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XXXXXXXXXX XXX XXXXXXXXXX AGREEMENT
THIS SETTLEMENT AND REPURCHASE AGREEMENT (this "Agreement") is
dated as of January 14, 2000, by and among ARIAD Pharmaceuticals, Inc., a
Delaware corporation ("ARIAD" or the "Company"), Promethean Investment Group
LLC, a New York limited liability company ("Promethean"), and HFTP Investments,
LLC, a New York limited liability company ("HFTP"). Promethean and HFTP are
referred to collectively as "Promethean Group."
WHEREAS, the Company and HFTP are parties to that certain
Securities Purchase Agreement (the "Purchase Agreement"), dated as of November
9, 1998, by and among the Company, the Xxxxx Xxxxxxx Strategic Growth Funds and
HFTP, pursuant to which HFTP was issued 3,000 shares of the Company's Series C
Convertible Preferred Stock (the "Preferred Stock"), having the rights,
preferences and privileges set forth in the Certificate of Designations,
Preferences and Rights of Series C Convertible Preferred Stock of ARIAD
Pharmaceuticals, Inc. filed with the Secretary of State of the State of Delaware
(the "Certificate of Designations");
WHEREAS, the Company and HFTP are parties to a Registration
Rights Agreement dated November 9, 1998 (the "Registration Rights Agreement")
(such Registration Rights Agreement, along with the Purchase Agreement and the
Certificate of Designations collectively being referred to as the "Transaction
Documents");
WHEREAS, on October 26, 0000, XXXX commenced litigation
against the Company in the Delaware Court of Chancery styled HFTP Investments,
LLC v. ARIAD Pharmaceuticals, Inc., C.A. No. 17501 (the "Delaware Action");
WHEREAS, on October 26, 1999, the Company commenced litigation
in the United States District Court for the Southern District of New York
against Promethean and HFTP styled ARIAD Pharmaceuticals, Inc. v. Promethean
Investment Group LLC and HFTP Investments, LLC, 99 Civ. 10794 (the "New York
Federal Action");
WHEREAS, the parties wish to resolve the pending Delaware
Action and New York Federal Action.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Consideration.
a. Company Purchase. The Company hereby agrees to
purchase, and Promethean Group agrees to sell, the 2,388 shares of Preferred
Stock outstanding which are
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owned by Promethean Group (the "Company Purchase") in the manner set forth
below. The aggregate purchase price for the 2,388 shares of Preferred Stock (the
"Purchase Price") shall be $6,925,000.
b. Settlement Shares. Pursuant to the conversion
notice delivered by HFTP to the Company on October 13, 1999 with respect to 612
shares of Preferred Stock held by HFTP, the Company shall deliver to HFTP a
stock certificate in the amount of 1,078,038 shares of the Company's common
stock in the form attached hereto as Exhibit A, which shares shall be free of
any legends, stop transfer orders or other restrictions on transfers (such
1,078,038 shares being referred to herein as the "Settlement Shares").
c. Stipulations of Discontinuance With Prejudice. The
parties shall execute stipulations of discontinuance with prejudice and without
costs of the New York Federal Action and Delaware Action, in the forms annexed
hereto as Exhibits B and C, respectively (the "Dismissal Stipulations"). Not
later than the second business day following the Closing referenced in Section
1.d. hereof, counsel for ARIAD shall submit to the United States District Court
for the Southern District of New York and the Delaware Court of Chancery the
Dismissal Stipulations.
d. Closing. The date and time of the closing of the
Company Purchase and other consideration shall be as determined by the parties
hereto (the "Closing"). The Closing shall occur at the offices of Weil, Gotshal
& Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
e. Closing Deliveries. At the Closing, (i) the
Company shall deliver to HFTP (x) the applicable Purchase Price by check from
Weil, Gotshal & Xxxxxx LLP and (y) a certificate for the Settlement Shares,
provided, however, that such Settlement Shares shall be used by Promethean
solely as permitted by this Agreement; and (ii) each party shall execute and
deliver to counsel for ARIAD the Dismissal Stipulations. In the event that all
of the conditions precedent to Promethean Group's obligation to consummate the
Company Purchase have been met, the Company shall become the lawful holder of
all rights, title and interests in the 2,388 shares of Preferred Stock, and
Promethean Group shall have no further rights, title or interest of any nature
in such shares of Preferred Stock.
2. Disposition of the Settlement Shares By Promethean Group.
a. Except as otherwise provided in this Agreement,
during the period commencing on the date hereof and ending on the fifteenth
trading day following (and including) the day in which the Form 8-K referenced
in Section 2.c. of this Agreement is accepted for filing with the Securities and
Exchange Commission ("SEC"), with any trading day in which the Form 8-K is filed
with the SEC before 9:00 a.m. and accepted by the SEC for filing by 10:30 a.m.
