<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998,
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
COMMISSION FILE NUMBER: 001-14165
----------------
RIBOGENE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-3095154
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
26118 RESEARCH ROAD
HAYWARD, CA 94545
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 732-5551
----------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter prior that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
At October 31, 1998 there were 5,662,993 shares of the Registrant's common
stock, $0.001 value, outstanding.
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<PAGE> 2
RIBOGENE, INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited).................................................... 3
Condensed Balance Sheets -- as of September 30, 1998 and December 31, 1997.......... 3
Condensed Statements of Operations -- for the three and nine months ended
September 30, 1998 and 1997......................................................... 4
Condensed Statements of Cash Flows -- for the nine months ended
September 30, 1998 and 1997......................................................... 5
Notes to Condensed Financial Statements............................................. 6
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................... 9
PART II. OTHER INFORMATION
Item 1 Legal Proceedings................................................................... 13
Item 2 Changes in Securities and Use of Proceeds........................................... 13
Item 3 Defaults upon Senior Securities..................................................... 13
Item 4 Submission of Matters to Vote of Security Holders................................... 13
Item 5 Other Information................................................................... 13
Item 6 Exhibits and Reports -- Form 8-K.................................................... 14
Signatures...................................................................................... 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RIBOGENE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(UNAUDITED) (NOTE 1)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 15,880 $ 2,045
Short-term investments................................................... 10,621 --
Prepaid expenses and other current assets................................ 152 207
---------- --------
Total current assets............................................. 26,653 2,252
Property and equipment, net................................................ 760 471
Deferred offering costs.................................................... -- 1,142
Deferred lease expense..................................................... 254 290
Other assets............................................................... 215 157
---------- --------
$ 27,882 $ 4,312
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable......................................................... $ 356 $ 1,402
Accrued research and development costs................................... 1,280 181
Accrued compensation..................................................... 261 254
Accrued interest payable................................................. 6 224
Deferred revenue-- related parties....................................... 667 556
Other current liabilities................................................ 383 288
Current portion of capital lease obligations............................. 155 174
Current portion of notes payable......................................... 66 918
---------- --------
Total current liabilities........................................ 3,174 3,997
Long-term portion of capital lease obligations............................. 264 289
Long-term portion of notes payable......................................... 271 --
Other noncurrent liabilities............................................... 61 188
Commitments
Stockholders' equity (deficit):
Preferred Stock, 5,000,000 shares, $0.001 par value, and 18,932,344
shares, no par value, authorized at September 30, 1998 and December
31, 1997, respectively; issuable in series, 1,428,572 at September 30,
1998 and 14,377,595 at December 31, 1997 (aggregate liquidation
preference of $10,000,000 and $40,478,381 at September 30, 1998 and
December 31, 1997, respectively...................................... 1 33,533
Common Stock, 30,000,000 shares, $0.001 par value, and 50,000,000
shares, no par value, authorized at September 30, 1998 and December
31, 1997, respectively; 5,662,993 and 103,845 shares issued and
outstanding at September 30, 1998 and December 31, 1997,
respectively......................................................... 6 1,839
Additional paid-in capital................................................ 66,632 1,672
Notes receivable from stockholders........................................ (147) (147)
Deferred compensation..................................................... (1,667) (1,362)
Deficit accumulated during the development stage.......................... (40,724) (35,697)
Net unrealized gain on available-for-sale securities...................... 11 --
---------- --------
Total stockholders' equity (deficit)............................ 24,112 (162)
---------- --------
$ 27,882 $ 4,312
========== ========
</TABLE>
See Accompanying Notes.
3
<PAGE> 4
RIBOGENE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PERIOD FROM
THREE MONTHS ENDED NINE MONTHS ENDED INCEPTION
SEPTEMBER 30, SEPTEMBER 30, MAY 5, 1989) TO
---------------------- --------------------- SEPTEMBER 30,
1998 1997 1998 1997 1998
--------- ------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenue:
Contract research revenue from related
parties................................... $ 501 $ 467 $ 1,889 $ 1,301 $ 4,669
Grant revenue................................ 191 227 594 974 3,517
--------- ------- --------- -------- --------
Total revenue........................ 692 694 2,483 2,275 8,186
--------- ------- --------- -------- --------
Operating expenses:
Research and development..................... 3,176 972 5,781 3,024 28,479
General and administrative................... 1,011 373 2,025 1,136 13,883
Financial advisory costs..................... -- -- -- -- 1,396
Acquired in-process research and
development............................... -- -- -- -- 5,000
--------- ------- --------- -------- --------
Total operating expenses............. 4,187 1,345 7,806 4,160 48,758
--------- ------- --------- -------- --------
Loss from operations........................... (3,495) (651) (5,323) (1,885) (40,572)
Interest income (expense), net................. 327 (3) 296 (27) (152)
--------- ------- --------- -------- --------
Net loss....................................... (3,168) (654) (5,027) (1,912) (40,724)
--------- ------- --------- -------- --------
Deemed dividend upon conversion of
preferred stock.............................. -- -- (7,989) -- (7,989)
--------- ------- --------- -------- --------
Net loss attributable to common
stockholders................................. $ (3,168) $ (654) $(13,016) $ (1,912) $(48,713)
========= ======= ========= ======== ========
Basic net loss per common share................ $ (0.58) $ (6.54) $ (5.34) $ (19.12)
========= ======= ========= ========
Weighted average shares of common stock
outstanding.................................. 5,463 100 2,438 100
========= ======= ========= ========
</TABLE>
See Accompanying Notes.
4
<PAGE> 5
RIBOGENE, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD
NINE MONTHS ENDED FROM INCEPTION
SEPTEMBER 30, (MAY 5, 1989)
----------------------- SEPTEMBER 30,
1998 1997 1998
--------- -------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss............................................................ $ (5,027) $ (1,912) $ (40,724)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization..................................... 177 100 1,143
Amortization of warrants and deferred compensation................ 448 26 566
Accrued interest on bridge notes converted to preferred
stock........................................................... -- -- 122
Losses on advances to related parties............................. -- -- 465
Issuance of common stock to collaboration partners................ 747 -- 747
Non-cash financial advisory costs................................. -- -- 1,300
Acquisition of in-process research and development
for notes -- -- 4,200
payable.........................................................
Other............................................................. 12 -- 50
Changes in assets and liabilities:
Prepaid expenses and other current assets....................... 68 (227) (139)
Other assets.................................................... (58) 66 (215)
Accounts payable................................................ (1,046) (283) 356
Deferred revenue-- related parties.............................. 111 -- 667
Accrued expenses and other liabilities.......................... 856 (295) 1,991
--------- -------- ---------
Net cash used in operating activities............................... (3,712) (2,525) (29,471)
--------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment................................. (369) -- (766)
Organization costs.................................................. -- -- (68)
Advances to related parties......................................... -- -- (715)
Repayment of notes receivables-- officer............................ -- -- 250
Purchases of short-term investments................................. (10,632) -- (17,113)
Maturities of short-term investments................................ -- -- 4,500
Sales of short-term investments..................................... -- -- 2,000
--------- -------- ---------
Net cash used in investing activities............................... (11,001) -- (11,912)
--------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bridge financing...................................... -- -- 3,630
Proceeds from equipment financing................................... 338 -- 338
Proceeds from short-term debt....................................... -- -- 4,908
Repayment of short-term debt........................................ -- -- (3,015)
Repayment of notes payable.......................................... (1,000) (1,000) (4,200)
Principal payments on capital lease obligations..................... (154) (90) (882)
Proceeds from sale-leaseback of equipment........................... -- -- 207
Deferred offering costs............................................. 1,142 -- --
Proceeds from issuances of common stock and warrants, net of
issuance costs, repurchases and repayment of stockholder notes.... 16,252 11 16,432
Net proceeds from issuance of convertible preferred stock and
warrants.......................................................... 11,970 4,084 39,845
--------- -------- ---------
Net cash provided by financing activities........................... 28,548 3,005 57,263
--------- -------- ---------
Net increase in cash and cash equivalents........................... 13,835 480 15,880
Cash and cash equivalents at beginning period....................... 2,045 1,981 --
--------- -------- ---------
Cash and cash equivalents at end of period.......................... $ 15,880 $ 2,461 $ 15,880
========= ======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest.............................................. $ 324 $ 193 $ 1,168
========= ======== =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
Equipment purchased under capital leases............................ $ 81 $ 75 $ 1,014
========= ======== =========
Conversion of debt obligations and accrued interest to
preferred stock..................................................... -- -- $ 5,645
========= ======== =========
Deferred compensation related to stock option grants................ $ 635 $ 410 $ 2,115
========= ======== =========
Warrants issued in connection with lease and borrowing
transactions...................................................... -- -- $ 372
========= ======== =========
</TABLE>
See Accompanying Notes.
5
<PAGE> 6
RIBOGENE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of RiboGene, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles and applicable Securities and Exchange Commission
regulations for interim financial information. These financial statements do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The unaudited financial
statements are intended to be read in conjunction with the audited financial
statements and footnotes thereto for the year ended December 31, 1997, contained
in the Company's Registration Statement filed on Form S-1 with the Securities
and Exchange Commission on May 28, 1998, as amended. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for fair presentation of interim financial information have
been included. Operating results for the interim periods presented are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998.
2. CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
The Company considers all highly liquid investments with a maturity from
the date of purchase of three months or less to be cash equivalents.
The Company classifies its investments as available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, if any, reported in a separate component of stockholders'
equity. As of September 30, 1998, the Company recognized an unrealized gain of
$11,000, and given the immateriality of this amount, comprehensive net loss in
accordance with Statement of Financial Accounts Standards 130 ("SFAS130"), has
not been presented herein. Realized gains and losses and declines in value
judged to be other-than-temporary on available-for-sale securities are included
in income. The Company has not experienced any realized gains or losses on its
cash equivalents. The cost of securities sold is based on the specific
identification method. Cash and cash equivalents and short-term investments at
September 30, 1998 and December 31, 1997, consist of the following (in
thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
Demand deposits with banks and investment in money market funds...... $ 15,880 $ 2,045
Corporate debt securities, including accrued interest................ 10,621 --
-------- -------
$ 26,501 $ 2,045
======== =======
</TABLE>
3. NET LOSS PER SHARE
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS 128"), basic net loss per share has been computed
using the weighted-average number of shares of common stock outstanding during
the period. Pro forma net loss per share gives effect to the conversion of the
convertible preferred stock that automatically converted on completion of the
Company's initial public offering (using the as-if converted method) from the
original date of issuance.
6
<PAGE> 7
The following is a reconciliation of shares used in the calculation of
basic net loss per share and pro forma net loss per share (in thousands except
per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1998 1997 1998 1997
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Net loss attributable to common
stockholders................................. $ (3,168) $ (654) $ (13,016) $ (1,912)
======== ======== ========= ========
Weighted average shares of common stock
outstanding.................................. 5,463 100 2,438 100
======== ======== ========= ========
Basic net loss per common share................ $ (0.58) $ (6.54) $ (5.34) $ (19.12)
======== ======== ========= ========
Calculation of shares outstanding for
computing pro forma net loss per share:
Shares used in computing basic net loss per
common share................................. 5,463 100 2.438 100
Adjusted to reflect the effect of the assumed
conversion of preferred stock, which
automatically converted upon the closing of
the Company's Initial Public offering from
the date of issuance or as of the beginning
of the period................................ -- 2,331 1,338 1,900
-------- -------- --------- --------
Shares used in computing pro forma net loss
per common share............................. 5,463 2,431 3,776 2,000
-------- -------- --------- --------
Pro forma net loss per common share............ $ N/A $ (0.27) $ (3.45) $ (0.96)
======== ======== ========= ========
Pro forma net loss excluding impact of deemed
dividend (see note 5)........................ $ N/A $ (0.27) $ (1.33) $ (0.96)
======== ======== ========= ========
</TABLE>
Diluted net loss per share has not been presented separately as, due to the
Company's net loss position, it is antidilutive.
4. STOCK OPTIONS AND WARRANTS
As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), the Company has elected
to account for stock options and purchase rights granted to employees using the
intrinsic value method and, accordingly, does not recognize compensation expense
for options and purchase rights granted to employees with exercise prices which
are not less than fair value of the underlying common stock.
For equity awards to non-employees, including lenders and lessors, the
Company applies the Black-Scholes method to determine the fair value of such
instruments. The value is recognized as expense over the period of services
received or the term of the related financing.
5. INITIAL PUBLIC OFFERING AND RELATED MATTERS
In June 1998, the Company consummated an initial public offering (the
"Offering") with the issuance of 2,300,000 shares of common stock at a price of
$7.00 per share. Concurrently with the closing of the Offering, the Company sold
571,429 additional shares of common stock at $7.00 per share to Abbott
Laboratories in a private placement. Proceeds from the Offering and private
placement net of issuance costs were $16,430,000.
The Company filed a Certificate of Amendment in the State of Delaware to
effect a one-for-14 reverse stock split of all outstanding shares of common
stock, and common stock options and warrants in June 1998. As a result of the
reverse stock split, each share of Series A through E and G preferred stock
converted into 0.0714 of a share of common stock. Each share of Series F
preferred stock converted into 0.6429 of a share of common stock. The Series F
preferred stock contained certain antidilution provisions that resulted in the
Series F preferred stock holders receiving an additional 1,141,317 shares of
common stock upon conversion. The value of this additional common stock,
$7,989,000, has been deemed to be the equivalent of a preferred stock dividend.
The Company recorded the deemed dividend at the time of conversion by offsetting
charges and credits to additional paid in capital, without any effect on total
stockholders' equity. There was no effect on cash or net loss for the nine
months ended September 30, 1998, from the conversion. However, the amount
increased the loss allocable to common stock, in the calculation of basic net
loss per share for the nine month period ended September 30, 1998. Following the
Offering, the Company filed a Restated Certificate of Incorporation to reduce
the authorized stock of the Company such that the Company will be authorized to
issue 5,000,000 shares of $0.001 par value preferred stock, and 30,000,000
shares of $0.001 par value common stock.
7
<PAGE> 8
6. DEVELOPMENT AND COLLABORATION AGREEMENTS
On July 7, 1998, the Company entered into an option and license agreement
with Roberts Pharmaceutical Corporation ("Roberts") for the development of
Emitasol, an intranasally administered drug being developed for treatment of
delayed onset nausea and vomiting in cancer chemotherapy patients. In addition,
Roberts made a $10 million equity investment in RiboGene by purchasing 1,428,572
shares of Series A non-voting convertible preferred stock at $7.00 per share.
Holders of the Series A non-voting convertible preferred stock are entitled to
non-cumulative dividends, when and if declined by the Board of Directors, and
have a liquidation preference, prior to any declared dividends, equal to the
original issue price of $7.00 per share. The Series A non-voting convertible
preferred stock is convertible into common stock on a one-for-one basis,
provided, however, that on or following each of the first three annual
anniversary dates of the stock issuance, the holders of the Series A preferred
stock only convert up to 33%, 50% and 100% of their shares, respectively.
Additionally, holders of the Series A preferred stock may request that the
Company register up to 20% of the converted shares in any twelve month period.
Under the terms of the option and license agreement, Roberts will conduct
clinical trials using Emitasol and, if those are successful, submit a New Drug
Application ("NDA") for Emitasol. If FDA regulatory approval is obtained,
Roberts will have 60 days to exercise an exclusive option for a license to
market Emitasol in North America. Roberts has agreed to make a payment to
RiboGene of up to $10,000,000 upon the exercise of the option and to pay a
royalty on product sales. RiboGene will provide up to $7,000,000 in funding for
the development of Emitasol through completion of Phase III trials and the
submission of an NDA, with the balance, if any, provided by Roberts.
On September 18, 1998, the Company issued Dainippon Pharmaceutical Co. Ltd.
("Dainippon") 230,000 shares of common stock in exchange for an increased
royalty interest in the sales from future products, as defined in the
collaboration agreement between the Company and Dainippon, dated January 28,
1998. As a result of this transaction, the Company recognized a $747,000 one
time non-cash charge to research and development expense during the three months
ended September 30, 1998, representing the fair market value of the common stock
at the date of issuance.
