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EXHIBIT 4.3
RIBOGENE, INC.
TENTH AMENDED AND RESTATED RIGHTS AGREEMENT
___________, 1998
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TABLE OF CONTENTS
PAGE
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1. TERMINATION OF PRIOR RIGHTS.................................................4
2. AMENDMENT...................................................................4
3. REGISTRATION RIGHTS.........................................................4
3.1 Definitions.......................................................4
3.2 Requested Registration............................................6
3.3 Company Registration..............................................7
3.4 Obligations of the Company........................................7
3.5 Furnish Information...............................................8
3.6 Expenses of Demand Registration...................................8
3.7 Expenses of Company Registration..................................8
3.8 Underwriting Requirements.........................................9
3.9 Delay of Registration.............................................9
3.10 Indemnification...................................................9
3.11 Reports Under Securities Exchange Act of 1934....................11
3.12 Form S-3 Registration............................................12
3.13 Assignment of Registration Rights................................13
3.14 Limitations on Subsequent Registration Rights....................13
3.15 "Market Stand-Off" Agreement.....................................13
3.16 Termination of Registration Rights...............................14
3.17 Limit on Sales...................................................14
3.18 Subsequent Rights................................................14
4. ADDITIONAL RIGHTS..........................................................15
4.1 Right of First Refusal...........................................15
5. MISCELLANEOUS..............................................................17
5.1 Assignment.......................................................17
5.2 Third Parties....................................................17
5.3 Governing Law....................................................17
5.4 Counterparts.....................................................17
5.5 Notices..........................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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5.6 Severability.....................................................18
5.7 Amendment and Waiver.............................................18
5.8 Effect of Amendment or Waiver....................................18
5.9 Rights of Holders................................................18
5.10 Delays or Omissions..............................................18
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RIBOGENE, INC.
TENTH AMENDED AND RESTATED RIGHTS AGREEMENT
THIS TENTH AMENDED AND RESTATED RIGHTS AGREEMENT (THE "RESTATED RIGHTS
AGREEMENT") is entered into as of __________, 1998, by and among RIBOGENE, INC.,
a California corporation (the "COMPANY"), and
Bios Equity Fund L.P.
The Institute of Protein Research of the Academy of Sciences of the USSR,
Sierra Ventures III,
Sierra Ventures III International,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ V
KPCB Zaibatsu Fund I,
Domain Partners II, L.P,
▇▇▇▇▇▇▇ ▇▇▇▇,
Aperture Associates,
CW Ventures II, L.P.,
Biotechnology Investments Limited,
Oxford Bioscience Partners L.P.,
Oxford Bioscience Partners (Bermuda) Limited Partnership,
Oxford Bioscience Partners (Adjunct) L.P.,
Dominion Fund II,
Dominion Ventures, Inc.,
Hyline Laboratories, Inc.,
Silicon Valley Bank,
SBC Capital Markets, Inc. and an individual affiliated therewith,
▇▇▇▇▇▇ Laboratories,
all purchasers of Series C Shares under the Fourth Purchase Agreement, and
Dainippon Pharmaceutical Co., Ltd.
(hereinafter jointly referred to as the "SHAREHOLDERS").
WHEREAS, the Company, the Institute of Protein Research of the Academy of
Sciences of the USSR ("IPR"), Sierra Ventures III ("SIERRA III") and Sierra
Ventures III International ("SIERRA INTERNATIONAL", and collectively with Sierra
III, "SIERRA") are parties to a Preferred Stock and Warrants Purchase Agreement
dated May 23, 1990 (the "FIRST PURCHASE AGREEMENT"), pursuant to which the
Company sold, and IPR and Sierra acquired, shares of the Company's Series A
Preferred Stock (the "SERIES A SHARES") and, in the case of Sierra, warrants to
purchase shares of the Company's capital stock (the "SIERRA WARRANTS");
WHEREAS, the Company, Sierra, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ V ("KPCB
V"), KPCB Zaibatsu Fund I ("KPCB ZAIBATSU," and collectively with KPCB V,
"KPCB") and
1.
