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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. ____)*
Under the Securities Exchange Act of 1934
EPOCH PHARMACEUTICALS, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
294273 10 7
(CUSIP Number)
Emanuel J. Adler
Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
(212) 885-5565
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications)
June 21, 1996
(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
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement.|_| (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 33 Pages
<PAGE>
SCHEDULE 13D
CUSIP No.294273 10 7 Page 2 of 33 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MOSES MARX
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 750,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH --
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 750,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
750,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS)
OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 33 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 294273 10 7 Page 3 of 33 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
UNITED EQUITIES (COMMODITIES) COMPANY
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 750,000
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH --
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 750,000
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
750,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN, BD
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS)
OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 33 Pages
<PAGE>
Item 1. Security and Issuer.
This statement relates to shares of Common Stock, $.01 par value per
share, of Epoch Pharmaceuticals, Inc. (the "Company"). The principal
executive offices of the Company are located at 1725 220th Street SE,
104, Bothell, Washington 98021.
Item 2. Identity and Background
(a) Pursuant to Rule 13d-1(f)(1) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), this Schedule 13D
is being filed by Moses Marx, an individual and United Equities
(Commodities) Company, a partnership ("United Equities Commodities").
Mr. Marx and United Equities Commodities (collectively called the
"Reporting Persons") are making this single, joint filing because they
may be deemed to constitute a "group" within the meaning of Section
13(d)(3) of the Exchange Act.
(b) - (c)
Moses Marx
Mr. Marx is principally employed as a securities and commodities broker.
Mr. Marx conducts his securities brokerage business in United Equities
Company, a partnership ("United Equities"), and his commodities
brokerage business in United Equites Commodities. The principal business
address of each of Mr. Marx and United Equities Commodities is 160
Broadway, New York, New York 10038.
United Equities Commodities
United Equities Commodities is a partnership which is a registered
commodities broker. The principal business address of United Equities
Commodities is 160 Broadway, New York, New York 10038. Pursuant to
Instruction C to Schedule 13D, the general partners of United Equities
Commodities are Moses Marx, who has a 99% equity interest in United
Equities Commodities, and Phillippe Katz and Dr. Joseph M. Fink, each of
whom has a .5% equity interest in United Equities Commodities. Mr. Marx'
business address and present principal occupation are set forth above.
Mr. Katz's business address is 160 Broadway, New York, New York 10038.
Mr. Katz is principally employed as a securities broker at United
Equities Commodities at the address indicated above. Dr. Fink's business
address is 501 Madison Avenue, New York,
Page 4 of 33 Pages
<PAGE>
New York 10022. Dr. Fink is principally employed as a periodontist.
(d) To the best knowledge of the Reporting Persons, during the last five
years, none of the Reporting Persons has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) To the best knowledge of the Reporting Persons, during the last five
years, none of the Reporting Persons has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and is subject to any judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or a finding of any
violation with respect to such laws.
(f) Each of the individuals named in this Item 2 is a citizen of the
United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The source of the funds used by United Equities Commodities to purchase
500,000 shares of Common Stock and 500,000 Class C Redeemable Common
Stock Purchase Warrants (the "Warrants"), which Warrants are exercisable
to purchase 250,000 shares of Common Stock at an exercise price of $1.25
per 1/2 share, reported in Item 5, was working capital. The shares of
Common Stock and the Warrants were purchased on June 21, 1996 at a
purchase price of $500,000.00.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the Common Stock and the Warrants of the
Company reported herein as being owned by each of them for investment
purposes. Depending upon market conditions and other factors that each
of the Reporting Persons may deem material to their respective
investment decisions, the Reporting Persons may purchase additional
shares of Common Stock and/or Warrants of the Company in the open market
or in private transactions, or may dispose of all or a portion of the
shares of Common Stock and/or Warrants of the Company that each now owns
or hereafter may acquire. Except as otherwise set forth herein, the
Reporting Persons have no plans or proposals which relate to, or could
result in any of the matters referred to in Paragraphs (b) through (j)
of Item 4 of Schedule 13D.
Page 5 of 33 Pages
<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) - (b)
According to the Company's Quarterly Report on Form 10- QSB for the
period ended June 30, 1996, there were, as of July 30, 1996, 14,266,713
shares of Common Stock of the Company issued and outstanding.
Moses Marx
Moses Marx beneficially owns 750,000 shares of Common Stock, comprised
of 500,000 shares and shares issuable upon exercise of 500,000 Warrants,
each to purchase, at any time until June 20, 2001, 1/2 share of Common
Stock at a purchase price of $1.25 per 1/2 share, comprising 5.2% of the
issued and outstanding shares of the Common Stock. With respect to the
shares described herein , Mr. Marx may be deemed to be a beneficial
owner by virtue of his being the only person in a position to determine
the investment and voting decisions of United Equities Commodities with
respect to such shares.
Mr. Marx has the sole power to vote and dispose of all such shares.
United Equities Commodities. United Equities Commodities owns 750,000
shares of Common Stock, comprised of 500,000 shares and shares issuable
upon exercise of 500,000 Warrants, each to purchase 1/2 share of Common
Stock at a purchase price of $1.25 per 1/2 share, comprising 5.2% of the
issued and outstanding shares of the Common Stock.
United Equities Commodities has the sole power to vote and dispose of
all such shares.
(c) During the period since June 21, 1996 and other than as set forth
above, neither Mr. Marx nor United Equities Commodities effected any
transactions in the Shares.
(d) Each of the Reporting Persons affirms that no person other than the
Reporting Persons has the right to receive, or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the Common
Stock owned by the Reporting Persons.
(e) It is inapplicable for the purposes herein to state the date on
which the Reporting Persons ceased to be the owners of more than five
percent of the Common Stock.
Page 6 of 33 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
The Warrants are callable by the company upon the terms and subject to
the conditions set forth in the Warrant Agreement between the Company
and American Stock Transfer & Trust Company, a copy of which is files as
an exhibit to this 13D.
Except as set forth elsewhere in this Schedule 13D, the Reporting
Persons do not have any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to any
securities of the Company, including, but not limited to, transfer or
voting of any such securities, finders' fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
1. Agreement dated June 21, 1996 among the Reporting Persons relating to
the filing of a joint statement pursuant to Rule 13d-1(f)(1).
