<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_ _ _ _ _ _ _ _ _
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarter ended March 31, 1996
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _ _ _ _ _ _ _ to _ _ _ _
Commission File Number 1-10492
EPITOPE, INC.
(Exact name of registrant as specified in its charter)
OREGON NO. 93-0779127
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8505 S.W. Creekside Place
Beaverton, Oregon 97008-7108
(Address of principal executive offices) (Zip code)
(503) 641-6115
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Number of shares of Common Stock, no par value, outstanding as of
March 31, 1996: 12,567,441
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Page No.
- - - -
Condensed Consolidated Balance Sheets at March 31, 1996 and
September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Operations for the three months
and six months ended March 31, 1996 and 1995 . . . . . . . . . . . . 4
Condensed Consolidated Statement of Changes in Shareholders' Equity for
the six months ended March 31, 1996 . . . . . . . . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows for the six months ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . 10
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . .10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 11
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<TABLE>
<CAPTION>
EPITOPE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
3/31/96 9/30/95
(Unaudited)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents . . . . . . . . . . . $ 5,922,113 $ 4,259,897
Marketable securities . . . . . . . . . . . . . 12,599,061 17,080,246
Accounts receivable, net of allowance for
doubtful accounts of $26,386 and $72,044,
respectively . . . . . . . . . . . . . . . . 717,559 367,487
Other receivables . . . . . . . . . . . . . . . 1,035,882 1,376,543
Inventories (Note 2) . . . . . . . . . . . . . 1,352,579 1,433,746
Prepaid expenses . . . . . . . . . . . . . . . 407,046 159,463
----------- ----------
Total current assets . . . . . . . . . . . . . 22,034,240 24,677,382
Property and equipment, net . . . . . . . . . . 2,164,818 2,544,772
Patents and proprietary technology, net . . . . 678,872 555,767
Investment in nonconsolidated
subsidiaries . . . . . . . . . . . . . . . . 2,295,665 2,117,343
Other assets and deposits (Note 3) . . . . . . 188,065 238,758
----------- ----------
$27,361,660 $30,134,022
Liabilities and Shareholders' Equity
Current liabilities
Current portion of installment notes payable $ 17,758 $ 17,758
Accounts payable . . . . . . . . . . . . . . . 316,589 945,395
Salaries, benefits and other accrued
liabilities . . . . . . . . . . . . . . . . . 2,883,752 3,182,516
----------- ----------
Total current liabilities . . . . . . . . . . . 3,218,099 4,145,669
Long-term portion of installment notes payable 20,281 21,749
Convertible notes, due 1997 (Note 3) . . . . . 3,620,003 3,620,003
Commitments and contingencies . . . . . . . . . - -
Shareholders' equity (Note 3)
Preferred stock, no par value - 1,000,000
shares authorized; no shares issued or
outstanding . . . . . . . . . . . . . . . . . - -
Common stock, no par value - 30,000,000 shares
authorized; 12,567,441 and 12,485,130 shares
issued and outstanding, respectively . . . . 95,558,122 93,931,947
Accumulated deficit . . . . . . . . . . . . . . (75,054,845) (71,585,346)
----------- ----------
20,503,277 22,346,601
$27,361,660 $30,134,022
</TABLE>
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<TABLE>
<CAPTION>
EPITOPE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three months ended Six months ended
3/31/96 3/31/95 3/31/96 3/31/95
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C> <C> <C> <C>
Revenues
Product sales . . . . . . . . $1,052,818 $1,672,837 $1,887,696 $2,787,950
Grants and contracts . . . . 417,088 1,806 893,349 21,465
- - - - - - - - - - - - - - - - - - - - - - - - - -
1,469,906 1,674,643 2,781,045 2,809,415
Costs and expenses
Product costs . . . . . . . . 682,595 2,202,088 1,168,554 3,975,638
Research and development
costs . . . . . . . . . . . 1,075,420 1,692,517 2,120,973 3,237,228
Selling, general, and
administrative expenses . . 1,751,817 2,826,569 3,405,460 5,079,109
- - - - - - - - - - - - - - - - - - - - - - - - - -
3,509,832 6,721,174 6,694,987 12,291,975
Loss from operations . . . . (2,039,926) (5,046,531) (3,913,942) (9,482,560)
Other income, net . . . . . . 222,789 214,051 444,443 347,868
- - - - - - - - - - - - - - - - - - - - - - - - - -
Net loss . . . . . . . . . . $(1,817,137) $(4,832,480) $(3,469,499) $(9,134,692)
Net loss per share . . . . . $ (.15) $ (.41) $ (.28) $ (.80)
Weighted average number of
shares outstanding . . . . 12,547,795 11,710,176 12,519,936 11,372,657
</TABLE>
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<TABLE>
<CAPTION>
EPITOPE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
Common Stock
Accumulated Shares Dollars Deficit Total
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C> <C> <C> <C>
Balances at September 30,
1995 . . . . . . . . . . . 12,485,130 $93,931,947 $(71,585,346) $22,346,601
Common stock issued upon
exercise of options . . . . 80,060 1,002,722 - 1,002,722
Common stock issued as
compensation . . . . . . . 2,251 37,687 - 37,687
Compensation expense on
stock option grants . . . . - 585,918 - 585,918
Equity issuance costs . . . . - (152) - (152)
Net loss for the period . . . - - (3,469,499) (3,469,499)
- - - - - - - - - - - - - - - - - - - - - - - - - -
Balances at March 31, 1996 . 12,567,441 $95,558,122 $(75,054,845) $20,503,277
</TABLE>
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<TABLE>
<CAPTION>
EPITOPE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six months ended March 31 1996 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C> <C>
Cash flows from operating activities
Net loss . . . . . . . . . . . . . . . . . . . . $(3,469,499) $(9,134,692)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization . . . . . . . . . . 583,266 772,720
(Gain) loss on disposition of property . . . . . 1,402 (24)
Increase in accounts receivable and other
receivables . . . . . . . . . . . . . . . . . . (9,411) (49,833)
(Increase) decrease in inventories . . . . . . . 81,167 (688,932)
Increase in prepaid expenses . . . . . . . . . . (247,583) (284,801)
(Increase) decrease in other assets and
deposits . . . . . . . . . . . . . . . . . . . 3,351 (2,360)
Increase (decrease) in accounts payable and
accrued liabilities . . . . . . . . . . . . . . (927,570) 143,101
Common stock issued as compensation for
services . . . . . . . . . . . . . . . . . . . 37,687 193,487
Compensation expense on stock option grants and
deferred salary increases . . . . . . . . . . . 585,918 570,944
- - - - - - - - - - - - -
Net cash used in operating activities . . . . . . (3,361,272) (8,480,390)
Cash flows from investing activities
Investment in marketable securities . . . . . . . (18,943,849) (6,401,070)
Proceeds from sale of marketable securities . . . 23,425,034 2,941,162
Additions to property and equipment . . . . . . . (60,496) (927,355)
Proceeds from sale of property . . . . . . . . . 4,097 10,080
Expenditures for patents and proprietary
technology . . . . . . . . . . . . . . . . . . (224,078) (144,055)
Investment in nonconsolidated subsidiaries . . . (178,322) (20,260)
- - - - - - - - - - - - -
Net cash provided by (used in) investing
activities . . . . . . . . . . . . . . . . . . 4,022,386 (4,541,498)
Cash flows from financing activities
Principal payments under installment purchase
obligations . . . . . . . . . . . . . . . . . . (1,468) (8,897)
Proceeds from issuance of common stock . . . . . 1,002,722 15,880,345
Cost of equity issuance . . . . . . . . . . . . . (152) (528,595)
- - - - - - - - - - - - -
Net cash provided by financing activities . . . . 1,001,102 15,342,853
Net increase in cash and cash equivalents . . . . 1,662,216 2,320,965
Cash and cash equivalents at beginning of
period . . . . . . . . . . . . . . . . . . . . 4,259,897 11,024,997
- - - - - - - - - - - - -
Cash and cash equivalents at end of period . . . $ 5,922,113 $13,345,962
</TABLE>
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EPITOPE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 - The Company
Epitope, Inc. (the Company or Epitope) is an Oregon corporation utilizing
biotechnology to develop and market medical diagnostic products and, through
its agricultural units, superior new plants and related products.
Note 2 - Summary of Significant Accounting Policies
CONSOLIDATION
The interim condensed consolidated financial statements include the accounts
of Epitope and its wholly owned subsidiaries.
