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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 31, 1999
ARIAD PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21696 22-3106987
- ---------------- ----------------------- --------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
26 LANDSDOWNE STREET
CAMBRIDGE, MASSACHUSETTS 02139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 494-0400
Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report: Not Applicable
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On December 31, 1999, ARIAD Pharmaceuticals, Inc. ("ARIAD")
completed the sale of its 50% interest in the Hoechst-ARIAD Genomics Center, LLC
(the "Genomics Center") to Aventis Pharmaceuticals Inc. (formerly known as
Hoechst Marion Roussel, Inc.) ("Aventis"). In the transaction, in exchange for
its interest in the Genomics Center (including ARIAD's rights to certain
equipment and intellectual property of the Genomics Center) ARIAD received from
Aventis: (1) $40 million in cash, of which $5 million had been advanced to ARIAD
on October 12, 1999, (2) the return of 3,004,436 shares of ARIAD Series B
Convertible Preferred Stock, (3) forgiveness of approximately $2 million of
long-term debt held by Aventis, and (4) the right to use certain genomics and
bioinformatics technologies developed by the Genomics Center.
(b) Also on December 31, 1999 and in connection with its sale to
Aventis of its interest in the Genomics Center, ARIAD entered into an agreement
with Hoechst Marion Roussel (France) ("HMR S.A.") pursuant to which ARIAD
received certain drug candidates and related technologies resulting from a
four-year osteoporosis collaboration with HMR S.A. on the development of Src
tyrosine kinase inhibitors, in which HMR S.A. invested over $31 million. Under
the agreement, HMR S.A. is entitled to receive certain payments from ARIAD upon
approval and achievement of commercial sales of Src inhibitors.
ITEM 5. OTHER EVENTS.
On December 31, 1999, ARIAD repurchased 2,000 shares of ARIAD Series C
Convertible Preferred Stock from Brown Simpson Strategic Growth Fund, Ltd. and
Brown Simpson Strategic Growth Fund, L.P. and certain rights, for an aggregate
purchase price of $3.4 million. Other rights repurchased include the right to
purchase additional shares of Series C Preferred Stock from ARIAD and the right
to participate, through a right of first refusal, in future financings of ARIAD.
The 2,000 shares of Series C Preferred Stock were issued by ARIAD to the Brown
Simpson funds in November 1998 for $2 million and represented 40% of the
outstanding shares of Series C Preferred Stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits.
2.1 Restructuring Agreement, dated December 31, 1999, by and among
Aventis Pharmaceuticals, Inc., the Hoechst-Ariad Genomics Center, LLC and
the Registrant. **
99.1 Press Release of the Registrant, dated January 4, 2000.
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99.2 Restructuring Agreement, dated December 31, 1999, by and between
Hoechst Marion Roussel (France) and the Registrant. **
** Confidential treatment has been requested from the Securities and
Exchange Commission.
Page 3 of 5 pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARIAD PHARMACEUTICALS, INC.
(Registrant)
Date: January 14, 2000 /s/ Harvey J. Berger
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Harvey J. Berger
Chairman and Chief Executive Officer
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EXHIBIT INDEX
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Exhibit Sequential
Number Description Page Number
- ------ ----------- -----------
2.1 Restructuring Agreement, dated
December 31, 1999, by and among
Aventis Pharmaceuticals, Inc., the
Hoechst-Ariad Genomics Center,
LLC and the Registrant. **
99.1 Press Release of the Registrant, dated
January 4, 2000
99.2 Restructuring Agreement, dated
December 31, 1999, by and between
Hoechst Marion Roussel (France)
and the Registrant. **
** Confidential treatment has been requested from the Securities and Exchange
Commission.
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EXHIBIT 2.1
ARIAD PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 2.1 PORTIONS OF THE
AGREEMENT FOR WHICH ARIAD PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH
BRACKETS AND AN ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
RESTRUCTURING AGREEMENT
(THE HOECHST-ARIAD GENOMICS CENTER, LLC)
THIS RESTRUCTURING AGREEMENT (this "Agreement") is entered into as of this
31st day of December, 1999, by and among AVENTIS PHARMACEUTICALS INC., a
Delaware corporation (formerly known as Hoechst Marion Roussel, Inc.) ("HMRI"),
THE HOECHST-ARIAD GENOMICS CENTER, a Delaware limited liability company (the
"HAGC"), and ARIAD PHARMACEUTICALS, INC., a Delaware corporation ("ARIAD").
W I T N E S S E T H:
WHEREAS, HMRI and ARIAD entered into that certain Joint Venture Master
Agreement dated as of March 4, 1997 (the "JV Master Agreement"), which provided
for, among other things, the formation of the HAGC;
WHEREAS, in furtherance of the formation and operation of the HAGC, the
parties entered into the following agreements: the Operating Agreement; the
Stock Purchase, Standstill and Registration Rights Agreement; the Administrative
Services Agreement; the Scientific Research Services Agreement; the ARIAD
License Agreement; the HMRI License Agreement; the Cross License Agreement; and
the Product Rights Agreement;
WHEREAS, the parties have determined that it is in their respective best
interests to restructure the transactions related to the formation and operation
of the HAGC; and
WHEREAS, on even date herewith, ARIAD and Hoechst Marion Roussel (France),
a stock company formed under the laws of France ("HMR S.A."), have
simultaneously herewith entered into that certain Src Restructuring Agreement
(the "Src Restructuring Agreement") which provides for, among other things, the
termination of the collaborative research program between ARIAD and HMR S.A. as
set forth in the Collaborative Research and License Agreement between HMR S.A.,
as successor to Roussel Uclaf S.A., and ARIAD, dated as of November 6, 1995 (the
"RU Agreement").
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the parties hereto, intending to
be legally bound, hereby agree as follows:
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ARTICLE I
DEFINITIONS
Unless otherwise provided in this Agreement, all capitalized terms used
herein shall have the meanings set forth in APPENDIX I.
ARTICLE II
ASSETS AND CONSIDERATION
2.1 ARIAD ASSETS. For the consideration set forth in Section 2.2, at the
Closing, ARIAD shall, to the extent set forth in this Section 2.1, sell, assign,
transfer and/or deliver to HMRI the following assets (collectively, the "ARIAD
Assets"):
(a) ARIAD'S OWNERSHIP INTEREST IN THE HAGC. ARIAD shall execute and
deliver the Assignment of Membership Interest in the form attached hereto as
EXHIBIT A (the "Membership Interest Assignment"), pursuant to which ARIAD shall
sell, assign and transfer to HMRI, free and clear of all liens and encumbrances,
all of ARIAD's right, title and interest in and to ARIAD's membership interest
in the HAGC (the "ARIAD Membership Interest"). In addition, ARIAD shall deliver
to HMRI any other instruments and documents of conveyance and transfer, in form
reasonably satisfactory to HMRI, as shall be necessary and effective to transfer
and assign to, and vest in, HMRI all of ARIAD's right, title and interest in and
to the ARIAD Membership Interest (including a release of any security interest
covering the ARIAD Membership Interest and UCC-3 termination statements in
connection with the release of liens against the ARIAD Membership Interest).
(b) PERSONAL PROPERTY.
(i) HMRI and ARIAD shall each execute the Bill of Sale and
Undertaking in the form attached hereto as EXHIBIT B (the "Bill of Sale and
Undertaking"), pursuant to which ARIAD shall sell to HMRI, and HMRI shall
purchase from ARIAD, free and clear of all liens and encumbrances, all of the
books and records, laboratory equipment, computers (hardware and software),
furniture, office supplies, fixtures and other office equipment used by the HAGC
and owned by ARIAD as of the Closing Date listed on SCHEDULE 2.1(b)(i) (as such
schedule may be updated pursuant to Section 8.12) (collectively, the "ARIAD
Owned HAGC Equipment"). The ARIAD Owned HAGC Equipment shall be transferred to
HMRI on an "as is" basis. In addition, ARIAD shall deliver to HMRI any other
instruments and documents of conveyance and transfer, in form reasonably
satisfactory to HMRI, as shall be necessary and effective to transfer and assign
to, and vest in, HMRI all of ARIAD's right, title and interest in and to the
ARIAD Owned HAGC Equipment (including releases of any security interest covering
such property and UCC-3 termination statements in connection with the release of
liens against the ARIAD Owned HAGC Equipment).
(ii) At the Closing, ARIAD shall cause ARIAD Corporation to
deliver to HMRI possession of all equipment ("ARIAD Leased HAGC Equipment")
currently leased by
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ARIAD Corporation for the benefit of the HAGC pursuant to that Amended and
Restated Master Lease Agreement (the "Current Transamerica Lease") by and
between ARIAD Corporation and Transamerica Business Credit Corporation
("Transamerica") dated as of July 10, 1998. From the Closing Date until the
close of business on December 31, 1999, ARIAD shall cause ARIAD Corporation to
provide all of the ARIAD Leased HAGC Equipment to the HAGC and HMRI pursuant to
the terms of the Scientific Research Services Agreement and Administrative
Services Agreement. At the Closing, HMRI shall, and ARIAD shall cause ARIAD
Corporation to, execute and deliver the Assumption Agreement by and among HMRI,
ARIAD Corporation and Transamerica in the form attached hereto as EXHIBIT C-1
and agreed to by Transamerica (the "Transamerica Assumption Agreement"),
pursuant to which ARIAD Corporation shall sell, assign, transfer and deliver
unto HMRI all of its right, title and interest in, and HMRI shall assume ARIAD
Corporation's obligations accruing as of January 1, 2000 with respect to, the
ARIAD Leased HAGC Equipment. All ARIAD Leased HAGC Equipment is listed on
SCHEDULE 2.1(b)(ii).
(iii) HMRI and ARIAD shall each execute the Assignment and
Assumption Agreement in the form attached hereto as EXHIBIT C-2 (the "Assignment
and Assumption Agreement"), pursuant to which ARIAD shall assign its interest,
and HMRI shall assume ARIAD's obligations accrued as of the Closing Date, in (A)
licenses for software used by the HAGC and licensed by ARIAD as of the Closing
Date and (B) other assets paid for or otherwise beneficially owned by the HAGC,
but for which the HAGC does not have title (collectively, the "Assigned HAGC
Agreements"). The Assigned HAGC Agreements are listed on SCHEDULE 2.1(b)(iii)
(as such schedule may be updated pursuant to Section 8.12).
(c) HAGC INTELLECTUAL PROPERTY.
(i) Subject to the licenses granted pursuant to Article VI, the
ARIAD Membership Interest sold, assigned and transferred by ARIAD to HMRI at the
Closing shall include, free and clear of all liens and encumbrances, all right,
title and interest granted to ARIAD in and to targets, products, technology,
know-how or other intellectual property (collectively, the "HAGC Intellectual
Property") under all agreements to which ARIAD is a party as of the Closing with
one or more of the HAGC, HMRI or current or former ARIAD employees (each such
agreement, an "Agreement for New Employees") (in the case of such ARIAD
employees only, specifically limited to HAGC Intellectual Property in existence
as of the Closing and made by such ARIAD employees while providing services to
the HAGC under the Scientific Research Services Agreement) and/or third parties,
in each case insofar as, and to the extent that, such agreements relate to the
HAGC, all of which agreements are listed on SCHEDULE 2.1(c)(i) (collectively,
the "ARIAD/HAGC Agreements"). In addition, ARIAD shall deliver to HMRI any other
instruments and documents of conveyance and transfer, in form reasonably
satisfactory to HMRI, as shall be necessary and effective to transfer and assign
to, and vest in, HMRI all of ARIAD's right, title and interest in and to the
HAGC Intellectual Property (including releases of any security interest covering
such property and UCC-3 termination statements in connection with the release of
liens against the HAGC Intellectual Property). ARIAD represents and warrants
that (A) SCHEDULE 2.1(c)(i) contains a true and complete list of ARIAD/HAGC
Agreements and (B) all current and former ARIAD employees
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who provided services to the HAGC under the Scientific Research Services
Agreement have executed an Agreement for New Employees in the form previously
provided to HMRI.
(ii) For avoidance of doubt, the HAGC Intellectual Property
transferred by ARIAD to HMRI pursuant to this Section 2.1(c): (i) specifically
includes
[*]
. For purposes of this Agreement, (i) the term
(ii) the term
[*]
and (iii) the term
[*]
shall not be
treated as [*] for purposes of this Agreement or any of the ancillary agreements
contemplated hereby and shall [*]. ARIAD represents and warrants that there is
no [*].
(d) RIGHTS TO FUTURE PAYMENTS. The purchase by HMRI of the ARIAD
Membership Interest shall include any and all rights of ARIAD to receive, after
the Closing, upfront payments, milestone fees, royalties or other payments under
any of the ARIAD/HAGC Agreements or the Joint Venture Agreements.
(e) OTHER. ARIAD shall: (A) transfer to HMRI (i) pursuant to the
Metagenome Agreement, certain agreements and intellectual property related to
the Metagenome Program, and (ii) pursuant to the Sublease (as hereinafter
defined), certain rights of ARIAD to the premises which are the subject of the
Sublease; and (B) terminate certain ARIAD/HAGC Agreements as set forth in
Article V.
2.2 HMRI CONSIDERATION. As full payment for the ARIAD Assets, at the
Closing, HMRI shall pay or deliver to ARIAD the consideration set forth below:
(a) CASH CONSIDERATION. The total cash consideration to be paid by
HMRI to ARIAD for the transactions contemplated by this Agreement shall be Forty
Million Dollars ($40,000,000) (the "Cash Consideration") which shall consist of:
(i) Five Million Dollars ($5,000,000) (the "Advance") paid by HMRI to ARIAD upon
the signing of the letter of intent between HMRI and ARIAD dated as of October
12, 1999, as amended as of November 30, 1999
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(as amended, the "Letter of Intent"), and (ii) Thirty Five Million Dollars
($35,000,000) (the "Closing Payment") to be paid at the Closing by wire transfer
of immediately available funds in accordance with ARIAD's written wire
instructions.
(b) SERIES B PREFERRED STOCK. HMRI shall return to ARIAD one or
more stock certificates representing all of the 3,004,436 shares of Series B
Preferred Stock owned by HMRI as of the Closing Date (the "ARIAD Shares"),
together with stock powers executed in blank.
(c) SUPPLEMENTAL CAPITAL LOANS. All principal and interest due
under any Supplemental Capital Loans made by HMRI to ARIAD shall be cancelled
and forgiven and all promissory notes evidencing such Supplemental Capital Loans
shall be cancelled and discharged.