2. Warrant Certificate No. WWC-051 of Epoch Pharmaceuticals, Inc.
representing the right of United Equities (Commodities) Company to
purchase shares of Common Stock.
3. Warrant Agreement between Epoch Pharmaceuticals, Inc. and American
Stock Transfer & Trust Company.
Page 7 of 33 Pages
<PAGE>
SIGNATURE
After reasonable inquiry, and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Date: October 7, 1996
/s/ Moses Marx
-------------------------------------
MOSES MARX
UNITED EQUITIES (COMMODITIES) COMPANY
By: /s/ Moses Marx
---------------------------------
Moses Marx, General Partner
Page 8 of 33 Pages
<PAGE>
Exhibit Index
-------------
Sequential
Exhibit No. Description Page No.
- ----------- ----------- --------
1 Agreement dated June 21, 1996 10
among the Reporting Persons
relating to filing of a joint
acquisition statement pursuant to
Rule 13d - 1(f)(1).
2 Warrant Certificate No. WWC-051 of 11
Epoch Pharmaceuticals, Inc.
representing the right of United Equities
(Commodities) Company to purchase shares of Common
Stock.
3 Warrant Agreement between Epoch, 16
Pharmaceuticals, Inc. and American
Stock Transfer & Trust Company.
Page 9 of 33 Pages
Exhibit 1
The undersigned hereby agree, pursuant to Rule 13d- 1(f)(1) to file a
joint statement on Schedule 13D and amendments thereto pertaining to their
shares of Common Stock and Common Stock Purchase Warrants of Epoch
Pharmaceuticals, Inc.
This agreement may be terminated for any reason by any party hereto
immediately upon the personal delivery or facsimile transmission of notice to
that effect to the other parties hereto.
This agreement may be executed in counterparts and all so executed shall
constitute one agreement.
Date: June 21, 1996
/s/ Moses Marx
-------------------------------------
MOSES MARX
UNITED EQUITIES (COMMODITIES) COMPANY
By: /s/ Moses Marx
---------------------------------
Moses Marx, General Partner
Page 10 of 33 Pages
EXHIBIT 2
WCC-051 WARRANT CERTIFICATE
CERTIFICATE FOR WARRANTS
NOT EXERCISABLE AFTER 5:00 P.M., NEW YORK CITY TIME,
ON JUNE 20, 2001
EPOCH PHARMACEUTICALS, INC.
CLASS C REDEEMABLE COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that
United Equities Commodities Company
or registered assigns is the registered holder (the "Registered Holder") of five
hundred thousand (500,000) Warrants, each of which represents the right to
purchase one-half (1/2) fully paid and nonassessable share of Common Stock, par
value $.01 per share (the "Common Stock") of Epoch Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), at the initial exercise price ("Exercise
Price") of $1.25 per one-half share at any time, but not after the Expiration
Date hereinafter referred to, by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon duly executed at the office
maintained pursuant to the Warrant Agreement hereinafter referred to for that
purpose by American Stock Transfer & Trust Company, or its successor as warrant
agent (any such warrant agent being herein called the "Warrant Agent"), and by
paying in full the Exercise Price, plus transfer taxes, if any. Payment of the
Exercise Price shall be made in United States currency, by certified check or
money order payable to the Warrant Agent for the account of the Company.
The Warrants are subject to call for redemption by the Company upon not
less than 30 days' nor more than 60 days' notice at a call price of $0.05 per
warrant (the "Call Price"), at any time after 9:30 A.M., New York City time, on
December 20, 1997, provided that closing sale price of the Common Stock, as
determined pursuant to Section 4.2 of the Warrant Agreement, dated as of June
21, 1996, between the Company and the Warrant Agent (the "Warrant Agreement"),
shall have been at least 150% of the then effective exercise price of the
Warrants, as adjusted pursuant to Section 4.8 of the Warrant Agreement (the
"Call Trigger Price"), for a period of 20 consecutive business days ending
within 15 days of the date that the notice of such call (the "Call Notice") is
given by the Company to the Warrant Agent pursuant to Section 4.11 of the
Warrant Agreement, and provided further that the Company has complied and
continues to be in compliance with the provisions of Section 2.2 of the Warrant
Agreement.
Page 11 of 33 Pages
<PAGE>
No Warrant may be executed after 5:00 P.M., New York City time, on the
expiration date (the "Expiration Date") which will be the earlier of June 20,
2001 or the business day preceding the call date specified in a Call Notice. All
Warrants evidenced hereby shall thereafter become void.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restrictions transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement, the Registered Holder shall be entitled to
transfer this Warrant Certificate, in whole or in part, upon surrender of this
Warrant Certificate at the office of the Warrant Agent maintained for that
purpose with the form of assignment set forth hereon duly executed, with
signatures guaranteed by a member firm of a national securities exchange, a
commercial bank or a trust company located in the United States or a member of
the National Association of Securities Dealers, Inc. or other eligible guarantor
institution which is a participant in a signature guarantee program (as such
terms are defined in Reg. 240.17Ad-15 under the Securities Exchange Act of 1934,
as amended), acceptable to the Warrant Agent. Upon any such transfer, a new
Warrant Certificate or Warrant Certificates representing the same aggregate
number of Warrants will be issued in accordance with instructions in the form of
assignment.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled to
exchange this Warrant Certificate with or without prior Warrant Certificates,
for another Warrant Certificate or Warrant Certificates of the same aggregate
number of Warrants upon surrender of this Warrant Certificate at the office
maintained for such purpose by the Warrant Agent.
Upon certain events provided for in the Warrant Agreement hereinafter
referred to the Exercise Price, the number of shares of Common Stock issuable
upon the exercise of each Warrant and the Call Trigger Price are required to be
adjusted.
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share which the registered holder of one or more Warrant
Certificates, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company shall
pay the cash value thereof determined as provided in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement and is subject to the terms and provisions contained in said
Warrant Agreement, to all of which terms and provisions the Registered Holder
consents by acceptance hereof.
This Warrant Certificate shall not entitle the Registered Holder to any
of the rights of a shareholder of the Company, including without limitation, the
rights to vote, to receive dividends and other distributions, or to attend or
receive any notice of meetings of shareholders or any other proceedings of the
Company.
