Exhibit 10.1
June 19, 2007
PRIVATE AND CONFIDENTIAL
Mr. Peter J. Nelson
Chair, Audit Committee of the Board of Directors
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, Massachusetts 02139-4234
Dear Pete:
In connection with our discussions concerning a potential strategic or
business combination transaction (the "Possible Transaction") between ARIAD
Pharmaceuticals, Inc. ("ARIAD" or the "Company")) and ARIAD Gene Therapeutics,
Inc. ("AGTI") or the stockholders of AGTI other than ARIAD, the undersigned,
Harvey J. Berger, M.D. ("Berger") and Jay R. LaMarche ("LaMarche" and, together
with Berger, the "AGTI Stockholders"), acting in their respective individual
capacities as minority stockholders of AGTI as more fully described herein, have
requested certain information concerning ARIAD and AGTI and the ability to
disclose such information to their financial and legal advisors for the purpose
of evaluating a Possible Transaction. This information is confidential and
proprietary to ARIAD and AGTI and not otherwise available. The purpose of this
agreement together with Exhibit A and Exhibit B attached hereto (collectively,
the "Agreement") is to confirm our understanding with ARIAD with regard to our
use of and access to confidential information and the other matters set forth
herein. In that connection, we and ARIAD agree as follows:
1. Individual Capacity. Solely with respect to the discussions and
negotiations concerning a Possible Transaction, ARIAD acknowledges and agrees
that the AGTI Stockholders are acting in their individual capacities as minority
stockholders of AGTI and not on behalf of or in any capacity (whether as an
officer, director or other fiduciary or otherwise) with regard to AGTI or any
other stockholder of AGTI, or ARIAD or any stockholder of ARIAD. ARIAD further
acknowledges and agrees that neither AGTI Stockholder, acting in his individual
capacity as a minority stockholder of AGTI, has the authority to bind or
obligate AGTI or any of the other stockholders of AGTI (such stockholders, other
than ARIAD, the "Other Minority AGTI Stockholders") to enter into any Possible
Transaction.
2. Confidentiality Agreement. The AGTI Stockholders (each, a "Receiving
Party") hereby agree to treat and keep all information, whether written or oral,
concerning ARIAD and AGTI (each, a "Disclosing Party"), or any of their
respective affiliates, subsidiaries or divisions, which the Disclosing Party or
any of its Representatives furnishes, whether before or after the date of this
Agreement, to each Receiving Party and/or its Representatives, together with all
originals or copies of all notes, reports, records, forecasts, analyses,
compilations, data, studies and other materials which contain or otherwise
reflect or are generated from such information (collectively, the "Evaluation
Material"), confidential and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the term "Evaluation Material" shall
not for the purposes of this Agreement include any information which (a) at the
time of disclosure or thereafter is generally available to and/or known by the
public other than as a result of a disclosure by the Receiving Party or its
Representatives in breach of this Agreement, or (b) has been independently
acquired by the Receiving Party without violating any of the obligations of the
Receiving Party or its Representatives under this Agreement. "Representatives"
of any person shall mean the financial advisors, marketing consultants and legal
advisors of such person and its affiliates.
3. Use of Evaluation Material and Confidentiality.
(a) Subject to Paragraph 3(b) below, the Evaluation Material will be
kept confidential by the Receiving Party and its Representatives and will not,
without the prior written consent of ARIAD, be disclosed, in whole or in part,
to any third party by the Receiving Party or any of its Representatives in any
manner whatsoever. In addition, the Receiving Party hereby agrees that it will
transmit Evaluation Material only to those of its Representatives who need to
know the information for the purpose of rendering professional advice to the
Receiving Party in connection with the Receiving Party's evaluation of a
Possible Transaction and who agree in advance in writing with ARIAD to be bound
by the confidentiality provisions contained in this Agreement as if a party
hereto with respect to such provisions; provided, however, that this Section
3(a) shall not limit the Receiving Party's (or its Representatives') right to
disclose Evaluation Material in connection with disclosure of Possible
Transaction Discussions to Other Minority AGTI Stockholders in compliance with
Section 4. Notwithstanding anything to the contrary provided in any other
agreement to which ARIAD or AGTI, on the one hand, and one or more of the AGTI
Stockholders, on the other hand, is a party, in the event that there is any
inconsistency with or conflict between the terms of such other agreement and the
terms of this Agreement with regard to the use and/or the disclosure of
confidential or proprietary information or property of ARIAD or AGTI by the AGTI
Stockholders, the terms of this Agreement shall govern.
(b) In the event that the Receiving Party or any of its
Representatives is requested or required in a civil, investigative, or other
proceeding initiated by a private third party or by a governmental or other
regulatory body (by means of interrogatories, requests for information or
documents, subpoena, deposition notice, civil investigative demand or similar
process) to disclose (i) any Evaluation Material, (ii) any information relating
to the opinion, judgment or recommendation of any such person concerning the
Disclosing Party, its affiliates or subsidiaries, or (iii) any other information
supplied to the Receiving Party in the course of the Receiving Party's, or its
Representatives', dealings with the Disclosing Party, the Receiving Party will
promptly notify ARIAD of such request or requirement so that the Disclosing
Party or other party in interest may seek an appropriate protective order or
waive compliance with the provisions of this Agreement, and/or take any other
mutually agreed action. If, in the absence of a protective order or the receipt
of a waiver hereunder, the Receiving Party or any of its Representatives is
compelled to disclose information or else stand liable for contempt or suffer
other censure or sanction, the Receiving Party or such Representative may
disclose that portion of the requested information that such person is compelled
to disclose.