(d) ADVANCE; SECURITY INTEREST. Prior to the Closing, the Advance
shall be secured by the ARIAD Membership Interest (the "Security Interest"). The
Security Interest is subordinated only to a pre-existing first lien on ARIAD's
assets (including the ARIAD Membership Interest) held by BankBoston, N.A. and is
evidenced by a UCC-1 financing statement filed with the Secretary of the
Commonwealth of Massachusetts and the Clerk of the City of Cambridge,
Massachusetts. ARIAD agrees that at any time, and from time to time, upon the
written request of HMRI, it will promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as HMRI
may reasonably request in order to maintain the Security Interest. The Advance
shall be immediately refundable by ARIAD to HMRI if a Change of Control or
Acquisition occurs prior to the Closing; provided, however, that if the Advance
is refunded by ARIAD to HMRI as a result of a Change of Control or Acquisition
prior to the Closing, then the Security Interest in the ARIAD Membership
Interest shall be released by HMRI at the time the Advance is refunded, and at
the Closing HMRI shall pay to ARIAD the Forty Million Dollars ($40,000,000) in
Cash Consideration for the ARIAD Assets. If no Change of Control or Acquisition
of ARIAD has occurred as of the Closing, at the Closing, ARIAD shall retain the
Advance as part of the Cash Consideration for the ARIAD Assets and the Security
Interest in the ARIAD Membership Interest shall be released by HMRI.
(e) CONVERSION OF ADVANCE. In the event that the Closing has not
occurred prior to December 31, 1999, then, at HMRI's option, HMRI may convert
the Advance into a loan due on May 31, 2000 (the "Loan") to be evidenced by a
promissory note bearing interest at 8.5% per annum from October 12, 1999. The
Loan will be subject to prepayment at any time without penalty and further
subject to mandatory prepayment in the event that a Change of Control or
Acquisition shall occur prior to the Closing or if this Agreement has been
terminated pursuant to Section 12.1. So long as any principal or interest is
outstanding under the Loan, the Security Interest shall continue to secure all
amounts due under the Loan. At any time after converting the Advance into the
Loan, HMRI may apply the amount of outstanding principal and interest under the
Loan as prepayment of a corresponding portion of its obligation to purchase
Series B Preferred Stock in accordance with the Stock Purchase, Standstill and
Registration Rights Agreement, upon which election ARIAD will deliver shares of
Series B Preferred Stock to HMRI. If the Loan remains outstanding and no Change
of Control or Acquisition has occurred as of the Closing, at the Closing, the
outstanding principal and interest due under the Loan shall
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be cancelled and forgiven as part of the Cash Consideration for the ARIAD Assets
and the Security Interest in the ARIAD Membership Interest shall be released by
HMRI.
(f) ASSUMPTION OF OBLIGATIONS. As of the Closing, HMRI shall
assume: (i) ARIAD's obligations pursuant to the Assigned HAGC Agreements as more
fully described in Section 2.1(b)(iii) and as set forth in the Assignment and
Assumption Agreement, (ii) pursuant to the Sublease, certain of ARIAD's
obligations with respect to certain of the premises which are the subject of the
Sublease, and (iii) pursuant to the Metagenome Agreement, certain of ARIAD's
obligations with respect to the Metagenome Program.
ARTICLE III
CLOSING
3.1 DATE, TIME AND PLACE. The Closing (the "Closing") of the
transactions contemplated by this Agreement shall take place at a time and on a
date to be specified by the parties as soon as practicable following
satisfaction (or waiver) of the last to occur of the conditions set forth in
Article XI hereof, provided that the Agreement has not been terminated pursuant
to Section 12.1 (the "Closing Date), at such place as the parties shall agree.
3.2 CLOSING DELIVERIES. At the Closing, subject to the terms and
conditions herein contained, the following shall occur:
(a) HMRI shall deliver to ARIAD the Closing Payment.
(b) HMRI shall deliver to ARIAD the ARIAD Shares.
(c) HMRI shall deliver to ARIAD promissory notes evidencing the
cancelled Supplemental Capital Loans.
(d) ARIAD shall execute and deliver to HMRI the Membership
Interest Assignment in the form attached hereto as EXHIBIT A.
(e) The parties shall execute and deliver the Bill of Sale and
Undertaking in the form attached hereto as EXHIBIT B.
(f) HMRI shall execute and deliver, and ARIAD shall cause ARIAD
Corporation to execute and deliver, the Transamerica Assumption Agreement in the
form attached hereto as EXHIBIT C-1.
(g) The parties shall execute and deliver the Assignment and
Assumption Agreement in the form attached hereto as EXHIBIT C-2.
(h) The parties shall execute and deliver the Transition Services
Agreement (the "Transition Services Agreement") in the form attached hereto as
EXHIBIT D.
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(i) The parties shall execute and deliver the Metagenome
Assignment Agreement (the "Metagenome Agreement") in the form attached hereto as
EXHIBIT E.
(j) (i) ARIAD shall cause ARIAD Corporation to deliver to HMRI the
Estoppel Letter (the "Estoppel Letter"), executed by Forest City Cambridge,
Inc., in the form attached hereto as EXHIBIT F-1; (ii) HMRI shall, and ARIAD
shall cause ARIAD Corporation to, execute and deliver the Consent to Sublease
and the Sublease (together, the "Sublease") in the forms attached hereto as
EXHIBIT F-2; and (iii) ARIAD shall cause ARIAD Corporation to terminate that
certain Sublease entered into as of November 1, 1997, between ARIAD Corporation
and HMRI (the "HMRI Office Sublease").
(k) HMRI shall execute and deliver to Incyte Pharmaceuticals, Inc.
("Incyte") the letter (the "Incyte Installation Site Designation Letter") in the
form attached hereto as EXHIBIT G.
(l) ARIAD shall deliver to HMRI evidence of the release of any and
all security interests covering the ARIAD Membership Interest and the ARIAD
Owned HAGC Property.
(m) ARIAD shall deliver to HMRI all consents required pursuant to
Section 4.1(g).
(n) ARIAD shall deliver to HMRI all releases of security
interests, including UCC-3 termination statements, as contemplated by Sections
2.1(a) and 2.1(b)(i).
(o) ARIAD and HMRI shall execute and deliver the closing
certificates contemplated by Section 11.1(a) and 11.2(a), respectively.
(p) Each party shall deliver all other documents, instruments and
certificates as the other party may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF ARIAD. ARIAD represents and
warrants to HMRI as follows:
(a) ORGANIZATION. ARIAD is a corporation duly organized, validly
existing and is in good standing under the laws of the State of Delaware.
(b) AUTHORIZATION. The execution, delivery and performance by
ARIAD of this Agreement and the other agreements and transactions contemplated
hereby have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of its stockholders or (ii)
violate any provision of any law, rule, regulation, order, writ,
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judgment, injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter documents.
(c) BINDING AGREEMENT. This Agreement and the other agreements
contemplated hereby are legal, valid and binding obligations of ARIAD
enforceable against it in accordance with their terms, except as rights to
indemnification hereunder and thereunder may be limited by applicable law and
except as the enforcement hereof and thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(d) NO INCONSISTENT OBLIGATIONS. ARIAD is not under any obligation
to any person, or entity, contractual or otherwise, that is materially
conflicting or materially inconsistent in any respect with the terms of this
Agreement or the other agreements contemplated hereby or that would materially
impede the diligent and complete fulfillment of its obligations.
(e) ARIAD MEMBERSHIP INTEREST. The ARIAD Membership Interest
constitutes one-half (1/2) of the outstanding membership interest in the HAGC,
ARIAD is the sole beneficial owner of the ARIAD Membership Interest and, except
as set forth on SCHEDULE 4.1(e), the ARIAD Membership Interest is free and clear
of all liens and encumbrances.
(f) HAGC AGREEMENTS. SCHEDULE 4.1(f) lists all written and, to the
best knowledge of ARIAD, oral agreements entered into by members of the
Management Committee of the HAGC designated to the Management Committee by
ARIAD, or employees (including contract employees) of ARIAD providing services
to the HAGC under the Administrative Services Agreement or Scientific Research
Services Agreement on behalf of the HAGC (the "HAGC Agreements") since formation
of the HAGC, true and correct copies of which have been delivered to HMRI.
(g) CONSENTS. Except as set forth in SCHEDULE 4.1(g), no consent
of any natural person, corporation, partnership, proprietorship, association,
trust or other legal entity is required to be obtained by ARIAD to the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, including without limitation, consents to the
assignment of the ARIAD Leased HAGC Property, the execution and performance of
the Sublease and the Metagenome Agreement, or pursuant to the HAGC Agreements.
(h) ASSIGNED HAGC AGREEMENTS. ARIAD represents and warrants that
(a) to the best of its knowledge, true and correct copies of each Assigned HAGC
Agreement has been delivered to HMRI, (b) there have been no amendments to any
Assigned HAGC Agreement, (c) each Assigned HAGC Agreement is in full force and
effect in accordance with its terms, and (d) neither ARIAD nor, to the best of
ARIAD's knowledge, the third party under any Assigned HAGC Agreement, is in
default under the respective Assigned HAGC Agreement, and there exists no state
of facts and no event has occurred which, with the passage of time or the giving
of notice, or both, would constitute a default by either ARIAD or, to the best
of ARIAD's knowledge, any third party under any Assigned HAGC Agreement.
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(i) EQUIPMENT. ARIAD represents and warrants that (A) all of the
ARIAD Owned HAGC Equipment, (B) ARIAD Leased HAGC Equipment, (C) equipment
subject to HAGC Agreements and (D) all books and records, laboratory equipment,
computers (hardware and software), furniture, office supplies, fixtures and
other office equipment owned by the HAGC (the "HAGC Owned Equipment") are, in
each case, on an "as is" basis, usable in the ordinary course of the HAGC's
business consistent with past practice and are located at the HAGC's principal
place of business. ARIAD further represents and warrants that between the date
hereof and the Closing Date it shall not sell or otherwise dispose of any ARIAD
Owned HAGC Equipment, ARIAD Leased HAGC Equipment, equipment subject to HAGC
Agreements or HAGC Owned Equipment, other than in the ordinary course of
business.
(j) LITIGATION. ARIAD represents and warrants that there is no
action, suit, proceeding, investigation, or arbitration pending before any
court, arbitration panel or other governmental or regulatory body or, to ARIAD's
knowledge, threatened against the HAGC or relating to the ARIAD Assets. To the
best of ARIAD's knowledge, ARIAD has not received any notice alleging
infringement of the rights of any third party relating to ARIAD's use of ARIAD
Background Technology and the other Technology listed on SCHEDULE 6.1(a)(ii).
(k) OPERATION OF THE HAGC. ARIAD represents and warrants that it
has conducted the operations of the HAGC pursuant to the Administrative Services
Agreement and the Scientific Research Services Agreement and, to the best of
ARIAD's knowledge, in material compliance with all applicable laws and
regulations, and except as set forth in SCHEDULE 4.1(k), to the best of ARIAD's
knowledge, the HAGC possesses all material approvals, consents, licenses, and
permits required for the conduct of its business as now conducted.
(l) DISCLOSURE. ARIAD represents and warrants that no
representation or warranty of ARIAD contained in this Agreement or the other
agreements contemplated hereby and no information contained in any schedule
hereto or thereto contain or will contain any untrue statement of a material
fact.
4.2 REPRESENTATIONS AND WARRANTIES OF HMRI. HMRI represents and warrants
to ARIAD as follows:
(a) ORGANIZATION. HMRI is a corporation duly organized, validly
existing and is in good standing under the laws of the State of Delaware.
(b) AUTHORIZATION. The execution, delivery and performance by HMRI
of this Agreement and the other agreements and transactions contemplated hereby
have been duly authorized by all necessary corporate action and do not and will
not (i) require any consent or approval of its stockholders or (ii) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter documents.
(c) BINDING AGREEMENT. This Agreement and the other agreements
contemplated hereby are legal, valid and binding obligations of HMRI enforceable
against it in accordance with their terms, except as rights to indemnification
hereunder and thereunder may
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be limited by applicable law and except as the enforcement hereof and thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(d) NO INCONSISTENT OBLIGATIONS. HMRI is not under any obligation
to any person, or entity, contractual or otherwise, that is materially
conflicting or materially inconsistent in any respect with the terms of this
Agreement or the other agreements contemplated hereby or that would materially
impede the diligent and complete fulfillment of its obligations.
ARTICLE V
TERMINATION OF CERTAIN AGREEMENTS
5.1 TERMINATION OF CERTAIN AGREEMENTS AT CLOSING. As of the Closing, the
following agreements shall be terminated in their entirety and the parties shall
have no continuing rights or obligations thereunder: the Joint Venture Master
Agreement (except Article 11 therein which shall survive); the Operating
Agreement (except for Section 6.14 therein which shall survive, except that,
with respect to the indemnification obligation pursuant to Section 6.14(a)
therein, HMRI shall only be responsible for one-half (1/2) of such
indemnification obligation); the HMRI Office Sublease; the Stock Purchase,
Standstill and Registration Rights Agreement; the ARIAD License Agreement; the
HMRI License Agreement; the Cross License Agreement; the Product Rights
Agreement; the Scientific Research Services Agreement; Administrative Services
Agreement; and the letter agreement dated as of December 2, 1999, among HMRI,
ARIAD and ARIAD Corporation, with respect to interim facilities improvements.
ARTICLE VI
LICENSES
6.1. ARIAD LICENSES TO HMRI AND THE HAGC.
(a) (i) Effective as of the Closing, ARIAD hereby grants to HMRI
and the HAGC a [*] (except as set forth in Section 6.1(b)) license [*] which is
listed on [*] attached hereto, as it exists as of the Closing, [*]. The [*]
licensed pursuant to this Section 6.1(a)(i) is limited to the items specifically
listed on [*]. ARIAD represents to HMRI and the HAGC that [*] and that [*]
contains a true and complete list of all [*].
(ii) Effective as of the Closing, ARIAD hereby grants to HMRI
and the HAGC [*] (except as set forth in Section 6.1(b)) sublicense [*] licensed
to ARIAD which is listed on [*] attached hereto (limited by, and subject to, the
applicable provisions of such license relating to the [*], to the extent
sublicensable and as it exists as of the Closing, [*] sublicensed pursuant to
this Section 6.1(a)(ii) is limited to the items specifically listed on [*].