(provided that the Company shall have issued its press release, as described in
Section 9 hereof, not later than 8:15 a.m. on such day) being treated as if the
filing was accepted on the preceding trading day (such ending date being
February 7, 2000, unless extended pursuant to Section 2.c.) (such ending date
being the "Trading Termination Date"), and subject further to Section 8 hereof,
Promethean Group hereby agrees to forebear from: (i) offering for sale or to
purchase, selling, acquiring, pledging, encumbering, assigning, hypothecating or
otherwise transferring any
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interest in (including entering into any agreement, arrangement or understanding
affecting the transfer or voting of any shares of) the Preferred Stock or any
shares of the Company's common stock into which the Preferred Stock is
convertible, including the Settlement Shares; or (ii) selling short or entering
into any other agreement, arrangement or understanding regarding the purchase or
sale of any common stock or other securities of the Company.
b. On or before the Trading Termination Date,
Promethean Group shall sell the Settlement Shares (and purchase an additional 62
shares of ARIAD common stock), and shall purchase ARIAD common stock to cover
and close out its entire Short Position (as defined in Section 3.c. hereof) in
the amount of 1,078,100 shares of ARIAD common stock. In order to facilitate the
disposal of the Settlement Shares and the covering of its Short Position during
the period from the acceptance for filing of the Form 8-K referenced in Section
2.c. through the Trading Termination Date, Promethean Group agrees as follows:
(i) the Settlement Shares shall be sold by not later than the close of the
market on the Trading Termination Date; (ii) Promethean Group shall purchase
shares of the Company's common stock to cover the Short Position (and shall
apply all purchased shares to cover the Short Position), provided, that at no
time during any trading day will the number of shares of ARIAD common stock
purchased by Promethean Group on that day exceed by more than 150,000 the number
of Settlement Shares sold on that day, nor will the number of shares of
Settlement Shares sold at any time during any trading day exceed by more than
150,000 the number of shares of ARIAD common stock purchased by Promethean Group
on that day; and provided further, that at the close of any trading day, the
total number of Settlement Shares sold pursuant to this Agreement shall not
exceed by more than 25,000 the number of shares of ARIAD common stock purchased
pursuant hereto (provided that after 11:59 a.m. on that day (a) trading is not
suspended or halted and (b) the Registration Statement remains available to be
utilized by HFTP for sale of the Settlement Shares); and (iii) all purchases and
sales of ARIAD common stock shall be effected solely through NASDAQ - NMS and
only during ordinary NASDAQ trading hours, and not in after-hours transactions.
As soon as practicable on each day (other than a weekend or Bank Holiday)
following any day in which Promethean Group purchased or sold shares of the
Company's common stock, including Settlement Shares, Promethean Group shall
provide by fax to Weil, Gotshal & Xxxxxx LLP, attention: Xxxxx X. Xxxxxx [fax:
000-000-0000], a copy of each broker confirmation that it receives for each such
transaction. On or before the Trading Termination Date, Promethean Group shall
provide an Officer's Certificate in the form attached hereto as Exhibit D
stating that Promethean Group has sold all of the Settlement Shares, covered the
entire Short Position of Promethean Group, and has complied with the provisions
of Sections 2.a. and 2.b hereof.
c. The Company shall maintain and keep effective at
all times the Registration Statement on Form S-3 (Registration No. 333-69689)
(the "Registration Statement") for HFTP's resale of the Settlement Shares to be
provided to HFTP pursuant to Section 1.b. hereof for a period ending on the
Trading Termination Date. The Company shall file a Form 8-K disclosing and
attaching a copy of this Agreement, with the SEC, by the close of the next
trading day following the execution of this Agreement. The Trading Termination
Date shall be extended for each day in which trading on the NASDAQ - NMS is
suspended or halted or the NASDAQ - NMS is closed or in which the Registration
Statement is not available to be utilized by HFTP for resale of the Settlement
Shares for a period of more than one (1) hour. At any time after the filing of
the Form 8-K, but on or before the Trading Termination Date, the Company shall
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promptly notify the Promethean Group in writing (i) at any time that the
Registration Statement becomes unavailable for use in connection with the resale
of the Settlement Shares, and (ii) at any time, after becoming unavailable, that
the Registration Statement again has become available for use in connection with
the resale of the Settlement Shares. In addition, the Company shall promptly
deliver to Promethean Group any amendments or supplements to the Registration
Statement occurring between the date of this Agreement and the Trading
Termination Date. Promethean Group shall give reasonable advance notice to the
Company of its intention to seek judicial relief with respect to any alleged
breach of this provision.