5
▇▇▇▇▇▇▇ ▇▇▇▇ are parties to a Series B Preferred Stock Purchase Agreement dated
June 5, 1991 (the "SECOND PURCHASE AGREEMENT"), pursuant to which the Company
sold and KPCB, Sierra and ▇▇▇▇▇▇▇ ▇▇▇▇ acquired, shares of the Company's Series
B Preferred Stock (the "OLD SERIES B SHARES");
WHEREAS, the Company, Sierra, KPCB V, Domain Partners II, L.P,
("DOMAIN") and Aperture Associates ("APERTURE") are parties to a Series B
Preferred Stock and Warrant Purchase Agreement dated February 28, 1992 as
amended on June 29, 1992 (the "THIRD PURCHASE AGREEMENT"), pursuant to which the
Company shares sold or shall sell, and Sierra, KPCB V, Domain and Aperture have
acquired or shall acquire, shares of the Company's Series B Preferred Stock (the
"NEW SERIES B SHARES," and collectively with the Old Series B Shares, the
"SERIES B SHARES") and warrants to purchase up to an aggregate of 3,295,226
shares of the Company's Common Stock, which have since terminated;
WHEREAS, the Company, Sierra, KPCB V, Domain, Aperture, CW Ventures
II, L.P. ("CW"), ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, JMC Family Partnership,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as Joint Tenants with Rights of Survivorship are or
may be parties to a Series C Preferred Stock Purchase Agreement dated March 31,
1993, or Amendment No. 1 thereto dated June 4, 1993 (collectively the "FOURTH
PURCHASE AGREEMENT"), pursuant to which the Company has sold, and Sierra, KPCB,
Domain, Aperture, CW, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, JMC Family
Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
have acquired, shares of the Company's Series C Preferred Stock (the "SERIES C
SHARES") and CW purchased a warrant to purchase shares of the Company's Series D
Preferred Stock, which warrant was subsequently exercised for shares of the
Company's Series D Preferred Stock (the "CW WARRANT SHARES");
WHEREAS, the Company elected a l-for-10 share reverse stock split on
August 2, 1993 pursuant to which all shares of the Company's capital stock were
automatically converted into one-tenth (1/10) of one share such class and series
of stock (all share numbers stated hereafter are stated in post-split numbers).
WHEREAS, the Company, Sierra, KPCB V, Domain, Aperture, CW,
Biotechnology Investments Limited(1) ("BIL"), Oxford Bioscience Partners L.P.,
Oxford Bioscience Partners (Bermuda) Limited Partnership, and Oxford Bioscience
Partners (Adjunct) L.P. (collectively with the previous two Oxford Bioscience
funds, "OXFORD"), and Dominion Fund II ("DOMINION FUND") are parties to a Series
E Preferred Stock Purchase Agreement dated April 26, 1994, as amended June 13,
1994 (the "FIFTH PURCHASE AGREEMENT"), pursuant to which the Company has sold,
and Sierra, KPCB, Domain, Aperture, CW, BIL, Oxford and Dominion Fund have
acquired, shares of the Company's Series E Preferred Stock (the "FIRST SERIES E
SHARES");
WHEREAS, the Company effected a 4-for-3 share stock split of the
outstanding Series E Preferred Stock on November 9, 1995, pursuant to which all
shares of the Company's Series E
--------
(1) Shares purchased by Biotechnology Investments Limited will be held under the
record name of "Old Court Limited."
2.
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Preferred Stock were automatically converted into one and one third shares
(11/3) of such series of stock (all share numbers stated hereafter are stated in
post-split numbers);
WHEREAS, the Company, Sierra, KPCB V, Domain, Aperture, CW, BIL and
Oxford are. parties to a Conversion Agreement of dated November 10, 1995, (the
"CONVERSION AGREEMENT"), pursuant to which the Company has sold, and Sierra,
KPCB V, Domain, Aperture, CW, BIL and Oxford have acquired, shares of the
Company's Series E Preferred Stock (the "SECOND SERIES E SHARES");
WHEREAS, Sierra has acquired an aggregate of 73,500 shares of the
Company's Series B Preferred Stock by exercising in full the Sierra Warrants
(the "SIERRA WARRANT SHARES"), CW has acquired an aggregate of 270,222 shares of
the Company's Series D Preferred Stock by exercising in full the CW Warrant (the
"CW WARRANT SHARES"), and IPR and Sierra have acquired an aggregate of 4,757
shares of the Company's Series A Preferred Stock as a dividend pursuant to
Section 1.1(d) of the First Purchase Agreement (the "DIVIDEND SHARES");
WHEREAS, the Company intends to issue up to an additional 21,546
shares of its Series B Preferred Stock to Dominion Ventures, Inc. ("DOMINION")
upon exercise of a warrant dated August 9, 1991 (as such amount may be adjusted
by the terms of such warrant, the "DOMINION B WARRANT SHARES"), up to an
additional 15,000 shares of its Series C Preferred Stock to Dominion upon
exercise of a warrant dated June 4, 1993 (as such amount may be adjusted by the
terms of such warrant, the "DOMINION C WARRANT Shares"), up to an additional
anticipated 17,777 shares of its Series E Preferred Stock to Dominion upon
exercise of a warrant issued in May 1994 (such final amount, as such amount may
be adjusted by the terms of such warrant, to be the "DOMINION E WARRANT SHARES"
and collectively with the Dominion B Warrant Shares and the Dominion E Warrant
Shares, the "DOMINION WARRANT SHARES"), up to an additional 1,300,000 shares of
its Common Stock to Hyline Laboratories, Inc. ("HYLINE") upon exercise of
warrant dated January 5, 1994 (the "HYLINE WARRANT" and the shares of Common
Stock issuable thereunder as the "HYLINE WARRANT SHARES"), up to an additional
13,000 shares of its Common Stock to Rip ▇▇▇▇▇▇▇▇ & Associates, Inc. ("BROKER")
upon exercise of a warrant dated January 5, 1994 (the "BROKER WARRANT SHARES"),
up to an additional 33,333 shares of its Series E Preferred Stock to Silicon
Valley Bank ("SVB") upon exercise of a warrants dated May 19, 1995 and September
25, 1995 (the "SVB WARRANT SHARES"), and 52,850 shares of Common Stock to SBC
Capital Markets, Inc. and an individual affiliated therewith (together, "SBC")
upon exercise of warrants dated September 20, 1995 (the "SBC WARRANT SHARES");
WHEREAS, the Company and the Shareholders, other than the Shareholder
purchasing the Series G Shares as of the date hereof, are also parties to a
Rights Agreement originally dated June 26, 1990, as amended and restated on June
5, 1991 and as amended on August 9, 1991, as amended and restated on February
28, 1992, June 29, 1992, March 31, 1993, June 4, 1993, January 5, 1994, April
26, 1994 and June 13, 1994, and as amended September 20, 1995, and as amended
and restated on May 1, 1996 (the "RIGHTS AGREEMENT"), pursuant to which the
Company granted to such Shareholders certain registration rights and a right of
first offer; and
3.
