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EXHIBIT 4.21
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE.
Issued: December, 31, 1997 CSW-14
RIBOGENE, INC.
COMMON STOCK PURCHASE WARRANT
1. NUMBER AND PRICE OF SHARES SUBJECT TO WARRANT.
(a) EXERCISE OF THE WARRANT. Subject to the terms and conditions
herein set forth, Hyline Laboratories, Inc., a New York corporation (the
"Purchaser"), or a permitted holder hereof, shall be entitled to purchase from
RiboGene, Inc., a California corporation (the "Company"), at any time and from
time to time after the date hereof but on or before the earlier to occur of (A)
January 5, 1999, (B) the closing of the Company's sale of all or substantially
all of its assets or the acquisition of the Company by another entity by means
of merger or other transaction as a result of which all shareholders of the
Company immediately prior to such acquisition in the aggregate possess a
minority of the voting power of the acquiring entity immediately following such
acquisition (the "Acquisition") to the extent that the acquiror in such
transaction requires, as a condition of such Acquisition, the exercise or
termination of all or part of this Warrant on or before the closing of such
Acquisition, which requirement shall be set forth in a writing signed by the
acquiror and delivered to the holder hereof, or (C) the date of the closing of
the Company's first underwritten public offering of securities at an aggregate
offering price of not less than $7,500,000 and a price per share of at least
$5.00, as adjusted for stock splits, combinations and the like (the "Initial
Public Offering"), to the extent that the managing underwriter(s) in such
transaction requires, as a condition of such underwriting, the exercise or
termination of all or part of this Warrant on or before the closing of such
Initial Public Offering, which requirement shall be set forth in a writing
signed by the underwriter and delivered to the holder hereof, up to 195,000
shares (which number of shares is subject to adjustment as described below) of
fully paid and nonassessable Common Stock of the Company (the "Shares") upon
surrender hereof at the principal office of the Company, and upon payment of the
purchase price for such shares (the "Purchase Price"), determined as the product
of the number of shares of Common Stock acquired upon exercise hereof and the
Warrant Price (as defined below), at said office in cash, by check, by wire
transfer or by cancellation of indebtedness, or upon a net exercise of this
Warrant as provided in Sections 7, 8 or 9 below. The Company shall give notice
to the Purchaser of the Initial Public Offering or Acquisition at least thirty
(30) days prior to the effective date thereof.
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(b) WARRANT PRICE. Subject to adjustment as hereinafter provided,
the exercise price for one share of Common Stock (or such securities as may be
substituted for one share of Common Stock pursuant to the provisions hereinafter
set forth) shall be $2.48. The exercise price for one share of Common Stock (or
such securities as may be substituted for one share of Common Stock pursuant to
the provisions hereinafter set forth) payable from time to time upon the
exercise of this Warrant (whether such price be the price specified above or an
adjusted price determined as hereinafter provided) is referred to herein as the
"Warrant Price."
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and
kind of securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time and the Company agrees to provide notice upon
the happening of certain events as follows:
(a) Adjustment of Warrant Price upon Issuance of Additional
Stock. The Warrant Price shall be subject to adjustment from time to time as
follows:
(i) (A) Upon each issuance by the Company of any
Additional Stock (as defined below), after the date of this Warrant, without
consideration or for a consideration per share less than the Warrant Price in
effect immediately prior to the issuance of such Additional Stock, the Warrant
Price in effect immediately prior to each such issuance shall forthwith (except
as otherwise provided in this Section 2(a)) be adjusted to a price determined by
multiplying the Warrant Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of shares of Common Stock which could be purchased were the then
Warrant Price used instead of the purchase price actually paid for such
Additional Stock (calculated by dividing the total consideration (before
deduction of costs) to be received by the Company in such issuance by the then
Warrant Price) and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus the number of
shares of such Additional Stock issued in such issuance. For purpose of this
Subsection (a), all shares of Common Stock issuable upon conversion of
outstanding Preferred Stock or upon exercise of this Warrant or any subsequent
warrant issued or deemed issued to Hyline Laboratories, Inc. within 90 days of
the date hereof shall be deemed to be outstanding and, immediately after any
Additional Stock is deemed issued, such Additional Stock shall be deemed
outstanding.