4. Nondisclosure of Negotiations. Except as otherwise expressly
permitted hereby, without the prior written consent of the other party, each
party hereby agrees that it will not, and will direct its Representatives not
to, disclose to any person the fact that any discussions or negotiations with
respect to a Possible Transaction are taking, have taken or are proposed to take
place or other facts with respect to such discussions, including the status
thereof, or the fact that any Evaluation Material has been made available to
either party, nor otherwise make any public disclosure, whether written or oral,
with respect to this Agreement or the actions or transactions contemplated
hereby (collectively, the "Possible Transaction Discussions"), except as such
party reasonably believes is required by applicable law; provided, however, that
the Receiving Party (and its Representatives) may, without the prior consent of
ARIAD, disclose Possible Transaction Discussions to any Other Minority AGTI
Stockholder and participate in discussions with such Other Minority AGTI
Stockholder concerning a Possible Transaction provided that in each such case
such Other Minority AGTI Stockholder is under a written obligation to ARIAD to
maintain the confidentiality thereof (and attached to this Agreement as Exhibit
A is the form of confidentiality agreement to be used with respect to those
Other Minority AGTI Stockholders who as of the date of this Agreement are not
under such a written confidentiality obligation to ARIAD); and provided further,
however, that notwithstanding the foregoing, the Receiving Party shall not be
authorized to act on behalf of ARIAD or AGTI in connection with any Possible
Transaction Discussions with Other Minority AGTI Stockholders. Notwithstanding
anything to the contrary provided in this Agreement, this Agreement shall not
(i) restrict ARIAD from communicating with, making a proposal to, providing
confidential information to, or soliciting votes or consents from any of the
Other Minority AGTI Stockholders in connection with a Possible Transaction, or
(ii) prohibit or restrict Harvey J. Berger, M.D. ("Berger") from making any
disclosure regarding AGTI or a Possible Transaction Discussions that is
consistent with any disclosure made by ARIAD in its filings with the Securities
and Exchange Commission or in connection with other disclosure made in
compliance with Regulation FD at the direction of the Board of Directors of
ARIAD.
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5. Return of Evaluation Material. Upon termination of discussions
concerning the Possible Transaction without a transaction having been
consummated, the Receiving Party and its Representatives will promptly return or
destroy the Evaluation Material and any analyses, compilations, studies or other
documents prepared by the Receiving Party and its Representatives that include,
utilize or reflect the Evaluation Material, except in each case as may otherwise
be prohibited under any applicable document retention policy. Notwithstanding
the return or destruction of the Evaluation Material, the Receiving Party and
its Representatives will continue to be bound by its obligations of
confidentiality hereunder.
6. Accuracy of Evaluation Material. ARIAD acknowledges and agrees that
it has endeavored, and shall continue to endeavor, to include in the Evaluation
Material information known to it that it believes is relevant to the Receiving
Party's evaluation of the Possible Transaction; provided, however, that ARIAD
shall not be required to include in the Evaluation Material any analyses or
reports prepared by its professional advisors concerning a Possible Transaction.
The Receiving Party understands, acknowledges and agrees that neither ARIAD,
AGTI nor any of their Representatives make any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material. The Receiving Party agrees that neither ARIAD, AGTI, nor any of their
Representatives shall have any liability to the Receiving Party or its
Representatives relating to or resulting from the use of the Evaluation Material
or any errors therein or omissions therefrom, and only those representations or
warranties or other agreements which are made in a final definitive agreement
regarding any Possible Transaction, when, as and if executed and delivered, and
subject to such limitations and restrictions as may be specified therein, will
have any legal effect. The Receiving Party acknowledges and agrees that it has
endeavored, and shall continue to endeavor, to cooperate and make itself
available to ARIAD (including by providing information known to it concerning or
relating to ARIAD's and AGTI's business and operations) in connection with
ARIAD's evaluation of a Possible Transaction; provided, however, that the
Receiving Party shall not be required to disclose to ARIAD or AGTI any analyses
or reports prepared by the Receiving Party's Representatives concerning a
Possible Transaction. Each of ARIAD and AGTI understand, acknowledge and agree
that neither the Receiving Party nor any of its Representatives make any
representation or warranty, express or implied, as to the accuracy or
completeness of any information provided to ARIAD or AGTI. Each of ARIAD and
AGTI agree that neither the Receiving Party nor any of its Representatives shall
have any liability to ARIAD and AGTI or their Representatives relating to or
resulting from the use of such information or any errors therein or omissions
therefrom, and only those representations or warranties or other agreements
which are made in a final definitive agreement regarding any Possible
Transaction, when, as and if executed and delivered, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.
7. Expense Reimbursement. ARIAD agrees to reimburse the AGTI
Stockholders for their reasonable and documented expenses, whether incurred
before or after the date of this Agreement, consistent with the engagement
letters of the AGTI Stockholders' Representatives previously provided to ARIAD,
in each case promptly after the AGTI Stockholders have presented invoices
therefor to ARIAD; provided, however, that the AGTI Stockholders agree that they
will (i) consider a Possible Transaction whereby all AGTI stockholders pay their
pro rata share of the amounts required to be paid by ARIAD pursuant to this
Section 7 and (ii) encourage the Other Minority AGTI Stockholders to bear their
pro rata share of the amounts required to be paid by ARIAD pursuant to this
Section 7. All such invoices and other expense reimbursement requests shall be
directed to Peter J. Nelson, Chairman of the Audit Committee of the Board of
Directors of ARIAD. Notwithstanding the foregoing, ARIAD agrees to consider in
good faith any request by the AGTI Stockholders to further reimburse the AGTI
Stockholders for their reasonable and documented expenses in excess of the
amounts set forth in the engagement letters of the AGTI Stockholders'
Representatives.