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WHEREAS, the Company and ▇▇▇▇▇▇ Laboratories ("ABBOTT") are parties
to a Series E Preferred Stock Purchase Agreement dated May 1, 1996 (the "SIXTH
PURCHASE AGREEMENT"), pursuant to which the Company has sold, and Abbott has
acquired, shares of the Company's Series E Preferred Stock (together with all
other shares of Company capital stock purchased by Abbott as a result of the
provisions of the Sixth Purchase Agreement that are "RESTRICTED SECURITIES"
under the Securities Act of 1933, the "ABBOTT SHARES");
WHEREAS, the Company, Sierra, KPCB V, Domain, Aperture, CW, BIL,
Oxford, Dominion Fund and Bios Equity Fund L.P. ("BIOS") are parties to a Series
E Preferred Stock Purchase Agreement dated May 1, 1996 (the "SEVENTH PURCHASE
AGREEMENT"), pursuant to which the Company has sold, and Sierra, KPCB V, Domain,
Aperture, CW, BIL, Oxford, Dominion Fund and Bios have acquired, shares of the
Company's Series E Preferred Stock (the "THIRD SERIES E SHARES" and collectively
with the First Series E Shares and the Second Series E Share, the "SERIES E
SHARES,")
WHEREAS, The Company and Dainippon Pharmaceutical Co. Ltd.
("DAINIPPON") are parties to a Series G Preferred Stock Purchase Agreement of
even date herewith (the "EIGHTH PURCHASE AGREEMENT"), pursuant to which the
Company will sell, and Dainippon will acquire shares of the Company's Series G
Preferred Stock (the "SERIES G SHARES", which, taken collectively with the
Series A Shares, the Series B Shares, the Series C Shares, the CW Warrant
Shares, the Sierra Warrant Shares, the Dividend Shares, the Dominion Warrant
Shares, the Hyline Warrant Shares, the Broker Warrant Shares, the SVB Warrant
Shares, the SBC Warrant Shares and the Abbott Shares are referred to herein as
the "SHARES");
WHEREAS, the Company and the Shareholders wish to execute this
Restated Rights Agreement and grant the Shareholder purchasing the Series G
Shares the rights contained herein in order to provide it with a further
inducement to purchase such Shares;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1. TERMINATION OF PRIOR RIGHTS. The Shareholders, who include a
majority in interest of the "Shareholders" who are parties to the Rights
Agreement, and the Company hereby terminate the Rights Agreement and in place
thereof enter into this Restated Rights Agreement which shall be the sole
agreement among the Shareholders and the Company relating to the subject matter
hereof.
2. AMENDMENT. Except as expressly provided herein, neither this
Restated Rights Agreement nor any term hereof may be amended, waived, discharged
or terminated other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or termination is
sought; provided, however, that any provisions hereof may be amended, waived,
discharged or terminated upon the written consent of the Company and the holders
of a majority of the outstanding Registrable Securities (as defined below),
determined on the basis of assumed conversion of all Shares into Registrable
Securities.
3. REGISTRATION RIGHTS.
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3.1 DEFINITIONS. As used in this Restated Rights Agreement:
(A) The terms "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the "ACT")
and the subsequent declaration or ordering of the effectiveness of such
registration statement.
(B) The term "REGISTRABLE SECURITIES" means:
(I) the shares of Common Stock constituting or issuable
or issued upon conversion or exercise of (l) the Series A Shares, (2) the Series
B Shares, (3) the Series C Shares, (4) the Series E Shares, (5) the Common
Warrant Shares, (6) the CW Warrant Shares, (7) the Dividend Shares, (8) the
Sierra Warrant Shares, (9) the Dominion Warrant Shares, (10) the Hyline Warrant,
(11) the Broker Warrant, (12) the SVB Warrant Shares, (13) the SBC Warrant
Shares, (14) the Abbott Shares, and (15) the Series G Shares (the shares of
Common Stock referred to in the foregoing clauses (1) through (15) being
collectively referred to hereafter as the "STOCK"); and
(II) any other shares of Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, the Stock, excluding in all cases,
however, any Registrable Securities, or Registrable Securities issuable upon the
exercise of other securities, sold by a person in a transaction in which his or
her rights under this Restated Rights Agreement are not assigned;
provided, however, that Common Stock or other securities shall only be treated
as Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Act under Section 4(1)
thereof, in either case, so that all transfer restrictions, and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale.