(B) No adjustment of the Warrant Price shall be
made in an amount less than one cent per share, provided that any adjustments
which are not required to be made by reason of this sentence shall be carried
forward and shall be either taken into account in any subsequent adjustment made
prior to 3 years from the date of the event giving rise to the adjustment being
carried forward, or shall be made at the end of 3 years from the date of the
event giving rise to the adjustment being carried forward. Except to the limited
extent provided for in subsections 2(a)(i)(E)(3) and (E)(4), no adjustment of
the Warrant Price pursuant to this subsection 2(a)(i) shall have the effect of
increasing the Warrant Price above the Warrant Price in effect immediately prior
to such adjustment.
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(C) In the case of issuance by the Company of
Common Stock for cash, the consideration shall be deemed to be the amount of
cash paid therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof.
(D) In the case of issuance by the Company of
Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value as determined
by the Board of Directors of the Company irrespective of any accounting
treatment.
(E) In the case of the issuance (whether before,
on or after the date of this Warrant) of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this subsection 2(a)(i);
1. The aggregate maximum number of shares
of Common Stock deliverable upon exercise (to the extent then exercisable) of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
subsections 2(a)(i)(C) and (a)(i)(D)), if any, received by the Company upon
issuance of such options or rights plus the minimum exercise price provided in
such options or rights (without taking into account potential antidilution
adjustments) for the Common Stock covered thereby.
2. The aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in exchange for (to the extent
then convertible or exchangeable) convertible or exchangeable securities or upon
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration, if any, received by the Company for any such securities and
related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the Company (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such securities or
the exercise of any related options or rights (the consideration in each case to
be determined in the manner provided in subsections 2(a)(i)(C) and 2(a)(i)(D)).
3. In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to the
Company under such options or rights or under such convertible or exchangeable
securities, including but not limited to, a change resulting from antidilution
provisions thereof, the Warrant Price, to the extent in any way affected by or
computed using such options, rights or securities, shall be adjusted based upon
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the actual issuance of Common Stock or any payment of such consideration upon
the exercise of any such options or rights or the conversion or exchange of such
securities.
4. Upon the expiration of any such options
or rights, the termination of any such options or rights to convert or exchange,
or the expiration of any options or rights related to such convertible or
exchangeable securities, the Warrant Price, to the extent in any way affected by
or computed using such options, rights or securities or options or rights
related to such securities, shall be recomputed to reflect the issuance of only
the number of shares of Common Stock (and convertible or exchangeable securities
which remain in effect) actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such securities or upon the exercise
of the options or rights related to such securities.
5. The number of shares of Common Stock
deemed issued and the consideration deemed paid therefor pursuant to subsections
2(a)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in either subsection
2(a)(i)(E)(3) or (4).
(ii) "ADDITIONAL STOCK" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to subsection 2(a)(i)(E))
by this Company after the date of this Warrant other than (A) shares of Common
Stock issued upon conversion of the Company's Preferred Stock issued prior to
the date of this Warrant, (B) shares of Common Stock issued to employees or
directors of or consultants and advisers to the Company or any subsidiary
pursuant to stock purchase or stock option plans or other similar arrangements
approved by the Company's Board of Directors, (C) shares of Common Stock issued
upon the exercise of warrants or options issued by the Company prior to the date
of this Warrant, or (D) shares of Common Stock issued or issuable upon exercise
or conversion of warrants to purchase shares of the capital stock of the Company
issued in connection with equipment lease financing transactions or bank
financing transactions unanimously approved by the Board of Directors, where the
issuance of such warrants is not principally for the purpose of raising
additional equity capital for the Company.
