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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) April 29, 1998
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ALTEON INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-19529 13-3304550
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(State or Other Juris- (Commission (I.R.S. Employer
diction of Incorporation) File Number) Identification No.)
170 Williams Drive, Ramsey, New Jersey 07446
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 934-5000
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(Former Name or Former Address, If Changed Since Last Report)
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Item 5. Other Events.
The Registrant and Genentech, Inc. entered into an Amendment
to Stock Purchase Agreement and Development Collaboration and
License Agreement dated as of April 29, 1998 amending certain
provisions of the Stock Purchase Agreement and Development
Collaboration and License Agreement, each dated as of December 1,
1998, between the parties.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
The following Exhibit is furnished in accordance with the
provisions of Item 601 of Regulation S-K:
10.1 Amendment to Stock Purchase Agreement and Development
Collaboration and License Agreement dated as of April 29,
1998 between Alteon Inc. and Genentech, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Alteon Inc.
By: /s/ James J. Mauzey
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James J. Mauzey
Chairman of the Board and
Chief Executive Officer
Date: May 6, 1998
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EXHIBIT INDEX
Exhibit
No. Description of Exhibit
10.1 Amendment to Stock Purchase Agreement and Development
Collaboration and License Agreement dated as of April 29,
1998 between Alteon Inc. and Genentech, Inc.
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AMENDMENT TO STOCK PURCHASE AGREEMENT AND
DEVELOPMENT COLLABORATION AND LICENSE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT AND DEVELOPMENT
COLLABORATION AND LICENSE AGREEMENT (this "Agreement") is dated as of
April 29, 1998, between Alteon Inc., a Delaware corporation, having
offices at 170 Williams Drive, Ramsey, New Jersey 07446 (the
"Company"), and Genentech, Inc., a Delaware corporation having
offices at 1 DNA Way, South San Francisco, California 94080 (the
"Purchaser").
PRELIMINARY STATEMENTS
A. The Company and the Purchaser have entered into a Stock
Purchase Agreement dated as of December 1, 1997 (the "Stock Purchase
Agreement") pursuant to which the Company agreed to issue to the
Purchaser shares of its Common Stock and shares of its Series G
Preferred Stock and Series H Preferred Stock (the "Preferred
Shares").
B. The Company and the Purchaser have entered into a
Development Collaboration and License Agreement dated as of December
1, 1997 (the "License Agreement") pursuant to which the Company has
granted certain license rights to the Purchaser.
C. The Company and the Purchaser wish to amend certain
provisions of the Stock Purchase Agreement to address concerns raised
by representatives of the Nasdaq National Market, Inc.
D. In connection with the amendment of the Stock Purchase
Agreement, the Company and the Purchaser wish to amend the License
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties contained in this Agreement, the parties
hereto agree as follows:
1. LIMITATIONS ON CONVERSION. The following shall be added as
Section 8.3 to the Stock Purchase Agreement:
"8.3 Limitation on Conversion Value. Notwithstanding
anything to the contrary contained in the Stock Purchase
Agreement, the Certificates of Designations of the
Company's Series G Preferred Stock and Series H Preferred
Stock or the License Agreement, the Preferred Shares shall
not be converted for a Conversion Value (as defined in the
Certificates of Designations) of less than $5.6875 (which
price shall be appropriately adjusted for any stock split,
reverse split, stock dividend or reclassification of the
Common Stock). If on any Conversion Date (as defined in
the
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Certificates of Designations) the Conversion Value is less
than $5.6875 (as so adjusted), the Conversion Value shall
be deemed to be $5.6875 (as so adjusted). The limitation
contained in this Section 8.3 shall continue in effect
unless and until the stockholders of the Company approve
its removal in accordance with the requirements of the
Nasdaq National Market. Upon such approval, this Section
8.3 shall have no further force and effect."
