<PAGE>
As filed with the Securities and Exchange Commission on May 17, 1999.
Registration No. 333-75079
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 3 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
Ribozyme Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 2834 34-1697351
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of IndustrialClassification Identification Number)
incorporation or Code Number)
organization)
2950 Wilderness Place
Boulder, Colorado 80301
(303) 449-6500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
RALPH E. CHRISTOFFERSEN
Ribozyme Pharmaceuticals, Inc.
Chief Executive Officer and President
2950 Wilderness Place
Boulder, Colorado 80301
(303) 449-6500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies:
HERBERT H. DAVIS III JAMES R. TANENBAUM
ROTHGERBER JOHNSON & LYONS LLP STROOCK & STROOCK & LAVAN LLP
1200 17th Street, Suite 3000 180 Maiden Lane
Denver, Colorado 80202 New York, New York 10038
(303) 623-9000 (212) 806-6048
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
----------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the SEC, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses Of Issuance And Distribution
The following table sets forth the various expenses in connection with the
distribution and sale of the securities being registered which will be paid by
us. All amounts are estimates except for the SEC registration fee:
<TABLE>
<S> <C>
SEC registration fee............................................... $ 2,390
Printing and mailing expenses...................................... $ 40,000
Nasdaq listing fee................................................. $ 17,500
Legal fees and expenses............................................ $ 75,000
Accounting fees and expenses....................................... $ 40,000
--------
TOTAL.......................................................... $174,890
========
</TABLE>
Item 14. Indemnification Of Directors And Officers
Article XI of our Bylaws provides for indemnification of our directors to the
fullest extent permitted by law, as now in effect or later amended. Article XI
of our Bylaws also permits the indemnification to the same extent of our
officers, employees or agents if, and to the extent, authorized by the Board of
Directors. In addition, the Bylaws provide for indemnification against expenses
incurred by a director to be paid by us at reasonable intervals in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall be ultimately determined that he is not entitled to be indemnified by
us. The Bylaws further provide for a contractual cause of action on the part of
our directors for indemnification claims that have not been paid by us.
Article VI of our Certificate of Incorporation, as amended, limits under
certain circumstances the liability of our directors for a breach of their
fiduciary duty as directors. These provisions do not eliminate the liability of
a director (1) for a breach of the director's duty of loyalty to us or our
stockholders, (2) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the General Corporate Law of the State of Delaware ("DGCL") (relating to the
declaration of dividends and purchase or redemption of shares in violation of
the DGCL) or (4) for any transaction from which the director derived an
improper personal benefit.
Section 145 of the DGCL contains provisions regarding indemnification, among
others, of officers and directors. Section 145 of the DGCL provides in relevant
part:
(a) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
II-1
<PAGE>
(b) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
Delaware law also permits a corporation to purchase and maintain insurance on
behalf of any person who is or was a director or officer against any liability
asserted against him and incurred by him in such capacity or arising out of his
status as such, whether or not the corporation has the power to indemnify him
against that liability under Section 145 of the DGCL.
We also have provided liability insurance for each director and officer for
losses arising from claims or charges made against them while acting in their
capacities as our directors or officers.
The above discussion of our corporate documents is not intended to be
exhaustive and is respectively qualified in its entirety by our corporate
documents.
Item 15. Recent Sale Of Unregistered Securities
The following table sets forth the Ribozyme Pharmaceuticals' sales of
unregistered securities for the past three years. All transactions listed below
involved the issuance of common stock, preferred stock convertible into shares
of common stock or options to acquire shares of common stock prior to
commencement of the offering described in the foregoing prospectus. No
underwriters were employed with respect to the sale of any of the securities
listed below. All shares were issued in reliance upon Section 4(2) and/or 3(b)
of the Securities Act.
<TABLE>
<CAPTION>
Securities Issued Purchaser Date Acquired Consideration
- ----------------- ----------- ------------- -------------
<S> <C> <C> <C>
212,776 shares of common stock......... Schering AG May 1997 $2,500,000
465,117 shares of common stock......... Schering AG May 1998 $2,500,000
5 shares of Series L preferred stock... Eli Lilly April 1999 $7,500,000
</TABLE>
II-2
<PAGE>
Item 16. Exhibits And Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
1.1+ Form of Placement Agency Agreement dated , 1999, between Ribozyme
Pharmaceuticals and Hambrecht & Quist LLC
1.2+ Form of Escrow Agreement dated , 1999, between Ribozyme
Pharmaceuticals Hambrecht & Quist LLC and Citibank, N.A.
3.1 Amended and Restated Certificate of Incorporation of Ribozyme
Pharmaceuticals dated April 17, 1996(5)
3.2 Bylaws of Ribozyme Pharmaceuticals, as amended(1)
4.1 Specimen Stock Certificate(1)
4.2+ Certificate of Designation, Preferences and Rights of Series L
Preferred Shares
5.1+ Opinion of Rothgerber Johnson & Lyons LLP
10.1 Form of Indemnity Agreement entered into between Ribozyme
Pharmaceuticals and its directors and officers, with related
schedule(1)
10.2 Ribozyme Pharmaceuticals' Incentive Stock Option Plan, including form
of Incentive Stock Option Agreement(1)
10.3 Ribozyme Pharmaceuticals' Non-Qualified Stock Option Plan, including
form of Non-Qualified Stock Option Agreement(1)
10.4 Ribozyme Pharmaceuticals' 1996 Stock Option Plan, including forms of
Incentive Stock Option and Nonstatutory Stock Option Agreements(1)
10.5 Ribozyme Pharmaceuticals' 1996 Employee Stock Purchase Plan(1)
10.6 Employment Agreement dated January 1, 1997, between Ribozyme
Pharmaceuticals and Ralph E. Christoffersen(5)
10.7 Incentive Stock Option Agreement between Ribozyme Pharmaceuticals and
Ralph E. Christoffersen dated December 23, 1992(1)
10.8 Incentive Stock Option Agreement between Ribozyme Pharmaceuticals and
Ralph E. Christoffersen dated September 23, 1994(1)
10.9 Warrant Purchase Agreement dated March 15, 1995, between Ribozyme
Pharmaceuticals and Hambrecht & Quist Guaranty Finance(1)
10.10 Warrant to Purchase Common Stock dated March 15, 1995, issued to
Hambrecht & Quist Guaranty Finance(1)
10.11 Warrant to Purchase Common Stock dated February 22, 1993, issued to
LINC Scientific Leasing(1)
10.12 Warrant to Purchase Common Stock dated July 30, 1993, issued to
Douglas E. Olson(1)
10.13 Warrant to Purchase Common Stock dated July 30, 1993, issued to
Richard J. Warburg and Ruth P. Warburg(1)
10.14 Warrant to Purchase Common Stock dated December 28, 1994, issued to
Competitive Technologies, Inc.(1)
10.15 Warrant to Purchase Common Stock dated December 29, 1995, issued to
Silicon Valley Bank(1)
10.16 Warrant to Purchase Common Stock dated July 26, 1996, issued to
Silicon Valley Bank(1)
10.17 Warrant to Purchase Common Stock dated April 17, 1996, issued to
Chiron Corporation(1)
10.18 Collaborative Research, Development and Commercialization Agreement
dated July 15, 1994, between Ribozyme Pharmaceuticals and Chiron
Corporation(1)
10.19 Research Collaboration and Licensing Agreement dated November 1, 1995,
between Ribozyme Pharmaceuticals and Pharmacia Biotech, AB(1)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
10.20 Research and Development Collaboration Agreement dated April 19, 1993,
between Ribozyme Pharmaceuticals and Parke-Davis Division of Warner-
Lambert Company(1)
10.21 First Amendment to the Research and Development Collaboration
Agreement dated April 17, 1995, between Ribozyme Pharmaceuticals and
Parke-Davis Division of Warner-Lambert Company(1)
10.22 Second Amendment to the Research and Development Collaboration
Agreement dated February 8, 1996, between Ribozyme Pharmaceuticals
and Parke-Davis Division of Warner-Lambert Company(1)
10.23 Financing Agreement dated March 16, 1995, among Wilderness Place
Holdings L.L.C., Hambrecht & Quist Guaranty Finance, L.P. and
Ribozyme Pharmaceuticals(1)
10.24 Negotiable Promissory Note dated October 7, 1992, between Ribozyme
Pharmaceuticals and Ralph Christoffersen and Addendum dated June 25,
1993(1)
10.25 Employment Agreement dated January 8, 1996, between Ribozyme
Pharmaceuticals and Lawrence E. Bullock(1)
10.26 Promissory Note dated February 8, 1996, between Ribozyme
Pharmaceuticals and Lawrence E. Bullock(1)
10.27 Lease for Real Property dated May 20, 1992, between Aero-Tech
Investments and Ribozyme Pharmaceuticals(1)
10.28 Non-Disturbance and Attornment Agreement dated March 31, 1995, among
General American Life Insurance Company, Aero-Tech Investments,
Wilderness Place Holdings L.L.C. and Ribozyme Pharmaceuticals(1)
10.29 Master Lease Agreement dated September 2, 1992, between Ribozyme
Pharmaceuticals and LINC Scientific Leasing(1)
10.30 Loan and Security Agreement dated February 28, 1994, between Ribozyme
Pharmaceuticals and Silicon Valley Bank(1)
10.31 Loan Modification Agreement dated December 21, 1994, between Ribozyme
Pharmaceuticals and Silicon Valley Bank(1)
10.32 Loan and Security Agreement dated December 29, 1995, between Ribozyme
Pharmaceuticals and Silicon Valley Bank and MMC/GATX Partnership No.
1(1)
10.33 Warrant to Purchase Common Stock dated December 29, 1995, issued to
MMC/GATX Partnership No. 1(1)
10.34 Agreement dated February 29, 1996, between Ribozyme Pharmaceuticals
and Chiron Corporation relating to research and development funding(1)
10.35 Amendments to original Employment Agreements between Ribozyme
Pharmaceuticals and Ralph E. Christoffersen, Lawrence E. Bullock and
Nassim Usman, pursuant to letters dated November 14, 1996, November
22, 1996, and December 15, 1996(3)
10.36 Promissory Note dated June 4, 1996, between Ribozyme Pharmaceuticals
and Nassim Usman(3)
10.37 Amendment to Lease for Real Property dated March 13, 1997, between
Aero-Tech Investments and Ribozyme Pharmaceuticals(3)
10.38 Employment Agreement dated May 2, 1996, between Ribozyme
Pharmaceuticals and Nassim Usman(2)
10.39 Collaboration Agreement Regarding Use of Ribozymes to Determine Gene
Function dated May 13, 1996, between Ribozyme Pharmaceuticals and
Chiron Corporation(2)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
10.40 Amended and Restated License Agreement dated November 20, 1996, between
Ribozyme Pharmaceuticals, University Research Corporation, University
of Colorado and United States Biochemical Corporation(3)*
10.41 Amended and Restated Sublicense Agreement dated November 20, 1996,
between Ribozyme Pharmaceuticals and United States Biochemical
Corporation(3)*
10.42 Amended and Restated License Agreement dated November 20, 1996, between
Ribozyme Pharmaceuticals and Competitive Technologies,
Incorporated(3)*
10.43 Memorandum of Understanding dated March 1, 1996, between Ribozyme
Pharmaceuticals and DowElanco(1)
10.44 Stock Subscription Agreement dated September 1996 between Ribozyme
Pharmaceuticals and University of Research Corporation(3)*
10.45 Stock Subscription Agreement dated November 20, 1996, between Ribozyme
Pharmaceuticals and United States Biochemical Corporation(3)*
10.46 Assignment of License and Restated License Agreement dated November 20,
1996, among Ribozyme Pharmaceuticals, United States Biochemical
Corporation and Competitive Technologies(3)*
10.47 Letter Agreement dated May 22, 1996, between Ribozyme Pharmaceuticals
and ALZA Corporation(3)*
10.48 Research and Development Collaboration Agreement dated December 2,
1996, between Ribozyme Pharmaceuticals and Protogene Laboratories(3)*
10.49 License Agreement dated February 14, 1997, between Ribozyme
Pharmaceuticals and IntelliGene, Ltd.(3)*
10.50 Subscription Agreement dated April 17, 1995, between Ribozyme
Pharmaceuticals and Parke-Davis Division of Warner-Lambert Company(1)
10.51 Stock Purchase Agreement dated June 28, 1995, among Ribozyme
Pharmaceuticals and investors(1)
10.52 Agreement dated March 1, 1996, between Ribozyme Pharmaceuticals and
DowElanco Corporation relating to the conversion of preferred stock(1)
10.53 Stock Subscription Agreement dated October 30, 1995, between Ribozyme
Pharmaceuticals and Gewestelijke Investeringsmaatschappij voor
Vlaanderon n.v.(1)
10.54 Research, License, Supply and Royalty Agreement between Schering
Aktiengesellschaft and Ribozyme Pharmaceuticals dated April 9,
1997(4)*
10.55 Purchase Agreement dated April 9, 1997, among Ribozyme Pharmaceuticals,
Schering Berlin Venture Corporation and Schering
Aktiengesellschaft(4)*
10.56 Employment Agreement dated February 27, 1997, between Ribozyme
Pharmaceuticals and Alene Holzman(5)
10.57 Employment Agreement dated July 5, 1997, between Ribozyme
Pharmaceuticals and Thomas Rossing(5)
10.58 Executive Bonus Plan dated March 27, 1998(6)
10.59 Research, Collaboration and License Agreement dated May 19, 1998,
between Ribozyme Pharmaceuticals and Roche Bioscience, a division of
Syntex (U.S.A.) Inc.(7)*
10.60 Employment Agreement dated September 8, 1998, between Ribozyme
Pharmaceuticals and Nassim Usman(8)
10.61 Participation Agreement dated August 31, 1998, as amended, and related
documents between Ribozyme Pharmaceuticals and Atugen Biotechnology
GmbH(9)**
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
10.62 Research Collaboration and License Agreement dated March 17, 1999,
between Ribozyme Pharmaceuticals and Eli Lilly and Company**
10.63 Stock Purchase Agreement dated April 30, 1999, between Ribozyme
Pharmaceuticals and Eli Lilly and Company
23.1+ Consent of Ernst & Young LLP, Independent Auditors
23.2+ Consent of Rothgerber Johnson & Lyons LLP (included in Exhibit 5.1)
24.1+ Power of attorney (included on the signature page of this
Registration Statement)
</TABLE>
- --------
+ Previously filed.
* Ribozyme Pharmaceuticals has applied for and received confidential
treatment with respect to portions of these exhibits.
** Ribozyme Pharmaceuticals has applied for confidential treatment with
respect to portions of these exhibits.
(1) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form SB-2 Registration Statement, File No. 333-1908-D.
(2) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-QSB for the quarter ended June 30, 1996.
(3) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-KSB for the year ended December 31, 1996.
(4) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 8-K dated June 12, 1997.
(5) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form SB-2 Registration Statement, dated September 5, 1997,
File No. 333-34981.
(6) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-K for the year ended December 31, 1997.
(7) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-Q/A for the quarter ended June 30, 1998.
(8) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-Q for the quarter ended September 30, 1998.
(9) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 8-K dated March 19, 1999.
(b) Financial Statement Schedules
All schedules have been omitted because they are not applicable or not
required or the required information is included in the financial statements or
notes thereto.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
II-6
<PAGE>
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provision described under Item 20 or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-l and has duly caused this Amendment No. 3 to
Form S-1 Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Boulder, Colorado, on May 17, 1999.
Ribozyme Pharmaceuticals, Inc.
/s/ Ralph E. Christoffersen
By: _________________________________
Ralph E. Christoffersen, Ph.D.
Chief Executive Officer and
President
In accordance with the requirements of the Securities Act of 1933, as
amended, this Amendment No. 3 to Form S-1 Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ralph E. Christoffersen Chief Executive Officer May 17, 1999
- -------------------------------------- and President (Principal
Ralph E. Christoffersen, Ph.D. Executive Officer)
/s/ Lawrence E. Bullock Vice President, May 17, 1999
- -------------------------------------- Administration Finance,
Lawrence E. Bullock Chief Financial Officer
and Secretary (Principal
Financial and Accounting
Officer)
/s/ David T. Morgenthaler* Chairman of the Board of May 17, 1999
- -------------------------------------- Directors
David T. Morgenthaler
/s/ Jeremy C. Cook* Director May 17, 1999
- --------------------------------------
Jeremy C. Cook
/s/ Anthony B. Evnin* Director May 17, 1999
- --------------------------------------
Anthony B. Evnin, Ph.D.
/s/ David Ichikawa* Director May 17, 1999
- --------------------------------------
David Ichikawa
/s/ Anders Wiklund* Director May 17, 1999
- --------------------------------------
Anders Wiklund
*/s/ Lawrence E. Bullock
- --------------------------------------
Lawrence E. Bullock
Attorney-in-fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1+ Form of Placement Agency Agreement dated , 1999, between Ribozyme
Pharmaceuticals and Hambrecht & Quist LLC
1.2+ Form of Escrow Agreement dated , 1999, between Ribozyme
Pharmaceuticals, Hambrecht & Quist LLC and Citibank N.A.