(b) If ARIAD becomes obligated to pay a third party any royalties
or other payments with respect to a particular product being developed or sold
by HMRI or the HAGC or
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<PAGE> 11
their Affiliates as a result of granting any sublicense pursuant to Section
6.1(a)(ii), HMRI shall provide ARIAD with regular statements of net sales of
such product(s) by HMRI or the HAGC or their Affiliates determined and reported
by HMRI in accordance with the provisions of the applicable license agreement
(which shall be provided in confidence by ARIAD to HMRI for this purpose) and
shall reimburse ARIAD for the amount of such royalties or other payments due
under the applicable license agreement within thirty (30) days of the receipt of
an invoice therefor, which invoice shall contain a calculation of the amount due
in reasonable detail. HMRI shall not be obligated to pay any license fees,
annual maintenance fees, subscription fees, minimum royalties or the like,
except for those based on or resulting from (i) the granting of the sublicense,
or (ii) the development, manufacture or sale of products by HMRI or the HAGC or
their Affiliates.
(c) In the event any license or rights granted to ARIAD, under
which a sublicense or right is granted hereby to HMRI, is due to expire, ARIAD
shall give written notice of such potential expiration to HMRI at least sixty
(60) days prior to the date of expiration, which notice shall specify whether
ARIAD intents to extend the license or rights and the terms of any proposed
extensions. If ARIAD advises HMRI that it does not intend to extend the license
or rights, HMRI may request that ARIAD extend the license or rights and ARIAD
will consider such extension in good faith, or HMRI may seek to obtain a license
or right to the Technology covered by such license or right directly from the
licensor thereof.
(d) Except as expressly set forth in Section 6.1(a), no other
licenses are granted by ARIAD to HMRI or the HAGC or their Affiliates under this
Agreement or any of the ancillary agreements contemplated hereby.
(e) After the Closing and in furtherance of the licenses granted
in Section 6.1(a), upon request by HMRI, ARIAD shall: (i) to the extent not
already disclosed to HMRI or the HAGC prior to the Closing, within a reasonable
time after the Closing, make available to HMRI and the HAGC [*] through such
reasonable written and oral disclosures and such reasonable on site training as
HMRI or the HAGC may request; and (ii) provide HMRI or the HAGC with copies of
manuals, standard operating procedures, process descriptions and the like, if
any, as ARIAD employs in its own utilization of [*].
6.2. HMRI AND HAGC LICENSE TO ARIAD. HMRI and the HAGC hereby grant to
ARIAD a [*] (except as permitted by this Section 6.2) license [*]
attached hereto (collectively, the "[*]"), as they exist as of the Closing,
[*]
, all of which are owned and controlled [*] and in existence as of the Closing.
Notwithstanding anything herein to the contrary,
[*]
. For purposes of this Section 6.2, a
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<PAGE> 12
[*]
ARTICLE VII
ACCOUNTING
7.1 ADMINISTRATIVE SERVICES AGREEMENT. At the Closing, ARIAD shall cause
to be delivered in writing a good faith estimate of the Reimbursable Costs (as
such term is defined in the Administrative Services Agreement) incurred by ARIAD
in providing Administrative Services (as such term is defined in the
Administrative Services Agreement) to the HAGC pursuant to the Administrative
Services Agreement from the first day of the fiscal quarter in which the Closing
occurs through the close of business on the Closing Date (the "Administrative
Services Estimate"). In the event that the amounts paid by the HAGC pursuant to
the Administrative Services Agreement for such quarter exceed the Administrative
Services Estimate (determined without regard to any adjustments made for any
prior quarter under the Administrative Services Agreement with respect to
Reimbursable Costs), ARIAD shall pay promptly such difference to the HAGC. In
the event that the Administrative Services Estimate exceeds the amounts paid by
the HAGC pursuant to the Administrative Services Agreement for such quarter
(determined without regard to any adjustments made for any prior quarter under
the Administrative Services Agreement with respect to Reimbursable Costs), the
HAGC shall pay promptly such difference to ARIAD.
7.2 SCIENTIFIC RESEARCH SERVICES AGREEMENT. At the Closing, ARIAD shall
cause to be delivered a good faith estimate of the Reimbursable Costs (as such
term is defined in the Scientific Research Services Agreement) incurred by ARIAD
in providing Scientific Research Services (as such term is defined in the
Scientific Research Services Agreement) to the HAGC pursuant to the Scientific
Research Services Agreement from the first day of the fiscal quarter in which
the Closing occurs through the close of business on the Closing Date (the
"Scientific Services Estimate"). In the event that the amounts paid by the HAGC
pursuant to the Scientific Research Services Agreement for such quarter exceed
the Scientific Services Estimate quarter (determined without regard to any
adjustments made for any prior quarter under the Scientific Services Agreement
with respect to Reimbursable Costs), ARIAD shall pay promptly such difference to
the HAGC. In the event that the Scientific Services Estimate exceeds the amounts
paid by the HAGC pursuant to the Scientific Research Services Agreement for such
quarter (determined without regard to any adjustments made for any prior quarter
under the Scientific
12
<PAGE> 13
Services Agreement with respect to Reimbursable Costs), the HAGC shall pay
promptly such difference to ARIAD.
7.3 OTHER AMOUNTS. At the Closing, ARIAD shall cause to be delivered a
good faith estimate of: (i) the difference between each party's capital
contributions to the HAGC for the fourth quarter of 1999 and such party's
Expense Sharing Percentage of the HAGC's operating expenses for the period from
October 1, 1999 through the Closing Date taking into account all payment
obligations of the HAGC incurred, accrued, prepaid, paid or deferred as of the
Closing (inclusive of the Administrative Services Estimate, the Scientific
Research Services Estimate and the Accruals and Prorations of the HAGC), and
(ii) any excess cash balances of the HAGC from the parties' capital
contributions of prior quarters (collectively, the "Closing Estimate"). The
Closing Estimate shall be attached hereto as SCHEDULE 7.3. For purposes of this
Agreement, Accruals and Prorations shall include: (i) expenses accrued but not
paid by the HAGC prior to the Closing and (ii) expenses paid by the HAGC in
excess of the pro-rated expense incurred attributable to the HAGC prior to the
Closing (the "Accruals and Prorations"). In the event of an excess in any
party's funding of the HAGC as set forth in the Closing Estimate, the amount of
any such excess shall be paid promptly to such party by the HAGC. In the event
of a deficit in any party's funding of the HAGC as set forth in the Closing
Estimate, the amount of any such deficit shall be paid promptly to the HAGC by
such party.
7.4 AUDITED FINANCIAL REPORT; POST-CLOSING ADJUSTMENT.
(a) At the HAGC's expense, ARIAD shall prepare or cause to be
prepared and delivered to HMRI within ninety (90) days of the Closing Date an
audited financial report of the HAGC for the period from January 1, 1999 to the
Closing Date, including a balance sheet, a profit and loss statement and a cash
flow or source and application of funds statement, all of which shall be
consistent with past practice, prepared on the accrual basis of accounting and
audited by the independent certified public accountant previously hired by HMRI
and ARIAD pursuant to Section 6.6 of the Operating Agreement. As part of the
preparation and delivery of such audited financial report, at the HAGC's
expense, ARIAD shall cause to be prepared and delivered a statement (the
"Post-Closing Statement") of (i) the actual Reimbursable Costs incurred by ARIAD
in providing Administrative Services to the HAGC pursuant to the Administrative
Services Agreement from the first day of the fiscal quarter in which the Closing
occurs through the close of business on the Closing Date, (ii) the actual
Reimbursable Costs incurred by ARIAD in providing Scientific Research Services
to the HAGC pursuant to the Scientific Research Services Agreement from the
first day of the fiscal quarter in which the Closing occurs through the close of
business on the Closing Date, and (iii) the actual operating expenses incurred
by the HAGC through the Closing Date taking into account all payment obligations
of the HAGC incurred, accrued, paid or deferred as of the Closing, taking into
account the amounts calculated pursuant to clauses (i) and (ii) of this
paragraph.
(b) In the event that the amount paid by ARIAD pursuant to the
Closing Estimate exceeds ARIAD's Expense Sharing Percentage of HAGC's operating
expenses as set forth in the Post-Closing Statement, the amount of such
overpayment shall be paid promptly by HMRI to ARIAD. In the event that the
amount paid by ARIAD pursuant to the Closing Statement is less than ARIAD's
Expense Sharing Percentage of HAGC's operating expenses as
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<PAGE> 14
set forth in the Post-Closing Statement, the amount of such underpayment shall
be paid promptly by ARIAD to HMRI.
7.5 TAX INFORMATION. At the HAGC's expense, ARIAD shall prepare or cause
to be prepared and delivered to HMRI such information as may be needed for HMRI
and ARIAD to file their federal income tax returns, any required state income
tax returns and any other reporting or filing requirements imposed by any
governmental agency or authority, each for the period from January 1, 1999 to
the Closing and consistent with past practice.
7.6 BOOKS AND RECORDS. ARIAD and HMRI shall each maintain true and
complete books of account containing an accurate record of the data necessary
for the proper determination and computation of all amounts to be paid pursuant
to or as contemplated by the JV Master Agreement, otherwise related to the HAGC
or under the terms of this Agreement; provided, however, that neither party
shall be required hereby to maintain any duplicate books of account or records.
Each of ARIAD and HMRI shall retain and maintain such records in accordance with
its records retention policy for its other books and records; provided however,
such retained records shall not be destroyed without the consent of the other
party (such consent not to be unreasonably withheld). HMRI shall have the right,
using the firm of independent certified public accountants employed by ARIAD to
conduct ARIAD's regular annual audit, or another national firm of independent
certified public accountants acceptable to ARIAD (whose approval of such
accountants will not be unreasonably withheld), to audit such books for the
purpose of verifying such amounts, prior to the second anniversary of the
Closing Date. Such examination shall be made upon reasonable advance notice to
ARIAD during normal business hours at ARIAD's principal office. In the event
that the result of any such audit is less than the amount originally indicated
by ARIAD and such difference exceeds five percent (5%) of the indicated amount,
ARIAD shall promptly pay to HMRI its share of such difference as determined in
accordance with JV Master Agreement. In the event that the result of any such
audit is greater than the amount originally indicated by ARIAD and such
difference exceeds five percent (5%) of the indicated amount, HMRI shall
promptly pay to ARIAD its share of such difference as determined in accordance
with the JV Master Agreement. The cost of any such audit shall be borne by, in
the event that any such difference is more than five percent (5%) of the
invoiced amount, the paying party, and, in the event that any such difference is
less than five percent (5%) of the invoiced amount, the requesting party.
ARTICLE VIII
COVENANTS OF THE PARTIES
8.1 HAGC NAME; Service marks, Trademarks, etc. As promptly as
practicable after the Closing, HMRI shall amend the organizational documents of
the HAGC so as to change the HAGC's name to a name which does not include, or
make reference to, "ARIAD" and will file in all jurisdictions in which the HAGC
is qualified to do business, any documents necessary to reflect such change in
the HAGC's name and neither HMRI nor the HAGC shall use any ARIAD service mark,
trademark, trade name, copyright, or similar name.
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<PAGE> 15
8.2 PRE-CLOSING OPERATIONS OF THE HAGC. Until the Closing and upon any
termination of this Agreement pursuant to Article XII, HMRI and ARIAD agree to
be bound by their obligations under the JV Master Agreement and the other Joint
Venture Agreements.
8.3 EMPLOYEES.
(a) ARIAD will cooperate with and assist HMRI in hiring, as of
January 1, 2000, the Company Scientists and the Scientific Director
(collectively, the "Employees"), each of which is listed on SCHEDULE 8.3. As of
January 1, 2000, ARIAD agrees that the hiring and employment of any Employees
listed on SCHEDULE 8.3 and hired by HMRI as of January 1, 2000 shall not be a
breach of any provisions governing non-competition under any written agreements
with such Employees.
(b) From the effective date of this Agreement and for one (1) year
from the Closing, ARIAD agrees (i) not to directly or indirectly solicit any of
the Employees to continue employment with, become employed by or consult for
ARIAD or its Affiliates; provided, however, that this Section 8.3(b) shall not
apply with respect to any Employee to whom HMRI has not made an offer of
employment as of January 1, 2000 or who has been terminated by HMRI during the
one (1) year period following the Closing; provided, further, that ARIAD shall
not be deemed to have breached this Section 8.3(b) by meeting its obligations
with respect to providing continued employment to any of the three (3) Employees
designated on SCHEDULE 8.3 as subject to written employment agreements with
ARIAD (the "Management Employees") under such written employment agreements with
ARIAD in existence as of the effective date of this Agreement.
(c) HMRI shall be permitted to communicate with the Employees for
the sole purpose of providing information regarding, and making offers of,
employment at the HAGC or HMRI to such Employees as of January 1, 2000, such
offers to be contingent upon the occurrence of the Closing. HMRI will identify
to ARIAD the person or persons who will contact the Employees and will
coordinate its contact with such Employees as permitted by this Section 8.3 with
a designated person or persons at ARIAD.
(d)
[*]
(e) ARIAD shall provide HMRI access to performance and
compensation information and other agreed upon relevant information relating to
the Employees contained in employee files.
(f) As soon as practicable after the Closing, HMRI shall cause the
Employees to return to ARIAD any laboratory notebooks, or the relevant portions
thereof, related to the ARIAD Excluded Technology.
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<PAGE> 16
8.4 CONSENTS; RELEASE OF SECURITY INTERESTS. ARIAD agrees to use
reasonable commercial efforts to obtain the consents listed on SCHEDULE 4.1(g)
and the release of the security interests as contemplated by SECTIONS 2.1 and
2.1(b)(i).
8.5 PUBLIC ANNOUNCEMENTS. Each party will give the other party prior
notification and an opportunity to provide comments on its announcement
regarding the transactions contemplated hereby and it will consider in good
faith any proposed revisions thereof.
8.6 ACCESS.
(a) PRIOR TO THE CLOSING. Between the date of this Agreement and
the Closing, ARIAD shall provide HMRI and its authorized representatives access
to documents, facilities and employees reasonably requested by HMRI for purposes
relating to the subject matter of the transactions contemplated hereby.