d. In the event that the Registration Statement is
not available to be utilized by HFTP for the resale of the Settlement Shares,
other than for reasons relating to the information that is supplied in writing
by Promethean Group or that Promethean Group is required to supply, for
inclusion in the Registration Statement, for any three (3) trading days (whether
or not consecutive) after the filing of the Form 8-K in accordance with Section
2.c., but before the Trading Termination Date, Promethean Group shall have the
right, but not the obligation, to require the Company to purchase some or all of
the Settlement Shares up to an amount equal to the number of shares of ARIAD
common stock that Promethean Group has purchased to cover some portion of the
Short Position in the period after the Registration Statement has been not so
available to be utilized for any three (3) trading days (whether or not
consecutive) and the Registration Statement was not so available at the time of
or after Promethean Group's purchase (the "Put"), at a price per share equal to
the price per share paid by Promethean Group for each such purchase of ARIAD
common stock to cover the portion of its Short Position triggering its option
hereunder. Promethean Group may exercise its Put separately with respect to each
such purchase that Promethean Group has made (each such purchase being a
"Triggering Purchase"). For purposes of Section 2.b.(ii) of this Agreement,
Promethean Group will be deemed to have exercised its Put and to have made its
sale to the Company upon the transmittal of a facsimile notice (the "Put
Notice") to the Company, attention: Xxx X. XxXxxxxx, at fax number (617)
000-0000, and telephone number (000) 000-0000, by 9:30 a.m. on the next trading
day following a Triggering Purchase, (i) identifying the date of the Triggering
Purchase, the number of shares purchased, the purchase price per share, the
number of Settlement Shares being put to and purchased by the Company, and the
total amount due from the Company for the shares; (ii) confirming compliance
with the representations, warranties and covenants set forth in Sections 3.a.
and 3.b. of this Agreement as if they applied to the Settlement Shares being
sold to the Company; and (iii) containing a representation that the Triggering
Purchase shares were used to cover the Short Position. Promethean Group shall
deliver to ARIAD one or more certificates, duly endorsed, evidencing such
Settlement Shares, as well as a copy of the broker's confirmation for such
Triggering Purchase, and ARIAD shall pay by cashier's or certified check, at a
closing to be held at the office of Weil, Gotshal & Xxxxxx LLP not earlier than
one (1) full business day and not later than two (2) full business days after
the delivery by Promethean Group of the Put Notice. The exercise or non-exercise
of the Put is in addition to Promethean Group's right to exercise any other
right or seek any other remedy for breach of this Agreement.
e. In the event that Promethean Group has not
disposed of all of the Settlement Shares by the close of the NASDAQ - NMS on the
Trading Termination Date, it shall promptly so notify ARIAD and advise ARIAD as
to the number of Settlement Shares that it has not disposed of. ARIAD may, by
the delivery of written notice (the "Call Notice") to
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Promethean Group by facsimile to the attention of Xxxxx X. X'Xxxxx, Xx., at fax
number (000) 000-0000, and telephone number (000) 000-0000, but need not,
require Promethean Group to sell to ARIAD some or all of such unsold Settlement
Shares (the "Call") at a price per share equal to the volume weighted average
price of ARIAD common stock on NASDAQ - NMS as reported by Bloomberg for the
trading day preceding the date on which the Call Notice is given; provided,
however, that if Promethean Group provides such notice to the Company by 5:30
p.m. on the Trading Termination Date that it has not disposed of all of the
Settlement Shares, ARIAD must provide such Call Notice by 9:00 a.m. on the next
day; and otherwise (but assuming Promethean Group thereafter has given the
notice of unsold Settlement Shares) ARIAD must provide such Call Notice by 9:00
a.m. on the second trading day after the later of the Trading Termination Date
or the date such notice is given by Promethean Group. Such Call Notice shall
state the number of Settlement Shares subject to the Call, the applicable price
per share, the aggregate purchase price, and the time and date of closing.
Promethean Group shall deliver the Settlement Shares to ARIAD, along with an
officer's certificate containing the representations, warranties and covenants
set forth in Section 3.a. and 3.b hereto as if they applied to the Settlement
Shares; and ARIAD shall pay by certified or cashier's check at a closing to be
held at the offices of Weil, Gotshal & Xxxxxx LLP not later than 72 hours after
the facsimile transmission to Promethean Group of the Call Notice. The exercise
or non-exercise of the Call is in addition to and not exclusive of ARIAD's right
to exercise any other right or to seek any other remedy for breach of this
Agreement. In the event that Promethean Group has not covered all of its Short
Position by the close of the NASDAQ - NMS Market on the Trading Termination
Date, Promethean Group, at ARIAD's written direction, shall promptly purchase
sufficient shares of common stock and apply such shares to close the remainder
of the Short Position. The determination to give such direction is in the sole
discretion of ARIAD, and the giving or not giving of such direction is in
addition to and not exclusive of ARIAD's right to exercise any other right or to
seek any other remedy for breach of this Agreement.