The interim condensed consolidated financial statements included herein are
unaudited; however, in the opinion of the Company, the interim data include
all adjustments, consisting only of normal recurring adjustments, necessary
for a fair statement of the results of operations for the interim periods.
These condensed consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's 1995 Annual Report on Form 10-K.
Results of operations for the period ended March 31, 1996 are not necessarily
indicative of the results of operations for the full fiscal year.
INVENTORIES
March 31, 1996 September 30, 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Raw materials . . . . . . . . . . . . $ 786,744 $ 657,568
Work-in-process . . . . . . . . . . . 354,937 379,470
Finished goods . . . . . . . . . . . . 158,316 295,032
Supplies . . . . . . . . . . . . . . . 52,582 101,676
- - - - - - - - - - - -
$1,352,579 $1,433,746
NET LOSS PER SHARE
Net loss per share is computed using the weighted average number of shares of
common stock outstanding during the period. Unexercised stock options and
warrants are excluded from such computations because their effect on net loss
per share would be antidilutive.
SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash financing activities not included in the Consolidated Statements of
Cash Flows for the six months ended March 31, 1996 and 1995 are as follows:
1996 1995
- ------------------------------------------------------------------------------
Conversion of notes to equity (Note 3) . . . . $ - $ 427,496
<PAGE>
EPITOPE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (continued)
Note 3 - Long-Term Debt
On June 30, 1992, a wholly owned subsidiary of the Company, Agritope, Inc.
(Agritope), completed a private placement with several European institutional
investors pursuant to which $5,495,000 of convertible notes were issued. The
notes are unsecured, mature on June 30, 1997 and bear interest at the rate of
4% per annum which is payable on each June 30 and December 31 until all
outstanding principal and interest on the notes have been paid in full. In
the event of an initial public offering of Agritope common stock, the notes
would be automatically converted to shares of Agritope common stock at 90% of
the public offering price. Costs incurred in connection with the debt
issuance are included in other assets and are being amortized over the
five-year life of the notes. Amortization expense of debt issuance costs for
the six months ended March 31, 1996 amounted to $47,341, leaving an
unamortized balance of $149,737.
During the six months ended March 31, 1995, investors exchanged $449,991
principal amount of convertible notes for Epitope common stock at a conversion
price of $19.53 per share. In conjunction with the exchanges, unamortized
debt issuance costs of $22,495 related to such notes were recognized as equity
issuance costs. There were no conversions of convertible notes into the
Company's common stock during the six months ended March 31, 1996.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company recorded revenues of $1.5 million and $2.8 million, respectively,
for the quarter and six-month period ended March 31, 1996, which were 12% and
1% lower than revenues for the respective periods of fiscal 1995. Product
sales were $1.1 million and $1.9 million for the respective 1996 periods.
Sales of the Company's Western Blot Kit HIV confirmatory test, EPIblot(R), for
the current quarter totaled $403,000, 21% lower than the revenues for the
second quarter of fiscal 1995. For the six-months ended March 31, 1996,
EPIblot sales of $745,000 were 32% below sales for the comparable period of
the prior year. For the six-month period, 97% of EPIblot sales were made in
the U.S. as compared to 95% for the comparable 1995 period. As of March 31,
1996, firm orders for EPIblot amounted to $588,000, including $358,000
scheduled for shipment during the upcoming quarter.
The Company's oral specimen collection device produced revenues of $647,000
for the current quarter as compared to $195,000 for the second quarter of
fiscal 1995. Sales of the device for the six-month period ended March 31,
1996 were $1.1 million, an increase of $809,000 over the first six months of
fiscal 1995. The increase in sales is attributable to increased use of the
device for insurance testing purposes. As of March 31, 1996, the Company had
firm orders for the device totaling $1.4 million, including $604,000 currently
scheduled for shipment before June 30, 1996.
Gross margins on product sales were 35% for the current quarter and 38% for
the six months ended March 31, 1996. Gross margins on product sales were
negative for both the second quarter and for the first six-months of fiscal
1995. Increased volume of sales of the Company's oral specimen collection
device accounted for the improved margins for medical products. The Company's
fresh flower operations, which were divested in the third quarter of fiscal
1995, experienced negative margins in 1995.
The loss from operations amounted to $2.0 million and $3.9 million for the
quarter and six months ended March 31, 1996, respectively, as compared to $5.0
million and $9.5 million for the same periods in fiscal 1995. The Company's
two agricultural operations which were divested in the third quarter of fiscal
1995 accounted for $1.4 million and $3.0 million of operating losses in the
second quarter and first six months of fiscal 1995, respectively. The medical
products division accounted for reduced operating losses of $1.1 million and
$2.1 million for the current quarter and six-month periods, respectively, due
to increased product sales volumes, contract revenues from SmithKline Beecham
and cost savings from a September 1995 restructuring program.
Other income, net, for the six-months ended March 31, 1996 and 1995 consisted
of interest income on the Company's investment of excess funds, less interest
expense on convertible notes (see Note 3 to the Condensed Consolidated
Financial Statements). Interest income increased in fiscal 1996 due to higher
levels of funds available for investment.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and marketable securities as of March 31, 1996
amounted to $18.5 million as compared to $21.3 million at September 30, 1995.
At March 31, 1996, the Company had working capital of $18.8 million as
compared to $20.5 million at September 30, 1995.
Proceeds from the issuance of equity securities represent the primary source
of funds for meeting the Company's requirements for operations, working
capital, and business expansion. During the six-months ended March 31, 1996,
the Company received $1.0 million from the exercise of employee stock options.
<PAGE>
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The 1996 annual meeting of shareholders (the Annual Meeting) of the
Company was held on February 20, 1996.
(b) At the Annual Meeting, the following individuals were elected by the
votes indicated as Class II directors of the Company for terms expiring in
1999:
Shares Voted at Annual Meeting
NOMINEE FOR WITHHELD
------------------- ---------- --------
Andrew S. Goldstein 11,162,404 112,691
R. Douglas Norby 11,190,680 84,415
G. Patrick Sheaffer 11,193,515 81,580
The other directors whose terms of office continued after the Annual
Meeting are: W. Charles Armstrong; Richard K. Donahue; Adolph J. Ferro,
Ph.D.; Margaret H. Jordan; Michael J. Paxton; Roger L. Pringle.
Item 5. OTHER INFORMATION
In January 1996, the U.S. Patent Office issued a patent covering a collection
device designed for use with the Company's OraQuick(R) rapid diagnostic
technology. This is the seventh U.S. patent issued with respect to the
Company's oral specimen collection technology.
In February 1996, Agritope formed Superior Tomato Associate, L.L.C. (STA), a
limited liability company, owned by Agritope; Sunseeds Company, a producer of
vegetable seeds; and Andrew & Williamson Sales Company, Inc., a producer and
distributor of cherry, roma and vine ripened tomatoes. STA is developing
cherry, roma and vine ripe large fruited tomato varieties which are expected
to have longer post-harvest shelf life and other advantageous characteristics.
The development program will utilize Agritope's ethylene-control technology
and Sunseeds' tomato germplasm. STA will also manage production and wholesale
distribution of the tomatoes developed under the program. The three owners of
STA will share development costs and profits equally.
In March 1996, Agritope received notification that the U.S. Department of
Agriculture had granted non-regulated status to a tomato variety containing
Agritope's ethylene control gene. Separately, the FDA also notified Agriptope
that it had sucessfully completed a consultation with the agency that resulted
in a determination that the tomatoes derived from the variety are not
materially different in composition, safety and other relevant parameters from
tomatoes currently on the market and that the genetically modified tomato does
not raise issues that would require premarket review or approval by the FDA.
Agritope does not intend to commercialize the subject variety, but it will
introduce the same gene into varieties developed by STA.
In April 1996, the FDA approved the Company's application to extend the
expiration date on the Company's oral specimin device from nine months to two
years. Achievement of this milestone resulted in a payment to the Company of
$4.2 million cash from an escrow account established in April 1995 by its
marketing partner, SmithKline Beecham, plc. The FDA decision also eliminated
certain contingencies affecting a $1 million license fee received in 1995. As
a result, the Company will recognize a license fee of $5 million plus interest
income of approximately $200,000 in its operating results for the quarter
ending June 30, 1996.
The Company's oral specimen collection device was approved for use in
screening for antibodies to HIV-1 in December 1994. In December 1995, the FDA
advised the Company that its application seeking permission to market its
Western blot confirmatory test for use in HIV-1 testing with the device was
approvable, subject to satisfactory completion of a facilities inspection and
submission, review and acceptance of certain additional information. The
agency advised the Company in April 1996 that its inspection was
satisfactorily completed. The Company has submitted all additional
information requested by the FDA and is awaiting completion of the Agency's
final review.