7. NOTES PAYABLE
In September 1998, the Company entered into a credit arrangement with a
financial institution. Under the terms of such arrangement, the Company will
receive up to $2,000,000 of financing in the form of secured equipment loans
over a twelve month period ending in September 1999. Each loan will have a 48
month term, bear interest at 7.2% plus an index equal to the rate on four year
treasury notes, and have a balloon payment equal to 12.5% of the original loan
amount. As of September 30, 1998, the company had borrowed $338,000 under this
arrangement.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Statements in this quarterly report on Form 10-Q that are not historical
fact constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements regarding future
pharmaceutical development, regulatory approvals, revenues, expenses, and
profits or losses. These forward-looking statements are subject to known and
unknown risks, uncertainties or other factors which may cause the actual results
of the Company to be materially different from historical results or any results
expressed or implied by the forward-looking statements. Factors that could cause
actual results to differ materially include, but are not limited to, the risks
and uncertainties described or discussed in the section "Risk Factors" in the
Company's Registration Statement (No. 333-38781) as filed by the Company with
the Securities and Exchange Commission on May 28, 1998. The forward-looking
statements contained herein represent the Company's judgement as of the date of
this quarterly report on Form 10-Q and the Company cautions readers not to place
undue reliance on such statements. Furthermore, the Company disclaims any
obligation or intent to update any such forward-looking statements to reflect
future events or developments.
OVERVIEW
RiboGene is a drug discovery company focused on the identification of novel
lead compounds and the development of potential drug candidates for the
treatment of infectious diseases. The Company was founded in May 1989 to develop
laboratory equipment for cell-free protein synthesis. In January 1993, the
Company discontinued development of the lab equipment and began to focus its
research and development efforts on the identification of novel lead compounds
and the development of potential drug candidates for the treatment of infectious
diseases. The Company's research efforts initially focused on infections caused
by fungi and viruses. In 1996, the Company expanded its research efforts to
include infections caused by bacteria. Simultaneously with the shift in focus to
infectious disease drug discovery, in 1993 and later in 1994, the Company
in-licensed or acquired the rights to certain in-process research and
development (the "Intranasal Product Acquisition"), including certain patents
and other intellectual property related to intranasal formulations and the
corresponding administration of metoclopramide, propranolol and certain
benzodiazepines. One of the potential products acquired by the Company was
Emitasol, an intranasal formulation of metoclopramide for the treatment of
emesis (nausea and vomiting) following chemotherapy.
On January 27, 1998, the Company entered into a collaboration with
Dainippon Pharmaceuticals Company, Ltd. ("Dainippon") encompassing two targets
in the Company's antibacterial program (the "Dainippon Collaboration"). As part
of the Dainippon Collaboration, Dainippon agreed to provide the Company with up
to $6.0 million in research support payments ($2.0 million of which has been
received), and to provide additional research and development at Dainippon, over
the three-year term of the research program. The Company may also be entitled to
receive milestone payments upon the achievement of mostly late-stage clinical
and regulatory milestones in an amount of up to $10.0 million for each product
developed through the collaboration, consisting of up to $5.0 million through
approval in Japan and up to $5.0 million through approval in one additional
major market territory. In connection with the Dainippon Collaboration,
Dainippon purchased $2.0 million of the Company's Series G preferred stock,
which automatically converted into 53,988 shares of common stock concurrently
with the closing of the initial public offering. In September 1998, the Company
issued Dainippon an additional 230,000 shares of common stock in exchange for an
increased royalty interest under the Dainippon Collaboration. From April 1996 to
April 1998, the Company had a collaboration with Abbott Laboratories for the
Company's antifungal program (the "Abbott Collaboration"). In connection with
the Abbott Collaboration, Abbott made a $3.5 million equity investment in the
Company and, concurrently with the Company's initial public offering, purchased
an additional $4.0 million of common stock directly from the Company in a
private placement at $7.00 per share.
In June 1998, the Company consummated an initial public offering (the
"Offering") with the issuance of 2,300,00 shares of common stock at a price of
$7.00 per share. Concurrently with the closing of the Offering the Company sold
571,429 additional shares of common stock to Abbott Laboratories in a private
placement. Proceeds from the Offering and Abbott private placement, net of
issuance costs, were $16 million. In connection with the Offering all
outstanding preferred stock automatically converted into common stock and the
Company recognized a deemed dividend to preferred stockholders in the amount of
$8 million.
On July 7, 1998, the Company entered into an option and license agreement
with Roberts Pharmaceutical Corporation ("Roberts") for the development of
Emitasol. In addition, Roberts made a $10 million equity investment in the
Company by purchasing 1,428,572 shares of Series A non-voting preferred stock at
$7.00 per share. Under the terms of the option and license agreement, Roberts
will conduct clinical trials using Emitasol and, if those are successful, submit
a New Drug Application (NDA) for Emitasol. If FDA regulatory approval is
obtained, Roberts will have 60 days to exercise an exclusive option for a
license to market Emitasol in North America. Roberts has agreed to make a
payment to the Company of up to $10 million upon the exercise at the option and
to pay a royalty on product sales. The Company will provide up to $7 million in
funding for the development of Emitasol through the completion of Phase III
trials and the submission of an NDA, with the balance, if any, provided by
Roberts.
9
<PAGE> 10
The Company is a development stage company, has generated no revenue from
the sale of products and, through September 30, 1998, has incurred cumulative
net losses of approximately $40.7 million and, at September 30, 1998, had net
stockholders' equity of $24.1 million. The Company expects to incur significant
operating losses over the next several years due primarily to expanded research
and development efforts, preclinical and clinical testing of its product
candidates and commercialization activities. The Company does not anticipate
revenues from product sales for a significant number of years, if ever. The
Company's sources of revenues for the next several years will be payments from
strategic collaborations, if any, and interest income. Certain payments under
collaborations are or will be contingent upon the Company or its collaborators
achieving certain milestones as to which there can be no assurance that such
milestones will be achieved. Results of operations may vary significantly from
quarter to quarter depending on, among other factors, the progress of the
Company's research and development efforts, results of clinical testing, the
timing of certain expenses, the establishment of collaborative research
agreements and the receipt of grants or milestone payments, if any.
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
For the three month period ended September 30, 1998, the Company's revenues
consisted of revenues from the Dainippon Collaboration agreements and Small
Business Innovation Research ("SBIR") grants from the National Institutes of
Health. Revenue earned under the Abbott collaboration, which ended on April 13,
1998, was $417,000 for the three months ended September 30, 1997. Revenue earned
as part of the Dainippon collaboration, which began in February 1998, was
$501,000 for the three month period ended September 30, 1998. Revenues from SBIR
grants for the three month period ended September 30, 1998 were $191,000 as
compared to $227,000 in the three month period ended September 30, 1997. The
decrease in grant revenues results from the completion of one grant in June 1998
and two grants during the third quarter of 1997. Revenues earned under research
grants are determined by the timing of the award from the issuing agency. As a
result, research grant revenue earned in one period is not predictive of
research grant revenue to be earned in future periods.
During the three months ended September 30, 1998, the Company incurred a
$747,000 one time non-cash charge equal to the fair market value of common stock
issued to Dainippon in exchange for an increase in the Company's royalty
interest in future product sales as defined in the Dainippon Collaboration.
Exclusive of this one time charge, research and development expenses increased
$1.5 million, or 150%, to $2.4 million for the three months ended September 30,
1998, from $972,000 in the three months ended September 30, 1997. This increase
resulted from the commencement of Emitasol development activities, personnel and
supply costs relating to the establishment of the Company's medicinal chemistry
capabilities, operating costs associated with the Company's new laboratories,
and a non-cash charge for deferred compensation relating to certain stock
options granted to employees and consultants during 1997 and 1998. Exclusive of
the one time $747,000 non-cash charge, research and development expenses
represented approximately 71% of total operating expenses of $3.4 million in the
three months ended September 30, 1998, and 72% of total operating expenses of
$1.3 million in the three months ended September 30, 1997.
General and administration expenses increased $638,000 or 171% to $1.0
million for the three months ended September 30, 1998, from $373,000 for the
three months ended September 30, 1997. This increase is due to additional
operating costs associated with the Company's status as a publicly held company,
the Company's new facility, legal and other professional services associated
with increased business development activities, and a non-cash charge for
deferred compensation relating to certain stock options granted employees and
consultants during 1997 and 1998.
For the three months ended September 30, 1998, the Company reported net
interest income of $327,000, as compared to net interest expense of $3,000 for
the three months ended September 30, 1997. This increase in interest income
results from interest earned on the investment of proceeds from the Company's
initial public offering, concurrent private placement and sale of preferred
stock.
The net loss for the three month period ended September 30, 1998 was $3.2
million, an increase of $2.5 million, or 384%, from the net loss of $654,000 for
the three month period ended September 30, 1997. The increase resulted from the
changes in revenue and operating expenses discussed above.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
For the nine month period ended September 30, 1998, the Company's revenues
consisted of revenues from collaboration agreements and SBIR grants from the
National Institutes of Health. Revenue earned as part of the Abbott
collaboration, which ended on April 13, 1998, was $556,000 for the nine month
period ended September 30, 1998, as compared to $1.3 million for the nine
10
<PAGE> 11
months period ended September 30, 1997. Revenue earned under the Dainippon
Collaboration, which began in February 1998, amounted to $1.3 million for the
nine months ended September 30, 1998. Revenues from SBIR grants for the nine
months ended September 30, 1998 were $594,000 as compared to $974,000 for the
nine months ended September 30, 1997. The decrease in grant revenues results
from the completion of one grant in June 1998 and two grants during the third
quarter of 1997. Revenues earned under research grants are determined by the
timing of the award from the issuing agency. As a result, research grant revenue
earned in one period is not predictive of research grant revenue to be earned in
future periods.
Exclusive of the $747,000 one time charge discussed above, research and
development expenses increased $2.0 million or 66%, to approximately $5.0
million for the nine months ended September 30, 1998, from $3.0 million in the
nine months ended September 30, 1997. This increase resulted from Emitasol
development costs, personnel and supply costs relating to the establishment of
the Company's medicinal chemistry capabilities, facility operating costs
associated with the Company's new laboratories, a non-cash charge for deferred
compensation relating to certain stock options granted to employees and
consultants during 1997 and 1998, and initial costs associated with the
Dainippon Collaboration. Exclusive of the $747,000 one-time charge, research and
development expenses represented approximately 71% of total operating expenses
of $7.1 million in the nine months ended September 30, 1998, as compared to 73%
of total operating expenses of $4.2 million in the nine month period ended
September 30, 1997.
General and administration expenses increased $889,000, or 78%, to $2.0
million for the nine months ended September 30, 1998, from $1.1 million in the
nine months ended September 30, 1997. This increase is due to additional
operating costs associated with the Company's status as publicly held, the
Company's new facility, legal and other professional services associated with
increased business development activities, and a non-cash charge for deferred
compensation relating to certain stock options granted to employees and
consultants during 1997 and 1998.
Net interest income for the nine months ended September 30, 1998, was
$296,000 as compared to net interest expense of $27,000 for the nine months
ended September 30, 1997. This increase results from interest earned on the
investment of proceeds from the Company's initial public offering and concurrent
private placement, and the sale of preferred stock.
The net loss, exclusive of the deemed dividend to common stockholders (Note
5), for the nine months ended September 30, 1998 was $5.0 million, an increase
of $3.1 million from the net loss of $1.9 million for the nine months ended
September 30, 1997. The increase resulted from the changes in revenue and
operating expenses discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since incorporation primarily
through private sales of common stock and preferred stock, warrants, SBIR
grants, the Abbott and Dainippon Collaborations, the issuance of short-term
convertible notes and equipment financing arrangements. Through September 30,
1998, the Company has raised approximately $67.4 million from the sale of common
stock and preferred stock, warrants and short-term convertible notes, $3.5
million from SBIR grants and $4.7 million from the Abbott and Dainippon
Collaborations (excluding the initial Abbott and Dainippon equity investments).
The Company's capital expenditures and payments under capital lease obligations
aggregate approximately $1.6 million through September 30, 1998, and cash used
to fund operating activities since incorporation totaled $29.5 million.
At September 30, 1998, the Company had cash and cash equivalents and
short-term investments of approximately $26.5 million and working capital of
$23.5 million. The Company has a policy of investing excess funds in investment
grade, interest-bearing securities primarily with an expected maturity of
one-and-one-half years or less.
In July 1998 the Company received $10 million from the sale of Series A
non-voting convertible preferred stock to Roberts Pharmaceutical Corporation.
Under the terms of a development agreement with Roberts, the Company will
provide up to $7 million in funding for the development of Emitasol.
The Company will require substantial additional funds to continue and
expand its research and development activities, conduct preclinical studies and
expand administrative capabilities. The Company estimates that at its planned
rate of spending, existing cash and cash equivalents, and the interest income
earned on such proceeds, will be sufficient for the purposes specified herein
and to allow the Company to maintain its current and planned operations through
the first quarter of 2000. There can be no assurance, however, that the
Company's assumptions regarding its future level of expenditures and operating
losses will prove to be accurate. The Company's future funding requirements will
depend on many factors, including any expansion or acceleration and the breadth
of the Company's research and development programs; the results of research and
development, preclinical studies and clinical trials conducted by the Company or
its collaborative partners or licensees, if any; the acquisition and licensing
of technologies or compounds, if any; the
11
<PAGE> 12
Company's ability to maintain existing and establish new corporate relationships
and research collaborations; the Company's ability to manage growth; competing
technological and market developments; the time and costs involved in filing,
prosecuting, defending and enforcing patent and intellectual property claims;
the receipt of licensing or milestone fees from its current or future
collaborative and license arrangements, if established; the continued funding of
governmental research grants; the timing of regulatory approvals; and other
factors.
YEAR 2000 READINESS
The Year 2000 issue refers to the inability of older computer programs to
accept four-digit codes for the year field in a set of data (the "Year 2000
Issue"). Beginning in the year 2000, four-digit codes will be necessary to
distinguish between 1900 base-year dates and 2000 base-year dates. Such
inability to recognize a date using "00" as the year 2000 rather than the year
1900 could result in a system failure or miscalculations causing disruptions in
the Company's operations or activities, including, among other things, the
Company's research and development efforts.
In connection with its recent move, the Company expanded its research
capabilities, improved its facilities and upgraded and replaced many of its
systems. Based on representations from manufacturers, the Company has determined
that these systems are Year 2000 ready. The Company does not have a formal Year
2000 readiness plan, however, the company intends to formulate and implement
such a plan in order to assess and test internal and third party systems for
Year 2000 readiness. The failure of, or disruption in, any of these systems
could have a material adverse effect on the Company's business and operations.
Based on this assessment, the Company will replace or correct critical systems,
such as compound library storage systems and systems for the retrieval and
storage of screening information. At September 30, 1998, assessment, testing and
modification or replacement of the Company's information technology and
operating equipment with embedded chips or software were substantially
incomplete.
The Company has identified and is asking its key suppliers and providers,
contractors and collaborators, communications providers and banks, whose systems
failures could adversely affect the Company's operations to verify their Year
2000 readiness.
Management anticipates having all of its internal systems Year 2000 ready
by the fall of 1999. Currently, however, the Company has no contingency plans in
place in the event it does not fully complete its Year 2000 readiness program by
such time. Management intends to evaluate the status of the Year 2000 readiness
program in the spring of 1999 and determine whether such a plan is necessary.
To date, the Company has not incurred significant expenses in connection
with assessing, testing and modifying its systems for Year 2000 readiness.
However, because the Company has not fully assessed the Year 2000 readiness of
its systems, Management is unable to determine the cost of becoming Year 2000
ready. To the extent that the Company or its key suppliers and providers fail to
achieve Year 2000 readiness, there could be a material adverse effect on the
Company's business, results of operations and financial position.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Recent Sales of Unregistered Securities
In July 1998, the Company sold and issued an aggregate of 1,428,572 shares
of Series A Non-Voting Preferred Stock to Roberts Pharmaceutical Corporation in
connection with a collaborative arrangement.
In October 1998, the Company sold and issued an aggregate of 230,000 shares
of Common Stock to Dainippon Pharmaceutical Co. Ltd. in connection with an
amendment to a license and option agreement.
(b) Use of Proceeds
1. The effective date of the Company's registration statement, filed
on Form S-1 under the Securities and Exchange Act of 1933, as
amended (File No. 333-38781), was May 28, 1998 (the "Registration
Statement"). The class of securities registered was Common Stock
and all securities sold were sold in the offering. The
underwriter for the offering was Gruntal & Co., L.C. Pursuant to
the Registration Statement, the Company sold 2,300,000 shares of
its Common Stock for an aggregate offering price of $16,100,000.
In connection with the public offering, the Company incurred
expenses of $3,865,000, of which $1,787,000 represented
underwriting discounts and commissions and expense reimbursements
and $2,078,000 represented other expenses related to the
offering. No proceeds were paid directly or indirectly to
directors, officers, general partners of the Company or to
persons holding ten percent or more of any class of equity
security issued by the Company, or to any other affiliate of the
Company. The net offering proceeds to the Company after total
expenses was $12,235,000.
