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UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
ELECTROPHARMACOLOGY, INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
286128
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(CUSIP Number)
Jonathan L. Awner, Esq.
Akerman, Senterfitt & Eidson, P.A.
One S.E. 3rd Avenue, 28th Floor, Miami, Florida 33131; (305) 374-5600
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
SEPTEMBER 9, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
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SCHEDULE 13D
CUSIP NO. 286128
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1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NORTON HERRICK
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,861,900
SHARES --------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,241,771
REPORTING --------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
1,861,900
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,861,900
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[x]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.3%
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14 TYPE OF REPORTING PERSON
IN
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2
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THE REPORTING PERSON LISTED ON THE COVER PAGE TO THIS SCHEDULE 13D HEREBY
MAKES THE FOLLOWING STATEMENT PURSUANT TO SECTION 13(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER. THIS STATEMENT IS AN AMENDMENT OF THE
SCHEDULE 13D DATED NOVEMBER 13,1995, AS AMENDED AND RESTATED BY AMENDMENT NO. 1
TO SCHEDULE 13D DATED OCTOBER 15, 1996, AS AMENDED BY AMENDMENT NO. 2 TO
SCHEDULE 13D DATED JUNE 5, 1997 (THE "ORIGINAL SCHEDULE 13D"). FOR FURTHER
INFORMATION REGARDING ANY OF THE ITEMS AMENDED HEREIN, REFERENCE IS MADE TO THE
ORIGINAL SCHEDULE 13D. CAPITALIZED TERMS USED HEREIN AND NOT DEFINED HAVE THE
MEANINGS ASCRIBED TO THEM IN THE ORIGINAL SCHEDULE 13D.
ITEM 2 IDENTITY AND BACKGROUND.
Item 2 of the Original Schedule 13D is hereby amended by adding the
following additional paragraph:
Pursuant to Rule 13d-5 promulgated under the Exchange Act, Mr. Herrick may
be deemed to be a member of a "group" with David Saloff, Murray Feldman, George
Levine, and Paragon Capital Corporation at Spear, Leeds & Kellogg, LLC
(collectively, the "EPHI Group") because they have mutually agreed to vote their
shares in favor of the transactions described in Item 4 below. However, because
such agreement to vote is limited to the matters described in Item 4 below, Mr.
Herrick disclaims the existence of a "group"and disclaims beneficial ownership
of the shares of Common Stock beneficially owned by the EPHI Group. Mr. Herrick
is filing this statement on his own behalf and not on behalf of the EPHI Group
pursuant to Rule 13d-1(f)(2) promulgated under the Exchange Act. Any information
provided in this statement with respect to the EPHI Group is based on the
Issuer's public filings with the Securities and Exchange Commission and
information provided by or on behalf of the EPHI Group, and Mr. Herrick
disclaims all responsibility for the completeness or accuracy of such
information.
ITEM 4 PURPOSE OF TRANSACTION.
Item 4 of the Original Schedule 13D is hereby amended in its entirety as
follows:
Mr. Herrick has acquired the Common Stock, Preferred Stock and Warrants for
investment purposes, and except as described below, Mr. Herrick has no plans or
proposals which relate to or would result in any of the events or transactions
described in Item 4(a)-(j) of Schedule 13D.
Pursuant to a Stockholders Agreement, dated as of September 9, 1997 (the
"Eurobiotech Stockholders Agreement"), among Eurobiotech Group, Inc.
("Eurobiotech"), the Issuer, Messrs. Herrick, Saloff, Feldman and Levine and
Paragon Capital Corporation at Spear, Leeds & Kellogg, LLC, as stockholders of
the Issuer holding a majority of the issued and outstanding Common Stock and
Preferred Stock (collectively, the "EPHI Stockholders"), and Christopher Wood,
Julie Wood and Warren Investments Ltd., as stockholders of Eurobiotech holding a
majority of the issued and outstanding voting stock of Eurobiotech
(collectively, the "Eurobiotech Stockholders"), each of the EPHI Stockholders
has irrevocably agreed to vote his or its respective shares of Common Stock and
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Preferred Stock (a) in favor of the approval and adoption of the transactions
contemplated by that certain Agreement and Plan of Merger and Reorganization,
dated as of September 9, 1997 (the "Eurobiotech Merger Agreement"), among
Eurobiotech and the Issuer which provides, in part, for the merger of
Eurobiotech with and into the Issuer (the "Eurobiotech Merger"), with the Issuer
continuing as the surviving corporation (the "Surviving Corporation") and the
stockholders of Eurobiotech receiving shares of Common stock representing 70% of
the aggregate number of shares of Common Stock issued and outstanding at the
effective date of the Eurobiotech Merger plus an additional 3,903,354 shares of
Common Stock in respect of the conversion of certain outstanding warrants and
options, (b) in favor of approval and adoption of the amendment and restatement
of the Issuer's Certificate of Incorporation and Bylaws as described in the
Eurobiotech Merger Agreement, and (c) against any transaction which would be
inconsistent with the Eurobiotech Merger. Each of the EPHI Stockholders has
agreed not to sell or otherwise dispose of any shares of Common Stock or
Preferred Stock prior to the consummation of the Eurobiotech Merger or the
earlier termination of the Eurobiotech Stockholders Agreement in accordance with
its terms.