In June 1995, VF Holding, Inc. (VF) agreed to purchase all of the common stock
of Vinifera, Inc. (Vinifera) for $3.9 million due on June 15, 1995,
$2.0 million due on November 15, 1995 and up to $5 million in earnout payments
based on gross profits of Vinifera. VF also agreed to contribute $4 million
of operating funds to Vinifera, of which $450,000 was paid on June 1, 1995.
To date, additional contributions totalling $380,000 have been made, but all
other payments are in default. In February 1996, Agritope and Vinifera filed
suit in the U.S. District Court for the District of Oregon against VF and
certain related individuals alleging federal and state securities laws
violations, fraud and breach of agreement and seeking both monetary and
injunctive relief.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibits are listed on the attached exhibit index following the signature
page of this report.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EPITOPE, INC., an Oregon corporation
May 15, 1996 ADOLPH J. FERRO, PH.D.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Date Adolph J. Ferro, Ph.D.
President, Chief Executive Officer
and Director
(PRINCIPAL EXECUTIVE OFFICER)
May 15, 1996 GILBERT N. MILLER
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Date Gilbert N. Miller
Executive Vice President, Chief
Financial Officer
(PRINCIPAL FINANCIAL OFFICER)
May 15, 1996 TERRY J. PAULSEN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Date Terry J. Paulsen
Accounting Manager
(PRINCIPAL ACCOUNTING OFFICER)
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- - - - - - - - - -
4.1 Current form of warrant certificate for warrants issued in
December 1992 offering
4.2 Current form of warrant certificate for warrants issued in
July 1993 offering
4.3 Current form of warrant certificate for warrants issued in
August 1993 offering
27 Financial data schedule
<PAGE>
<PAGE>
Exhibit 4.1
THESE WARRANTS AND THE SHARES OF COMMON STOCK UNDERLYING THESE WARRANTS HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
("1933 ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE
DISPOSED OF, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES
OR TO A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE 1933
ACT), NOR MAY THESE WARRANTS BE EXERCISED IN THE UNITED STATES OR BY OR ON
BEHALF OF A U.S. PERSON, UNLESS (i) THE TRANSACTION IS REGISTERED UNDER THE
1933 ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE, TERRITORY OR
POSSESSION OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA ("STATE ACT"), OR
(ii) AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE
ACT IS AVAILABLE AND THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL TO SUCH
EFFECT REASONABLY SATISFACTORY TO IT.
COMMON STOCK PURCHASED PURSUANT TO THE EXERCISE OF THESE WARRANTS MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED OR DISPOSED OF FOR A PERIOD OF 60 DAYS AFTER THE
DATE OF PURCHASE OF SUCH COMMON STOCK
VOID AFTER 5 P.M., UNITED STATES PACIFIC TIME,
ON SEPTEMBER 30, 1996
OR SUCH EARLIER DATE AS SPECIFIED HEREIN
WARRANTS TO PURCHASE COMMON STOCK
Warrant No. Number of Warrants
EPITOPE, INC.
THIS CERTIFIES THAT
Warrantholder
or registered assigns, is the registered holder of the number of Warrants
(each, a "Warrant," and collectively, "Warrants") set forth above. Each
Warrant represented by this certificate for Warrants ("Warrant Agreement")
entitles the registered holder thereof (the "Warrantholder") to purchase from
Epitope, Inc., a corporation incorporated under the laws of the state of
Oregon ("Company"), United States of America ("U.S."), one fully paid and
nonassessable share of common stock, no par value, of the Company ("Common
Stock") upon presentation and surrender of this Warrant Agreement with the
accompanying Election to Exercise Warrants duly completed, at any time prior
to 5 P.M., U.S. Pacific time, on the Expiration Date (as defined in
Section 2), at the corporate offices of the Company at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, or at such other address as may be specified
by the Company pursuant to Section 9, accompanied by payment of the Exercise
Price (as defined herein) and any applicable taxes, either in cash in
U.S. funds or by certified or official bank check in U.S. funds payable to the
order of the Company. These Warrants are issued pursuant to a Warrant
Purchase Agreement ("Purchase Agreement") among the Company and the Investors
described therein dated as of November 25, 1992.
Section 1. Exercise Price. Each Warrant entitles the Warrantholder to
purchase one share of Common Stock for U.S. $18.50 (the "Exercise Price"),
subject to adjustment as provided herein.
Section 2. Expiration. All Warrants not theretofore exercised shall
expire at 5 p.m., U.S. Pacific time, on the earlier of the following dates
(the "Expiration Date"): (a) September 30, 1996 and (b) the expiration of 120
days after the first period of 20 consecutive trading days during which period
the average of the high and low sales prices of the Common Stock on the
American Stock Exchange is at least $30.00.
Section 3. Adjustments of Number and Kind of Shares Purchasable and
Exercise Price. The number and kind of securities or other property
purchasable upon exercise of a Warrant shall be subject to adjustment from
time to time upon the occurrence, after the date hereof, of the following
events:
3.1 If the outstanding shares of the Company's Common Stock
are divided into a greater number of shares or a dividend in Common
Stock is paid on the Common Stock, the number of shares of Common
Stock issuable on exercise of the Warrants shall be proportionately
increased and the Exercise Price in effect immediately prior to such
subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be
proportionately reduced; and, conversely, if the outstanding shares
of Common Stock are combined into a smaller number of shares of
Common Stock, the number of shares of Common Stock issuable upon
exercise of the Warrants shall be proportionately reduced and the
Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. The increases and reductions provided
for in this subsection 3.1 shall be made with the intent and, as
nearly as practicable, the effect that neither the percentage of the
total equity of the Company issuable on exercise of the Warrants nor
the price payable for such percentage upon such exercise shall be
affected by any event described in this subsection 3.1.
3.2 No adjustment of the Exercise Price will be made if the
amount of the adjustment is less than U.S. $.01 per share, but in
that case any adjustment that would otherwise be required to be made
will be carried forward and will be made at the time of and together
with the next adjustment of the Exercise Price which, together with
any adjustment carried forward, amounts to U.S. $.01 per share or
more.
3.3 In case of any change in the Common Stock of the Company
through merger, consolidation, reclassification, reorganization,
partial or complete liquidation, or other change in the capital
structure of the Company (not including a combination of shares or
the issuance of additional shares of Common Stock by the Company by
stock split or stock dividend), then, as a condition of the change
in the capital structure of the Company, provision shall be made so
that the holder of this Warrant Agreement will have the right
thereafter to receive upon the exercise of the Warrants the kind and
amount of shares of stock or other securities or property to which
such holder would have been entitled if, immediately prior to such
merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure, such
holder had held the number of shares of Common Stock issuable upon
the exercise of the Warrants. In any such case, appropriate
adjustment shall be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of
the Warrantholder, to the end that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon the exercise of the Warrants. The Company will not
permit any change in its capital structure to occur unless the
issuer of the shares of stock or other securities to be received by
the holder of this Warrant Agreement, if not the Company, agrees to
be bound by and comply with the provisions of this Warrant
Agreement.
3.4 When any adjustment is required to be made in the number
of shares of Common Stock, other securities, or property purchasable
upon exercise of the Warrants, the Company shall promptly determine
the new number of shares or other securities or property purchasable
upon exercise of the Warrants and (a) prepare and retain on file a
statement describing in reasonable detail the method used in
arriving at the new number of shares or other securities or property
purchasable upon exercise of the Warrants and (b) cause a copy of
such statement to be mailed to the Warrantholder within thirty (30)
days after the date when the event giving rise to the adjustment
occurred.
3.5 No fractional shares of Common Stock or other securities
shall be issued in connection with the exercise of any Warrants, but
the Company shall pay, in lieu of fractional shares, a cash payment
therefor on the basis of the closing price on a national securities
exchange on the day immediately prior to exercise or, if the Common
Stock or other securities are not traded on a national securities
exchange on such day, on the basis of the fair market value thereof
as determined by the board of directors of the Company, which
determination shall be conclusive.
3.6 Notwithstanding anything herein to the contrary, there
shall be no adjustment made hereunder on account of the sale and
issuance of the shares of Common Stock or other securities
purchasable upon exercise of the Warrants.