(b) ADJUSTMENT FOR DIVIDENDS IN STOCK. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor, other or additional
securities or other property of the Company by way of dividend or distribution,
then and in each case, the holder of this Warrant shall, upon the exercise
hereof, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional securities or other property of
the Company which such holder would hold on the date of such exercise had it
been the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional securities or
other property receivable by it as aforesaid during such
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period, giving effect to all adjustments called for during such period by this
paragraph (b) and paragraphs (a), (c) and (d) of this Section 2.
(c) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case
of any reclassification or change of the outstanding securities of the Company
or of any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) on or after the date hereof, then and in each such case the Company
shall give the holder of this Warrant at least thirty (30) days notice of the
proposed effective date of such transaction, and the holder of this Warrant,
upon the exercise hereof at any time after the consummation of such
reclassification, change or reorganization, shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the exercise
hereof prior to such consummation, the stock or other securities or property to
which such holder would have been entitled upon such consummation if such holder
had exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in paragraphs (a), (b) and (d) of this Section 2.
(d) STOCK SPLITS AND REVERSE STOCK SPLITS. If at any time on or
after the date hereof the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of the Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares of Common Stock receivable upon exercise of this Warrant shall thereby be
proportionately decreased. Notwithstanding the foregoing, the Company shall not
conduct a reverse stock split with respect to its Common Stock without first
obtaining the written consent of the holders of a majority of the Warrant Shares
represented hereby; provided, however, that such requirement terminate upon and
shall not apply to a reverse stock split conducted in connection with the
Initial Public Offering (if such reverse stock split is conditioned upon the
consummation of the Initial Public Offering).
3. NO FRACTIONAL SHARES. No fractional shares of Common Stock will
be issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined in good faith by the
Company's Board of Directors.
4. SHAREHOLDER RIGHTS AND OBLIGATIONS. This Warrant as such shall
not entitle its holder to any of the rights or bind its holder to any of the
obligations of a shareholder of the Company until the holder has exercised this
Warrant in accordance with Section 6 hereof. The shares of Common Stock issued
upon the exercise of this Warrant shall be entitled to the rights, preferences
and privileges afforded to the other shares of Common Stock as set forth in the
Company's Articles of Incorporation, as may be amended from time to time in
accordance with applicable law.
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5. RESERVATION OF STOCK. The Company covenants that during the
period this Warrant is exercisable, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant. The Company agrees
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
6. PROCEDURE FOR EXERCISE. This Warrant may be exercised by its
holder by the surrender of this Warrant and the executed Notice of Exercise
attached hereto at the principal office of the Company, accompanied by payment
in full of the Purchase Price of the Shares purchased thereby, as described
above, or may be net exercised as described below. This Warrant shall be deemed
to have been exercised immediately prior to the close of business on the date of
its surrender for exercise as provided above, and the person entitled to receive
the Shares or other securities issuable upon such exercise shall be treated for
all purposes as the holder of such shares of record as of the close of business
on such date. As promptly as practicable, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or certificates
for the number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share as provided above. If this
Warrant shall have been only partially exercised, the Company shall also deliver
to the holder either (a) a statement executed by an officer of the Company
setting forth the shares remaining subject to purchase under this Warrant or (b)
a replacement Warrant identical to this Warrant except that the Shares
purchasable thereunder shall be only those Shares not purchased upon exercise of
this Warrant, at the Company's option.
7. EXERCISE UPON INITIAL PUBLIC OFFERING.
(a) HOLDER RIGHTS COMPANY OPTION. In the event that the managing
underwriter(s) in the Initial Public Offering require the exercise or
termination of this Warrant as a condition to their underwriting, the holder
shall have the right to exercise one or any combination of the rights of the
holder set forth in Sections (b) and (c) below in such combination as the
Company, in its sole and complete discretion, shall determine in a notice
delivered to the holder hereof not later than promptly following the meeting of
the pricing committee of the Company's Board of Directors with the managing
underwriter(s) of the Initial Public Offering in which the offering is sized and
priced. All actions taken by the holder hereof pursuant to this Section 7 shall
be conditioned upon the closing of the Initial Public Offering. If for some
reason the holder hereof has taken action under this Section 7 and such offering
does not close within one hundred twenty (120) days after such action is taken,
the holder's actions hereunder shall be considered to have been rescinded and
this Warrant shall continue in full force and effect until otherwise terminated
or exercised.