This Warrant Certificate shall not be valid for any purpose unless and
until it shall have been countersigned by the Warrant Agent.
Page 12 of 33 Pages
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its facsimile Corporate Seal.
Dated: June 21, 1996
EPOCH PHARMACEUTICALS, INC.
ATTEST:
By: /s/ Sanford S. Zweifach
---------------------------------
Sanford S. Zweifach
President and Corporate Secretary
Page 13 of 33 Pages
<PAGE>
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise___________ of the
Warrants represented by this Warrant Certificate and to purchase the shares of
Common Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO:
- --------------------------------------------------------------------------------
(NAME)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
- --------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
DELIVER TO:
- --------------------------------------------------------------------------------
(NAME)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the Warrants
represented by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_______ by certified check or money order payable to Warrant Agent for the
account of the Company in United States currency.
Dated:____________
__________________________________
Insert Social Security or other
identifying number(s) of holder(s)
______________________________________ __________________________________
Name of registered holder - please print Signature of registered holder
______________________________________ __________________________________
Name of registered holder, if co-owned Signature of registered holder,
- - please print if co-owned
NOTE: Signature(s) must conform in all respects to name of Registered
Holder(s) as specified on the face of the Warrant Certificate
Page 14 of 33 Pages
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned represented
by the within Warrant Certificate, with respect to the number of warrants as set
forth below:
Name of Assignee Address No. of Warrants
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and does hereby irrevocably constitute and appoint_________________________ to
make such transfer on the books of Epoch Pharmaceuticals, Inc. maintained for
that purpose, with full power of substitution in the premises.
Dated:____________
__________________________________
Insert Social Security or other
identifying number(s) of holder(s)
______________________________________ __________________________________
Name of registered holder - please print Signature of registered holder
______________________________________ __________________________________
Name of registered holder, if co-owned Signature of registered holder,
if co-owned - please print
NOTE: Signature(s) must conform in all respects to name of Registered
Holder(s) as specified on the face of the Warrant Certificate
Signature(s) Guaranteed:
Page 15 of 33 Pages
EXHIBIT 3
- --------------------------------------------------------------------------------
WARRANT AGREEMENT
BETWEEN
EPOCH PHARMACEUTICALS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated as of June 21, 1996
- --------------------------------------------------------------------------------
Page 16 of 33 Pages
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES.......................................... 1
1.1 Appointment of Warrant Agent.................................... 1
1.2 Form of Warrant Certificates.................................... 1
1.3 Execution of Warrant............................................ 2
1.4 Issuance and Distribution of Warrant Certificate................ 2
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS............................... 2
2.1 Exercise Price ................................................. 2
2.2 Registration of Common Stock and Exercisability of Warrants..... 2
2.3 Procedure for Exercise of Warrants.............................. 3
2.4 Issuance of Warrant Shares...................................... 3
2.5 Certificates for Unexercised Warrants........................... 3
2.6 Reservation of Shares........................................... 3
2.7 Disposition of Proceeds......................................... 3
ARTICLE III
CALL OF WARRANTS.............................................................. 4
3.1 Call price and Trigger Price.................................... 4
3.2 Payment of Call Price........................................... 4
ARTICLE IV
ADJUSTMENTS AND NOTICE PROVISIONS............................................. 4
4.1 Adjustment of Exercise Price.................................... 4
4.2 Current Market Price............................................ 5
4.3 No Adjustment to Exercise Price................................. 5
4.4 Deferral of Adjustments to Exercise Price....................... 6
4.5 Adjustment of Number of Shares.................................. 6
4.6 Reorganization ................................................. 6
4.7 Reclassification................................................ 6
4.8 Adjustment of Call Trigger Price................................ 7
4.9 Verification of Computations.................................... 7
4.10 Notice of Certain Actions...................................... 7
4.11 Notice of Call................................................. 8
4.12 Notice of Adjustments.......................................... 8
4.13 Warrant Certificate Amendment.................................. 9
4.14 Fractional Shares.............................................. 9
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS OF REGISTERED HOLDERS
OF WARRANT CERTIFICATES....................................................... 9
5.1 Rights of Warrant Holders....................................... 9
5.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates....... 9
Page 17 of 33 Pages
<PAGE>
Page
----
ARTICLE VI
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER AND CANCELLATION OF
WARRANT CERTIFICATES .........................................................10
6.1 Split Up, Combination, Exchange and Transfer of
Warrant Certificates..........................................10
6.2 Cancellation of Warrant Certificates............................11
6.3 Agreement of Warrant Certificate Holders........................11
ARTICLE VII
PROVISIONS CONCERNING THE WARRANT AGENT AND OTHER MATTERS.....................11
7.1 Payment of Taxes and Charges....................................11
7.2 Resignation or Removal of Warrant Agent.........................11
7.3 Notice of Appointment...........................................12
7.4 Merger of Warrant Agent.........................................12
7.5 Company Responsibilities........................................12
7.6 Certification for the Benefit of Warrant Agent..................12
7.7 Books and Records...............................................12
7.8 Liability of Warrant Agent......................................13
7.9 Use of Attorneys, Agents and Employees..........................13
7.10 Indemnification................................................13
7.11 Acceptance of Agency...........................................13
7.12 Changes to Agreement...........................................13
7.13 Assignment .................................................14
7.14 Successor to Company...........................................14
7.15 Notices .................................................14
7.16 Defects in Notice..............................................15
7.17 Governing Law .................................................15
7.18 Standing .................................................15
7.19 Headings .................................................15
7.20 Counterparts .................................................15
7.21 Conflict of Interest...........................................15
7.22 Availability of the Agreement..................................15
Page 18 of 33 Pages
<PAGE>
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of June 21, 1996, between EPOCH
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), and AMERICAN
STOCK TRANSFER & TRUST COMPANY, a corporation organized under the banking laws
of the State of New York (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company has made a private placement of units consisting of
one (1) share of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), and one (1) Class C Redeemable Common Stock Purchase Warrants
(the "Warrants") to purchase one-half (1/2) share of the Company's Common Stock;
and
WHEREAS, the Company desires the Warrant Agent, and the Warrant Agent
agrees, to act on behalf of the Company in connection with the issuance,
transfer, exchange, replacement, redemption and surrender of certificates
representing the Warrants (the "Warrant Certificates"); and
WHEREAS, the Company and the Warrant Agent desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced, redeemed and surrendered in connection with
the exercise and redemption of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES
1.1 Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act on behalf of the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
1.2 Form of Warrant Certificates. The Warrant Certificates shall be
issued in registered form only and, together with the purchase and assignment
forms to be printed on the reverse thereof, shall be substantially in the form
of Exhibit A attached hereto, and, in addition, may have such letters, numbers
or other marks of identification or designation and such legends, summaries or
endorsements stamped, printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Agreement or as, in any particular case, may be required, in the opinion of
counsel for the Company, to comply with any law or with any rule or regulation
of any regulatory authority or agency or to conform to customary usage.