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8. Indemnification of AGTI Stockholders. ARIAD shall indemnify, defend
and hold harmless, to the fullest extent permitted under applicable law, each
AGTI Stockholder (each, an "Indemnitee") with respect to all claims, demands,
causes of action, rights, obligations, liabilities, losses, damages, judgments,
fines, penalties, costs (including amounts paid in settlement or compromise) and
Expenses (collectively, "Losses") in connection with any Proceeding, whenever
asserted, based on, relating to, or arising out of, in whole or in part, any
acts or omissions by an Indemnitee in the Indemnitee's individual capacity as
described in Section 1 of this Agreement relating to or arising out of the
Possible Transaction (including, but not limited to, acts or omissions with
respect to the negotiation, preparation, execution or performance of this
Agreement and the negotiation, preparation, execution or performance of any
agreement relating to the Possible Transaction) (herein referred to as the
Indemnitee's "Covered Capacity"); provided, however, that ARIAD shall not be
obligated to indemnify any AGTI Stockholder hereunder to the extent of any such
Losses that are determined in a final non-appealable judgment by a court of
competent jurisdiction in a Proceeding (including a shareholder derivative
action) to have resulted primarily from (i) the intentional misconduct of or a
knowing violation of law by such AGTI Stockholder, (ii) bad faith conduct by
such AGTI Stockholder, or (iii) the gross negligence of such AGTI Stockholder.
In addition, ARIAD shall advance funds for all Expenses of any Indemnitee in
accordance with the Supplemental Indemnification Provisions set forth in Exhibit
B attached to this Agreement. ARIAD and the AGTI Stockholders agree that they
shall be bound by the terms set forth in said Exhibit B and that such terms are
incorporated by reference into this Section 8 and shall form an integral part of
this Agreement.
9. Supplemental Insurance. ARIAD shall maintain liability insurance
coverage, at its sole expense, for the benefit of the AGTI Stockholders, in
their individual capacities as described in Section 1 hereof, in accordance with
the terms of the endorsement entered into on or prior to the date of this
Agreement between ARIAD and the insurers signatory thereto. ARIAD represents and
warrants to the AGTI Stockholders that the premiums relating to such insurance
coverage have been fully paid on or prior to the date of this Agreement and that
it shall not take any action to cancel or reduce the benefits afforded to the
AGTI Stockholders by such coverage.
10. Remedies. Each party agrees that monetary damages would not be a
sufficient remedy for any breach of this Agreement and that in addition to all
other remedies, each party shall be entitled to equitable relief, including,
without limitation, injunction and specific performance, as a remedy for any
such breach. Such remedies shall not be deemed to be the exclusive remedies for
a breach of this Agreement but shall be in addition to all other remedies
available at law or equity. The parties further agree not to raise as a defense
or objection to the request or granting of such relief that any breach of this
Agreement is or would be compensable by an award of monetary damages, and agree
to waive any requirements for the securing or posting of any bond in connection
with such remedy.
11. Material Non-Public Information. Each of the Receiving Party and
ARIAD acknowledge and agree that it is aware (and that its Representatives are
aware or, upon receipt of any Evaluation Material, will be advised by the
Receiving Party or ARIAD, as applicable) that (i) the Evaluation Material being
furnished contains or may itself be material, non-public information regarding
ARIAD and/or AGTI and (ii) federal and state securities laws, rules and
regulations prohibit any persons who have material, nonpublic information
concerning ARIAD and/or AGTI, including the Evaluation Material, from purchasing
or selling securities of ARIAD and AGTI or from communicating such information
to any person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities in reliance upon such
information.
12. No Agreement. The parties agree that no contract or agreement
providing for any Possible Transaction shall be deemed to exist between them
unless and until a final definitive agreement has been executed and delivered,
and hereby waive, in advance, any claims (including, without limitation, breach
of contract) in connection with any Possible Transaction (other than claims
arising out of or relating to the parties' respective obligations under this
Agreement) unless and until the AGTI Stockholders and ARIAD shall have entered
into a final definitive agreement concerning a Possible Transaction. The parties
also agree that unless and until a final definitive agreement regarding a
Possible Transaction has been executed and delivered, no party will be under any
legal obligation of any kind whatsoever with respect to such a Possible
Transaction by virtue of this Agreement except for the matters specifically
agreed to herein.
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13. No Third Party Beneficiaries. This Agreement does not and is not
intended to confer any rights or remedies upon any person other than the parties
signatory hereto.
14. No License. Nothing in this Agreement shall be deemed to grant a
license, whether directly or by implication, estoppel or otherwise, to any
Evaluation Material disclosed pursuant to this Agreement.
15. Waiver and Amendment. Each party understands and agrees that no
failure or delay by the other party or any of its Representatives in exercising
any right, power or privilege hereunder will operate as a waiver thereof, nor
will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder. The
agreements set forth herein may only be waived, amended or modified by an
agreement in writing signed on behalf of all of the parties.
16. Successors and Assigns. This Agreement shall inure to the benefit of
and be enforceable by each of the parties and their successors and permitted
assigns. No party may assign any rights or delegate any performance under this
Agreement without obtaining the prior written consent of each of the other
parties, except that ARIAD shall not be required to obtain the consent of the
other parties to make any assignment or delegation in connection with a merger
or sale of substantially all of ARIAD's assets.
17. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section, paragraph
or sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
18. Governing Law; Venue. This Agreement and the transactions
contemplated by this Agreement, and all disputes between the parties under or
related to this Agreement or the facts and circumstances leading to its
execution, whether in contract, tort or otherwise, shall be governed by and
construed in accordance with the Laws of the State of Delaware, without
reference to conflict of laws principles. Each of the parties to this Agreement
(i) irrevocably submits itself to the personal jurisdiction of any state or
federal court sitting in Wilmington, Delaware, as well as to the jurisdiction of
all courts to which an appeal may be taken from such courts, in any suit, action
or proceeding arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that all claims in
respect of such suit, action or proceeding shall be brought, heard and
determined exclusively in the Court of Chancery of the State of Delaware
(provided that, in the event that subject matter jurisdiction is unavailable in
that court, then all such claims shall be brought, heard and determined
exclusively in any other state or federal court sitting in Wilmington,
Delaware), (iii) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from such court, (iv)
agrees not to bring any action or proceeding arising out of or relating to this
Agreement or any of the transactions contemplated by this Agreement in any other
court, and (v) expressly waives, and agrees not to plead or to make any claim
that any such action or proceeding is subject (in whole or in part) to a jury
trial. Each of the parties hereto waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought. Each of the parties
further agrees to waive any bond, surety or other security that might be
required of any other party with respect to any action or proceeding, including
an appeal thereof. Each of the parties agrees that service of any process,
summons, notice or document by U.S. registered mail to its address set forth in
Section 22 hereof shall be effective service of process for any action, suit or
proceeding brought against it.
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19. Authority of AGTI Stockholders. The AGTI Stockholders represent and
warrant that this Agreement has been duly executed and delivered by them and,
assuming due authorization, execution and delivery of this Agreement by ARIAD,
constitutes the legal, valid and binding obligation of the AGTI Stockholders
enforceable against them in accordance with its terms, except to the extent that
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws, now or hereafter in effect,
affecting creditors' rights generally.
20. Authority of ARIAD. ARIAD represents and warrants that it has the
requisite corporate power and authority to enter into this Agreement and perform
its obligations hereunder. ARIAD further represents and warrants that the
execution and delivery of this Agreement by ARIAD and the performance by it of
its obligations hereunder have been duly authorized by all necessary corporate
action on the part of ARIAD, including by (i) the Board of Directors of ARIAD by
the affirmative vote of a majority of the directors of ARIAD (with Berger and
LaMarche abstaining), (ii) the independent and disinterested directors of ARIAD
with respect to a Possible Transaction by the affirmative vote of a majority of
such directors, (iii) the Audit Committee of the Board of Directors of ARIAD by
the affirmative vote of the directors who are members of that committee, and
(iv) the Nominating and Corporate Governance Committee of the Board of Directors
of ARIAD by the affirmative vote of the directors who are members of that
committee (with LaMarche abstaining), for purposes of compliance with ARIAD's
Corporate Code of Conduct and Ethics policy as in effect on the date hereof,
including with respect to Sections II, III and VII thereof, and no other
additional corporate proceedings on the part of ARIAD are necessary to authorize
the execution and delivery of this Agreement and the performance of ARIAD's
obligations hereunder. ARIAD also represents and warrants that this Agreement
has been duly executed and delivered by it and, assuming due authorization,
execution and delivery of this Agreement by the AGTI Stockholders, constitutes
the legal, valid and binding obligation of ARIAD enforceable against ARIAD in
accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws, now or hereafter in effect, affecting creditors' rights
generally.
21. Consent of ARIAD. For purposes of this Agreement, any requirement
that ARIAD shall have consented to or approved any action shall mean the consent
or approval, as the case may be, of the independent directors of ARIAD acting
through their duly appointed designee(s), together with any required approval by
any of the constituencies referred to in clauses (i), (iii) and (iv) of Section
20 hereof.
22. Notice. Each party giving or making any notice, request, demand or
other communication (a "Communication") pursuant to this Agreement shall address
such Communication to the receiving party at the address below:
(a) If to the AGTI Stockholders:
Harvey J. Berger, M.D.
Jay R. LaMarche
With a copy to:
Goodwin Procter LLP
53 State Street
Exchange Place
Boston, MA 02109
Attn: Brian E. Pastuszenski, Esq.
James A. Matarese, Esq.
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(b) If to ARIAD:
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, MA 02139-4234
Attn: Laurie Allen, Esq.
With a copy to:
Abrams & Laster LLP
Brandywine Plaza West
1521 Concord Pike, Suite 303
Wilmington, DE 19803
Attn: Kevin G. Abrams, Esq.
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, MA 02139-4234
Attn: Peter Nelson
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
Attn: Howard L. Shecter, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
One Financial Center
Boston, MA 02111
Attn: Jeffrey M. Wiesen, Esq.
23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.
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Please acknowledge your agreement to the foregoing by countersigning this
Agreement in the place provided below and returning it to the undersigned.
Very truly yours,
By: /s/ Harvey J. Berger, M.D.
--------------------------
Harvey J. Berger, M.D.
By: /s/ Jay R. LaMarche
-------------------
Jay R. LaMarche
Accepted and Agreed to,
this 19th day of June, 2007
INDEPENDENT AND DISINTERESTED DIRECTORS OF
ARIAD PHARMACEUTICALS, INC. WITH RESPECT TO AGTI
By: /s/ Peter J. Nelson
-------------------
Name: Peter J. Nelson
Title: Chairman, Audit Committee of the Board of Directors of
ARIAD Pharmaceuticals, Inc.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Edward M. Fitzgerald
------------------------
Name: Edward M. Fitzgerald
Title: Senior Vice President, Finance and Corporate
Operations, Chief Financial Officer
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Exhibit A
[Form of Other Minority AGTI Stockholder Confidentiality Agreement]
____________, 2007
PRIVATE AND CONFIDENTIAL
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, Massachusetts 02139-4234
In connection with discussions concerning a potential strategic or
business combination transaction (the "Possible Transaction") between ARIAD
Pharmaceuticals, Inc. ("ARIAD") and ARIAD Gene Therapeutics, Inc. ("AGTI") or
the stockholders of AGTI other than ARIAD, the undersigned stockholder of AGTI
(the "AGTI Stockholder") has requested certain information for the purpose of
evaluating a Possible Transaction. This information is confidential and
proprietary to ARIAD and AGTI and not otherwise available. In that connection,
the AGTI Stockholder and ARIAD agree as follows:
1. Confidentiality Agreement. The AGTI Stockholder hereby agrees to (i)
treat and keep all information, whether written or oral, concerning ARIAD and
AGTI, or any of their respective affiliates, subsidiaries or divisions, which
ARIAD furnishes or which Harvey J. Berger, M.D. ("Berger") or Jay R. LaMarche
("LaMarche") or any of their representatives furnishes in accordance with the
terms of that certain confidentiality agreement dated June 19, 2007 among ARIAD,
Berger and LaMarche, whether before or after the date of this Agreement, to the
AGTI Stockholder (collectively, the "ARIAD Confidential Information"),
confidential and in accordance with the provisions of this Agreement, and (ii)
treat and keep all information, whether written or oral, relating to Berger's
and LaMarche's evaluation and analysis of the Possible Transaction, which Berger
or LaMarche furnishes, whether before or after the date of this Agreement, to
the AGTI Stockholder (collectively, the "Berger/LaMarche Confidential
Information"), confidential and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, neither the term "ARIAD Confidential
Information" nor the term "Berger/LaMarche Confidential Information" shall for
the purposes of this Agreement include any information which (a) at the time of
disclosure or thereafter is generally available to and/or known by the public
other than as a result of a disclosure by the AGTI Stockholder in breach of this
Agreement, (b) was within the AGTI Stockholder's possession prior to being
furnished to the AGTI Stockholder, (c) becomes available to the AGTI Stockholder
on a nonconfidential basis, or (d) has been independently acquired by the AGTI
Stockholder without violating any of the obligations of the AGTI Stockholder
under this Agreement.
