Exhibit 10.3
RIBOZYME PHARMACEUTICALS, INC.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
XXX
February 4, 2003
To
SCHERING AKTIENGESELLSCHAFT
X-00000 Xxxxxx
Germany
Attention: XX. XXXXX XXXXXX
Re: PURCHASE AGREEMENT dated as of April 9, 1997 ("Purchase Agreement") among
RIBOZYME PHARMACEUTICALS, INC., a Delaware corporation (the "COMPANY"),
SCHERING BERLIN VENTURE CORPORATION, a Delaware corporation and SCHERING
AKTIENGESELLSCHAFT, a German corporation ("SCHERING AG").
Dear Xx. Xxxxxx:
Ribozyme Pharmaceuticals, Inc. (the "Company") intends to enter into a
certain Common Stock and Warrant Purchase Agreement (the "Stock Purchase
Agreement") with certain investors named therein (the "Investors"), providing
for, among other things, the sale of a controlling interest in the Company to
the Investors (the "Transaction"). Such Investors will include Oxford Bioscience
Partners IV, The Sprout Group and Venrock Associates, Inc. (the New Investors),
who shall purchase 50% or more of the common shares of the Company to be issued
under the Stock Purchase Agreement. The execution of the Stock Purchase
Agreement and the completion of the Transaction (the "Closing") are subject to
the satisfaction of various conditions, but is expected to occur on or about
April 10, 2003 (the "Closing Date"). The Investors have advised us that they
intend to continue to operate the business of the Company at its current
locations. Consummation of the Transaction pursuant to the terms of the Stock
Purchase Agreement would result in a Change in Control (as defined in the
Purchase Agreement) of the Company. Pursuant to Section X(l) of the Purchase
Agreement, a Change in Control of the Company would constitute an Event of
Default under the terms of the Purchase Agreement.
The purpose of this letter is to obtain from you a waiver of your
right to declare the Loans (as defined in the Purchase Agreement) outstanding to
be in default and immediately due and payable in whole or in part as a result of
the Change in Control pursuant to the Transaction. The Company acknowledges that
the outstanding principal balance plus accrued interest owing to Schering AG
under the Loans as of December 31, 2002 is U.S. $ 3,459,555.55.
The funds received as part of the Transaction shall become and remain
the property of the Company to be used for ordinary operating expenses of the
Company and the Company will remain responsible for the performance of the
Company's obligations and liabilities under the Purchase Agreement. In the event
the proposed Transaction is abandoned or the Closing does not occur by June 30,
2003 for any reason, or if the terms of the Transaction at the time of Closing
are materially different than those set forth in the Preliminary Summary of
Terms provided herewith, this letter agreement shall be null and void and
without any force or effect whatsoever. We shall keep you periodically informed
of the status of the proposed transactions and you will be notified if and when
the Closing occurs.
In consideration of Schering AG's grant of the waiver provided herein,
the Company agrees to the following:
a. In the event the Company receives less than $45 million within
ninety (90) days after the Closing Date based on receipts, net of
underwriters/placement fee, from the Transaction, the Company
shall pay to Schering AG, in each case in immediately available
funds:
(i) All accrued interest on the Loans as of the Closing Date,
within five (5) days after the Closing Date;
(ii) Not later than five (5) days after the close of each
calendar quarter after the Closing Date, payment of all
accrued interest on the Loans through the end of such
calendar quarter; and
(iii) The outstanding principal balance of the Loans in full plus
all accrued and unpaid interest, on April 9, 2004, which
shall be the Maturity Date.
OR
b. In the event the Company receives greater than or equal to $45
million within ninety (90) days after the Closing Date based on
receipts, net of underwriters/placement fee, from the
Transaction, the Company shall promptly issue warrants to
Schering AG, in form and content reasonably acceptable to
Schering AG, to purchase Common Stock of the Company in a number
equivalent to 250,000, with a 5-year term and an exercise price
per share at $0.42. The number of Common Stock and the exercise
price attributable to the warrants, shall be proportionately
adjusted for any reverse stock split. In addition, the Company
shall pay to Schering AG in each case in immediately available
funds:
(i) All accrued interest on the Loans as of the Closing Date,
within five (5) days after the Closing Date;
(ii) Not later than five (5) days after the close of each
calendar quarter after the Closing Date, payment of all
accrued interest on the Loans through the end of such
calendar quarter; and
(iii) The outstanding principal balance of the Loans in full plus
all accrued and unpaid interest on January 31, 2005, which
shall be the Maturity Date.
Failure to make any payment of principal or interest in the amounts
and on the applicable dates set forth above shall be an Event of Default
pursuant to Article X of the Purchase Agreement. Except as specifically set
forth above, all other terms and conditions of the Purchase Agreement and all
other documents executed in connection therewith, including without limitation
the Security Agreement entered into between Schering AG and the Company dated as
of April 9, 1997, and all amounts owing thereunder to Schering AG shall remain
in full force and effect.
If the foregoing meets with your approval, kindly sign and date this
letter in the space provided below, retain one copy for your records and return
one copy to the undersigned, whereupon this letter shall, subject to the terms
and conditions set forth herein, serve as a waiver of Schering AG's right to
declare the Loans immediately due and payable due to a Change in Control
resulting from the Transaction.
Very truly yours,
RIBOZYME PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx
President and CEO
ACKNOWLEDGED AND AGREED
as of this 6th day of February 2003.
SCHERING AG
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Head of Group Finance
By: /s/ Xxxxxx-Laebe
-----------------------------------
Name: Xxxxxx-Laebe
Title: Legal Counsel