Pursuant to the Eurobiotech Stockholders Agreement, the EPHI Stockholders
and the Eurobiotech Stockholders have agreed that following the consummation of
the Eurobiotech Merger in connection with the election of directors to the Board
of Directors of the Surviving Corporation they shall each vote their shares of
Common Stock of the Surviving Corporation in favor of two persons nominated by
the EPHI Stockholders and five persons nominated by the Eurobiotech
Stockholders.
Pursuant to the Eurobiotech Stockholders Agreement, upon consummation of
the Eurobiotech Merger, the Issuer and Messrs. Herrick and Saloff, have agreed
that the Stockholders Agreement dated as of November 13, 1995 among such parties
shall be terminated and of no further force and effect.
Pursuant to the Stockholders Agreement, Mr. Herrick and the Issuer have
agreed that upon consummation of the Eurobiotech Merger all shares of Preferred
Stock and all Warrants held by Mr. Herrick will be redeemed and exchanged for an
aggregate of 1,575,000 shares of Common Stock of the Surviving Corporation (the
"Herrick Redemption Shares"). In addition, each of Messrs. Feldman and Levine
have agreed with the Issuer that upon consummation of the Eurobiotech Merger all
warrants to purchase shares of Common Stock owned by each of them, respectively,
will be redeemed and exchanged for 160,000 shares and 90,000 shares of Common
Stock, respectively (collectively, the "Other Redemption Shares," and together
with the Herrick Redemptions Shares, the "Redemption Shares"). The Surviving
Corporation has agreed to either (i) within 15 days of the effective date of the
Eurobiotech Merger, supplement the Issuer's existing registration statement on
Form S-3 to include the Redemption Shares or (ii) as promptly as practicable
following the effective date of the Eurobiotech Merger, register such shares on
a new registration statement for resale by the holders of the Redemption Shares,
in each case in accordance with the terms of the Registration Rights Agreement
(as described in the Original Schedule 13D).
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Pursuant to the Eurobiotech Stockholders Agreement, Messrs. Herrick,
Feldman and Levine have agreed not to sell or otherwise dispose of any of the
Redemption Shares, and the Eurobiotech Stockholders have agreed not to sell or
otherwise dispose of any shares of Common Stock received by them in the
Eurobiotech Merger, in each case for a period of 365 days after the effective
date of the Eurobiotech Merger, provided that they each will be permitted to
sell an amount of shares which when aggregated with all shares sold for their
individual accounts within the preceding three months does not exceed the
greater of (a) one percent of the outstanding shares of Common Stock of the
Surviving Corporation or (b) the average weekly reported trading volume of such
securities on The Nasdaq Stock Market during the preceding four calender weeks.
Prior to the effective date of the Eurobiotech Merger, the Eurobiotech
Stockholders Agreement will terminate on the earliest to occur of (i) December
31, 1997, or (ii) the date the Eurobiotech Merger Agreement is terminated in
accordance with its terms. From and after the effective date of the Eurobiotech
Merger, the Eurobiotech Stockholders Agreement will terminate on the earliest to
occur of (a) two years from the effective date of the Eurobiotech Merger, or (b)
the date on which the market capitalization of the Surviving Corporation equals
or exceeds $40,000,000.
A copy of the Eurobiotech Stockholders Agreement is attached hereto as
Exhibit 9 and is incorporated herein by reference. The description of the terms
of the Eurobiotech Stockholders Agreement set forth herein is qualified in its
entirety by the terms of the Eurobiotech Stockholders Agreement.