(b) POST-CLOSING. After the Closing, each party agrees to
cooperate with the other party (the "requesting party") and the requesting
party's employees, attorneys, accountants, officers, representatives, and
agents, during normal business hours and upon reasonable advance notice, to
provide reasonable access to records maintained by the other party relating to
the HAGC and the ARIAD Assets and to permit copying at the requesting party's
expense or, where reasonably necessary, to loan original documents relating to
the same for the sole purposes of (i) any financial reporting or tax matters
relating to the HAGC or the ARIAD Assets; (ii) any claims or litigation
involving the HAGC or the ARIAD Assets; (iii) any investigation being conducted
by any federal, state, or local governmental authority relating to the HAGC or
the ARIAD Assets; (iv) any matter relating to any indemnification or
representation or warranty or any other term of this Agreement or (v) any
similar or related matter. ARIAD and HMRI shall each maintain, for the extent
required by applicable law, all such records and documents in the United States
in accordance with each party's record retention policy for its other such
records and documents. The requesting party shall use its reasonable efforts to
ensure that its access to and requests for records and documents pursuant to
this Section 8.6(b) are conducted so as not to interfere with the normal and
ordinary operation of the other party. The parties acknowledge that the records
and documents made available to the requesting party pursuant to this Section
8.6(b) constitute "Confidential Information" and disclosure of such information
shall be governed by Article IX hereof.
8.7 INCYTE. HMRI agrees to, effective as of the Closing: (a) terminate
the HAGC as an "Installation Site" pursuant to the Second Amended and Restated
Collaborative Agreement between Incyte, Hoechst AG and HMRI (the "HMRI Incyte
Agreement"),and (b) designate the facility which is the subject of the Sublease
as an alternative "Installation Site" under the HMRI Incyte Agreement. In
furtherance of such "Installation Site" termination and designation, HMRI shall
deliver, as of the Closing, the Incyte Installation Site Designation Letter to
Incyte Pharmaceuticals, Inc. At ARIAD's reasonable request, HMRI shall: (i)
provide any other instruments and documents as are reasonably necessary for HMRI
or its Affiliates to effectuate such "Installation Site" termination and
designation; and (ii) assist ARIAD in obtaining an early termination of the
Second Amended and Restated Collaboration Agreement between Incyte and ARIAD.
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<PAGE> 17
8.8 NO OTHER ARRANGEMENTS. From the effective date of this Agreement and
until termination of this Agreement pursuant to Article XII, neither ARIAD nor
its representatives will solicit, nor, except as required under applicable law,
accept or entertain any other offer for, or enter into discussions with or
provide information to others concerning, any transaction which would involve
the sale or other transfer of the ARIAD Membership Interest. ARIAD shall
promptly notify HMRI in writing immediately if it receives such an offer.
8.9 FURTHER ASSURANCES. Each party agrees that at any time and from time
to time, upon the written request of the other, it will promptly and duly
execute and deliver any and all such further instruments and documents and take
such further action as the other may reasonably request in order to obtain the
full benefits of this Agreement and of the transactions contemplated hereby.
Without limiting the generality of the foregoing, ARIAD agrees to assist
(including through the enforcement of employee agreements at the expense of the
HAGC or its successor) HMRI and the HAGC in the filing and prosecution of patent
applications arising from the HAGC Intellectual Property and in any
interference, conflict, opposition or litigation which may arise involving the
HAGC Intellectual Property or the patent or patents thereon, and to execute any
reissue, divisional, continuing or substitute application and assent to HMRI and
the HAGC making any applications in other countries corresponding to any patent
or patents on the HAGC Intellectual Property as may be reasonably requested by
HMRI and the HAGC.
8.10 HSR ACT. The parties shall cooperate fully and use their best
efforts to comply with the HSR Act, including with respect to the Notification
Report thereunder filed with the Federal Trade Commission and the Department of
Justice on November 29, 1999, in accordance with such rules and regulations,
with respect to the transactions contemplated by this Agreement.
8.11 DISCLOSURE SCHEDULES. Between the date hereof and the Closing, ARIAD
shall promptly disclose to HMRI in writing any information set forth in a
schedule hereto (or to any agreement contemplated hereunder) that is no longer
complete, true or applicable and any information of the nature of that set forth
in a schedule hereto (or to any agreement contemplated hereunder) that arises
after the date hereof and that would have been required to be included therein
if such information had been obtained on the date of delivery thereof. Any such
changes in schedules may be taken into account by HMRI in the exercise of rights
under Section 12.1(a).
8.12 DELIVERY OF BOOKS, RECORDS AND ASSETS. Subject to the terms and
conditions of this Agreement, ARIAD will take all commercially reasonable steps
to deliver or make available to HMRI at the HAGC at the time of the Closing all
books and records of the HAGC and the ARIAD Assets in ARIAD's possession, and if
at any time after the Closing, ARIAD discovers in its possession or in the
possession of its Affiliates or under its control or the control of its
Affiliates any other such books or records, it will forthwith deliver same at
its expense to HMRI. After such delivery, at the request of HMRI, ARIAD shall
promptly take all steps necessary to destroy, delete and/or remove any
electronic copies of Confidential Information of the HAGC from computers and
other electronic media controlled by ARIAD, to the extent that the destruction,
deletion and/or removal of such Confidential Information is feasible.
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<PAGE> 18
8.13 BANK ACCOUNTS. Promptly following the Closing, ARIAD shall take all
steps to close any and all bank accounts in the name of the HAGC and remit any
balance thereunder to the HAGC and, to the extent it cannot do so promptly
following the Closing, ARIAD shall take all steps to change the authorized
signatories under any and all such bank accounts to the persons designated by
HMRI.
8.14 [*]. For the period from the Closing Date through
[*]
. During such period,
[*]
No later than
[*]
MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED,
IN RESPECT OF THE
[*] .
ARTICLE IX
CONFIDENTIALITY
9.1 ARIAD and HMRI each recognize that the Confidential Information of
the parties constitutes highly valuable and proprietary confidential
information. ARIAD and HMRI each agree that from the date hereof and for five
(5) years from the Closing, it will keep confidential, and will cause its
employees, consultants, Affiliates (including, in the case of HMRI, the HAGC),
and licensees and sublicensees to keep confidential, all Confidential
Information of the other party including, in the case of ARIAD, the HAGC, that
has been disclosed to it, or to any of its employees, consultants, Affiliates
and licensees and sublicensees. Neither ARIAD nor HMRI nor any of their
respective employees, Affiliates and licensees and sublicensees shall use
Confidential Information of the other party or, in the case of ARIAD, of the
HAGC, for any purpose whatsoever except as expressly permitted in this
Agreement.
9.2 ARIAD and HMRI each agree that any disclosure of the Confidential
Information of the other party, including, in the case of ARIAD, the
Confidential Information of the HAGC, to any of its officers, employees,
consultants or agents or those of any of its Affiliates and licensees and
sublicensees shall be made only if and to the extent necessary to carry out its
rights and responsibilities under this Agreement and the other agreements
contemplated hereby, shall
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<PAGE> 19
be limited to the maximum extent possible consistent with such rights and
responsibilities and shall only be made to persons who are bound by written
confidentiality obligations and to maintain the confidentiality thereof and not
to use such Confidential Information except as expressly permitted by this
Agreement. ARIAD and HMRI each agree not to disclose the Confidential
Information of the other party, including, in the case of ARIAD, the
Confidential Information of the HAGC, to any third parties under any
circumstances without the prior written approval from the other party, except as
required by law, and except as otherwise expressly permitted by this Agreement.
Each party shall take such action, and shall cause its Affiliates and licensees
and sublicensees to take such action, to preserve the confidentiality of each
other's Confidential Information, including, in the case of ARIAD, the
Confidential Information of the HAGC, as it would customarily take to preserve
the confidentiality of its own Confidential Information, and in no event, less
than reasonable care. Each party, upon the other's request, will return all the
Confidential Information disclosed to it by the other party pursuant to this
Agreement, including all copies and extracts of documents, within sixty (60)
days of the request following the termination of this Agreement; provided,
however, that a party may retain one copy of Confidential Information in
inactive archives solely for the purpose of establishing the contents thereof.
9.3 ARIAD and HMRI each represent that all of its employees and the
employees of its Affiliates, and any consultants to such party or its
Affiliates, who shall have access to Confidential Information of the other
party, including, in the case of ARIAD, the Confidential Information of the
HAGC, are bound by written obligations to maintain such information in
confidence and not to use such information except as expressly permitted herein.
Each party agrees to enforce confidentiality obligations to which its employees
and consultants (and those of its Affiliates) are obligated.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY HMRI. HMRI shall indemnify, defend and hold
harmless ARIAD, its Affiliates and their respective directors, officers,
employees and agents, and their respective successors, heirs and assigns (the
"ARIAD Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorneys' fees and expenses of litigation) incurred by or imposed
upon the ARIAD Indemnitees, or any one of them, in connection with any claims,
suits, actions, demands or judgments of third parties, including, without
limitation, personal injury and product liability matters (except in cases where
such claims, suits, actions, demands or judgments result from a material breach
of this Agreement, gross negligence or willful misconduct on the part of ARIAD)
arising out of the development, testing, production, manufacture, promotion,
import, sale or use by any person of any products which utilize ARIAD Background
Technology and which are manufactured or sold by HMRI or by an Affiliate,
licensee, sublicensee, distributor or agent of HMRI.
10.2 INDEMNIFICATION BY ARIAD. ARIAD shall indemnify, defend and hold
harmless HMRI, its Affiliates and their respective directors, officers,
employees and agents, and their respective successors, heirs and assigns (the
"HMRI Indemnitees"), against any liability,
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<PAGE> 20
damage, loss or expense (including reasonable attorneys' fees and expenses of
litigation) incurred by or imposed upon the HMRI Indemnitees, or any one of
them, in connection with any claims, suits, actions, demands or judgments of
third parties, including, without limitation, personal injury and product
liability matters (except in cases where such claims, suits, actions, demands or
judgments result from a material breach of this Agreement, gross negligence or
willful misconduct on the part of HMRI) arising out of the use of any Licensed
HAGC SOPs by ARIAD or by an Affiliate, sublicensee, distributor or agent of
ARIAD.
ARTICLE XI
CONDITIONS PRECEDENT
11.1 CONDITIONS PRECEDENT TO HMRI'S OBLIGATIONS. All obligations of HMRI
to consummate the transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) The representations and warranties of ARIAD contained in this
Agreement or in any certificate or document in connection herewith shall be true
and correct in all material respects on and as of the Closing. ARIAD shall have
performed, complied with and satisfied all agreements and conditions in all
material respects required by this Agreement to be performed, complied with and
satisfied prior to or at the Closing. ARIAD shall have delivered a certificate
to the foregoing effect to HMRI at the Closing.
(b) Any waiting period (and any extension thereof) applicable to
the consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated, and no statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the
transactions contemplated hereby from being consummated.
(c) All consents and approvals required to be obtained by ARIAD to
consummate the transactions contemplated hereby shall have been obtained by
ARIAD.
(d) The closing under the Src Restructuring Agreement shall occur
simultaneously with the Closing.
(e) There shall not be in effect on the date of the Closing any
judgment, order, injunction, decree, ruling or charge restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.
(f) The Transamerica Assumption Agreement shall have been executed
and delivered by all parties thereto.
11.2. CONDITIONS PRECEDENT TO ARIAD'S OBLIGATIONS. All obligations of
ARIAD to consummate the transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
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<PAGE> 21
(a) The representations and warranties of HMRI contained in this
Agreement or in any certificate or document in connection herewith shall be true
and correct in all material respects on and as of the Closing. HMRI shall have
performed, complied with and satisfied all agreements and conditions in all
material respects required by this Agreement to be performed, complied with and
satisfied prior to or at the Closing. HMRI shall have delivered a certificate to
the foregoing effect to HMRI at the Closing.
(b) Any waiting period (and any extension thereof) applicable to
the consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated, and no statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the
transactions contemplated hereby from being consummated.
(d) The closing under the Src Restructuring Agreement shall occur
simultaneously with the Closing.
(e) There shall not be in effect on the date of the Closing any
judgment, order, injunction, decree, ruling or charge restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.
(f) The Transamerica Assumption Agreement shall have been executed
and delivered by all parties thereto.
ARTICLE XII
TERMINATION
12.1 TERMINATION. This Agreement may be terminated before the Closing
occurs only as follows:
(a) by the written mutual agreement of HMRI and ARIAD; or
(b) by ARIAD or HMRI by notice to the other if the Closing has not
occurred by the close of business December 31, 1999, unless such date is
extended pursuant to Section 12.2.
12.2 EXTENSION. The date referenced in Section 12.1(b) may be extended by
the written mutual agreement of HMRI and ARIAD, provided that, if such date is
extended, the parties shall agree to mutually acceptable terms for the interim
operation and funding of the HAGC.
ARTICLE XIII
GENERAL TERMS
13.1 ASSUMPTION OF LIABILITIES. At the Closing hereunder, HMRI shall
assume only the liabilities and obligations of ARIAD arising or to be performed
after the Closing under the Assigned HAGC Agreements and the Metagenome
Agreement and no others. Nothing contained herein shall cause HMRI to assume (a)
any liabilities or obligations arising out of the
21
<PAGE> 22
Assigned HAGC Agreements prior to the Closing, whether known or unknown on the
date of Closing; (b) any liabilities or obligations arising out of any provision
of any agreement, contract, commitment or lease of ARIAD other than any
liability or obligation under the Assigned HAGC Agreements and the Metagenome
Agreement arising after the Closing; (c) any employment-related liability or
obligation arising prior to or as a result of the Closing to any employees,
agents or independent contractors of ARIAD, whether or not employed by HMRI
after the Closing, or under any benefit arrangement with respect thereto; or (d)
any liability or obligation of ARIAD arising or incurred in connection with the
negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby and fees and expenses of counsel, accountants, investment
bankers and other experts.
13.2 NOTICES. All notices, requests and other communications to ARIAD or
HMRI hereunder shall be in writing (including telecopy or similar electronic
transmissions) and shall be personally delivered by a courier service providing
evidence of receipt or sent by telecopy or other electronic facsimile
transmission or by registered mail or certified mail, return receipt requested,
postage prepaid, in each case to the respective address set forth below (or such
other address as may be specified in writing to the other party hereto):
If to HMRI: Aventis Pharmaceuticals Inc.
Route 202-206
P.O. Box 6800
Bridgewater, NJ 08807-0800
Attention: Vice President and General Counsel,
Global Drug Development Center
Telecopy: (908) 231-4480
with a copy to: Morgan, Lewis & Bockius LLP
502 Carnegie Center
Princeton, NJ 08540
Attention: Randall B. Sunberg, Esq.