(b) EXERCISE AND REGISTRATION. If this Warrant shall be exercised
as result of such requirement by the managing underwriter(s) for the Initial
Public Offering, then upon such exercise in accordance with the terms stated in
Section 1 above, the holder shall be entitled, to the extent permitted by the
Company under this Section 7, to include in the Initial Public
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Offering that number of Shares such that the proceeds to the holder, net of
underwriting commission or discounts ("Proceeds"), shall equal not less than the
total Purchase Price of this Warrant actually paid by the holder upon exercise
under this subsection (b) (the "Inclusion Right"). In lieu of payment of the
Purchase Price to be paid upon exercise under this subsection (b), the holder
and the Company may direct the underwriters to pay that portion of the proceeds
from the Initial Public Offering otherwise payable to the holder directly to the
Company in satisfaction of the holder's Purchase Price obligation.
(c) RIGHT TO CONVERT. If this Warrant shall be exercised as a
result of such requirement by the managing underwriter(s) for the Initial Public
Offering, then the holder hereof shall be entitled, to the extent permitted by
the Company under this Section 7, to so exercise by converting this Warrant or
portion hereof (the "Conversion Right") into shares of Common Stock, without
payment by such holder of any cash or other consideration, as provided below
immediately prior to its expiration after the Company has given the Purchaser
notice of the Initial Public Offering pursuant to Section 1 above, subject to
the restrictions set forth in subsection (e) hereof. In connection with any
exercise of the Conversion Right, this Warrant shall represent the right to
subscribe for and acquire the number of Shares (rounded to the next highest
integer) (the "Converted Warrant Shares") equal to
(i) the number of Shares being converted by the holder
hereunder, as specified by the holder pursuant to subsection (d) below (the
"Total Number"), multiplied by
(ii) a fraction, (A) the numerator of which is the excess of
the Fair Market Value of one Share, as determined pursuant to subsection (f)
below, over the Warrant Price then in effect, and (B) the denominator of which
is the Fair Market Value of one Share, all determined as of the Conversion Date.
(d) EXERCISE OF CONVERSION RIGHT. To the extent exercisable, the
Conversion Right set forth in subsection (c) above may be exercised by the
holder hereof by the surrender of this Warrant prior to its expiration and after
the Company shall have given the Purchaser notice pursuant to Section 1 of the
Initial Public Offering, at the principal office of the Company together with
written statement specifying that the holder thereby intends to exercise the
Conversion Right immediately prior to the expiration of this Warrant and
indicating the number of shares subject to this Warrant which are being
surrendered (referred to in subsection (c) hereof as the Converted Warrant
Shares) in exercise of the Conversion Right. Such conversion shall be effective
immediately prior to the expiration of this Warrant (the "Conversion Date").
Certificates for the shares of Common Stock issuable upon exercise of the
Conversion Right (or any other securities deliverable in lieu thereof under
Section 2(b) above) and, if applicable, a new Warrant of like tenor evidencing
the balance of the Shares remaining subject to this Warrant shall be issued as
of the Conversion Date and shall be delivered to the holder immediately
following the Conversion Date.
(e) RESTRICTIONS ON CONVERSION RIGHT. In the event that the
Conversion Right contained herein would, at any time this Warrant remains
outstanding, be deemed by the Company's independent certified public accountants
to trigger a charge to the Company's
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earnings for financial reporting purposes, then the Conversion Right under this
Section 7 shall automatically terminate upon the Company's written notice to the
holder of such adverse accounting treatment.