ITEM 5 INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Original Schedule 13D is hereby amended in its entirety as
follows:
(a) and (b) As of September 9, 1997, Mr. Herrick may be deemed to
beneficially own, on an individual basis before attribution of shares
beneficially owned as part of a "group" as described below, 1,861,900 shares of
Common Stock (which includes 242,950 shares of Common Stock issuable upon
conversion of the Preferred Stock and 1,300,000 shares of Common Stock issuable
upon exercise of the Warrants), representing approximately 35.3% of the
outstanding shares of Common Stock, calculated in accordance with Rule 13d-3
under the Exchange Act (based on 3,732,376 shares of Common Stock issued and
outstanding as of June 30, 1997, as reported on the Issuer's quarterly report on
Form 10-QSB for the quarterly period ended June 30, 1997, plus the 1,542,950
shares of Common Stock issuable upon conversion of the Preferred Stock and upon
exercise of the Warrants that Mr. Herrick may be deemed to beneficially own and
which are deemed outstanding for purposes of this computation). Except as
described in Item 4 above, Mr. Herrick has the sole power to vote and the sole
power to dispose of the 1,861,900 shares of Common Stock which he may be deemed
to beneficially own.
To the extent that Mr. Herrick may be deemed to be a member of a "group"
with the EPHI Group pursuant to Rule 13d-5 under the Exchange Act, Mr. Herrick
may be deemed to beneficially own the shares of Common Stock currently
beneficially owned by Mr. Saloff (259,199 shares of
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Common Stock and presently exercisable options to purchase 100,000 shares of
Common Stock), Mr. Feldman (692,361 shares of Common Stock and presently
exercisable warrants to purchase 373,607 shares of Common Stock), Mr. Levine
(25,000 shares of Common Stock), and Paragon Capital Corporation at Spear, Leeds
& Kellogg, LLC (604,104 shares of Common Stock and presently exercisable
warrants to purchase 187,500 shares of Common Stock) for which Mr. Herrick
shares voting power pursuant to the Eurobiotech Stockholders Agreement described
in Item 4 above. As of September 9,1997, the 2,241,771 shares of Common Stock
beneficially owned by the EPHI Group together with the 1,861,900 shares of
Common Stock beneficially owned by Mr. Herrick described above represent
approximately 69.1% of the outstanding shares of Common Stock, calculated in
accordance with Rule 13d-3 under the Exchange Act (based on 3,732,376 shares of
Common Stock issued and outstanding as of June 30, 1997, as reported on the
Issuer's quarterly report on Form 10-QSB for the quarterly period ended June 30,
1997, plus the 1,542,950 shares of Common Stock issuable to Mr. Herrick upon
conversion of the Preferred Stock and upon exercise of the Warrants, plus the
100,000 shares of Common Stock issuable to Mr. Saloff upon exercise of certain
options, plus the 373,607 shares of Common Stock issuable to Mr. Feldman upon
exercise of certain warrants, and plus the 187,500 shares of Common Stock
issuable to Paragon Capital Corporation upon exercise of certain warrants, in
each case which may be deemed to be beneficially owned by such persons and which
are deemed outstanding for purposes of this computation). Mr. Herrick shares
voting power of the shares of Common Stock beneficially owned by the EPHI Group
as described in Item 4 above, but has no other rights with respect to such
shares and disclaims beneficial ownership of such shares and the existence of a
"group."
(c) The only transactions in any securities of the Issuer that were
affected during the past sixty days by Mr. Herrick are the following
transactions:
(1) On June 6, 1997, Mr. Herrick sold 7,000 shares of Common Stock at
$2.625 per share on the open market.
(2) On July 18, 1997, Mr. Herrick sold 2,000 shares of Common Stock
at $1.50 per share on the open market.
(3) On July 18 1997, Mr. Herrick sold 6,000 shares of Common Stock at
$1.5625 per share on the open market.
(4) On August 1, 1997, Mr. Herrick sold 10,000 shares of Common Stock
at $0.5625 per share on the open market.
(5) On August 8, 1997, Mr. Herrick sold 10,000 shares of Common Stock
at $0.65625 per share on the open market.
(6) On August 8, 1997, Mr. Herrick sold 5,000 shares of Common Stock
at $0.625 per share on the open market.
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ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Original Schedule 13D is hereby amended by adding the
following additional paragraph:
Reference is made to the Eurobiotech Stockholders Agreement described in
Item 4 above.