3.1 Amended and Restated Certificate of Incorporation of Ribozyme
Pharmaceuticals dated April 17, 1996(5)
3.2 Bylaws of Ribozyme Pharmaceuticals, as amended(1)
4.1 Specimen Stock Certificate(1)
4.2+ Certificate of Designation, Preferences and Rights of Series L
Preferred Shares
5.1+ Opinion of Rothgerber Johnson & Lyons LLP
10.1 Form of Indemnity Agreement entered into between Ribozyme
Pharmaceuticals and its directors and officers, with related
schedule(1)
10.2 Ribozyme Pharmaceuticals' Incentive Stock Option Plan, including form
of Incentive Stock Option Agreement(1)
10.3 Ribozyme Pharmaceuticals' Non-Qualified Stock Option Plan, including
form of Non-Qualified Stock Option Agreement(1)
10.4 Ribozyme Pharmaceuticals' 1996 Stock Option Plan, including forms of
Incentive Stock Option and Nonstatutory Stock Option Agreements(1)
10.5 Ribozyme Pharmaceuticals' 1996 Employee Stock Purchase Plan(1)
10.6 Employment Agreement dated January 1, 1997, between Ribozyme
Pharmaceuticals and Ralph E. Christoffersen(5)
10.7 Incentive Stock Option Agreement between Ribozyme Pharmaceuticals and
Ralph E. Christoffersen dated December 23, 1992(1)
10.8 Incentive Stock Option Agreement between Ribozyme Pharmaceuticals and
Ralph E. Christoffersen dated September 23, 1994(1)
10.9 Warrant Purchase Agreement dated March 15, 1995, between Ribozyme
Pharmaceuticals and Hambrecht & Quist Guaranty Finance(1)
10.10 Warrant to Purchase Common Stock dated March 15, 1995, issued to
Hambrecht & Quist Guaranty Finance(1)
10.11 Warrant to Purchase Common Stock dated February 22, 1993, issued to
LINC Scientific Leasing(1)
10.12 Warrant to Purchase Common Stock dated July 30, 1993, issued to
Douglas E. Olson(1)
10.13 Warrant to Purchase Common Stock dated July 30, 1993, issued to
Richard J. Warburg and Ruth P. Warburg(1)
10.14 Warrant to Purchase Common Stock dated December 28, 1994, issued to
Competitive Technologies, Inc.(1)
10.15 Warrant to Purchase Common Stock dated December 29, 1995, issued to
Silicon Valley Bank(1)
10.16 Warrant to Purchase Common Stock dated July 26, 1996, issued to
Silicon Valley Bank(1)
10.17 Warrant to Purchase Common Stock dated April 17, 1996, issued to
Chiron Corporation(1)
10.18 Collaborative Research, Development and Commercialization Agreement
dated July 15, 1994, between Ribozyme Pharmaceuticals and Chiron
Corporation(1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.19 Research Collaboration and Licensing Agreement dated November 1, 1995,
between Ribozyme Pharmaceuticals and Pharmacia Biotech, AB(1)
10.20 Research and Development Collaboration Agreement dated April 19, 1993,
between Ribozyme Pharmaceuticals and Parke-Davis Division of Warner-
Lambert Company(1)
10.21 First Amendment to the Research and Development Collaboration
Agreement dated April 17, 1995, between Ribozyme Pharmaceuticals and
Parke-Davis Division of Warner-Lambert Company(1)
10.22 Second Amendment to the Research and Development Collaboration
Agreement dated February 8, 1996, between Ribozyme Pharmaceuticals and
Parke-Davis Division of Warner-Lambert Company(1)
10.23 Financing Agreement dated March 16, 1995, among Wilderness Place
Holdings L.L.C., Hambrecht & Quist Guaranty Finance, L.P. and Ribozyme
Pharmaceuticals(1)
10.24 Negotiable Promissory Note dated October 7, 1992, between Ribozyme
Pharmaceuticals and Ralph Christoffersen and Addendum dated June 25,
1993(1)
10.25 Employment Agreement dated January 8, 1996, between Ribozyme
Pharmaceuticals and Lawrence E. Bullock(1)
10.26 Promissory Note dated February 8, 1996, between Ribozyme
Pharmaceuticals and Lawrence E. Bullock(1)
10.27 Lease for Real Property dated May 20, 1992, between Aero-Tech
Investments and Ribozyme Pharmaceuticals(1)
10.28 Non-Disturbance and Attornment Agreement dated March 31, 1995, among
General American Life Insurance Company, Aero-Tech Investments,
Wilderness Place Holdings L.L.C. and Ribozyme Pharmaceuticals(1)
10.29 Master Lease Agreement dated September 2, 1992, between Ribozyme
Pharmaceuticals and LINC Scientific Leasing(1)
10.30 Loan and Security Agreement dated February 28, 1994, between Ribozyme
Pharmaceuticals and Silicon Valley Bank(1)
10.31 Loan Modification Agreement dated December 21, 1994, between Ribozyme
Pharmaceuticals and Silicon Valley Bank(1)
10.32 Loan and Security Agreement dated December 29, 1995, between Ribozyme
Pharmaceuticals and Silicon Valley Bank and MMC/GATX Partnership No.
1(1)
10.33 Warrant to Purchase Common Stock dated December 29, 1995, issued to
MMC/GATX Partnership No. 1(1)
10.34 Agreement dated February 29, 1996, between Ribozyme Pharmaceuticals
and Chiron Corporation relating to research and development funding(1)
10.35 Amendments to original Employment Agreements between Ribozyme
Pharmaceuticals and Ralph E. Christoffersen, Lawrence E. Bullock and
Nassim Usman, pursuant to letters dated November 14, 1996, November
22, 1996, and December 15, 1996(3)
10.36 Promissory Note dated June 4, 1996, between Ribozyme Pharmaceuticals
and Nassim Usman(3)
10.37 Amendment to Lease for Real Property dated March 13, 1997, between
Aero-Tech Investments and Ribozyme Pharmaceuticals(3)
10.38 Employment Agreement dated May 2, 1996, between Ribozyme
Pharmaceuticals and Nassim Usman(2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.39 Collaboration Agreement Regarding Use of Ribozymes to Determine Gene
Function dated May 13, 1996, between Ribozyme Pharmaceuticals and
Chiron Corporation(2)
10.40 Amended and Restated License Agreement dated November 20, 1996,
between Ribozyme Pharmaceuticals, University Research Corporation,
University of Colorado and United States Biochemical Corporation(3)*
10.41 Amended and Restated Sublicense Agreement dated November 20, 1996,
between Ribozyme Pharmaceuticals and United States Biochemical
Corporation(3)*
10.42 Amended and Restated License Agreement dated November 20, 1996,
between Ribozyme Pharmaceuticals and Competitive Technologies,
Incorporated(3)*
10.43 Memorandum of Understanding dated March 1, 1996, between Ribozyme
Pharmaceuticals and DowElanco(1)
10.44 Stock Subscription Agreement dated September 1996 between Ribozyme
Pharmaceuticals and University of Research Corporation(3)*
10.45 Stock Subscription Agreement dated November 20, 1996, between Ribozyme
Pharmaceuticals and United States Biochemical Corporation(3)*
10.46 Assignment of License and Restated License Agreement dated November
20, 1996, among Ribozyme Pharmaceuticals, United States Biochemical
Corporation and Competitive Technologies(3)*
10.47 Letter Agreement dated May 22, 1996, between Ribozyme Pharmaceuticals
and ALZA Corporation(3)*
10.48 Research and Development Collaboration Agreement dated December 2,
1996, between Ribozyme Pharmaceuticals and Protogene Laboratories(3)*
10.49 License Agreement dated February 14, 1997, between Ribozyme
Pharmaceuticals and IntelliGene, Ltd.(3)*
10.50 Subscription Agreement dated April 17, 1995, between Ribozyme
Pharmaceuticals and Parke-Davis Division of Warner-Lambert Company(1)
10.51 Stock Purchase Agreement dated June 28, 1995, among Ribozyme
Pharmaceuticals and investors(1)
10.52 Agreement dated March 1, 1996, between Ribozyme Pharmaceuticals and
DowElanco Corporation relating to the conversion of preferred stock(1)
10.53 Stock Subscription Agreement dated October 30, 1995, between Ribozyme
Pharmaceuticals and Gewestelijke Investeringsmaatschappij voor
Vlaanderon n.v.(1)
10.54 Research, License, Supply and Royalty Agreement between Schering
Aktiengesellschaft and Ribozyme Pharmaceuticals dated April 9,
1997(4)*
10.55 Purchase Agreement dated April 9, 1997, among Ribozyme
Pharmaceuticals, Schering Berlin Venture Corporation and Schering
Aktiengesellschaft(4)*
10.56 Employment Agreement dated February 27, 1997, between Ribozyme
Pharmaceuticals and Alene Holzman(5)
10.57 Employment Agreement dated July 5, 1997, between Ribozyme
Pharmaceuticals and Thomas Rossing(5)
10.58 Executive Bonus Plan dated March 27, 1998(6)
10.59 Research, Collaboration and License Agreement dated May 19, 1998,
between Ribozyme Pharmaceuticals and Roche Bioscience, a division of
Syntex (U.S.A.) Inc.(7)*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.60 Employment Agreement dated September 8, 1998, between Ribozyme
Pharmaceuticals and Nassim Usman(7)
10.61 Participation Agreement dated August 31, 1998, as amended, and related
documents between Ribozyme Pharmaceuticals and Atugen Biotechnology
GmbH(9)**
10.62 Research Collaboration and License Agreement dated March 17, 1999,
between Ribozyme Pharmaceuticals and Eli Lilly and Company**
10.63 Stock Purchase Agreement dated April 30, 1999, between Ribozyme
Pharmaceuticals and Eli Lilly and Company
23.1+ Consent of Ernst & Young LLP, Independent Auditors
23.2+ Consent of Rothgerber Johnson & Lyons LLP (included in Exhibit 5.1)
24.1+ Power of attorney (included on the signature page of this Registration
Statement)
</TABLE>
- --------
+ Previously filed.
* Ribozyme Pharmaceuticals has applied for and received confidential
treatment with respect to portions of these exhibits.
** Ribozyme Pharmaceuticals has applied for confidential treatment with
respect to portions of these exhibits.
(1) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form SB-2 Registration Statement, File No. 333-1908-D.
(2) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-QSB for the quarter ended June 30, 1996.
(3) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-KSB for the year ended December 31, 1996.
(4) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 8-K dated June 12, 1997.
(5) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form SB-2 Registration Statement, dated September 5,
1997, File No. 333-34981.
(6) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-K for the year ended December 31, 1997.
(7) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-Q/A for the quarter ended June 30, 1998.
(8) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 10-Q for the quarter ended September 30, 1998.
(9) Documents incorporated by reference herein to certain exhibits to Ribozyme
Pharmaceuticals' Form 8-K dated March 19, 1999.
<PAGE>
Research Collaboration and License Agreement
between
Eli LILLY and Company
and
Ribozyme Pharmaceuticals Inc.
March 17, 1999
<PAGE>
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.25B-2B OF THE SECURITIES EXCHANGE ACT OF 1934. [*] INDICATES OMITTED
MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST AND IS FILED
SEPARATELY WITH THE COMMISSION.
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS.............................................................. 2
2. CONDUCT OF THE RESEARCH AND DEVELOPMENT UNDER THE COLLABORATION.......... 10
3. MANAGEMENT OF COLLABORATION.............................................. 11
4. PRODUCT DEVELOPMENT...................................................... 13
5. DIAGNOSTIC PRODUCTS...................................................... 14
6. PAYMENTS................................................................. 15
7. RECORDS; AUDITS; AND REPORTS............................................. 19
8. PATENT RIGHTS AND INFRINGEMENT........................................... 21
9. LICENSES AND OTHER COMMERCIAL RIGHTS..................................... 23
10. MANUFACTURING AND PURCHASE OF RIBOZYME PRODUCTS.......................... 24
11. DISCOUNT................................................................. 25
12. CONFIDENTIALITY.......................................................... 25
13. REPRESENTATIONS, WARRANTIES AND COVENANTBY BOTH PARTIES.................. 27
14. INDEMNIFICATION.......................................................... 28
15. TERM AND TERMINATION..................................................... 29
16. PUBLICITY................................................................ 31
17. DISPUTE RESOLUTION....................................................... 31
18. ASSIGNMENT AND DELEGATION................................................ 32
19. ADDITIONAL TERMS......................................................... 32
</TABLE>
[*] Confidential treatment requested
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<PAGE>
RESEARCH COLLABORATION AND LICENSE AGREEMENT
THIS RESEARCH COLLABORATION AND LICENSE AGREEMENT is entered into on March
17 1999 (the "Effective Date"), by and between ELI LILLY AND COMPANY, an Indiana
corporation, having a place of business at LILLY Corporate Center, Indianapolis,
Indiana 46285 ("LILLY"), and RIBOZYME PHARMACEUTICALS INC., a Delaware
corporation, having a place of business at 2950 Wilderness Place, Boulder,
Colorado, 80301 ("RPI"). LILLY (and its Affiliates) and RPI may be referred to
herein as a "Party" or, collectively, as "Parties." LILLY and RPI shall include
their Affiliates throughout this Agreement.
WHEREAS, RPI is conducting a program to design and develop Ribozymes for
the prevention and treatment of Hepatitis C virus infection; and
WHEREAS, LILLY is interested in developing and commercializing
pharmaceutical products to treat Hepatitis C virus infection and would like to
collaborate with RPI in a research and development effort specifically using
Ribozyme Technology to target hepatitis C virus;
WHEREAS, LILLY and RPI have entered into an Option Agreement, January 26,
1999, herein incorporated by reference (Appendix F) and contingent upon the
parties performing the obligations contained in Decision 1 therein and now have
entered into this Agreement; and
WHEREAS, RPI and LILLY believe that each party can bring significant and
complementary strengths to a collaboration and wish to proceed in accordance
with the terms of the following agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements expressed herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the Parties agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "AFFILIATE" means a business entity that owns, controls, is owned by,
controlled by, is under common ownership or common control with a Party.
For the purposes of this definition, the possession (directly or
indirectly) of more than fifty percent (50%) of the outstanding voting
securities of an entity or the maximum ownership permitted by law or
administrative practice, or the right to receive fifty percent (50%) or
more of the profits or earnings of an entity shall be deemed to constitute
ownership or control.
1.2 "AGREEMENT" means this agreement together with all appendices and schedules
hereto.
1.3 "BASE ROYALTIES" shall have the meaning set forth in Section 6.5.1.
1.4 "BASIC THERAPEUTIC UTILITY" means certain chemical or physical modification
of the Ribozyme incorporated in a Ribozyme Product to facilitate the utility
of a Ribozyme Product as a therapeutic in the Field. Such modification
shall not include the Delivery System unless the Drug Delivery System is
required for the therapeutic utility.
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1.5 "CARUTHERS PATENTS" shall mean the inventions and discoveries which are
the subject of, or which are covered in whole or in part by, the claims
included in U.S. Patent Numbers 4,415,732; 4,458,066; 4,500,707;
4,668,777; 4,973,679; 5,132,418; and 5,153,319 and any corresponding
patent applications or any patents that may issue thereon throughout the
world, including any extensions, renewals, divisions, continuations,
continuations-in-part, patents of addition, and/or reissues thereof,
including any patent application and any patents issuing thereon
throughout the world, including any extensions, renewals, continuations,
continuations-in-part, divisions, patents of additions and/or reissues
thereof, filed upon any invention the practice of which would infringe the
claims covered by the foregoing patents.
1.6 "CECH PATENTS" shall mean the inventions and discoveries which are the
subject of, or which are covered in whole or in part by, the claims
included in (i) U.S. Patent Application Serial Number 937,327, filed
December 3, 1986 entitled RNA RIBOZYME POLYMERASES, DEPHOSPHORYLASES,
RESTRICTION ENDORIBONUCLEASES AND METHODS (the "'327 Patent Application")
, (ii) the United States Patents listed in APPENDIX B under Cech Patents,
and any patents issuing thereon as well as any corresponding patent
applications or any patents that may issue thereon throughout the world,
including any extensions, renewals, divisions, continuations,
continuations-in-part, patents of addition, and/or reissues thereof,
including any patent application and any patents issuing thereon
throughout the world, including any extensions, renewals, continuations,
continuations-in-part, divisions, patents of additions and/or reissues
thereof, filed upon any invention the practice of which would infringe the
claims covered by the foregoing patents, which invention was made by
Thomas R. Cech, Arthur J. Zaug and Michael D. Been, and/or persons acting
under their direction and control at the University of Colorado, which is
the work product of the Research Support Funding Agreement between USB and
the University of Colorado Foundation entered into on May 20, 1987 (the
"RSFA") and which was conceived or reduced to practice during the term of
the RSFA.
1.7 "CHANGE OF CONTROL" shall mean a merger or acquisition by, with or of RPI
in which the equity holders of RPI immediately prior to such event do not
hold at least [ * ]of the equity of the resulting entity, and a
single new acquiring party controls at [ * ]of the equity of the resulting
entity or the sale of all or substantially all the assets of RPI to a
Third Party.
1.8 "CLINICAL DEVELOPMENT" shall mean activities related to the development
obligations of a party in connection with clinical trials, with respect to
a Ribozyme Product for a particular indication.
1.9 "COMBINATION PRODUCT" means any pharmaceutical product which comprises the
Ribozyme Product and another active compound(s) effective in treating HCV
infections.
1.10 "COMBINED PRODUCT" means one or more Ribozyme Products, which may be a
Combination Product, marketed as a unit with the Delivery System.
1.11 "CONFIDENTIAL INFORMATION" means each party's confidential information
disclosed in writing or if disclosed orally, confirmed within 30 days in
writing and marked confidential which includes: inventions, know-how and
data, and shall include, without limitation, the terms of this Agreement,
research, development, manufacturing, marketing, financial, regulatory,
personnel and other business information and plans, whether in oral,
written, graphic or electronic form and whether in existence as of the
Effective Date or developed or acquired in the future, except as otherwise
provided in Article
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<PAGE>
12.2.
1.12 "CONTROL" OR "CONTROLLED" shall refer to possession of the ability to
grant a license or sublicense of patent rights, know-how or other
intangible rights as provided for herein without violating terms of any
agreement or other arrangement with any Third Party.
1.13 "COST OF GOODS" OR "COGS" shall mean fully-loaded costs of supplying
Ribozymes calculated in accordance with RPI's accounting methods
consistently applied which methodology shall be calculated in compliance
with U.S. generally accepted accounting principles (GAAP). Expenses
include raw materials, labor, quality control testing, labeling, packaging
and shipping costs, depreciation for capital investment in plant and
equipment for the manufacture of bulk drug and Research Ribozymes, as
further outlined in APPENDIX B hereto.
1.14 "COST OF PRODUCTS" OR "COPS" shall mean fully-loaded costs of supplying
Ribozyme Products calculated in accordance with LILLY's accounting methods
consistently applied which methodology shall be calculated in compliance
with U.S. generally accepted accounting principles (GAAP). For the
Purposes of this Agreement, COPS shall include COGS, Third Party Royalty
burden, Royalties due RPI, final filling/finishing and packaging of the
Ribozyme Product and only for purposes of this COPS calculation final
filling/finishing and packaging cost is not to exceed [ * ] of the
average bulk drug cost calculated [ * ]
1.15 "COVER" (including variations thereof such as "Covered", "Coverage", or
"Covering") means that the making, having made, using, offering for sale,
selling or importing of a particular product would infringe a Valid Claim
of an issued patent in the absence of license rights under such patent.
The determination of whether a product is Covered by particular patent
rights shall be made on a country by country basis.
1.16 "CPI" OR "CONSUMER PRICE INDEX" shall mean the consumer price index for
all urban consumer series ID: CUUR0000SA0 as published from time to time
by the Bureau of Labor Statistics, where October 1998 was 164.0.
1.17 "DELIVERY SYSTEMS" shall mean a substrate, encapsulant, mechanical
device or other means for delivering Ribozyme to a patient in need of
treatment, which Delivery System, in the absence of a Ribozyme would have
no Basic Therapeutic Utility.
1.18 "DRUG APPROVAL APPLICATION" means an application for Regulatory Approval
required to be approved before marketing and commercial sale of a Ribozyme
Product in humans as a biologic or a drug (and an associated device or
delivery system, if necessary) in a regulatory jurisdiction, including but
not limited to NDA and BLA for the United States and their counterparts in
other countries.
1.19 "ECKSTEIN PATENTS" shall mean the inventions and discoveries which are the
subject of, or which are covered in whole or in part by, the claims
included in (i) U.S. Patent Application Serial Number 965,411, filed
December August 9, 1993 entitled MODIFIED RIBOZYMES (the "411 Patent
Application"); (ii) the United States Patent Numbers 5,672,695; 5,698,687;
and 5,817,635, and any patents issuing thereon as well as any
corresponding patent applications or any patents that may issue thereon
throughout the world, including any extensions, renewals, divisions,
continuations, continuations-in-
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<PAGE>
part, patents of addition, and/or reissues thereof, including any patent
application and any patents issuing thereon throughout the world,
including any extensions, renewals, continuations, continuations-in-part,
divisions, patents of additions and/or reissues thereof, filed upon any
invention the practice of which would infringe the claims covered by the
foregoing patents.
1.20 "EXISTING THIRD PARTY PATENTS" [ * ].
1.21 "FAR EAST" shall mean East Asian and South-East Asian countries
bordering on the Pacific Ocean, including Japan, China, South Korea,
Thailand, Philippines, and Taiwan,
1.22 "FDA" means the United States Food and Drug Administration of the
Department of Health and Human Services, and any successor entities.
