Exhibit 99.2
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO REGULATION
240.24B-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 COMMISSSION.
AMENDMENT
TO
THE PARTICIPATION AGREEMENT
OF AUGUST 24, 1998
This Amendment to the Participation Agreement dated August 24, 1998
("Amendment"), is entered into by and between: Ribozyme Pharmaceuticals Inc., a
Delaware corporation ("Founder 1); Dr. Ralph E. Christoffersen ("Founder 2");
Mr. Lawrence Bullock ("Founder 3"); Dr. Nassim Usman ("Founder 4"); Dr. James
Thompson ("Founder 5"); Ms. Alene Holzman ("Founder 6"); Dr. Thomas H. Rossing
("Founder 7"); Dr. Jorg Potzsch ("Founder 8"); Dr. Thomas Walther ("Founder 9");
Atugen Biotechnology, GmbH, a German entity ("Company"); and BB Bioventures L.P.
and its affiliates, all of which are managed by MPM Asset Management, LLC.,
("Investor"), as of this 23 day of November, 1998 (Effective Date). Founders
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1-9 may hereinafter be referred to as "Founders."
RECITALS:
A. The Founders, Investor and Company are parties to a Participation Agreement
dated August 24, 1998 ("Agreement").
B. The Founders, Investor and Company desire to amend the Agreement as set
forth below.
I. AMENDMENTS:
A. At all points in the document, DM12,696,246 shall be equivalent to
US$7,000,000.
B. PREAMBLE
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Replace the second paragraph with the following:
"The Founders intend to increase the share capital of the Company in order
to provide the Company with new operating funds. Within the framework of
this capital increase, the Investor shall be given the opportunity to
purchase a share in the nominal amount of up to 30,600 DM in total after
the capital increase has been effected at a closing (the "Closing") as set
out in Annex 26."
[*] Confidential treatment requested
B. PART 1: PARTICIPATION
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1. Section 1: Increase of Capital
a. Paragraph 4 shall be replaced with the following:
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"The Investor shall pay the original capital contribution of DM
30,600 and Founder 1 shall pay to the Company the US $2,000,000
financial support required by the Service Agreement, the form of
which is attached hereto as Annex 25, both immediately upon the
execution of this Amendment by all parties hereto. Immediately
upon receipt by the Company of the US$2,000,000 from Founder 1,
the Investor shall also transfer to the Company, its US$7,000,000
surcharge. All payments under this section shall be wired or made
by check to the Company's bank account at the Commerzbank, Berlin
with the [*] and such payments shall be net of any bank transaction
fees."
b. Paragraph 5 shall be deleted in its entirety.
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c. Paragraph 6 shall be deleted in its entirety
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d. The following new Paragraph 7 shall be added:
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"The Parties agree that a partial share of Founder 1 in the
nominal amount of DM 8,500 shall be redeemed on or before
December 31, 1998 for the compensation of DM 8,500. Such a
redemption shall be contingent upon the receipt of License Fees
by Founder 1 from the Company as provided and defined in the
License Agreement (Annex 23)."
2. Section 2: Transformation into an AG (German Stock Corporation) and
Employee Participation
a. Paragraph 1 shall be replaced with the following:
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"The Parties will convert the Company into an Aktiengesellschaft
(German Stock Corporation), changing its legal form within sixty
(60) days from the date of Closing, provided that the terms of
the restructuring, as set forth in the documents to be prepared
in connection therewith, are acceptable to the Investor. In the
course of the Company's conversion into an AG, the Investor's
shares will be changed into preferred convertible stock
[*] Confidential treatment requested
with voting rights and liquidation preference ("Vorzugsaktien") as
outlined in annex 17 and the founders' shares will be changed into
common stock. "
C. PART 2: ASSURANCES AND WARRANTIES
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1. Section 3, Subsection I (2), paragraph 1 shall be replaced with the
following:
"On May 5, 1998, Founder 1 acquired all capital shares of the
Company, changed the Company's name to "Atugen Biotechnology GmbH",
amended and restated the Articles of Association. On June 10, 1998,
the Company moved the Company's seat to Berlin, shortly thereafter
split its share with the nominal amount of DM 50,000 into one partial
share with the nominal amount of DM 46,000 and four small partial
shares and sold the latter ones to the Founders 2, 8 and 9 as well as
to the Founders 3 to 7 who are holding their share in the nominal
amount of DM 1,600 jointly. There are no other shares of capital
stock of the Company issued or outstanding (see Annex 26)."