2. ACQUISITION OF COMMON STOCK. Section 5.7 of the Stock
Purchase Agreement is amended to provide in its entirety as follows:
"(a) Holdings of Common Stock. From the date of this
Agreement the Purchaser, its Affiliates and any Group of
which the Purchaser or any of its Affiliates is a member
shall not at any time be the beneficial owner (as defined
in Rule 13d-3 promulgated pursuant to the Exchange Act) of,
in aggregate, more than nineteen and ninety-nine one
hundredths percent (19.99%) of the shares of Common Stock
outstanding from time to time, exclusive of any shares of
Common Stock issuable but not issued upon conversion of
Series G Preferred Stock or Series H Preferred Stock by the
Company. The Company may refuse to issue any shares of
Common Stock upon the conversion of the Preferred Stock if,
as a result of such issuance, the Purchaser, its Affiliates
and any Group of which the Purchaser or any of its
Affiliates is a member would, following such issuance, be
the beneficial owner of, in aggregate, more than nineteen
and ninety-nine one hundredths (19.99%) percent of the
shares of Common Stock outstanding from time to time.
"(b) Influence and Control. The Purchaser represents
and warrants to the Company that it is acquiring the
securities to be acquired pursuant to the Stock Purchase
Agreement in the ordinary course of its business and not
with the purpose or the effect of changing or influencing
the control of the Company. During any period when the
Purchaser holds any shares of Common Stock, Preferred Stock
or Common Stock issued upon conversion of Preferred Stock
purchased pursuant to this Agreement, the Purchaser shall
not, directly or indirectly, take any action the purpose or
effect of which is to change or influence the control of
the Company or participate in any transaction having such
purpose or effect. Without limitation, the Purchaser shall
not engage in any proxy solicitation in opposition to a
solicitation of proxies by the Board of Directors of the
Company."
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The foregoing amendment to Section 5.7 of the Stock Purchase
Agreement shall continue in effect unless and until the stockholders
of the Company approve its removal in accordance with the
requirements of the Nasdaq National Market. Upon such approval,
Section 5.7 of the Stock Purchase Agreement as originally included in
such Agreement shall be in full force and effect.
3. CLOSING DATES AND AMOUNTS. (a) Sections 2.1(b) and (c) of
the Stock Purchase Agreement are amended to provide in their
entireties as follows:
"(b) Subsequent Closings. Except as otherwise
provided herein, with respect to subsequent Closings the
agreed-upon Development Costs for the collaborative
development of Pimagedine Products in the United States
shall be funded in advance by purchases of Series H
Preferred Stock. Subject to the other terms of the License
Agreement, such funding and Closings shall begin three (3)
days after the later of the date on which (i) the National
Association of Securities Dealers, Inc. has advised the
Company in writing that the concerns raised in its letter
of January 29, 1998 to the Company's counsel have been
satisfactorily resolved and (ii) the Company's 1998 Annual
Meeting of Stockholders is held (the "First Series H
Closing") and such Closings shall continue on a quarterly
basis thereafter on October 1, 1998, January 2, 1999, April
1, 1999, July 1, 1999 and October 1, 1999 (or such other
dates as are provided herein), with the final Closing on
January 2, 2000, or such other date on which the aggregate
purchase price of the Series H Preferred Stock purchased
hereunder equals the lesser of (i) $48,000,000, or (ii) the
amount of total Development Costs agreed-upon under Section
3 of the License Agreement, provided, however, that if the
stockholders of the Company have not, prior to October 1,
1998, approved the elimination of the limitations (the
"Limitations") contained in Sections 1 and 2 of the
Amendment to Stock Purchase Agreement and Development
Collaboration and License Agreement dated as of April 29,
1998 (the "Amendment"), the first quarterly Closing
subsequent to the First Series H Closing shall occur on the
earlier of (i) three (3) days after the date on which the
stockholders of the Company approve the removal of the
Limitations or (ii) sixty (60) days after the date on which
data from the Company's ACTION I trial are unblinded to the
Purchaser (the "Data Release Date"). Notwithstanding any
other provision of this Agreement, the License Agreement or
the Amendment, if at any time prior to the expiration of
the sixty (60) day period following the Data Release Date
the Purchaser gives the Company notice that it is
terminating the License Agreement in its entirety under
Section 10.5 thereof and
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the stockholders of the Company have not, prior to the date
such termination notice is given, approved the removal of
the Limitations, then a final Closing (the "Final Closing")
will be held ten (10) days after the delivery of such
termination notice and thereafter, except as otherwise
provided in Section 2.1(c)(iv), the Purchaser shall have no
obligation to purchase additional shares of Series H
Preferred Stock and no additional Closings shall occur. If
a Final Closing occurs, the Parties agree that the
provisions of Section 2.1(c)(iv) below shall supersede, and
performance thereunder shall satisfy in full, any
obligation on the Purchaser's part under Section 3.11(c) of
the License Agreement or otherwise to pay for costs
incurred by Alteon after the date of the Purchaser's notice
of termination until the effectiveness of such termination
and thereafter.