References herein to the FDA shall include to the extent applicable any
comparable foreign regulatory authority that has the authority to grant
full Regulatory Approval.
1.23 "FIELD" shall mean applications of Ribozymes as therapeutics for treating
Hepatitis C Virus (HCV) infection as a primary indication, including
without limitation, research, prophylactic and therapeutic uses, in test
tubes, cells, humans, and animals.
1.24 "FIRST COMMERCIAL SALE" of a Ribozyme Product shall mean the first regular
sale for use or consumption of such Ribozyme Product in a country after
required marketing and pricing approval has been granted by the governing
health regulatory authority of such country to a Third Party.
1.25 "FTE" means one full time-equivalent research and/or development employee.
An FTE will be defined as [ * ].
1.26 "IMMUNOLOGIC BASED COMPOUND" means a compound that modifies the immune
system such that an antiviral response occurs and excludes, for example, a
compound that directly targets the hepatitis C RNA, a compound that
directly targets the HCV proteins, proteases, helicases or polymerases.
1.27 "IND" means an Investigational New Drug application as defined 21 C.F.R.
312 and any revisions thereof governing the FDA, as may be amended from
time to time. For purposes of this Agreement, an investigator held
Investigational New Drug application shall not be deemed an IND.
1.28 "INVENTION" means any patentable discovery or invention in the Field made
under this Agreement and within the scope of the R&D Plan.
1.29 "KNOW-HOW" means all non-public, proprietary information related to the
research, development, use, manufacture or administration of Ribozyme in
the Field possessed and/or developed by either party
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<PAGE>
under this Agreement.
1.30 "LILLY DEVELOPMENT COSTS" of a Ribozyme Product shall mean the world wide
fully-burdened costs to a party of performing development of such Ribozyme
Product and preparing and prosecuting regulatory applications with respect
to such Ribozyme Product. This shall include, without limitation, the
direct cost of labor and benefits, materials (including clinical
supplies), overhead (including indirect costs and general and
administrative expenses) and fees or other Third Party expenses.
1.31 "LILLY TECHNOLOGY LICENSE" means a license granted hereunder pursuant to
which LILLY shall grant a non-exclusive, worldwide, royalty-bearing (in
accordance with Sections 4.2.1, 4.2.2, 15.4.3 or 15.4.4) license under the
LILLY Technology to RPI for purposes of developing a Ribozyme Product.
1.32 "LILLY TECHNOLOGY" means the Invention and/or Non-Patented Technology
owned or Controlled by LILLY.
1.33 "LILLY" means LILLY and/or any of its Affiliates.
1.34 "MAJOR EUROPE" means United Kingdom, Germany, France, Italy or Spain.
1.35 "NET SALES" shall mean:
a) The gross amount invoiced by a Party, its Affiliates and sublicensees
to Third Party customers on any sale, transfer or other disposition of
a Ribozyme Product, less (i) trade quantity and cash discounts
allowed; (ii) commissions, discounts, refunds, rebates, charge backs,
retroactive price adjustments, and any other allowances which
effectively reduce the net selling price; (iii) product returns and
allowances; (iv) that portion of the sales value associated with
Delivery Systems; (v) any tax imposed on the production, sale,
delivery or use of the Ribozyme Product; (vi) allowance for customary
distribution of [ * ] ; (vii) any other similar, reasonable, and
customary deductions which are properly recorded as a reduction of
sales under GAAP, consistently applied using the selling Party's then-
current standard procedures and methodology, including its then
current standard exchange rate methodology for the translation of
foreign currency sales into U.S. Dollars ("Dollars"). Notwithstanding
the foregoing, the provision under sub-section (iv) above shall not
apply if RPI has made any technical contribution towards any component
of the Delivery System which causes a significant reduction in the
quantity of Ribozyme Product administered to a patient in each dose as
approved by JDT and determined on a cost contribution basis by each
party.
b) In the event that the Ribozyme Product is sold as part of a
Combination Product, the Net Sales from the Ribozyme Product, for the
purposes of determining royalty payments, shall be determined by
multiplying the Net Sales of the Combination Product by the fraction,
A / (A+B) where A is the weighted (by sales volume) average sale price
of the Ribozyme Product when sold separately in finished form, and B
is the weighted (by sales volume) average sale price of the other
product(s) sold separately in finished form.
c) In the event that the weighted average sale price of the Ribozyme
Product can be determined but the weighted average sale price of the
other product(s) cannot be determined, Net Sales for purposes of
determining royalty payments shall be calculated by multiplying the
Net Sales of the Combination Product by the fraction A / C where A is
the weighted (by sales volume)
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<PAGE>
average sale price of the Ribozyme Product when sold separately in
finished form and C is the weighted (by sales volume) average selling
price of the Combination Product.
d) In the event that the weighted average sale price of the other
product(s) can be determined but the weighted average sale price of
the Ribozyme Product cannot be determined, Net Sales for purposes of
determining royalty payments shall be calculated by multiplying the
Net Sales of the Combination Product by the following formula: one (1)
minus B / C where B is the weighted (by sales volume) average sale
price of the other product(s) when sold separately in finished form
and C is the weighted (by sales volume) average selling price of the
Combination Product.
e) In the event that the weighted average sale price of both the Ribozyme
Product and the other product(s) in the Combination Product cannot be
determined, the Net Sales of the Ribozyme Product shall be deemed to
be equal to [ * ]of the Net Sales of the Combination Product.
f) The weighted average sale price for a Ribozyme Product, other
product(s), or Combination Product shall be calculated once each
Calendar Year and such price shall be used during all applicable
royalty reporting periods for the entire Calendar Year. When
determining the weighted average sales price of a Ribozyme Product,
other product(s), or Combination Product, the weighted average sale
price shall be calculated using the data arising from the twelve (12)
months of the preceding Calendar Year. In the initial partial Calendar
Year, a forecasted weighted average sale price will be used for the
Ribozyme Product, other product(s), or Combination Product. Any over
or under payment due to a difference between forecasted and actual
weighted average sale prices will be paid or credited in the first
Calendar Quarter royalty payment of the following Calendar Year.
g) In the event the Delivery System is sold as part of a Combined Product
(as defined above), the Net Sales of the Delivery System, for the
purposes of determining royalty payments, shall be determined by
multiplying the Net sales of the Combined Product by the fraction,
A/(A+B) where A is the average sale price of the Delivery System when
sold separately in finished form, and B is the average sales price of
the other product(s) sold separately in finished form. In the event
that such average sale price cannot be determined for both the
Delivery System and other products in combination, Net sales for
purposes of determining royalty payments shall be calculated by
multiplying the Net Sales of the Combined Product by the fraction C/
(C-D) where C is the selling Party's cost of goods of the Delivery
system D is the selling Party's cost of the goods of the other
product(s) determined in accordance with the method of accounting
normally employed by the selling Party in computing cost of goods.
1.36 "NON-PATENTED TECHNOLOGY" means know-how, trade secrets or other
information or materials that are not patentable or, for a possibly
patentable discovery or invention, on which the parties choose not to file
a patent, made under this Agreement and within the scope of the Research
and/or Development Plan.
1.37 "PATENT COST REIMBURSEMENT" means Patent Costs, relating to the RPI Patent
Rights licensed to LILLY hereunder, reimbursed to RPI by LILLY as
specifically provided under Section 6.3
1.38 "PATENT COSTS" means the fees and expenses paid to outside legal counsel
and other Third Parties, and filing, prosecution and maintenance expenses,
incurred in connection with the establishment and maintenance of Patent
Rights.
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1.39 "PATENT RIGHTS" means all rights under Patents.
1.40 "PATENT" means (i) patents (including inventor's certificates) that
include one or more Valid Claims, including without limitation any
substitution, extension (including supplemental protection certificate),
registration, confirmation, reissue, reexamination or renewal thereof and
(ii) pending applications, including provisional applications,
continuations, divisionals, and continuations-in-part of any of the
foregoing.
1.41 "PHASE I" means studies conducted in accordance with Good Clinical
Practices ("GCPs") in a small number of healthy volunteers or patients to
establish an initial safety profile and pharmacokinetics of a Ribozyme
Product for an indication in the Field.
1.42 "PHASE II" means that portion of the clinical development program which
provides for the initial trials of a product on a limited number of
patients for the primary purpose of evaluating safety, dose ranging and
efficacy in the proposed therapeutic indication, as more precisely defined
by the rules and regulations of the FDA and corresponding rules and
regulations in other countries.
1.43 "PHASE III" means that portion of the clinical development program which
provides for the continued trials of a Ribozyme Product on sufficient
numbers of patients to establish the safety and efficacy of a product for
the desired claims and indications, as more precisely defined by the rules
and regulations of the FDA and corresponding rules and regulations in
other countries. Any trial designed to support a NDA without further
clinical studies will be considered a Phase III trial for purposes of this
Agreement.
1.44 "PHENOTYPE" means the entire physical, biochemical, and physiological
makeup of an individual as determined both genetically or environmentally
and any one or any group of such traits.
1.45 "PIVOTAL" means a clinical trial upon the completion of which a decision
is made to obtain the necessary Regulatory Approval in Japan immediately
prior to Product Launch in Japan.
1.46 "PRE-CLINICAL REIMBURSEMENT" means reimbursement by LILLY of costs
incurred by RPI as of the Effective Date of this Agreement. relating to
the overall research and development of Ribozyme Technology, including
Ribozymes targeting the HCV RNA. The Pre-clinical Reimbursement is
specifically set forth in Section 6.3 herein.
1.47 "PRODUCT EFFECTIVENESS" means demonstration of the ability of a Ribozyme
Product to cause statistically significant reduction in patient serum HCV
RNA. Other Product Effectiveness criteria (business and scientific) shall
be determined based on mutual agreement of the Parties and as approved by
the JDT. The JDT shall develop a timeline to address the Product
Effectiveness criteria.
1.48 "PRODUCT LAUNCH" shall mean the First Commercial Sale of a Ribozyme
Product in a particular territory.
1.49 "REGULATORY APPROVAL" means any approvals, product and/or establishment
licenses, registrations or authorizations of any federal, state or local
regulatory agency, department, bureau or other governmental entity,
necessary for the manufacture, use, storage, importation, export,
transport, or sale of the Ribozyme Products in a regulatory jurisdiction.
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1.50 "RESEARCH AND DEVELOPMENT PLAN" OR "R&D PLAN" means a plan approved by the
Joint Steering Committee in accordance with Section 2.1, but no plan shall
be for [ * ], describing the research and development of a Ribozyme
Product and which contains the following information: (i) the Commencement
Date; (ii) a definition of various end-points; (iii) the key goals and
target dates to accomplish each goal, (iv) the requirements for success
for each stage of development, and (v) the quantity of FTE support to be
paid to RPI by LILLY.
1.51 "RESEARCH COLLABORATION" means the overall collaboration between the
Parties.
1.52 "RESPONSIBLE PARTY" means the Party responsible for Patent Management.
1.53 "RIBOZYME PRODUCT" or "PRODUCT" means a substance that (i) is or is
intended to be sold commercially, and (ii) contains a Ribozyme as an
active therapeutic or diagnostic (subject to Article 5) for use in the
Field.
1.54 "RIBOZYME TECHNOLOGY" means all inventions, improvements, know-how or
other developments relating to Ribozymes in the Field, including the
identification, manufacture, synthesis, delivery, use, enhancement and
control of Ribozymes which is a work product of or relating to Ribozymes
Controlled as of the Effective Date and during the Term by RPI, and all
foreign equivalents, counterparts, patents and patent applications
throughout the world that may issue thereon, including any extensions,
renewals, divisions, continuations, continuations-in-part, patents of
addition and reissues thereof and including those listed in APPENDIX A.
1.55 "RIBOZYME" means a ribonucleic acid-based molecule able to cause catalytic
cleavage of itself or another molecule independent of protein.
1.56 "ROYALTY TERM" means, in the case of any Ribozyme Product, in any country,
the period of time commencing on the First Commercial Sale of such
Ribozyme Product and ending upon the expiration of the last to expire of
the Patent Rights Controlled by RPI as to LILLY's payment of royalties and
LILLY as to RPI's payment of royalties, Covering such Ribozyme Product in
such country. Royalty Term shall be determined on a Product by Product,
country by country basis.
1.57 "RPI" shall mean Ribozyme Pharmaceutical Inc. and/or any of its
Affiliates.
1.58 "RPI BACKGROUND PATENT RIGHTS" means all rights under Patents existing as
of the Effective Date that RPI Controls, including Patent Rights for the
Ribozyme Technology.
1.59 "RPI PATENT RIGHTS" means RPI Background Patent Rights and all Patent
Rights claiming an RPI Invention.
1.60 "SCIENTIFICALLY REASONABLE AND DILIGENT EFFORTS" means, unless the Parties
agree otherwise, those efforts consistent with the exercise of prudent
scientific and business judgment, as applied to other research,
development and commercialization programs or products of similar
scientific and commercial potential within the relevant product lines of
the Party developing the Ribozyme Product and its Affiliates.
Scientifically Reasonable and Diligent Efforts shall also mean the use of
commercially reasonable diligent efforts to develop, commercialize and
market a Ribozyme Product.
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1.61 "SUBMISSION" shall mean when documentation is filed with the appropriate
regulatory agency and such agency has accepted that documentation as
satisfactory for further regulatory action.
1.62 "SUCCESSFUL COMPLETION" means that a toxicity study or clinical trial has
been completed and has met the criteria established by the JDT at the
beginning of the study for what would be deemed a successful result of
such toxicity study or clinical trial and a decision is made by LILLY to
proceed to the next stage of clinical trials.
1.63 "THIRD PARTY" means an entity other than RPI or LILLY and its
sublicensees.
1.64 "VALID CLAIM" means a claim of an issued patent which claim has not
lapsed, expired, been canceled or become abandoned and has not been
declared invalid by an unreversed and unappealable decision or judgment of
a court or other appropriate body of competent jurisdiction, and which has
not been admitted to be invalid or unenforceable through reissue or
disclaimer.
2. CONDUCT OF THE RESEARCH AND DEVELOPMENT UNDER THE COLLABORATION
2.1 R&D PLAN. The research and development shall be conducted in accordance
with the R&D Plan. The R&D Plan shall include planned Clinical Development
activities for the Clinical Development of Ribozyme Products. The proposed [
* ] R&D Plan is attached as APPENDIX C and is subject to amendment and final
approval by the JDT under this Agreement within sixty (60) days of the Effective
Date. All such R&D Plans can be amended from time to time in writing by the JDT
when significant changes occur in the goals or resource needs of a study and
target dates to accomplish such goals. On or before October 1 (commencing [ *
]of each calendar year of the research and development program, the JDT shall
use its best efforts to agree upon a R&D Plan for the following calendar year.
If the JDT is unable to reach agreement on an annual R&D Plan by October 1 of
the year preceding the calendar year in which such plan is to go into effect,
the matter shall be referred to the JSC for resolution. With respect to
preclinical research, the R&D Plan shall identify the general tasks, and
associated costs (including all the R&D Plan approved FTEs and other support of
RPI activities by LILLY necessary for RPI to perform its obligations under this
Agreement), to be accomplished by each party during the following year. Once an
annual R&D Plan is adopted and fully funded, each party will use Scientifically
Reasonable and Diligent Efforts to perform the tasks allocated to it under such
R&D Plan.
2.2 EFFORTS. Each Party shall use Scientifically Reasonable and Diligent
Effort to perform the respective responsibilities set forth in the R&D Plan.
Except as expressly provided in Section 6.1 or as otherwise agreed from time to
time by the Parties, LILLY and RPI shall each bear all of its own expenses
incurred in connection with the performance of this Agreement.
2.3 AVAILABILITY OF RESOURCES. Each Party shall maintain laboratories, offices
and all other facilities reasonably necessary to carry out the activities
provided under the Research Plan. Each Party agrees to make its employees and
non-employee consultants reasonably available at their respective places of
employment to consult with the other Party on issues arising in the course of a
study and in connection with any request from any regulatory agency, including,
without limitation, regulatory, scientific, technical and clinical testing
issues. Representatives of RPI and LILLY may, upon reasonable notice and at
times
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reasonably acceptable to the other Party (i) visit the facilities where the
research is being conducted; and (ii) consult informally, during such visits and
by telephone and electronic mail, with personnel of the other Party performing
work on the Research Collaboration.
2.4 REPORTS. Each Party shall make summary presentations of research progress
at each meeting of the JDT pursuant to a pre-determined agenda. Each Party will
also communicate informally and through the JDT to inform the other of research
done under the Research Plan.
3. MANAGEMENT OF COLLABORATION
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3.1 FORMATION OF JOINT DEVELOPMENT TEAM. The Collaboration shall be managed by
a group of key senior research and development executives from RPI and LILLY who
will direct and oversee all of the research and development (the "JOINT
DEVELOPMENT TEAM" or "JDT"). The JDT shall be comprised of [ * ] (unless a
Party chooses to have fewer members) appointed by each of LILLY and RPI. Either
Party may appoint substitute or replacement members of the JDT to serve as their
representatives. The initial members of the JDT shall be appointed by the
Parties within thirty (30) days following the Effective Date. The JDT shall
have the responsibility and authority to: (i) review and approve the R&D Plan;
(ii) monitor all of the research and development under this Agreement; (iii)
coordinate tasks and responsibilities under the R&D Plans; (iv) review and
approve achievement of clinical milestones; and (v) alert management of both
Parties when there are significant changes in the timeframe and/or costs
contained in the R&D Plan and when target dates will not be met, what remedial
actions are to be taken. All major decisions, such as approval of the budget
and clinical milestones, shall be finally approved by the JSC.
3.2 FORMATION OF THE JOINT STEERING COMMITTEE. The collaborative effort
conducted hereunder shall be conducted under the overall direction of a Joint
Steering Committee comprised of [ * ] members. [ * ] members shall be
appointed by each of LILLY and RPI not later than thirty (30) days after the
Effective Date. All decisions of the Joint Steering Committee shall be
unanimous. Either party may change its representation on the Joint Steering
Committee at any time by written notice to the other. The JSC shall hold
meetings at least [ * ]times annually in person, by telephone or video-
conference by previous agreement. The Parties shall assume all meeting costs of
their representatives to the JSC. Minutes shall be kept of all Joint Steering
Committee meetings and circulated to the parties for approval. Minutes shall be
deemed approved unless any member of the Joint Steering Committee objects to the
accuracy of such minutes within five (5) days of receipt.
3.3 MEETINGS OF JOINT DEVELOPMENT TEAM. The JDT shall initially meet at least
[ * ] times per year at locations and times to be determined by the JDT,
with the intent of meeting at alternating locations in Boulder, Colorado and
Indianapolis, Indiana, with each Party to bear all travel and related costs for
its members. In addition to regular JDT meetings, either Party may schedule a
special meeting at the other Party's offices on [ * ] notice. Under special
circumstances and upon approval of a majority of the members, the JDT is also
authorized to conduct meetings by telephone or video-conference. In addition,
there shall be regular contact by telephone, e-mail or other communication
between meetings. The Parties shall assume all meeting costs of their
representatives to the JDT.