2. Confidentiality and Non-Use. Subject to the following sentence and
except as otherwise expressly provided herein, the ARIAD Confidential
Information and Berger/LaMarche Confidential Information will be kept
confidential by the AGTI Stockholder and will not, without the prior written
consent of ARIAD or Berger and LaMarche, as the case may be, be disclosed, in
whole or in part, to any third party by the AGTI Stockholder in any manner
whatsoever. In the event that the AGTI Stockholder is requested or required by
law, government regulation or court order to disclose any ARIAD Confidential
Information or Berger/LaMarche Confidential Information, the AGTI Stockholder
will promptly notify ARIAD or Berger and LaMarche, as the case may be, of such
request or requirement so that ARIAD or Berger and LaMarche, as the case may be,
may seek an appropriate protective order or waive compliance with the provisions
of this Agreement, and/or take any other action mutually agreed to between the
AGTI Stockholder and ARIAD or Berger and LaMarche, as the case may be.
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3. Nondisclosure of Negotiations. Except as otherwise expressly
permitted hereby and except to the extent known by the public other than as a
result of a disclosure by the AGTI Stockholder in breach of this Agreement,
without the prior written consent of ARIAD, the AGTI Stockholder hereby agrees
that it will not disclose to any person the fact that any discussions or
negotiations with respect to a Possible Transaction are taking, have taken or
are proposed to take place or other facts with respect to such discussions,
including the status thereof, or the fact that any ARIAD Confidential
Information or Berger/LaMarche Confidential Information has been made available
to the AGTI Stockholder, nor otherwise make any public disclosure, whether
written or oral, with respect to this Agreement or the actions or transactions
contemplated hereby (collectively, the "Possible Transaction Discussions");
provided, however, that the AGTI Stockholder may, without the prior consent of
ARIAD, disclose Possible Transaction Discussions to any other stockholder of
AGTI and participate in discussions with such other AGTI stockholder concerning
a Possible Transaction provided that in each such case such other AGTI
stockholder is under a written obligation to ARIAD to maintain the
confidentiality of the ARIAD Confidential Information; and, provided further,
however, that in connection therewith no Berger/LaMarche Confidential
Information may be disclosed by the AGTI Stockholder to any other AGTI
stockholder without the prior written consent of Berger and LaMarche.
4. Return of Confidential Information. Upon termination of discussions
concerning the Possible Transaction without a transaction having been
consummated, the AGTI Stockholder will promptly return (to ARIAD or Berger and
LaMarche, as the case may be) or destroy the ARIAD Confidential Information and
Berger/LaMarche Confidential Information and any analyses, compilations, studies
or other documents prepared by the AGTI Stockholder that include, utilize or
reflect the ARIAD Confidential Information or Berger/LaMarche Confidential
Information. Notwithstanding the return or destruction of the ARIAD Confidential
Information and Berger/LaMarche Confidential Information, the AGTI Stockholder
will continue to be bound by its obligations of confidentiality hereunder.
5. Accuracy of Confidential Information. The AGTI Stockholder
understands, acknowledges and agrees that neither ARIAD, AGTI, Berger or
LaMarche nor any of their representatives makes any representation or warranty,
express or implied, as to the accuracy or completeness of the ARIAD Confidential
Information or Berger/LaMarche Confidential Information. The AGTI Stockholder
agrees that neither ARIAD, AGTI, Berger or LaMarche nor any of their
representatives shall have any liability to the AGTI Stockholder relating to or
resulting from the use of the ARIAD Confidential Information or Berger/LaMarche
Confidential Information or any errors therein or omissions therefrom, and only
those representations or warranties or other agreements which are made in a
final definitive agreement regarding any Possible Transaction, when, as and if
executed and delivered, and subject to such limitations and restrictions as may
be specified therein, will have any legal effect.