ITEM 7 MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Original Schedule 13D is hereby amended by adding the
following additional exhibit:
Exhibit 9: Stockholders Agreement, dated as of September 9, 1997, among
Eurobiotech Group, Inc., Electropharmacology, Inc., Norton Herrick,
David Saloff, Murray Feldman, George Levine, Paragon Capital
Corporation at Spear, Leeds & Kellogg, LLC, Christopher Wood, Julie
Wood, and Warren Investments, Ltd.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: September 17, 1997 /s/ Norton Herrick
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NORTON HERRICK
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EXHIBIT 9
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of September 9,
1997, among EUROBIOTECH GROUP, INC., a Delaware corporation ("Eurobiotech"),
ELECTROPHARMACOLOGY, INC., a Delaware corporation ("EPi"), and the undersigned
Stockholders (each a "Stockholder," and together, the "Stockholders") who are
either stockholders of EPi or Eurobiotech.
RECITALS
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A. Each Stockholder owns or has the power to vote the number of shares of
the common stock, $.01 par value, of EPi ("EPi Common Stock"); and/or Series A
preferred stock, $.01 par value, of EPi ("EPi Preferred Stock"); or common
stock, $.001 par value, of Eurobiotech ("Eurobiotech Common Stock"), set forth
next to his, her or its name on the signature page of this Agreement (together
with all shares of such stock which the Stockholder subsequently acquires or
obtains the power to vote, the "Shares").
B. EPi has entered into a certain Agreement and Plan of Merger and
Reorganization with Eurobiotech, dated September 9, 1997 (the "Merger
Agreement"), pursuant to which Eurobiotech will be merged with and into EPi (the
"Merger"), pursuant to which the stockholders of Eurobiotech will exchange their
shares of Eurobiotech Common Stock for shares of EPI Common Stock in accordance
with the terms and conditions of the Merger Agreement. EPi will be the surviving
corporation (the "Surviving Corporation") of the Merger, and the separate
corporate existence of Eurobiotech will cease.
C. Under the terms of the Merger Agreement, EPi and Eurobiotech have each
agreed to call a meeting of its stockholders for the purpose of voting upon the
approval of the Merger and the adoption of the Merger Agreement (together with
any adjournments thereof, the "Stockholders' Meeting").
D. It is a condition to the obligations of Eurobiotech and EPi under the
Merger Agreement that the Stockholders shall have agreed to vote their shares of
EPi Common Stock, EPi Preferred Stock, and Eurobiotech Common Stock,
respectively, in favor of the Merger and the adoption of the Merger Agreement.
AGREEMENT
---------
Accordingly, the parties agree as follows:
1. AGREEMENT TO VOTE REGARDING BUSINESS COMBINATION. Each Stockholder
irrevocably agrees to vote the Shares as follows:
Exhibit 9-1
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(a) in favor of the adoption of the Merger Agreement (including all
schedules and exhibits thereto as finalized pursuant to the provisions thereof)
and the approval of the Merger at the Stockholders' Meeting, including without
limitation, the amendment and restatement of EPi's Certificate of Incorporation
and By-Laws as contemplated by the Merger Agreement, respectively, attached
thereto;
(b) against the approval of any proposal relating to a competing merger or
business combination involving the acquisition of EPi or Eurobiotech or the
purchase of all or a substantial portion of the assets of EPi or Eurobiotech
other than as contemplated by the Merger Agreement; and
(c) against any other transaction which is inconsistent with the
obligations of EPi and Eurobiotech to consummate the Merger in accordance with
the Merger Agreement.
2. AGREEMENT TO VOTE REGARDING BOARD OF DIRECTORS.
(a) As of the effective date of the Merger, the Board of Directors of the
Surviving Corporation shall be comprised of seven members. Of such directors,
two directors shall be nominated (the "EPi Nominees") by supermajority of 75%
vote of Messrs. Levine, Feldman, Saloff and Herrick, based on the number of
shares of the Surviving Corporation held by each (the "EPi Representatives"),
and five directors shall be nominated (the "Eurobiotech Nominees") by majority
vote of Christopher Wood, Julie Wood and Warren Investments Ltd., based on the
number of shares of the Surviving Corporation held by each (the "Eurobiotech
Representatives"). If the number of members of the Board of Directors of the
Surviving Corporation shall be fixed by the board as a number other than seven,
the number of EPi Nominees and the number of Eurobiotech Nominees shall be
adjusted accordingly to maintain the same 2:5 ratio.
(b) Subject to the provisions of Subsection 2(c) below, each Stockholder
(or the Stockholder's successors, assigns, designees or transferees) agrees at
all times in any election of directors of the Surviving Corporation, whether at
a meeting of directors or stockholders, by consent or otherwise, and in any
election or action to replace any director or fill vacancies occurring between
annual meetings, to vote the shares of the Surviving Corporation, whether common
or preferred stock, now or hereafter owned by him or it for the EPi Nominees and
Eurobiotech Nominees.