Telecopy: (609) 919-6639
If to ARIAD to: ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, MA 02139
Attention: Chief Executive Officer
Telecopy: (617) 494-1828
with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jeffrey Wiesen, Esq.
Telecopy: (617) 542-2241
22
<PAGE> 23
13.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
application of principles of conflicts of law.
13.4 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective legal representatives,
successors and permitted assigns.
13.5 HEADINGS. Section and subsection headings are inserted for
convenience of reference only and do not form a part of this Agreement.
13.6 COUNTERPARTS. This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original.
13.7 AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.
13.8 NO THIRD PARTY BENEFICIARIES. No third party, including any employee
of any party to this Agreement, shall have or acquire any rights by reason of
this Agreement.
13.9 ASSIGNMENT AND SUCCESSORS. This Agreement shall not be assignable by
either party to any third party without the written consent of the other party,
except that each party can assign this Agreement to an Affiliate, in connection
with the sale of all or substantially all of such party's assets which relate to
the subject matter of this Agreement or, with respect to ARIAD, in a transaction
constituting a Change of Control or an Acquisition or, with respect to HMRI, in
a transaction substantially equivalent thereto relating to HMRI. The terms and
conditions shall be binding on and inure to the benefit of the permitted
successors and assigns of the parties. No such permitted assignment shall
relieve the assignor of any of its obligations or liabilities under this
Agreement.
13.10 INTERPRETATION. The parties hereto acknowledge and agree that: (i)
each party and its counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.
13.11 INTEGRATION; SEVERABILITY. This Agreement, together with the Bill of
Sale and Undertaking, the Assignment and Assumption Agreement, the Transition
Services Agreement, the Membership Interest Assignment, the Metagenome
Agreement, the Estoppel Letter, the
23
<PAGE> 24
Sublease, the Incyte Installation Site Designation Letter, the Transamerica
Assumption Agreement and the Src Restructuring Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and all
prior or contemporaneous agreements and understandings, whether written or oral,
between the parties with respect to such matter, including, without limitation,
the Letter of Intent, are hereby superseded in their entirety. If any provision
hereof should be held invalid, illegal or unenforceable in any respect in any
jurisdiction then, to the fullest extent permitted by law (i) all other
provisions hereof shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, each party hereby waives any provision of
law that would render any provision hereof prohibited or unenforceable in any
respect.
13.12 SURVIVAL. The representations and warranties of each party made
herein shall survive the Closing.
13.13 EXPENSES. Each party agrees to pay its own legal, accounting and
other expenses in connection with the transactions contemplated hereby including
the fees and expenses of any investment banker or broker engaged by such party.
13.14 EXHIBITS AND SCHEDULES. All appendices, exhibits and schedules
referred to in this Agreement are attached hereto and are incorporated herein by
reference as if fully set forth herein.
[Remainder of this page intentionally left blank.]
24
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this Restructuring
Agreement to be executed by their duly authorized representatives as of the date
first written above.
AVENTIS PHARMACEUTICALS INC. HOECHST-ARIAD GENOMICS CENTER, LLC
By: Aventis Pharmaceuticals Inc.,
as member
By: /s/ Frank L. Douglas, M.D.
Name: Frank L. Douglas
Title: Vice-President By: /s/ Frank L. Douglas, M.D.
Name: Frank L. Douglas
Title: Vice President
ARIAD PHARMACEUTICALS, INC.
By: ARIAD Pharmaceuticals, Inc.,
as member
By: /s/ Harvey Berger
Name: Harvey J. Berger
Title: Chairman and Chief Executive
Officer By: /s/ Harvey Berger
Name: Harvey J. Berger
Title: Chairman and Chief
Executive Officer
25
<PAGE> 26
LIST OF EXHIBITS AND SCHEDULES
APPENDICES
- ----------
I Definitions
EXHIBITS
- --------
A Membership Interest Assignment
B Bill of Sale and Undertaking
C-1 Transamerica Assumption Agreement
C-2 Assignment and Assumption Agreement
D Transition Services Agreement
E Metagenome Agreement
F-1 Estoppel Letter
F-2 Sublease
G Incyte Installation Site Designation Letter
H Transamerica Lease
SCHEDULES
- ---------
2.1(b)(i) ARIAD Owned HAGC Equipment
2.1(b)(ii) ARIAD Leased HAGC Equipment
2.1(b)(iii) Assigned HAGC Agreements
2.1(c)(i) ARIAD/HAGC Agreements
[*]
4.1(e) ARIAD Membership Interest
4.1(f) HAGC Agreements
4.1(g) Consents
4.1(k) Operation of the HAGC
[*]
7.3 Closing Estimate
8.3 Employees
ARIAD hereby agrees to furnish supplementally a copy of any omitted
schedule to the Commission upon request.
<PAGE> 27
APPENDIX I
DEFINITIONS
Unless otherwise provided, all capitalized terms used herein shall have the
meanings set forth below:
"Acquisition" shall mean a consolidation or merger of ARIAD with another
entity, or the conveyance, sale or lease to another entity of all or
substantially all of the stock, assets or business of ARIAD and its subsidiaries
taken as a whole, unless the stockholders of ARIAD immediately prior to the
transaction own a majority of the voting equity securities of the merged,
consolidated or acquiring entity after the transaction.
"Administrative Services Agreement" shall mean the Administrative Services
Agreement by and among ARIAD, the HAGC and HMRI dated as of March 4, 1997.
"Affiliates" shall mean any corporation, firm, partnership or other entity
which directly or indirectly controls or is controlled by or is under common
control with a party to this Agreement. "Control" shall mean ownership, directly
or through one or more Affiliates, of more than fifty percent (50%) of the
shares of stock entitled to vote for the election of directors, in the case of a
corporation, or more than fifty percent (50%) of the equity interests in the
case of any limited liability company or other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a party
controls or has the right to control the board of directors or equivalent
governing body of a corporation or other entity.
"Analog Protein Drugs" shall mean a Protein or polypeptide, the discovery
of which was based on the identification of a Validated Protein or the Candidate
Gene of such Validated Protein, and which has been modified through a change in
its primary structure or sequence resulting in a functionally significant
change.
"Antibody Drugs" shall mean an antibody (monoclonal or polyclonal) or
fragments or constructs thereof.
"Antisense Drug" shall mean any nucleic acid or a functional analog,
derivative or homologue thereof which is complementary to a segment of DNA of a
Gene or such Gene's cognate RNA, the discovery of which was based on the
identification of a Validated Target or the Candidate Gene of such Validated
Target, and which, upon delivery by any means, alters the transcription,
processing, elaboration, RNA expression or protein production of or by such
Gene.
"ARIAD Background Technology" shall mean Technology owned or licensed by
ARIAD or its Affiliates that existed as of March 4, 1997 or was acquired by
ARIAD or its Affiliates between March 4, 1997 and the Closing Date, that is
useful in Functional Genomics and that was applicable to the objectives of the
Research Program.
<PAGE> 28
"ARIAD Corporation" shall mean ARIAD Corporation, a Delaware corporation
and a wholly-owned subsidiary of ARIAD.
"ARIAD License Agreement" shall mean shall mean the ARIAD License
Agreement by and between ARIAD and HAGC dated as of March 4, 1997.
"Bioinformatics" shall mean genomics software and databases (including,
without limitation, databases containing information pertaining to the sequence,
function and relationship of genomic information) and methods and tools for
creation, maintenance and analysis thereof (including, without limitation,
source and object code, maintenance files and documentation for software, and
computer systems).
"Candidate Gene" shall mean a Gene whose [*] cDNA sequence is known and
whose function has been determined, in whole or in part, in accordance with
criteria determined by the Management Committee.
"Change of Control" shall be deemed to have occurred upon consummation of
any transaction or similar event as a result of which any other entity acquires
or controls and is able to vote without restriction (directly or through
nominees of beneficial ownership or by proxy) more than fifty percent (50%) of
the capital stock or ARIAD outstanding at the time having the power ordinarily
to vote for directors of ARIAD.
"Company Scientists" shall mean the scientists engaged by ARIAD to conduct
research pursuant to the Scientific Research Services Agreement.
"Confidential Information" shall mean all tangible embodiments of
Technology and all information (including but not limited to information about
any element of Technology) which is disclosed by one party to the other party
hereunder or under the Joint Venture Agreements, except to the extent that such
information (i) as of the date of disclosure is demonstrably known to the party
receiving such disclosure or its Affiliates, as shown by written documentation,
other than by virtue of a prior confidential disclosure to such party or its
Affiliates; (ii) as of the date of disclosure is in, or subsequently enters, the
public domain, through no fault or omission of the party receiving such
disclosure; or (iii) as of the date of disclosure or thereafter is obtained from
a third party free from any obligation of confidentiality to the disclosing
party. For purposes of this Agreement and the Metagenome Agreement, all
Metagenome Technology (as such term is defined in the Metagenome Agreement) is
Confidential Information of HMRI, unless such Metagenome Technology otherwise
falls within the exceptions to Confidential Information contained in clauses
(i), (ii) or (iii) of the preceding sentence.
"Cross License Agreement" shall mean the Cross License Agreement by and
between ARIAD and HMRI dated as of March 4, 1997.
"Derivative Protein Drug" shall mean a Protein, the discovery of which was
based on the identification of a Validated Protein or the Candidate Gene of such
Validated Protein, including, without limitation, species variant forms thereof,
amino acid variant forms thereof having [*] amino acid sequence identity and
truncated forms or fragments thereof.
<PAGE> 29
"Diagnostic Products" shall mean any product in the form of a device,
compound, kit or service, the discovery of which was based upon, or which
utilizes, any Candidate Gene, Validated Target or Validated Protein, which is
intended to predict, detect or identify a disease, determine the presence of
pathologic condition or monitor the course of disease or therapy in humans.
"Drug" shall mean any product which is intended to treat and/or prevent a
disease or disorder in humans.
"Expense Sharing Percentage" shall mean, with respect to ARIAD, fifty
percent (50%), and with respect to HMRI, fifty percent (50%).
"Field" shall mean Functional Genomics.
"Functional Genomics" shall mean the identification of Genes, and the
function of such Genes or the products thereof, and the interacting elements of
pathways involving those Genes.
"Gene" shall mean cDNA or a human gene or a family of such human genes or
any portion of such cDNA, gene or genes.
"Gene Therapy Drug" shall mean a nucleic acid or a functional analog,
derivative or homologue thereof, the discovery of which was based on the
identification of a Validated Protein or the Candidate Gene of such Validated
Protein, which, upon delivery by any means, causes a gene product encoded
thereby to be expressed, but does not include an Antisense Drug or a Vaccine.
"HMRI License Agreement" shall mean the HMRI License Agreement by and
between HAGC and HMRI dated as of March 4, 1997.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Joint Venture Agreements" shall mean the JV Master Agreement, the
Administrative Services Agreement, the ARIAD License Agreement, the Certificate
of Formation of HAGC, the Cross License Agreement, the HMRI License Agreement,
the Operating Agreement, the Scientific Research Services Agreement, the Stock
Purchase, Standstill and Registration Rights Agreement and the Product Rights
Agreement.
"Joint Venture Patent Rights" shall mean Patent Rights arising out of the
Research Program.
"Joint Venture Technology" shall mean technology arising out of the
Research Program.
"Management Committee" shall mean the committee of ARIAD and HMRI
representatives which administered, managed and coordinated the HAGC.
<PAGE> 30
"Operating Agreement" shall mean the Operating Agreement of HAGC by and
between ARIAD and HMRI dated as of March 4, 1997.
"Other Products" shall mean any product (e.g., a cosmetic or veterinary
product) which does not comprise a Small-molecule Drug, Peptidomimetic Drug,
Antisense Drug, Protein Drug, Derivative Protein Drug, Analog Protein Drug,
Protein Mimetic Drug, Gene Therapy Drug, Vaccine, Antibody Drug or Diagnostic
Product.
"Patent Rights" shall mean the rights and interests in and to issued
patents and pending patent applications (which for purposes of this Agreement
shall be deemed to include certificates of invention and applications for
certificates of invention and priority rights) in any country, including all
substitutions, continuations, continuations-in-part, divisions, and renewals,
all letters patents granted thereon, and all reissues, reexaminations and
extensions thereof, whether owned or licensed by a party with the right to
sublicense.
"Peptidomimetic Drug" shall mean a synthetic organic molecule which is a
mimetic of, or is designed or developed, using computational, medicinal or
combinatorial chemistry techniques, to interact with a Validated Target and
which incorporates key structural features of a peptide.
"Product Rights Agreement" shall mean the Products Rights Agreement by and
among ARIAD, HAGC and HMRI dated as of March 4, 1997.
"Products" shall mean any product that comprises a Small-molecule Drug,
Peptidomimetic Drug, Antisense Drug, Protein Drug, Derivative Protein Drug,
Analog Protein Drug, Protein Mimetic Drug or Gene Therapy Drug; provided,
however, that Product shall not include any Diagnostic Product, Vaccine,
Antibody Drug or Other Product.
"Protein Drug" means a Validated Protein used as a Drug.
"Protein Mimetic Drug" shall mean a synthetic organic molecule which is a
mimetic of, or is designed or developed using computational, medicinal or
combinatorial chemistry techniques to incorporate the key properties of a
Validated Protein.
"Proteins" shall mean any of a class of high molecular weight polymer
compounds composed of a variety of amino acids joined by peptide linkages,
including aggregates and hybrids thereof, as well as naturally
post-translationally modified variants thereof (e.g., glycosylated proteins) and
chemically modified versions thereof (e.g., pegylated or liposomally
encapsulated proteins).
"Research Program" shall mean the research program conducted by HAGC
pursuant to the Joint Venture Agreements and reflected in the Master and Annual
Research Plans.
"Scientific Director" shall mean Mark Zoller, Ph.D.
<PAGE> 31
"Scientific Research Services Agreement" shall mean the Scientific
Research Services Agreement by and among ARIAD, HAGC and HMRI dated as of March
4, 1997.
"Series B Preferred Stock" shall mean ARIAD's Series B Convertible
Preferred Stock, par value $0.01 per share.
"Small-molecule Drug" shall mean a small-molecule therapeutic product,
identified in an assay using a Validated Target, other than a Peptidomimetic
Drug, Antisense Drug, Protein Drug, Derivative Protein Drug, Analog Protein
Drug, Protein Mimetic Drug, Gene Therapy Drug, Vaccine or Antibody Drug.