(f) DETERMINATION OF FAIR MARKET VALUE. For purposes of this
Section 7, fair market value of a share of Common Stock as of the Conversion
Date shall mean the value of the shares of Common Stock, as provided in the
"Price to Public" specified in the final prospectus with respect to such
offering.
(g) COMBINATION OF RIGHTS. To the extent that the Company limits
the exercise of the Conversion Right to a portion of this Warrant or if the
Conversion Right is terminated under Section 7(e) above, it shall allow the
holder hereof to exercise the Inclusion Right to the extent necessary to produce
Proceeds equal to the aggregate purchase price of those Shares not eligible for
conversion under the Conversion Right. Similarly, to the extent that the Company
limits the exercise of the Inclusion Right to a portion of this Warrant, it
shall allow the holder hereof to exercise the Conversion Right with respect to
those Shares the purchase price for which would not be accounted for through
such limited exercise of the Inclusion Right.
(h) DEMONSTRATION OF EXERCISE UNDER SECTION 7. Examples of a full
and partial exercise of the rights set forth in this Section 7 are attached
hereto as Attachment 1. Such examples are limited by their stated assumptions
and should be used for reference purposes only.
8. NET EXERCISE UPON ACQUISITION OR TERMINATION.
(a) In the event that the acquiror in the Acquisition requires
the exercise or termination of this Warrant as a condition to such Acquisition,
the holder shall have the right to exercise the rights of the holder set forth
in Sections 7(c), 7(d) and 7(f) above (without reference to Section 7(e)),
interpreting all references therein to "Initial Public Offering" to mean
"Acquisition" and substituting the following language for the determination of
fair market value set forth in Section 7(f): "fair market value of a share of
Common Stock as of the Conversion Date shall mean the effective per share
consideration to be received in an Acquisition by holders of the Common Stock,
which price shall be as specified in the agreement entered into with respect to
such Acquisition, or if no such price is set forth in the agreement concerning
the Acquisition, then as reasonably determined in good faith by the Company's
Board of Directors upon a review of all relevant factors." All actions taken by
the holder hereof pursuant to this Section 8(a) shall be conditioned upon the
closing of the Acquisition. If for some reason the holder hereof has taken
action under this Section 8(a) and such transaction does not close within one
hundred twenty (120) days after such action is taken, the holder's actions
hereunder shall be considered to have been rescinded and this Warrant shall
continue in full force and effect until otherwise terminated or exercised.
(b) If this Warrant shall not have been exercised or terminated
prior to January 5, 1999, then this Warrant shall be deemed to have been
automatically converted pursuant to the provisions set forth in Sections 7(c),
7(d) and 7(f) above (without reference to the first sentence
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in Section 7(d) or to Section 7(e)), ignoring all references therein to "Initial
Public Offering," any notice deliverable thereupon or any other language or
right specific thereto other than the right to convert this Warrant into shares
of Common Stock. For purposes of this Section 8(b), the following language shall
be substituted for the determination of fair market value set forth in Section
7(f): "fair market value of a share of Common Stock as of the Conversion Date
shall mean, at the holder's option, either (i) the price per share at which the
Company's Preferred Stock (initially convertible into one share of Common Stock)
was last sold by the Company prior to the Conversion Date, or (ii) the value
determined by a mutually acceptable investment advisor within thirty (30) days
after the Conversion Date upon review of all relevant factors provided, however,
in determining the value of share of Common Stock, no discount shall be taken
for either the fact that the shares of Common Stock to be issued to a Holder may
not then be freely tradeable on a public market or that such shares may
constitute a minority interest in the Company. The holder shall indicate in
written notice to the Company not later than the Conversion Date which of
options (i) or (ii) the holder wishes to accept or pursue. The fees and expenses
of the investment advisor, if applicable, shall be borne equally by the Company
and the holder; provided, however, that if the Company's Preferred Stock
(initially convertible into one share of Common Stock) was last sold by the
Company within eighteen (18) months prior to the Conversion Date, the fees and
expenses of the investment advisor, if applicable, shall be borne solely by the
holder."