Notwithstanding the foregoing, or any other provision herein to the
contrary, the parties hereto understand and agree that the Dominion Warrant
Shares shall be entitled only to "piggy-back" and Form S-3 registration rights
hereunder. Consequently, neither the Dominion Warrant Shares nor the Common
Stock issuable upon conversion thereof shall be deemed Registrable Securities or
Stock, and the holders of such Dominion Warrant Shares shall not be deemed
Shareholders, Holders or Rightholders as such terms are used herein for purposes
of Sections 3.2, 3.6, 3.14 and 4.
(C) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities (including, without
limitation, then exercisable warrants) which are, Registrable Securities.
5.
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(D) The term "HOLDER" means any holder of outstanding
Registrable Securities who acquired such Registrable Securities in a transaction
or series of transactions not involving any registered public offering.
(E) The term "FORM S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the Securities and Exchange Commission ("SEC") which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
3.2 REQUESTED REGISTRATION.
(A) If the Company shall receive at any time after the
earlier of (i) March 31, 1998, or (ii) three (3) months after the effective date
of the first registration statement for a public offering of securities of the
Company (other than a registration statement relating either to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or an SEC Rule 145 transaction), a written request from
the Holders of at least twenty-five percent (25%) of the Registrable Securities
then outstanding that the Company file a registration statement under the Act
coveting the registration of the lesser of (A) at least twenty-five percent
(25%) of the Registrable Securities then outstanding (or a lesser percent if the
anticipated aggregate offering price would exceed $2,000,000) or (B) 250,000
Registrable Securities, then the Company shall, within ten (10) days of the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations of subsection 3.2(b), effect as soon as practicable,
and in any event within ninety (90) days of the receipt of such request, the
registration under the Act of all Registrable Securities which the Holders
request to be registered within twenty (20) days of the mailing of such notice
by the Company in accordance with Section 5.5.
(B) If the Holders initiating the registration request
hereunder ("INITIATING HOLDERS") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to this Section 3.2 and the
Company shall include such information in the written notice referred to in
subsection 3.2(a). In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Holders participating in such public offering (the
"PARTICIPATING Holders") and the underwriter of such offering) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
3.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Participating Holders. Notwithstanding any other provision of
this Section 3.2, if the underwriter advises the Participating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Participating Holders
in proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Participating Holder.
6.
10
(C) The Company is obligated to effect only two (2) such
registrations pursuant to this Section 3.2.
(D) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 3.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.
3.3 COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders other than the Holders) any of its Common Stock
or other securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating either to the
sale of securities to participants in a Company stock option, stock purchase or
similar plan or to an SEC Rule 145 transaction, or a registration on any other
form not reasonably and customarily appropriate for this purpose), the Company
shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after mailing of such notice by the Company in accordance with Section 5.5,
the Company shall subject to the provisions of Section 3.8, cause to be
registered under the Act all of the Registrable Securities that each such Holder
has requested to be registered.
3.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 3
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(A) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
(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
Act with respect to the disposition of all securities covered by such
registration statement.
(C) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
7.
11
(D) 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 jurisdictions as shall be reasonably requested by the Holders,
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.
(E) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwater of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(F) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
requited to be delivered under the Act of 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 requited to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(G) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 3, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 3, 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 the Holders requesting
registration of Registrable Securities 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 the Holders requesting registration of Registrable Securities.
3.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 3 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
3.6 EXPENSES OF DEMAND REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 3.2, including
(without limitation), all registration, filing and qualification fees, printers
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of
8.
12
any registration proceeding begun pursuant to Section 3.2 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered (in which case all Participating
Holders shall bear such expenses), unless the Holders of a majority of the
Registrable Securities agree to forfeit their right to one (1) demand
registration pursuant to Section 3.2; provided further, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that known to the
Holders at the time of their request, then the Holders shall not be required to
pay any of such expenses and shall retain their rights pursuant to Section 3.2.
3.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
3.3 for each Holder (which right may be assigned as provided in Section 3.13),
including (without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or apportionable thereto and the fees and
disbursements of one counsel for the selling Holders selected by them, but
excluding underwriting discounts and commissions relating to Registrable
Securities.
3.8 UNDERWRITING REQUIREMENTS. In connection with any offering involving
an underwriting of shares being issued by the Company, the Company shall not be
required under Section 3.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it, and then only in such
quantity as will not, in the written opinion of the underwriters, jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling shareholders
according to the total amount of securities entitled to be included therein
owned by each selling shareholder or in such other proportions as shall mutually
be agreed to by such selling shareholders); but in no event shall (i) the amount
of securities of the selling Holders included in the offering be reduced below
twenty-five percent (25%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities, in which case the selling shareholders may be excluded if the
underwriters make the determination described above and no other shareholder's
securities are included or (ii) notwithstanding (i) above, any shares being sold
by a shareholder exercising a demand registration right similar to that granted
in Section 3.2 be excluded from such offering. For purposes of the preceding
parenthetical concerning apportionment, for any selling shareholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "SELLING
SHAREHOLDER," and any pro rata reduction with respect to such selling
shareholder shall be based
9.