Section 4. Rights of Warrantholder as Shareholder. No holder of this
Warrant Agreement shall, as such, be entitled to vote, receive dividends, or
be deemed the holder of Common Stock or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose
whatever, nor shall anything contained herein be construed to confer upon the
holder of this Warrant Agreement, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof or give or withhold
consent to any corporate action (whether upon any matter submitted to
shareholders at any meeting thereof or otherwise) including, without
limitation, giving or withholding consent to any merger, recapitalization,
issuance of stock, reclassification of stock, exchange of stock, change of
stock to par value, consolidation or conveyance, or to receive notice of
meetings or other actions affecting shareholders or to receive dividends or
subscription rights or other distributions.
Section 5. Payment of Certain Taxes and Charges. The Company shall not
be required to issue or deliver any certificate for shares of Common Stock or
other securities upon the exercise of Warrants evidenced by this Warrant
Agreement or to register the transfer of the Warrants evidenced hereby until
any applicable transfer tax and any other taxes or governmental charges that
the Company may be required by law to collect in respect of such exercise or
transfer shall have been paid, such tax being payable by the holder of this
Warrant Agreement at the time of surrender for exercise or transfer.
Section 6. Registration. The Company has prepared a registration
statement on Form S-3 (the "Registration Statement") under the 1933 Act with
respect to transfer by the Warrantholder of the Warrants covered by this
Warrant Agreement and the re-sale by the Warrantholder of the shares of Common
Stock issued or issuable upon exercise of this Warrant Agreement (the "Warrant
Shares"). As soon as practicable after the original issue date of this
Warrant Agreement (the "Original Issue Date"), the Company shall file the
Registration Statement with the U.S. Securities and Exchange Commission and
shall use its best efforts to cause the Registration Statement to become
effective under the 1933 Act as promptly as practicable after the Original
Issue Date as provided for in, and in accordance with, the terms and
conditions of the Purchase Agreement.
Section 7. Transfer and Exchange.
7.1 Transfer. This Warrant Agreement is transferable on the
registry books of the Company subject to the restrictions on the
first page hereof and in Section 7.4. The Company may deem and
treat the person or entity in whose name this Warrant Agreement is
registered as the absolute owner hereof (notwithstanding any
notation of ownership or other writing thereon made by anyone other
than the Company) for all purposes whatever, and the Company shall
not be affected by any notice to the contrary.
7.2 Exchange. Subject to the provisions of Section 7.4 and
the restrictions on the first page hereof, this Warrant Agreement is
exchangeable at the principal office of the Company for Warrant
Agreements to purchase the same aggregate number of shares of Common
Stock as are purchasable hereunder, each new Warrant Agreement to
represent the right to purchase such number of shares as the
Warrantholder shall designate at the time of such exchange.
7.3 Securities Act of 1933. The Warrantholder, by
acceptance hereof, agrees that this Warrant Agreement and the shares
of Common Stock issued or issuable upon exercise of this Warrant
Agreement may not be offered or sold except in compliance with the
1933 Act. The Warrantholder consents to the Company's making a
notation on its records and on the certificates for any shares of
Common Stock issued upon exercise hereof in order to implement such
restriction on transferability.
7.4 Minimum Warrant Agreement Amount. Notwithstanding the
provisions of Section 7.1 and Section 7.2, the Company shall not be
required to issue a Warrant Agreement for Warrants covering less
than 1,000 shares of Common Stock, except in the case of a partial
exercise by the Warrantholder of this Warrant Agreement that leaves
Warrants exercisable to purchase less than 1,000 shares that are to
remain registered in the name of the exercising Warrantholder, and
any subsequent partial exercise, transfer, or exchange of such
Warrant Agreement.
7.5 No Transfer of Common Stock for 60 Days. Common Stock
purchased pursuant to the exercise of these Warrants may not be sold
or otherwise transferred or disposed of for a period of 60 days
after the date of purchase of such Common Stock.
Section 8. Holdback Agreement. The Warrantholder, if requested by the
Company and an underwriter of the Company's securities, shall agree not to
sell or otherwise transfer or dispose of any Warrants or Warrant Shares for a
specified period of time (not to exceed 90 days) following the effective date
of a registration statement pursuant to which the Company proposes to sell its
securities to the public generally; provided, however, that all executive
officers and directors of the Company enter into similar agreements.
Section 9. Notices. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, by international courier
service, or by registered mail, airmail postage prepaid, return receipt
requested, to: (a) the Company at 8505 S.W. Creekside Place, Beaverton,
Oregon 97008, U.S.A., Attn: Secretary, with a copy to Miller, Nash, Wiener,
Hager & Carlsen, 3500 U. S. Bancorp Tower, 111 S.W. Fifth Avenue, Portland,
Oregon 97204, U.S.A., Attn: Erich W. Merrill, Jr., or at such other addresses
as may be specified by the Company by notice given to the Warrantholders in
accordance with this Section 9, and (b) to the Warrantholders at the addresses
set forth in the registry books of the Company referred to in Section 7.1,
with copies to Michel de Beaumont, American Equities Overseas (U.K.) Ltd., 16
Old Bond Street, London W1X 3DB, United Kingdom, and Jack H. Halperin, Esq.,
361 Silver Court, Woodmere, New York 11598, U.S.A. Any notice, request or
other communication (other than an Election to Exercise Warrants) given by
registered airmail shall be deemed given 10 days after the mailing date;
notices, requests, or other communications given in any other manner and any
Election to Exercise Warrants shall be deemed given when received.
Section 10. Amendment. This Warrant Agreement may be amended or its
provisions waived only by an instrument in writing signed by the Company and
the Warrantholder as provided in the Purchase Agreement.
Section 11. Certain Definitions. Rules 9.02(o) and 9.02(p) of
Regulation S promulgated under the 1933 Act defining "U.S. person" and "United
States," respectively, are set forth in Appendix 1.
Section 12. Law Governing. This Warrant Agreement shall be governed by
and construed in accordance with the laws of the state of Oregon, without
giving effect to choice of laws principles thereof.
Dated as of ________________.
EPITOPE, INC.
By_____________________________
Name
Title
<PAGE>
APPENDIX 1
to
Warrant Agreement
Set forth below is the text of Rule 902(o) promulgated under the
1933 Act which defines "U.S. person" as follows:
(o) U.S. Person.
(1) "U.S. person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) Any estate of which any executor or administrator is a
U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the
United States;
(vi) Any nondiscretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. person;
(vii) Any discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in the
United States; and
(viii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction; and
(B) formed by a U.S. person principally for the purpose of investing
in securities not registered under the 1933 Act, unless it is
organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a)) who are not natural persons, estates or
trusts.
(2) Notwithstanding paragraph (o)(1) of this rule, any
discretionary account or similar account (other than an estate or trust) held
for the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an individual) resident
in the United States shall not be deemed a "U.S. person."
(3) Notwithstanding paragraph (o)(1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a
U.S. person has sole or shared investment discretion with respect to
the assets of the estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (o)(1), any trust of which any
professional fiduciary acting as trustee is a U.S. person shall not be deemed
a U.S. person if a trustee who is not a U.S. person has sole or shared
investment discretion with respect to the trust assets, and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding paragraph (o)(1), an employee benefit plan
established and administered in accordance with the law of a country other
than the United States and customary practices and documentation of such
country shall not be deemed a U.S. person.
(6) Notwithstanding paragraph (o)(1), any agency or branch of a
U.S. person located outside the United States shall not be deemed a
"U.S. person" if:
(i) The agency or branch operates for valid business reasons;
and
(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive insurance or
banking regulation, respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be
deemed "U.S. persons."
Set forth below is the text of Rule 9.02(p) promulgated under the
1933 Act which defines "United States" as follows:
(p) "United States" means the United States of America, its
territories and possessions, any State of the United States, and the District
of Columbia.
<PAGE>
ELECTION TO EXERCISE WARRANTS
[NOTE: Unless the transaction has been registered under the 1933 Act
or is exempt from registration thereunder, this Election to Exercise
Warrants must be executed, and the Warrant Shares must be delivered,
outside of the U.S., its territories and possessions.]
To: Epitope, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97008
U.S.A.
The undersigned hereby exercises Warrants represented by the within
Warrant Agreement for ________ shares of the Common Stock of Epitope, Inc.
("Warrant Shares"), and tenders payment herewith in the amount of
U.S. $_________ in accordance with the terms thereof.
The undersigned hereby certifies that (mark one of the two
responses below):
___ (i) It is the sole beneficial owner of the Warrants being
exercised, (ii) it is not a U.S. person, as defined in
Appendix 1 to the within Warrant Agreement and within the
meaning of Regulation S promulgated by the U.S. Securities
and Exchange Commission pursuant to the Securities Act of
1933 ("1933 Act"), and (iii) it is not exercising Warrants
for the benefit of any U.S. person.