3.4 DECISION-MAKING PROCESS.
3.4.1 Decisions of the JDT shall be made by unanimous consensus when
possible, and otherwise by majority vote, subject to the right of either party
to appeal any decision of the JDT to the Joint Steering Committee. All decisions
made or actions taken by the JDT shall be made [ * ] is called upon to make a
decision or to take action. No vote of the JDT may be taken unless a majority of
the members of the JDT are present, including at least one (1) representative of
each party. The JDT shall keep minutes of any meeting at which a decision is to
be reached and shall circulate such minutes to all members of the JDT and the
Joint Steering Committee [ * ]. Minutes shall be deemed approved unless any
member of the JDT or the Joint Steering Committee objects to the accuracy of
such minutes [ * ] of receipt. Any party desiring to appeal a decision of the
JDT to the Joint Steering Committee shall make its appeal in writing to
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the Joint Steering Committee within [ * ] days of receipt of the minutes for the
meeting at which the decision was made. Action pursuant to any decision appealed
to the Joint Steering Committee shall be suspended pending a determination by
the Joint Steering Committee to accept, reject or modify the decision of the
JDT. Any party may at any time request reconsideration of any issue if such
party in good faith believes that substantial changes in circumstances have
occurred that necessitate such reconsideration.
3.4.2 The JDT may appoint one or more other committees ("Advisory
Committees") to perform such functions as the JDT may determine. Unless a party
elects not to participate on a particular Advisory Committee, all Advisory
Committees shall have at least one representative of each party. Advisory
Committees may provide advice and make recommendations to the JDT, but shall
have no authority to bind the JDT or any of the parties.
3.4.3 Any disagreement, which cannot be resolved by the vote of the JDT,
shall be referred to the Joint Steering Committee. If the dispute remains
unresolved, the matter shall be referred to the [ * ] of RPI and the [ * ]LILLY
or such equivalent level executive. If the dispute remains unresolved, then the
Parties will enter into a non-binding arbitration process.
3.5 GOVERNANCE FOLLOWING PRODUCT LAUNCH. As soon as practicable following
product launch of a Ribozyme Product, the parties shall meet to review whether
it is appropriate to continue the collaboration under the day to day management
of the JDT, or whether the objectives of the JDT have been substantially
achieved and it is appropriate to disband or reorganize the JDT. Regardless of
whether the parties elect to disband or reorganize the JDT, the Joint Steering
Committee shall continue to provide overall direction to the collaboration.
4. PRODUCT DEVELOPMENT
4.1 LILLY'S EXCLUSIVE RIGHTS TO DEVELOP RIBOZYME PRODUCTS. Subject to the
exceptions set forth in Sections 4.2.1 and 4.2.2, LILLY shall have the
exclusive, worldwide right to develop, commercialize and market Ribozyme
Products in the Field.
4.2 RPI'S RIGHTS TO RIBOZYME PRODUCTS. Subject to the following Sections 4.2.1
and 4.2.2, RPI shall exclusively and diligently perform its obligations for the
development of Ribozymes in the Field with LILLY.
4.2.1 DUE DILIGENCE FAILURE. [ * ]
4.2.2 TERMINATION OF A RIBOZYME PRODUCT. [ * ]
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4.3 REGULATORY WORK. LILLY shall be responsible for determining all regulatory
responsibilities for the preparation and filing of all Drug Approval
Applications in the name of LILLY and all activities necessary for such Drug
Approval Applications including but not limited to the manufacture, marketing
and sale of any Ribozyme Product. Any such work to be conducted by RPI under
this Agreement will be fully-funded by LILLY as approved in the R&D Plan.
4.4 MEDICAL ACTIVITY DECISIONS. LILLY shall solely determine whether to proceed
with the Clinical Development of a Ribozyme Product; however such decisions
shall be subject to 4.2.1 and 4.2.2.
4.5 ADVERSE EVENT REPORTING. Lilly will report adverse events and serious
adverse events which occur during the development or marketing of the Product to
the relevant regulatory authorities promptly according to the applicable
regulations. RPI will report to Lilly serious adverse events and spontaneously
reported adverse events of which it becomes aware of within 3 business days of
RPI's initial receipt of such information, in order that Lilly can fulfill its
obligations to the appropriate regulatory authorities.
4.6 MARKETING. LILLY shall have the exclusive, worldwide right to market and
sell any Ribozyme Product developed under this Agreement with RPI unless the
rights revert to RPI [ * ]
5. DIAGNOSTIC PRODUCTS
5.1 DIAGNOSTIC PRODUCT RIGHTS. [ * ]
5.2 DIAGNOSTIC PRODUCTS. [ *
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6. PAYMENTS
6.1 FTE SUPPORT.
6.1.1 WORKPLAN. LILLY shall provide to RPI funding according to the Workplan
provided under the R&D Plan at an FTE rate of [ * ] per FTE per year to support
RPI research * ] The number of FTEs for which RPI will and development in
accordance with the R&D receive reimbursement will be set forth in Plan. [ the
Workplan on an annual basis. RPI, on a quarterly basis, will provide to LILLY
the names of employees working on the R&D Plan and the number of hours billed to
LILLY for each employee along with the number of hours that are based on work
done in the United States and shall be invoiced to LILLY by RPI within thirty
(30) days after the conclusion of each quarter. LILLY shall also pay RPI for any
other expenses as provided in the Workplan in addition to the agreed upon FTEs
and as expressly approved by the JDT.
6.1.2 THIRD PARTY SERVICES. When the services of outside contractors,
consultants, or any Third Party are required and approved by the Joint
Development Team, LILLY will reimburse RPI for its actual costs paid and
documented for such services. RPI agrees not to mark-up such costs and LILLY
shall not pay profits to RPI for such costs unless approved by the JDT.
6.1.3 PAYMENT. Payments due under Section 6.1.1 shall be due from LILLY to
RPI [ * ]
6.2 RIBOZYME COSTS. Subject to the terms of this Agreement, RPI agrees to
provide Ribozymes for the Clinical Development studies at [ * ].
6.3 LICENSE FEE AND REIMBURSEMENTS. In consideration of rights granted by RPI
under this Agreement, LILLY has agreed to purchase US$7.5 million in RPI non-
voting preferred shares of RPI [ * ] under a Stock Purchase Agreement. [ * ]
[ * ]
6.4 MILESTONES.
6.4.1 CLINICAL MILESTONES FOR RIBOZYME PRODUCTS [ * ].. LILLY shall pay
RPI the following amounts within [ * ]after the first occurrence of the
following:
AMOUNT MILESTONE
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[*]
6.4.2 [*]
6.4.3 [*]
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6.4.4 CREDITS.
6.4.4.1 [*]
6.4.4.2 In the event of a technical failure prior to the third anniversary of
the Option Agreement and LILLY has decided not to pursue the development of the
Ribozyme Product under this Agreement, then LILLY has the option to convert the
US$7.5 million of RPI preferred shares to US$2.5 million in RPI common stock at
the then current market price (30 day average preceding such event) and obtain a
US$5.0 million credit towards LILLY's choice of non-royalty payments for a new
Ribozyme product.[*]
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6.4.4.3 [*]
6.5 ROYALTIES
6.5.1 BASE ROYALTY. LILLY shall pay RPI Royalties on the Net Sales of each
Ribozyme Product for the Royalty Term according to the following schedule ("Base
Royalties"). The following worldwide Annual Net Sales for each Royalty tier
shall be adjusted annually relative to the Effective Date according to the CPI .
WORLDWIDE ANNUAL NET SALES ROYALTY
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Royalty Calculation Example:
For [*] in annual sales (not CPI adjusted in this example) [*]
6.5.2 THIRD PARTY ROYALTIES.
6.5.2.1 [*]
6.5.2.2 BASIC THERAPEUTIC UTILITY. [*] is responsible for the payment of
any royalties or other payments to Third Parties in respect of the use of the
Ribozyme Technology necessary to develop and commercialize a Ribozyme Product to
the point of Basic Therapeutic Utility subject to the provisions under the
Discount section hereunder (Article 11).
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6.5.2.3 DELIVERY SYSTEMS. [*] shall be responsible for the payment of any
royalties or other payments to Third Parties in respect of the use of a Third
Party Delivery System, so long as such Delivery System is not required for Basic
Therapeutic Utility.
6.5.2.4 OTHER THIRD PARTY ROYALTIES. [*]
6.5.3 RPI Royalties. RPI shall pay LILLY a royalty of [*] on the Net Sales
of each Ribozyme Product if RPI obtains rights to a Ribozyme Product in
accordance with Section 4.2.1 or 4.2.2.
6.5.4 OTHER RIBOZYME PRODUCTS. During the Term of this Agreement, should LILLY
enter into a collaboration or development program in the Field using Ribozymes
covered by a Valid Claim under RPI Patent Rights with a Third party, LILLY will
pay RPI the royalties due under this Agreement for such Patent Rights.
7. RECORDS; AUDITS; AND REPORTS
7.1 RECORDS. During the term of this Agreement and for a period of two years
thereafter, the Party paying royalties (the "ROYALTY PAYING PARTY") shall keep
(and shall require its Affiliates and sublicensees to keep,) full, true and
accurate books of account containing all particulars that may be necessary for
the purpose of calculating all royalties payable to the other Party (the
"ROYALTY RECEIVING PARTY").
7.2 AUDIT. At the Royalty Receiving Party's expense, Royalty Receiving Party
or its authorized independent public accountant has the right to engage Royalty
Paying Party's independent public accountant, or an independent public
accountant agreed to mutually by the Parties, where the public accountant is a
reputable national U.S. accounting firm to perform an audit, conducted in
accordance with generally accepted auditing standards in the United States of
America, of such books and records of Royalty Paying Party that are deemed
necessary by Royalty Paying Party's independent public accountants to report on
Net Sales of the Ribozyme Product for the period or periods requested by Royalty
Receiving Party. Such audit shall not be performed more frequently than once
per calendar year nor more frequently than once with respect to records covering
any specific period of time, upon at least [*]prior written notice, and
shall be conducted during regular business hours in such a manner as to not
unnecessarily interfere with Royalty Paying Party's normal business activities.
All information, data documents and abstracts herein referred to shall be used
only for the purpose of verifying royalty statements or compliance with this
Agreement, shall be treated as the Royalty Paying Party's Confidential
Information subject to the obligations of this Agreement and need not be
retained more than [*] after completion of an audit hereof, if an audit
has been requested; nor more than [*]from the end of the calendar year to
which each shall pertain; nor more than [*] after the date of termination
of this Agreement. The failure of the Royalty Receiving Party to request
verification of any royalty calculation during the period when records must be
retained shall be deemed acceptance of the
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accuracy of such reporting.
7.3 MANUFACTURING/CLINICAL/TESTING AUDIT RIGHTS. Upon LILLY's written request,
RPI will allow LILLY to review its cGMP processes and procedures as such
processes relate to bulk drug and the preparation of Ribozyme Product. Such
audit shall be subject to the confidentiality Article 12. Such reviews shall
occur as soon as reasonably practical. LILLY shall have the right to inspect
all manufacturing and testing facilities and operations (including Third
Parties) to assure compliance with cGMP requirements and regulatory commitments.
RPI will assure compliance with regulatory commitments and will correct any
deficiencies prior to manufacturing of any Ribozyme Product.
7.4 PAYMENT; REPORTS. All royalty payments due to either Party under this
Agreement shall be paid in United States dollars within [*] after the end
of each calendar quarter [*] for royalties due from sublicensees), and all
other payments will be due within [*] of receipt of billing unless
otherwise specifically provided herein. Each payment of royalties shall be
accompanied by a report of Net Sales in sufficient detail to permit confirmation
of the accuracy of the royalty payment made.
7.4.1 EXCHANGE RATE. Royalty payments and reports for the sale of Ribozyme
Products shall be calculated and reported for each calendar quarter. With
respect to each quarter, for countries other than the United States, whenever
for the purpose of calculating royalties conversion from any foreign currency
shall be required, such foreign currencies shall be converted into United States
dollars for the countries concerned, using LILLY's normal practices used to
prepare its audited financial statements for internal and external reporting
purposes using GAAP which use a widely accepted source of published exchange
rates.
7.4.2 PROHIBITED ROYALTY RATES. If rates of royalties provided for herein
are prohibited by law or regulation in any country where a Ribozyme Product is
sold, the Royalty Paying Party shall pay to the Royalty Receiving Party a
royalty at the highest rate permitted in that country for a license of the type
herein granted, provided that such rate is not greater than the rate applicable
under this Agreement.
7.5 MANNER AND PLACE OF PAYMENT. All payments owed under this Agreement shall
be made by wire transfer, unless otherwise specified by the receiving Party.
7.6 LATE PAYMENTS. In the event that any payment, including royalty, milestone
and research payments, due hereunder is not made when due, the payment shall
accrue interest from the date due until the date paid at the rate of [*]
per month; provided that in no event shall such rate exceed the maximum legal
annual interest rate. The payment of such interest shall not limit any Party
from exercising any other rights it may have as a consequence of the lateness of
any payment. In the event that any payment, including royalty, milestone and
research payments, due hereunder is not made when due, [*] due date, this
Agreement shall be referred to dispute resolution mechanism under Article
17.
7.7 TAXES. All turnover and other taxes levied on account of the royalties and
other payments accruing to each Party under this Agreement shall be paid by the
Party receiving such royalty or other payment for its own account, including
taxes levied on income of the Royalty Receiving Party. If provision is made in
law or regulation for withholding, such tax shall be deducted from the royalty
or other payment made by the Party making such payment to the proper taxing
authority and a receipt of payment of the tax secured and
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promptly delivered to the Royalty Receiving Party. Each Party agrees to assist
the other Party in claiming exemption from such deductions or withholdings under
any double taxation or similar agreement or treaty from time to time in force.
8. PATENT RIGHTS AND INFRINGEMENT
8.1 INVENTORSHIP. Any Invention that is made (i) solely by one or more
representatives of RPI shall be deemed invented solely by RPI (a "RPI
INVENTION"); (ii) solely by one or more representatives of LILLY shall be deemed
invented solely by LILLY (a "LILLY INVENTION"); and (iii) jointly by one or more
representatives of RPI and one or more representatives of LILLY shall be deemed
invented jointly by RPI and LILLY (a "JOINT INVENTION"). Any Non-Patented
Technology that is made (i) solely by one or more representatives of RPI shall
be deemed invented solely by RPI, (ii) solely by one or more representatives of
LILLY shall be deemed invented solely by LILLY; and (iii) jointly by one or more
representatives of RPI and one or more representatives of LILLY shall be deemed
invented jointly by RPI and LILLY. Determination of inventorship shall be made
in accordance with the patent laws of the United States of America. If the
parties cannot agree on inventorship, determination of inventorship shall be
made by mutually agreed upon patent counsel in accordance with the patent laws
of the United States of America.
8.2 OWNERSHIP.
8.2.1 All Inventions and Non-Patented Technology shall be owned by the
Party who invented it or, if a joint Invention or joint Non-Patented Technology,
jointly as the case may.
8.2.2 For LILLY sole Inventions and Non-Patented Technology covering
Ribozyme Technology, RPI shall have a royalty-free, non-exclusive license
without a right to sublicense.
8.3 PATENT MANAGEMENT.
8.3.1 FILING PARTY. The Party owning the Invention shall be responsible for
the preparation, filing, prosecution, and maintenance (the "PATENT MANAGEMENT")
of a Patent for such Invention(the "FILING PARTY"), subject to the provisions of
Section 8.3. For jointly invented Inventions, the Parties will mutually decide
who will be responsible for filing and will share all expenses.
8.3.2 RIBOZYMES. Except as set forth below, RPI shall take any and all
actions necessary with respect to the Patent Management of Patents, including
those LILLY Inventions or joint Inventions, claiming Ribozymes and Ribozyme
targets discovered or identified as a result of performance under this Agreement
("RIBOZYME INVENTIONS"). Prosecution will be at RPI's sole expense with LILLY
having the right to pursue prosecution of those Ribozyme Inventions RPI chooses
not to pursue at LILLY's expense. The Filing Party shall provide the other Party
with drafts of any Patent application directed towards or claiming such Ribozyme
Product (the "RIBOZYME APPLICATION") at least [*] prior to filing the Ribozyme
Application for review and comment by the other Party. The Filing Party shall
endeavor in good faith to incorporate such comments. If the other Party fails to
respond within such [*] time period, the Filing Party shall not be obligated
to delay the filing of such Ribozyme Application. In addition, the Filing shall
promptly provide the other Party with copies of all substantive communications
from the United States or any foreign patent office regarding such Ribozyme
Applications and resulting Patents, within [*] of receipt from the patent
office. The Filing Party will provide
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drafts of any response at least two (2) weeks prior to filing.
8.3.3 NON-RIBOZYMES. The Party owning the Invention other than those
relating to Ribozymes, shall be responsible for Patent Management of such
Patents, with the Non-Filing Party having the right to pursue prosecution of
those Inventions the Filing Party chooses not to pursue at the Non-Filing
party's expense.
8.4 PATENT COSTS. The Filing Party shall be responsible for all Patent Costs
for the Patent Rights unless and until transferred to the other Party.
8.5 COOPERATION OF THE PARTIES. Each Party agrees to cooperate fully in the
Patent Management of any Patent Rights under this Agreement. Such cooperation
includes, but is not limited to: (i) turning over to the Filing Party all files,
papers and documents relating to such Patent; (ii) executing all papers and
instruments, or requiring its employees or agents, to execute such papers and
instruments, so as to effectuate the ownership of Patent Rights set forth in
Section 8.2 and to enable the other Party to apply for and to prosecute
Applications in any country; and (iii) promptly informing the other Party of any
matters coming to such Party's attention that may affect the Patent Management
of any such Application.
8.6 PRODUCT TRADEMARK. LILLY shall own and be responsible for all Product
Trademark(s) and shall at its expense, file, maintain and enforce Product
Trademark for each such Ribozyme Product worldwide unless rights to such
Ribozyme Product revert to RPI under Sections 4.2.1, 4.2.2, 15.4.3 or 15.4.4.
8.7 INFRINGEMENT BY THIRD PARTIES. Each Party shall promptly notify the other
Party in writing of any alleged or threatened infringement by a Third Party of
any RPI Patent Rights or LILLY Patent Rights of which they become aware and
provide the other Party with all evidence in its possession supporting said
infringement. The Parties agree to cooperate in taking commercially reasonable
legal actions to protect the commercial interests of the Parties in a Ribozyme
Product against infringement by Third Parties. The Filing Party shall take the
lead in any such action. [*] If more than one Party wishes to
participate in taking action to protect the commercial interests of the Parties
in the Ribozyme Product against infringement, then an authorized representative
of each Party shall control such action; the costs of maintaining such action
shall be shared equally by the Parties, and the damages recovered from such
action for the past infringement shall be first used to pay all costs of each
Party, compensatory damages for LILLY's lost sales shall be treated as Net Sales
and any other damages will be shared equally by the both Parties. Each Party
shall render such reasonable assistance as the prosecuting Party may
request.
8.8 RIBOZYME TECHNOLOGY PATENTS. Notwithstanding the foregoing, RPI shall
handle in its sole discretion and expense any oppositions, interferences, or
litigation relating to the Ribozyme Technology/Cech Patents and shall keep LILLY
informed on a regular basis, but no less than quarterly, of the status of any
such oppositions, interferences, or litigation, and shall promptly provide LILLY
with copies of all substantive communications relating thereto. LILLY shall
have the option to join RPI in such proceedings by notifying
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RPI in writing and the costs of maintaining such action shall be shared equally
by the Parties.