To date, the Company has used $2,530,000 of the net proceeds from
the offering for operations. The Company has invested the
remainder of the net proceeds in short-term, investment-grade,
interest bearing financial instruments. The use of the proceeds
from the offering does not represent a material change in the use
of the proceeds described in the Registration Statement.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
13
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
<S> <C>
+10.40 Option and License Agreement by and between the Company and Roberts Pharmaceutical
Corporation dated July 6, 1998.
10.41 Stock Purchase Agreement by and between the Company and Roberts Pharmaceutical
Corporation dated July 16, 1998.
10.42 Rights Agreement by and between the Company and Roberts Pharmaceutical Corporation,
dated July 6, 1998.
+10.43 Amendment No. 1 to Option and License Agreement by and between the Company and
Dainippon Pharmaceutical Co. Ltd. dated September 18, 1998.
10.44 Common Stock Purchase Agreement by and between Dainippon Pharmaceutical Co. Ltd.
dated September 18, 1998.
27 Financial Data Schedule
</TABLE>
- -------------
+ Portions omitted pursuant to a request of confidentiality filed separately
with the Commission
(b) Reports on Form 8-K
There were no reports on Form 8-K during the quarter ended September 30,
1998.
14
<PAGE> 15
SIGNATURES
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.
RIBOGENE, INC.
By: /s/ TIMOTHY E. MORRIS
------------------------------------
Timothy E. Morris
Vice President, Finance and
Administration Chief Financial
Officer (Principal Financial and
Accounting Officer)
Date: November 10, 1998
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
<S> <C>
+10.40 Option and License Agreement by and between the Company and Roberts Pharmaceutical
Corporation dated July 6, 1998.
10.41 Stock Purchase Agreement by and between the Company and Roberts Pharmaceutical
Corporation dated July 16, 1998.
10.42 Rights Agreement by and between the Company and Roberts Pharmaceutical Corporation,
dated July 6, 1998.
+10.43 Amendment No. 1 to Option and License Agreement by and between the Company and
Dainippon Pharmaceutical Co. Ltd. dated September 18, 1998.
10.44 Common Stock Purchase Agreement by and between Dainippon Pharmaceutical Co. Ltd.
dated September 18, 1998.
27 Financial Data Schedule
</TABLE>
- -------------
+ Portions omitted pursuant to a request of confidentiality filed separately
with the Commission
<PAGE> 1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN
THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
EXHIBIT 10.40
OPTION AND LICENSE AGREEMENT
This Agreement ("Agreement") is entered into as of the 6th day of
July, 1998, by and between RIBOGENE, INC., a corporation organized under the
laws of Delaware ("RiboGene"), and ROBERTS PHARMACEUTICAL CORPORATION
("Roberts"), a corporation organized under the laws of New Jersey.
RECITALS
WHEREAS, RiboGene has conducted research and development with an
intranasally administered pharmaceutical product containing metoclopramide as an
active ingredient for the treatment of delayed onset emesis and other
indications, and owns certain patents relating thereto; and
WHEREAS, Roberts is interested in completing the development of
RiboGene's product as a contract research organization for RiboGene, and desires
to obtain an exclusive option for obtaining a license to market said product
after regulatory approvals have been obtained;
WHEREAS, RiboGene and Roberts have entered into that certain Series A
Preferred Stock Purchase Agreement, dated as of the date hereof, (the "Purchase
Agreement"), pursuant to which Roberts will purchase 1,428,572 shares of Series
A Convertible Non-voting Preferred Stock of RiboGene (the "Stock Purchase");
NOW, THEREFORE, in consideration of the foregoing and the covenants
and promises contained herein, and subject to the Closing of the Stock Purchase,
the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean (i) any corporation or other entity
("Parent") which directly or indirectly owns or controls at least fifty percent
(50%) of the outstanding voting securities of a party, (ii) any corporation or
other entity in which a party owns or controls at least fifty percent (50%)
equity interest, and (iii) any corporation or other entity in which a Parent of
a party owns or controls at least a fifty percent (50%) equity interest.
1.2 "Allowable Expenses" shall mean the pre-existing third party
commitments and any patent and trademark costs in the Territory incurred by
RiboGene relating to the Product, an estimate of which is contained in Exhibit
A.
1.3 "Closing" shall have the meaning specified in the Purchase
Agreement.
1.4 "Collaboration Know-How" shall mean all inventions, discoveries,
materials and information developed by either party relating to the Product
during the term of this Agreement. Collaboration Know-How shall not include
Collaboration Patents.
1.
<PAGE> 2
1.5 "Collaboration Patents" shall mean any and all patents, including,
without limitation, any substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, which have
not been held invalid or unenforceable by a non-appealable or non-appealed
decision of a court of competent jurisdiction, issuing from patent applications
filed in any jurisdiction, including, without limitation, any provisionals,
divisionals, continuations, and continuations-in-part, which cover inventions or
discoveries made by either party alone or both parties jointly relating to the
Product during the term of this Agreement.
1.6 "Collaboration Technology" shall mean all Collaboration Patents
and Collaboration Know-How.
1.7 "Confidential Information" shall mean a party's confidential
information, including, without limitation, Roberts Know-How, RiboGene Know-How,
Collaboration Know-How, Development Programs, engineering designs and drawings,
research data, manufacturing processes and techniques, scientific,
manufacturing, marketing, and business plans, financial or personnel matters
relating to the party, its present or future products, sales, suppliers,
customers, employees, investors or business.
1.8 "Development Program" shall mean the program of preclinical and
clinical development activities relating to the Product undertaken by Roberts
pursuant to this Agreement.
1.9 "Effective Date" shall mean the date on which the Closing occurs,
as defined in the Purchase Agreement.
1.10 "FDA" shall mean the United States Food and Drug Administration.
1.11 "Field" shall mean therapeutic treatment of delayed onset emesis
and any other conditions or diseases in humans.
1.12 "NDA" shall mean the approval required by the FDA or an
equivalent non-U.S. authority required for the marketing and sale of the Product
in the Territory.
1.13 "Net Sales" shall mean the gross invoice price of the Product
sold in the Territory by Roberts, its Affiliates or sublicensees to an
independent third party after deducting, if not already deducted in the amount
invoiced (a) trade, quantity and cash discounts actually taken, (b) returns,
rebates, chargebacks and allowances made or granted, and (c) transportation and
insurance charges separately billed. With respect to sales of combination
products consisting of metoclopramide combined with one or more additional
active ingredients, the parties will agree on a method of allocation in the
event the situation arises. Sales among Roberts and its Affiliates or
sublicensees shall not be deemed Net Sales. The Product shall be considered sold
when invoiced by Roberts.
1.14 "Product" shall mean a pharmaceutical product containing
metoclopramide as an active ingredient formulated for intranasal delivery.
1.15 "RiboGene Know-How" shall mean all inventions, discoveries,
materials and information (i) which RiboGene owns, controls or has a license
(with a right to sublicense) as of
2.
<PAGE> 3
the Effective Date or which arise outside the Development Program during the
term of this Agreement, and (ii) which are necessary or useful for the conduct
of the Development Program, or the manufacture, use or sale of the Product.
RiboGene Know-How shall not include RiboGene Patents.
1.16 "RiboGene Patents" shall mean the patents listed in Exhibit B and
any and all patents other than Collaboration Patents, including, without
limitation, any substitutions, extensions, reissues, renewals, supplementary
protection certificates and inventors' certificates, which have not been held
invalid or unenforceable by a non-appealable or non-appealed decision of a court
of competent jurisdiction, issuing from patent applications filed in any
jurisdiction, including, without limitation, any provisionals, divisionals,
continuations, continuations-in-part, which (i) RiboGene owns, controls or has a
license to (with the right to sublicense) as of the Effective Date, and (ii)
would be infringed by the conduct of the Development Program, or the
manufacture, use or sale of the Product.
1.17 "RiboGene Technology" shall mean the RiboGene Patents and the
RiboGene Know-How.
1.18 "Regulatory Approval(s)" shall mean shall mean all new drug
approvals, marketing approvals, applications, licenses, permits, and other
authorizations, which are required for manufacturing and selling the Product in
compliance with applicable laws in the Territory.
1.19 "Regulatory Authority" shall mean the competent government
regulatory authority responsible for granting the Regulatory Approvals in a
country of the Territory.
1.20 "Roberts Know-How" shall mean all inventions, discoveries,
materials and information (i) which Roberts owns, controls or has a license to
(with a right to sublicense) as of the Effective Date or which arise outside of
the Development Program from time to time during the term of this Agreement, and
(ii) which are necessary or useful for the conduct of the Development Program,
or the manufacture, use or sale of the Product. Roberts Know-How shall not
include Roberts Patents.
1.21 "Roberts Patents" shall mean any and all patents other than
Collaboration Patents, including, without limitation, any substitutions,
extensions, reissues, renewals, supplementary protection certificates and
inventors' certificates, which have not been held invalid or unenforceable by a
non-appealable or non-appealed decision of a court of competent jurisdiction,
issuing from patent applications filed in any jurisdiction, including, without
limitation, any provisionals, divisionals, continuations, continuations-in-part,
which (i) Roberts owns, controls or has a license to (with the right to
sublicense) as of the Effective Date, and (ii) would be infringed by the conduct
of the Development Program, or the manufacture, use or sale of the Product.
1.22 "Roberts Technology" shall mean the Roberts Patents and the
Roberts Know-How.
3.
<PAGE> 4
1.23 "Steering Committee" shall mean the committee established by the
parties pursuant to Section 2.1.
1.24 "Territory" shall mean in the United States, its commonwealth and
possessions, Canada and Mexico.
1.25 "Trademark" shall mean Emitasol(R).
ARTICLE 2
PRODUCT DEVELOPMENT
2.1 STEERING COMMITTEE.
(a) Formation of Steering Committee. Promptly after the Effective
Date, the parties shall establish the Steering Committee. The Steering Committee
shall consist of an equal number of members from Roberts and RiboGene, appointed
and substituted by each party as necessary from time to time. Each member shall
have appropriate technical credentials and knowledge and ongoing familiarity
with the Development Program. All decisions of the Steering Committee shall be
unanimous.
(b) Meetings of Steering Committee. The Steering Committee shall
meet quarterly or at such other intervals as shall be agreed between the
parties, and at such times as shall be mutually agreed upon by the parties and
at a site alternating between RiboGene's and Roberts's place of business, or as
otherwise mutually agreed.
(c) Responsibilities of the Steering Committee. The Steering
Committee shall establish the Development Program for the Product aimed at
developing and commercializing the Product in all possible indications in all
countries of the Territory. The Steering Committee shall monitor the progress of
the Development Program and may revise it as necessary to achieve the overall
goal of developing the Product as quickly as commercially feasible, and
maximizing the commercial potential of the Product.
2.2 CONDUCT OF THE DEVELOPMENT PROGRAM.
(a) Roberts will conduct the Development Program under the
direction of the Steering Committee. Roberts shall keep the Steering Committee
fully informed on a reasonable basis of the development of the Product,
including but not limited to periodic written updates on the progress of each
filing with a Regulatory Authority.
(b) In performing the Development Program, Roberts shall devote
the same degree of attention, resources and diligence to the preclinical and
clinical development of the Product as it devotes to its own high priority
compounds and products. In particular, Roberts undertakes to diligently conduct
clinical trials and to apply for Regulatory Approval of the Product in each
country of the Territory within [ * ] from the Effective Date. If Roberts has
not filed an NDA or its foreign equivalent in a country of the Territory within
[ * ] from the Effective Date, Roberts' option granted under Section 4.1 shall
be deemed to
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
4.
<PAGE> 5
have expired in such country, and such country shall be excluded from the
Territory. Should an action of a Regulatory Authority outside of Roberts'
control give rise to a reasonable basis to extend the aforesaid [ * ] period,
meaning that it is reasonable to expect that Roberts acting with commercially
reasonable diligence shall not have applied for Regulatory Approval as
aforesaid, an extension of time will be provided to enable Roberts to complete
the Development Plan and the parties shall negotiate in good faith and arrive at
a reasonable period of extension.
(c) All regulatory filings shall be made in the name of RiboGene,
and any Regulatory Approvals granted thereon shall be transferred to Roberts
upon exercise of the option as set forth in Section 4.2.
2.3 MANUFACTURE FOR DEVELOPMENT. Roberts shall be responsible for
obtaining supplies of the Product in quantities necessary for performing the
preclinical and clinical development activities under the Development Program.
2.4 ACCESS AND USE OF INFORMATION. RiboGene shall have the right to
use all data obtained in the studies, all filings made, and all Regulatory
Approvals obtained by Roberts in the Territory, and shall have the right to
reference any such data, any regulatory filings and Regulatory Approvals for
inclusion in regulatory submissions such as filings for Regulatory Approvals for
the Product outside of the Territory.
2.5 DEVELOPMENT FUNDING. RiboGene shall fund the preclinical and
clinical studies conducted by Roberts under the Development Program, and pay the
Allowable Expenses up to an amount of seven million dollars ($7,000,000)
("Development Funds"). Any costs of activities to be performed under the
Development Program and any Allowable Expenses in excess of the Development
Funds shall be funded by Roberts. Payments by RiboGene shall be made on a
contract research basis in accordance with a development budget and schedule
established by the Steering Committee in the Development Program.
2.6 [ * ] If at any time during the term of this Agreement and prior
to the exercise of the option by Roberts pursuant to Section 4.2 below [ * ].
The [ * ] RiboGene at the time when [ * ] or upon the first Regulatory Approval
of the Product. If necessary to pay for the preclinical and clinical studies
under the Development Program or the Allowable Expenses, [ * ] the budget and
payment schedule contained in the Development Program or the due date of the
payments for Allowable Expenses.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
5.
<PAGE> 6
ARTICLE 3
OWNERSHIP OF INTELLECTUAL PROPERTY AND LICENSES
3.1 ROBERTS TECHNOLOGY. RiboGene acknowledges and agrees that Roberts
is and shall remain the sole owner of the Roberts Technology and that RiboGene
has no rights in or to any of it other than the license and rights specifically
granted herein and the licenses granted pursuant to this Agreement.
3.2 RIBOGENE TECHNOLOGY. Roberts acknowledges and agrees that RiboGene
is and shall remain the sole owner of the RiboGene Technology and that Roberts
has no rights in or to any of them other than the rights specifically granted
herein and the license to be granted pursuant to this Agreement.
3.3 COLLABORATION TECHNOLOGY. Collaboration Technology shall be owned
by either party alone or jointly with the other party depending on whether such
Collaboration Technology was developed by a party alone or jointly with the
other party. Inventorship shall be determined in accordance with the rules of
inventorship under U.S. patent laws. Neither party shall have rights to such
Collaboration Technology owned solely or jointly except as expressly granted
under this Agreement.
3.4 LICENSE GRANTS.
(a) License Grant to Roberts. As of the Effective Date, RiboGene
hereby grants to Roberts a non-royalty bearing, exclusive license under RiboGene
Technology and Collaboration Technology in the Field for the sole purpose of
conducting the Development Program. Roberts may not grant sublicenses under the
license granted in this subsection (a) except in the context of contract
research or contract development by a third party as part of the Development
Program, and then only after the prior written approval of RiboGene, which
approval shall not be unreasonably withheld. The terms of any sublicense shall
conform to the terms of this Agreement in all respects.
(b) License Grant to RiboGene. As of the Effective Date, Roberts
hereby grants to RiboGene a non-royalty bearing, non-exclusive license, with the
right to sublicense, under Roberts Technology, and a non-royalty bearing,
exclusive license, with the right to sublicense, under Collaboration Technology
to research, develop, make, have made, use, import, offer for sale and sell the
Product outside of the Territory.
3.5 TRADEMARK LICENSE. As of the Effective Date, RiboGene hereby
grants to Roberts a non-royalty bearing, exclusive license, with the right to
sublicense subject to RiboGene's prior written approval, under RiboGene's rights
in and to the Trademark for the sole purpose of developing, marketing, and
selling the Product in the Territory during the term of this Agreement. Roberts
shall use the Trademark in connection with the development, marketing, promotion
and selling of the Product. RiboGene shall file and maintain the Trademark in
all countries of the Territory. The costs of such filings and maintenance shall
be part of Allowable
6.
<PAGE> 7
Expenses until Roberts has exercised its option pursuant to Section 4.2,
whereafter such costs shall be borne by Roberts.