--OR--
___ The transaction in which the Warrant Shares will be delivered
upon exercise of the Warrant has been registered under the
1933 Act or is exempt from registration thereunder and
Epitope, Inc., has been provided with a written opinion of
counsel to that effect or has waived the requirement for an
opinion. A legal opinion regarding the registration of the
transaction will be obtained at the expense of Epitope, Inc.,
by its designated legal counsel upon notice of exercise of
the Warrant Agreement by the Warrantholder at any time after
the effective date of a registration statement covering the
transaction; any other legal opinion shall be the
responsibility of the Warrantholder.
THE UNDERSIGNED HEREBY AGREES NOT TO SELL OR OTHERWISE TRANSFER OR
DISPOSE OF THE WARRANT SHARES FOR A PERIOD ENDING 60 DAYS AFTER THE DATE OF
PURCHASE OF THE WARRANT SHARES.
Please deliver the certificate and a new Warrant Agreement for the
unexercised Warrants, if any, to:
____________________________________
____________________________________
____________________________________
Warrantholder:__________________________
By___________________________________
Title:
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the U.S.]
Dated: ____________, 199_
Warrantholder: _____________________________________
Address: _____________________________________
_____________________________________
_____________________________________
<PAGE>
FORM OF ASSIGNMENT
[NOTE: Unless the transaction has been registered under the 1933 Act
or is exempt from registration thereunder, this Assignment must be
executed, and the re-issued Warrants must be delivered, outside of
the U.S., its territories and possessions.]
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
Agreement hereby sells, assigns, and transfers to the Assignee(s) named below
all of the rights of the undersigned under the Warrant Agreement, with respect
to Warrants for the number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares*
- ---------------- ------- -------------
*Please note that the minimum denomination in which Warrant Agreements
may be issued is 1,000 shares of Common Stock.
Dated: ____________, 19___.
Warrantholder:_______________________
By___________________________________
Title:
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the U.S.]
<PAGE>
Exhibit 4.2
THESE WARRANTS AND THE SHARES OF COMMON STOCK UNDERLYING THESE WARRANTS HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
("1933 ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE
DISPOSED OF, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES
OR TO A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE 1933
ACT), NOR MAY THESE WARRANTS BE EXERCISED IN THE UNITED STATES OR BY OR ON
BEHALF OF A U.S. PERSON, UNLESS (i) THE TRANSACTION IS REGISTERED UNDER THE
1933 ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE, TERRITORY OR
POSSESSION OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA ("STATE ACT"), OR
(ii) AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE
ACT IS AVAILABLE AND THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL TO SUCH
EFFECT REASONABLY SATISFACTORY TO IT.
COMMON STOCK PURCHASED PURSUANT TO THE EXERCISE OF THESE WARRANTS MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED OR DISPOSED OF FOR A PERIOD OF 60 DAYS AFTER THE
DATE OF PURCHASE OF SUCH COMMON STOCK.
VOID AFTER 5 P.M., UNITED STATES PACIFIC TIME,
ON MARCH 31, 1997
OR SUCH EARLIER DATE AS SPECIFIED HEREIN
WARRANTS TO PURCHASE COMMON STOCK
Warrant No. 93I- Number of Warrants
EPITOPE, INC.
THIS CERTIFIES THAT
Warrantholder
or registered assigns, is the registered holder of the number of Warrants
(each, a "Warrant," and collectively, "Warrants") set forth above. Each
Warrant represented by this certificate for Warrants ("Warrant Agreement")
entitles the registered holder thereof (the "Warrantholder") to purchase from
Epitope, Inc., a corporation incorporated under the laws of the state of
Oregon ("Company"), United States of America ("U.S."), one fully paid and
nonassessable share of common stock, no par value, of the Company ("Common
Stock") upon presentation and surrender of this Warrant Agreement with the
accompanying Election to Exercise Warrants duly completed, at any time after
the Common Stock issuable upon exercise of this Warrant has been approved for
listing on the American Stock Exchange upon official notice of issuance, and
prior to 5 P.M., U.S. Pacific time, on the Expiration Date (as defined in
Section 2), at the corporate offices of the Company at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, or at such other address as may be specified
by the Company pursuant to Section 9, accompanied by payment of the Exercise
Price (as defined herein) and any applicable taxes, either in cash in U.S.
funds or by certified or official bank check in U.S. funds payable to the
order of the Company. These Warrants are issued pursuant to a 1993 Warrant
Purchase Agreement ("Purchase Agreement") among the Company and the Investors
described therein dated as of July 6, 1993.
Section 1. Exercise Price. Each Warrant entitles the Warrantholder to
purchase one share of Common Stock for U.S. $20.00 (the "Exercise Price"),
subject to adjustment as provided herein.
Section 2. Expiration. All Warrants not theretofore exercised shall
expire at 5 p.m., U.S. Pacific time, on the earlier of the following dates
(the "Expiration Date"): (a) March 31, 1997, and (b) the expiration of 120
days after the first period of 20 consecutive trading days during which period
the average of the high and low sales prices of the Common Stock on the
American Stock Exchange is at least $30.00.
Section 3. Adjustments of Number and Kind of Shares Purchasable and
Exercise Price. The number and kind of securities or other property
purchasable upon exercise of a Warrant shall be subject to adjustment from
time to time upon the occurrence, after the date hereof, of the following
events:
3.1 If the outstanding shares of the Company's Common Stock
are divided into a greater number of shares or a dividend in Common
Stock is paid on the Common Stock, the number of shares of Common
Stock issuable on exercise of the Warrants shall be proportionately
increased and the Exercise Price in effect immediately prior to such
subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be
proportionately reduced; and, conversely, if the outstanding shares
of Common Stock are combined into a smaller number of shares of
Common Stock, the number of shares of Common Stock issuable upon
exercise of the Warrants shall be proportionately reduced and the
Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. The increases and reductions provided
for in this subsection 3.1 shall be made with the intent and, as
nearly as practicable, the effect that neither the percentage of the
total equity of the Company issuable on exercise of the Warrants nor
the price payable for such percentage upon such exercise shall be
affected by any event described in this subsection 3.1.
3.2 No adjustment of the Exercise Price will be made if the
amount of the adjustment is less than U.S. $.01 per share, but in
that case any adjustment that would otherwise be required to be made
will be carried forward and will be made at the time of and together
with the next adjustment of the Exercise Price which, together with
any adjustment carried forward, amounts to U.S. $.01 per share or
more.
3.3 In case of any change in the Common Stock of the Company
through merger, consolidation, reclassification, reorganization,
partial or complete liquidation, or other change in the capital
structure of the Company (not including a combination of shares or
the issuance of additional shares of Common Stock by the Company by
stock split or stock dividend), then, as a condition of the change
in the capital structure of the Company, provision shall be made so
that the holder of this Warrant Agreement will have the right
thereafter to receive upon the exercise of the Warrants the kind and
amount of shares of stock or other securities or property to which
such holder would have been entitled if, immediately prior to such
merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure, such
holder had held the number of shares of Common Stock issuable upon
the exercise of the Warrants. In any such case, appropriate
adjustment shall be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of
the Warrantholder, to the end that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon the exercise of the Warrants. The Company will not
permit any change in its capital structure to occur unless the
issuer of the shares of stock or other securities to be received by
the holder of this Warrant Agreement, if not the Company, agrees to
be bound by and comply with the provisions of this Warrant
Agreement.
3.4 When any adjustment is required to be made in the number
of shares of Common Stock, other securities, or property purchasable
upon exercise of the Warrants, the Company shall promptly determine
the new number of shares or other securities or property purchasable
upon exercise of the Warrants and (a) prepare and retain on file a
statement describing in reasonable detail the method used in
arriving at the new number of shares or other securities or property
purchasable upon exercise of the Warrants and (b) cause a copy of
such statement to be mailed to the Warrantholder within thirty (30)
days after the date when the event giving rise to the adjustment
occurred.
3.5 No fractional shares of Common Stock or other securities
shall be issued in connection with the exercise of any Warrants, but
the Company shall pay, in lieu of fractional shares, a cash payment
therefor on the basis of the closing price on a national securities
exchange on the day immediately prior to exercise or, if the Common
Stock or other securities are not traded on a national securities
exchange on such day, on the basis of the fair market value thereof
as determined by the board of directors of the Company, which
determination shall be conclusive.