13
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "SELLING SHAREHOLDER," as defined in
this sentence.
3.9 DELAY OF REGISTRATION. No Holder shall 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 3.
3.10 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 3:
(A) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Act, the 1934 Act or other
federal or, state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "VIOLATION"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
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
(iii) any violation or alleged violation by the Company of the Act, the 1934
Act, any state securities law or any rule or regulation promulgated under the
Act, the 1934 Act or any state securities law; and the Company will pay as
incurred to each such Holder, underwriter or controlling person, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 3.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or delayed), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by the Holder,
underwriter or controlling person seeking indemnification hereunder.
(B) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection
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with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 3.10(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 3.10(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld or delayed; provided that in no
event shall any indemnity under this subsection 3.10(b) exceed the gross
proceeds from the offering received by such Holder.
(C) Promptly after receipt by an indemnified party under this
Section 3.10 of notice of a claim or of the commencement of any action
(including any governmental claim or action), such indemnified party will, if
claim in respect thereof is to be made against any indemnifying party under this
Section 3.10, deliver to the indemnifying party a written notice of the claim or
the commencement of the action and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own counsel with
the fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 3.10 only to the
extent that it was so prejudiced, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section 3.10.
(D) The obligations of the Company and Holders under this Section
3.10 shall survive the completion of. any offering of Registrable Securities in
a registration statement under this Section 3, and otherwise.
3.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(A) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(B) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as
11.
15
practicable after the end of the fiscal year in which the first registration
statement filed by the Company for the offering of its securities to the general
public is declared effective;
(C) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act;
(D) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of. any such securities without registration or pursuant to such form;
(E) upon the request of any Holder, remove all legends and stop
transfer orders on such Holder's Registrable Securities (i) at such time as such
Registrable Securities qualify for sale under Rule 144(k), or (ii) in connection
with a sale of such Registrable Securities pursuant to the other provisions of
Rule 144;
(F) use its best efforts to otherwise comply with the "REGISTRANT
REQUIREMENTS" for the use of Form S-3.
3.12 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders owning in the aggregate at least the lesser of (i) twenty
percent (20%) of the Registrable Securities then outstanding (or a lesser
percent if the fair market value of the Registrable Securities held by such
Holder(s) would exceed $2,000,000) or (ii) 250,000 Registrable Securities
(adjusted to reflect subsequent stock splits, stock dividends or
recapitalization), a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(A) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(B) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 3.12, (1) if Form S-3 is
not available for such offering by the Holders; (2) if the Holders, together
with the holders of any other securities of the Company entitled to
12.
16
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $500,000; (3) if the
Company shall furnish to the Holders a certificate signed by the president of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 3.12,
provided, however, that the Company shall not utilize this right more than once
in any twelve month period; (4) if the Company has, within the six (6) month
period preceding the date of such request, already effected one registration on
Form S-3 for the Holders pursuant to this Section 3.12; or (5) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.
(C) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. All expenses incurred in connection with a registration
requested pursuant to Section 3.12, including (without limitation) all
registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the selling Holder or Holders
and counsel for the Company, shall be borne pro rata by the Holder or Holders
participating in the Form S-3 Registration; provided, however, that the Company
shall bear any auditing expenses that shall be incurred in the normal course of
business and shall bear all regular salary expenses of its employees.
Registrations effected pursuant to this Section 3.12 shall not be counted as
demands for registration or registrations effected pursuant to Section 3.2 or
3.3.
3.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 3 may be assigned by
a Holder to a transferee or assignee of at least the lesser of (i) 150,000
shares (adjusted to reflect subsequent stock splits, stock dividends or
recapitalization) or (ii) all of such Holder's Registrable Securities provided
the Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act. The foregoing share
limitation shall not apply, however, to transfers by a Holder to shareholders,
partners (including limited partners) or retired partners of the Holder
(including spouses and ancestors, lineal descendants and siblings of such
partners or spouses, or trusts for their benefit, who acquire Registrable
Securities by glib, will or intestate succession) if all such transferees or
assignees agree in writing to appoint a single representative as their attorney
in fact for the purpose of receiving any notices and exercising their rights
under this Section 3.
3.14 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Restated Rights Agreement, the Company shall not, without the prior
written consent of
13.
17
the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 3.2 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders which is included or (b) to make a demand registration
which could remit in such registration statement being declared effective prior
to the earlier of either of the dates set forth in subsection 3.2(a) or within
one hundred twenty (120) days of the effective date of any registration effected
pursuant to Section 3.2.
3.15 "MARKET STAND-OFF" AGREEMENT. The Holder hereby agrees that during
the 180-day period following the effective date of a registration statement of
the Company filed under the Act, it shall not, to the extent requested by the
Company and such underwriter, sell or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any Common Stock of the Company
held by it at any time during such period except Common Stock included in such
registration; provided, however, that:
(A) such agreement shall be applicable only to the first such
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and
(B) all officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Restated Rights
Agreement) enter into similar agreements.
To enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of the Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.
3.16 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled to
exercise any right provided for in this Section 3: (a) after seven (7) years
following the consummation of the Company's sale of its Common Stock in a bona
fide, firm commitment underwriting pursuant to a registration statement on Form
S-1 under the Act which results in aggregate gross cash proceeds to the Company
in excess of $7,500,000 and the public offering price of which is not less than
$5.00 per share (adjusted to reflect subsequent stock dividends, stock splits or
recapitalization) (other than a registration statement relating either to the
sale of securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or a SEC Rule 145 transaction); or (b) at such time
following the Company's initial public offering and for so long as such Holder
may sell all of such Holder's Registrable Securities in any one three-month
period pursuant to Rule 144 (or such successor rule as may be adopted).
3.17 LIMIT ON SALES. Notwithstanding anything herein to the contrary,
none of (a) Hyline, (b) ▇▇▇▇▇▇, (c) Dainippon, or (d) the remaining Holders of
Registrable Securities as a group, respectively, shall dispose of more than
250,000 shares of Registrable Securities within any three-month period after the
date of this Agreement pursuant to a registration made under
14.
18
Sections 3.2 or 3.12 above; provided, however, that if Hyline, ▇▇▇▇▇▇, or
Dainippon wishes to so dispose of more than 250,000 shares of Registrable
Securities in any such period, it may do so provided that (i) it delivers to the
Company a written notice not less than ninety (90) days prior to the date on
which shares in excess of 250,000 will be disposed of stating its desire to so
dispose of Registrable Securities and setting forth the aggregate number of
shares that Hyline, ▇▇▇▇▇▇, or Dainippon wishes to so dispose of in the such
three-month period and (ii) the Company does not receive a writing from its
principal investment banker or equivalent financial advisor advising the Company
that marketing factors require a limitation of the number of shares to be
underwritten at such time, which limitation would otherwise be exceeded by the
registration of in excess of 250,000 shares of Registrable Securities by Hyline,
▇▇▇▇▇▇, or Dainippon.
3.18 SUBSEQUENT RIGHTS. If, after the date of this Agreement, the
Company shall grant registration rights to a third party different from the
rights set forth in this Section 3, the following shall apply on each such
occasion until the right set forth in this Section 3.18 is exercised:
(I) The Company shall first deliver to each of Hyline, ▇▇▇▇▇▇, and
Dainippon a written notice (the "Notice") setting forth the material terms of
such subsequent registration rights (the "SUBSEQUENT RIGHTS").
(II) For a period of thirty (30) days after the receipt of the
Notice (the "NOTICE PERIOD"), Hyline, ▇▇▇▇▇▇ and Dainippon shall each have the
right, but not the obligation, to surrender its registration rights under this
Section 3 and agree to accept and be bound by the terms of the Subsequent Rights
(the "EXCHANGE RIGHT"). If Hyline, ▇▇▇▇▇▇ and/or Dainippon chooses to so
exercise the Exchange Right, it shall deliver a written notice of such intent to
the Company and enter into an agreement with the Company pursuant to which it
will surrender its registration rights under this Section 3 and the Company will
grant to Hyline, ▇▇▇▇▇▇ and/or Dainippon, as appropriate. the Subsequent Rights.
(III) To the extent that Hyline, ▇▇▇▇▇▇, or Dainippon declines to
exercise the Exchange Right within the Notice Period, it shall retain its
registration rights and the Exchange Right under this Section 3 with respect to
future Subsequent Rights, if any, and shall not be entitled to, nor bound by,
the Subsequent Rights so declined.
4. ADDITIONAL RIGHTS.
4.1 RIGHT OF FIRST REFUSAL. Subject to the terms and conditions
specified in this Section 4.1, and subject to any limitations imposed by
applicable laws governing the nature and extent of foreign investment in
companies domiciled in the U.S., the Company hereby grants to each Shareholder,
so long as such Shareholder holds at least 50,000 Shares (or, in the case of a
holder of the Hyline Warrant, the portion of such warrant so held represents the
right to purchase at least 50,000 Shares) (as subsequently adjusted for
subsequent stock splits, stock dividends or recapitalization) (the
"RIGHTHOLDER"), a right of first offer with respect to future sales by the
Company of its New Securities (as hereinafter defined). For purposes of this
Section 4.1, the term Rightholder includes any partners, shareholders or
affiliates of the Rightholder. The
15.
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Rightholder shall be entitled to apportion the right of first offer hereby
granted among itself and its partners, shareholders and affiliates in such
proportions as it deems appropriate.
(A) In the event the Company proposes to issue New Securities, it
shall give the Rightholder written notice (the "NOTICE") of its intention
stating (i) a description of the New Securities it proposes to issue, (ii) the
number or shares of New Securities it proposes to offer, (iii) the price per
share at which, and other terms on which, it proposes to offer such New
Securities and (iv) the number of shares that the Rightholder has the right to
purchase under this Section 4.1, based on the Rightholder's Percentage (as
defined in Section 4. l(d)(ii)).