9. NET EXERCISE RIGHT. In lieu of exercising this Warrant as
specified in Section 1(a) above, Purchaser may from time to time exchange this
Warrant, in whole or in part, into the number of Shares determined by dividing
(a) the aggregate fair market value on the date of such exchange of a number of
Shares or other securities otherwise issuable upon exercise of this Warrant
designated by Purchaser (the "Designated Shares") minus the aggregate Warrant
Price of the Designated Shares by (b) the fair market value of one Share. Upon
such exchange, the number of Shares purchasable upon exercise of this Warrant
shall be reduced by the number of Designated Shares and, if a balance of
purchasable Shares remains after such exchange, the Company shall execute and
deliver to Purchaser a new Warrant evidencing the right to purchase such balance
of Shares; provided, no fractional shares shall be issuable upon such exchange,
and if the number of Shares determined in accordance with the foregoing formula
is other than a whole number, the Company shall pay Purchaser an amount by
check, determined in accordance with the provisions of Section 3. For purposes
of this Section 9, if the Shares are traded in a public market, the fair market
value of the Shares shall be the closing price of the Shares (or the closing
price of the Company's stock into which the Shares are convertible) reported for
the business day immediately before Purchaser delivers its Notice of Exercise to
the Company. If the Shares are not traded in a public market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment. The foregoing notwithstanding, if Purchaser advises the
Board of Directors in writing that Purchaser disagrees with such determination,
then the Company and Purchaser shall promptly agree upon a reputable investment
banking firm to undertake such valuation. All fees and expenses of the
investment banking firm shall be borne equally by the Company and Purchaser.
10. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number
or type of securities issuable upon exercise of this Warrant is adjusted, as
herein provided, the Company
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shall promptly deliver to the record holder of this Warrant a certificate of an
officer of the Company setting forth the nature of such adjustment and a brief
statement of the facts requiring such adjustment.
11. PROPOSED TRANSFERS. This Warrant may not be sold, assigned,
pledged or otherwise transferred by the holder hereof to a third party other
than in compliance with all terms of this Section 11.
(a) This Warrant may be sold, assigned, pledged or otherwise
transferred by the holder hereof to a majority-owned subsidiary of the Purchaser
or an entity holding a majority of the Purchaser's outstanding voting securities
or to the members of the immediate family of such majority shareholder, if an
individual, or to trusts for their benefit.
(b) If the holder hereof wishes to sell, assign, pledge or
otherwise transfer this Warrant or any portion thereof to a party(ies) other
than a party set forth in subsection 11(a) above, the holder shall first offer
the Warrant to the Company on the following terms:
(i) The transferring holder shall first deliver to the
Company a written offer (the "Offer") to sell at the price and on the terms
offered to the third-party transferee(s) with respect to the offered portion(s)
of this Warrant (collectively, the "Offered Portion"), along with a statement
(the "Offer Statement") setting forth the holder's intention to so transfer and
the name and address of the third-party transferee(s).
(ii) For a period of thirty (30) days after the receipt of
the Offer (the "Offer Period"), the Company shall have the right, but not the
obligation, to purchase all of the Offered Portion on the terms set forth in the
Offer. If the Company chooses to so exercise this purchase right, it shall
deliver a written notice of such intent to the transferring holder and must so
purchase all (and not less than all) of the security(ies) so offered within
thirty (30) days of the receipt of such notice by the transferring holder.
(iii) To the extent that the Company declines to exercise
its right to purchase all of the Offered Portion within the Offer Period, the
transferring holder may sell, assign, pledge or otherwise transfer the Offered
Portion to the third-party transferee(s) set forth in the Offer Statement at a
price not less than, and upon terms not more favorable to such transferee(s)
than the terms set forth in the Offer; provided, however, that if the
transferring holder has not completed such transfer within one hundred twenty
(120) days after the Offer Period lapses, such transfer shall again become
subject to the terms of this subsection 11(b).