3.6 Notwithstanding anything herein to the contrary, there
shall be no adjustment made hereunder on account of the sale and
issuance of the shares of Common Stock or other securities
purchasable upon exercise of the Warrants.
Section 4. Rights of Warrantholder as Shareholder. No holder of this
Warrant Agreement shall, as such, be entitled to vote, receive dividends, or
be deemed the holder of Common Stock or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose
whatever, nor shall anything contained herein be construed to confer upon the
holder of this Warrant Agreement, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof or give or withhold
consent to any corporate action (whether upon any matter submitted to
shareholders at any meeting thereof or otherwise) including, without
limitation, giving or withholding consent to any merger, recapitalization,
issuance of stock, reclassification of stock, exchange of stock, change of
stock to par value, consolidation or conveyance, or to receive notice of
meetings or other actions affecting shareholders or to receive dividends or
subscription rights or other distributions.
Section 5. Payment of Certain Taxes and Charges. The Company shall not
be required to issue or deliver any certificate for shares of Common Stock or
other securities upon the exercise of Warrants evidenced by this Warrant
Agreement or to register the transfer of the Warrants evidenced hereby until
any applicable transfer tax and any other taxes or governmental charges that
the Company may be required by law to collect in respect of such exercise or
transfer shall have been paid, such tax being payable by the holder of this
Warrant Agreement at the time of surrender for exercise or transfer.
Section 6. Registration. The Company has prepared a registration
statement on Form S-3 (the "Registration Statement") under the 1933 Act with
respect to the resale by the Warrantholder of the Warrants covered by this
Warrant Agreement and of the shares of Common Stock issued or issuable upon
exercise of this Warrant Agreement (the "Warrant Shares"). As soon as
practicable after the original issue date of this Warrant Agreement (the
"Original Issue Date"), the Company shall file the Registration Statement with
the U.S. Securities and Exchange Commission and shall use its best efforts to
cause the Registration Statement to become effective under the 1933 Act as
promptly as practicable after the Original Issue Date as provided for in, and
in accordance with, the terms and conditions of the Purchase Agreement.
Section 7. Transfer and Exchange.
7.1 Transfer. This Warrant Agreement is transferable on the
registry books of the Company subject to the restrictions on the
first page hereof and in Section 7.4. The Company may deem and
treat the person or entity in whose name this Warrant Agreement is
registered as the absolute owner hereof (notwithstanding any
notation of ownership or other writing thereon made by anyone other
than the Company) for all purposes whatever, and the Company shall
not be affected by any notice to the contrary.
7.2 Exchange. Subject to the provisions of Section 7.4 and
the restrictions on the first page hereof, this Warrant Agreement is
exchangeable at the principal office of the Company for Warrant
Agreements to purchase the same aggregate number of shares of Common
Stock as are purchasable hereunder, each new Warrant Agreement to
represent the right to purchase such number of shares as the
Warrantholder shall designate at the time of such exchange.
7.3 Securities Act of 1933. The Warrantholder, by
acceptance hereof, agrees that this Warrant Agreement and the shares
of Common Stock issued or issuable upon exercise of this Warrant
Agreement may not be offered or sold except in compliance with the
1933 Act. The Warrantholder consents to the Company's making a
notation on its records and on the certificates for any shares of
Common Stock issued upon exercise hereof in order to implement such
restriction on transferability.
7.4 Minimum Warrant Agreement Amount. Notwithstanding the
provisions of Section 7.1 and Section 7.2, the Company shall not be
required to issue a Warrant Agreement for Warrants covering less
than 1,000 shares of Common Stock, except in the case of a partial
exercise by the Warrantholder of this Warrant Agreement that leaves
Warrants exercisable to purchase less than 1,000 shares that are to
remain registered in the name of the exercising Warrantholder, and
any subsequent partial exercise, transfer, or exchange of such
Warrant Agreement.
7.5 No Transfer of Common Stock for 60 Days. Common Stock
purchased pursuant to the exercise of these Warrants may not be sold
or otherwise transferred or disposed of for a period of 60 days
after the date of purchase of such Common Stock.
Section 8. Holdback Agreement. The Warrantholder, if requested by the
Company and an underwriter of the Company's securities, shall agree not to
sell or otherwise transfer or dispose of any Warrants or Warrant Shares for a
specified period of time (not to exceed 90 days) following the effective date
of a registration statement pursuant to which the Company proposes to sell its
securities to the public generally; provided, however, that all executive
officers and directors of the Company enter into similar agreements.
Section 9. Notices. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, by international courier
service, or by registered mail, airmail postage prepaid, return receipt
requested, to: (a) the Company at 8505 S.W. Creekside Place, Beaverton,
Oregon 97008, U.S.A., Attn: Secretary, with a copy to Miller, Nash, Wiener,
Hager & Carlsen, 3500 U. S. Bancorp Tower, 111 S.W. Fifth Avenue, Portland,
Oregon 97204, U.S.A., Attn: Erich W. Merrill, Jr., or at such other addresses
as may be specified by the Company by notice given to the Warrantholders in
accordance with this Section 9, and (b) to the Warrantholders at the addresses
set forth in the registry books of the Company referred to in Section 7.1,
with copies to Michel de Beaumont, American Equities Overseas (U.K.) Ltd., 16
Old Bond Street, London W1X 3DB, United Kingdom, and Jack H. Halperin, Esq.,
361 Silver Court, Woodmere, New York 11598, U.S.A. Any notice, request or
other communication (other than an Election to Exercise Warrants) given by
registered airmail shall be deemed given ten days after the mailing date;
notices, requests, or other communications given in any other manner and any
Election to Exercise Warrants shall be deemed given when received.
Section 10. Amendment. This Warrant Agreement may be amended or its
provisions waived only by an instrument in writing signed by the Company and
the Warrantholder as provided in the Purchase Agreement.
Section 11. Certain Definitions. Rules 9.02(o) and 9.02(p) of
Regulation S promulgated under the 1933 Act defining "U.S. person" and "United
States," respectively, are set forth in Appendix 1.
Section 12. Law Governing. This Warrant Agreement shall be governed by
and construed in accordance with the laws of the state of Oregon, without
giving effect to choice of laws principles thereof.
Dated as of ________________.
EPITOPE, INC.
By _____________________________________
Name
Title
<PAGE>
APPENDIX 1
to
Warrant Agreement
Set forth below is the text of Rule 902(o) promulgated under the
1933 Act which defines "U.S. person" as follows:
(o) U.S. Person.
(1) "U.S. person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) Any estate of which any executor or administrator is a
U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the
United States;
(vi) Any nondiscretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. person;
(vii) Any discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in the
United States; and
(viii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction; and
(B) formed by a U.S. person principally for the purpose of investing
in securities not registered under the 1933 Act, unless it is
organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a)) who are not natural persons, estates or
trusts.
(2) Notwithstanding paragraph (o)(1) of this rule, any
discretionary account or similar account (other than an estate or trust) held
for the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an individual) resident
in the United States shall not be deemed a "U.S. person."
(3) Notwithstanding paragraph (o)(1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a
U.S. person has sole or shared investment discretion with respect to
the assets of the estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (o)(1), any trust of which any
professional fiduciary acting as trustee is a U.S. person shall not be deemed
a U.S. person if a trustee who is not a U.S. person has sole or shared
investment discretion with respect to the trust assets, and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding paragraph (o)(1), an employee benefit plan
established and administered in accordance with the law of a country other
than the United States and customary practices and documentation of such
country shall not be deemed a U.S. person.
(6) Notwithstanding paragraph (o)(1), any agency or branch of a
U.S. person located outside the United States shall not be deemed a
"U.S. person" if:
(i) The agency or branch operates for valid business reasons;
and
(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive insurance or
banking regulation, respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be
deemed "U.S. persons."
Set forth below is the text of Rule 9.02(p) promulgated under the
1933 Act which defines "United States" as follows:
(p) "United States" means the United States of America, its
territories and possessions, any State of the United States, and the District
of Columbia.
<PAGE>
ELECTION TO EXERCISE WARRANTS
[NOTE: Unless the transaction has been registered under the 1933 Act
or is exempt from registration thereunder, this Election to Exercise
Warrants must be executed, and the Warrant Shares must be delivered,
outside of the U.S., its territories and possessions.]
To: Epitope, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97008
U.S.A.
The undersigned hereby exercises Warrants represented by the within
Warrant Agreement for ________ shares of the Common Stock of Epitope, Inc.