"Stock Purchase, Standstill and Registration Rights Agreement" shall mean
the Stock Purchase, Standstill and Registration Rights Agreement by and between
ARIAD and HMRI dated as of March 4, 1997.
"Supplemental Capital Loans" shall mean funds loaned to ARIAD by HMRI
pursuant to the Operating Agreement for the purpose of ARIAD funding its
Supplemental Capital Contributions (as such term is defined in the Operating
Agreement).
"Technology" shall mean and includes all inventions, discoveries,
improvements and proprietary materials, whether or not patentable or
copyrightable, including but not limited to samples of, and structural and
functional information pertaining to, chemical compounds, DNA vectors, cells,
antibodies, other proteins or other biological substances, including DNA
sequence information and information pertaining to three-dimensional structure
of proteins and other substances; Bioinformatics and other software (in both
source and object form) and documentation with respect thereto; other data;
formulations; techniques; and know-how; including any negative results.
"Technology" of a party includes Technology owned by a party or licensed to that
party with a right to grant sublicenses.
"Vaccines" shall mean any product which achieves a prophylactic or
therapeutic effect by inducing antigen-specific humoral and/or cellular immune
system response.
"Validated Protein" shall mean a Protein encoded by a Candidate Gene and
which has been determined by the Management Committee to be potentially suitable
for development into a Drug or potentially useful in the discovery of a Drug.
"Validated Target" shall mean a biological molecule (e.g., receptor,
enzyme, ion channel or protein domain) or Gene, the function of which has been
identified and which has been determined by the Management Committee to be
potentially useful in the discovery of a Drug.
<PAGE> 32
As used in this Agreement, the following terms shall have the respective
meanings specified in the Sections indicated below.
Section
-------
Actions 10.2(a)
Accruals and Prorations 7.3
Advance 2.2(a)
Administrative Services Estimate 7.1
Agreement Preamble
Agreement for New Employees 2.1(c)(i)
ARIAD Preamble
ARIAD Assets 2.1
[*]
ARIAD/HAGC Agreements 2.1(c)(i)
ARIAD Indemnitee 10.1
ARIAD Leased HAGC Equipment 2.1(b)(ii)
ARIAD Membership Interest 2.1(a)
ARIAD Owned HAGC Equipment 2.1(b)(i)
[*]
ARIAD Shares 2.2(b)
Assigned HAGC Agreements 2.1(b)(iii)
Assignment and Assumption
Agreement 2.1(b)(ii)
Bill of Sale and Undertaking 2.1(b)(i)
Cash Consideration 2.2(a)
Closing 3.1
Closing Date 3.1
Closing Estimate 7.3
Closing Payment 2.2(a)
Current Transamerica Lease 2.1(b)(ii)
Employees 8.3(a)
Estoppel Letter 3.2(j)
HAGC Preamble
HAGC Agreements 4.1(f)
HAGC Owned Equipment 4.1(i)
HAGC Intellectual Property 2.1(c)(i)
HMR S.A. Preamble
HMRI Preamble
HMRI Indemnitee 10.2
HMRI Incyte Agreement 8.7
HMRI Office Sublease 3.2(j)
<PAGE> 33
Incyte 3.2(k)
Incyte Installation Site
Designation Letter 3.2(k)
[*]
JV Master Agreement Preamble
Letter of Intent 2.2(a)
Loan 2.2(e)
Management Employees 8.3(b)
Membership Interest Assignment 2.1(a)
Metagenome Agreement 3.2(i)
Permissible Successor 6.2
Post-Closing Statement 7.4(a)
requesting party 8.6(b)
RU Agreement Preamble
Scientific Services Estimate 7.2
Security Interest 2.2(d)
Src Restructuring Agreement Preamble
Sublease 3.2(j)
Transamerica 2.1(b)(ii)
Transamerica Assumption
Agreement 2.1(b)(ii)
Transamerica Lease 3.2(o)
Transition Services Agreement 3.1(g)
<PAGE> 1
Exhibit 99.1
NEWS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: Jay LaMarche
Chief Financial Officer
(617) 494-0400
Eytan Apter
SmallCaps Online Group, LLC
(212) 554-4158
ARIAD COMPLETES SALE OF ITS INTEREST IN
GENOMICS JOINT VENTURE WITH AVENTIS AND
ACQUISITION OF RIGHTS IN OSTEOPOROSIS COLLABORATION
ARIAD ALSO REPURCHASES 2,000 SHARES OF SERIES C PREFERRED STOCK
CAMBRIDGE, MA, JANUARY 4, 2000 -- ARIAD Pharmaceuticals, Inc. (Nasdaq: "ARIA")
today announced the completion of the sale of its 50% interest in the
Hoechst-ARIAD Genomics Center, LLC to Aventis Pharmaceuticals Inc. (formerly
known as Hoechst Marion Roussel, Inc.). In a transaction completed December 31,
1999, ARIAD received (1) $40 million in cash, of which $5 million had been
advanced on October 12, 1999, (2) the return of approximately three million
shares of ARIAD series B convertible preferred stock, (3) forgiveness of
approximately $2 million of long-term debt held by Aventis, (4) drug candidates
and related technologies resulting from a four-year osteoporosis collaboration
with Hoechst Marion Roussel (France) on the development of Src tyrosine kinase
inhibitors, in which Hoechst Marion Roussel invested over $31 million, and (5)
the right to use certain genomics and bioinformatics technologies developed by
the Genomics Center. Hoechst Marion Roussel (France) is entitled to receive
certain payments upon approval and achievement of commercial sales of Src
inhibitors.
ARIAD and Aventis established the Hoechst-ARIAD Genomics Center, LLC in 1997 to
pursue functional genomics based upon state-of-the-art technologies in molecular
and cellular genetics and bioinformatics to analyze human genes and identify
those genes that encode novel therapeutic proteins or targets for small-molecule
drug discovery.
<PAGE> 2
ARIAD and Hoechst Marion Roussel (France) began to collaborate on the discovery
and development of drugs to treat osteoporosis and related bone diseases in
1995. The goal of the collaboration has been to develop novel, small-molecule
drugs that block the activity of Src, an intracellular signaling protein that is
critical to the osteoporosis disease process. Using its expertise in
structure-based drug design and combinatorial chemistry, ARIAD has developed
potent Src inhibitors that are well tolerated and effective in in vitro and in
vivo models of osteoporosis.
"The restructuring of our relationship with Aventis should allow ARIAD to focus
on near-term development programs and our own products. Our goal is to bring one
of our proprietary osteoporosis candidates to the clinic as soon as possible.
This transaction with Aventis is the first of a series of steps we are taking to
redefine our business," said Harvey J. Berger, M.D., chairman and chief
executive officer of ARIAD.
In addition, ARIAD announced that, in a separate transaction which also closed
on December 31, 1999, it repurchased 2,000 shares of ARIAD series C convertible
preferred stock from Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson
Strategic Growth Fund, L.P. and certain rights for an aggregate purchase price
of $3.4 million. Other rights repurchased include the right to purchase
additional shares of series C preferred stock from ARIAD and the right to
participate, through a right of first refusal, in future financings of ARIAD.
The 2,000 shares of series C preferred stock were issued by ARIAD to the Brown
Simpson funds in November 1998 for $2 million and represented 40% of the
outstanding shares of series C preferred stock.
"ARIAD is very pleased with its relationship with Brown Simpson Asset Management
and looks forward to the potential of working with Brown Simpson again in the
future," said Dr. Berger.
ARIAD Pharmaceuticals (www.ariad.com) is engaged in the discovery and
development of novel therapeutics based on signal transduction technology. ARIAD
is developing small-molecule drugs to block intracellular signaling pathways
that play a critical role in major diseases, including osteoporosis and various
immune-related disorders. ARIAD is also developing ARGENT(TM), a proprietary
gene regulation technology for orally active protein therapy and cellular
immunotherapy that utilizes small-molecule drugs to control intracellular
signaling pathways in engineered cells.
Some of the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties, which include, but are not
limited to, risks and uncertainties regarding the Company's preclinical studies,
the ability of the Company to conduct clinical trials of its products and the
success of such trials, as well as risks and uncertainties relating to economic
conditions, markets, products, competition, intellectual property, services and
prices, key employees, future capital needs, dependence on our collaborators and
other factors under the heading "Cautionary Statement Regarding Forward-Looking
Statements" in ARIAD's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the Securities and Exchange Commission.
###
<PAGE> 1
EXHIBIT 99.2
ARIAD PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 99.2 PORTIONS OF THE
AGREEMENT FOR WHICH ARIAD PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH
BRACKETS AND AN ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
RESTRUCTURING AGREEMENT
(SRC RESEARCH AND DEVELOPMENT PROGRAM)
THIS SRC RESTRUCTURING AGREEMENT (this "Agreement") is entered into this
31st day of December, 1999, by and between HOECHST MARION ROUSSEL (France), a
stock company formed under the laws of France ("HMR S.A."), and ARIAD
PHARMACEUTICALS, INC., a Delaware corporation ("ARIAD").
W I T N E S S E T H:
WHEREAS, HMR S.A., as successor in interest to Roussel Uclaf S.A., a
French corporation, and ARIAD are parties to that certain Collaborative Research
and License Agreement dated as of November 6, 1995 (the "RU Agreement"); and
WHEREAS, HMR S.A. and ARIAD have been engaged in the Research and
Development Program;
WHEREAS, the parties have decided that it is in their respective best
interests to restructure their relationship regarding the Research and
Development Program and to terminate the RU Agreement; and
WHEREAS, Aventis Pharmaceuticals Inc., a Delaware corporation (formerly
known as Hoechst Marion Roussel, Inc.), and ARIAD have simultaneously herewith
entered into that certain Restructuring Agreement (the "Restructuring
Agreement"), which provides for, among other things, the restructuring of the
transactions related to the formation and operation of the Hoechst-ARIAD
Genomics Center, LLC.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. DEFINITIONS. Unless otherwise provided herein, all capitalized terms
used herein shall have the meanings set forth on SCHEDULE 1 hereto.
2. ASSIGNMENT AND ASSUMPTION OF ARIAD OWNED TECHNOLOGY, JOINT
TECHNOLOGY AND ROUSSEL OWNED TECHNOLOGY. As of the Effective Time, HMR S.A.
hereby sells, assigns
<PAGE> 2
and transfers to ARIAD all of its right, title and interest in and to, and ARIAD
hereby accepts such sale, assignment and transfer of, ARIAD Owned Technology (if
any), Joint Technology and ROUSSEL Owned Technology (as such terms are defined
in Schedule 1), each as in existence as of the Effective Time, and including
without limitation the Joint Technology and ROUSSEL Owned Technology listed on
SCHEDULE 2 hereto (collectively, the "Assigned Technology"). To the best of HMR
S.A.'s knowledge, Schedule 2 contains a true and complete list of all patent
applications and patents claiming any element of the Joint Technology or ROUSSEL
Owned Technology.
[*]
In furtherance of the foregoing, the Assigned Technology
[*]
does and shall grant
[*]
provided, however, that
[*]
set
forth in this sentence, and the right to
[*]
.
3. TANGIBLE MATERIALS. In furtherance of the provisions of Section 2
hereof, HMR S.A. will deliver to ARIAD, no later than January 31, 2000, such
manuals, standard operating procedures, assay methods, process descriptions and
the like, and all other tangible materials (including without limitation copies
of research results and other records, copies of relevant portions of laboratory
notebooks, biological materials and chemical materials) that are ARIAD
2
<PAGE> 3
Owned Technology, Joint Technology or ROUSSEL Owned Technology), including
without limitation the items listed on SCHEDULE 3 hereto (collectively, the
"Tangible Materials"); provided, however, that a reasonable additional period of
time shall be permitted for the delivery as promptly as practicable to ARIAD of
Tangible Materials relating to the deconvolution of certain libraries.
4. UNDERTAKINGS.
(a) In furtherance of the provisions of Sections 2 and 3 hereof,
designated representatives of HMR S.A. and its Affiliates shall meet with
designated representatives of ARIAD at the location in France and on the dates
set forth on Schedule 4 hereof, at which meeting HMR S.A. shall review and
discuss with ARIAD the status of the Research and Development Program as
concluded as of the Effective Time and the Assigned Technology. The identities
of the persons who will attend such meeting on behalf of HMR S.A. and its
Affiliates, and on behalf of ARIAD, are set forth on Schedule 4.
(b) After transferring all Assigned Technology (including Tangible
Materials) to ARIAD, HMR S.A. shall, as soon as practicable after the Effective
Time and subject to the proviso in the last sentence of Section 11(b) hereto,
take all steps necessary to destroy, delete and/or remove all data and
information relating to Compounds (including screening of such Compounds), the
Research and Development Program and the Assigned Technology, whether the same
is in written form or in electronic form and contained in the computers,
databases and other electronic media of HMR S.A. and its Affiliates and
successors, to the extent that the isolation and destruction, deletion and/or
removal of such data and information is feasible. Notwithstanding anything to
the contrary contained in this Agreement, (i) HMR S.A. and its Affiliates shall
be entitled to retain and use copies of publicly available materials, and (ii)
patent counsel for HMR S.A. and its Affiliates shall be entitled to retain and
use copies of data and information relating to Assigned Technology applicable
to, and for the sole purpose of, supporting the patentability, including without
limitation the utility or industrial applicability, of Compounds, compounds and
methods of HMR S.A. or its Affiliates, described on Schedule 2; it being
understood that access by HMR S.A. and its Affiliates to the data and
information relating to the Assigned Technology for the purposes described in
clause (ii) of this sentence is strictly limited to inventors and in-house and
outside patent counsel for HMR S.A. and its Affiliates.
(c) After the Effective Time, ARIAD shall undertake and assume all
costs and expenses associated with the Assigned Technology, including without
limitation those related to prosecution of patent rights (except as set forth in
Schedule 2), but only to the extent such costs and expenses relate to its
ownership or actions, events or omissions occurring after the Effective Time.
HMR S.A. shall have no responsibility for costs and expenses relating to the
Assigned Technology (except as set forth on Schedule 2) or to ARIAD's possession
of, or actions, events or omissions associated with, the Assigned Technology
occurring after the Effective Time. Except as provided in the RU Agreement,
ARIAD shall have no responsibility for costs and expenses relating to the
Assigned Technology or to HMR S.A.'s or its Affiliates' possession of, or
actions, events or omissions associated with, the Assigned Technology occurring
prior to the Effective Time.
