1
Exhibit 4.18
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: January 5, 1994 CSW-7
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) the date that is five (5) years from the date hereof, (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 presently constituted (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 1,300,000 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 or 8 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.
(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 $3.00. 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
1
2
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.
(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
3
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 or account of
accrual 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 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
3
4
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 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 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.
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
4
5
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 a 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 Offering that
number of Shares such that the proceeds to the holder, net of underwriting
commissions 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 Conversation
Date.
5
6
(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 a 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 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 the 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 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.
6
7
(b) If this Warrant shall not have been exercised or
terminated prior to the date five (5) years from original issuance date of this
Warrant, 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 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 a review of all relevant factors provided, however, in
determining the value of a 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 a 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. 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 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.
10. 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 10.
(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 9(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
7
8
Period lapses, such transfer shall again become subject to the terms of this
subsection 10(b).
(iv) The right of purchase set forth in this subsection
10(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) Notwithstanding any provision of this Section 9, the holder
hereof shall not be entitled to transfer warrants representing the right to
purchase more than 395,000 Shares subject to purchase under this Warrant to any
single third-party transferee or group of related transferees, other than to
(i) the Company or its assignees hereunder or (ii) transferees under the terms
of subsection 10(a) above; provided, however, that if the Company shall issue a
warrant subsequent to the original issuance date of this Warrant and such other
warrant shall permit the transfer of more than 395,000 shares subject to
purchase under such warrant to a single third-party transferee or group of
related transferees (other than to the transferees previously exempted in this
sentence) the number of shares transferable under this Section 10(c) shall be
automatically adjusted to such higher share amount through no further action by
the holder or the Company.
(d) 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 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
holder'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.
10. 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.
11. 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 determine 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 11 shall terminate if and at such time as Xxxxxxx Xxxxxx
beneficially owns less than fifty percent (50%) of the original number of
8
9
Shares subject to purchase hereunder. 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 amended, except that such term shall be deemed to include shares held
by the members Xx. Xxxxxx'x immediately family or in trust for their benefit.
12. 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.
13. 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-7 is
issued this 5th day of January, 1994.
RIBOGENE, INC.,
a California corporation
By: [illegible]
-------------------------------
Title: V.P. Finance
----------------------------
9
10
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)
10
11
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
- 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
11
12
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).
12