ARTICLE 4
OPTION GRANT
4.1 OPTION FOR COMMERCIALIZATION LICENSE. Roberts shall have the
option to obtain an exclusive license, with the right to sublicense subject to
RiboGene's prior written approval, under RiboGene Technology and Collaboration
Technology in the Field to make, have made, use, import, offer for sale and sell
the Product in the Territory. The option shall be in effect in any particular
country of the Territory for a period beginning on the Effective Date and ending
sixty (60) days after first Regulatory Approval of the Product in that
particular country of the Territory ("Option Period").
4.2 OPTION EXERCISE. Roberts shall exercise the option by giving
RiboGene written notice prior to the expiration of the Option Period.
4.3 EXPIRY OF OPTION. If the option granted under Section 4.1 expires
under the terms of this Agreement, Roberts shall transfer to RiboGene all
information, including, without limitation, data, reports and documentation
generated by Roberts in the course of the performance of the Development Program
and all rights of Roberts in and to such information.
ARTICLE 5
COMMERCIAL TERMS
5.1 LICENSE FEE. Within [ * ] after exercising the option pursuant to
Section 4.2 above, Roberts shall pay to RiboGene a license fee of ten million
dollars ($10,000,000) ("License Fee") as follows:
(a) [ * ] of the License Fee, i.e. [ * ] if the option is
exercised following FDA Regulatory Approval of the Product for delayed onset
emesis or for an indication which permits the promotion of the Product for
treatment of the symptoms of delayed onset emesis;
(b) [ * ] of the License Fee, i.e. [ * ] if the option is
exercised following FDA Regulatory Approval of the Product for an indication
which does not permit the promotion of the Product for the treatment of the
symptoms of delayed onset emesis;
(c) [ * ] of the License Fee, i.e. [ * ] if the option is
exercised following Regulatory Approval of the Product in Canada or Mexico;
(d) In the event of a partial payment of the License Fee pursuant
to subsections (b) through (c) above, Roberts shall make additional payments
upon the occurrence of any subsequent Regulatory Approvals for an indication
which permits the promotion of the
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Product for the treatment of the symptoms of delayed onset emesis described in
subsections (a) through (c), up to and until such time as the full amount of the
License Fee has been paid;
(e) Notwithstanding the payment events described in subsections
(b) through (d) above and license fee payments made by Roberts thereunder, the
balance of the License Fee shall be due and payable (i) if gross sales generated
with the Product in the first year from the date of first commercial sale reach
or exceed [ * ]; or (ii) if the aggregate gross sales generated with the Product
reach or exceed [ * ]
5.2 ROYALTIES.
(a) Royalty Rate. Roberts shall pay to RiboGene royalties at a
rate of [ * ] of Net Sales of the Product.
(b) Royalty Term.
(i) In any country where the manufacture, use or sale of the
Product is covered by a Collaboration Patent or RiboGene Patent, royalties shall
be payable in such country until the later of (i) [ * ] from the first
commercial sale of the Product in such country and (ii) the expiration of the
last to expire of such Collaboration Patent or RiboGene Patent.
(ii) In any country where the manufacture, use or sale of
the Product is not covered by a Collaboration Patent or RiboGene Patent,
royalties shall be payable in such country until the expiration of [ * ] from
the date of first commercial sale of the Product in such country.
(c) If, due to restrictions or prohibitions imposed by national
or international authority, including but not limited to restrictions on
payments of royalties from the Territory, Roberts is unable to make the payments
of royalties as aforesaid, the parties shall consult with a view to finding a
prompt and acceptable solution and Roberts shall not be relieved of the
obligation to make such payments and will from time to time deal with such
monies as RiboGene may lawfully direct.
(d) Any and all taxes payable in connection with the payments to
be made pursuant to this Section 5.2 shall be for the account of RiboGene. In
the event that Roberts shall be required to withhold or pay any taxes in the
Territory applicable to RiboGene with respect to any such payments, Roberts
shall promptly furnish RiboGene with the respective tax receipts, or other
evidence of payment.
(e) Upon request by RiboGene, Roberts shall file on behalf of
RiboGene any tax returns which the law of the Territory may require. Such tax
returns shall be filed in accordance with RiboGene's instructions and Roberts
shall pay such taxes on RiboGene's behalf, deducting the amounts of such tax
payments from the royalty payments due pursuant to this Section 5.2.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(f) Roberts shall reasonably assist RiboGene in obtaining a tax
credit under the applicable taxation treaties and laws, including by providing
appropriate evidence of RiboGene's payment of the withholding tax.
5.3 DUE DILIGENCE.
(a) Roberts undertakes to launch and sell the Product in each
country of the Territory within [ * ] from the date of Regulatory Approval,
including pricing approval, where applicable, in such country. Roberts shall
market and promote the Product as it markets and promotes its own products with
similar sales potential.
(b) If Roberts has not launched the Product within the time
period required under subsection (a) above, Roberts' license obtained pursuant
to the exercise of the option under Section 4.2 shall be deemed to have expired
in such country, and such country shall be excluded from the Territory. Upon
expiry of the license, Roberts shall transfer to RiboGene all Regulatory
Approvals in such country, and information, including, without limitation, data,
reports and documentation generated by Roberts in the course of the performance
of the development of the Product for such country and all rights of Roberts in
and to such information.
5.4 TERRITORIAL LIMITATION. Roberts hereby undertakes to practice the
RiboGene Technology and Collaboration Technology licensed hereunder only within
the Territory. Roberts shall not sell or distribute the Product outside of the
Territory, and shall not sell or supply the Product to any third party of whom
it knows or has reason to believe that such third party sells or supplies the
Product to customers outside of the Territory.
ARTICLE 6
PAYMENTS; RECORDS; AUDIT
6.1 ROYALTY PAYMENT AND REPORTS.
(a) Royalty amounts payable to RiboGene under Section 5.2 shall
be paid in U.S. Dollars within [ * ] of the end of each calendar quarter. Each
payment of royalties shall be accompanied by a statement of the amount of Net
Sales during such period, the amount of aggregate Net Sales to date as of the
end of such period, and the amount of royalties due on such Net Sales.
(b) For the purpose of calculating royalties on Net Sales
generated in currencies other than U.S. dollars, such Net Sales shall be
converted into U.S. dollars at the rate of exchange as quoted in the Wall Street
Journal on the last business day of the relevant calendar quarter. All royalty
payments owed under this Agreement shall be made by means of wire transfer to
RiboGene's account in a bank in the United States to be designated by RiboGene.
6.2 RECORDS AND AUDIT.
(a) During the term of this Agreement and for a period of [ * ]
thereafter, Roberts shall keep complete and accurate records pertaining to the
sale or other
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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disposition of the Product commercialized by it, in sufficient detail to permit
RiboGene to confirm the accuracy of all payments due hereunder.
(b) RiboGene shall have the right to cause an independent,
certified public accountant to audit such records to confirm Roberts's Net Sales
and royalty payments; provided, however, that such auditor shall not disclose
Roberts's confidential information to RiboGene, except to the extent such
disclosure is necessary to verify the amount of royalties due under this
Agreement.
(c) Such audits may be exercised once a year, within [ * ] after
the royalty period to which such records relate, upon notice to Roberts and
during normal business hours.
(d) RiboGene shall bear the full cost of such audit unless such
audit discloses a variance of more than [ * ] from the amount of the Net Sales
or royalties previously paid. In such case, Roberts shall bear the full cost of
such audit. The terms of this Section 6.2 shall survive any termination or
expiration of this Agreement for a period of [ * ]
(e) OVERDUE PAYMENTS. If RiboGene does not receive payment of any
sum payable under this Agreement on the date it is due, simple interest shall
thereafter accrue on the sum due to RiboGene until the date of payment at the
per annum rate of [ * ]
ARTICLE 7
PATENT PROSECUTION AND DEFENSE
7.1 PATENT PROSECUTION AND MAINTENANCE.
(a) RiboGene shall maintain the RiboGene Patents during the term
of this Agreement. The costs of such maintenance shall be part of Allowable
Expenses until Roberts has exercised its option pursuant to Section 4.2,
whereafter such costs shall be borne by Roberts.
(b) Roberts shall be responsible for filing and prosecuting
applications for Collaboration Patents and for maintaining Collaboration Patents
owned solely by either party or jointly by the parties in the Territory. Roberts
shall consult with RiboGene as to the selection of countries in which to file
applications for such Collaboration Patents. Roberts shall be responsible for
bearing the cost of filing and prosecuting applications for Collaboration
Patents and of maintaining Collaboration Patents in the Territory. In the event
that Roberts decides not to proceed with prosecuting an application for a
Collaboration Patent, it shall give RiboGene [ * ] notice before any relevant
deadline, and RiboGene shall have the right to pursue, at its own expense,
prosecution of such patent application or maintenance of such patent, and such
patent shall be excluded from the licenses granted herein or in the License
Agreement.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(c) Each party agrees to cooperate with the other and take all
reasonable additional actions and execute such agreements, instruments, and
documents as may be reasonably required to prosecute patent applications as
provided in this section, and to perfect the other's ownership interest in
Collaboration Patents as allocated in Article 3, including, without limitation,
the execution of necessary and appropriate instruments of assignment.
7.2 INFRINGEMENT OF PATENTS BY THIRD PARTIES.
(a) Notice. Each party shall promptly notify the other in writing
of any alleged or threatened infringement of RiboGene Patents, Roberts Patents,
or Collaboration Patents which may adversely impact the rights of the parties
hereunder.
(b) Roberts Patents and RiboGene Patents.
(i) The party which is the holder of Roberts Patents or
RiboGene Patents, respectively, shall have the right, but not the obligation, to
bring an appropriate action against any person or entity directly or
contributorily infringing its patents. If the patent holder brings an action
against an alleged infringer, the other party shall cooperate reasonably with
the patent holder in any such efforts.
(ii) Any recovery obtained by the patent holder as a result
of such action, whether obtained by settlement or otherwise, shall be disbursed
as follows: first, each party shall be reimbursed for any reasonable expenses
incurred in bringing or assisting in such action (including counsel fees). If
the infringement was made by a third party product which competed with the
Product in the Territory, the remaining proceeds shall be added to Net Sales. In
the event of any other kind of infringement, the remaining proceeds shall
retained by the patent holder.
(iii) No settlement, compromise or other disposition of any
such action which compromises a party's rights under this Agreement shall be
entered into without such party's prior consent, which shall not be unreasonably
withheld.
(c) Collaboration Patents.
(i) If a Collaboration Patent is infringed in the Territory,
Roberts shall have the right to bring, at its own expense, an appropriate action
against any person or entity directly or contributorily infringing such
Collaboration Patent. In such event, RiboGene shall cooperate reasonably with
Roberts in any such action, including if required to bring such action, the
furnishing of a power of attorney.
(ii) In the event Roberts fails to institute an infringement
suit or take other reasonable action to protect the relevant Collaboration
Patent, RiboGene shall have the right, upon [ * ] of notification of Roberts, to
institute such suit or take other appropriate action at its own expense in its
own name, the joint owners' name, or both. In such event, Roberts hereby agrees
to cooperate reasonably with RiboGene in any such effort, including if required
to bring such action, the furnishing of a power of attorney.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(iii) Regardless of which party brings the action, any
recovery obtained by settlement or otherwise shall be disbursed as follows: the
party bringing such action shall first ensure that any reasonable expenses
incurred in assisting in such action (including counsel fees) by both parties
are reimbursed. Thereafter, the party bringing such action shall ensure that the
net recovery shall be added to Net Sales.
7.3 INFRINGEMENT OF THIRD PARTY RIGHTS.
(i) Joint Strategy. In the event that the Product developed,
manufactured or sold hereunder becomes the subject of a claim for patent,
copyright or other proprietary right infringement in the Territory ("Product
Infringement Claim"), and irrespective of whether Roberts or RiboGene is charged
with said infringement, and the venue of such claim, the parties shall promptly
confer to discuss the claim. The parties shall agree on how to best defend the
Product Infringement Claim and shall designate the party who shall have primary
responsibility to conduct the defense of any Product Infringement Claim in the
Territory.
(ii) Defense. The party with primary responsibility for the
defense of a Product Infringement Claim shall keep the other party informed on
the progress and shall provide it with copies of all filings made or received in
connection with such claim. The other party shall have the right to participate
in any proceedings and to be represented by counsel of its own choice. The costs
of such defense shall be shared between the parties. Each party shall reasonably
cooperate with the party conducting the defense of the Product Infringement
Claim, including if required to conduct such defense, furnishing a power of
attorney. Neither party shall enter into any settlement that affects the other
party's rights or interests without such other party's written consent, which
consent shall not be unreasonably withheld.
7.4 PATENT MARKING. Roberts shall mark, if necessary, all the Product
manufactured, used or sold under the terms of this Agreement, or its containers,
in accordance with the applicable patent marking laws, as required.
ARTICLE 8
PUBLICATION; PUBLICITY
8.1 PUBLICATION.
(a) Review and Approval. Each party to this Agreement recognizes
that the publication of papers, including oral presentations and abstracts,
regarding the Collaboration Know-How and the Collaboration Patents, subject to
reasonable controls to protect Confidential Information, will be beneficial to
both parties. However, each party shall have the right to review and approve any
paper proposed for publication by the other party, including oral presentations
and abstracts, which utilizes data generated from the Development Program and/or
includes Collaboration Know-How or Confidential Information of the reviewing
party.
(b) Review and Approval Process. At least [ * ] before any such
paper is presented or submitted for publication, the party proposing publication
shall deliver a
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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complete copy to the other party. The receiving party shall review any such
paper and give its comments to the publishing party within [ * ] of the delivery
of such paper to the receiving party. With respect to oral presentation
materials and abstracts, the parties shall make reasonable efforts to expedite
review of such materials and abstracts, and shall return such items as soon as
practicable to the publishing party with appropriate comments, if any, but in no
event later than [ * ] from the delivery date thereof to the receiving party.
The publishing party shall comply with the other party's request to delete
references to such other party's Confidential Information in any such paper and
agrees to withhold publication of same in order to permit the parties to obtain
patent protection, if either of the parties deem it necessary, in accordance
with the terms of this Agreement.
8.2 PUBLICITY. Except as otherwise provided herein or required by law,
no party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld, [ * ].
8.3 PRESS RELEASE. Notwithstanding any provision of this Agreement to
the contrary, promptly after the date hereof, each party may issue a press
release substantially in the form as agreed to by the parties.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 CORPORATE POWER, DUE AUTHORIZATION, BINDING AGREEMENT. Each party
hereby represents and warrants:
(a) That it is duly organized and validly existing under the laws
of the state or country of its incorporation and has full corporate power and
authority to enter into this Agreement and to carry out the provisions hereof;
(b) That it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder;
(c) That this Agreement is a legal and valid obligation binding
upon it and is enforceable in accordance with its terms, and that the execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
9.2 INTELLECTUAL PROPERTY. Each party has the full right to grant the
licenses granted by it under this Agreement and is not aware, to the best of its
knowledge, of any claims by third parties to a conflicting ownership interest in
its solely-owned Patents.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.3 RIBOGENE DISCLAIMER. THE RIBOGENE TECHNOLOGY AND COLLABORATION
TECHNOLOGY LICENSED HEREUNDER IS PROVIDED "AS IS" AND RIBOGENE EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL
CASES WITH RESPECT THERETO.
ARTICLE 10
INDEMNIFICATION
10.1 INDEMNIFICATION BY RIBOGENE. RiboGene shall indemnify Roberts,
its Affiliates, and all their officers, directors, employees and agents, for any
reasonable out-of-pocket costs and expenses (including court and arbitration
costs, witness fees and reasonable attorneys' fees), non-appealed or
non-appealable judicial or arbitration damage awards, and settlement payments,
payable or owed by Roberts in connection with any demands, law suits and other
legal actions of third parties arising from (i) the performance or breach of
this Agreement by RiboGene, and (ii) any negligent actions or willful misconduct
by RiboGene, its Affiliates, agents or sublicensees.
10.2 INDEMNIFICATION UNDERTAKING BY ROBERTS. Roberts shall indemnify
RiboGene, its Affiliates and sublicensees, and all their officers, directors,
employees and agents, for any reasonable out-of-pocket costs and expenses
(including court and arbitration costs and reasonable attorneys' fees),
non-appealed or non-appealable judicial or arbitration damage awards, and
settlement payments agreed with the third party claimants payable or owed by
RiboGene in connection with any demands, law suits and other legal actions of
third parties arising from (i) the performance or breach of this Agreement by
Roberts, (ii) any negligent actions or willful misconduct by Roberts, its
Affiliates, or agents, and (iii) the possession, manufacture, use, marketing,
promotion, distribution, sale or administration of the Product.