(iv) The right of purchase set forth in this subsection
11(b) may be assigned by the Company without the consent of the holder hereof.
Notice of such assignment shall be given to the holder hereof.
(c) Other than transfers of this Warrant or any Shares received
upon exercise hereof to a transferee or transferees set forth in subsection (a)
above, prior to any proposed transfer of this Warrant consistent with the
foregoing or the Shares received upon the exercise
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hereof (collectively, the "Securities"), unless there is in effect a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the proposed transfer, the holder thereof shall give
written notice to the Company of such xxxxxx's intention to effect such
transfer. Each such notice shall describe the manner and circumstances of the
proposed transfer in sufficient detail, and shall, if the Company so requests,
be accompanied (except in transactions in compliance with Rule 144) by either
(i) an unqualified written opinion of legal counsel who shall be reasonably
satisfactory to the Company addressed to the Company and reasonably satisfactory
in form and substance to the Company's counsel, to the effect that the proposed
transfer of the Securities may be effected without registration under the
Securities Act, or (ii) a "no action " letter from the Commission to the effect
that the transfer of such Securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of the Securities shall be entitled to transfer
the Securities in accordance with the terms of the notice delivered by the
holder to the Company. Each certificate evidencing the Securities transferred as
above provided shall bear the appropriate restrictive legend set forth above,
except that such certificate shall not bear such restrictive legend if in the
opinion of counsel for the Company such legend is not required in order to
establish compliance with any provisions of the Securities Act.
12. MERGER. If the Company shall at any time merge with or into
another corporation in a transaction that is not an Acquisition, the holder of
this Warrant will thereafter receive, upon the exercise of this Warrant in
accordance with its terms, the securities or properties to which the holder of
the number of shares of Common Stock then deliverable upon exercise of this
Warrant would have been entitled upon such merger.
13. OBSERVER RIGHTS. At any time prior to the consummation of the
Initial Public Offering and for so long as this Warrant is issued and
outstanding, Xxxxxxx Xxxxxx shall have the right to attend all meetings
(including telephonic meetings) of the Company's Board of Directors in a
non-voting, observer capacity and, in this respect, the Company shall give Xx.
Xxxxxx, whether or not present at such meetings, copies of all notices, minutes,
consents and other materials that it provides to its directors; provided,
however, (i) that Xx. Xxxxxx shall agree to hold in confidence and trust and to
act in a fiduciary manner with respect to all information so provided; (ii) that
the Company reserves the right to withhold any information and to exclude Xx.
Xxxxxx from any meeting, or portion thereof, if the Board of Directors
determines in good faith that access to such information or attendance at such
meeting could materially and adversely affect the Company, whether by way of
adversely affecting the attorney-client privilege between the Company and its
counsel, or otherwise; and (iii) that in no event shall the failure to provide
the notice described above invalidate in any way any action taken at a meeting
of the Company's Board of Directors. If it is necessary for Xx. Xxxxxx to travel
to any such Board meeting, he shall receive the same remuneration and
reimbursement from the Company as do the Company's Directors residing in the
eastern United States. Notwithstanding the foregoing, the observer rights set
forth in this Section 13 shall terminate if and at such time as Xxxxxxx Xxxxxx
beneficially owns less than 650,000 Shares. For the purpose of the calculation
set forth in the preceding sentence, "beneficial ownership" shall be interpreted
consistently with Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as
11.
12
amended, except that such term shall be deemed to include shares held by the
members of Xx. Xxxxxx'x immediate family or in trusts for their benefit.