Page 19 of 33 Pages
<PAGE>
1.3 Execution of Warrant. The Warrant Certificates shall be executed on
behalf of the Company by its Chairman of the Board, Chief Executive Officer or
President or any Vice President, and by its Chief Financial Officer or Treasurer
or any Assistant Treasurer, or Secretary or any Assistant Secretary, either
manually or by facsimile signature printed thereon. The Warrant Certificate
shall be manually countersigned and dated the date of the countersignature by
the Warrant Agent and shall not be valid for any purpose unless so countersigned
and dated. In case any authorized officer of the Company who shall have signed
any of the Warrant Certificates shall cease to be such officer of the Company
either before or after delivery thereof by the Company to the Warrant Agent, the
signature of such person on such Warrant Certificates, nevertheless, shall be
valid and such Warrant Certificates may be countersigned by the Warrant Agent
and issued and delivered to those persons entitled to receive the Warrants
represented thereby with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
1.4 Issuance and Distribution of Warrant Certificates. The Company shall
deliver to the Warrant Agent an adequate supply of Warrant Certificates executed
on behalf of the Company, as described in Section 1.3 hereof. Upon receipt of an
order from the Company, the Warrant Agent shall within three business days
complete and countersign Warrant Certificates and shall deliver such Warrant
Certificates pursuant to written instructions of the Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Price. Each Warrant Certificate for the Warrants shall,
when signed by the Chairman, Chief Executive Officer or President or any Vice
President, and by the Chief Financial Officer or Treasurer or any Assistant
Treasurer, or Secretary or any Assistant Secretary, of the Company and
countersigned by the Warrant Agent, entitle the registered holder thereof,
subject to the provisions of Article III hereof, to purchase from the Company
one-half (1/2) share of Common Stock for each Warrant evidenced thereby, at the
purchase price of $1.25 per one-half (1/2) share (the "Initial Price"), or such
adjusted number of shares at such adjusted purchase price as may be established
from time to time pursuant to the provisions of Article IV hereof, payable in
full at the time of exercise of the Warrant. Except as the context otherwise
requires, the term "Exercise Price" as used in this Agreement shall mean the
purchase price of one share of Common Stock upon the exercise of a Warrant,
reflecting all appropriate adjustments made in accordance with the provisions of
Article IV hereof and Section 7.12 hereof.
2.2 Registration of Common Stock and Exercisability of Warrants. Each
Warrant may be exercised at any time, but not after 5:00 P.M., New York City
time, on the earlier of June 20, 2001 or the business day immediately preceding
the Call Date (as defined in Section 4.9). The term "Exercise Deadline" as used
in this Agreement shall mean the latest time and date at which the Warrants may
be exercised. Pursuant to the Subscription Agreements under which the Warrants
were sold, the Company is obligated to register the shares issuable upon
exercise of the Warrants.
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2.3 Procedure for Exercise of Warrants. During the period specified in
and subject to the provisions of Section 2.2 hereof, the Warrants may be
exercised by surrendering the Warrant Certificates representing such Warrants to
the Warrant Agent at its principal office (the "Principal Office"), which is
presently located at 40 Wall Street, New York, New York 10005, with the election
to purchase form set forth on the Warrant Certificate duly completed and
executed, with signatures guaranteed by a member firm of a national securities
exchange, a commercial bank or trust company located in the United States, a
member of the National Association of Securities Dealers, Inc. ("NASD") or other
eligible guarantor institution which is a participant in a signature guarantee
program (as such terms are defined in Reg. 240.17Ad-15 under the Securities
Exchange Act of 1934, as amended) acceptable to the Warrant Agent ("Signatures
Guaranteed"), accompanied by payment in full of the Exercise Price as provided
in Section 2.1 in effect at the time of such exercise, together with such taxes
as are specified in Section 7.1 hereof, for each share of Common Stock with
respect to which such Warrants are being exercised. Such Exercise Price and
taxes shall be paid in full by certified check or money order, payable in United
States currency, to the Warrant Agent for the account of the Company. The date
on which Warrants are exercised in accordance with this Section 2.3(a) is
sometimes referred to herein as the Date of Exercise of such Warrants.
2.4 Issuance of Warrant Shares. As soon as practicable after the Date of
Exercise of any Warrants, the Company shall issue, or cause the transfer agent
for the Common Stock, if any, to issue a certificate or certificates for the
number of full shares of Comon Stock to which such holder is entitled,
registered in accordance with the instructions set forth in the election to
purchase. All Warrant Shares shall be validly authorized and issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof, and shall be previously unissued
shares. Each person in whose name any such certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the holder of record of
the Warrant Shares represented thereby on the Date of Exercise of the Warrants
resulting in the issuance of such shares, irrespective of the date of issuance
or delivery of such certificate for the Warrant Shares.
2.5 Certificates for Unexercised Warrants. In the event that less than
all of the Warrants represented by a Warrant Certificate are exercised, the
Warrant Agent shall execute and mail, by first-class mail, within 30 days of the
Date of Exercise, to the registered holder of such Warrant Certificate, or such
other person as shall be designated in the election to purchase, a new Warrant
Certificate representing the number of full Warrants not exercised. In no event
shall a fraction of a Warrant be exercised, and the Warrant Agent shall
distribute no Warrant Certificates representing fractions of Warrants under this
or any other section of this Agreement. Final fractions of shares shall be
treated as provided in Section 4.14.
2.6 Reservation of Shares. The Company shall at all times reserve and
keep available for issuance upon the exercise of Warrants a number of its
authorized but unissued shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants.