("Warrant Shares"), and tenders payment herewith in the amount of
U.S. $_________ in accordance with the terms thereof.
The undersigned hereby certifies that (mark one of the two responses
below):
___ (i) It is the sole beneficial owner of the Warrants being
exercised, (ii) it is not a U.S. person, as defined in Appendix 1
to the within Warrant Agreement and within the meaning of
Regulation S promulgated by the U.S. Securities and Exchange
Commission pursuant to the Securities Act of 1933 ("1933 Act"), and
(iii) it is not exercising Warrants for the benefit of any U.S.
person.
--OR--
___ The transaction in which the Warrant Shares will be delivered upon
exercise of the Warrant has been registered under the 1933 Act or
is exempt from registration thereunder and Epitope, Inc., has been
provided with a written opinion of counsel to that effect or has
waived the requirement for an opinion. A legal opinion regarding
the registration of the transaction will be obtained at the expense
of Epitope, Inc., by its designated legal counsel upon notice of
exercise of the Warrant Agreement by the Warrantholder at any time
after the effective date of a registration statement covering the
transaction; any other legal opinion shall be the responsibility of
the Warrantholder.
THE UNDERSIGNED HEREBY AGREES NOT TO SELL OR OTHERWISE TRANSFER OR
DISPOSE OF THE WARRANT SHARES FOR A PERIOD ENDING 60 DAYS AFTER THE DATE OF
PURCHASE OF THE WARRANT SHARES.
<PAGE>
Please deliver the certificate and a new Warrant Agreement for the
unexercised Warrants, if any, to:
____________________________________
____________________________________
____________________________________
Warrantholder:__________________________
By___________________________________
Title:
Dated: ____________, 199_
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the U.S.]
Warrantholder: _____________________________________
Address: _____________________________________
_____________________________________
_____________________________________
<PAGE>
FORM OF ASSIGNMENT
[NOTE: Unless the transaction has been registered under the 1933 Act
or is exempt from registration thereunder, this Assignment must be
executed, and the re-issued Warrants must be delivered, outside of
the U.S., its territories and possessions.]
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
Agreement hereby sells, assigns, and transfers to the Assignee(s) named below
all of the rights of the undersigned under the Warrant Agreement, with respect
to Warrants for the number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares*
- ---------------- ------- -------------
*Please note that the minimum denomination in which Warrant Agreements
may be issued is 1,000 shares of Common Stock.
Dated: ____________, 19___.
Warrantholder:__________________________
By___________________________________
Title:
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the U.S.]
<PAGE>
Exhibit 4.3
THESE WARRANTS AND THE SHARES OF COMMON STOCK UNDERLYING THESE WARRANTS HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"),
AND MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED UNLESS THEY
ARE REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THE ISSUER IS FURNISHED
A SATISFACTORY OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
COMMON STOCK PURCHASED PURSUANT TO THE EXERCISE OF THESE WARRANTS MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED OR DISPOSED OF FOR A PERIOD OF 60 DAYS AFTER THE
DATE OF PURCHASE OF SUCH COMMON STOCK.
VOID AFTER 5 P.M., UNITED STATES PACIFIC TIME,
ON MARCH 31, 1997
OR SUCH EARLIER DATE AS SPECIFIED HEREIN
WARRANTS TO PURCHASE COMMON STOCK
Warrant No.
Number of Warrants
EPITOPE, INC.
THIS CERTIFIES THAT
Warrantholder
or registered assigns is the registered holder of the number of Warrants
(each, a "Warrant," and collectively, "Warrants") set forth above. Each
Warrant represented by this certificate for Warrants ("Warrant Agreement")
entitles the registered holder thereof (the "Warrantholder") to purchase from
Epitope, Inc., a corporation incorporated under the laws of the state of
Oregon ("Company"), United States of America ("U.S."), one fully paid and
nonassessable share of common stock, no par value, of the Company ("Common
Stock") upon presentation and surrender of this Warrant Agreement with the
accompanying Election to Exercise Warrants duly completed, at any time prior
to 5 P.M., U.S. Pacific time, on the Expiration Date (as defined in
Section 2), at the corporate offices of the Company at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, or at such other address as may be specified
by the Company pursuant to Section 9, accompanied by payment of the Cash
Purchase Consideration and the Exercise Price (as defined herein) and any
applicable taxes, either in cash in U.S. funds or by certified or official
bank check in U.S. funds payable to the order of the Company. These Warrants
are issued pursuant to a 1993 Technology Transfer Warrant Issuance Agreement
("Issuance Agreement") among the Company and the Investors described therein
dated as of June 15, 1993.
Section 1. Cash Purchase Consideration and Exercise Price. Upon payment
by the Warrantholder to the Company of U.S. $3.00 for each Warrant desired to
be exercised (the "Cash Purchase Consideration"), each Warrant entitles the
Warrantholder to purchase one share of Common Stock for U.S. $15.50 (the
"Exercise Price"), subject to adjustment as provided herein.
Section 2. Expiration. All Warrants not theretofore exercised shall
expire at 5 p.m., U.S. Pacific time, on the earlier of the following dates
(the "Expiration Date"): (a) March 31, 1997, and (b) the expiration of 120
days after the first period of 20 consecutive trading days during which period
the average of the high and low sales prices of the Common Stock on the
American Stock Exchange is at least $30.00.
Section 3. Adjustments of Number and Kind of Shares Purchasable and
Exercise Price. The number and kind of securities or other property
purchasable upon exercise of a Warrant shall be subject to adjustment from
time to time upon the occurrence, after the date hereof, of the following
events:
3.1 If the outstanding shares of the Company's Common Stock
are divided into a greater number of shares or a dividend in Common
Stock is paid on the Common Stock, the number of shares of Common
Stock issuable on exercise of the Warrants shall be proportionately
increased and the Exercise Price in effect immediately prior to such
subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be
proportionately reduced; and, conversely, if the outstanding shares
of Common Stock are combined into a smaller number of shares of
Common Stock, the number of shares of Common Stock issuable upon
exercise of the Warrants shall be proportionately reduced and the
Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. The increases and reductions provided
for in this subsection 3.1 shall be made with the intent and, as
nearly as practicable, the effect that neither the percentage of the
total equity of the Company issuable on exercise of the Warrants nor
the price payable for such percentage upon such exercise shall be
affected by any event described in this subsection 3.1.
3.2 No adjustment of the Exercise Price will be made if the
amount of the adjustment is less than U.S. $.01 per share, but in
that case any adjustment that would otherwise be required to be made
will be carried forward and will be made at the time of and together
with the next adjustment of the Exercise Price which, together with
any adjustment carried forward, amounts to U.S. $.01 per share or
more.
3.3 In case of any change in the Common Stock of the Company
through merger, consolidation, reclassification, reorganization,
partial or complete liquidation, or other change in the capital
structure of the Company (not including a combination of shares or
the issuance of additional shares of Common Stock by the Company by
stock split or stock dividend), then, as a condition of the change
in the capital structure of the Company, provision shall be made so
that the holder of this Warrant Agreement will have the right
thereafter to receive upon the exercise of the Warrants the kind and
amount of shares of stock or other securities or property to which
such holder would have been entitled if, immediately prior to such
merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure, such
holder had held the number of shares of Common Stock issuable upon
the exercise of the Warrants. In any such case, appropriate
adjustment shall be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of
the Warrantholder, to the end that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon the exercise of the Warrants. The Company will not
permit any change in its capital structure to occur unless the
issuer of the shares of stock or other securities to be received by
the holder of this Warrant Agreement, if not the Company, agrees to
be bound by and comply with the provisions of this Warrant
Agreement.
3.4 When any adjustment is required to be made in the number
of shares of Common Stock, other securities, or property purchasable
upon exercise of the Warrants, the Company shall promptly determine
the new number of shares or other securities or property purchasable
upon exercise of the Warrants and (a) prepare and retain on file a
statement describing in reasonable detail the method used in
arriving at the new number of shares or other securities or property
purchasable upon exercise of the Warrants and (b) cause a copy of
such statement to be mailed to the Warrantholder within thirty (30)
days after the date when the event giving rise to the adjustment
occurred.
3.5 No fractional shares of Common Stock or other securities
shall be issued in connection with the exercise of any Warrants, but
the Company shall pay, in lieu of fractional shares, a cash payment
therefor on the basis of the closing price on a national securities
exchange on the day immediately prior to exercise or, if the Common
Stock or other securities are not traded on a national securities
exchange on such day, on the basis of the fair market value thereof
as determined by the board of directors of the Company, which
determination shall be conclusive.