14. HSR ACT AND RULES. In the event the Company or any holder hereof
reasonably believes that the exercise of this Warrant and the issuance of shares
of Common Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) requires prior compliance with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act and Rules"), any such exercise
shall be contingent upon such prior compliance, and, subject to effecting such
compliance, be effective as of the date that this Warrant is surrendered for
exercise pursuant to Section 6 above.
15. MISCELLANEOUS. This Warrant shall be governed by the laws of the
State of California (without reference to conflict of laws principles). The
headings in this Warrant are for purposes of convenience of reference only and
shall not be deemed to constitute a part hereof. Neither this Warrant nor any
term hereof may be changed, waived, discharged or terminated orally but only by
an instrument in writing signed by the Company and the registered holder hereof.
All notices and other communications from the Company to the holder of this
Warrant shall be delivered personally or mailed by first class mail, postage
prepaid, to the address furnished to the Company in writing by the last holder
of this Warrant who shall have furnished an address to the Company in writing,
and if mailed shall be deemed given three days after deposit in the U.S. Mail.
IN WITNESS WHEREOF, this Common Stock Purchase Warrant No. CSW-14 is
issued this 31st day of December, 1997.
RIBOGENE, INC.
a California corporation
By: /s/ XXXXXXX XXXXXXXXX
-----------------------------------
Title:
--------------------------------
12.
13
NOTICE OF EXERCISE
OF RIBOGENE, INC.
COMMON STOCK PURCHASE WARRANT
To:
Attn:
1. The undersigned hereby elects to purchase _______________ shares
of Stock of _____________________________________ pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
2. Please issue a certificate or certificates representing said
shares in the name of the undersigned or in such other name or names as are
specified below:
Name:
Address:
3. The undersigned represents that the aforesaid shares being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares,
other than distributions to members of the undersigned immediate family or to
trusts for their benefit.
--------------------------------
(Signature)
--------------------------------------
(Date)
13.
14
ATTACHMENT 1
EXAMPLES OF EXERCISE OF CONVERSION AND INCLUSION RIGHTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXAMPLE #1
Assumptions:
1. Full exercise of Conversion Right
2. Variables:
X = Shares acquirable upon exercise of conversion right
Y = Total Number (to be converted) = 2,000,000
A = Fair Market Value = 5
B = Warrant Price = 3
Conversion Right Calculation:
X = Y * (A-B) - X = 2,000,000 * (5-3) - X = 800,000 shares
----- -----------------
B 5
--------------------------------------------------------------------------------
EXAMPLE #2
Assumptions:
1. 1/2 exercise of Conversion Right and 1/2 cash exercise and full exercise
of Inclusion Right.
2. Underwriting discounts and commissions have not been taken into
consideration.
3. Variables:
- For Conversion Right Calculation:
X = Shares acquirable upon exercise of right
Y = Total Number (to be converted) = 1,000,000
A = Fair Market Value = 5
B = Warrant Price = 3
14.
15
- For Cash Exercise and Inclusion Right:
X = Shares included in Initial Public Offering
Y = Shares cash exercised = 1,000,000
Z = Fully paid shares owned by holder after cash
exercise and inclusion
A = Fair Market Value = 5
B = Warrant Price = 3
Calculations:
Conversion Right Calculation:
X = Y * (A-B) - X =1,000,000 * (5-3) - X = 400,000 shares
----- -----
B 5
Cash Exercise and Inclusion Right Calculation:
X = (Y * B)- X = (1,000,000 * 3) - X = 600,000 shares
----- -------------
A 5
Z = Y - X - Z = 1,000,000 - 600,000 - Z = 400,000
--------------------------------------------------------------------------------
ACCORDINGLY, THE HOLDER IS LEFT WITH 800,000 FULLY PAID SHARES UNDER
EACH OF THE FOREGOING EXAMPLES, REGARDLESS OF WHETHER THE CONVERSION RIGHT WAS
EXERCISED IN FULL (800,000 shares) OR WHETHER EACH RIGHT WAS EXERCISED EQUALLY
(400,000 + 400,000 shares).
15.