2.7 Disposition of Proceeds. The Warrant Agent shall account at least
monthly (or more frequently upon the request of the Company, provided that in no
event shall the Warrant Agent be required to account more frequently than
weekly) to the Company with respect to Warrants exercised and concurrently
deliver to the Company all funds.
Page 21 of 33 Pages
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ARTICLE III
CALL OF WARRANTS
3.1 Call price and Trigger Price. The Company may, at its option, upon
not less than 30 days' nor more than 60 days' notice, call for redemption of all
or any portion of the then outstanding Warrants at a call price of $.05 per
warrant (such price is hereinafter referred to as the "Call Price"), at any time
after 9:30 A.M., New York City time, on December 20, 1997, provided the Current
Market Price of the Company's Common Stock, as determined pursuant to Section
4.2, has been at least 150% of the then effective Exercise Price of the
Warrants, as adjusted pursuant to Section 4.8 (the "Call Trigger Price") but not
giving effect to any decrease of such Exercise Price as permitted by Section
7.12 hereof, for 20 consecutive business days ending within 15 days of the date
of the notice of such call shall have been given to the Warrant Agent by the
Company pursuant to Section 4.11, and provided further that the Company has
compiled and continues to be in compliance with the provisions of Section 2.2
hereof. In the event the Company exercises its right to redeem the Warrants,
such Warrants will be exercisable until the close of business on the date fixed
for redemption in such notice. If any Warrant called for redemption is not
exercised by such time, such Warrant shall cease to be exercisable and the
holder thereof shall be entitled only to the redemption price.
3.2 Payment of Call Price. On or prior to the opening of business on the
Call Date (as defined in Section 4.11), the Company will deposit with the
Warrant Agent funds in form satisfactory to the Warrant Agent sufficient to
purchase all the Warrants which are to be called. Payment of the Call Price will
be made by the Warrant Agent upon presentation and surrender of the Warrant
Certificates representing such Warrant to the Warrant Agent at its Principal
Office.
ARTICLE IV
ADJUSTMENTS AND NOTICE PROVISIONS
4.1 Adjustment of Exercise Price. Subject to provisions of this Article
IV, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
(a) In case the Company shall at any time after the date hereof (i)
declare a dividend on the outstanding Common Stock payable in shares of its
capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
Page 22 of 33 Pages
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(b) In case the Company shall distribute to all holders of Common Stock
(including any such distribution made to the shareholders of the Company in
connection with a consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness, cash or assets (other than
distributions and dividends payable in shares of Common Stock), or rights,
options or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock, then, in each case,
the Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of shareholders
entitled to receive such distribution by a fraction, the numerator of which
shall be the Current Market Price (as determined pursuant to Section 4.2 hereof)
per share of Comon Stock on such record date, less the fair market value (as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of such rights,
options, or warrants or convertible or exchangeable securities, or the amount of
such cash, applicable to one share, and the denominator of which shall be such
Current Market Price per share of Common Stock. Such adjustment shall become
effective at the close of business on such record date.
4.2 Current Market Price. For the purpose of any computation under
Section 3.1 and this Article IV, the Current Market Price per share of Comon
Stock on any date shall be deemed to be the average of the daily closing prices
for the 20 consecutive trading days immediately preceding the date in question.
For the purpose of any computation hereunder or under Section 3.1, the closing
price for each day shall be the last reported sales price regular way or, in
case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange
(including, for purposes hereof, the NASDAQ National Market System) on which the
Common Stock is listed or admitted to trading or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the highest
reported bid price for the Common Stock as furnished by the NASD through NASDAQ
or a similar organization if NASDAQ is no longer reporting such information. If
on any such date the Common Stock is not listed or admitted to trading on any
national securities exchange and is not quoted by NASDAQ or any similar
organization, the fair value of a share of Common Stock on such date as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error, shall be used.
4.3 No Adjustment to Exercise Price. No adjustment in the Exercise shall
be required if such adjustment is less than $.05; provided, however, that any
adjustments which by reason of this Article IV are no required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article IV shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be.
4.4 Deferral of Adjustments to Exercise Price. In any case in which this
Article IV shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
Page 23 of 33 Pages
<PAGE>
4.5 Adjustment of Number of Shares. Upon each adjustment of the Exercise
Price as a result of the calculation made in Section 4.1(b) hereof, the Warrants
shall thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of shares (calculated to the nearest hundredth) obtained by dividing
(A) the product obtained by multiplying the number of shares purchasable upon
exercise of the Warrants prior to adjustment of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise Price by (B) the
Exercise Price in effect after such adjustment of the Exercise Price.
4.6 Reorganization. In case of any capital reorganization, other than in
the cases referred to in Section 4.1 hereof, or the consolidation or merger of
the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock or
the conversion of such outstanding shares of Common Stock into shares of other
stock or other securities or property), or in the case of any sale, lease or
conveyance to another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety (such actions being
hereinafter collectively referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
shares of Common Stock theretofore deliverable) the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock which would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Warrant holders so
that the provisions set forth herein shall thereafter be applicable, as nearly
as possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants. Any such adjustment shall be made by and set forth in
a supplemental agreement between the Company, or any successor thereto, and the
Warrant Agent and shall for all purposes hereof conclusively be deemed to be an
appropriate adjustment. The Company shall not effect any such Reorganization
unless upon or prior to the consummation thereof the successor corporation, or
if the Company shall be the surviving corporation in any such Reorganization and
is not the issuer of the shares of stock or other securities or property to be
delivered to holders of shares of the Common Stock outstanding at the effective
time thereof, then such issuer shall assume by written instrument the obligation
to deliver to the registered holder of any Warrant Certificate such shares of
stock, securities, cash or other property as such holder shall be entitled to
purchase in accordance with the foregoing provisions. In the event of sale,
lease or conveyance or other transfer of all or substantially all of the assets
of the Company as part of a plan for liquidation of the Company, all rights to
exercise any Warrant shall terminate 30 days after the Company gives written
notice to each registered holder of a Warrant Certificate that such sale or
conveyance or other transfer has been consummated.
4.7 Reclassification. In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the Company is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of the
shares of Comon Stock (other than a change in par value, or from no par value to
a
Page 24 of 33 Pages
<PAGE>
specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article IV. The above
provisions of this Section 4.7 shall similarly apply to successive
reclassifications and changes of shares of Common Stock.