2. Section 3, Subsection I (5) shall be replaced with the following:
"The excerpt from the Trade Register in Berlin as seen in annex 4
correctly and completely shows the Company's current legal status,
except that such excerpt does not reflect the appointment of Dr.
Potzsch as general manager, which appointment was effected by the
shareholders' meeting of July 10, 1998."
3. Section 3, Subsection I (6) shall be replaced with the following:
The only persons entitled to represent the Company and to execute
documents on its behalf are:
Dr. Ralph Earl Christoffersen
Dr. Jorg Potzsch
Dr. Michael Steinmetz (upon Closing and shareholder action)
4. Section 3, subsection II: Declarations with of Assets and Financial
Standing
a. Paragraph 1(a) shall be replaced with the following:
"The Company has no due binding obligations with regard to
taxes or social insurance contributions or other contributions
for an employee's pension, and the
[*] Confidential treatment requested
Company is not obligated under any warranty or guarantee
contracts, bills of exchange or suretyships."
b. Paragraph 1(b) shall be replaced with the following:
"Past due pension obligations do not exist. Promises for pensions
have not been made."
c. Paragraph 2, line 4:
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"[A]nnex 14" shall be replaced with Annex 23 and Annex 24--
5. Section 3, subsection III: Other Declarations
a. Paragraph 2 shall be replaced with the following:
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"The Founders each individually declare that they are not the
owner of any intellectual property rights (patents, licenses,
other intellectual property rights) on the basis of which any
royalty payment could be demanded from the Company or the
Company's business conduct could be impeded or prohibited world-
wide with the exception of the patents and patent applications of
Founder 1 which are subject to licenses to the Company through
the license agreements enclosed herein as Annex 23 and Annex 24
and the Service Agreement enclosed herein as Annex 25.
(i) To the extent set forth in Annex 27, the initial Licensed
Technology List to be provided by Founder 1 to the Investor
pursuant to Section 3.2.5(1) of the License Agreement attached
hereto as Annex 23, the Cech Patents in the Annex 24, and the
"Pending Trademark Applications list in Annex 21, (together
"Founder 1 IP"), considered together, contain a complete and
accurate list of all (a) patented or registered intellectual
property rights owned by the Company or owned by Founder 1 and
being transferred or licensed to the Company in connection with
the transactions contemplated herein, (b) pending patent
applications and applications for registrations of other
intellectual property rights filed by Founder 1 which relate to
the technology to be transferred or licensed to the Company, (c)
material unregistered trade names and corporate names owned by
the Company, (d) material unregistered trademarks, service marks,
copyrights, mask works and computer software owned by the Company
and (e) all other intellectual property rights owned by the
[*] Confidential treatment requested
Company that are material to the operation of the business of the
Company as presently conducted and as presently proposed to be
conducted. The items constituting the Founder 1 IP constitute all
of the intellectual property and intellectual property rights
necessary for the operation of the Company's business as
contemplated by this Agreement and the other agreements
contemplated hereby.
(ii) Annex 22 also contains a complete and accurate list of (a)
all material licenses and other rights granted by the Company to
any third party with respect to any intellectual property rights,
except with respect to rights granted to customers of the Company
with respect to the Company's products in the ordinary course of
business, (b) all material licenses and other rights granted by
Founder 1 to any third party with respect to any intellectual
property rights to be transferred to the Company, and (c) to the
extent not disclosed pursuant to Paragraph 2(i), all licenses and
other rights material to the operation of the businesses of the
Company as presently conducted and as presently proposed to be
conducted, free and clear or subordinated of all liens or
encumbrances granted by any third party to the Company with
respect to any intellectual property rights, in each identifying
the subject intellectual property rights.