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<PAGE> 4
(d) Except as set forth in Section 4(b) hereof, HMR S.A.
acknowledges and agrees that neither it nor any of its Affiliates shall use any
Assigned Technology for any purpose following the Closing.
5. TERMINATION OF RU AGREEMENT. As of the Effective Time, the RU
Agreement shall be terminated in its entirety (including, without limitation,
any survival provisions) and, notwithstanding anything in the RU Agreement to
the contrary, the parties shall have no rights or obligations thereunder.
6. CONSIDERATION.
(a) ONE-TIME PAYMENT UPON [*]. In the event that ARIAD shall enter
into any transaction with a third party, which transaction will provide such
third party directly or indirectly with rights to [*], ARIAD shall,
[*]
. For purposes of clarification,
[*]
.
(b) MILESTONES. ARIAD shall, [*] days following the occurrence of
the triggering event, pay to HMR S.A. the following milestone payments with
respect to
[*]
:
(i)
[*]
; and
(ii)
[*]
.
(c) FURTHER PAYMENTS.
(i) Until such time as the condition in Section 6(e) hereof
is achieved, ARIAD shall pay HMR S.A.:
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<PAGE> 5
(A) an amount based on the [*] equal to [*] actually received by
ARIAD or any of its Affiliates in each Fiscal Year;
(B) an amount based on [*] equal to [*] actually received by ARIAD
or any of its Affiliates in each such Fiscal Year;
(C) an amount based on [*] equal to [*] actually received by ARIAD
or any of its Affiliates in each Fiscal Year; and
(D) an amount equal to [*] actually received by ARIAD or any of
its Affiliates with respect to [*], as the case may be, by
licensees of ARIAD or any of its Affiliates in each Fiscal
Year; provided, however, that the amounts payable by ARIAD to
HMR S.A. in each Fiscal Year under the preceding clause (D)
shall be:
(x) [*] by licensees of ARIAD or any of its Affiliates of
[*];
(y) [*] by licensees of ARIAD or any of its Affiliates of
[*]; and
(z) [*] by licensees of ARIAD or any of its
Affiliates of [*].
In furtherance of the foregoing and for purposes of clarification, if a product
is
[*]
then, unless (i) such product is
[*]
or (ii)
[*]
the payment on the [*] shall be calculated using the
[*]
.
(ii) Such amounts shall be paid by ARIAD within ninety (90) days
after the end of each Fiscal Quarter in which Net Sales are made by ARIAD or any
of its Affiliates or payments from licensees are received. Such payments shall
be accompanied by a report showing the quantity and Net Sales of each Human
Therapeutic Product or Human Therapeutic Non-Field Product sold by ARIAD or any
Affiliate or licensee in each country and a calculation of the amount due
pursuant to this Section 6(c).
(iii) ARIAD and its Affiliates shall keep, and shall cause its
licensees to keep, for five (5) years from the date of each such payment
complete and accurate records of
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<PAGE> 6
sales by ARIAD and its Affiliates and licensees of each Human Therapeutic
Product or Human Therapeutic Non-Field Product in sufficient detail to allow the
accruing of such payments to be determined accurately. HMR S.A. will have the
right for a period of three (3) years after receiving any report or statement
with respect to payments due and payable to appoint at its expense an
independent certified public accountant reasonably acceptable to ARIAD to
inspect the relevant records of ARIAD and its Affiliates to verify such report
or statement. ARIAD and its Affiliates shall each make its records available for
inspection by such independent certified public accountant during regular
business hours at such place or places where such records are customarily kept,
upon reasonable notice from HMR S.A., solely to verify the accuracy of the
reports and payments. At the written request of HMR S.A., and as part of the
exercise by HMR S.A. of the aforesaid right to inspect the records of ARIAD and
its Affiliates, ARIAD will exercise its rights to inspect the records of its
licensees (and ARIAD will ensure that its agreements with its licensees permit
such inspection) and provide HMR S.A. with the results of such inspection. Such
inspection right shall not be exercised more than once in any calendar year nor
more than once with respect to sales of any Human Therapeutic Product or Human
Therapeutic Non-Field Product in any given period. HMR S.A. agrees to hold in
strict confidence all information concerning such payments and reports, and all
information learned in the course of any audit or inspection, except to the
extent necessary for HMR S.A. to reveal such information in order to enforce its
rights under this Agreement or if disclosure is required by law. The results of
each inspection, if any, shall be binding on both parties. HMR S.A. shall pay
for such inspections, except that in the event that there is any upward
adjustment in aggregate amounts payable for any Fiscal Year shown by such
inspection of more than two percent (2%) of the amount paid, ARIAD shall pay for
such inspection.
(d) LATE PAYMENTS. Payments not made within the time periods set
forth in Sections 6(a), 6(b) and 6(c) hereof, respectively, shall bear interest
at a rate of the lesser of (i) one percent (1%) per month and (ii) the maximum
rate allowed under applicable law, from the due date until paid in full.
(e) MAXIMUM PAYMENTS. The maximum aggregate amount of payments due
by ARIAD to HMR S.A. pursuant to Sections 6(b) and 6(c) hereof shall be
[*]
by ARIAD and its Affiliates and licensees.
7. DISCLAIMER. EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 9(f) AND 9(g)
OF THIS AGREEMENT, HMR S.A. MAKES NO WARRANTIES OR REPRESENTATIONS OR WARRANTIES
WHATSOEVER, WHETHER EXPRESSED OR IMPLIED, IN RESPECT OF THE ASSIGNED TECHNOLOGY
OR ARIAD'S ABILITY TO PURSUE RESEARCH, DEVELOPMENT OR COMMERCIALIZATION
ACTIVITIES WITH RESPECT TO THE ASSIGNED TECHNOLOGY AND HEREBY DISCLAIMS
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS WITH RESPECT TO
ANY AND ALL OF THE FOREGOING.
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<PAGE> 7
8. INDEMNIFICATION. ARIAD shall indemnify, defend and hold harmless HMR
S.A., its Affiliates and their respective directors, officers, employees and
agents, and their respective successors, heirs and assigns (the "HMR S.A.
Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorneys' fees and expenses of litigation) incurred by or imposed
upon the HMR S.A. Indemnitees, or any one of them, in connection with any
claims, suits, actions, demands or judgments of third parties, including,
without limitation, personal injury and product liability matters (except in
cases where such claims, suits, actions, demands or judgments result from the
gross negligence or willful misconduct on the part of HMR S.A.) arising out of
the development, testing, production, manufacture, promotion, import, sale or
use by any person of any Human Therapeutic Product or Human Therapeutic
Non-Field Product which is manufactured or sold by ARIAD, or by an Affiliate,
licensee, distributor or agent of ARIAD.
9. REPRESENTATIONS AND WARRANTIES OF HMR S.A. As of the Effective Time,
HMR S.A. hereby represents and warrants to ARIAD as follows:
(a) ORGANIZATION. HMR S.A. is a corporation duly organized,
validly existing and in good standing under the laws of France.
(b) AUTHORIZATION. The execution, delivery and performance by HMR
S.A. of this Agreement have been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of its
stockholders or (ii) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to it or any provision of its charter documents.
(c) BINDING AGREEMENT. This Agreement is a legal, valid and
binding obligation of HMR S.A. enforceable against it in accordance with its
terms.
(d) NO INCONSISTENT OBLIGATIONS. HMR S.A. is not under any
obligation to any person, entity, contractual or otherwise, that is materially
conflicting or materially inconsistent in any respect with the terms of this
Agreement or that would materially impede the diligent and complete fulfillment
of its obligations.
(e) CONSENTS. No consent of any natural person, corporation,
partnership, proprietorship, association, trust or other legal entity is
required to be obtained by HMR S.A. to the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby,
including without limitation, consents to the assignment of the Assigned
Technology.
(f) LITIGATION OR ADMINISTRATIVE PROCEEDINGS. There is no action,
suit, proceeding, investigation, or arbitration pending before any court,
arbitration panel or other governmental or regulatory body or, to HMR S.A.'s
knowledge, threatened relating to the Assigned Technology. To HMR S.A.'s
knowledge, HMR S.A. has not received any notice alleging infringement of the
rights of any third party relating to HMR S.A.'s use of the Assigned Technology.
HMR S.A. has not made any regulatory filings with the U.S. Food and Drug
Administration, or a governmental
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<PAGE> 8
agency of any other country serving the same function, relating to any aspect of
the Assigned Technology or the testing thereof.
(g) DISCLOSURE. HMR S.A. represents and warrants that no
representation or warranty of HMR S.A. contained in this Agreement and no
information contained in any schedule hereto contains or will contain any untrue
statement of a material fact.
10. REPRESENTATIONS AND WARRANTIES OF ARIAD. As of the Effective Time,
ARIAD hereby represents and warrants to HMR S.A. as follows:
(a) ORGANIZATION. ARIAD is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware.
(b) AUTHORIZATION. The execution, delivery and performance by
ARIAD of this Agreement have been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of its
stockholders or (ii) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicable to it or any provision of its charter documents.
(c) BINDING AGREEMENT. This Agreement is a legal, valid and
binding obligation of ARIAD enforceable against it in accordance with its terms.
(d) NO INCONSISTENT OBLIGATIONS. ARIAD is not under any obligation
to any person, entity, contractual or otherwise, that is materially conflicting
or materially inconsistent in any respect with the terms of this Agreement or
that would materially impede the diligent and complete fulfillment of its
obligations.
11. CONFIDENTIALITY.
(a) ARIAD and HMR S.A. each recognize that the other party's
Confidential Information constitutes highly valuable and proprietary
confidential information. ARIAD and HMR S.A. each agree that for five (5) years
from the date of this Agreement, it will keep confidential, and will cause its
employees, consultants, Affiliates and licensees and sublicensees to keep
confidential, all Confidential Information of the other party that is disclosed
to it, or to any of its employees, consultants, Affiliates and licensees and
sublicensees, pursuant to or in connection with this Agreement. Neither ARIAD
nor HMR S.A. nor any of their respective employees, consultants, Affiliates and
licensees and sublicensees shall use Confidential Information of the other party
for any purpose whatsoever except as expressly permitted in this Agreement.
Without limiting the generality of the foregoing, neither ARIAD nor HMR S.A. nor
any of their respective employees, consultants, Affiliates and licensees and
sublicensees shall use Confidential Information of the other party to invalidate
or challenge any patent, issued or pending, of such other party, its Affiliates
or successors, except in the defense of a legal or administrative action brought
by such other party, its Affiliates or successors and, in such case, only to the
extent that such Confidential Information is produced pursuant to a discovery
request (prepared without any use of Confidential Information), an order of a
court of competent jurisdiction or by similar judicial, administrative or
governmental action.
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<PAGE> 9
(b) ARIAD and HMR S.A. each agree that any disclosure of the other
party's Confidential Information to any officer, employee, consultant or agent
of the other party or of any of its Affiliates and licensees and sublicensees
shall be made only if and to the extent necessary to carry out its rights and
responsibilities under this Agreement, shall be limited to the maximum extent
possible consistent with such rights and responsibilities and shall only be made
to persons who are bound by written confidentiality obligations to maintain the
confidentiality thereof and not to use such Confidential Information except as
expressly permitted by this Agreement. ARIAD and HMR S.A. each agree not to
disclose the other party's Confidential Information to any third parties under
any circumstance without the prior written approval from the other party (such
approval not to be unreasonably withheld), except as required in any application
for regulatory approval for testing, manufacture or sale of a Human Therapeutic
Product or Human Therapeutic Non-Field Product subject to this Agreement, or as
otherwise required by law, and except as otherwise expressly permitted by this
Agreement. Each party shall take such action, and shall cause its Affiliates and
licensees and sublicensees to take such action, to preserve the confidentiality
of each other's Confidential Information as it would customarily take to
preserve the confidentiality of its own Confidential Information, and in no
event, less than reasonable care. Each party, upon the other's request, will
return all the Confidential Information of the other party disclosed to it
pursuant to this Agreement and the RU Agreement, including all copies and
extracts of documents, within sixty (60) days of the request following the
termination of this Agreement; provided, however, that a party may retain one
copy of Confidential Information in inactive archives of its legal department
solely for the purpose of establishing the contents thereof.
(c) ARIAD and HMR S.A. each represent that all of its employees
and the employees of its Affiliates, and any consultants to such party or its
Affiliates who shall have access to Confidential Information of the other party
are bound by written obligations to maintain such information in confidence and
not to use such information except as expressly permitted herein. Each party
agrees to enforce confidentiality obligations to which its employees and
consultants (and those of its Affiliates) are obligated.
12. FURTHER ASSURANCES. Each party agrees that at any time and from time
to time, upon the written request of the other, it will promptly and duly
execute and deliver any and all such further instruments and documents and take
such further action as the other may reasonably request in order to transfer the
Assigned Technology (including the Tangible Materials) and obtain the full
benefits of this Agreement and of the transactions contemplated hereby. Without
limiting the generality of the foregoing, at the reasonable request of the other
party, each party agrees to, and agrees to cause its Affiliates and successors
to, execute and deliver any patent assignments relating to the Assigned
Technology or the rights set forth in the fifth sentence of Section 2 to permit
the requesting party to obtain the full benefits of this Agreement and the
transactions contemplated hereby. In addition, HMR S.A. and ARIAD agree (a) to
assist (including enforcement of employee agreements at the expense of the party
requesting such assistance) each other
[*]
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<PAGE> 10
[*]
as may be reasonably requested by the other party. The parties acknowledge
that such assistance shall only be required to extend to administrative
assistance reasonably necessary to enable the requesting party to exercise or
enforce rights obtained under this Agreement, and shall
[*]
.
13. GENERAL.
(a) NOTICES. All notices, requests and other communications to
ARIAD or HMR S.A. hereunder shall be in writing (including telecopy or similar
electronic transmissions) and shall be personally delivered by a courier service
providing evidence of receipt or sent by telecopy or other electronic facsimile
transmission or by registered mail or certified mail, return receipt requested,
postage prepaid, in each case to the respective address set forth below (or such
other address as may be specified in writing to the other party hereto):
If to HMR S.A.: Hoechst Marion Roussel (France)
102 Route de Noisy
93235 Romainville Cedex
FRANCE
Attention: General Counsel
Telecopy: 33 1 49 91 30 55
With a copy to Aventis Pharmaceuticals Inc.