10.3 CONDITIONS AND LIMITATIONS OF INDEMNIFICATION OBLIGATION.
(a) In order to maintain the right to be indemnified by the other
party ("Indemnitor") for any demands, law suits and other legal actions of third
parties ("Third Party Claims") described in Sections 10.1 and 10.2 above, the
party claiming indemnification ("Indemnitee") must:
(i) notify the Indemnitor promptly after learning of a Third
Party Claim;
(ii) allow the Indemnitor to manage and control (by way of
intervention or otherwise) the defense and/or settlement of the Third Party
Claim against the Indemnitee;
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(iii) cooperate with the Indemnitor in the defense or the
settlement negotiations of any Third Party Claims for which indemnification is
sought, as reasonable required by the Indemnitor;
(iv) abstain from making any statements or taking any
actions which damage the defense against a Third Party Claim (including, without
limitation, any statements against the interest of the Indemnitee or admissions
of causation or guilt).
(b) The Indemnitor shall not agree to any settlement that
adversely affects the Indemnitee's rights or interest without the Indemnitee's
prior written approval (which approval shall not be unreasonably withheld).
(c) The Indemnitor shall have no obligation to indemnify the
Indemnitee to the extent that a Third Party Claim results from the negligence or
willful misconduct of the Indemnitee.
ARTICLE 11
CONFIDENTIALITY
11.1 DISCLOSURE OF CONFIDENTIAL INFORMATION. Confidential Information
disclosed by one party to the other pursuant to and during the term of this
Agreement shall be subject to the confidentiality obligations set forth below:
(a) if disclosed in writing and marked "confidential" or
"proprietary" by the disclosing party prior to or at the time of the disclosure
thereof, or if it would be apparent to a reasonable person, familiar with the
disclosing party's business and the industry, that such information is of a
confidential or proprietary nature; and
(b) if [ * ] after disclosure of Confidential Information, the
disclosing party informs the receiving party in writing of the confidential
nature of the disclosed information, describing such information and referencing
the place and date of the oral, visual or written disclosure and the names of
the employees or officers of the receiving party to whom such disclosure was
made.
11.2 CONFIDENTIALITY AND NON-USE. Except to the extent expressly
authorized by this Agreement or unless otherwise agreed in writing by the
parties, each party agrees that, for the combined term of this Agreement and the
Development Agreement, and for [ * ] thereafter, it shall keep confidential and
shall not publish or otherwise disclose and shall not use for any purpose other
than as provided for in this Agreement any Confidential Information, unless the
receiving party can demonstrate by competent proof that such Confidential
Information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure by the other party;
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part of
the public domain after it disclosure and other than through any act or omission
of the receiving party in breach of such Agreements;
(d) was disclosed to the receiving party, other than under an
obligation of confidentiality to a third party, by a third party who had no
obligation to the disclosing party not to disclose such information to others;
or
(e) was independently discovered or developed by the receiving
party without the use of Confidential Information belonging to the disclosing
party.
11.3 AUTHORIZED DISCLOSURE.
(a) Each party may disclose Confidential Information belonging to
the other party to Affiliates and sublicensees who agree to be bound by similar
terms of confidentiality. In addition, each party may disclose Confidential
Information of the other party to the extent such disclosure is reasonably
necessary to: (i) comply with applicable securities laws and regulations and
other applicable governmental regulations, (ii) file or prosecute patents
relating to Collaboration Technology, (iii) prosecute or defend litigation, (iv)
file applications for Regulatory Approvals for the Product, and (vi) conduct
pre-clinical or clinical trials with the Product.
(b) Notwithstanding the foregoing, in the event a party is
required to make a disclosure of the other party's Confidential Information
pursuant to subsection (a) above, it will, except where impracticable, give
reasonable advance notice to the other party of such disclosure and use best
efforts to secure confidential treatment of such information. In any event, the
parties agree to take all reasonable action to avoid disclosure of Confidential
Information hereunder.
ARTICLE 12
IMPORT AND EXPORT CONTROLS
12.1 UNITED STATES LAWS. The parties understand and acknowledge that
each of them is subject to regulation by agencies of the U.S. government,
including the U.S. Department of Commerce, which prohibit export, re-export or
diversion of the Product and technology to certain countries. Any and all
obligations of Roberts or RiboGene to provide access to or license any
technology pursuant to this Agreement, as well as any technical assistance shall
be subject in all respects to such United States laws and regulations as shall
from time to time govern the license and delivery of technology and the Product
abroad by persons subject to the jurisdiction of the United States, including
the Export Administration Act of 1979, as amended, any successor or interim
controlling legislation, and the Export Administration Regulations issued by the
Department of Commerce, International Trade Administration, Bureau of Export
16.
<PAGE> 17
Administration. Both parties also agree to comply with the requirements of the
U.S. Foreign Corrupt Practices Act (the "Act") and shall refrain from making any
payments to third parties which would cause Roberts or RiboGene to violate the
Act.
12.2 NON-UNITED STATES LAWS. Roberts and RiboGene shall each provide
the other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.
ARTICLE 13
TERM AND TERMINATION
13.1 TERM. Except as provided under Section 13.2 below, the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire royalty obligation.
13.2 TERMINATION ON MATERIAL BREACH. If either party materially
breaches the Agreement, including without limitation its due diligence
obligations under Section 2.2(b) and 5.3, and the breaching party has not cured
the breach or initiated good faith efforts to cure such breach to the reasonable
satisfaction of the non-breaching party within sixty (60) days of notice of
breach from the non-breaching party, the non-breaching party may terminate this
Agreement upon expiration of such sixty (60)-day period.
13.3 LICENSES UPON EXPIRATION OR TERMINATION.
(a) Upon expiration or termination of this Agreement, Roberts
shall have a fully paid, nonexclusive license under RiboGene Technology and
Collaboration Technology in the Field to make, have made, use, import, offer for
sale and sell the Product in the Territory.
(b) Notwithstanding subsection (a) above, if this Agreement is
terminated by RiboGene based on a material breach by Roberts, then Roberts'
license rights shall terminate and RiboGene shall have a perpetual, paid-up,
worldwide license under Roberts Technology and Roberts-owned or jointly owned
Collaboration Technology to make, have made, use, import, offer for sale and
sell the Product.
(c) If this Agreement is terminated by Roberts due to a failure
by RiboGene to pay for the performance of the Development Program conducted
under this Agreement, Roberts shall have an exclusive license under RiboGene
Technology and Collaboration Technology in the Field to make, have made, use,
import, offer for sale and sell the Product in the Territory, subject only to
the obligation to pay the License Fee (less any amounts of the Development Funds
owed but not paid by RiboGene to Roberts hereunder) and royalties as provided in
Section 5.2.
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13.4 SURVIVING RIGHTS AND OBLIGATIONS. Termination of this Agreement,
for whatever reason, shall not affect any rights or obligations of either party
which are intended by the parties to survive termination.
13.5 ACCRUED RIGHTS. The termination, relinquishment or expiration of
the Agreement for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of either party prior to such termination,
relinquishment or expiration, including any damages arising from any breach
hereunder.
ARTICLE 14
MISCELLANEOUS
14.1 WAIVER. No waiver by either party hereto of any breach or default
of any of the covenants or agreements herein set forth shall be deemed a waiver
as to any subsequent or similar breach or default.
14.2 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder without the prior written consent of the other; except
that RiboGene may assign this Agreement incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of RiboGene.
14.3 NOTICES. Any notice or other communication required or permitted
to be given to either party hereto shall be in writing and shall be deemed to
have been properly given and to be effective on the date of delivery if
delivered in person or by facsimile or five (5) days after mailing by registered
or certified mail, postage paid, to the other party at the following address:
In the case of RiboGene: RiboGene, Inc.
26118 Research Road
Hayward, CA 94545
Fax: (510) 293-2596
Attention: President
with a copy to: Cooley Godward LLP
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (650) 857-0663
Attention: Brian C. Cunningham, Esq.
In the case of Roberts: Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, New Jersey 07724
Fax: (732) 398-1014
Attention: A. A. Rascio, VP and General
Counsel
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Either party may change its address for communications by a notice to the other
party in accordance with this section.
14.4 HEADINGS. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
14.5 AMENDMENT. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
14.6 CHOICE OF LAW, JURISDICTION AND VENUE.
(a) This Agreement and its terms and conditions shall be governed
exclusively by and construed according to the laws of California, excluding its
choice of law provisions and also excluding the United Nations Convention on
Contracts for the International Sale of Goods.
(b) All disputes which may arise between the parties hereto in
relation to the interpretation or administration of this Agreement shall be
first referred to the Steering Committee for resolution. Any disputes which the
Steering Committee is unable to resolve with a reasonable period of time shall
be resolved by the agreement of the Chief Executive Officers of the respective
parties or their delegates. Any disputes which cannot be resolved in this manner
shall be finally resolved in the courts with jurisdiction and venue at the
domicile of the defendant.
14.7 FORCE MAJEURE. Any delays in performance by any party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, fire, flood,
explosion, riots, wars, civil disorder, rebellion or sabotage. The party
suffering such occurrence shall immediately notify the other party as soon as
practicable and any time for performance hereunder shall be extended by the
actual time of delay caused by the occurrence.
14.8 INDEPENDENT CONTRACTORS. In making and performing this Agreement,
Roberts and RiboGene act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency, partnership or employer and employee relationship between RiboGene
and Roberts. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
14.9 SEVERABILITY. If any term, condition or provision of this
Agreement is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms, conditions
and provisions of this Agreement shall be deemed valid and enforceable to the
full extent.
14.10 CUMULATIVE RIGHTS. The rights, powers and remedies hereunder
shall be in addition to, and not in limitation of, all rights, powers and
remedies provided at law or in equity,
19.
<PAGE> 20
or under any other agreement between the parties. All of such rights, powers and
remedies shall be cumulative, and may be exercised successively or cumulatively.
14.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
14.12 ENTIRE AGREEMENT. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof.
20.
<PAGE> 21
IN WITNESS WHEREOF, both Roberts and RiboGene have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, as of the day and year hereinabove written.
RIBOGENE, INC. ROBERTS PHARMACEUTICAL CORPORATION
By:_______________________________ By:_________________________________
Name: Timothy E. Morris Name:
Title: Vice President Finance & Title:
Administration and
Chief Financial Officer
21.
<PAGE> 22
EXHIBIT A
ALLOWABLE EXPENSES
[ * ]
[ ] Estimated costs for patent and trademark prosecution, consisting of
approximately [ * ] including the estimated cost of [ * ]
[ ] Estimated patent and trademark maintenance costs (subject to increases due
to litigation or other unforeseen circumstances).
[ ] These expenses shall [ * ] once the Product, [ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
1.
<PAGE> 23
EXHIBIT B
RIBOGENE PATENTS
[ * ]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
2.
<PAGE> 1
EXHIBIT 10.41
STOCK PURCHASE AGREEMENT
RIBOGENE, INC.
JULY 6, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. PURCHASE AND SALE........................................................................................1
1.1 Sale of Shares..................................................................................1
1.2 Closing Date....................................................................................1
1.3 Delivery........................................................................................1
1.4 Standstill Covenant.............................................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................2
2.1 Organization and Standing; Certificate and Bylaws...............................................2
2.2 Authorization...................................................................................2
2.3 Validity of Shares..............................................................................2
2.4 Offering........................................................................................2
2.5 No Conflict; No Violation.......................................................................2
2.6 Consents and Approvals..........................................................................3
3. REPRESENTATIONS AND WARRANTIES OF ROBERTS................................................................3
3.1 Legal Power.....................................................................................3
3.2 Due Execution...................................................................................3
3.3 Investment Representations......................................................................3
4. LIMITATIONS ON TRANSFER..................................................................................4
5. REGISTRATION OF SHARES...................................................................................5
5.1 Registration....................................................................................5
5.2 Delay of Registration; Furnishing Information...................................................5
6. CONDITIONS TO CLOSING....................................................................................5
6.1 Conditions to Obligations of Roberts............................................................5
(a) Representations and Warranties True; Performance of Obligations........................5
(b) Qualifications, Legal Investment.......................................................6
(c) Registration Rights Agreement..........................................................6
6.2 Conditions to Obligations of the Company........................................................6
(a) Representations and Warranties True....................................................6
(b) Performance of Obligations.............................................................6
(c) Qualifications, Legal Investment.......................................................6
7. MISCELLANEOUS............................................................................................6
</TABLE>
i.
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
7.1 Governing Law...................................................................................6
7.2 Successors and Assigns..........................................................................7
7.3 Entire Agreement................................................................................7
7.4 Severability....................................................................................7
7.5 Amendment and Waiver............................................................................7
7.6 Delays or Omissions.............................................................................7
7.7 Notices.........................................................................................8
7.8 Titles and Subtitles............................................................................8
7.9 Counterparts....................................................................................8
</TABLE>
EXHIBITS
Exhibit A -- Schedule of Exceptions
Exhibit B -- Permitted Pledgee
Exhibit C -- Registration Rights Agreement
ii.
<PAGE> 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of July 6, 1998 (the "Effective Date"), by and between RIBOGENE, INC., a
Delaware corporation (the "Company"), and ROBERTS PHARMACEUTICAL CORPORATION, a
New Jersey corporation ("Roberts").
1. PURCHASE AND SALE.
Subject to the terms and conditions hereof, and in reliance upon
the representations, warranties and agreements contained herein, the Company
hereby agrees to issue and sell to Roberts, and Roberts hereby agrees to
purchase from the Company, the aggregate number of shares of the Company's
Series A Convertible Non-voting Preferred Stock (the "Series A Preferred")
determined in accordance with Subsection 1.1 hereof.
1.1 SALE OF SHARES. The Company shall issue and sell to Roberts,
and Roberts shall purchase for cash from the Company one million four hundred
twenty-eight thousand five hundred seventy-two (1,428,572) shares of the
Company's Series A Preferred (the "Shares") for an aggregate purchase price of
ten million four dollars ($10,000,004). Shares of the Company's Common Stock
issuable upon conversion of the Shares shall hereinafter be referred to as the
"Conversion Shares."
1.2 CLOSING DATE. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m.,
local time, on July 16, 1998, at the offices of Cooley Godward LLP, Five Palo
Alto Square, 3000 El Camino Real, Palo Alto, California 94306, or at such other
time or place as the Company and Roberts may mutually agree (such date is
hereinafter referred to as the "Closing Date").
1.3 DELIVERY. At the Closing, the Company will deliver to Roberts
a certificate registered in the name of Roberts, representing the Shares to be
purchased by Roberts from the Company, dated the Closing Date, against payment
of the Purchase Price by wire transfer, a check made payable to the order of the
Company, or any combination thereof.
1.4 STANDSTILL COVENANT. Other than the Shares which it will
purchase pursuant to Section 1.1 of this Agreement, Roberts hereby covenants and
agrees that neither Roberts nor any of its affiliates (including parents,
subsidiaries or other related entities) will, without the prior written consent
of the Company (i) purchase or otherwise acquire, directly or indirectly, any
equity securities or assets of the Company (or rights or options to purchase
such securities), or (ii) make any tender or exchange offer, merger, business
combination, recapitalization or other extraordinary transaction involving the
Company, or (iii) enter into any agreement with any other person with respect to
the foregoing, or assist any other person to do any of the foregoing. This
provision shall terminate and be of no further force or effect five (5) years
from the Effective Date or such earlier date as shall be agreed to by the
Company.
1.
<PAGE> 5
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as otherwise set forth on the Schedule of Exceptions
attached hereto as Exhibit A, which shall contain Section numbers specifically
corresponding to the Section numbers in this Agreement, the Company hereby
represents and warrants to Roberts as follows:
2.1 ORGANIZATION AND STANDING; CERTIFICATE AND BYLAWS. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has full power and authority to own
and operate its properties and assets and to carry on its business as presently
conducted and as proposed to be conducted. The Company is qualified as a foreign
corporation to do business in each jurisdiction in the United States in which
the ownership of its property or the conduct of its business requires such
qualification, except where any statutory fines or penalties or any corporate
disability imposed for the failure to qualify would not materially adversely
affect the Company, its assets, financial condition or operations. True and
correct copies of the Company's Amended and Restated Certificate of
Incorporation and Bylaws currently in effect have been delivered to Roberts.
2.2 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
of the Company's obligations hereunder, and for the authorization, issuance,
sale and delivery of the Shares has been taken or will be taken prior to
Closing. This Agreement, when executed and delivered, shall constitute a valid
and legally binding obligation of the Company in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors, and subject to general equity principles.
