right, remedy or claim under this Agreement.
14
22. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and such
counterparts shall together constitute but one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first
above written.
APOLLO BIOPHARMACEUTICS, INC.
By:
----------------------------
Name:
Title:
NEIDIGER, TUCKER, BRUNER, INC.
By:
----------------------------
Name:
Title:
[SEAL] WESTPORT RESOURCES INVESTMENT
SERVICES, INC.
Attest:
By:
-------------------------- ----------------------------
Secretary Name:
Title:
15
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
No. W VOID AFTER , 2002
------ -----------
----------- WARRANTS
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 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 Unit, such Unit consisting of two fully paid
and nonassessable share of Common Stock, $0.02 par value, of
Apollo BioPharmaceutics, Inc., a Delaware corporation (the
"Company"), and one Redeemable Warrant to purchase one share
of Common Stock at any time from , 1997 (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 $ , 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
Representatives' Warrant Agreement (the "Warrant
Agreement"), dated , 1997 [date of the
--------------
Prospectus], by and between the Company and Neidiger,
Tucker, Bruner, Inc. and Westport Resources Investment
Services, Inc. This Warrant Certificate is being issued
upon exercise of certain Representatives' Warrants issued by
the Company and dated as of , 1997.
-----------------
In the event of certain contingencies provided for
in the Warrant Agreement, the Exercise Price and the number
of Units 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 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 , 2002. If such date shall in
-----------
the City of New York 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. New
York 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 best 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 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
2
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, equaled or exceeded $ per share (subject to
------
adjustment in the event of any stock splits or other similar events);
provided, further that so long as this Warrant is held by the Representatives
or an affiliate of the Representatives, the Company may not redeem this
Warrant. 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 on
this Certificate.
Prior to due presentment for registration of
transfer hereto 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 may not be transferred
for a period of one year from the Initial Warrant Exercise
Date, except to officers of the Representatives or to
members of the Representatives' selling group in the Public
Offering.
This Warrant Certificate shall be governed by and
construed in accordance with the laws of the State of New
York.
3
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 , 1997
-----------------
SEAL APOLLO BIOPHARMACEUTICS, INC.
By:
-----------------------
Name:
Title:
By:
-----------------------
Name:
Title:
COUNTERSIGNED:
AMERICAN STOCK TRANSFER AND TRUST COMPANY,
as Warrant Agent
By:
--------------------------------
Authorized Officer
4
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise
the right, represented by this Warrant Certificate, to
purchase shares of Common Stock and
--------------------
herewith tenders in payment for such securities a certified
or official bank check payable in New York Clearing House
Funds to the order of APOLLO BIOPHARMACEUTICS, INC. (the
"Company") in the amount of $ , all in accordance
---------
with the terms of Section 3.1 of the Representatives'
Warrant Agreement dated as of , 1997 between
---------------
the Company and NEIDIGER, TUCKER, BRUNER, INC. and WESTPORT
RESOURCES INVESTMENT SERVICES, INC. The undersigned
requests that a certificate or certificates for such
securities be registered in the name of
whose address is
----------------------
and whose social
------------------------------------------
security or taxpayer identification number is
and that such certificate or
-------------------------
certificates be delivered to
whose address is
----------------------------------
------------------------------------------------------------
.
----------
Dated: Signature
-------------- ----------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate.)
-------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
-----------------------
transfers unto
------------------------------------------------------------
(Please print name and address of transferee)
Representatives' Warrants
----------------------------------
represented by this Warrant Certificate, together with all
right, title and interest therein, and does hereby
irrevocably constitute and appoint
Attorney, to transfer the
-------------------------------
within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature
----------------- -------------------------------------
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate.)
-----------------------------------------
(Insert Social Security or Other Identifying
Number of Assignee)