4.8 Adjustment of Call Trigger Price. Upon each adjustment of the
Exercise Price of the Warrants pursuant to Article IV hereof, the Call Trigger
Price shall be adjusted by multiplying such price as in effect prior to such
adjustment by a fraction, the numerator of which shall be the Exercise Price
subsequent to adjustment and the denominator of which shall be the Exercise
Price prior to such adjustment. All calculations under this Section 4.8 shall be
made to the nearest cent.
4.9 Verification of Computations. Whenever the exercise price is
adjusted as provided in this Article IV, the Company will promptly obtain a
certificate of its Chief Financial Officer setting forth the exercise price as
so adjusted and a brief statement of the facts accounting for such adjustment,
and will make available a brief summary thereof to the holders of the Warrant
Certificates, at their addresses listed on the register maintained for that
purpose by the Warrant Agent (which summary may be included in any notice of
adjustment required by Section 4.12 hereof).
4.10 Notice of Certain Actions. In case at any time the Company shall
propose:
(a) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution
(other than regularly scheduled cash dividends which are not in a
greater amount per share than the most recent such cash dividend) to all
holders of Common Stock; or
(b) to issue any rights, warrants or other securities to all
holders of Common Stock entitling them to purchase any additional shares
of Common Stock or any other rights, warrants or other securities; or
(c) to effect any consolidation, merger, sale, lease, or
conveyance of property, described in Section 4.6, or any
reclassification or change of outstanding shares of Common Stock,
described in Section 4.7; or
(d) to effect any liquidation, dissolution or winding-up of the
Company; or
(e) to take any other action which would cause an adjustment to
the Exercise Price;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to the Warrant Agent. Such notice shall specify the date on which
the books of the Company shall close,
Page 25 of 33 Pages
<PAGE>
or a record shall be taken, for determining holders of Common Stock entitled to
receive such stock dividend or other distribution or such rights or warrants, or
the date on which such reclassification, change, consolidation, merger, sale,
lease, other disposition, liquidation, dissolution, winding up or exchange or
other action shall take place of commence, as the case may be, and the date as
of which it is expected that holders of record of Comon Stock shall be entitled
to receive securities or other property deliverable upon such action, if any
such date has been fixed. The Company shall cause copies of such notice to be
mailed to each registered holder of a Warrant Certificate. Such notice shall be
mailed, in the case of any action covered by Subsection 4.10(a) or 4.10(b)
above, at least 15 days prior to the record date for determining holders of the
Comon Stock for purposes of receiving such payment or offer; in the case of any
action covered by Subsection 4.10(c) or 4.10(d) above, at least 15 days prior to
the earlier of the date upon which such action is to take place or any record
date to determine holders of Comon Stock entitled to receive such securities or
other property; and in the case of any action covered by Subsection 4.10(e)
above, no more than 15 days after such action.
4.11 Notice of Call. Notice of any call for redemption shall be given to
the Warrant Agent by the Company upon not less than 30 days nor more than 60
days prior to the date established for such call (the "Call Date") and the
Company shall cause the Warrant Agent to mail such notice to all registered
holders of Warrant Certificates to be called promptly after the Company shall
have given such notice to the Warrant Agent. Each such notice of call will
specify the Call Date and the Call Price. The notice will state that payment of
the Call Price will be made by the Warrant Agent upon presentation and surrender
of the Warrant Certificates representing such Warrants to the Warrant Agent at
its Principal Office, and will also state that the right to exercise the
Warrants will terminate at 5:00 P.M., New York City time, on the business day
immediately preceding the Call Date. The Company will also make prompt public
announcement of such redemption by news release and by notice to the NASD or any
national securities exchange on which the Warrants are listed for trading.
4.12 Notice of Adjustments. Whenever any adjustment is made pursuant to
this Article IV, the Company shall cause written notice of such adjustment to be
sent by registered mail, postage prepaid to the Warrant Agent within 15 days
thereafter, such notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any adjustments, and (iii)
the Exercise Price, the number of shares or the securities or other property
purchasable upon exercise of each Warrant and the Call Trigger price after
giving effect to such adjustment. The Company shall cause the Warrant Agent,
within 15 days after receipt for such notice from the Company, to mail a similar
notice to be mailed to each registered holder of a Warrant Certificate.
4.13 Warrant Certificate Amendment. Irrespective of any adjustments
pursuant to this Article IV, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments.
4.14 Fractional Shares. The Company shall not be required upon the
exercise of any Warrant to issue fractional shares of Common Stock which may
result from such exercise. If more than one Warrant is exercised at one time by
the same registered holder, the number of full shares of Common Stock which
shall be deliverable shall be computed based on the number of shares deliverable
in exchange for the aggregate number of Warrants exercised. With respect to any
final
Page 26 of 33 Pages
<PAGE>
fraction of a share called for upon the exercise of any Warrant or Warrants, the
Company may pay a cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the Current Market Price of a share of Comon Stock
calculated in accordance with section 4.2.
ARTICLE V
OTHER PROVISIONS RELATING TO
RIGHTS OF REGISTERED HOLDERS
OF WARRANT CERTIFICATES
5.1 Rights of Warrant Holders. No Warrant Certificate shall entitle the
registered holder thereof to any of the rights of a shareholder of the Company,
including, without limitation, the right to vote, to receive dividends and other
distributions, or to receive any notice of, or to attend, meetings of
shareholders or any other proceedings of the Company.