6. Remedies; Severability. Each party agrees that monetary damages would
not be a sufficient remedy for any breach of this Agreement and that in addition
to all other remedies, each party shall be entitled to equitable relief,
including, without limitation, injunction and specific performance, as a remedy
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement but shall be in addition to all other
remedies available at law or equity. The parties further agree not to raise as a
defense or objection to the request or granting of such relief that any breach
of this Agreement is or would be compensable by an award of monetary damages,
and agree to waive any requirements for the securing or posting of any bond in
connection with such remedy. In case provisions of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
7. Material Non-Public Information. The AGTI Stockholder acknowledges
and agrees that it is aware that (i) the ARIAD Confidential Information and
Berger/LaMarche Confidential Information being furnished contains or may itself
be material, non-public information regarding ARIAD and/or AGTI and (ii) federal
and state securities laws, rules and regulations prohibit any persons who have
material, nonpublic information concerning ARIAD and/or AGTI, including the
ARIAD Confidential Information or Berger/LaMarche Confidential Information, from
purchasing or selling securities of ARIAD and AGTI or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities in
reliance upon such information.
10
8. Waiver and Amendment; Successors and Assigns. Each party understands
and agrees that no failure or delay by the other party in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder. The
agreements set forth herein may only be waived, amended or modified by an
agreement in writing signed on behalf of all of the parties. This Agreement
shall inure to the benefit of and be enforceable by each of the parties and
their successors and permitted assigns. No party may assign any rights or
delegate any performance under this Agreement without obtaining the prior
written consent of the other parties, except that ARIAD shall not be required to
obtain the consent of the AGTI Stockholder or Berger or LaMarche to make any
assignment or delegation in connection with a merger or sale of substantially
all of ARIAD's assets.
9. Governing Law. This Agreement and the transactions contemplated by
this Agreement, and all disputes between the parties under or related to this
Agreement or the facts and circumstances leading to its execution, whether in
contract, tort or otherwise, shall be governed by and construed in accordance
with the Laws of the State of Delaware, without reference to conflict of laws
principles.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.
Please acknowledge your agreement to the foregoing by countersigning this
Agreement in the place provided below and returning it to the undersigned.
Very truly yours,
By: _________________________
Accepted and Agreed to,
this ____ day of _____________, 2007
ARIAD PHARMACEUTICALS, INC.
By: _________________________
Name:
Title:
By: _________________________
Harvey J. Berger, M.D.
By: _________________________
Jay R. LaMarche
11
Exhibit B
Supplemental Indemnification Provisions
The following Supplemental Indemnification Provisions are incorporated by
reference into the agreement dated June 19, 2007 among ARIAD Pharmaceuticals,
Inc. ("ARIAD" or the "Company")) and ARIAD Gene Therapeutics, Inc. ("AGTI"), and
Harvey J. Berger, M.D. ("Berger") and Jay R. LaMarche ("LaMarche" and, together
with Berger, the "AGTI Stockholders"), to which these provisions are attached as
Exhibit B (such agreement together with Exhibit A thereto and this Exhibit B,
constitute the "Agreement"). Capitalized terms used in this Exhibit B without
definition shall have the meanings assigned to them elsewhere in the Agreement.
1. Definitions. As used in these Supplemental Indemnification
Provisions and Section 8 of the Agreement:
(a) References to "agent" shall mean any person who is or was a
director, officer, or employee of the Company or a subsidiary of the Company or
other person authorized by the Company to act for the Company, to include such
person serving in such capacity as a director, officer, employee, fiduciary or
other official of another corporation, partnership, limited liability company,
joint venture, trust or other enterprise at the request of, for the convenience
of, or to represent the interests of the Company or a subsidiary of the Company.
(b) "Delaware Court" shall mean the Court of Chancery of the State
of Delaware.
(c) "Disinterested Director" shall mean a director of the Company
who is not and was not a party to the Proceeding (as defined below) in respect
of which indemnification is sought by Indemnitee.
(d) "Enterprise" shall mean the Company or AGTI and any other
corporation, constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which the Company or AGTI
(or any of their wholly owned subsidiaries) is a party.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(f) "Expenses" shall include attorneys' fees and costs, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or otherwise participating in, a
Proceeding (as defined below). Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding (as defined below),
including without limitation the premium, security for, and other costs relating
to any cost bond, supersedeas bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or
the amount of judgments or fines against Indemnitee.
(g) "Independent Counsel" shall mean a law firm or a member of a
law firm that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under the Agreement, or of other
indemnitees under similar indemnification agreements); or (ii) any other party
to the Proceeding (as defined below) giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under the Agreement.
(h) The term "Person" shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof;
provided, however, that "Person" shall exclude: (i) the Company; (ii) any
Subsidiaries (as defined below) of the Company; (iii) any employment benefit
plan of the Company or of a Subsidiary (as defined below) of the Company or of
any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company; and (iv) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a Subsidiary (as defined below) of
the Company or of a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company.
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(i) The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by reason of the
Indemnitee's Covered Capacity or by reason of any action (or failure to act)
taken by him or of any action (or failure to act) on his part in connection with
his Covered Capacity.
(j) The term "Subsidiary," with respect to any Person, shall mean
any corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
that Person.
2. Indemnification For Expenses Of A Party Who Is Wholly Or Partly
Successful. Notwithstanding any other provisions of the Agreement, to the extent
that Indemnitee is a party to (or a participant in) and is successful, on the
merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify and hold
harmless Indemnitee against all Expenses actually and reasonably incurred by him
in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify and hold harmless Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section 2 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
3. Indemnification For Expenses Of A Witness. Notwithstanding any
other provision of the Agreement, to the extent that Indemnitee is, by reason of
his Covered Capacity, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified and held harmless against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.
4. Contribution In The Event Of Joint Liability.
(a) To the fullest extent permissible under applicable law, if the
indemnification and hold harmless rights provided for in the Agreement are
unavailable to Indemnitee in whole or in part for any reason whatsoever (other
than as a result of the application of the proviso in the first sentence of
Section 8 of the Agreement), the Company, in lieu of indemnifying and holding
harmless Indemnitee, shall pay, in the first instance, the entire amount
incurred by Indemnitee, whether for judgments, liabilities, fines, penalties,
amounts paid or to be paid in settlement and/or for Expenses, in connection with
any Proceeding without requiring Indemnitee to contribute to such payment, and
the Company hereby waives and relinquishes any right of contribution it may have
at any time against Indemnitee.