(iii) Except to the extent set forth in the schedule of
exceptions provided to the Investor, (a) the Company and Founder
1 collectively own all right, title and interest in and to all of
the intellectual property rights listed or required to be listed
in the Founder 1 IP pursuant to Section 2(i), free and clear or
subordinated of all liens or encumbrances; (b) the Company will
have pursuant to the license granted by Founder 1, a valid
license to all intellectual property rights not owned by Founder
1 that are material to the operation of the contemplated
businesses of the Company as presently conducted and as presently
proposed to be conducted (including but not limited to those
intellectual property rights listed under Founder 1 IP pursuant
to Sections 2(i), and (ii)), free and clear or subordinated of
all liens or encumbrances, and such license or licenses will not
be terminated as a result of or require any third party consent
to effect an effective transfer via the license to the Company;
(c) the conduct of the Founder 1's business as it relates to the
technology being licensed to the Company, to the best of Founder
1`s knowledge, and except as disclosed to the Investor, as of
[*] Confidential treatment requested
the effective date of this Agreement, Founder 1 is not aware that
it has infringed, misappropriated or conflicted with any
intellectual property rights of other persons; (d) neither the
Company nor Founder 1 has received any notices of, any
infringement or misappropriation by, or conflict with, any third
party with respect to such intellectual property rights
(including, without limitation, any demand or request that the
Company or Founder 1 license any rights from a third party) nor,
to the Company's or Founder 1's knowledge, are there valid
grounds for any such assertion of infringement, misappropriation
or conflict; (e) to the best of the Company's and Founder 1's
knowledge, the intellectual property rights owned by or licensed
to the Company have not been infringed, misappropriated or
conflicted by other persons or entities; and (f) Founder 1 has
taken all actions reasonably necessary to maintain and protect
the Intellectual Property Rights which they own.
Each service provider of Founder 1 has executed a proprietary
information and inventions agreement that provides for the
confidential treatment of the intellectual property rights of
Founder 1 and the assignment to Founder 1 of inventions developed
in connection with the performance of services for Founder 1, in
the form previously furnished or made available to the Investors.
To the Founder 1's best knowledge, no such service provider is in
violation thereof. To Founder 1's best knowledge, all relevant
technology has been assigned to Founder 1 by all service
providers. Each service provider of the Company will execute a
proprietary information and inventions agreement that provides
for the confidential treatment of the intellectual property
rights to be held by the Company and the assignment to the
Company of inventions to be developed in connection with services
performed for the Company."
b. Paragraph 7 shall be replaced with the following:
"Annex 28 of this Amendment contains a complete and correct list
of all bank accounts of the Company and all powers granted to
employees for the respective bank accounts."
c. Paragraph 11 shall be replaced with the following:
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[*] Confidential treatment requested
"Other than obligations to employees, obligations to make
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payments upon a line of credit in the amount of DM 1,000,000 and
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those obligations listed on Annex 8, the Company is not a party
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to any contract or other agreement or obligation pursuant to
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which it is committed or would become committed upon the
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fulfillment of contingencies to pay to any party an amount
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greater than DM 50,000 per annum."