8.9 THIRD PARTY PATENT RIGHTS. Each Party shall promptly notify the other if it
receives notice that activities involving the Research Collaboration or the
development or commercialization of Ribozyme Product allegedly infringe a Third
Party's proprietary rights. The Parties shall consult concerning the action(s)
to be taken. The Royalty Paying Party shall have the sole right and
responsibility for addressing such alleged infringement regarding Ribozyme
Products, and bearing the cost thereof. Notwithstanding the foregoing, if such
action relates to Ribozyme Technology, then RPI shall have the right and
responsibility for addressing such alleged infringement regarding Ribozyme
Products and LILLY shall have the option of joining with RPI in negotiation with
a Third Party.
8.10 PATENT TERM EXTENSION. Upon receiving Regulatory Approval for a Ribozyme
Product, the parties agrees to coordinate the application for any patent term
extension which may be available under the Patent Rights in any country; however
the responsibility of applying for any such extension shall be the Party having
the right to make the extension application under the applicable law. The
responsible Party shall keep the other party fully informed of its efforts to
obtain such extension, with copies of any submission and correspondence relating
to such request for patent term extension and each party shall provide
reasonable assistance to obtain such extension. The responsible Party will pay
all expenses in this regard to obtaining the extension.
9. LICENSES AND OTHER COMMERCIAL RIGHTS
9.1 RIBOZYME TECHNOLOGY LICENSE.
9.1.1 LICENSE. Subject to the royalty-free rights of RPI to make, use and
practice the Ribozyme Technology for research, purposes in the Field, if any,
RPI hereby grants LILLY a sole and exclusive, worldwide, royalty bearing license
under Ribozyme Technology, RPI Patent Rights, Non-Patented Technology and RPI
Inventions to make, have made (both subject to the provisions under
Manufacturing Section 10, hereunder), use, offer to sell, sell, export or import
Ribozyme Products in the Field during the Term of this Agreement. The rights
granted to LILLY in this Agreement exclude any and all Inventions made outside
the R&D Plan.
9.1.2 RIGHT TO SUB-LICENSE. [*]
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9.2 LILLY TECHNOLOGY LICENSE. LILLY hereby grants RPI a sole and nonexclusive,
worldwide, royalty bearing (in accordance with Sections 4.2.1, 4.2.2, 15.4.3 or
15.4.4) license, with a right to sub-license, under LILLY Technology and LILLY
Inventions to make, have made, use, offer to sell, sell or import Ribozyme
Products in the Field during the Term, following the termination of this
Agreement or reversion of Product rights to RPI under this Agreement.
9.3 COVENANT OF NON-USE. Neither Party shall practice the Patent Rights and/or
Non-Patented Technology of the other Party other than as expressly licensed
herein.
10. MANUFACTURING AND PURCHASE OF RIBOZYME PRODUCTS
10.1 RPI MANUFACTURE. Subject to the limitations hereunder, RPI has the
exclusive right to manufacture and/or have manufactured the Ribozyme component
of the Ribozyme Products ("bulk drug") and to manufacture Ribozymes for research
("Research Ribozymes") pursuant to the R&D Plan. RPI shall manufacture all of
the worldwide requirements for the bulk drug for the Ribozyme Products and sell
such bulk drug as stable bulk material to LILLY for final filling/finishing and
packaging. The bulk drug responsibilities will be described in a separate
Manufacturing Requirements Document ("MRD") for clinical and commercial
materials. The MRD will be included in a separate Ribozyme Manufacture and
Supply Agreement which shall be formalized at the recommendation of the JDT and
shall contain all terms and conditions of this Agreement and those that are
standard for a pharmaceutical manufacturing agreement (such terms and conditions
as outlined in APPENDIX E), including the obligation of RPI to comply with all
rules and regulations of the FDA or any other applicable regulatory agency. The
Term of the Ribozyme Manufacture and Supply Agreement shall be consistent with
the Royalty Term under this Agreement. The Ribozyme Manufacture and Supply
Agreement shall incorporate this Agreement by reference in its entirety and vice
versa.
10.2 RIGHT TO INSPECT MANUFACTURING. LILLY shall have the right to audit and
approve all subcontractors selected by RPI to manufacture Ribozyme Product or
bulk products as provided and in addition to Section 7.3. LILLY quality
assurance shall have the right to audit all manufacturing facilities for
Ribozyme Product for clinical studies and commercial sale. Such reviews shall
occur as soon as reasonably practical. RPI will assure compliance with
regulatory commitments and will correct any deficiencies prior to manufacturing
of any Ribozyme Product. RPI will promptly notify LILLY of any regulatory
inspections and inquiry/communications which involve Ribozyme Product and give
LILLY an opportunity to assist RPI in responding to any such inquires.
10.3 LILLY'S OPTION TO MANUFACTURE. Notwithstanding the foregoing, after Product
Launch, LILLY shall have the option to manufacture up to [*] of the requirement
of stable Ribozyme bulk drug required for the sale of the Ribozyme Product. In
consideration of this option, and in the event LILLY manufactures the Ribozyme
Product provided herein, LILLY shall increase the Royalty due RPI under Section
6.5.1 by up to [*], provided such manufacture by LILLY is not due to a failure
by RPI to provide the required quantity of the bulk drug. Failure by RPI shall
mean failure to provide required bulk drug in the required quantities to LILLY
as described in the R&D Plan. The increase in the Royalty due RPI shall be
determined using the following formula:
[*]
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10.4 PURCHASE OF RIBOZYME PRODUCT.
10.4.1 Purchase Price. [*]
10.4.2 LOW COST PROVIDER. [*]
10.4.3 COPS. [*]
10.4.4 EXCESS CAPACITY. [*]
11. DISCOUNT
[*]
12. CONFIDENTIALITY
12.1 NONDISCLOSURE. During the term of this Agreement and for a period of [*]
years after termination hereof, neither Party shall disclose any Confidential
Information received from the other Party to any Third Party, or use any such
Confidential Information for any purpose other than accomplishing the
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purposes of this Agreement, except as expressly authorized by this Agreement or
as required by any regulatory agency or by any governmental rule, regulation,
law or court order. Each Party may disclose such Confidential Information to its
Affiliates, employees, agents, consultants, collaborators, and other
representatives with a need to know such Confidential Information to accomplish
the purposes of this Agreement. Each Party shall promptly notify the other upon
discovery of any unauthorized use or disclosure of such Confidential
Information. Upon termination of this Agreement, each Party shall return to the
other Party promptly upon request any tangible embodiment of such Confidential
Information provided by the other Party; provided, however, that one copy shall
be kept by the receiver Party's legal department for purposes of interpreting
this Agreement.
12.2 EXCEPTIONS. Confidential Information shall not include any information
which the receiving Party can prove by competent evidence:
12.2.1 is now, or hereafter becomes, through no act or failure to act on the
part of the receiving Party, generally known or available;
12.2.2 is known by the receiving Party at the time of receiving such
information, as evidenced by its records;
12.2.3 is hereafter furnished to the receiving Party by a Third Party, as a
matter of right and without restriction on disclosure;
12.2.4 is independently developed by the receiving Party without the aid,
application or use of Confidential Information;
12.2.5 is the subject of a written permission to disclose provided by the
disclosing Party, where such a permission shall not be unreasonably withheld.
12.3 PUBLICATIONS. Each Party to this Agreement recognizes that the publication
of papers regarding results of the Research Collaboration, including oral
presentations and abstracts, may be beneficial to both Parties provided such
publications are subject to reasonable controls to protect Confidential
Information. In particular, it is the intent of the Parties to maintain the
confidentiality of any information regarding the Ribozyme Products included in
any patent application until such patent application has been filed in the
patent office. Accordingly, each Party shall have the right to review and
approve any paper proposed for publication by the other Party regarding results
of the Research Collaboration hereunder, including oral presentations and
abstracts, which utilizes data generated from the Research Collaboration or
includes Confidential Information of the other Party. Before any such paper is
submitted for publication, the Party proposing publication shall deliver a
complete copy to the JDT at [*] prior to submitting the paper to a publisher.
The JDT shall review any such paper and give its comments to the publishing
Party [*] of the delivery of such paper to the JDT. With respect to oral
presentation materials, the JDT shall make reasonable efforts to expedite review
of such materials, and shall return such items as soon as practicable to the
disclosing Party with appropriate comments, if any, but in no event later than
[*] from the date of delivery to the receiving Party. The disclosing Party shall
comply with the other Party's request to delete references to Confidential
Information in any such paper and agrees to withhold publication of same for an
[*] (or longer if necessary) in order to permit the Parties to obtain patent
protection, if either of the Parties deem it necessary,
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in accordance with the terms of this Agreement. If there is a dispute regarding
publications, such dispute shall be resolved by the Joint Steering Committee.
13. REPRESENTATIONS, WARRANTIES AND COVENANTBY BOTH PARTIES
13.1 DULY ORGANIZED. Each Party hereby represents and warrants that such Party
is duly organized and validly existing under the laws of the state of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof
13.2 DUE AUTHORIZATION. Each Party hereby represents and warrants that such
Party is duly authorized to execute and deliver this Agreement and to perform
its obligations hereunder.
13.3 BINDING AGREEMENT. Each Party hereby represents and warrants that this
Agreement is a legal and valid obligation binding upon it and is enforceable in
accordance with its terms. 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.
13.4 PERSONNEL. [*]
13.5 REPRESENTATIONS AND WARRANTIES BY RPI.
13.5.1 PATENT INFRINGEMENT. To the best of RPI's knowledge, as of the
Effective Date and except as disclosed to LILLY as of the Effective Date it is
not aware of any patent or other intellectual property right of any other person
that would be infringed by the research contemplated under the R&D Plan.
13.5.2 SUFFICIENT RIGHTS. RPI owns or possesses adequate licenses or other
rights to use all Patents, Patent Rights, Inventions, and Know-How including an
exclusive license to the Cech Patents and Ribozyme Technology to conduct
research, to grant rights and licenses granted herein to LILLY, and to fulfill
its other duties and obligations pursuant to this Agreement.
13.5.3 DEBARRMENT. RPI warrants and represents that it is not debarred under
subsection 306 (a) or (b) of the Federal Food, Drug and Cosmetics Act (U.S.
Generic Drug Enforcement Act of 1992: 21 USC 335a(a) or (b)) and that to the
best of its knowledge and belief it will not use in a capacity the services of
any person debarred under such law with respect to services performed under this
Agreement and that it will amend certification in light of new information.
13.5.4 LICENSES TO THE CECH PATENTS AND RIBOZYME TECHNOLOGY. RPI has fully
complied, and will use its best efforts to remain in material compliance with,
and is not in breach of, and this Agreement will not materially breach, any
terms, conditions or obligations of all the RPI licenses to the Cech Patents and
Ribozyme Technology.
13.5.5 KEY PERSONNEL. [*]
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13.5.6 CHANGE OF CONTROL. In the event RPI becomes aware of a process that
will likely cause the Change of Control of RPI, LILLY will be promptly notified.
In any such case, RPI must, prior to the execution of any Change of Control
document, provide assurances to LILLY of all performance under this Agreement.
13.5.7 OTHER. RPI covenants that at no time during the term of this Agreement
shall RPI assign, transfer, encumber or grant rights in or with respect to
Ribozyme Products inconsistent with the grants and other rights reserved to
LILLY under this Agreement. Provided, however, this covenant shall not affect
the absolute right of RPI to transfer title to its exclusively owned Patents or
Know-How to any successor to all or substantially all of that portion of RPI's
business. Additionally, RPI agrees not to grant license and rights to a Third
Party, to develop and commercialize a Ribozyme product for the treatment of HCV
infection as a primary indication.
14. INDEMNIFICATION
14.1 LILLY'S INDEMNIFICATION. LILLY will indemnify (subject to 14.3), defend
and hold RPI harmless against any and all actions, suits, claims, demands,
prosecutions, liabilities, costs, and expenses based on or arising out of this
Agreement, the manufacturing, packaging, use or sale of Ribozyme Products, or
use of licensed technical information or Ribozyme Products by LILLY, its
Affiliates, its Sublicensees or its (or their) customers and any representation
made or warranty given by LILLY, its Affiliates or Sublicensees with respect to
Licensed Products; except for those activities that can be directly related to
------
RPI's negligence in the Manufacture of Ribozymes.
14.2 RPI'S INDEMNIFICATION. RPI will indemnify (subject to 14.3), defend and
hold LILLY harmless against any and all actions, suits, claims, demands,
prosecutions, liabilities, costs, and expenses based on or arising out of this
Agreement, resulting from RPI's activities under this Agreement and activities
related to the manufacture of Ribozymes, limited to the amount RPI has been paid
by LILLY under this Agreement as of such claims of indemnification.
14.3 CONDITIONS OF INDEMNIFICATION. If either party proposes to seek
indemnification from the other under 14.1 or 14.2, it shall notify the other
party within fifteen (15) days of receipt of notice of any such claim or suits
and shall cooperate fully with the other party in the defense of all such claims
or suits. No settlement or compromise shall be binding on a party hereto without
its prior written consent, which consent shall not be unreasonably withheld.
14.4 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANY WAY OUT OF
THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION
WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE.
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14.5 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY OF ANY
NATURE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF NON-
INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
14.6 FORCE MAJEURE. The Parties will not be liable for any failure to perform
as required by this Agreement, to the extent such failure to perform is caused
by any reason beyond the control of either Party, or by reason of any of the
following: labor disturbances or disputes of any kind, accidents, governmental
policy, civil disorders, acts of aggression, acts of God, energy or other
conservation measures, failure of utilities, mechanical breakdowns, material
shortages, disease or similar occurrences. Each Party will notify the other
immediately should any such contingencies occur.
15. TERM AND TERMINATION
15.1 TERM. The Term of this Agreement shall begin on the Effective Date and
terminate at the end of the Royalty Term for the last Ribozyme Product in the
country with the last to expire royalty obligation, unless terminated earlier in
accordance with the provisions of Sections 15.2 or 15.3. Thereafter, LILLY will
have a fully paid-up, exclusive license to Ribozyme Product in such country.
15.2 TERMINATION WITHOUT CAUSE. [ * ]
15.3 TERMINATION FOR CAUSE. [ * ]
15.3.1 Upon or after the bankruptcy, dissolution or winding up of the other
Party (other than dissolution or winding up for the purposes of reconstruction
or amalgamation);
15.3.2 Upon or after the material breach of this Agreement by the other Party
if the breaching Party has not cured such breach within the sixty (60) days
following written notice of such termination by the other Party.
15.4 EFFECT OF EXPIRATION OR TERMINATION.
15.4.1 SURVIVAL. Expiration or termination of this Agreement shall not
relieve the Parties of any obligation accruing prior to such expiration or
termination. Except as otherwise specifically set forth in this Section 0 or
elsewhere in this Agreement, the obligations and rights of the Parties under
Sections 12, 14, 15 and 19 shall survive termination or expiration of this
Agreement.
15.4.2 LILLY TERMINATES FOR CAUSE. [ * ]
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15.4.3 RPI TERMINATES FOR CAUSE. [ * ]
15.4.4 LILLY TERMINATES.
[ * ]
15.4.5 RPI TERMINATES FOR BANKRUPTCY. If RPI becomes subject to a voluntary
or involuntary bankruptcy not discharged within one hundred and eighty (180)
days after commencement, RPI will use its best efforts to transfer its interests
in assets related to the development and commercialization of a Ribozyme
Product, including the employment contracts (if any) with the scientists
involved in the Research Collaboration to LILLY.
15.4.6 LILLY TERMINATES FOR BANKRUPTCY. If LILLY becomes subject to a
voluntary or involuntary bankruptcy not discharged within one hundred and eighty
(180) days after commencement, LILLY will use its best efforts to transfer its
interests in assets related to the development and commercialization of a
Ribozyme Product, including the employment contracts (if any) with the
scientists involved in the Research Collaboration to RPI.
15.5 RIGHTS IN LAW OR EQUITY. Except as otherwise expressly provided herein,
termination by either
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Party pursuant to this Sections 15.3 shall not prejudice any other remedy that a
Party might have in law or equity, except that neither Party may claim
compensation for lost opportunity or like consequential damages arising out of
the fact of such termination
16. PUBLICITY
16.1 PUBLICITY REVIEW. LILLY and RPI shall jointly discuss and agree, based on
the principles of Section 12, on any statement to the public regarding the
execution and the subject matter of this Agreement or any other aspect of this
Agreement, except with respect to disclosures required by law or regulation.
Within [ * ] following the Effective Date, the Parties shall issue a joint press
release covering the field of collaboration as well as total deal value amount
to be mutually agreed to by the Parties (a copy of the press release is attached
to this Agreement as APPENDIX D). In no event shall specific payment amounts be
announced (i.e. license fee, Patent Reimbursement, Pre-clinical Reimbursement,
royalties). Except with respect to information disclosed in the joint press
release, neither Party shall (i) disclose the material terms of this Agreement,
or (ii) use the name of the other Party, in any public statement, prospectus,
annual report, or press release without the prior written approval of the other
Party, which may not be unreasonably withheld or delayed, provided, however,
that both parties shall endeavor in good faith to give the other Party a minimum
of five business days to review such press release, prospectus, annual report,
or other public statement; provided, further, that either Party may (i) disclose
the material terms of this Agreement or (ii) use the name of the other Party in
any public statement, prospectus, annual report, or press release without the
prior written approval of the other Party, if such Party is advised by counsel
that such disclosure is required to comply with applicable law.
16.2 STANDARDS. In the discussion and agreement referred to in Section 16.1,
the principles observed by LILLY and RPI will be accuracy, the requirements for
confidentiality under Article 12, the advantage a competitor of LILLY or RPI may
gain from any public or Third Party statements under Section 16.1, the
requirements of disclosure under any securities laws or regulations of the
United States, including those associated with public offerings, or companies
whose stock is registered under or subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, and the standards and customs in
the pharmaceutical industry for such disclosures by companies comparable to
LILLY and RPI. RPI will give LILLY the opportunity to redact any SEC or other
regulatory or administrative filings and RPI will not unreasonably refuse any
such redactions provided they are within the scope of the law .
17. DISPUTE RESOLUTION
17.1 DISPUTES. The Parties recognize that disputes as to certain matters may
from time to time arise during the term of this Agreement which relate to either
Party's rights and/or obligations hereunder. It is the objective of the Parties
to establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the Parties agree to follow the
procedures set forth in this Section 17.1 if and when a dispute arises under
this Agreement between the Parties. Notwithstanding the foregoing, the Parties
recognize that disputes relating to the R&D Plan, and particularly matters
within the authority of the JDT and issues to be resolved by the Joint Steering
Committee shall first be attempted to be resolved in accordance with the
decision making process provisions set forth in Sections 3.3.4.
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17.2 DISPUTE RESOLUTION PROCEDURES. If the Parties cannot resolve the dispute
within [ * ] of formal request by either Party to the other, any Party may,
by written notice to the other, have such dispute referred to their respective
officers designated below or their successors, for attempted resolution by good
faith negotiations within [ * ] after such notice is received. Said
designated officers (or such equivalent level officer at such time) are as
follows:
For LILLY: [ * ]
For RPI: [ * ]
18. ASSIGNMENT AND DELEGATION
18.1 THIRD PARTIES. Neither Party may assign or delegate any or all of its
rights or obligations under this Agreement to any Third Party without the prior
written permission of the other Party, except pursuant to Section 18.3.