(b) The Company shall not enter into any settlement of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding) unless such settlement provides for a full and
final release of all claims asserted against Indemnitee.
(c) The Company hereby agrees to fully indemnify and hold harmless
Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.
5. Exclusions. Notwithstanding any provision in the Agreement, the
Company shall not be obligated under the Agreement to make any indemnification,
hold harmless or exoneration payments in connection with any claim made against
Indemnitee:
13
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy, contract, agreement, other indemnity provision or otherwise; or
(b) except as otherwise provided in Sections 10(e)-(f) of these
Supplemental Indemnification Provisions, in connection with any Proceeding (or
any part of any Proceeding) initiated by Indemnitee, including any Proceeding
(or any part of any Proceeding) initiated by Indemnitee against the Company or
its directors, officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, hold harmless or
exoneration payment, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.
6. Advances Of Expenses; Defense Of Claim.
(a) Notwithstanding any provision of the Agreement to the contrary,
and to the fullest extent permitted by applicable law, the Company shall advance
the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be
incurred by Indemnitee within three months) in connection with any Proceeding
within ten (10) days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether prior to or after
final disposition of any Proceeding. Advances shall be unsecured and interest
free. Advances shall be made without regard to Indemnitee's ability to repay the
Expenses and without regard to Indemnitee's ultimate entitlement to be
indemnified, held harmless or exonerated under the other provisions of the
Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing a Proceeding to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed. The Indemnitee shall qualify for advances, to the fullest
extent permitted by applicable law, solely upon the execution and delivery to
the Company of an undertaking providing that the Indemnitee undertakes to repay
the advance to the extent that it is ultimately determined that Indemnitee is
not entitled to be indemnified by the Company under the provisions of the
Agreement. This Section 6(a) shall not apply to any claim made by Indemnitee for
which an indemnification, hold harmless or exoneration payment is excluded
pursuant to Section 5 of these Supplemental Indemnification Provisions.
(b) The Company will be entitled to participate in the Proceeding
at its own expense.
(c) The Company shall not settle any action, claim or Proceeding
(in whole or in part) which would impose any Expense, judgment, fine, penalty or
limitation on the Indemnitee without the Indemnitee's prior written consent.
7. Procedure For Notification And Application For Indemnification.
(a) Indemnitee agrees to notify promptly the Company in writing
upon being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification, hold harmless or exoneration rights, or advancement
of Expenses covered hereunder. The failure of Indemnitee to so notify the
Company shall not relieve the Company of any obligation which it may have to the
Indemnitee under the Agreement, or otherwise.
(b) Indemnitee may deliver to the Company a written application to
indemnify and hold harmless Indemnitee in accordance with the Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(a) of
these Supplemental Indemnification Provisions.
8. Procedure Upon Application For Indemnification.
(a) A determination, if required by applicable law, with respect to
Indemnitee's entitlement to indemnification shall be made in the specific case
by one of the following methods, which shall be at the election of Indemnitee:
(i) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board or (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee. The Company promptly
will advise Indemnitee in writing with respect to any determination that
Indemnitee is or is not entitled to indemnification, including a description of
any reason or basis for which indemnification has been denied. If it is so
determined that Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made within ten (10) days after such determination. Indemnitee shall
reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or Expenses (including
attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
14
(b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(a) of
these Supplemental Indemnification Provisions, the Independent Counsel shall be
selected as provided in this Section 8(b) of these Supplemental Indemnification
Provisions. The Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected and certifying that the Independent
Counsel so selected meets the requirements of "Independent Counsel" as defined
in Section 1 of these Supplemental Indemnification Provisions. If the
Independent Counsel is selected by the Board, the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so
selected and certifying that the Independent Counsel so selected meets the
requirements of "Independent Counsel" as defined in Section 1 of these
Supplemental Indemnification Provisions. In either event, Indemnitee or the
Company, as the case may be, may, within ten (10) days after such written notice
of selection shall have been received, deliver to the Company or to Indemnitee,
as the case may be, a written objection to such selection; provided, however,
that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of "Independent Counsel" as
defined in Section 1 of these Supplemental Indemnification Provisions, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit. If, within
twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) of these Supplemental Indemnification
Provisions, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition the Delaware Court for resolution
of any objection which shall have been made by the Company or Indemnitee to the
other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Delaware Court, and the person
with respect to whom all objections are so resolved or the person so appointed
shall act as Independent Counsel under Section 8(a) of these Supplemental
Indemnification Provisions. Upon the due commencement of any judicial proceeding
or arbitration pursuant to Section 10(a) of these Supplemental Indemnification
Provisions, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify and hold harmless such Independent
Counsel against any and all Expenses, claims, liabilities and damages arising
out of or relating to the Agreement or its engagement pursuant hereto.
9. Presumptions and Effect Of Certain Proceedings.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
the Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 7(b) of these Supplemental Indemnification Provisions,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption. Neither the failure of the Company (including by
its directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to the Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of conduct.
15
(b) If the person, persons or entity empowered or selected under
Section 8 of these Supplemental Indemnification Provisions to determine whether
Indemnitee is entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the request therefor,
the requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a final
judicial determination that any or all such indemnification is expressly
prohibited under applicable law; provided, however, that such 30-day period may
be extended for a reasonable time, not to exceed an additional fifteen (15)
days, if the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information relating
thereto.
(c) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in of these Supplemental Indemnification Provisions) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not meet the applicable standard of conduct for
indemnification hereunder.
(d) For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee's action is based on
the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected by the Enterprise. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in the Agreement.
(e) The knowledge and/or actions, or failure to act, of any other
director, officer, trustee, partner, managing member, fiduciary, agent or
employee of the Enterprise or other Indemnitee shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under the
Agreement.