"(c) Amounts Purchased at Subsequent Closings.
(i) The aggregate purchase price of the Series H
Preferred Stock to be purchased at the First Series H
Closing (the "First Series H Closing Price") shall be
$8,000,000.
(ii) At the subsequent quarterly Closing in 1998 after
the First Series H Closing, the Purchaser shall purchase a
number of shares of Series H Preferred Stock having an
aggregate purchase price equal to the excess of the
aggregate annual Development Costs as set forth in the
agreed-upon Collaborative Budget established by the Joint
Steering Committee for 1998 for Pimagedine Products in the
United States over the First Series H Closing Price (the
"Second Series H Closing Price"). In the event that there
is no quarterly Closing in 1998 after the First Series H
Closing, at the first quarterly Closing in 1999 (unless
such Closing is the Final Closing), the Purchaser shall
purchase, in addition to the number of shares of Series H
Preferred Stock to be purchased at such quarterly Closing
in 1999 as provided herein, a number of shares of Series H
Preferred Stock having an aggregate purchase price equal to
the Second Series H Closing Price.
(iii) The aggregate purchase price of the Series H
Preferred Stock to be purchased at each quarterly Closing
in 1999 and thereafter shall be equal to one-fourth (1/4)
of the aggregate annual Development Costs as set forth in
the agreed-upon Collaborative Budget established by the
Joint Steering Committee for the calendar year in which
such Closing occurs for Pimagedine Products in the United
States, until the Purchaser has purchased shares of Series
H Preferred Stock having an aggregate purchase
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price of up to the lesser of (i) $48,000,000, or (ii) the
total amount of the Development Costs agreed-upon under
Section 3 of the License Agreement, provided, that if any
quarterly Closing in 1999 or thereafter does not occur
because the date for the first Closing subsequent to the
First Series H Closing (as described in Section 2.1(b)
hereof) has not occurred (such omitted quarterly Closings
being referred to herein as the "Omitted Closings") then at
the first quarterly Closing in any calendar year, the
Purchaser shall purchase, in addition to the number of
shares of Series H Preferred Stock to be purchased at such
Closing as provided herein, a number of shares of Series H
Preferred Stock equal to the aggregate number of such
shares which would have been purchased at the Omitted
Closings had they occurred.
(iv) Notwithstanding anything to the contrary
contained herein or in the License Agreement, at the Final
Closing (if such a Closing shall occur), the Purchaser
shall purchase a number of shares of Series H Preferred
Stock having an aggregate purchase price equal to the
excess of eighty percent (80%) of the aggregate annual
Development Costs as set forth in the agreed-upon
Collaborative Budget established by the Joint Steering
Committee for 1998 (and 1999 if the Final Closing is in
1999) for Pimagedine Products in the United States through
the date of the notice of termination referred to in
Section 2.1(b) hereof (the "Eighty Percent Amount") over
the First Series H Closing Price. The amount of such
Development Costs through the date of the termination
notice shall be the sum of (A) such Development Costs as
set forth in the agreed-upon Collaborative Budget for 1998
multiplied by a fraction, the numerator of which shall be
the number of full calendar months which have elapsed from
January 1, 1998 (with any calendar month in which more than
fifteen (15) days have elapsed being treated as a full
month) to the date of the Final Closing and the denominator
of which shall be twelve (12) and (B) such Development
Costs as set forth in the agreed-upon collaborative budget
for 1999 multiplied by a fraction, the numerator of which
shall be the number of full calendar months which have
elapsed from January 1, 1999 (with any calendar month in
which more than fifteen (15) days have elapsed being
treated as a full month) to the date of the Final Closing
and the denominator of which shall be twelve (12). As
promptly as possible after the Final Closing, the Company
shall provide the Purchaser with a reasonably detailed
statement of the Company's actual Development Costs for
1998 (and 1999 if applicable) for the collaborative
development of Pimagedine Products in the United States,
with such actual Development Costs to be shown on an
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activity-by-activity basis and compared to the budgeted
amounts for each such activity in the agreed-upon
Collaborative Budget(s). The Purchaser shall have thirty
(30) days from the receipt of such statement in which to
review it, and during such review period the Company shall
provide the Purchaser with such additional information
regarding the Company's activities and costs incurred as
the Purchaser may reasonably request, in order to confirm
which costs were incurred for activities within the scope
of the collaborative efforts of the Parties under the
License Agreement and within the scope of the agreed-upon
Collaborative Budget for 1998 (and 1999 if applicable),
provided that the Purchaser shall have no liability to the
Company for activities (or costs related thereto) not
within the scope of the collaborative efforts of the
Parties under the License Agreement for the collaborative
development of Pimagedine Products in the United States, or
for any costs incurred in excess of agreed-upon
Collaborative Budgets for 1998 (and 1999 if applicable).