18.2 AFFILIATES. Neither Party may assign or delegate any or all of its rights
or obligations under this Agreement without the prior written consent of the
other Party; provided, however, that either Party may assign or delegate any or
all of its rights or obligations under this Agreement to any Affiliate without
the consent of the other Party.
18.3 MERGER. Either Party may also assign all of its rights or obligations
under this Agreement (but not a portion thereof) in connection with the sale of
all or substantially all of its assets relating to the subject matter hereof, or
may otherwise assign all of its rights or obligations under this Agreement (but
not a portion thereof) with the prior written consent of the other Party. This
Agreement shall survive any merger of either Party with or into another Party
and no consent for a merger or similar reorganization shall be required
hereunder; provided, that in the event of such merger or in the event of a sale
of all assets, no intellectual property rights of the acquiring corporation
shall be included in the technology licensed hereunder.
18.4 MISCELLANEOUS. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the Parties; provided,
however, that any such permitted assignment or delegation shall not relieve the
assigning Party of its responsibilities for performance of its obligations under
this Agreement. Any assignment not in accordance with this Agreement shall be
void.
19. ADDITIONAL TERMS
19.1 NOTICES. Any notices or communications provided for in this Agreement to
be made by either of the Parties to the other shall be in writing, in English,
and shall be made by prepaid air mail with return receipt or overnight courier
or facsimile addressed to the other at its address set forth below. Any such
notice or communication may also be given by hand, or facsimile to the
appropriate designation. Either Party may by like notice specify an address to
which notices and communications shall thereafter be sent. Notices sent by
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mail, facsimile or courier shall be effective upon receipt and notices given by
hand shall be effective when delivered.
If to RPI: Ribozyme Pharmaceuticals Inc.
2950 Wilderness Place
Boulder, Colorado, 80301
Fax: 303/449-6995
Attention: Vice President, Business Development
If to LILLY: Eli Lilly and Company Lilly
Corporate Center
Indianapolis, IN 46285
Attention: Vice President, Infectious Diseases, Drug
Discovery Research and Clinical Investigation
with a copy to: Eli Lilly and Company LILLY
Corporate Center
Indianapolis, IN 46285
Fax: 317-276-4152
Attention: V.P. General Counsel
_____________________________
19.2 WAIVER. Except as specifically provided for herein, the waiver from time
to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.
19.3 SEVERABILITY. If any term, covenant or condition of this Agreement or the
application thereof to any Party or circumstance shall, to any extent, be held
to be invalid or unenforceable, then (i) the remainder of this Agreement, or the
application of such term, covenant or condition to Parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law; and (ii) the
Parties hereto covenant and agree to re-negotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it being the intent of the
Parties that the basic purposes of this Agreement are to be effectuated.
19.4 GOVERNING LAW. This Agreement shall be governed by, construed, and
interpreted in accordance with the laws of the [ * }, utilizing the courts * ]
as the preferred venue for of [ the Parties, without reference to principles of
conflicts of laws. This Agreement is subject to all applicable USA laws and
regulations, including but not limited to, export control regulations regarding
commodities and technical data/information. Each Party specifically agrees not
to export or re-export any commodities and/or data/information in violation of
any applicable USA laws and/or regulations.
19.5 NON-USE OF NAMES. Except as expressly granted in this Agreement, nothing
herein shall confer on any Party any right, title or interest in or to any name,
trademark, trade name or logo of the other Party.
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Neither Party shall use the name, or sales literature, or otherwise for
commercial purposes, without the prior written consent of such Party.
19.6 HEADINGS. The headings of the several sections of this Agreement are
intended for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
19.7 INDEPENDENT CONTRACTORS. It is expressly agreed that RPI and LILLY shall
be independent contractors and that the relationship between the two Parties
shall not constitute a partnership or agency of any kind. Neither RPI nor LILLY
shall have the authority to make any statements, representations or commitments
of any kind, or to take any action, which shall be binding on the other, without
the prior written authorization of such other Party to do so
19.8 SURVIVAL. In the event that a court of competent jurisdiction holds that a
particular provision or requirement of this Agreement is in violation of any
law, such provision or requirement shall not be enforced except to the extent
that it is not in violation of such law and all other provisions and
requirements of this Agreement shall remain in full force and effect. The
parties shall replace such invalidated or unenforceable provision or requirement
by valid and enforceable provision or requirement which will achieve, to the
extent possible, the economic, business and other purposes of the replaced
provision.
19.9 FURTHER ASSURANCES. At any time or from time to time on and after the
Effective Date, LILLY and RPI shall at the request of the other (a) deliver to
the other such records, data or other documents consistent with the provisions
of this Agreement, (b) execute, and deliver or cause to be delivered, all such
assignments, consents, documents or further instruments of transfer or license,
and (c) take or cause to be taken all such other actions, as may reasonably deem
necessary or desirable in order to obtain the full benefits of this Agreement
and the transactions contemplated hereby.
19.10 REPRESENTATION BY COUNSEL. The Parties acknowledge that each of them has
been represented by counsel in connection with the negotiation and drafting of
this Agreement and that no rule of strict construction should be applied to
either of them as the drafter of all or any part of this Agreement.
19.11 ENTIRE AGREEMENT. This Agreement, together with its exhibits and each R&D
Plan when approved by the JDT, sets forth all of the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the Parties hereto and supersedes and terminates all prior agreements and
understanding between the Parties, including any Confidentiality Agreement
previously entered into between the Parties. Information disclosed under the
Confidentiality Agreement shall be treated as "Confidential Information" of the
disclosing Party subject to this Agreement. There are no covenants, promises,
agreements, warranties, representations conditions or understandings, either
oral or written, between the Parties other than as set forth herein and therein.
No subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the Parties hereto unless reduced to writing and signed by the
respective authorized officers of the Parties. In the event of any
inconsistencies or conflicts between the terms of this Agreement and any
exhibits or Appendix referred to herein, the terms of the Agreement shall
govern.
19.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be
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be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the Effective Date.
ELI LILLY COMPANY RIBOZYME PHARMACEUTICALS INC.
By:_____________________________________ By: _______________________________
Name:________________________________ Ralph E. Christoffersen
Title:_______________________________ President & CEO
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APPENDIX A
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APPENDIX B
EXPENSE FOR COGS
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APPENDIX C
RESEARCH & DEVELOPMENT PLAN
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APPENDIX D
DRAFT PRESS RELEASE
FOR IMMEDIATE RELEASE:
- ----------------------
Contacts:
Ribozyme Pharmaceuticals Inc. Eli Lilly and Company
Ralph E. Christoffersen, Ph.D. James P. Kappel
CEO and President
(303) 449-6500 (317) 276-5795
Daniel McCue
Freeman McCue
(714) 557-3663
LILLY AND RIBOZYME PHARMACEUTICALS TO COLLABORATE ON
NEW AND PROMISING HEPATITIS C TREATMENT
Eli Lilly and Company (NYSE: LLY) and Ribozyme Pharmaceuticals Inc. (RPI)
(NASDAQ: RYZM) announced today that they have signed an agreement to collaborate
on the research, development and commercialization of ribozymes for the
treatment of hepatitis C virus (HCV) infection.
Under the terms of the agreement, RPI will receive $9.2 million in 1999, which
includes initial fees, funding for research, clinical trial materials and an
equity investment. RPI could eventually receive up to $38 million principally
made up of contingent milestone payments, not including royalties on sales. RPI
could also realize increased revenues from product manufacturing and research.
Lilly will receive the exclusive worldwide commercialization rights to products
that result from this collaboration.
Infection with hepatitis C virus (HCV), an RNA virus, can lead to cirrhosis,
hepatocellular carcinoma, liver failure and death. Currently, 175 million
people worldwide are afflicted with the virus. HCV, like many other viruses,
mutates quite rapidly and makes developing therapeutic candidates challenging.
RPI has developed a lead ribozyme candidate called HEPTAZYME that specifically
targets the conserved region of the HCV RNA.
-more-
Ribozymes are based on a Nobel-Prize-winning technology and have the unique
ability to act as molecular scissors. Because present approved drug therapies
are not always effective and are associated with significant adverse side
effects, HEPTAZYME
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potentially offers an advantage. Recently, at the American Association for the
Study of Liver Diseases Conference (AASLD), RPI announced encouraging efficacy
data in surrogate cell culture experiments for HEPTAZYME.
"HEPTAZYME therapy offers a new and promising treatment for the more than 4.5
million chronically infected Hepatitis C patients in the United States. The
activity of HEPTAZYME in cell culture is impressive and warrants further
investigation. Undoubtedly, there are many chronic Hepatitis C patients who will
not respond to currently available therapies and therefore could benefit from
this exciting new therapy," said Dr. Willis C. Maddrey, MD, hepatologist,
executive vice president of clinical affairs and professor of medicine,
University of Texas Southwestern Medical Center, Dallas Texas.
"We believe RPI has developed novel technology that may offer a potential
breakthrough for the treatment of Hepatitis C," said Gail H. Cassell, Ph.D.,vice
president of infectious diseases discovery research and clinical investigation
for Lilly. "Our collaboration with RPI gives us an opportunity to further expand
our efforts in this important medical area."
"We look forward to collaborating with Lilly in the development of novel
therapeutics to treat HCV. The recent results with HEPTAZYME are very
encouraging and take us one step closer to providing an effective treatment for
the HCV," said Dr. Ralph Christoffersen, Ph.D., Chief Executive Officer and
President of RPI.
Lilly is a global research-based pharmaceutical corporation headquartered in
Indianapolis, Indiana, that is dedicated to creating and delivering innovative
pharmaceutical-based health care solutions which enable people to live longer,
healthier, and more active lives.
RPI, located in Boulder, Colorado, was founded to capitalize on the broad
potential of ribozymes for use as human therapeutics and other areas, including
the identification of gene function and therapeutic target validation. RPI is
also developing an anti-angiogenesis compound ANGIOZYME in collaboration with
Chiron Corporation. ANGIOZYME is in Phase I clinical trials.
This release may contain forward-looking statements that reflect management's
current views of future events and operations. The information is based on
management's current expectations but actual results may differ materially due
to various factors, including those mentioned in this release, risks and
uncertainties, including market conditions, competitive pricing, the successful
outcome of clinical trials, the timely receipt of regulatory approvals and those
outlined in Lilly and RPI filings with the SEC.
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APPENDIX E
MANUFACTURING RESPONSIBILITIES DOCUMENT (MRD)
TABLE OF CONTENTS GUIDELINE
(Bulk Drug Substance)
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APPENDIX F
ATTACHMENTS / APPENDIX
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STOCK PURCHASE AGREEMENT
Between
ELI LILLY AND COMPANY
And
RIBOZYME PHARMACEUTICALS INC.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
1. PURCHASE AND SALE OF SHARES .................................................... 1
2. REPRESENTATIONS OF RPI.......................................................... 2
3. REPRESENTATIONS OF THE PURCHASER................................................ 9
4. CONDITIONS TO THE OBLIGATIONS OF PURCHASER...................................... 10
5. CONDITIONS TO THE OBLGATIONS OF RPI............................................. 11
6. COVENANTS OF RPI AND PURCHASER.................................................. 12
7. RESTRICTIONS ON TRANSFER AND COMPLIANCE WITH SECURITIES
ACT AND REGISTRATION............................................................ 13
8. REGISTRATION RIGHTS............................................................. 14
9. MISCELLANEOUS................................................................... 22
</TABLE>
<PAGE>
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
30th day of April, 1999, by and among Ribozyme Pharmaceuticals, Inc., a Delaware
corporation (the "RPI"), and Eli Lilly and Company, an Indiana corporation
("Purchaser").
RECITALS
--------
1. RPI has been organized to engage in the business of developing and
commercializing its ribozyme technology.
2. RPI and Purchaser have entered into a certain Research Collaboration
and License Agreement dated March 17, 1999 ("Collaboration Agreement") to
develop a ribozyme product for treating the Hepatitis C virus infection
("Heptazyme") attached herein as Exhibit B.
3. As a condition to, and in consideration for Purchaser entering into the
Collaboration Agreement, Purchaser has agreed to purchase and RPI has agreed to
sell securities of RPI on the terms and conditions set forth in this Agreement.
IN CONSIDERATION OF the mutual premises, representations, warranties and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I. PURCHASE AND SALE OF SHARES
1.1 SALE OF SHARES. Subject to the terms and conditions set forth in this
--------------
Agreement, the Purchaser will purchase and RPI will sell five (5) shares of
RPI's Series L Preferred Stock at a purchase price of US$1,500,000 per share
(the "Series L Preferred" or "Shares") for a total purchase price of Seven
Million Five Hundred Thousand Dollars (US$7,500,000.00). The Series L Preferred
shall have the rights, privileges and restrictions set forth in the form of
resolution of RPI's board of directors attached as EXHIBIT A hereto (the "Series
L Preferred Authorizing Resolution").
1.2 CLOSING. The closing of the purchase and sale of the Shares shall
-------
take place at the offices of RPI, 2950 Wilderness Place, Boulder, CO 80301, as
soon as practicable after the satisfaction of all conditions to this Agreement
(the "Closing"). At the Closing, RPI shall deliver to Purchaser a certificate
for the Shares registered in the name of Purchaser, against payment to RPI of
the purchase price therefor, by wire transfer to the following bank account of
RPI:
Bank of New York
48 Wall Street
New York, NY
ABA # 021000018
BNF Pain Webber, Inc.
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A/C
OBI-FBO Ribozyme Pharmaceuticals
A/C
ARTICLE II. REPRESENTATIONS OF RPI
The following are representations and warranties made by RPI as of the
date of this Agreement and as of the date of the Closing except as otherwise
disclosed to Purchaser in the Disclosure Schedules attached hereto or otherwise
in a written supplement to the Disclosure Schedules provided to Purchaser prior
to the Closing.
2.1 ORGANIZATION AND STANDING. RPI is a corporation duly organized,
-------------------------
validly existing and in good standing under the laws of the State of Delaware
with full corporate power and authority to conduct its business as presently
conducted and as proposed to be conducted by it and to enter into and perform
this Agreement and to carry out the transactions contemplated herein. RPI is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of the State of Colorado and under the laws of any other state in
which qualification by RPI to do business is required. RPI has furnished to the
Purchaser true and complete copies of its Certificate of Incorporation and
Bylaws, each as amended to the date hereof and as in effect on the date hereof.
2.2 CAPITALIZATION. Capital Stock. The authorized capital stock of RPI
-------------- -------------
consists of: (i) 20,000,000 shares of Common Stock, par value $0.01 per share,
of which 9,184,646 are duly and validly issued, fully paid, nonassessable and
outstanding, 1,923,229 are reserved for issuance upon the exercise of stock
options granted or to be granted under RPI's stock option, Employee Stock
Purchase Plan and 401(k) plans; 487,458 are reserved for issuance upon the
exercise of warrants issued by RPI, and approximately 1,170,000 shares issuable
to one of our collaborators, Schering AG, upon conversion of outstanding debt,
assuming a conversion price of $5.00 per share; and (ii) 5,000,000 shares of
Preferred Stock, par value $0.01 per share, of which no shares are outstanding.
Except as set forth above, (i) there are no shares of capital stock or other
equity securities of RPI outstanding and (ii) there are no outstanding warrants,
options, agreements, convertible or exchangeable securities or other commitments
(other than this Agreement) pursuant to which RPI is or may become obligated to
issue, sell, purchase, return or redeem any shares of capital stock or other
securities of RPI, and there are not any equity securities of RPI reserved for
issuance for any purpose. On March 26, 1999, RPI filed a registration statement
on Form S-1 registration papers with the SEC to sell one million eight hundred
thousand (1,800,000) shares of RPI's Common Stock on an "all or none" basis
("Form S-1"). No shares of RPI's Common Stock have yet been issued under this
offering.
2.3 SUBSIDIARIES. Except as set forth in Form S-1, RPI has no
------------
subsidiaries and does not own or control, directly or indirectly, any interest
in any other corporation, association or business entity. RPI is not a
participant in a joint venture or partnership. Notwithstanding the foregoing,
RPI has approximately 53% voting interest in Atugen Biotechnology, GmbH.
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2.4 ISSUANCE OF SHARES. The issuance, sale and delivery of the Shares in
------------------
accordance with this Agreement, and the issuance and delivery of the shares into
which the Shares are convertible under the terms of the Series L Preferred
Authorizing Resolution ("Conversion Shares") have been, or will be on or prior
to the Closing, duly authorized and reserved for issuance, as the case may be,
by all necessary corporate action on the part of RPI, and the Shares when so
issued, sold and delivered against payment therefor in accordance with the
provisions of this Agreement, and the Conversion Shares, when issued upon such
conversion, will be duly and validly issued, fully paid and non-assessable.
Neither the issuance, sale and delivery of the Shares nor the issuance and
delivery of the Conversion Shares is subject to any preemptive rights of
stockholders of RPI or to any right of first refusal or other similar right in
favor of any person which has not been waived
2.5 AUTHORITY FOR AGREEMENT. The execution, delivery and performance by
-----------------------
RPI of this Agreement have been duly authorized by all necessary corporate
action, and this Agreement has been duly executed and delivered by RPI. This
Agreement constitutes a valid and binding obligation of RPI enforceable in
accordance with its terms, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization or similar laws affecting generally the
enforcement of creditors' rights and subject to a court's discretionary
authority with respect to the granting of a decree ordering specific performance
or other equitable remedies. The execution of, and RPI's performance of the
transactions contemplated by, this Agreement and compliance with its provisions
by RPI will not violate any provision of law and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, its Certificate of Incorporation or Bylaws or any
indenture, lease, agreement or other instrument to which RPI is a party or by
which it or any of its properties is bound, or any decree, judgment, order,
statute, rule or regulation applicable to RPI.
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
---------------------
of, or registration, qualification, designation, declaration or filing with, any
governmental authority is required on the part of RPI in connection with the
execution and delivery of this Agreement, the offer, issue, sale and delivery of
the Shares or Conversion Shares or the other transactions contemplated by this
Agreement, except (i) such filings as shall have been made prior to and shall be
effective on and as of the Closing and (ii) filings under state securities laws
that are permitted by such laws to be made following the Closing. Based on the
representations made by the Purchaser in Article IV of this Agreement, the offer
and sale of the Shares and issuance of the Conversion Shares to the Purchaser
will be in compliance with applicable Federal and state securities laws.
2.7 LITIGATION. There is no action, suit, proceeding or investigation
----------
pending, or, to the best of RPI's knowledge, any basis therefor or threat
thereof, against RPI, which questions the validity of this Agreement or the
right of RPI to enter into it, or which might result, either individually or in
the aggregate, in any material adverse change in the assets, condition
(financial or otherwise), business or prospects of RPI, nor is there any
litigation pending, or, to the best of RPI's knowledge, any basis therefor or
threat thereof, against RPI by reason of the past employment relationships of
any of RPI's officers, directors, employees, or consultants, the proposed
activities of RPI, or negotiations by RPI with possible investors in RPI.