(c) Prior to each nomination of directors, the EPi Representatives and the
Eurobiotech Representatives shall disclose to the Surviving Corporation the
identity of the EPi Nominees and the Eurobiotech Nominees. In the event that the
election of any EPi Nominee or any Eurobiotech Nominee to the Board of Directors
would reasonably be expected to have a material adverse effect on the operation,
financial condition, properties or business of the Surviving Corporation in the
good faith judgment of the EPi Representatives or the Eurobiotech
Representatives, as the case may be, the Surviving Corporation and the
Stockholders shall not be required to comply with their respective obligations
under this Agreement with respect to such EPi Nominee or Eurobiotech Nominee, as
the case may be, and the respective representatives nominating the EPi Nominee
and Eurobiotech Nominee shall be entitled to name a replacement for such
nominee.
Exhibit 9-2
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(d) The EPi Representatives may at any time and for any reason (or for no
reason) designate any EPi Nominee that is elected as a director of the Surviving
Corporation (an "EPi Director") for removal. Likewise, the Eurobiotech
Representatives may at any time and for any reason (or for no reason) designate
any Eurobiotech Nominee that is elected as a director of the Surviving
Corporation (a "Eurobiotech Director") for removal. If at any time a vacancy is
created on the Board of Directors by reason of the death, removal or resignation
of an EPi Director, the EPi Representatives shall be entitled to nominate an
individual to fill such vacancy until his or her successor is elected or
qualified, and the Stockholders shall, as soon as practicable after the date
such vacancy first occurs and in any event prior to the transaction of any other
business by the Board of Directors, take action to elect such nominee to fill
such vacancy. Likewise, if at any time a vacancy is created on the Board of
Directors by reason of the death, removal or resignation of a Eurobiotech
Director, the Eurobiotech Representatives shall be entitled to nominate an
individual to fill such vacancy until his or her successor is elected or
qualified, and the Stockholders shall, as soon as practicable after the date
such vacancy first occurs and in any event prior to the transaction of any other
business by the Board of Directors, take action to elect such nominee to fill
such vacancy.
(e) In order to effectuate the provisions of this Section 2, the
Stockholders hereby agree that when any action or vote is required to be taken
by the EPi Representatives or the Eurobiotech Representatives pursuant to this
Section 2, the Stockholders shall each use their best efforts to call, or cause
the appropriate officers and directors of the Surviving Corporation to call, a
stockholders' meeting or to execute or cause to be executed a written consent
pursuant to Section 228(a) of the Delaware General Corporation Law to effectuate
such stockholder action.
(f) Notwithstanding anything in this Agreement to the contrary, from and
after the date that any of Messrs. Levine, Feldman, Saloff, or Herrick
beneficially holds individually less than one percent (1%) of the outstanding
shares of common stock and/or preferred stock of the Surviving Corporation, such
individual shall no longer be an EPi Representative entitled to participate in
the selection and nomination of the EPi Nominees and shall no longer be bound to
vote his or its Shares in accordance with this Section 2. Likewise,
notwithstanding anything in this Agreement to the contrary, from and after the
date that any of Christopher Wood, Julie Wood or Warrant Capital beneficially
holds less than one percent (1%) of the outstanding shares of common stock
and/or preferred stock of the Surviving Corporation, such individual or entity
shall no longer be a Eurobiotech Representative entitled to participate in the
selection and nomination of the Eurobiotech Nominees and shall no longer be
bound to vote his, her or its Shares in accordance with this Section 2.
3. LIMITATION ON VOTING POWER. It is expressly understood and acknowledged
that nothing contained herein is intended to restrict any Stockholder from
voting on any matter, or otherwise from acting, in the Stockholder's capacity as
a director or officer of EPi, Eurobiotech, or the Surviving Corporation with
respect to any matter, including but not limited to, the management or operation
of EPi, Eurobiotech or the Surviving Corporation.
Exhibit 9-3
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4. CERTAIN AGREEMENTS WITH NORTON HERRICK.
(a) As of the effective time of the Merger, that certain Stockholders
Agreement, dated as of November 13, 1995, among EPi, Norton Herrick and David
Saloff shall be terminated and of no further force and effect.
(b) EPi and Mr. Herrick hereby agree to (i) the redemption of all of
the issued and outstanding shares of EPi Preferred Stock owned of record by Mr.
