STOCK PURCHASE AGREEMENT
Between
XXX XXXXX AND COMPANY
And
RIBOZYME PHARMACEUTICALS INC.
Table of Contents
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
STOCK PURCHASE AGREEMENT
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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 Xxx Lilly and Company, an Indiana corporation
("Purchaser").
RECITALS
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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
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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
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take place at the offices of RPI, 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, 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
00 Xxxx Xxxxxx
Xxx Xxxx, XX
ABA # 000000000
BNF Pain Xxxxxx, Inc.
1
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,
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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
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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 Xxxxx 00, 0000, XXX 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
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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.
2
2.4 ISSUANCE OF SHARES. The issuance, sale and delivery of the Shares in
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
6
"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
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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
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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
7
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,
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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
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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
8
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
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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
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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
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definition set forth in Securities Act Rule 501(a).
3.5 BINDING EFFECT. This Agreement has been duly executed and delivered
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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
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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
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
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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.
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4.5 OPINION OF COUNSEL. The Purchaser shall have received a legal opinion
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of Rothgerber Xxxxxxx & Xxxxx 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
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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
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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
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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
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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
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
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
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
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
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
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
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
(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
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
-----------
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
20
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
--------
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.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President & CEO
With a copy to:
Xxxxxxx X. Xxxxx III
Rothgerber Xxxxxxx & Xxxxx LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
21
If to Purchaser:
Xxx Lilly and Company
Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
With a copy to:
Xxx Xxxxx and Company
Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
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,
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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
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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
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accordance with the laws of the State of Delaware.
9.12 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
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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
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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
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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/ Xxxxx X. Xxxxxxxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxxxxxxx, Ph.D.
President & CEO
XXX XXXXX AND COMPANY
An Indiana corporation
By: /s/ August X. Xxxxxxxx
--------------------------------
August X. Xxxxxxxx, 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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