2.3 VALIDITY OF SHARES. The sale of the Shares is not subject to
any preemptive rights or rights of first refusal that have not been waived and,
when issued, sold and delivered in compliance with the provisions of this
Agreement, the Shares will be validly issued, fully paid and non-assessable, and
will be free of any liens or encumbrances created by the Company; provided,
however, that the Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed.
2.4 OFFERING. Assuming the accuracy of the representations and
warranties of Roberts contained in Section 3 hereof, the offer, issue, and sale
of Shares are exempt from the registration and prospectus delivery requirements
of the Securities Act, and the Shares have been registered or qualified (or are
exempt from registration and qualification) under the registration, permit, or
qualification requirements of all applicable state securities laws.
2.5 NO CONFLICT; NO VIOLATION. The execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby will not (a) conflict with any provisions of the Amended and Restated
Certificate of Incorporation or Bylaws of the Company; (b) result in any
material violation or default of, or permit the acceleration of any obligation
under (in each case, upon the giving of notice, the passage of time, or both),
any material mortgage, indenture, lease, agreement or other instrument, permit,
franchise, license,
2.
<PAGE> 6
judgment, order, decree, law, ordinance, rule or regulation applicable to the
Company or its properties.
2.6 CONSENTS AND APPROVALS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and federal securities commissions after the Closing, which notices will be
filed on a timely basis.
3. REPRESENTATIONS AND WARRANTIES OF ROBERTS.
Roberts hereby represents and warrants to the Company as follows:
3.1 LEGAL POWER. It has the requisite legal power to enter into
this Agreement, to purchase the Shares hereunder, and to carry out and perform
its obligations under the terms of this Agreement.
3.2 DUE EXECUTION. This Agreement has been duly authorized,
executed and delivered by it, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of it.
3.3 INVESTMENT REPRESENTATIONS.
(a) Roberts is acquiring the Shares and Conversion Shares
for its own account, not as nominee or agent, for investment and not with a view
to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act.
(b) Roberts understands (i) that neither the Shares nor the
Conversion Shares have been registered under the Securities Act, by reason of a
specific exemption therefrom, that they must be held by it indefinitely, and
that it must, therefore, bear the economic risk of such investment indefinitely,
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration; (ii) each certificate representing the
Shares and Conversion Shares will be endorsed with the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
(A) PURSUANT TO SEC RULE 144 OR (B) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR (C) RIBOGENE,
INC. RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO RIBOGENE, INC., STATING THAT SUCH SALE,
OFFER FOR SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
3.
<PAGE> 7
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
THE 1933 ACT."
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares or Conversion Shares unless the conditions
specified in the foregoing legend are satisfied. Roberts shall have the right to
demand removal of the foregoing legend with respect to any or all of the Shares
and Conversion Shares if, in the opinion of counsel to the Company, removal of
such legend is permitted by the rules and regulations of the SEC.
(c) It has been furnished with such materials and has been
given access to such information relating to the Company as it or its qualified
representative has requested and it has been afforded the opportunity to ask
questions regarding the Company and the Shares, all as it has found necessary to
make an informed investment decision.
(d) It is an "accredited investor" within the meaning of
Regulation D under the 1933 Act.
(e) It was not formed for the specific purpose of acquiring
the Shares or Conversion Shares offered hereunder.
4. LIMITATIONS ON TRANSFER.
(a) Roberts hereby covenants and agrees that it will not,
without the prior written consent of the Company, contract to sell, sell or
otherwise transfer, loan, pledge or grant any rights, except a bona fide pledge
to the company listed in Exhibit B, with respect to any Shares or any Conversion
Shares acquired pursuant to this Agreement (or purchase or sell any derivative
security that has a similar effect or enter into any contract that has a similar
effect) during a period of twelve (12) months from the Effective Date; provided,
however, that Roberts shall be permitted to tender and transfer any such shares
(a) to a subsidiary of Roberts controlled by Roberts, on the condition that any
such subsidiary shall agree in writing to be bound by the terms of this
Agreement, (b) to a tender offeror in connection with a tender offer by any
person or entity to acquire thirty-three percent (33%) or more of the Company's
outstanding voting equity securities.
(b) Except as provided in Paragraph 4.4(a) above, Roberts
shall not transfer any Shares or Conversion Shares purchased pursuant to this
Agreement, whether or not for consideration, to a third party, without complying
with the provisions of this Paragraph 4.4(b). The right of first refusal herein
shall not be assignable by the Company except to any legal entity which directly
or indirectly, within the meaning of the Securities Act, is controlled by or
controls the Company.
(i) In the event Roberts desires to transfer any Shares
or Conversion Shares then held by it, Roberts shall give written notice to the
Secretary of the Company of such intent to transfer (the "Transfer Notice"). The
Transfer Notice must name the proposed transferee (if a private transaction),
the number of such shares involved in the proposed transfer, the proposed
purchase price per share (if a private transaction), and any other terms and
conditions of the proposed transfer. Within five (5) business days after
delivery of the Transfer Notice, the Company shall have the right to elect to
purchase all or a part representing at least
4.
<PAGE> 8
thirty-three percent (33%) of the Shares or Conversion Shares proposed to be
transferred (the "Option Shares") on substantially the same terms and conditions
specified in the Transfer Notice, by delivery to Roberts of a written notice
stating the number of Option Shares the Company elects to purchase.
(ii) In the event that the Company fails to exercise
the right of first refusal as to all Option Shares within the period specified
above, Roberts shall have one hundred twenty (120) days thereafter to sell the
Option Shares at a price and upon terms no more favorable to the purchase
thereof than specified in the Transfer Notice. In the event that Roberts has not
sold such shares within such one hundred twenty (120) day period, Roberts shall
not thereafter sell any of such shares without first offering such shares to the
Company in the manner provided above.
(iii) In the event of a consolidation or merger of
Roberts with or into any other corporation or other entity or person or any
other corporate reorganization, in which the stockholders of Roberts immediately
prior to such consolidation, merger or reorganization, own less than fifty
percent (50%) of Roberts' voting power immediately after such consolidation,
merger or reorganization, or any transaction or series of related transactions
in which in excess of fifty percent (50%) of Roberts' voting power is
transferred, the Company shall have the right to purchase all or a part
representing at least thirty-three percent (33%) of the shares of the Company
then held by Roberts, by delivery to Roberts of a written notice stating the
number of shares the Company elects to purchase.
5. REGISTRATION OF SHARES.
5.1 REGISTRATION. The registration rights concerning the Shares
purchased by Roberts shall be governed by the registration rights agreement set
forth in Exhibit C.
5.2 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) Roberts shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such Registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 5.
(b) It shall be a condition precedent to the obligations of
Company to take any action pursuant to this Section 5 that Roberts shall furnish
to Company such information regarding themselves, the Shares and Conversion
Shares held by them and the intended method of disposition of such shares as
shall be required to effect the registration of the Conversion Shares.
6. CONDITIONS TO CLOSING.
6.1 CONDITIONS TO OBLIGATIONS OF ROBERTS. Roberts's obligation to
purchase the Shares at the Closing is subject to the fulfillment, at or prior to
the Closing, of all of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 2
hereof shall
5.
<PAGE> 9
be true and correct in all material respects on the Effective Date, and the
Company shall have performed all obligations and conditions herein required to
be performed by it on or prior to the Closing.
(b) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing. No stop
order or other order enjoining the sale of the Shares shall have been issued and
no proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the SEC or any commissioner of corporations or similar
officer of any other state having jurisdiction over this transaction. At the
time of the Closing, the sale and issuance of the Shares shall be legally
permitted by all laws and regulations to which Roberts and the Company are
subject.
(c) REGISTRATION RIGHTS AGREEMENT. The execution of a
Registration Rights Agreement by RiboGene in the form attached hereto as Exhibit
C.
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
fulfillment to the Company's satisfaction, on or prior to the Closing, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by Roberts in Section 3 hereof shall be true and correct at
the Effective Date.
(b) PERFORMANCE OF OBLIGATIONS. Roberts shall have performed
and complied with all agreements and conditions herein required to be performed
or complied with by it on or before the Closing.
(c) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing. No stop
order or other order enjoining the sale of the Shares shall have been issued and
no proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the SEC or any commissioner of corporations or similar
officer of any state having jurisdiction over this transaction. At the time of
the Closing, the sale and issuance of the Shares shall be legally permitted by
all laws and regulations to which Roberts and the Company are subject.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement will be governed by and
interpreted in accordance with the laws of the State of California, applicable
to contracts executed and performed wholly within the State of California. Any
claim or controversy arising out of or related to this Agreement or any breach
hereof shall be submitted to a court of applicable jurisdiction in the State of
California, and each party hereby consents to the jurisdiction and venue of such
court.
6.
<PAGE> 10
7.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, neither party may assign or transfer this Agreement or any
rights or obligations hereunder without the prior written consent of the other;
provided however, that the Company may assign its rights and obligations under
this Agreement to the surviving entity in the event of a merger or other
reorganization in which the Company is not the surviving entity or to the
purchaser of all or substantially all of the Company's assets. Except as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto.
7.3 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects
hereof, and no party shall be liable or bound to any other party in any manner
by any representations, warranties, covenants, or agreements except as
specifically set forth herein or therein. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
7.4 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal, or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
7.5 AMENDMENT AND WAIVER.
(a) Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), with the written consent of the
Company and Roberts. Any amendment or waiver effected in accordance with this
Section shall be binding upon Roberts, each future holder of the Shares, and the
Company.
(b) None of the conditions or provisions of this agreement
shall be held to have been waived by any act or knowledge on the part of either
party, except by an instrument in writing signed by a duly authorized officer or
representative of the parties. Further, the waiver by either party of any right
hereunder or the failure to enforce at any time any of the provisions of this
Agreement, or any rights with respect thereto, shall not be deemed to be a
waiver of any rights hereunder or any breach or failure of performance of the
other party.
7.6 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power, or remedy accruing to Roberts or any subsequent holder of any
Shares upon any breach, default or noncompliance of the Company under this
Agreement, shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent, or
approval of any kind or character on Robert's part of any breach, default or
noncompliance under this Agreement or any
7.
<PAGE> 11
waiver on Robert's part of any provisions or conditions of this Agreement must
be in writing and shall be effective only to the extent specifically set forth
in such writing, and that all remedies, either under this Agreement, by law, or
otherwise afforded to Roberts, shall be cumulative and not alternative.
7.7 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be delivered as follows with the notice deemed
given as indicated: (i) by personal delivery when delivered personally; (ii) by
overnight courier upon written verification of receipt; (iii) by telecopy or
facsimile transmission upon acknowledgment of receipt of electronic
transmission; (iv) by certified or registered mail, return receipt requested,
upon verification of receipt. Notice shall be sent to the addresses set forth
above or such other address as either party may specify in writing. If to the
Company, to:
RiboGene, Inc.
26118 Research Road
Hayward, CA 94545
Attention: President and Chief Executive
Officer
with a copy to:
Cooley Godward LLP
5 Palo Alto Square, 4th Floor
3000 El Camino Real
Palo Alto, CA 94306-2155
Facsimile: (650) 857-0663
Attention: Robert J. Brigham, Esq.
(a) if to Roberts, to:
Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, New Jersey 07724
Fax: (732) 389 1014
Attention: A. A. Rascio, VP and General
Counsel
Notwithstanding the foregoing, all notices and other communications to
an address outside of the United States shall be sent by telecopy and confirmed
in writing to be sent by first class mail.
7.8 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
8.
<PAGE> 12
The foregoing Agreement is hereby executed as of the date first above
written.
RIBOGENE, INC. ROBERTS PHARMACEUTICAL CORPORATION
By:_______________________________ By:_________________________________
Printed Name:_____________________ Printed Name:_______________________
Title:____________________________ Title:______________________________
Signature Page of Stock Purchase Agreement
9.
<PAGE> 13
EXHIBIT A
SCHEDULE OF EXCEPTIONS
None.
<PAGE> 14
EXHIBIT B
PERMITTED PLEDGEE
2.
<PAGE> 15
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
3.
<PAGE> 1
EXHIBIT 10.42
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 16, 1998 by and among RIBOGENE, INC., a Delaware
corporation (the "Company"), and ROBERTS PHARMACEUTICAL CORPORATION, a New
Jersey corporation ("Roberts").
RECITALS
WHEREAS, Roberts is a party to that certain Series A Preferred Stock
Purchase Agreement, dated July 6, 1998, by and among the Company and Roberts
(the "Purchase Agreement"), pursuant to which certain of the Company's and
Roberts's obligations are conditioned upon the execution and delivery by Roberts
and the Company of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1.1 DEFINITIONS. As used in this Agreement the following terms
shall have the following respective meanings:
"Conversion Shares" means all of the shares of Common Stock of the
Company resulting from conversion of the Shares and any shares of Common Stock
issued in respect of the Shares upon any stock split, stock dividend,
recapitalization or similar event.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, as defined below, and the declaration or ordering of
effectiveness of such registration statement or document.
"Registration Expenses" means all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of a single special
counsel for Roberts for a due diligence examination of the Company, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of the Conversion Shares.
"SEC" or "Commission" means the Securities and Exchange Commission.
1.
<PAGE> 2
"Shares" means all of the Company's Series A Preferred Stock issued
pursuant to the Purchase Agreement.
2. Restrictions on Transfer; Registration.
2.1 Restrictions on Transfer.
(a) Roberts agrees not to make any disposition of all or any
portion of the Shares or Conversion Shares unless and until the transferee has
agreed in writing for the benefit of the Company to be bound by this Section
2.1, provided and to the extent such Section is then applicable and:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (A) Roberts shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (B) if
reasonably requested by the Company, Roberts shall have furnished the Company
with an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Securities
Act. It is agreed that the Company will not require opinions of counsel for
transactions made pursuant to Rule 144.
(b) Each certificate representing Shares or Conversion
Shares shall (unless otherwise permitted by the provisions of the Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED OR ASSIGNED UNLESS (A) PURSUANT TO
SEC RULE 144 OR (B) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE 1933 ACT COVERING SUCH SECURITIES OR (C) RIBOGENE, INC. RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO RIBOGENE, INC., STATING THAT SUCH SALE, OFFER FOR SALE,
TRANSFER OR ASSIGNMENT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE 1933 ACT."
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed
2.
<PAGE> 3
upon receipt by the Company of an order of the appropriate blue sky authority
authorizing such removal.
2.2 Requested Registration.
(a) REQUEST FOR REGISTRATION. On or after the date one year
from the date hereof (the "First Anniversary") and subject to and in compliance
with the provisions of this Section 2.2 and Section 4, Roberts may request
registration of up to twenty percent (20%) of the Conversion Shares in any
twelve (12) month period. In case the Company shall receive from Roberts a
written request that the Company effect any registration with respect to a
permissible portion of the Conversion Shares, the Company will use its
commercially reasonable best efforts to effect such registration (including,
without limitation, preparation of a registration statement and prospectus
complying as to form with the requirements of the Securities Act, the execution
of an undertaking to file post-effective amendments, appropriate qualifications
under the applicable blue sky or other state securities laws and appropriate
compliance with exemptive regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and distribution of such Conversion Shares
as is specified in such request; provided, that the Company shall not be
obligated to take any action to effect such registration pursuant to this
Section 2.2:
(1) If the Company has already registered 20% of the
Conversion Shares, in the aggregate, under this Section and Section 2.4 hereof
within 12 months prior to the Roberts request; or
(2) If the Company has effected six (6) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective; or
(3) If the Company qualifies at that time to register
the securities requested to be registered pursuant to a registration described
in Section 2.4 hereof; or
(4) If the underwriter of a firm commitment
underwritten public offering so requests, for a period of ninety (90) days
following the effective date of any registration statement covering such
offering.
Subject to the foregoing clauses (1) through (4), the Company shall file a
registration statement covering the Conversion Shares so requested to be
registered as soon as practical, but in any event within 60 days after receipt
of the request or requests of Roberts; provided, however, that if within 30 days
after receipt of such request or requests the Company shall furnish to Roberts a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors it would be
seriously detrimental to the Company for the reasons stated in such certificate
for such registration statement to be filed at the date filing would be required
and it is therefore essential to defer the filing of such registration
statement, the Company shall be entitled to delay the filing of such
registration statement not more than once in any twelve month period for a
period of up to 120 days after receipt of such request or requests.
(b) UNDERWRITING. If Roberts intends to distribute the
Conversion Shares covered by its request by means of an underwriting, it shall
so advise the Company as a
3.