Herrick, and (ii) the redemption and cancellation of all warrants to purchase
shares of EPi Common Stock issued and outstanding to Mr. Herrick and which are
more fully described on Schedule A attached hereto (the "Herrick EPi Warrants"),
in exchange for the issuance by EPi of 1,575,000 shares of EPi Common Stock to
Mr. Herrick (collectively, the "Herrick Redemption"). The Herrick Redemption
shall be effective at the effective time of the Merger (the "Herrick Redemption
Effective Time") on the effective date of the Merger. At the Herrick Redemption
Effective Time, the shares of EPi Preferred Stock and any and all of the Herrick
EPi Warrants issued and outstanding shall be automatically redeemed and
converted without further action on the part of the holder thereof into an
aggregate of 1,575,000 shares of EPi Common Stock. Each outstanding certificate
evidencing EPi Preferred Stock and the Herrick EPi Warrants not surrendered on
the effective date of the Herrick Redemption, will as of the effective date of
the Herrick Redemption be deemed for all purposes to be canceled and no longer
represent shares of EPi Preferred Stock or warrants to purchase EPi Common
Stock, but instead will represent the right to receive that number of whole
shares of EPi Common Stock into or for which the shares of EPi Preferred Stock
and the Herrick EPi Warrants will be converted pursuant to this Section 4(b).
5. CERTAIN AGREEMENTS WITH MURRAY FELDMAN. EPi and Mr. Feldman hereby agree
to the redemption and cancellation of all warrants to purchase shares of EPi
Common Stock issued and outstanding to Mr. Feldman and which are more fully
described on Schedule A attached hereto (the "Feldman EPi Warrants"), in
exchange for the issuance by EPi of 160,000 shares of EPi Common Stock to Mr.
Feldman (collectively, the "Feldman Redemption"). The Feldman Redemption shall
be effective at the effective time of the Merger (the "Feldman Redemption
Effective Time") on the effective date of the Merger. At the Feldman Redemption
Effective Time, any and all of the Feldman EPi Warrants issued and outstanding
shall be automatically redeemed and converted without further action on the part
of the holder thereof into an aggregate of 160,000 shares of EPi Common Stock.
Each outstanding certificate evidencing the Feldman EPi Warrants not surrendered
on the effective date of the Feldman Redemption will as of the effective date of
the Feldman Redemption be deemed for all purposes to be canceled and no longer
represent warrants to purchase EPi Common Stock, but instead will represent the
right to receive that number of whole shares of EPi Common Stock into or for
which the Feldman EPi Warrants will be converted pursuant to this Section 5.
6. CERTAIN AGREEMENTS WITH GEORGE LEVINE AND PARAGON CAPITAL CORP. AT
SPEAR, LEEDS & KELLOGG ("PARAGON CAPITAL"). EPi, George Levine, and Paragon
Capital hereby agree to the redemption and cancellation of all warrants to
purchase shares of EPi Common Stock issued and outstanding to Mr. Levine and/or
Paragon Capital and which are more fully described on Schedule A attached hereto
(collectively, the "Paragon EPi Warrants"), in exchange for the issuance by EPi
of an aggregate 90,000 shares of EPi Common Stock to George Levine and Paragon
Capital (collectively, the
Exhibit 9-4
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"Paragon Redemption"). The Paragon Redemption shall be effective at the
effective time of the Merger (the "Paragon Redemption Effective Time") on the
effective date of the Merger. At the Paragon Redemption Effective Time, any and
all of the Paragon EPi Warrants issued and outstanding shall be automatically
redeemed and converted without further action on the part of the holder thereof
into an aggregate of 90,000 shares of EPi Common Stock. Each outstanding
certificate evidencing the Paragon EPi Warrants not surrendered on the effective
date of the Paragon Redemption will as of the effective date of the Paragon
Redemption be deemed for all purposes to be canceled and no longer represent
warrants to purchase EPi Common Stock, but instead will represent the right to
receive that number of whole shares of EPi Common Stock into or for which the
Paragon EPi Warrants will be converted pursuant to this Section 6.
7. TERMINATION.
(a) Prior to and until the effective time of the Merger, this Agreement
shall only terminate on the earliest of (w) December 31, 1997, or (x) the date
on which the Merger Agreement is terminated in accordance with Article X of the
Merger Agreement. In the event of the termination of this Agreement pursuant to
this Section 7(a), Sections 4, 5 and 6 of this Agreement shall likewise be of no
force and effect.
(b) From and after the effective time of the Merger, the provisions of this
Agreement (other than Section 1 which shall have expired pursuant to its terms),
shall terminate on the earlier of (a) two years from the effective date of the
Merger Agreement, or (b) the date on which the market capitalization of the
Surviving Corporation equals or exceeds Forty Million Dollars ($40,000,000);
PROVIDED, HOWEVER, the provisions of Sections 4, 5 and 6 of this Agreement shall
survive the termination of this Agreement pursuant to this Section 7(b).