(B) Within thirty (30) days after the Notice is given (in
accordance with Section 5.5), the Rightholder may elect to purchase, at the
price specified in the Notice, up to the number of shares of the New Securities
proposed to be issued that the Rightholder has the right to purchase as
specified in the Notice. An election to purchase shall be made in writing and
must be given to the Company within such thirty (30) day period (in accordance
with Section 5.5). The closing of the sale of New Securities by the Company to
the participating Rightholder upon exercise of its rights under this Section 4.1
shall take place simultaneously with the closing of the sale of New Securities
to third parties. Notwithstanding the foregoing, the thirty-day period set forth
above shall be fifteen (15) days with respect to the holder(s) of the Hyline
Warrant, other than a Shareholder who holds other Shares in addition to such
Hyline Warrant.
(C) The Company shall have ninety (90) days after the last date on
which the Rightholder's right of first offer lapsed to enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within forty-five (45) days from the execution thereof) to sell the
New Securities which the Rightholder did not elect to purchase under this
Section 4.1, at or above the price and upon terms not materially more favorable
to the purchasers of such securities than the terms specified in the initial
Notice given in connection with such sale. In the event the Company has not
entered into an agreement to sell the New Securities within such ninety (90) day
period (or sold and issued New Securities in accordance with the foregoing
within forty-five days from the date of said agreement), the Company shall not
thereafter issue or sell any New Securities without first offering such New
Securities to the Rightholder in the manner provided in this Section 4.1.
(D) "NEW SECURITIES" shall mean any shares of, or securities
convertible into or exercisable for any shares of, any class of the Company's
capital stock; provided that "NEW SECURITIES" does not include: (i) the Shares
or the Common Stock issuable upon conversion thereof; (ii) securities issued
pursuant to the acquisition of another business entity by the Company by merger,
purchase of substantially all of the assets of such entity, or other
reorganization whereby the Company owns not less than a majority of the voting
power of such entity; (iii) shares, or options to purchase shares, of the
Company's Common Stock and the shares of Common Stock issuable upon exercise of
such options, issued pursuant to any arrangement approved by the Board of
Directors to employees, officers and directors of, or consultants, advisors or
other persons performing services for, the Company; (iv) shares of the Company's
Common Stock or Preferred Stock of any series issued in connection with any
stock split, stock dividend or recapitalization of the Company; (v) Common Stock
issued upon exercise
16.
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of warrants, options or convertible securities if the issuance of such
warrants, options or convertible securities was a result of the exercise of the
right of first offer granted under this Section 4.1 or was subject to the right
of first offer granted under this Section 4.1; (vi) capital stock or warrants or
options for the purchase of shares of capital stock issued by the Company to a
lender in connection with any loan or lease financing transaction; and (vii)
securities sold to the public in an offering pursuant to a registration
statement filed with the Securities and Exchange Commission under the Act.
(i) The applicable "PERCENTAGE" for the Rightholder shall be
the number of shares of New Securities calculated by dividing (i) the total
number of shares of Common Stock owned by the Rightholder (assuming conversion
of all shares of Preferred Stock and exercise of the Hyline Warrant) by (ii) the
total number of shares of Common Stock outstanding at the time the Notice is
given (assuming conversion of all shares of Preferred Stock and exercise of the
Hyline Warrant); provided, however, that IPR shall not be entitled to purchase
more than that number of shares of New Securities the aggregate purchase price
of which is equal to the cumulative sum of $25,000 for each calendar quarter
that has elapsed from June 26, 1990 until the time of exercise of the right of
first offer provided by this Section 4.1, less the aggregate purchase price of
any New Securities already purchased by the Rightholder pursuant to this Section
4.1; provided that in no case may the number of shares of capital stock of the
Company owned by the Rightholder equal or exceed 25.1% of the total number of
outstanding shares of capital stock of the Company.
(E) The right of first offer granted under this Section 4. l shall
expire upon the earlier of (a) March 31, 1998, or (b) following the consummation
of the Company's sale of its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement on Form S-1 under the Act
which results in aggregate gross cash proceeds to the Company in excess of
$7,500,000 and the public offering price of which is not less than $600 per
share (as subsequently adjusted to reflect subsequent stock dividends, stock
splits or recapitalization) (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or a SEC Rule 145 transaction).
(F) The right of first offer granted under this section may be
assigned by the Rightholder to a transferee or assignee of the Rightholder's
shares of the Company's stock acquiring the lesser of (a) at least 50,000 of the
Rightholder's shares of the Company's Common Stock (treating all shares of
Preferred Stock for this purpose as though convened into Common Stock and the
Hyline Warrant as having been exercised) (equitably adjusted for any stock
splits, subdivision stock dividends, changes, combinations or the like) or (b)
all of the Rightholder's remaining shares of the Company's stock. In the event
that the Rightholder shall assign its right of first offer pursuant to this
Section 4.1 in connection with the transfer of less than all of its shares of
the Company's stock, the Rightholder shall also retain its right of first otter.
5. MISCELLANEOUS.
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5.1 ASSIGNMENT. Subject to the provisions of Section 3.13 hereof, the
terms and conditions of this Restated Rights Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties hereto.