5.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If any
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
shall direct the Warrant Agent to execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Warrant Certificate, or in
lieu of or in substitution for a lost, stolen or destroyed Warrant Certificate,
a new Warrant Certificate for the number of Warrants represented by the Warrant
Certificate so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Warrant Certificate, and of
the ownership thereof, and indemnity, if requested, all satisfactory to the
Company and the Warrant Agent. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges incidental hereto as the Company or Warrant Agent
may prescribe. Any such new Warrant Certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
ARTICLE VI
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
6.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of Section 6.2, may be split up, combined or exchanged for other
Warrant Certificates representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any holder desiring to split up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Warrant Agent at its Principal Office and shall
surrender the Warrant Certificate or Warrant Certificates so to be split up,
combined or exchanged at said office. Subject to any applicable laws, rules or
regulations restricting transferability, any restriction on transferability that
may appear on a Warrant Certificate in accordance with the terms hereof, or any
"stop-transfer" instructions the
Page 27 of 33 Pages
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Company may give to the Warrant Agent to implement any such restrictions (which
instructions the Company is expressly authorized to give), transfer of
outstanding Warrant Certificates may be effected by the Warrant Agent from time
to time upon the books of the Company to be maintained by the Warrant Agent for
that purpose, upon a surrender of the Warrant Certificate to the Warrant Agent
at its Principal Office, with the assignment form set forth in the Warrant
Certificate daily executed and with Signatures Guaranteed. Upon any such
surrender for split up, combination, exchange or transfer, the Warrant Agent
shall execute and deliver to the person entitled thereto a Warrant Certificate
or Warrant Certificates, as the case may be, as so requested. The Warrant Agent
may require the holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split up, combination,
exchange or transfer of Warrant Certificates prior to the issuance of any new
Warrant Certificate.
6.2 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered upon the exercise of Warrants or for split up, combination, exchange
or transfer, or purchase or otherwise acquired by the Company, shall be
cancelled and shall not be reissued by the Company; and, except as provided (i)
in Section 2.5, in case of the exercise of less than all of the Warrants
evidenced by a Warrant Certificate, or (ii) in Section 6.1, in case of a split
up, combination, exchange or transfer of the Warrants evidenced by a Warrant
Certificate, no Warrant Certificate shall be issued hereunder in lieu of such
cancelled Warrant Certificate. Any Warrant Certificate so cancelled shall be
destroyed by the Warrant Agent unless otherwise directed by the Company.
6.3 Agreement of Warrant Certificate Holders. Every holder of a Warrant
Certificate by accepting the same consents and agrees with the Company and the
Warrant Agent and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be registered on the
books of the Company maintained for that purpose by the Warrant Agent only if
surrendered at the Principal Office of the Warrant Agent, duly endorsed or
accompanied by a proper instrument of transfer, with Signatures Guaranteed; and
(b) prior to due presentment for registration of transfer, the Company
and the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company or the Warrant Agent)
for all purposes whatsoever, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
ARTICLE VII
PROVISIONS CONCERNING THE
WARRANT AGENT AND OTHER MATTERS
7.1 Payment of Taxes and Charges. The Company will from time to time
promptly pay to the Warrant Agent, or make provisions satisfactory to the
Warrant Agent for the payment of, all taxes and charges that may be imposed by
the United States or any state upon the Company or the Warrant Agent in
connection with the issuance or delivery of shares of Common Stock upon the
exercise of any Warrant, but any transfer taxes in connection with the issuance
of Warrant Certificates or certificates for shares of Common Stock in any name
other than that of the registered
Page 28 of 33 Pages
<PAGE>
holder of the Warrant Certificate surrendered shall be paid by such registered
holder; and, in such case, the Company shall not be required to issue or deliver
any Warrant Certificate or certificate for shares of Common Stock until such
taxes shall have been paid or it has been established to the Company's
satisfaction that no tax is due.
7.2 Resignation or Removal of Warrant Agent. The Warrant Agent may
resign its duties and be discharged from all further duties and liabilities
hereunder after giving 30 days' notice in writing to the Company, except that
such shorter notice may be given as the Company shall, in writing, accept as
sufficient. Upon comparable notice to the Warrant Agent, the Company may remove
the Warrant Agent; provided, however, that in such event the Company shall
appoint a new Warrant Agent, as hereinafter provided, and the removal of the
Warrant Agent shall not be effective until a new Warrant Agent has been
appointed and has accepted such appointment. If the office of Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a new Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of any Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. Any successor Warrant
Agent, whether appointed by the Company or any such court, shall be a registered
transfer agent, bank or trust company in good standing and incorporated under
the United States banking laws or under the laws of any state within the United
States, having its principal office within the United States. Any new Warrant
Agent appointed hereunder shall execute, acknowledge and deliver to the former
Warrant Agent last in office and to the Company, an instrument accepting such
appointment under substantially the same terms and conditions as are contained
herein and thereupon such new Warrant Agent, without any further act or deed,
shall become vested with the rights, powers, duties and responsibilities of the
Warrant Agent and the former Warrant Agent shall cease to be the Warrant Agent;
but if for any reason it becomes necessary or expedient to have the former
Warrant Agent execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the former Warrant Agent.
7.3 Notice of Appointment. Not later than the effective date of the
appointment of a new Warrant Agent, the Company shall cause notice thereof to be
mailed to the former Warrant Agent and the transfer agent, if any, for the
Common Stock and shall forthwith cause a copy of such notice to be mailed to
each registered holder of a Warrant Certificate. Failure to mail such notice, or
any defect contained therein, shall not affect the legally or validly of the
appointment of the successor Warrant Agent.
7.4 Merger of Warrant Agent. Any company into which the Warrant Agent
may be merged or with which it may be consolidated, or any company resulting
from any merger or consolidation to which the Warrant Agent shall be a party,
shall be the successor Warrant Agent under this Agreement without further act,
provided that such company would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 7.2 hereof. Any such successor
Warrant Agent may adopt the prior countersignature of any predecessor Warrant
Agent and distribute Warrant Certificates countersigned but not distributed by
such predecessor Warrant Agent, or may countersign the Warrant Certificates in
its own name.
Page 29 of 33 Pages
<PAGE>
7.5 Company Responsibilities. The Company agrees that it shall (i) pay
the Warrant Agent reasonable remuneration for its services as Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenses,
advances and expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder (including fees and expenses of its counsel);
(ii) provide the Warrant Agent, upon request, with sufficient funds to pay any
cash due pursuant to Section 4.14 upon exercise of Warrants; and (iii) perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this Agreement.
7.6 Certification for the Benefit of Warrant Agent. Whenever in the
performance of its duties under this Agreement the Warrant Agent shall deem it
necessary or desirable that any matter be proved or established or that any
instructions with respect to the performances of its duties hereunder be given
by the Company prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established, or such instructions may be
given, by a certificate or instrument signed by the Chairman, the Chief
Executive Officer, the President, a Vice President, the Secretary or the
Treasurer of the Company and delivered to the Warrant Agent. Such certificate or
instrument may be relied upon by the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement; but in its
discretion the Warrant Agent may in lieu thereof accept other evidence of such
matter or it may require such further or additional evidence as it may deem
reasonable.