8. REPRESENTATIONS, WARRANTIES, AND ADDITIONAL COVENANTS OF THE
STOCKHOLDER. Each Stockholder hereby represents and warrants that the
Stockholder has the capacity and all necessary power and authority to vote the
Shares and that this Agreement constitutes a legal, valid, and binding
obligation of the Stockholder, enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency, or similar laws affecting
enforcement of creditors rights generally. Each Stockholder further agrees that
from the date hereof until the effective date of the Merger or until the earlier
termination of this Agreement pursuant to Section 7(a) of this Agreement, the
Stockholder will not sell or otherwise voluntarily dispose of any of the Shares
which are owned by the Stockholder or take any other voluntary action which
would have the effect of removing the Stockholder's power to vote the Shares or
which would be inconsistent with this Agreement; PROVIDED, HOWEVER, that this
last sentence of Section 8 shall not apply to Paragon Capital.
9. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS OF EPI AND THE
SURVIVING CORPORATION. The shares of EPi Common Stock to be issued pursuant to
Sections 4, 5 and 6 above, when issued, will be duly authorized, validly issued,
fully paid and non-assessable. The Surviving Corporation shall use its
reasonable best efforts to register as promptly as practicable the shares of EPi
Common Stock to be issued in the Herrick Redemption, Feldman Redemption, and
Paragon
Exhibit 9-5
<PAGE> 6
Redemption with the present intention to do so by means of a Rule 424(b)(3)
Prospectus Supplement to the Prospectus contained in EPi's Registration
Statement on Form S-3 (SEC File No. 333-03887). If the registration of the
shares of EPi Common Stock issued in the Herrick Redemption, Feldman Redemption
and Paragon Redemption may be registered by use of a Rule 424(b)(3) Prospectus
Supplement, the Surviving Corporation shall file the Rule 424(b)(3) Prospectus
Supplement within fifteen (15) days of the effective date of the Merger, and if
the registration of such shares may not be so accomplished, the Surviving
Corporation shall register the shares of EPi Common Stock as promptly as
practicable in accordance with that certain Registration Rights Agreement
between EPi and Mr. Herrick, dated November 13, 1995. Notwithstanding anything
to the contrary contained in this Section 9, no shares of EPi Common Stock
covered by Section 10 of this Agreement may be offered, sold or otherwise
disposed of in contravention of that Section.
10. LOCK-UP OF SALE OF SHARES OF EPI COMMON STOCK. Each of the Stockholders
hereby irrevocably agree that it will not, directly or indirectly, without the
prior written consent of each of the other parties hereto other than Paragon
Capital for a period of 365 days after the effective date of the Merger, sell,
offer to sell, contract to sell, pledge, grant any option for the sale of or
otherwise transfer or dispose of, or cause the disposition of, any shares of EPi
Common Stock received in the Merger, the Herrick Redemption, the Feldman
Redemption, or the Paragon Redemption which are issued to Mr. Levine, other than
any pledge of such shares in connection with a bona fide loan transaction which
does not permit the pledgee, directly or indirectly, to offer, sell, contract to
sell or otherwise transfer or dispose of any interest in such shares during such
365-day period, except that such shares of EPi Common Stock may be sold for the
account of the Stockholder if the amount of all shares of EPi Common Stock sold
for the account of such Stockholder within the preceding three months shall not
exceed the greater of
(i) One percent of the shares of EPi Common Stock outstanding as
shown by the most recent report or statement published by the
Surviving Corporation; or
(ii) The average weekly reported volume of trading in such
securities reported through the automated quotation system of a
registered securities association during the four calendar weeks
preceding the date of receipt of the order to execute the
transaction by the broker or the date of execution of the
transaction directly with a market maker, or
(iii) The average weekly volume of trading in such securities
reported through the consolidated transaction reporting system
contemplated by Rule 11Aa3-1 under the Securities Exchange Act of
1934 (ss. 240.11A3-1) during the four-week period specified in
paragraph (ii) of this Section.
Prior to the expiration of such 365-day period, the undersigned will not
announce or disclose any intention to do anything after the expiration of such
period which the undersigned is prohibited, as provided in the preceding
sentence, from doing during such period except as required by applicable law.