3.6 Notwithstanding anything herein to the contrary, there
shall be no adjustment made hereunder on account of the sale and
issuance of the shares of Common Stock or other securities
purchasable upon exercise of the Warrants.
Section 4. Rights of Warrantholder as Shareholder. No holder of this
Warrant Agreement shall, as such, be entitled to vote, receive dividends, or
be deemed the holder of Common Stock or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose
whatever, nor shall anything contained herein be construed to confer upon the
holder of this Warrant Agreement, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof or give or withhold
consent to any corporate action (whether upon any matter submitted to
shareholders at any meeting thereof or otherwise) including, without
limitation, giving or withholding consent to any merger, recapitalization,
issuance of stock, reclassification of stock, exchange of stock, change of
stock to par value, consolidation or conveyance, or to receive notice of
meetings or other actions affecting shareholders or to receive dividends or
subscription rights or other distributions.
Section 5. Payment of Certain Taxes and Charges. The Company shall not
be required to issue or deliver any certificate for shares of Common Stock or
other securities upon the exercise of Warrants evidenced by this Warrant
Agreement or to register the transfer of the Warrants evidenced hereby until
any applicable transfer tax and any other taxes or governmental charges that
the Company may be required by law to collect in respect of such exercise or
transfer shall have been paid, such tax being payable by the holder of this
Warrant Agreement at the time of surrender for exercise or transfer.
Section 6. Registration. The Company has prepared a registration
statement on Form S-3 (the "Registration Statement") under the 1933 Act with
respect to the resale by the Warrantholder of the shares of Common Stock
issued or issuable upon exercise of this Warrant Agreement (the "Warrant
Shares"). As soon as practicable after the original issue date of this
Warrant Agreement (the "Original Issue Date"), the Company shall file the
Registration Statement with the U.S. Securities and Exchange Commission and
shall use its best efforts to cause the Registration Statement to become
effective under the 1933 Act as promptly as practicable after the Original
Issue Date as provided for in, and in accordance with, the terms and
conditions of the Issuance Agreement.
Section 7. Transfer and Exchange.
7.1 Transfer. This Warrant Agreement is transferable on the
registry books of the Company subject to the restrictions on the
first page hereof and in Section 7.4. The Company may deem and
treat the person or entity in whose name this Warrant Agreement is
registered as the absolute owner hereof (notwithstanding any
notation of ownership or other writing thereon made by anyone other
than the Company) for all purposes whatever, and the Company shall
not be affected by any notice to the contrary.
7.2 Exchange. Subject to the provisions of Section 7.4 and
the restrictions on the first page hereof, this Warrant Agreement is
exchangeable at the principal office of the Company for Warrant
Agreements to purchase the same aggregate number of shares of Common
Stock as are purchasable hereunder, each new Warrant Agreement to
represent the right to purchase such number of shares as the
Warrantholder shall designate at the time of such exchange.
7.3 Securities Act of 1933. The Warrantholder, by
acceptance hereof, agrees that this Warrant Agreement and the shares
of Common Stock issued or issuable upon exercise of this Warrant
Agreement may not be offered or sold except in compliance with the
1933 Act. The Warrantholder consents to the Company's making a
notation on its records and on the certificates for any shares of
Common Stock issued upon exercise hereof in order to implement such
restriction on transferability.
7.4 Minimum Warrant Agreement Amount. Notwithstanding the
provisions of Section 7.1 and Section 7.2, the Company shall not be
required to issue a Warrant Agreement for Warrants covering less
than 1,000 shares of Common Stock, except in the case of a partial
exercise by the Warrantholder of this Warrant Agreement that leaves
Warrants exercisable to purchase less than 1,000 shares that are to
remain registered in the name of the exercising Warrantholder, and
any subsequent partial exercise, transfer, or exchange of such
Warrant Agreement.
7.5 No Transfer of Common Stock for 60 Days. Common Stock
purchased pursuant to the exercise of these Warrants may not be sold or
otherwise transferred or disposed of for a period of 60 days after the
date of purchase of such Common Stock.
Section 8. Holdback Agreement. The Warrantholder, if requested by the
Company and an underwriter of the Company's securities, shall agree not to
sell or otherwise transfer or dispose of any Warrants or Warrant Shares for a
specified period of time (not to exceed 90 days) following the effective date
of a registration statement pursuant to which the Company proposes to sell its
securities to the public generally; provided, however, that all executive
officers and directors of the Company enter into similar agreements.
Section 9. Notices. Any notice, request, or other communication
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally or by certified mail, postage
prepaid, return receipt requested, to: (a) the Company at 8505 S.W. Creekside
Place, Beaverton, Oregon 97008, Attn: Secretary, with a copy to Miller, Nash,
Wiener, Hager & Carlsen, 3500 U.S. Bancorp Tower, 111 S.W. Fifth Avenue,
Portland, Oregon 97204-3699, Attn: Erich W. Merrill, Jr. and (b) to the
Warrantholders at the addresses set forth in the registry books of the Company
referred to in Section 7.1. Any notice, request, or other communication given
by certified mail shall be deemed given 10 days after the mailing date;
notices, requests, or other communications given in any other manner shall be
deemed given when received.
Section 10. Amendment. This Warrant Agreement may be amended or its
provisions waived only by an instrument in writing signed by the Company and
the Warrantholder as provided in the Issuance Agreement.
Section 11. Law Governing. This Warrant Agreement shall be governed by
and construed in accordance with the laws of the state of Oregon, without
giving effect to choice of laws principles thereof.
Dated as of _________________
EPITOPE, INC.
By
----------------------------
Name
Title
<PAGE>
ELECTION TO EXERCISE WARRANT
To: Epitope, Inc.
8505 S.W. Creekside Place
Beaverton, Oregon 97008
The undersigned hereby exercises the within Warrant Agreement for
________ shares of the Common Stock of Epitope, Inc. ("Warrant Shares"), and
tenders payment herewith in the amount of U.S. $_________ in accordance with
the terms thereof.
THE UNDERSIGNED HEREBY AGREES NOT TO SELL OR OTHERWISE TRANSFER OR
DISPOSE OF THE WARRANT SHARES FOR A PERIOD ENDING 60 DAYS AFTER THE DATE OF
PURCHASE OF THE WARRANT SHARES.
Please deliver the certificate and a new Warrant Agreement for the
unexercised Warrants, if any, to:
____________________________________
____________________________________
____________________________________
Warrantholder:___________________________
By_____________________________________
Title:
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the United States.]
Dated: ____________, 199__.
Warrantholder: _____________________________________
Address: _____________________________________
_____________________________________
_____________________________________
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this
Warrant Agreement hereby sells, assigns, and transfers to the Assignee(s)
named below all of the rights of the undersigned under the Warrant Agreement,
with respect to Warrants for the number of shares of Common Stock set forth
below:
Name of Assignee Address No. of Shares*
- ---------------- ------- -------------
*Please note that the minimum denomination in which Warrant Agreements
may be issued is 1,000 shares of Common Stock.
The undersigned agrees to furnish to the Company upon request a
satisfactory opinion of counsel to the effect that the transfer requested
above is exempt from the Securities Act of 1933, as amended, and applicable
state securities laws.
Dated: ______________, 19___.
Warrantholder: ___________________
By____________________________
Title:
[Name of Warrantholder must be identical to
name shown in the registry books of the
Company; signature must be guaranteed by a
bank or brokerage firm doing business in
the United States.]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the condensed
consolidated financial statements included
herein and is qualified in its entirety by
reference to such financial statements.
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<PERIOD-TYPE> 6-MOS
<S> <C>
<CASH> 5,922,113
<SECURITIES> 12,599,061
<RECEIVABLES> 743,945
<ALLOWANCES> 26,386
<INVENTORY> 1,352,579
<CURRENT-ASSETS> 22,034,240
<PP&E> 6,164,001
<DEPRECIATION> 3,999,183
<TOTAL-ASSETS> 27,361,660
<CURRENT-LIABILITIES> 3,218,099
<BONDS> 0
0
0
<COMMON> 95,558,122
<OTHER-SE> (75,054,845)
<TOTAL-LIABILITY-AND-EQUITY> 27,361,660
<SALES> 1,887,696
<TOTAL-REVENUES> 2,781,045
<CGS> 1,168,554
<TOTAL-COSTS> 6,694,987
<OTHER-EXPENSES> (444,443)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,469,499)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,469,499)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> 0
</TABLE>