<PAGE> 4
part of its request made pursuant to Section 2.2. The Company shall enter into
an underwriting agreement in customary form and consistent with the terms hereof
with the underwriter or underwriters selected for such underwriting by the
Company, provided, however, that the managing underwriter shall be approved by
Roberts, which approval shall not be unreasonably withheld. Notwithstanding any
other provision of this Section 2.2, if the underwriter advises Roberts in
writing that marketing factors require a limitation of the number of Conversion
Shares to be underwritten, the Company shall so advise Roberts, and the number
of shares that may be included in the underwriting may be reduced. Any
Conversion Shares which are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from such underwriting shall be
withdrawn from such registration.
2.3 Company Registration.
(a) RIGHT TO INCLUDE. Subject to and in compliance with the
provisions of this Section 2.3 and Section 4, if at any time or from time to
time following the First Anniversary, the Company proposes to register any of
its securities, for its own account or the account of any of its stockholders
other than Roberts (other than a registration relating solely to employee
benefit plans or with respect to corporate reorganizations or other transactions
under Rule 145 of the Securities Act), the Company will:
(i) promptly give to Roberts written notice thereof;
and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance with applicable laws), and
in any underwriting involved therein, all the Conversion Shares specified in a
written request or requests by Roberts, made within 20 days after receipt of
such written notice from the Company; provided, however, that the Company shall
not be required to register more than 20% of the Conversion Shares in any
consecutive twelve (12) month period.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise Roberts as a part of the written notice given pursuant
to subsection 2.3(a)(i). In such event the right of Roberts to registration
pursuant to Section 2.3 shall be conditioned upon Roberts's participation in
such underwriting and the inclusion of Roberts's Conversion Shares in the
underwriting to the extent provided herein. Roberts shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form and
consistent with the terms hereof with the underwriter or underwriters selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 2.3, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
the number of Conversion Shares to be included in the registration and
underwriting. In the event of a cutback by the underwriters of the number of
shares to be included in the registration and underwriting, the Company shall so
advise Roberts, and the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second to Roberts
(subject to Section 4 herein); and third, to any stockholder of the Company
(other than Roberts) on a pro rata basis. If Roberts disapproves of the terms of
any such underwriting, it may elect to withdraw therefrom
4.
<PAGE> 5
by written notice to the Company and the underwriter. Any Conversion Shares
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
2.4 FORM S-3. After the Company has qualified for the use of Form
S-3, Roberts shall have the right to request an unlimited number of
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Conversion Shares to be disposed of and the intended method
of disposition of Conversion Shares), subject to the provisions of Section 4 and
the following:
(a) The Company shall not be required to effect a
registration pursuant to this Section 2.4 within 120 days of the effective date
of any registration referred to in Section 2.2 or 2.3 above.
(b) The Company shall not be required to register greater
than 20% of the Conversion Shares in any consecutive 12 month period.
(c) The Company shall not be required to effect a
registration pursuant to this Section 2.4 if Form S-3 (or any successor or
similar form) is not available for such offering by Roberts.
(d) The Company shall not be required to effect more than
two (2) registrations on Form S-3 for Roberts pursuant to this Section 2.4
within any consecutive twelve (12) month period.
The Company will use its best efforts to effect promptly the registration of
Conversion Shares on Form S-3 to the extent requested by Roberts for purposes of
disposition; provided, however, that if within 30 days after receipt of such
request or requests the Company shall furnish to Roberts a certificate signed by
the President or Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company for the reasons stated in such certificate for such registration
statement to be filed at the date filing would be required and it is therefore
essential to defer the filing of such registration statement, the Company shall
be entitled to delay the filing of such registration statement not more than
once in any twelve-month period for a period of up to 120 days after receipt of
such request or requests. Any registration pursuant to this Section 2.4 shall
not be counted as a registration pursuant to Section 2.2.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided
herein, all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or 2.4 herein shall be borne by the Company. All Selling Expenses
incurred in connection with any registrations hereunder, shall be borne by the
holders of the securities so registered pro rata on the basis of the number of
shares so registered. The Company shall not, however, be required to pay for
expenses of any registration proceeding begun pursuant to Section 2.2. or 2.4,
the request of which has been subsequently withdrawn by Roberts unless (a) the
withdrawal is based upon material adverse information concerning the Company of
which Roberts was not aware at the time of such request or (b) Roberts agrees to
forfeit its right to one requested registration pursuant to Section 2.2. If the
Company is required to pay the Registration Expenses of a withdrawn offering
pursuant to
5.
<PAGE> 6
clause (a) above, then Roberts shall not forfeit its rights pursuant to Section
2.2 to a demand registration.
2.6 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep Roberts advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense the Company will:
(a) Keep such registration, qualification or compliance
pursuant to Sections 2.2, 2.3 or 2.4 effective for a period of 120 days or until
Roberts has completed the distribution described in the registration statement
relating thereto, whichever first occurs;
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish to Roberts such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as it may
reasonably request in order to facilitate the disposition of the Conversion
Shares;
(d) Notify Roberts at any time when a prospectus relating
thereto is required to be delivered under the Securities Act or the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and, in any such case, prepare and furnish to Roberts a
reasonable number of copies of a supplement to or amendment of such prospectus
as may be necessary so that, as thereafter delivered to purchasers of such
Conversion Shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(e) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such United States jurisdictions as shall be reasonably
requested by Roberts; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act;
(f) Cause all such Conversion Shares registered under this
Section 2 to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
6.
<PAGE> 7
(g) Provide a transfer agent and registrar for all
Conversion Shares and a CUSIP number for all such Conversion Shares, in each
case not later than the effective date of such registration; and
(h) Furnish, at the request of Roberts, on the date that
such Conversion Shares are delivered to the underwriters for sale in connection
with such registration, if such securities are being sold through underwriters
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Roberts, and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
Roberts.
2.7 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless Roberts and
its officers and directors, with respect to which such registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter of the
Conversion Shares, against all claims, losses, expenses (including, without
limitation, reasonable legal fees and expenses), damages and liabilities (or
actions in respect thereto) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any preliminary or
final prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation or
alleged violation by the Company relating to action or inaction required of the
Company in connection with any role or regulation promulgated under the
Securities Act or any state securities law applicable to the Company and will
reimburse Roberts and its officers and directors, and each such underwriter and
each person who controls any such underwriter, for any reasonable legal and any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company in an
instrument duly executed by Roberts or underwriter specifically for use therein,
and provided further that the agreement of the Company to indemnify any
underwriter and any person who controls such underwriter contained herein with
respect to any such preliminary prospectus shall not inure to the benefit of any
underwriter, from whom the person asserting any such claim, loss, damage,
liability or action purchased the stock which is the subject thereof, if at or
prior to the written confirmation of the sale of such stock, a copy of the
prospectus (or the prospectus as amended or supplemented) was not sent or
delivered to such person, excluding the documents incorporated therein by
reference, and the untrue statement or omission of a material fact contained in
such preliminary prospectus was corrected in the prospectus (or the prospectus
as amended or supplemented).
7.
<PAGE> 8
(b) Roberts will indemnify and hold harmless the Company and
its officers and directors, each underwriter, if any of the Company's securities
covered by such a registration statement, each person who controls the Company
within the meaning of the Securities Act, and each other such stockholder
included in such Registration Statement and each of its respective officers,
directors and partners and each person controlling each such other stockholder,
against all claims, losses, expenses (including, without limitation, reasonable
legal fees and expenses), damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any preliminary or final prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, such
other stockholders, such directors, officers, partners, persons or underwriters
for any reasonable legal or any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company in an instrument duly executed by Roberts specifically for use
therein, and provided further that the agreement of Roberts to indemnify any
underwriter and any person who controls such underwriter contained herein with
respect to any such preliminary prospectus shall not inure to the benefit of any
underwriter, from whom the person asserting any such claim, loss, damage,
liability or action purchased the stock which is the subject thereof, if at or
prior to the written confirmation of the sale of such stock, a copy of the
prospectus (or the prospectus as amended or supplemented) was not sent or
delivered to such person, excluding the documents incorporated therein by
reference, and the untrue statement or omission of a material fact contained in
such preliminary prospectus was corrected in the prospectus (or the prospectus
as amended or supplemented). Notwithstanding the foregoing, in no event shall
the indemnification provided by Roberts hereunder exceed the net proceeds
received by Roberts for the sale of Conversion Shares pursuant to such
registration.
(c) Each party entitled to indemnification under this
Section 2.7 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought. The Indemnified Party shall promptly permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably be withheld). The Indemnified Party may
participate in such defense and hire counsel at such party's own expense. The
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations hereunder, unless such failure
is materially prejudicial to an Indemnifying Party's ability to defend such
action. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such In Indemnified
Party of a release from all liability in respect to such claim or litigation.
Any
8.
<PAGE> 9
Indemnified Party shall cooperate with the Indemnifying Party in the defense
of any claim or litigation brought against such Indemnified Party.
2.8 LOCK-UP PROVISION. Upon receipt of a written request by the
Company or by its underwriters, Roberts shall enter into an agreement with the
Company to not sell, sell short, grant an option to buy, or otherwise dispose of
shares of the Company's Common Stock or other securities of the Company (except
for any such shares included in the registration) for a period of 180 days
following the effective date of a registration statement of the Company filed
under the Securities Act; provided, that all executive officers and directors of
the Company enter into similar agreements. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of said 180-day period.
2.9 RULE 144 REPORTING. With a view of making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of the Conversion Shares to the public without registration, the Company
agrees to:
(a) Make and keep public information available as those
terms are understood and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject to
such reporting requirements; and
(c) So long as Roberts owns any Conversion Shares, furnish
to Roberts forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
as Roberts may reasonably request in availing itself of any rule or regulation
of the Commission allowing Roberts to sell any Conversion Shares without
registration.
2.10 INFORMATION BY ROBERTS. Roberts shall promptly furnish to
the Company such information regarding Roberts and the distribution proposed by
Roberts as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to
herein.
2.11 TERMINATION. The rights of Roberts under Section 2 of this
Agreement shall terminate on the earlier to occur of (a) the fifth anniversary
of the date hereof, or (b) the date on which Roberts can sell all of its Shares
or Conversion Shares, without registration pursuant to Rule 144 within a three
month period.
3. ASSIGNMENT OF RIGHTS.
The rights granted pursuant to this Agreement may be assigned to a
transferee or assignee of Securities which acquires at least 100,000 Shares (as
adjusted for stock splits, stock dividends and combinations; provided, however,
that such rights may not be assigned to a transferee which the Company
reasonably believes is a competitor or intends to become a competitor of the
Company (but in no event shall any bank, insurance company or other
institutional investor be or be deemed to be a competitor of the Company for
purposes hereof) and provided further that the
9.
<PAGE> 10
Company is given prompt notice of such transfer and any such transferee shall
agree to become subject to the obligations of Roberts under this Agreement. Each
such transferee, provided that it complies with the conditions set forth herein,
shall be entitled to all the rights of Roberts under this Agreement.
4. REGISTRATION RIGHTS OF PRIOR SHAREHOLDERS.
Roberts acknowledges that it has received the agreements listed
in Exhibit A between the Company and certain shareholders regarding the grant of
registration rights ("Prior Rights") to such shareholders. Roberts further
acknowledges that the rights granted to it under this Agreement are subject to
the Prior Rights, including, without limitation:
(a) That Roberts' rights under Section 2.3 do not apply in
connection with a registration pursuant to that certain Investor Rights
Agreement by and among the Company, Paramount Capital, Inc. and the security
holders identified therein, dated June 23, 1997, as amended;
(b) That Roberts' rights under Section 2.3 may be restricted
by limitations imposed on the number of Conversion Shares registered in
connection with a registration pursuant to that certain Tenth Amended and
Restated Rights Agreement by and among the Company and the security holders
identified therein, dated February 25, 1997 (the "Tenth Amended and Restated
Rights Agreement"); and
(c) That pursuant to the Tenth Amended and Restated Rights
Agreement, certain parties thereto have the right to elect the registration
rights offered to Roberts hereunder.
5. MISCELLANEOUS.
5.1 AMENDMENT OR WAIVER. Any term of this Agreement may be
amended and the observance of any such term may be waived (either generally or
in a particular instance and either retroactively or prospectively) with the
written consent of the Company and Roberts; provided, however, that this
Agreement may be amended with only the written consent of the Company to include
additional parties as provided in Section 4(c) above.
5.2 GOVERNING LAW. This Agreement, including the validity hereof
and the rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents, thereunder, shall be construed
in accordance with and governed by the domestic substantive laws of the State of
California without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
5.3 ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with respect to the
subject hereof and it supersedes, merges, and renders void any and all prior
understandings and/or agreements, written or oral, with respect to such subject
matter.
10.
<PAGE> 11
5.4 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be delivered as follows with the notice deemed
given as indicated: (i) by personal delivery when delivered personally; (ii) by
overnight courier upon written verification of receipt; (iii) by telecopy or
facsimile transmission upon acknowledgment of receipt of electronic
transmission; (iv) by certified or registered mail, return receipt requested,
upon verification of receipt. Notice shall be sent to the addresses set forth
above or such other address as either party may specify in writing.
If to the Company, to:
RiboGene, Inc.
26118 Research Road
Hayward, CA 94545
Attention: President and Chief Executive
Officer
with a copy to:
Cooley Godward LLP
5 Palo Alto Square, 4th Floor
3000 El Camino Real
Palo Alto, CA 94306-2155
Facsimile: (650) 857-0663
Attention: Robert J. Brigham, Esq.
if to Roberts, to:
Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, New Jersey 07724
Fax: (732) 389-1014
Attention: A. A. Rascio, VP and General
Counsel
Notwithstanding the foregoing, all notices and other
communications to an address outside of the United States shall be sent by
telecopy and confirmed in writing to be sent by first class mail.
5.5 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
5.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
11.
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
RIBOGENE, INC.
By:_________________________________
Title: Chairman, President and Chief
Executive Officer
ROBERTS PHARMACEUTICAL CORPORATION
By:_________________________________
Title:______________________________
(Signature Page of Registration Rights Agreement)
12.
<PAGE> 13
EXHIBIT A
PRIOR REGISTRATION RIGHTS AGREEMENTS
Investor Rights Agreement dated February 25, 1997, as amended
Tenth Amended and Restated Rights Agreement dated February 20, 1998
Abbott Registration Rights Agreement dated June 2, 1998
13.
<PAGE> 1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN
THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
EXHIBIT 10.43
AMENDMENT NO. 1 TO LICENSE AGREEMENT
This Amendment ("Amendment") is entered into as of the ____ day of
_________, 1998 (the "Effective Date") by and between RiboGene Inc., a Delaware
corporation ("RiboGene"), and Dainippon Pharmaceutical Co., Ltd.
("Dainippon"), a corporation organized under the laws of Japan.
Recitals
Whereas, Dainippon desires to purchase two hundred thirty thousand
(230,000) shares of RiboGene common stock and RiboGene desires to sell such
common stock to Dainippon at a price of US$.001 per share; and
Whereas, in partial consideration of the sale of shares to Dainippon
the parties desire to amend the License Agreement to reflect an increase in the
royalties payable to RiboGene;
Now, Therefore, in consideration of the foregoing and the covenants and
promises contained herein and in the License Agreement, the parties agree to
amend the License Agreement as follows:
1. Section 5.2(a) of the License Agreement shall be amended to read as follows:
5.2 Royalties.
(a) Royalty Payments. Dainippon shall pay to RiboGene a
royalty on Net Sales as follows:
Royalty Rate in Percent (%) Payable on portion of annual Net Sales
(in US$ millions)
[*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
1.
<PAGE> 2
In Witness Whereof, both Dainippon and RiboGene have executed this Amendment, in
duplicate originals, by their respective officers hereunto duly authorized, as
of the Effective Date.
RiboGene, Inc. Dainippon Pharmaceutical Co., Ltd.
By:_______________________ By:__________________________
Name: Charles J. Casamento Name: Takeshi Tomotake
Title: Chairman, President and Title: President
Chief Executive Officer
2.
<PAGE> 1
EXHIBIT 10.44
COMMON STOCK PURCHASE AGREEMENT
RIBOGENE, INC.