Route 202-206
P.O. Box 6800
Bridgewater, NJ 08807-0800
U.S.A.
Attention: Vice President and General Counsel,
Global Drug Development Center
Telecopy: (908) 231-4480
and a copy to: Morgan, Lewis & Bockius LLP
502 Carnegie Center
Princeton, NJ 08540
U.S.A.
Attention: Randall B. Sunberg, Esq.
Telecopy: (609) 919-6639
If to ARIAD to: ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, MA 02139
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<PAGE> 11
U.S.A.
Attention: Chief Executive Officer
Telecopy: (617) 494-8144
with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attention: Jeffrey M. Wiesen, Esq.
Telecopy: (617) 542-2241
(b) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the application of principles of conflicts of law.
(c) BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective legal representatives,
successors and permitted assigns.
(d) HEADINGS. Section and subsection headings are inserted for
convenience of reference only and do not form a part of this Agreement.
(e) COUNTERPARTS. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original.
(f) AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.
(g) NO THIRD PARTY BENEFICIARIES. No third party, including any
employee of any party to this Agreement, shall have or acquire any rights by
reason of this Agreement.
(h) ASSIGNMENT AND SUCCESSORS. This Agreement shall be assignable
by ARIAD, without consent, to any third party and shall not be assignable by HMR
S.A. to any third party without the written consent of ARIAD, except that HMR
S.A. may assign this Agreement to an Affiliate or to a third party transferee of
all or substantially all of HMR S.A.'s assets which relate to the subject matter
of this Agreement. The terms and conditions shall be binding on and inure to the
benefit of the permitted successors and assigns of the parties. No such
permitted assignment shall relieve the assignor of any of its obligations or
liabilities under this Agreement.
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<PAGE> 12
(i) INTERPRETATION. The parties hereto acknowledge and agree that:
(i) each party and its counsel reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.
(j) INTEGRATION; SEVERABILITY. This Agreement constitutes the
entire understanding of HMR S.A. and ARIAD with respect to the subject matter
hereof and all prior or contemporaneous agreements and understandings, whether
written or oral, between the parties with respect to such matter, including,
without limitation, the RU Agreement, are hereby superseded in their entirety.
If any provision hereof should be held invalid, illegal or unenforceable in any
respect in any jurisdiction then, to the fullest extent permitted by law (i) all
other provisions hereof shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, each party hereby waives any provision of
law that would render any provision hereof prohibited or unenforceable in any
respect.
(k) EXPENSES. Each party agrees to pay its own legal, accounting
and other expenses in connection with the transactions contemplated hereby
including the fees and expenses of any investment banker or broker engaged by
such party.
(l) SCHEDULES. All schedules referred to in this Agreement are
attached hereto and are incorporated herein by reference as if fully set forth
herein.
(m) CURRENCY. All amounts used herein are denominated in United
States dollars. All calculations required hereby shall be computed, and all
payments to be made hereunder, shall be in United States dollars. For purposes
of determining the amounts due hereunder, the amount of Net Sales in any foreign
currency shall be computed by converting such amount into United States dollars
at the prevailing commercial rate of exchange for purchasing United States
dollars with such foreign currency as reported in The Wall Street Journal on the
last business day of the Fiscal Quarter to which a payment relates. Each payment
under this Agreement shall be paid by ARIAD by wire transfer of funds to an
account of HMR S.A. in accordance with the instructions provided by HMR S.A.
from time to time.
(n) ARBITRATION. In the event of any dispute, difference or
question arising between the parties in connection with this Agreement, the
construction thereof, or the rights, duties or liabilities of either party, then
such dispute shall be resolved by binding arbitration in accordance with the
rules of the American Arbitration Association. The arbitration panel shall be
composed of three arbitrators, one of whom shall be chosen by HMR S.A., one by
ARIAD, and the third by the two so chosen. If both or either of HMR S.A. or
ARIAD fails to choose an arbitrator or arbitrators within fourteen (14) days
after receiving notice of commencement of arbitration or if the two arbitrators
fail to choose a third arbitrator within fourteen (14) days after their
appointment, then the President of the American Arbitration Association shall,
upon the
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<PAGE> 13
request of both or either of the parties to the arbitration, appoint the
arbitrator or arbitrators required to complete the board or, if he or she shall
decline or fail to do so, such arbitrator or arbitrators shall be appointed by
the New York City, New York office of the American Arbitration association. The
decision of the arbitrators shall be by majority vote and, at the request of
either party, the arbitrators shall issue a written opinion of findings of fact
and conclusions of law. Costs shall be borne as determined by the arbitrators.
Unless the parties to the arbitration shall otherwise agree to a place of
arbitration, the place of arbitration shall be at New York City, New York,
U.S.A. The arbitration award shall be final and binding upon the parties to such
arbitration and may be entered in any court having jurisdiction.
14. EFFECTIVE TIME. This Agreement shall become effective (the
"Effective Time") simultaneously with the Closing (as such term is defined in
the Restructuring Agreement) of the Restructuring Agreement, and shall terminate
simultaneously with any termination of the Restructuring Agreement.
15. PUBLIC ANNOUNCEMENTS. Each party will give the other party prior
notification and an opportunity to provide comments on its announcement
regarding the transactions contemplated hereby and will consider in good faith
any proposed revisions thereof.
[Remainder of page intentionally left blank]
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.
HOECHST MARION ROUSSEL (FRANCE)
By: /s/ Raynaud Jacques
Name: Raynaud Jacques
Title: Head of DIA HMR-FRANCE
ARIAD PHARMACEUTICALS, INC.
By: /s/ Harvey Berger
Name: Harvey J. Berger
Title: Chairman and Chief Executive Officer
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SCHEDULE 1
DEFINITIONS
The following capitalized terms used throughout this Agreement shall have the
meanings set forth below:
"Analog" shall mean a [*] , but
[*] it in respect to [*]
.
"Affiliate" shall mean any corporation, firm, partnership or other entity
which directly or indirectly controls or is controlled by or is under common
control with a party to this Agreement. "Control" means ownership, directly or
through one or more Affiliates, of more than fifty percent (50%) of the shares
of stock entitled to vote for the election of directors, in the case of a
corporation, or more than fifty percent (50%) of the equity interests in the
case of any other type of legal entity, status as a general partner in any
partnership, or any other arrangement whereby a party controls or has the right
to control the board of directors or equivalent governing body of a corporation
or other entity.
"Anti-Cancer Activity" shall mean cytostatic or cytolitic activity in
cultured tumor cells.
"ARIAD Owned Technology" shall mean Technology solely invented, discovered
or developed by ARIAD under, and during the term of, the Research and
Development Program and without use of ROUSSEL Owned Technology, and shall
include without limitation the Technology set forth on Schedule 1-A. ARIAD
represents and warrants that there is not [*] that constitutes
any [*] .
"Compound" shall mean a compound invented, discovered or developed under,
and during the term of, the Research and Development Program by either party
alone or jointly by both parties which [*]
Src protein tyrosine kinase. "ROUSSEL
or Joint Compound" shall mean a Compound invented, discovered or developed by
HMR S.A. or any of its Affiliates alone or jointly with ARIAD or any of its
Affiliates.
"Confidential Information" shall mean all information of a party
(including but not limited to information about any element of Technology) which
is disclosed by or on behalf of one party to the other with respect to the
subject matter hereof (including, without limitation, any such information
disclosed under the RU Agreement) except to the extent that such information (i)
as of the date of disclosure is demonstrably known to the party receiving such
disclosure or its Affiliates, as shown by written documentation, other than by
virtue of a prior confidential disclosure to such party or its Affiliates; (ii)
as of the date of disclosure is in, or subsequently enters, the public domain,
through no fault or omission of the other party receiving such disclosure; or
(iii) as of the date of disclosure or thereafter is obtained from a third party
free from any obligation of confidentiality to the disclosing party. For
purposes of this Agreement,
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all [*] is Confidential Information of ARIAD, unless such [*] otherwise falls
within the exceptions to Confidential Information contained in clauses (i), (ii)
or (iii) of the preceding sentence.
"Covered" means, with respect to
[*]
.
"directly inhibits", "direct inhibition" and similar words shall mean the
direct inhibition at a [*] conducted in accordance with
accepted scientific procedures.
"Field" shall mean the treatment or prophylaxis, by
[*]
Src protein
tyrosine kinase, of hyperresorptive bone diseases in humans,
[*]
.
"Fiscal Quarter" shall mean one quarter of ARIAD's Fiscal Year.
"Fiscal Year" shall mean a year starting January 1 and ending December 31.
"Human Therapeutic Non-Field Product" shall mean any product [*] which is
invented, discovered or developed utilizing a [*]
with respect to which [*]
or any [*].
"Human Therapeutic Product" shall mean any product which is invented,
discovered or developed utilizing a
[*]
including, without limitation, any of the
[*]
.
"Joint Technology" shall mean
[*]
.
"Net Sales" shall mean the gross amount billed by ARIAD or its Affiliates
or licensees to third parties worldwide for the sales of Human Therapeutic
Products, Human Therapeutic Src Inhibition Products or Human Therapeutic
Non-Field Products, as the case may be, less (a)
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allowances for normal and customary trade, quantity and cash discounts actually
taken, (b) transportation, insurance and postage charges, if prepaid by ARIAD or
any affiliate or licensee of ARIAD and billed on ARIAD's or any Affiliate's or
licensee's invoices as a separate item, (c) credits, rebates, returns
(including, but not limited to, wholesaler and retailer returns), to the extent
actually allowed, and (d) sales, use and other taxes similarly incurred to the
extent stated on the invoice as a separate item, all subject to the following:
(i) In the case of pharmacy incentive programs, hospital performance
incentive program chargebacks, disease management programs, similar
programs or discounts on "bundles" of products, all discounts and the like
shall be allocated among products on the basis on which such discounts and
the like were actually granted, or if such basis cannot be determined,
proportionately to the list prices of such products.
(ii) In the case of any sale or other disposal by a party hereto to
an Affiliate, for resale, the Net Sales shall be calculated as above on
the value charged or invoiced on the first arm's length sale to a party
who is not an Affiliate;
(iii) In the event of a license as to any Human Therapeutic Product,
Human Therapeutic Src Inhibition Product or Human Therapeutic Non-Field
Product, Net Sales will be calculated with respect to sales of the Human
Therapeutic Product, Human Therapeutic Src Inhibition Product or Human
Therapeutic Non-Field Product, as the case may be, by the licensee.
(iv) In the case of a sale of unformulated Licensed Compound in bulk
for resale after formulation into Human Therapeutic Product, Human
Therapeutic Src Inhibition Product or Human Therapeutic Non-Field Product,
Net Sales will be calculated on the resale of Human Therapeutic Product,
Human Therapeutic Src Inhibition Product or Human Therapeutic Non-Field
Product, as the case may be.
(v) In the case of any other sale or other disposal, such as barter
or counter-trade, of any Human Therapeutic Product, or part thereof,
otherwise than in an arm's length transaction exclusively for money, the
Net Sales shall be calculated as above on the fair market price (if
higher) in the relevant country of sale or disposal.
"Research and Development Program" shall mean the research and development
program conducted by ARIAD and HMR S.A. pursuant to the RU Agreement.
"ROUSSEL Owned Technology" shall mean Technology (i) solely invented,
discovered or developed by HMR S.A. or its Affiliates under, and during the term
of, the Research and Development Program and without use of ARIAD Technology and
(ii) Section 3.1 Technology. For purposes of clarification, ROUSSEL Owned
Technology does not include Technology invented, discovered or developed by HMR
S.A.'s Affiliates, other than under, and during the term of, the Research and
Development Program or publicly-available Technology.
"Src Inhibition Field" shall mean the treatment or prophylaxis, by [*]
Src protein tyrosine kinase, of diseases in humans [*].
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"Section 3.1 Technology" shall mean Technology transferred to HMR S.A. by
ARIAD pursuant to Section 3.1 of the RU Agreement.
"Technology" shall mean and include all inventions, discoveries,
improvements and proprietary materials, whether or not patentable, and all data
and information related thereto, including, but not limited to, samples of, and
structural and functional information pertaining to, chemical compounds, DNA
vectors, cells, antibodies, other proteins or other biological substances,
including DNA sequence information and information pertaining to
three-dimensional structure of proteins and other substances; other data;
formulations; techniques; and know-how; including any negative results.
"Valid Claim" means, with respect to each country in the world, a claim in
any issued patent that is directed to any ROUSSEL Owned Technology or Joint
Technology that has not been disclaimed or held unenforceable or invalid in such
country by a governmental agency or court of competent jurisdiction by a
decision beyond right of review.
As used in this Agreement, the following terms shall have the respective
meanings specified in the Sections indicated below.
Defined Term Section
------------ -------
Agreement Preamble
Assigned Technology 2
ARIAD Preamble
Effective Time 14
HMR S.A. Preamble
HMR S.A. Indemnitee 8
Restructuring Agreement Preamble
RU Agreement Preamble
Tangible Materials 3
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SCHEDULE A-1
ARIAD TECHNOLOGY
(Patents Applications)
[*]
[One page redacted.]
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SCHEDULE 2
JOINT TECHNOLOGY AND ROUSSEL OWNED TECHNOLOGY
---------------------------------------------
(INCLUDING PATENTS AND PATENT APPLICATIONS)
I. Patents to be assigned by HMR S.A. to ARIAD are set forth on Exhibit A to
this Schedule 2.
II. [*] patent to be assigned by HMR S.A. to ARIAD:
Case: [*]
Country: [*]
Type: [*]
Filing Date: [*]
Filing No.: [*]
Expiration: [*]
Abbreviated Title: [*]
III.
[*]
IV.
[*]
V. Schedule 3 is incorporated herein by reference.
[One page redacted.]
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EXHIBIT A
Patent Applications Filed
By Hoechst Marion Roussel
[*]
[Four pages redacted.]
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EXHIBIT B
[*]
[Thirty pages redacted.]
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SCHEDULE 3
TANGIBLE MATERIALS
I.
[*]
II.
[*]
III.
[*]
[One page redacted.]
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SCHEDULE 4
MEETING DATE, LOCATION AND ATTENDEES
1. HMR S.A. and Affiliates attendees:
[*]
[*]
[*]
[*]
2. ARIAD attendees:
[*]
[*]
[*]
[*]
[*]
3. Meeting date: [*].
4. Meeting location: [*]
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