5.2 THIRD PARTIES. Nothing in this Restated Rights 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 Restated Rights Agreement, except as
expressly provided herein.
5.3 GOVERNING LAW. This Restated Rights Agreement shall be governed by
and construed under the laws of the State of California in the United States of
America.
5.4 COUNTERPARTS. This Restated Rights Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
5.5 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be sent by prepaid registered or certified mail, return
receipt requested (or if the addressee and addresser are in different countries,
by prepaid registered or certified airmail, return receipt requested, or by
facsimile with confirmation of receipt), and addressed, if to the Company, to
its principal offices, or if to a Shareholder, to the address for such
Shareholder set forth on Exhibit A hereto. Such notice shall be deemed to have
been given when receipt is so confirmed.
5.6 SEVERABILITY. If one or more provisions of this Restated Rights
Agreement are held to be unenforceable under applicable law, portions of such
provisions, or such provisions in their entirety, to the extent necessary, shall
be severed from this Restated Rights Agreement, and the balance of this Restated
Rights Agreement shall be enforceable in accordance with its terms.
5.7 AMENDMENT AND WAIVER. Any provision of this Restated Rights
Agreement may be amended with the written consent of the Company and the Holders
of at least a majority of the outstanding shares of the Registrable Securities.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each Holder of Registrable Securities, and the Company. In
addition, the Company may waive performance of any obligation owing to it, as to
some or all of the Holders of Registrable Securities, or agree to accept
alternatives to such performance, without obtaining the consent of any Holder of
Registrable Securities. In the event that an underwriting agreement is entered
into between the Company and any Holder, and such underwriting agreement
contains terms differing from this Restated Rights Agreement, as to any such
Holder the terms of such underwriting agreement shall govern.
5.8 EFFECT OF AMENDMENT OR WAIVER. Each Shareholder and its successors
and assigns acknowledge that by the operation of Section 5.7 hereof the holders.
of a majority of the outstanding Registrable Securities, acting in conjunction
with the Company, will have the right and power to diminish or eliminate all
rights pursuant to this Restated Rights Agreement.
18.
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5.9 RIGHTS OF HOLDERS. Each holder of Registrable Securities shall have
the absolute right to exercise or refrain from exercising any right or rights
that such holder may have by reason of this Restated Rights Agreement,
including, without limitation, the right to consent to the waiver or
modification of any obligation under this Restated Rights Agreement, and such
holder shall not incur any liability to any other holder of any securities of
the Company as a result of exercising or refraining from exercising any such
right or rights.
5.10 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any pant to this Restated Rights Agreement, upon any
breach or default of the other ▇▇▇▇▇, shall impair any such right, power or
remedy of such nonbreaching party nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any since breach
or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Restated
Rights Agreement, or any waiver on the part of any party of any provisions or
conditions of this Restated Rights Agreement, must be made in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Restated Rights Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
19.
23
IN WITNESS WHEREOF, the parties hereto have executed this
Tenth Amended and Restated Rights Agreement as of the
day and year first above written.
COMPANY: SHAREHOLDERS:
RIBOGENE, INC.
By:
-------------------------------- -----------------------------------------
(Print or Type Name of Shareholder)
Title: By:
------------------------------ --------------------------------------
Title:
------------------------------------
-----------------------------------------
(Print or Type Name of, Shareholder)
By:
--------------------------------------
Title:
------------------------------------
-----------------------------------------
(Print or Type Name of, Shareholder)
By:
--------------------------------------
Title:
------------------------------------
20.
24
EXHIBIT A
SCHEDULE OF SHAREHOLDERS
▇▇▇▇▇▇ Laboratories Institute of Protein Research of the Russian
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Academy of Sciences
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 142292 Puschino
Attn: Dr. ▇▇ ▇▇▇▇▇▇ Moscow Region, Russia
Biotechnology Investments Limited(2) Dominion Fund II
c/o Domain Associates Dominion Ventures, Inc.
One ▇▇▇▇▇▇ Square ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Oxford Bioscience Partners L.P. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Bioscience Partners (Bermuda) Limited Partnership ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Oxford Bioscience Partners (Adjunct) L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇ CW Ventures II, L.P.
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Domain Partners II, L.P. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
One ▇▇▇▇▇▇ Square ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Sierra Ventures III ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Sierra Ventures III International ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Petri Vainio JMC Family Partnership
c/o ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ V ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
KPCB Zaibatsu Fund I ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Aperture Associates, L.P.
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Associates ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
--------
(2) These shares will be held under the record name of "Old Court Limited."
25
SCHEDULE OF SHAREHOLDERS (CON'T.)
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
2642 ▇▇▇▇▇ Street ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
as Joints Tenants with ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Rights of Survivorship ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Hyline Laboratories, Inc. Silicon Valley Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Rip ▇▇▇▇▇▇▇▇ & Associates, Inc. SBC Capital Markets, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:____________________
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bios Equity Fund, ▇.▇.
▇▇▇▇▇▇▇▇▇ Capital Management Corporation ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn:____________________
Dainippon Pharmaceutical Co., Ltd.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇
Attention: President
2.