Once the Company and the Purchaser have agreed upon the
amount of such actual Development Costs for 1998 (and 1999
if applicable) for the collaborative development of
Pimagedine Products in the United States, within thirty
(30) days thereafter the Purchaser shall purchase from the
Company a number of shares of Series H Preferred Stock
having an aggregate purchase price equal to the excess (if
any) of such agreed-upon actual Development Costs over the
Eighty Percent Amount. If the Eighty Percent Amount
exceeds such agreed-upon actual Development Costs, within
such thirty (30) day period the Company shall purchase from
the Purchaser a number of shares of Series H Preferred
Stock having an aggregate purchase price equal to the
excess of such Eighty Percent Amount over such agreed-
upon actual Development Costs."
(b) Section 2.1(d)(i) of the Stock Purchase Agreement is
amended by changing the amount "$16,000,000" to the words "the First
Series H Closing Price plus the Second Series H Closing Price" and
the words "July 1, 1998 and October 1, 1998 Closings" to the words
"subsequent quarterly Closing in 1998."
(c) Section 5.5 of the Stock Purchase Agreement is amended by
changing the section heading to read as follows: "Restriction on
Short Sales and Hedging Transactions".
4. CERTIFICATES OF DESIGNATIONS. The Company shall cause
Section 5(h) of the Certificate of Designations of Series G Preferred
Stock and the Certificate of Designations of Series H Preferred Stock
attached as Exhibits B and C to the Stock Purchase Agreement,
respectively, to be amended by the addition of the following
sentence: "The Board of Directors of the Corporation or
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any officer designated by the Board of Directors of the Corporation
may waive the provisions of this Section 5(h) for any one transaction
or for any series of transactions."
5. LICENSE AGREEMENT. If at any time prior to the expiration
of the sixty (60) day period following the Data Release Date, the
Purchaser gives the Company notice that it is terminating the License
Agreement in its entirety under Section 10.5 thereof and the
stockholders of the Company have not, prior to the date such notice
is given, approved the removal of the limitations contained in
Sections 1 and 2 of this Agreement, then the second sentence of
Section 3.11(c) of the License Agreement shall be of no force or
effect and the License Agreement shall be construed as if such
sentence were not contained therein.
6. OTHER MODIFICATIONS TO LICENSE AGREEMENT. In addition to
the modification set forth in Section 5 above, the License Agreement
is hereby amended as follows:
(a) Section 4.8 of the License Agreement is amended to provide
that the parties will enter into the Manufacturing and Supply
Agreement by not later than August 1, 1998.
(b) Section 4.8 of the License Agreement is also amended to
provide that Alteon shall have established and staffed an internal
quality control and quality assurance function as provided in the
last sentence of Section 4.8 by not later than June 1, 1998.
7. NO OTHER CHANGES. Except as specifically provided herein,
the Stock Purchase Agreement and the License Agreement shall be
unaffected by this Amendment and shall continue in full force and
effect. Unless otherwise expressly provided herein, the capitalized
terms used in this Agreement without further definition have the
meanings ascribed thereto in the Stock Purchase Agreement or License
Agreement.
8. BINDING EFFECT. The provisions of the Stock Purchase
Agreement, the License Agreement and of this Agreement shall be
binding upon any subsequent holder of the Preferred Stock.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed and delivered by its duly authorized officer
as of the day and year first above written.
ALTEON INC.
By: /s/ James J. Mauzey
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Name: James J. Mauzey
Title: Chairman and
Chief Executive Officer
GENENTECH, INC.
By: /s/ Nicholas J. Simon
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Name:
Title:
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