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D. PART 4: NEW PROVISIONS
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1. Section 3(vi) shall be replaced with the following:
"maintain such insurance, including if determined by the Advisory
Council, key person insurance"
2. Section 6: The title shall be replaced with the following:
"License, Sub-License and Service Agreements"
a. Paragraph 1 shall be replaced with the following:
"The Company has concluded an employment agreement for the
position of general manager with Dr. Potzsch in accordance with
annex 11."
b. Paragraph 2 shall be replaced with the following:
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"The Company has concluded individual employment contracts with
the employees listed in the Annex 29."
c. Paragraph 3 shall be replaced with the following:
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"The Company has concluded a License Agreement and a Sub-License
Agreement with the Founder 1 in the forms attached hereto as
Annex 23 and Annex 24, respectively."
b. Paragraph 4 shall be replaced with the following:
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"The Company has concluded a Service Agreement with the Founder 1
in the form attached hereto as Annex 25."
c. Paragraph 5 shall be deleted in its entirety
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E. TABLE: LIST OF ANNEXES TO THE PARTICIPATION AGREEMENT shall be replaced with
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the following:
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[*] Confidential treatment requested
List of Annexes
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to the
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Participation Agreement
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Annex 1 Signed Term Sheet of June 16,1998
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Annex 2 Business Plan in the version of July 30, 1998
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Annex 3 Minutes from the shareholders' meeting of June 10, 1998
including the Articles of Association
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Annex 4 Excerpt from the Trade Register
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Annex 5 List of Shareholders
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Annex 6 Shareholdings in other Companies Which Are Active in
the Field of the Company or a Related Field or Are in a
Business Relationship with the Company
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Annex 7
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Annex 8 Obligations of the Company Exceeding DM 50,000
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Annex 9
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Annex 10 Draft of the New Articles of Association
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Annex 11 Employment Contracts for the General Manager(s)
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Annex 12 Employment Contract
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Annex 13 Void
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Annex 14 Void
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Annex 15 Void
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Annex 16 Void
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Annex 17 Rights of Preferred Stock
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[*] Confidential treatment requested
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Annex 18 Letter of Intent (BMBF)
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Annex 19 Letter of Intent (Senate of Berlin)
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Annex 20 Void
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Annex 21 Void
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Annex 22 List of Existing Licensees
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Annex 23 License Agreement
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Annex 24 Manufacturing and Supply Agreement and Sub-License
Agreement
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Annex 25 Service Agreement
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Annex 26 Cap Table
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Annex 27 Liens
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Annex 28 Bank Accounts of the Company
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Annex 29 List of Employees
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II. ENTIRE AMENDMENT:
This Amendment, to the extent set forth herein, amends and
modifies and supplements the Agreement. Except as expressly amended
herein, all of the terms and provisions of the Agreement remain in full
force and effect and cannot be amended, modified or changed in any way
except in writing witnessed and signed by duly authorized representatives
of each Company, Founders and the Investor.
III. GENERAL PROVISION:
While both a German and an English version of this Amendment exist, only
the English version of this Amendment shall be binding, and the German
version of this Amendment shall not be used for any legal purpose,
interpretive or otherwise.
[*] Confidential treatment requested
IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by
their duly authorized representatives.
November 23, 1998
--
Larry Bullock
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RIBOZYME PHARMACEUTICALS INC.
Founder 1
/s/ Ralph E. Christoffersen
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Dr. Ralph Earl Christoffersen
Founder 2
/s/ Larry Bullock
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Mr. Larry Bullock
Founder 3
/s/ Nassim Usman
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Dr. Nassim Usman
Founder 4
/s/ James Thompson
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Dr. James Thompson
Founder 5
/s/ Alene Holzman
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Ms. Alene Holzman
Founder 6
/s/s Thomas Rossing
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Dr. Thomas Rossing
Founder 7
November __, 1998
BB BIOVENTURES L.P.
By: /s/ Ansbert S. Gadicke
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[*] Confidential treatment requested
Name: Ansbert S. Gadicke
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Title: Managing Director
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November 23, 1998
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/s/ Jorg Potzsch
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Dr. Jorg Potzsch
Founder 8
/s/ Thomas Walther
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Dr. Thomas Walther
Founder 9
/s/ Ralph E. Christoffersen
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Atugen Biotechnology GmbH
Company
[*] Confidential treatment requested