10. Remedies Of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 8 of these Supplemental Indemnification Provisions that Indemnitee is
not entitled to indemnification under the Agreement, (ii) advancement of
Expenses, to the fullest extent permitted by applicable law, is not timely made
pursuant to Section 10 of these Supplemental Indemnification Provisions, (iii)
no determination of entitlement to indemnification shall have been made pursuant
to Section 8(a) of these Supplemental Indemnification Provisions within thirty
(30) days after receipt by the Company of the request for indemnification, (iv)
payment of indemnification is not made pursuant to Sections 2 or 3 or the last
sentence of Section 8(a) of these Supplemental Indemnification Provisions within
ten (10) days after receipt by the Company of a written request therefor, (v) a
contribution payment is not made in a timely manner pursuant to Section 4 of
these Supplemental Indemnification Provisions, (vi) payment of indemnification
pursuant to Section 8 of the Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification, or
(vii) payments to Indemnitee pursuant to any hold harmless or exoneration rights
under the Agreement or otherwise is not made within ten (10) days after receipt
by the Company of a written request therefor, Indemnitee shall be entitled to an
adjudication by the Delaware Court to such indemnification, hold harmless,
exoneration, contribution or advancement rights. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Except as set forth herein, the provisions of Delaware
law (without regard to its conflict of laws rules) shall apply to any such
arbitration. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
16
(b) In the event that a determination shall have been made pursuant
to Section 8(a) of these Supplemental Indemnification Provisions that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 10 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 10, Indemnitee shall be presumed
to be entitled to be indemnified, held harmless, exonerated and to receive
advances of Expenses under the Agreement and the Company shall have the burden
of proving Indemnitee is not entitled to be indemnified, held harmless,
exonerated or receive advances of Expenses as the case may be, and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(a) of these Supplemental Indemnification Provisions adverse to
Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 10, Indemnitee shall not be required to
reimburse the Company for any advances pursuant to Section 6 of these
Supplemental Indemnification Provisions until a final determination is made with
respect to Indemnitee's entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to Section
8(a) of these Supplemental Indemnification Provisions that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Section 10,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of the Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of the Agreement.
(e) The Company shall indemnify and hold harmless Indemnitee to the
fullest extent permitted by law against all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after the Company's receipt of such
written request) advance to Indemnitee, to the fullest extent permitted by
applicable law, such Expenses which are incurred by Indemnitee in connection
with any judicial proceeding or arbitration brought by Indemnitee (i) to enforce
his rights under, or to recover damages for breach of, the Agreement; or (ii)
for recovery or advances under any insurance policy maintained for the benefit
of Indemnitee pursuant to Section 9 of the Agreement, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance, contribution or insurance recovery, as the case may be.
(f) Interest shall be paid by the Company to Indemnitee at the
legal rate under Delaware law for amounts which the Company indemnifies, holds
harmless or exonerates or is obliged to indemnify, hold harmless or exonerate
for the period commencing with the date on which Indemnitee requests
indemnification, to be held harmless, exonerated, contribution, reimbursement or
advancement of any Expenses and ending with the date on which such payment is
made to Indemnitee by the Company.
11. Security. Notwithstanding anything herein to the contrary, to the
extent requested by the Indemnitee and approved by the Board, the Company may at
any time and from time to time provide security to the Indemnitee for the
Company's obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once provided to the
Indemnitee, may not be revoked or released without the prior written consent of
the Indemnitee.
12. Non-Exclusivity; Survival Of Rights; Insurance; Subrogation.
(a) The rights of Indemnitee as provided by the Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the Company's Bylaws, any agreement,
a vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of the Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under the Agreement in respect of any action
taken or omitted by such Indemnitee in his individual capacity as described in
Section 1 of the Agreement in connection with the evaluation of the Possible
Transaction prior to such amendment, alteration or repeal. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
17
(b) The DGCL, the Charter and the Company's Bylaws permit the
Company to purchase and maintain insurance or furnish similar protection or make
other arrangements including, but not limited to, providing a trust fund, letter
of credit, or surety bond ("Indemnification Arrangements") on behalf of
Indemnitee against any liability asserted against him or incurred by or on
behalf of him or in such capacity as a director, officer, employee or agent of
the Company, or arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under the
provisions of the Agreement or under the DGCL, as it may then be in effect. The
purchase, establishment, and maintenance of any such Indemnification Arrangement
shall not in any way limit or affect the rights and obligations of the Company
or of the Indemnitee under the Agreement except as expressly provided herein,
and the execution and delivery of the Agreement by the Company and the
Indemnitee shall not in any way limit or affect the rights and obligations of
the Company or the other party or parties thereto under any such Indemnification
Arrangement.
(c) If, at the time the Company receives notice from any source of
a Proceeding as to which Indemnitee is a party or a participant (as a witness or
otherwise), the Company has liability insurance in effect as provided in Section
9 of the Agreement, the Company shall give prompt notice of such Proceeding to
the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under the Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
13. Duration of Agreement. Notwithstanding anything contained in the
Agreement to the contrary, all agreements and obligations of the Company
contained in the Agreement shall continue thereafter so long as Indemnitee shall
be subject to any possible Proceeding (including any rights of appeal thereto
and any Proceeding commenced by Indemnitee pursuant to Section 10 of these
Supplemental Indemnification Provisions) by reason of his Covered Capacity,
whether or not he is acting in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement
14. Enforcement And Binding Effect.
(a) The indemnification, hold harmless, exoneration and advancement
of expenses rights provided by or granted pursuant to the Agreement shall be
binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), shall continue as to an Indemnitee who has ceased to
be acting in his individual capacity as described in Section 1 of the Agreement
in connection with the evaluation of the Possible Transaction, and shall inure
to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.
(b) The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform the Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.
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