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2.8 FINANCIAL STATEMENTS. The most recent audited and unaudited financial
--------------------
statements of RPI included within reports filed by RPI with the Securities and
Exchange Commission ("SEC") prior to the date hereof (the "Financial
---------
Statements") are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis with each other and with the financial statements
of all previous fiscal periods (subject only, in the case of unaudited
statements, to normal, recurring audit adjustments). Since the date of those
Financial Statements, RPI has not:
(a) incurred any debts, obligations or liabilities, absolute, accrued,
contingent or otherwise, whether due or to become due, except current
liabilities incurred in the ordinary course of business, none of which
(individually or in the aggregate) could reasonably be expected to have a
material adverse effect on RPI;
(b) discharged or satisfied any liens other than those securing, or
paid any obligation or liability other than, current liabilities shown on the
Financial Statements and current liabilities incurred since the most recent date
thereof, in each case in the usual and ordinary course of business;
(c) mortgaged, pledged or subjected to lien any of its assets,
tangible or intangible;
(d) sold, transferred or leased any of its assets except in the usual
and ordinary course of business none of which (individually or in the aggregate)
could reasonably be expected to have a material adverse effect on RPI;
(e) canceled or compromised any debt or claim, or waived or released
any right of material value;
(f) suffered any physical damage, destruction or loss (whether or not
covered by insurance) which either alone or in the aggregate could reasonably be
expected to have a material adverse effect on RPI;
(g) entered into any transaction other than in the usual and ordinary
course of business;
(h) declared or paid any dividends or other distributions with respect
to its outstanding securities;
(i) suffered or experienced any other change that, individually or in
the aggregate, could reasonably be expected to have a material adverse effect on
RPI.
(j) engaged in any material discussions; (i) with any representative
of any corporation or corporations regarding the consolidation or merger of RPI
with or into any such
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corporation or corporations; (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of RPI or a transaction or
series of transactions in which more than 50% of the voting power of RPI is
disposed of; or (iii)_regarding any other forms of business combination,
liquidation, dissolution or winding up of RPI.
2.9 PROPERTY AND ASSETS. RPI has good title to all of its material
-------------------
properties and assets, including, without limitation, all properties and assets
reflected in the Financial Statements, and none of such properties or assets is
subject to any mortgage, pledge, lien, security interest, lease, charge or
encumbrance except as set forth in the Financial Statements. Each lease or
agreement to which RPI is a party under which it is a lessee of any property,
real or personal, owned by any third party, is a valid and existing agreement,
without any default of RPI thereunder and, to the best knowledge and belief of
RPI, after due inquiry, without any default thereunder of the other party
thereto. RPI's possession of such property has not been disturbed nor has any
claim been asserted against RPI adverse to its rights in such leasehold
interests.
2.10 PROPRIETARY RIGHTS. RPI has sufficient title and ownership of all
------------------
Proprietary Rights (as defined below) necessary for its business as now
conducted. RPI is not bound by or a party to any options, licenses or agreements
of any kind with respect to the Proprietary Rights of any other person or entity
which prevent RPI from carrying out its business as it is now conducted. Except
as set forth in Form S-1 and as previously disclosed to Purchaser, RPI has not
-----------------------------------------
received any communications alleging that RPI has violated or, by conducting its
business as proposed, would violate the Proprietary Rights of others.
"Proprietary Rights" shall mean patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes.
2.11 MATERIAL CONTRACTS. RPI has filed all material agreements as
------------------
exhibits to filings with the SEC under the Securities Act of 1933, as amended
(the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are required to be filed as exhibits under the rules and
regulations of the SEC. All such agreements filed as Exhibits are referred to as
"Contracts." Each of the Contracts is valid, binding and in full force and
effect and is enforceable by RPI in accordance with its terms. RPI has performed
all material obligations required to be performed by it to date under each of
the Contracts and is not (with or without the lapse of time or the giving of
notice or both) in breach or default in any material respect thereunder and, to
the knowledge of RPI, no other party to any of the Contracts is (with or without
the lapse of time or the giving of notice or both) in breach or default in any
material respect thereunder.
2.12 COMPLIANCE. To the best of RPI's knowledge, RPI has, in all material
----------
respects, complied with all laws, regulations, and orders applicable to its
present business and has all material permits, licenses and authorizations
required thereby. There is no term or provision of any mortgage, indenture,
contract, agreement or instrument to which RPI is a party or by which it is
bound, or, to the knowledge of RPI, of any state or federal judgment, decree,
order, statute, rule or regulation applicable to or binding upon RPI, which
materially adversely affects the business, prospects, condition, affairs or
operations of RPI or any of its properties or assets.
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2.13 EMPLOYEES AND CONSULTANTS. As of the date hereof, each current or
-------------------------
former employee with access to confidential or proprietary information of RPI
has executed and delivered to RPI a nondisclosure and assignment of invention
agreement (in the form provided to Purchaser), and all of such agreements are in
full force and effect. Each consultant with access to confidential or
proprietary information has executed and delivered a nondisclosure agreement (in
the form provided to Purchaser), and all such agreements are in full force and
effect. RPI, after reasonable investigation, is not aware that any of its
employees or consultants is in violation of such agreement, and RPI will use its
best efforts to prevent any such violation.
2.14 NO REGISTRATION RIGHTS. Except as provided in this Agreement and as
----------------------
disclosed in Form S-1, RPI is under no contractual obligation to register (now
or in the future, whether contingent or not) under any applicable securities
laws any of its presently outstanding securities or any of its securities that
may subsequently be issued.
2.15 NO VOTING AGREEMENTS. To RPI's knowledge, there are no outstanding
--------------------
stockholder agreements, voting trusts, proxies or other arrangements or
understandings among the stockholders of RPI or with RPI relating to the voting
of their respective shares.
2.16 TAXES. All required tax returns of RPI have been accurately prepared
-----
and duly and timely filed, and all Taxes (as defined below) required to be paid
with respect to the periods covered by such returns have been paid. RPI has not
been delinquent in the payment of any Tax, assessment or governmental charge.
For these purposes, references to "tax returns" shall be interpreted broadly to
include any Federal, state or local tax return, and any tax return, or
equivalent of any taxing jurisdiction outside of the United States. "Taxes"
shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any governmental authority
responsible for the imposition of such taxes (domestic or foreign).
2.17 ERISA. No ERISA Event has occurred or is reasonably expected to
-----
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could be reasonably expected to have
a material adverse effect on RPI. For these purposes:
(a) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
(b) "ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with RPI, is treated as a single employer under
Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended from time
to time (the "Code") or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414 of the Code.
(c) "ERISA Event" means (i) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (ii)
the existence with respect to any Plan of an
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"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (iv) the
incurrence by RPI or any of its ERISA Affiliates of any liability under Title IV
of ERISA with respect to the termination of any Plan; (v) the receipt by RPI or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (vi) the incurrence by RPI or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (vii) the receipt by RPI or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from RPI or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
(d) "Multiemployer Plan" means a multiemployer plan as defined in
------------------
Section 4001 (a)(3) of ERISA.
(e) "PBGC" means the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA and any successor entity performing similar functions.
(f) "Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which RPI or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
2.18 ENVIRONMENTAL MATTERS. RPI represents and warrants that to the best
---------------------
of its knowledge:
(a) RPI is, and will continue to be, in material compliance with all
applicable federal, state and local environmental laws, regulations and
ordinances (collectively, "Environmental Laws") governing its business with
respect to all discharges into the ground and surface water, emissions into the
ambient air and generation, accumulation, storage, treatment, recycling,
transportation, labeling or disposal of waste materials or process by-products,
except laws, the violation of which, either individually or in the aggregate,
could not reasonably be expected to have a material adverse affect on RPI;
(b) RPI is not liable for any penalties, fines or forfeitures for
failure to comply with any Environmental Laws;
(c) all licenses, permits or registrations required for the businesses
presently conducted and proposed to be conducted by RPI under any Environmental
Laws have been or will, in a timely manner, be obtained or made, other than such
licenses, permits or registrations as to which the failure to obtain or make,
either individually or in the aggregate, could not be
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reasonably expected to have a material adverse effect on RPI, and RPI is in
material compliance therewith;
(d) no release, emission or discharge into the environment of
hazardous substances, as defined under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, or hazardous waste, as defined
under the Resource Conservation and Recovery Act, or air pollutants as defined
under the Clean Air Act, or pollutants, as defined under the Clean water Act, by
RPI has occurred or is presently occurring on or from any property owned or
leased by RPI, in excess of releases permitted by Environmental Laws (then or
now applicable, as the case may be) other than such releases, emissions or
discharges as, either individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on RPI;
(e) RPI has not (i) owned, occupied or operated a site or structure on
or in which any hazardous substance was or is stored, transported or disposed of
in violation of any Environmental Laws at such time as such site or structure
was owned, occupied or operated by RPI or, to the best of RPI's knowledge, at
any other time, or (ii) transported or arranged for the transportation of any
hazardous substance other than in full compliance with all applicable
Environmental Laws;
(f) RPI has not caused or been held legally responsible for any
release or threatened release of any hazardous substance; and
(g) RPI has not received notification from any federal, state or other
governmental authority of any such release or threatened release of hazardous
substances, or that RPI may be required to pay any costs or expenses incurred or
to be incurred in connection with any efforts to mitigate the environmental
impact of any release or threatened release, of any hazardous substance from any
site or structure owned, occupied or operated by RPI.
2.19 ABSENCE OF CHANGES. Since the dates of the Financial Statements,
-------------------
there has been no material adverse change in the condition, financial or
otherwise, net worth or operations or prospects of RPI, other than changes
occurring in the ordinary course of business.
2.20 DISCLOSURE. RPI has made available to the Purchaser a true and
----------
complete copy of each report, schedule, registration statement and definitive
proxy statement, including exhibits filed therewith (but excluding exhibits
incorporated therein by reference and not attached thereto), filed by RPI during
the fiscal year ended December 31, 1998, and any subsequent interim periods,
with the SEC (the "SEC Documents"), which are all the documents that RPI was
required to file. As of their respective dates and, except to the extent
information contained therein has been revised or superseded by a later filed
SEC Document, as of the date hereof, none of the SEC Documents contained or
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of RPI included in the SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and
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regulations with respect thereto, have been prepared in accordance with GAAP
during the periods presented and fairly present (subject only, in the case of
the unaudited statements, to normal, recurring audit adjustments) the financial
position of RPI as of the date thereof and the results of its operations and its
cash flows for the periods then ended.
ARTICLE III. REPRESENTATIONS OF THE PURCHASER
Purchaser represents and warrants to RPI as of the Closing the following:
3.1 INVESTMENT. Purchaser is acquiring the Shares and Conversion Shares
----------
for its own account for investment and not with a view to, or for sale in
connection with, any public distribution thereof and, except as contemplated by
this Agreement, Purchaser has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof.
3.2 AUTHORITY. Purchaser has full power and authority to enter into and
---------
to perform this Agreement in accordance with its terms.
3.3 EXPERIENCE. Purchaser has carefully reviewed the representations
----------
concerning RPI contained in this Agreement and has made detailed inquiry
concerning RPI, its business and its personnel; Purchaser has received any and
all written information which it has requested and all questions and inquiries
have been answered to Purchaser's satisfaction; and Purchaser has sufficient
business and financial experience to be able to evaluate the merits and risks of
an investment in RPI. The provisions of this Section 3.3 shall not be construed
to limit in any respect any of RPI's representations and warranties set forth in
this Agreement.
3.4 ACCREDITED INVESTOR. Purchaser is an "accredited investor" within the
-------------------
definition set forth in Securities Act Rule 501(a).
3.5 BINDING EFFECT. This Agreement has been duly executed and delivered
--------------
by Purchaser, constitutes a valid and binding obligation of Purchaser,
enforceable in accordance with its terms, subject as to enforcement of remedies
to applicable bankruptcy, insolvency, reorganization or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies.
3.6 RESTRICTED SECURITIES. Purchaser acknowledges that (i) the Shares and
---------------------
Conversion Shares have not been registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 under the Securities Act;
(ii) the Shares and Conversion Shares cannot be sold, transferred or otherwise
disposed of unless they are subsequently registered under the Securities Act or
an exemption from registration is then available; (iii) in any event, the
exemption from registration under Rule 144 will not be available for at least
one (1) year and even then will not be available unless various conditions have
been satisfied; and (iv) there is now no registration statement on file with the
Securities and Exchange
9
<PAGE>
Commission with respect to the Shares or Conversion Shares and, except as
provided in Article VIII hereof, RPI has no obligation or current intention to
register the Shares or Conversion Shares under the Securities Act.
ARTICLE IV. CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligation of Purchaser to purchase the Shares at the Closing is
subject to the fulfillment, or the waiver by Purchaser, on or before the
Closing, of each of the following conditions:
4.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each representation and
------------------------------------------
warranty contained in Article II shall be true on and as of the Closing with the
same effect as though such representation and warranty had been made on and as
of that date.
4.2 PERFORMANCE. RPI shall have performed and complied with all
-----------
agreements and conditions contained in this Agreement required to be performed
or complied with by RPI prior to or at such Closing.
4.3 CERTIFICATES AND DOCUMENTS. RPI shall have delivered to Purchaser:
--------------------------
(a) The Certificate of Incorporation of RPI as amended and in effect
at such Closing;
(b) Certificates, as of the most recent practicable dates, as to the
corporate good standing of RPI issued by the Secretary of State of the State of
Delaware and the Secretary of State of the State of Colorado confirming such
good standing on or immediately prior to such Closing;
(c) Bylaws of RPI as in effect on such Closing;
(d) the Series L Preferred Authorizing Resolution;
(e) Resolutions of the Board of Directors of RPI, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated hereby; and
(f) the Certificate of Designation filed with the Secretary of the
State of Delaware under the General Corporation Law of the State of Delaware
certifying the Series L Preferred Authorizing Resolution.
4.4 COMPLIANCE CERTIFICATE OF RPI. RPI shall have delivered to the
-----------------------------
Purchaser certificates, executed by the President of RPI, dated as of the
Closing, certifying to the fulfillment of the conditions specified in Sections
4.1 and 4.2 of this Agreement.
10
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4.5 OPINION OF COUNSEL. The Purchaser shall have received a legal opinion
------------------
of Rothgerber Johnson & Lyons LLP, in the form attached to this Agreement as
EXHIBIT C.
4.6 COLLABORATION AGREEMENT. The Collaboration Agreement shall be in full
-----------------------
force and effect and shall not have been terminated.
4.7 OTHER MATTERS. All corporate and other proceedings in connection with
-------------
the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Purchaser and Purchaser shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
ARTICLE V. CONDITIONS TO THE OBLIGATIONS OF RPI
The obligation of RPI to sell the Shares at the Closing is subject to
fulfillment, or the waiver by RPI, on or before the Closing, of each of the
following conditions:
5.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------------------
warranties of the Purchaser contained in Article III shall be true on and as of
such Closing the same effect as though such representations and warranties had
been made on and as of that date.
5.2 PERFORMANCE. Purchaser shall have performed and complied with all
-----------
agreements and conditions contained in this Agreement required to be performed
or complied with by Purchaser prior to or at the Closing.
5.3 INVESTMENT. Purchaser shall have tendered, in the manner and amount
----------
specified in Article I hereof, the consideration for the purchase of Shares to
occur at the Closing.
5.4 COMPLIANCE CERTIFICATE OF PURCHASER. Purchaser shall have delivered
-----------------------------------
to RPI certificates, executed by a duly authorized officer of Purchaser, dated
as of the Closing, certifying to the fulfillment of the conditions specified in
Sections 5.1 and 5.2 of this Agreement.
5.5 APPROVALS. This Agreement and the transactions contemplated hereby
---------
shall have been approved by RPI's Board of Directors.
5.6 COLLABORATION AGREEMENT. The Collaboration Agreement shall be in full
-----------------------
force and effect and shall not have been terminated.
5.7 OTHER MATTERS. All corporate and other proceedings in connection with
-------------
the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to RPI and RPI shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably
request.
11
<PAGE>
ARTICLE VI. COVENANTS OF RPI AND PURCHASER
6.1 COVENANTS OF RPI.
----------------
(a) RPI shall permit Purchaser to visit and inspect the properties of
RPI, including its corporate and financial records, and to discuss its business
and finances with officers of RPI, during normal business hours following
reasonable notice and as often as may be reasonably requested.
(b) With a view to making available to the Purchaser the benefits of
Rule 144 under the Securities Act and any other rule or regulation of the SEC
that may at any time permit the sale of securities to the public without
registration or pursuant to a registration on Form S-3 or any successor form,
RPI agrees to:
(i) take such action as is necessary to enable the Purchaser or
its assignees to utilize Form S-3 for the sale of their securities,
(ii) file with the SEC in a timely manner all reports and other
documents required of RPI under the Securities Act and the Exchange Act; and
(iii) furnish to the Purchaser, so long as the Purchaser owns
securities of RPI, upon request (A) a written statement by RPI that it has
complied with the reporting requirements of SEC Rule 144, the Securities Act and
the Exchange Act, or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3, (B) a copy of the most recent annual or quarterly
report of RPI and such other reports and documents so filed by RPI with the SEC,
and (C) such other information as may be reasonably requested in availing the
Purchaser or its assignees of any rule or regulation of the SEC which permits
the selling of any such securities without registration or pursuant to such
forms.
6.2 COVENANTS OF THE PURCHASER. Purchaser hereby agrees that
--------------------------
notwithstanding voting rights given it as the holder of a series of Preferred
Stock pursuant to Delaware corporate law or to the Certificate of Incorporation
of RPI, and except for an amendment to the Certificate of Incorporation of RPI
or other action which would (i) alter or change any of the express powers,
rights, preferences, privileges, qualifications, limitations or restrictions of
the Series L Preferred; or (ii) increase the authorized number of shares of
Series L Preferred, or issue any shares of Series L Preferred other than
pursuant to this Agreement; Purchaser shall not vote its shares of Series L
Preferred against any proposal approved by each other series of outstanding
Preferred Stock voting thereon if the approval of the holders of the Series L
Preferred, voting separately as a class, is required under law. This provision
shall in no way affect the right of Purchaser to vote at its discretion on any
matter voted on by any class of stock or by all holders generally and shall not
affect Purchaser's voting rights in any way following the conversion of all
Series L Preferred into Common Stock.
12
<PAGE>
ARTICLE VII. RESTRICTIONS ON TRANSFER AND
COMPLIANCE WITH SECURITIES ACT AND REGISTRATION
7.1 COMPLIANCE WITH SECURITIES LAWS. Purchaser agrees to be bound by the
-------------------------------
provisions of this Article VII which are primarily intended to ensure compliance
with the Securities Act and applicable state securities laws. Purchaser agrees
that the Shares and the Conversion Shares will be disposed of only in accordance
with the Securities Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
7.2 RESTRICTIVE LEGENDS. (a) Except as otherwise provided in this Article
-------------------
VII, each certificate for Shares or Conversion Shares issued to Purchaser, and
each certificate for Shares or Conversion Shares issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES
LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE
VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR THE HOLDER OF THE SECURITIES
PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO RPI AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO RPI, TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED.
7.3 TRANSFERS. Neither the Shares nor the Conversion Shares shall be
---------
transferred other than pursuant to an effective registration statement under the
Securities Act or an exemption from the registration provisions thereof. Each
certificate, if any, evidencing Shares or Conversion Shares issued upon any such
transfer other than in a public offering pursuant to an effective registration
statement shall bear the restrictive legend set forth in Section 7.2. (a),
unless in the opinion of the holder's counsel (who may be an employee of
Purchaser), which opinion shall be reasonably acceptable to RPI, such legend is
not required for the purposes of compliance with the Securities Act.