SEPTEMBER _____, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
1. AUTHORIZATION AND SALE OF THE SHARES.....................................................................1
1.1 AUTHORIZATION OF THE SHARES..............................................................................1
1.2 SALE OF SHARES...........................................................................................1
2. CLOSING DATE; DELIVERY...................................................................................1
2.1 CLOSING DATE.............................................................................................1
2.2 DELIVERY.................................................................................................1
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................1
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION; CERTIFICATE AND BYLAWS....................................1
3.2 CAPITALIZATION...........................................................................................2
3.3 AUTHORIZATION............................................................................................2
3.4 VALID ISSUANCE OF SECURITIES.............................................................................2
3.5 OFFERING.................................................................................................2
3.6 NO CONFLICT; NO VIOLATION................................................................................3
3.7 CONSENTS AND APPROVALS...................................................................................3
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER; RESTRICTIONS ON TRANSFER................................3
4.1 LEGAL POWER..............................................................................................3
4.2 DUE EXECUTION............................................................................................3
4.3 INVESTMENT REPRESENTATIONS...............................................................................3
4.4 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS.............................................................4
4.5 STANDSTILL COVENANT......................................................................................4
5. CONDITIONS TO CLOSING....................................................................................5
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING.........................................................5
5.2 CONDITION TO COMPANY'S OBLIGATIONS AT THE CLOSING........................................................5
6. FURTHER AGREEMENTS.......................................................................................6
6.1 NONDISCLOSURE............................................................................................6
6.2 COOPERATION..............................................................................................6
7. MISCELLANEOUS............................................................................................6
7.1 AMENDMENTS...............................................................................................6
</TABLE>
i.
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
7.2 GOVERNING LAW............................................................................................6
7.3 SUCCESSORS AND ASSIGNS...................................................................................7
7.4 ENTIRE AGREEMENT.........................................................................................7
7.5 SEVERABILITY OF THIS AGREEMENT...........................................................................7
7.6 TITLES AND SUBTITLES.....................................................................................7
7.7 DELAYS OR OMISSIONS......................................................................................7
7.8 PAYMENT OF FEES AND EXPENSES.............................................................................7
7.9 NOTICES..................................................................................................8
7.10 COUNTERPARTS.............................................................................................8
</TABLE>
ii.
<PAGE> 4
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of September ____, 1998, between RIBOGENE, INC., a Delaware
corporation (the "Company"), and DAINIPPON PHARMACEUTICAL CO., LTD., a
corporation organized under the laws of Japan (the "Purchaser").
1. AUTHORIZATION AND SALE OF THE SHARES.
1.1 AUTHORIZATION OF THE SHARES. The Company has authorized, or before
the Closing, as defined in paragraph 2.1 hereof, will have authorized, the
issuance and sale of 230,000 shares of its Common Stock (the "Common Stock") at
a purchase price of US$.001 per share. The Common Stock has the rights provided
for in the Company's Amended and Restated Certificate of Incorporation, in the
form attached hereto as Exhibit A (the "Certificate").
1.2 SALE OF SHARES. In consideration for the increased royalty payments
to be made to the Company pursuant to Amendment No. 1, dated September ____,
1998, to the License Agreement between the Company and Purchaser (the
"Amendment"), in substantially the form attached hereto as Exhibit B, and
subject to the terms and conditions hereof, the Company will issue and sell to
the Purchaser, and the Purchaser will purchase from the Company, 230,000 shares
of Common Stock (the "Shares") at a purchase price of US$.001 per share, for an
aggregate purchase price of Two Hundred Thirty U.S. Dollars (US$230.00).
2. CLOSING DATE; DELIVERY.
2.1 CLOSING DATE. The closing for the purchase and sale of the Shares
hereunder will be on September ____, 1998 (the "Closing") at the offices of
Cooley Godward LLP, Five Palo Alto Square, 4th Floor, 3000 El Camino Real, Palo
Alto, California 94306-2155, or at such other time and place as the Company and
the Purchaser shall agree upon (the "Closing Date").
2.2 DELIVERY. At the Closing, the Company will deliver to Purchaser a
certificate registered in the name of Purchaser, representing the Shares to be
purchased by Purchaser from the Company, dated the Closing Date, against payment
of the aggregate purchase price by wire transfer, a check made payable to the
order of the Company, or any combination thereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION; CERTIFICATE AND
BYLAWS. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in the United States in which the
1.
<PAGE> 5
failure so to qualify would have a material adverse effect on its business or
properties. True and correct copies of the Company's Certificate and Bylaws
currently in effect have been delivered to Purchaser.
3.2 CAPITALIZATION. The authorized capital of the Company consists, or
will consist, immediately prior to Closing of:
(a) Preferred Stock.
(i) 5,000,000 shares of Preferred Stock, of which
1,428,572 shares have been designated Series A Non-voting Convertible Preferred
Stock, 1,428,572 of which are issued and outstanding,
(b) Common Stock. 30,000,000 shares of Common Stock, of which
5,364,055 shares are issued and outstanding.
(c) There are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements, orally or in writing,
for the purchase or acquisition from the Company of any shares of its capital
stock, except for: (i) the conversion privileges of the Series A Non-voting
Convertible Preferred Stock; (ii) an aggregate of 1,662,433 shares of Common
Stock reserved for issuance under the Company's stock and equity incentive
plans; (iii) an aggregate of 733,755 shares of Common Stock reserved for
issuance upon the exercise of outstanding placement agent options; and (iv) an
aggregate of 598,963 shares of Common Stock reserved for issuance upon the
exercise of outstanding warrants.
3.3 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of the Agreement, the issuance of the Shares and the performance of
all obligations of the Company hereunder has been taken or will be taken prior
to the Closing, and the Agreement constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms.
3.4 VALID ISSUANCE OF SECURITIES. The sale of the Shares is not subject
to any preemptive rights or rights of first refusal that have not been waived
and, when issued, sold and delivered in compliance with the provisions of this
Agreement, the Shares will be validly issued, fully paid and non-assessable, and
will be free of any liens or encumbrances created by the Company; provided,
however, that the Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed.
3.5 OFFERING. Assuming the accuracy of the representations and
warranties of Purchaser contained in Section 4 hereof, the offer, issue, and
sale of the Shares is exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Act"), and the
Shares have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit, or qualification requirements of
all applicable state securities laws.
2.
<PAGE> 6
3.6 NO CONFLICT; NO VIOLATION. The execution, delivery and performance
of this Agreement and consummation of the transactions contemplated hereby will
not (a) conflict with any provisions of the Certificate or Bylaws of the
Company; (b) result in any material violation or default of, or permit the
acceleration of any obligation under (in each case, upon the giving of notice,
the passage of time, or both), any material mortgage, indenture, lease,
agreement or other instrument, permit, franchise, license, judgment, order,
decree, law, ordinance, rule or regulation applicable to the Company or its
properties.
3.7 CONSENTS AND APPROVALS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and federal securities commissions after the Closing, which notices will be
filed on a timely basis.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER; RESTRICTIONS ON
TRANSFER.
Purchaser hereby represents and warrants to the Company with respect to
the purchase of the Shares provided for herein as follows:
4.1 LEGAL POWER. It has the requisite legal power to enter into this
Agreement, to purchase the Shares hereunder, and to carry out and perform its
obligations under the terms of this Agreement.
4.2 DUE EXECUTION. This Agreement has been duly authorized, executed
and delivered by it, and, upon due execution and delivery by the Company, this
Agreement will be a valid and binding agreement of it.
4.3 INVESTMENT REPRESENTATIONS.
(a) Purchaser is acquiring the Shares for its own account, not
as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Act.
(b) Purchaser understands (i) that the Shares have not been
registered under the Act, by reason of a specific exemption therefrom, that they
must be held by it indefinitely, and that it must, therefore, bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Act or is exempt from such registration; (ii) each
certificate representing the Shares will be endorsed with the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the "1933
ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (A)
3.
<PAGE> 7
PURSUANT TO SEC RULE 144 OR (B) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR (C) RIBOGENE,
INC. RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO RIBOGENE, INC., STATING THAT SUCH SALE,
OFFER FOR SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT."
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied. Purchaser shall have the right to demand removal of the
foregoing legend with respect to any or all of the Shares and if, in the opinion
of counsel to the Company, removal of such legend is permitted by the rules and
regulations of the Securities and Exchange Commission ("SEC").
(c) It has been furnished with such materials and has been
given access to such information relating to the Company as it or its qualified
representative has requested and it has been afforded the opportunity to ask
questions regarding the Company and the Shares, all as it has found necessary to
make an informed investment decision.
(d) It is an "accredited investor" within the meaning of
Regulation D under the Act.
(e) It was not formed for the specific purpose of acquiring
the Shares offered hereunder.
4.4 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend relating
to the Act endorsed on a stock certificate pursuant to paragraph 4.3 of this
Agreement and the stop transfer instructions with respect to the Shares
represented by such certificate shall be removed and the Company shall issue a
certificate without such legend to the holder of such Shares if such Shares are
registered under the Act and a prospectus meeting the requirements of Section 10
of the Act is available or if such holder provides to the Company an opinion of
counsel for such holder of the Shares reasonably satisfactory to the Company, or
a no-action letter or interpretive opinion of the staff of the SEC to the effect
that a public sale, transfer or assignment of such Shares may be made without
registration and without compliance with any restriction such as Rule 144.
4.5 STANDSTILL COVENANT. Other than the Shares which it will purchase
pursuant to Section 1.1 of this Agreement, Purchaser hereby covenants and agrees
that neither Purchaser nor any of its affiliates (including parents,
subsidiaries or other related entities) will, without the prior written consent
of the Company (i) purchase or otherwise acquire, directly or indirectly, any
equity securities or assets of the Company (or rights or options to purchase
such securities), or (ii) make any tender or exchange offer, merger, business
combination, recapitalization or other extraordinary transaction involving the
Company, or (iii) enter into any agreement with any other person with respect to
the foregoing, or assist any other person to do any of the foregoing. This
provision shall terminate and be of no further force or effect five (5) years
from the Closing Date or such earlier date as shall be agreed to by the Company.
4.
<PAGE> 8
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING. The Purchaser's
obligation to purchase the Shares at the Closing is subject to the fulfillment
on or prior to the Closing Date of the following conditions, any of which may be
waived in writing in whole or in part by the Purchaser:
(a) The representations and warranties made by the Company
herein shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on and as
of the same date; and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.
(b) All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful sale and issuance of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing. No stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC or any
commissioner of corporations or similar officer of any other state having
jurisdiction over this transaction. At the time of the Closing, the sale and
issuance of the Shares shall be legally permitted by all laws and regulations to
which Purchaser and the Company are subject.
(c) The Company and the Purchaser shall have executed the
Amendment in substantially the form attached hereto as Exhibit B.
5.2 CONDITION TO COMPANY'S OBLIGATIONS AT THE CLOSING. The Company's
obligation to sell and issue the Shares at the Closing is subject to the
fulfillment to the Company's satisfaction on or prior to the Closing Date of the
following conditions, any of which may be waived in writing in whole or in part
by the Company:
(a) The representations and warranties made by the Purchaser
herein shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on and as
of the same date, and the Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by them on or prior to
the Closing Date.
(b) All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful sale and issuance of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing. No stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC or any
commissioner of corporations or similar officer of any state having jurisdiction
over this transaction. At the time
5.
<PAGE> 9
of the Closing, the sale and issuance of the Shares shall be legally permitted
by all laws and regulations to which the Purchaser and the Company are subject.
(c) The Company and the Purchaser shall have executed the
Amendment in substantially the form attached hereto as Exhibit B.
6. FURTHER AGREEMENTS.
6.1 NONDISCLOSURE. The Purchaser agrees not to use Confidential
Information (as hereinafter defined) of the Company for its own use other than
as permitted by agreement with the Company or for any purpose except to evaluate
its equity investment in the Company. The Purchaser agrees not to disclose such
Confidential Information to any third parties or to any of its employees except
employees who are required to have the Confidential Information to evaluate the
Purchaser's investment in the Company or as permitted under the terms of any
other agreements between the parties. For purposes of this paragraph,
"Confidential Information" means any information disclosed pursuant to this
Agreement, including, but not limited to, information relating to the Company's
research, products, development activities, inventions, marketing, or finances,
disclosed by the Company either directly or indirectly in writing, orally or by
drawings and which the Company has marked "confidential," "proprietary" or
"secret" or has otherwise identified as being such. Confidential Information
does not include information which (i) is in the Purchaser's possession at the
time of disclosure as shown by Purchaser's files and records and not subject to
a confidentiality undertaking under an other agreement; or (ii) before or after
it has been disclosed to the Purchaser, is part of the public knowledge or
literature, not as a result of any action or inaction of the Purchaser; or (iii)
is approved for release by written authorization of Company or (iv) is disclosed
to the Purchaser by a third party not under an obligation of confidentiality to
the Company; or (v) is independently developed by Purchaser.
6.2 COOPERATION. The Company shall cooperate with the Purchaser in
supplying such information as may be reasonably requested by the Purchaser to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption,
presently existing or hereafter adopted, from the Act for the sale of the
Shares.
7. MISCELLANEOUS.
7.1 AMENDMENTS. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), with the written consent of the
Company and Purchaser. Any amendment or waiver effected in accordance with this
Section shall be binding upon Purchaser, each future holder of the Shares, and
the Company.
7.2 GOVERNING LAW. This Agreement will be governed by and interpreted
in accordance with the laws of the State of California, applicable to contracts
executed and performed wholly within the State of California. Any claim or
controversy arising out of or related to this Agreement or any breach hereof
shall be submitted to a court of applicable
6.
<PAGE> 10
jurisdiction in the State of California, and each party hereby consents to the
jurisdiction and venue of such court.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, neither party may assign or transfer this Agreement or any rights or
obligations hereunder without the prior written consent of the other; provided
however, that the Company may assign its rights and obligations under this
Agreement to the surviving entity in the event of a merger or other
reorganization in which the Company is not the surviving entity or to the
purchaser of all or substantially all of the Company's assets. Except as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto.
7.4 ENTIRE AGREEMENT. This Agreement and the other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
7.5 SEVERABILITY OF THIS AGREEMENT. In case any provision of this
Agreement shall be invalid, illegal, or unenforceable, it shall, to the extent
practicable, be modified so as to make it valid, legal and enforceable and to
retain as nearly as practicable the intent of the parties, and the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
7.6 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to the Purchaser, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character by the Purchaser of any breach or default under this
Agreement, or any waiver by the Purchaser of any provisions or conditions of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to the Purchaser, shall be cumulative
and not alternative.
7.8 PAYMENT OF FEES AND EXPENSES. The Company and the Purchaser each
shall bear its own expenses incurred on its behalf with respect to this
Agreement and the transactions contemplated thereby. If any action at law or in
equity is necessary to enforce the terms of this Agreement or the Certificate,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
7.
<PAGE> 11
7.9 NOTICES. Any notice or report required in this Agreement or
permitted to be given shall be given in writing and by personal delivery or by
registered or certified airmail, postage prepaid, return receipt requested, or
by facsimile with confirmation of receipt, and shall be deemed to be given or
made upon personal delivery or when receipt is so confirmed, and addressed (i)
if to the Purchaser, at 6-8 Doshomachi 2-chome, Chuo-ku, Osaka 541-0045, Japan,
or at such other address as such Purchaser shall have furnished to the Company
in writing, or (ii) if to any other holder of any Shares, at such address as
such holder shall have furnished the Company in writing, or, until any such
holder so furnishes an address to the Company, or (iii) if to the Company, one
copy should be sent to the Company at 26118 Research Road, Hayward, California,
94545, United States of America, and addressed to the attention of the Corporate
Secretary, or at such other address as the Company shall have furnished to the
Purchaser.
7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.
<PAGE> 12
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
COMPANY: PURCHASER:
RIBOGENE, INC. DAINIPPON PHARMACEUTICAL CO., LTD.
By:_______________________________ By:_________________________________
Name: Charles J. Casamento Name: Takeshi Tomotake
Title: Chairman, President and Title: President
Chief Executive Officer
9.
<PAGE> 13
EXHIBITS INDEX
Exhibit A Certificate of Incorporation
Exhibit B Amendment No. 1 to the License Agreement
<PAGE> 14
EXHIBIT A
CERTIFICATE OF INCORPORATION
<PAGE> 15
EXHIBIT B
AMENDMENT NO. 1 TO LICENSE AGREEMENT
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 15,880
<SECURITIES> 10,621
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,653
<PP&E> 1,808
<DEPRECIATION> 1,048
<TOTAL-ASSETS> 27,882
<CURRENT-LIABILITIES> 3,174
<BONDS> 0
0
1
<COMMON> 6
<OTHER-SE> 24,105
<TOTAL-LIABILITY-AND-EQUITY> 27,882
<SALES> 0
<TOTAL-REVENUES> 2,483
<CGS> 0
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