7.7 Books and Records. The Warrant Agent shall maintain the Company's
books and records for registration and registration of transfer of the Warrant
Certificates issued hereunder. Such books and records shall show the names and
addresses of the respective holders of the Warrant Certificates, the number of
Warrants evidenced on its face by each Warrant Certificate and the date of each
Warrant Certificate.
7.8 Liability of Warrant Agent. The Warrant Agent shall be liable
hereunder for its own negligence or willful misconduct. The Warrant Agent shall
act hereunder solely as an agent for the Company and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not be
liable for or by reason of any of the statements of fact or recitals contained
in this Agreement or in the Warrant Certificates (except its counter-signature
thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only. The Warrant Agent
will not incur any liability or responsibility to the Company or to any holder
of any Warrant Certificate for any action taken, or any failure to take action,
in reliance on any notice, resolution, waiver, consent, order, certificate or
other paper, document or instrument reasonably believed by the Warrant Agent to
be genuine and to have been signed, sent or presented by the proper party or
parties. The Warrant Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof by the
Company or in respect of the validly or execution of any Warrant Certificate
(except its counter-signature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Warrant Certificate; nor shall it be responsible for the making of any
adjustment required under the provisions of Article IV hereof or responsible for
the manner, method or amount of any such adjustment or the facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the
Page 30 of 33 Pages
<PAGE>
authorization or reservation of any shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Warrant Certificate or as to
whether any shares of Comon Stock or other securities will, when issued, be
validly authorized and issued and fully paid and nonassessable.
7.9 Use of Attorneys, Agents and Employees. The Warrant Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys, agents or
employees.
7.10 Indemnification. The Company agrees to indemnify the Warrant Agent
and save it harmless against any and all losses, expenses or
liabilities,including judgments, costs and counsel fee arising out of or in
connection with its agency under this Agreement, except as a result of the
negligence or willful misconduct of the Warrant Agent.
7.11 Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth.
7.12 Changes to Agreement. The Warrant Agent may, without the consent or
concurrence of any registered holder of a Warrant Certificate, by supplemental
agreement or otherwise, join with the Company in making any changes or
corrections in this Agreement that they shall have been advised by counsel (i)
are required to cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein contained;
(ii) add to the covenants and agreements of the Company or the Warrant Agent in
this Agreement such further covenants and agreements thereafter to be observed;
or (iii) result in the surrender or modification of any right or power reserved
to or conferred upon the Company or the Warrant Agent in his Agreement,
including, without limitation, the reduction of the Exercise Price (except for
purposes of Article III hereof), but which changes or corrections do not or will
not adversely affect, alter or change the rights, privileges or immunities of
the registered holders of Warrant Certificates.
7.13 Assignment. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns.
7.14 Successor to Company. The Company will not merger or consolidate
with or into any other corporation or sell or otherwise transfer its property,
assets and business substantially as an entirety to a successor corporation,
unless the corporation resulting from such merger, consolidation, sale or
transfer (if not the Company) shall expressly assume, by supplemental agreement
satisfactory in form and substance to the Warrant Agent and delivered to the
Warrant Agent, the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company.
7.15 Notices. Any notice or demand required by this Agreement to be
given or made by the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed (until another
address is filed in writing with the Warrant Agent by the Company), as follows:
Page 31 of 33 Pages
<PAGE>
Epoch Pharmaceuticals, Inc.
1725 220th Street, S.E. No. 104
Bothel, Washington 98021
Attention: Chief Financial Officer
Any notice or demand required by this Agreement to be given or made by the
registered holder of any Warrant Certificate or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing with the Company by the Warrant Agent), as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: George Karfunkel
Any notice or demand required by this Agreement to be given or made by the
Company or the Warrant Agent to or on the registered holder of any Warrant
Certificate shall be sufficiently given or made, whether or not such holder
receives the notice, if sent by first-class or registered mail, postage prepaid,
addressed to such registered holder at his last address as shown on the books of
the Company maintained by the Warrant Agent. Otherwise such notice or demand
shall be deemed given when received by the party entitled thereto.
7.16 Defects in Notice. Failure to file any certificate or notice or to
mail any notice, or any defect in any certificate or notice pursuant to this
Agreement shall not affect in any way the rights or any registered holder of a
Warrant Certificate or the legally or validity of any adjustment made pursuant
to Article IV hereof, or any transaction giving rise to any such adjustment, or
the legality or validity of any action taken or to be taken by the Company.
7.17 Governing Law. The laws of the State of New York shall govern this
Warrant Agreement and the Warrant Certificates.
7.18 Standing. Nothing in this Agreement expressed and nothing that may
be implied from any of the provisions hereof is intended, or shall be construed,
to confer upon, or give to, any person or corporation other than the Company,
the Warrant Agent, and the registered holders of the Warrant Certificates any
right, remedy or claim under or by reason of this Agreement or of any covenant,
condition, stipulation, promise or agreement contained herein; and all
covenants, conditions, stipulations, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company and the
Warrant Agent and their respective successors and assigns, and the registered
holders of the Warrant Certificates.
7.19 Headings. The descriptive headings of the articles and sections of
this Agreement are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
7.20 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
Page 32 of 33 Pages
<PAGE>
7.21 Conflict of Interest. The Warrant Agent and any shareholder,
director, officer or employee of the Warrant Agent may buy, sell or deal in any
of the Warrant Certificates or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though the Warrant Agent were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company, including, without limitation, as trustee under
any indentures or as transfer agent for the Common Stock or any other securities
of the Company, or for any other legal entity.
7.22 Availability of the Agreement. The Warrant Agent shall keep copies
of this Agreement available for inspection by holders of Warrants during normal
business hours at its Principal Office. Copies of this Agreement may be obtained
upon written request addressed to:
Epoch Pharmaceuticals, Inc.
1725 220th Street, S.E. No. 104
Bothel, Washington 98021
Attention: Chief Financial Officer
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
EPOCH PHARMACEUTICALS, INC.
By: /s/ Stanford Zweifach
--------------------------------------------------
Name: Stanford Zweifach
Title: President and Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert J. Lemmer
--------------------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
Page 33 of 33 Pages