7.4 TERMINATION OF SECURITIES LAW RESTRICTIONS. Notwithstanding the
------------------------------------------
foregoing provisions of Article VII, the restrictions imposed herein upon the
transferability of the Shares and the Conversion Shares and the legend
requirements of Section 7.2 shall terminate as to any particular Share or
Conversion Share (i) when such security shall have been effectively registered
under the Securities Act and disposed of pursuant thereto or (ii) when RPI shall
have received an opinion of the holder's counsel (who may be an employee of
Purchaser), which opinion shall be reasonably acceptable to RPI, that such
legend is not required for purposes of compliance with the Securities Act.
Whenever the restrictions imposed by this Article VII shall terminate as to the
Shares or Conversion Shares, as hereinabove provided, the holder thereof shall
be entitled to receive from RPI, at the expense of RPI, a new certificate not
containing the restrictive legend.
13
<PAGE>
ARTICLE VIII. REGISTRATION RIGHTS
8.1 DEFINITIONS. As used in this Article VIII:
-----------
(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 (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
(b) the term "Registrable Securities" means the common stock issuable
----------------------
upon conversion of all or any part of the Shares pursuant to this Agreement as
well as any capital stock of RPI issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such common stock issuable
upon conversion of the Shares.
(c) the term "Holders" shall mean the Purchaser or any permitted
-------
transferee pursuant to Section 8.8;
(d) "Registration Expenses" shall mean all expenses incurred by RPI in
---------------------
compliance with Sections 8.2, 8.3, 8.4 and 8.5 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for RPI, 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 RPI, which shall be paid in
any event by RPI);
(e) "Selling Expenses" shall mean all underwriting discounts and
----------------
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders.
8.2 REQUESTED REGISTRATION.
----------------------
(a) Request for Registration. Upon conversion of the Shares, if RPI
------------------------
shall receive from one or more Holders, at any time after the date of this
Agreement a written request that RPI effect a registration of Registrable
Securities RPI shall as soon as practicable, use its diligent best efforts to
effect such registration under the Securities Act (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as would permit or facilitate the sale and distribution of all
of the Registrable Securities; provided, however, that RPI shall not be
obligated to effect or take any action to effect, (A) more than one registration
pursuant this Section 8.2 (provided, however, that any registration where the
registration statement does not become effective shall not constitute a
registration pursuant to Section 8.2), or (B) any
14
<PAGE>
registration pursuant to this Section 8.2 in any particular jurisdiction in
which RPI would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless RPI is
already subject to such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder.
(b) Underwriting. If the Holders intend to distribute the Registrable
------------
Securities covered by their request by means of an underwriting, they shall so
advise RPI as part of their request made pursuant to Section 8.2(a) and RPI
shall enter into an underwriting agreement in customary form (including, without
limitation, such representations and warranties and indemnity and contribution
provisions as the underwriter or underwriters customarily require) with the
representative of the underwriter or underwriters selected for such underwriting
by RPI, such underwriter or underwriters to be acceptable to the Holders.
(c) Form S-3. RPI shall use reasonable efforts to qualify and remain
--------
qualified for effecting registration of its securities on Form S-3 and pursuant
to Rule 415 under the Securities Act for secondary sales. Any request by a
Holder for a registration of Registrable Securities pursuant to Section 8.2(a)
shall be made on Form S-3 so long as RPI is qualified to register the
Registrable Securities on such form and shall be a shelf registration pursuant
to Rule 415 under the Securities Act if requested by the Holder and RPI is
qualified under such Rule. If RPI is not qualified to register the Registrable
Securities on Form S-3, or if RPI registers the Registrable Securities on Form
S-3 and subsequently becomes ineligible to use such form, then RPI will register
the Registrable Securities on a registration statement on Form S-l or other
available form and will file any amendments or supplements to such registration
statement as may be necessary to allow such Holder to meet the prospectus
delivery requirements of the Securities Act in connection with its sales of
Registrable Securities under such registration statement.
8.3 RPI REGISTRATION.
----------------
(a) If at any time after the date of this Agreement and after the
conversion of the Shares to common stock RPI shall determine to register any of
its securities for its own account or for the account of any other holder of
securities, other than a registration relating solely to director stock option
or employee benefit plans, or a registration relating solely to a transaction
for the type described in Rule 145 under the Securities Act, or any successor to
Rule 145, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Registrable Securities, RPI will provide prior written notice at least thirty
(30) days before the filing with the SEC of such registration statement. Such
notice shall offer to include in such filing that number of Registrable
Securities as the Holders may request, subject to the conditions hereinafter set
forth. If the Holder desires to have Registrable Securities registered under
this Section 8.3, it shall be required to so advise RPI in writing within twenty
(20) days after the date of receipt of such offer from RPI, setting forth the
number of Registrable Securities for which registration is requested. RPI shall
thereupon include in such filing the number of Registrable Securities for which
registration is so requested, subject to its
15
<PAGE>
right to reduce the number of Registrable Securities as set forth in Section
8.3(b) below, and shall use its best efforts to effect registration under the
Securities Act of such Registrable Securities.
(b) Underwriting. Where the registration of which RPI gives notice is
------------
for a registered public offering involving an underwriting, RPI shall so advise
the Holders as part of the written notice given pursuant to Section 8.3(a). In
such event, the right of each of the Holders to registration pursuant to this
Section 8.3 shall be conditioned upon such Holders' participation in such
underwriting and the inclusion of such Holders' Registrable Securities in the
underwriting to the extent provided herein. The Holders shall (and it shall be a
condition of their participation in any such registration and underwriting that
any other shareholders distributing securities through such underwriting also
shall) enter into an underwriting agreement in customary form (including,
without limitation, such indemnity and contribution provisions as the
underwriter or underwriters customarily require) with the underwriter or
underwriters selected for underwriting by RPI. Notwithstanding any other
provision of this Section 8.3, if the underwriter determines that marketing
factors require a limitation on the number of shares to be underwritten, the
underwriter may (subject to the allocation priority set forth below) exclude
from such registration and underwriting some or all of the Registrable
Securities which would otherwise be underwritten pursuant hereto. In such a
case, RPI shall so advise all Holders requesting registration, and participation
in the underwriting by Holders and other holders of the securities shall be
reduced, on a pro rata basis, by such minimum number of shares as is necessary
to comply with such limitation. If any Holder disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written notice
to RPI and the underwriter. Any Registrable Securities or other securities
excluded (in accordance with this Section 8.3(b)) or withdrawn from such
underwriting shall be withdrawn from such registration.
8.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Article VIII shall be borne by RPI, and Selling Expenses shall be borne by the
Holders.
8.5 REGISTRATION PROCEDURES.
-----------------------
(a) Whenever RPI effects or is required to effect the registration of
any Registrable Securities, RPI will as expeditiously as possible:
(i) prepare and file with the SEC. a registration statement with
respect to such Registrable Securities and use reasonable efforts to cause such
registration statement to promptly become and remain effective for the period
set forth in subsection (ii) below and promptly notify the Holders (x) when such
registration statement becomes effective, (y) when any amendment to such
registration statement becomes effective and (z) of any request by the SEC for
any amendment or supplement to such registration statement or any prospectus
relating thereto or for additional information;
(ii) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to comply
with the provisions of the
16
<PAGE>
Securities Act with respect to the offer of the Registrable Securities covered
by such registration statement during the period required for distribution of
the Registrable Securities, which period shall not be in excess of (i) nine (9)
months from the effective date of such registration statement with respect to
any registration statement that is not a shelf registration filed pursuant to
Rule 415 and (ii) the period permitted under the Securities Act with respect to
a shelf registration under Rule 415.
(iii) furnish to the Holders, prior to filing a registration
statement, copies of such registration statement as proposed to be filed and
thereafter, such number of copies of such registration statement, each amendment
and supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus, reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which RPI shall have filed with the SEC and financial
statements, reports and proxy statements mailed to shareholders of RPI) as the
Holders may reasonably request in order to facilitate the disposition of the
Registrable Securities being offered by the Holders;
(iv) use reasonable efforts to register or qualify, not later than
the effective date of any filed registration statement, the Registrable
Securities covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the Holders reasonably request, subject,
however, to the proviso to Section 8.2(a);
(v) make available, upon reasonable notice and during business
hours, for inspection by the underwriter or underwriters (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents,
----------
agreements and properties of RPI (collectively the "Records") as shall be
-------
necessary to enable the Inspectors to exercise their due diligence
responsibilities, and cause RPI's officers, directors and employees to supply
all information reasonably requested by any such Inspector in connection with
the registration statement;
(vi) if the securities covered by the Registration Statement are to
be sold through one or more underwriters, obtain a comfort letter from RPI's
independent public accountants dated within five business days prior to the
effective date of the registration statement (and as of such other dates as the
underwriter or underwriters for the Registrable Securities may reasonably
request) in customary form and covering such matters of the type customarily
covered by such comfort letters as such underwriter or underwriters reasonably
request;
(vii) if the securities covered by the Registration Statement are to
be sold through one or more underwriters, obtain an opinion of counsel dated the
closing of the sale of the Registrable Securities (and as of such other dates as
the underwriter or underwriters for the Registrable Securities may reasonably
request) in customary form and covering such matters of the type customarily
covered by such opinions as counsel designated by such underwriter or
underwriters reasonably requests;
(viii) if the securities covered by the Registration Statement are to
be sold through one or more underwriters, provide to the underwriter or
underwriters
17
<PAGE>
representations and warranties of RPI, dated the closing of the sale of the
Registrable Securities (and as of such other dates as the underwriter or
underwriters for the Registrable Securities may reasonably request) in customary
form and covering such matters of the type customarily covered by such
representations and warranties as counsel designated by such underwriter or
underwriters reasonably request;
(ix) during the period when the registration statement is
required to be effective, notify the Holders of the happening of any event as a
result of which the prospectus included in the registration statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and RPI
will forthwith prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made not
misleading;
(x) cause such Registrable Securities to be listed for trading
on each securities exchange on which similar Securities of the same class issued
by RPI are then traded, provided that RPI is eligible to do so under applicable
listing requirements;
(xi) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to the holders of
RPI's Securities, as soon as reasonably practicable, an earnings statement
governing a period of twelve months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Holder shall timely furnish to RPI such information regarding
the distribution of such Registrable Securities as RPI may from time to time
reasonably request.
(c) The Holder agrees that upon the receipt of any notice from RPI of
the happening of any event of the kind described in paragraph (a)(ix) above, the
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until receipt
by the Holder of the copies of the supplemented or amended prospectus
contemplated by paragraph (a)(ix) above.
8.6 INDEMNIFICATION.
---------------
(a) RPI will indemnify each of the Holders, as applicable, each of its
officers, directors and partners, and each person controlling each of the
Holders, with respect to each registration which has been effected pursuant to
this Article VIII, and each underwriter, if any, and each person who controls
any underwriter, against all claims, losses, 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 prospectus, offering
circular or other document
18
<PAGE>
(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 by RPI of the Securities Act or any rule or regulation thereunder
applicable to RPI and relating to action or inaction required of RPI in
connection with any such registration, qualification or compliance, and will
reimburse each of the Holders, each of its officers, directors and partners, and
each person controlling each of the Holders, each such underwriter and each
person who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that RPI will not be liable
in any such case to any Holder or underwriter or person controlling such Holder
or underwriter to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished in writing to RPI by such Holder or underwriter or
person controlling such Holder or underwriter and stated to be specifically for
use therein.
(b) Each of the Holders will, if Registrable Securities held by it are
included in the Securities as to which such registration, qualification or
compliance is being effected, indemnify RPI, each of its directors and officers
and each underwriter, if any, of RPI's securities covered by such a registration
statement, each person who controls RPI or such underwriter within the meaning
of the Securities Act and the rules and regulations thereunder, each other
holder of Securities in respect of which such registration, qualification or
compliance is being effected ("Other Shareholder") and each of their officers,
-----------------
directors, and partners, and each person controlling such Other Shareholder
against all claims, losses, 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 such registration statement,
prospectus, offering circular or other document made by such Holder or any
violation by the Purchaser of the Securities Act or any rule or regulation
thereunder applicable to the Purchaser and relating to action or inaction
required of the Purchaser in connection with any such registration,
qualification or compliance, or 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 by such Holder, and will reimburse RPI and
such Other Shareholders, directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending 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 RPI by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder shall
be limited to an amount equal to the proceeds to such Holder for securities sold
as contemplated herein.
(c) Each party entitled to indemnification under this Section 8.6 (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, and shall
permit the Indemnifying Party to assume the
19
<PAGE>
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 an y litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld) and the Indemnified
Party may participate in such defense at such party's expense (unless (i) the
employment of counsel by such Indemnified Party has been authorized by the
Indemnifying Party, or (ii) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in the defense of such action, in each of which
cases the fees and expenses of one law firm serving as counsel for each
Indemnified Party shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Article VIII unless such failure or any delay in providing such
notice results in the loss of material defenses or rights. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party (which consent shall not be unreasonably
withheld), 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 Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 8.6 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in a negotiated underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall be controlling.
8.7 INFORMATION. In connection with any request for registration, the
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Holders shall be required to furnish RPI with all relevant information
concerning the proposed method of sale or other disposition of the Registrable
Securities, the identity of and compensation to be paid to any underwriters
proposed to be employed in connection therewith, and such other information as
may be reasonably required by RPI to properly prepare and file such registration
statement in
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accordance with applicable provisions of the Securities Act and the rules and
regulations thereunder. Upon request of RPI, such information shall be furnished
by the Holders in writing.
8.8 ASSIGNABILITY OF REGISTRATION RIGHTS. The registration rights granted
------------------------------------
pursuant to this Article VIII shall be assignable at the option of each of the
Holders, in whole or in part.
8.9 "MARKET STAND-OFF" AGREEMENT. Holder hereby agrees that following the
----------------------------
effective date of a registration statement of RPI filed under the Securities
Act, it shall not, to the extent requested by RPI and its underwriter, directly
or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any
securities of RPI held by it at any time during such period except Registrable
Securities included in such registration.
ARTICLE IX. MISCELLANEOUS
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
-----------------------------------------------------
agreements, representations, warranties and covenants contained herein shall
survive the execution and delivery of this Agreement and the closing of the
transactions contemplated hereby.
9.2 EXPENSES. Each party shall pay its own expenses in connection with
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the investment contemplated herein.
9.3 NOTICES. All notices, requests, consents, and other communications
-------
when deemed given under this Agreement shall be in writing and shall be
delivered by hand, which shall include delivery by express courier service, or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid and notice shall be deemed given when actually received by the
intended recipient:
If to RPI:
Ribozyme Pharmaceuticals, Inc.
2950 Wilderness Place
Boulder, Colorado 80301
Attention: President & CEO
With a copy to:
Herbert H. Davis III
Rothgerber Johnson & Lyons LLP
1200 17th Street, Suite 3000
Denver, Colorado 80202-5839
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If to Purchaser:
Eli Lilly and Company
Corporate Center
Indianapolis, IN 46285
Attention: General Counsel
With a copy to:
Eli Lilly and Company
Corporate Center
Indianapolis, IN 46285
Attention: Assistant Treasurer
or at such other address or addresses as may have been furnished in writing
pursuant to the provision of this Section 9.3.
9.4 BROKERS. RPI and Purchaser (i) represent and warrant to the other
-------
that it has retained no finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) will indemnify and save the other party
harmless from and against any and all claims, liabilities or obligations with
respect to brokerage or finders' fees or commissions or consulting fees in
connection with the transactions contemplated by this Agreement asserted by any
person on the basis of any statement or representation alleged to have been made
by such indemnifying party.
9.5 DISPUTE RESOLUTION. The Parties recognize that disputes as to certain
------------------
matters may from time to time arise during the term of this Agreement which
relate to either Party's rights and/or obligations hereunder. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. If the Parties cannot resolve the
dispute within twenty (20) days of formal request by either Party to the other,
any Party may, by written notice to the other, have such dispute referred to
their respective officers designated below or their successors, for attempted
resolution by good faith negotiations within forty-five (45) days after such
notice is received. Said designated officers (or such equivalent level officer
at such time) are as follows:
For LILLY: Vice President, Infectious Diseases, Drug Discovery Research
and Clinical Investigation
For RPI: Chief Executive Officer
9.6 ENTIRE AGREEMENT. This Agreement together with the other agreements
----------------
referred to herein embody the entire agreement and understanding between the
parties hereto with respect
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to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
9.7 AMENDMENTS AND WAIVERS. Except as otherwise expressly set forth in
----------------------
this Agreement, 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 and either retroactively or prospectively), with the written consent of
RPI as to any provision that is for the benefit of RPI and by the Purchaser.
9.8 COUNTERPARTS. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.9 HEADINGS. The headings of the Articles and paragraphs of this
--------
Agreement have been added for convenience only and shall not be deemed to be a
part of this Agreement.
9.10 SEVERABILITY. The invalidity or unenforceability of any provision of
------------
this Agreement shall not affect the validity or enforceability of any other
provision.
9.11 GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
9.12 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
----------------------
binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors and administrators of the parties hereto.
9.13 NON-DISCLOSURE OF THE AGREEMENT. Neither party shall disclose any
-------------------------------
information about this Agreement, including its existence, without the prior
written consent of the other. Consent shall not be required, however, for
disclosures to tax authorities or to bona fide potential sublicensees, to the
extent required or contemplated by this Agreement, provided, that in connection
with such disclosure, each party agrees to use its commercially reasonable
efforts to secure confidential treatment of such information. Each party shall
have the further right to disclose the terms of this Agreement as reuired by
applicable law, including the rules and regulations promulgated by the
Securities and Exchange Commission and to disclose such information to
shareholders or potential investors as is customary for publicly-held companies,
provided the disclosing party provides to the other party a copy of the
information to be disclosed and an opportunity to comment thereon prior to such
disclosure and consults within a reasonable time in advance of the proposed
disclosure with the other on the necessity for the disclosure and the text of
the proposed release.
9.14 FINANCIAL STATEMENTS. RPI shall deliver to the Holders all financial
--------------------
and other reports required under federal, state or local law and such other
reports as the parties may agree upon. In additiion, in the event that RPI
becomes a non-publicly held corporation, RPI shall deliver to the Holders: (i)
as soon as practicable, but in any event within 120 days after the end of each
fiscal year of RPI, an income statement for such fiscal year, a balance sheet as
of the end of
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such year and a schedule as to the sources and applications of funds for such
year, such year end financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, consistently applied,
and audited and certified by independent public accountants reasonably
acceptable to the Holders; and (ii) within 30 days of the end of each quarter,
an unaudited income statement, balance sheet and cash flow analysis for and as
of the end of such quarter, including the foregoing information on a comparative
and year to date basis.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
RIBOZYME PHARMACEUTICALS, INC.
a Delaware corporation
By: /s/ Ralph E. Christoffersen
--------------------------------
Ralph E. Christoffersen, Ph.D.
President & CEO
ELI LILLY AND COMPANY
An Indiana corporation
By: /s/ August M. Watanabe
--------------------------------
August M. Watanabe, MD
Vice President
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EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES L PREFERRED
SHARES OF RIBOZYME PHARMACEUTICALS, INC.
Exhibit 4.2 to the Form S-1 Registration Statement of Ribozyme Pharmaceuticals,
File No. 333-75079 is incorporated herein by reference.
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