Exhibit 9-6
<PAGE> 7
11. SPECIFIC PERFORMANCE. Each of the undersigned acknowledges that damages
would be an inadequate remedy for any breach of the provisions of this Agreement
and agrees that the obligations of the Stockholder hereunder shall be
specifically enforceable and that each party hereto shall be entitled to
injunctive or other equitable relief upon such a breach by any other party
hereto. Each Stockholder further agrees to waive any bond in connection with the
obtaining of any such injunctive or equitable relief. This provision is without
prejudice to any other rights that each party hereto may have against another
party hereto for any failure to perform his, her or its obligations under this
Agreement.
12. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles. Each Stockholder agrees that the provisions of
this Agreement shall be binding also upon the successors, assigns, heirs and
personal representatives of the undersigned Stockholder.
13. COUNTERPART AND FACSIMILE SIGNATURES. This Agreement may be executed in
multiple counterparts, each of which will be deemed to be an original, and all
such counterparts will constitute but one instrument. This Agreement may be
executed by any party hereto by facsimile, and each such executed counterpart
shall be deemed to be validly executed and enforceable against each such party
in accordance with its terms.
[INTENTIONALLY LEFT BLANK]
Exhibit 9-7
<PAGE> 8
IN WITNESS WHEREOF, the undersigned have executed this Stockholder
Agreement as of the day and year first above written.
ELECTROPHARMACOLOGY, INC. EUROBIOTECH GROUP, INC.
By: /s/ Arup Sen By: /s/ Christopher Wood
----------------------------- -----------------------------------
ITS: PRESIDENT AND CHIEF ITS: PRESIDENT AND CHIEF
EXECUTIVE OFFICER EXECUTIVE OFFICER
EPI STOCKHOLDERS:
/s/ David Saloff /s/ George Levine
- -------------------------------- ---------------------------------------
DAVID SALOFF GEORGE LEVINE
(259,199 shares of (25,000 shares of EPi Common Stock)
EPi Common Stock)
PARAGON CAPITAL AT
SPEAR, LEEDS & KELLOGG
By: /s/ George Levine
-----------------------------------
George Levine
Its:
(604,104 shares of EPi Common Stock)
/s/ Norton Herrick /s/ Murray Feldman
- -------------------------------- ---------------------------------------
NORTON HERRICK MURRAY FELDMAN
(318,950 shares of (692,361 shares of EPi Common Stock)
EPi Common Stock)
(242,950 shares of
EPi Preferred Stock)
EUROBIOTECH STOCKHOLDERS:
/s/ Christopher Wood /s/ Julie Wood
- -------------------------------- ---------------------------------------
CHRISTOPHER WOOD JULIE WOOD
(______ shares of (______ shares of
Eurobiotech Common Stock) Eurobiotech Common Stock)
WARREN INVESTMENTS LTD.
By: /s/
----------------------------
Its:
(_______ shares of
Eurobiotech Common Stock)
Exhibit 9-8
<PAGE> 9
SCHEDULE A
OUTSTANDING EPI WARRANTS TO BE REDEEMED AND CANCELED
<TABLE>
<CAPTION>
========================================================================================================================
Original Number of
Issue Shares (Post- Exercise Expiration
Date Issued To split) Price Date Registration Rights/Other Terms
========================================================================================================================
<S> <C> <C> <C> <C> <C>
08/04/93 M. Feldman 11,622 5.03 08/04/98 Yes (in pre-split agreement only)
- ------------------------------------------------------------------------------------------------------------------------
05/25/94 M. Feldman 38,741 5.03 05/25/99 Yes (in pre-split agreement only)
- ------------------------------------------------------------------------------------------------------------------------
09/20/94 M. Feldman 23,244 5.03 09/20/99 Yes (in pre-split agreement only)
- ------------------------------------------------------------------------------------------------------------------------
05/19/95 Paragon Capital 125,000 7.00 05/12/00 Yes; ss.3.2 - cashless exercise
- ------------------------------------------------------------------------------------------------------------------------
05/19/95 Paragon Capital 62,500 6.00 05/12/00 Yes; ss.3.2 - cashless exercise
- ------------------------------------------------------------------------------------------------------------------------
11/21/95 M. Feldman 300,000 6.25 11/21/00 Yes
- ------------------------------------------------------------------------------------------------------------------------
11/13/95 N. Herrick 800,000 6.00 11/13/05 Yes
- ------------------------------------------------------------------------------------------------------------------------
11/13/95 N. Herrick 250,000 7.50 11/13/05 Yes
- ------------------------------------------------------------------------------------------------------------------------
11/13/95 N. Herrick 250,000 9.00 11/13/05 Yes
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Exhibit 9-9