3. Representations, Warranties and Covenants of Promethean
Group. Each of Promethean Group represents, warrants and covenants, jointly and
severally, to the Company as of the Closing, as follows:
a. Sole Ownership of the Preferred Stock. HFTP is the
sole owner, both of record and beneficially, of all shares of Preferred Stock
subject to this Agreement, and all shares of the Preferred Stock are free and
clear of all claims, liens, encumbrances, charges, assessments and interests of
third parties of any kind or nature whatsoever other than those which might have
been created by the Company (collectively, "Encumbrances").
b. Good and Valid Title to the Preferred Stock. HFTP
has the full power, right and authority to sell all shares of the Preferred
Stock subject to this Agreement to the Company, without restriction, and the
Company will, in accordance with this Agreement, acquire good and valid title to
all shares of the Preferred Stock subject to this Agreement free and clear of
any and all Encumbrances, so that, after the Company Purchase, the Company may
freely exercise all voting and other rights of ownership in and with respect to
the 2,388 shares of the Preferred Stock subject to this Agreement. Except as set
forth in this Agreement, Promethean Group has no agreement, arrangement or
understanding affecting the transfer or voting of any shares of the Preferred
Stock or any shares of ARIAD common stock.
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c. Common Stock. Other than as referred to herein,
Promethean Group does not own, of record or beneficially, any shares of common
stock or warrants of the Company. Promethean Group represents and warrants that
its total outstanding short position is 1,078,100 shares of the Company's common
stock (the "Short Position").
4. Further Representations and Warranties. (a) The Company
represents and warrants to Promethean Group that this Agreement has been duly
and validly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms. The Company further represents and warrants that,
except for information pertaining to Promethean Group, the Registration
Statement on or before the Trading Termination Date does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby (including, without
limitation, the repurchase of the Preferred Stock) will not result in a
violation of the Company's Certificate of Incorporation or the Company's
By-laws. (b) Promethean Group represents and warrants to the Company that this
Agreement has been duly and validly authorized, executed and delivered by
Promethean Group and constitutes the legal, valid and binding obligation of each
of Promethean Group, enforceable against each of them in accordance with its
terms. Promethean Group further represents and warrants that information
pertaining to Promethean Group in the Registration Statement on or before the
Trading Termination Date does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The execution, delivery and performance of this
Agreement by Promethean Group and the consummation by Promethean Group of the
transactions contemplated hereby (including, without limitation, the sale to
ARIAD of the Preferred Stock) will not result in a violation of Promethean
Group's organizational documents.
5. Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants made pursuant to this Agreement shall
survive the Closing hereunder, and shall remain effective for a period of one
(1) year, regardless of any investigation made by or on behalf of the Company or
Promethean Group during such period or of any information that the Company or
Promethean Group may have with respect thereto.
6. Release by ARIAD. The Company, on behalf of itself and its
former, present and future directors, officers, partners and employees,
subsidiaries, affiliates, agents, attorneys, investment and financial advisors,
accountants, representatives, trustees, heirs, successors or predecessors in
interest, and assigns, for good and sufficient consideration, the receipt of
which is hereby acknowledged, remises, releases and forever discharges
Promethean Group and any and all of its respective agents, servants, attorneys,
former, present or future principals, members, directors, officers, investors,
partners and employees, subsidiaries, parents, affiliates, associates,
shareholders, investment bankers and financial advisors, accountants, auditors,
representatives, commercial bankers, trustees, heirs, successors or predecessors
in interest, and assigns from any and all claims, rights, debts, suits, losses,
liabilities, demands, judgments, accounts, obligations, promises, acts,
agreements, damages, matters, issues, actions and causes of action of whatsoever
kind or nature, whether direct or indirect, individual, class,
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derivative, or otherwise in any representative capacity, known or unknown,
asserted or unasserted, matured or unmatured, based on, relating to (directly or
indirectly), or arising out of or in connection with (i) the facts,
transactions, events and occurrences referred to in or arising out of, or in
connection with, the complaints in the New York Federal Action or Delaware
Action, including the Transaction Documents, or (ii) any purchase, sale,
conversion or redemption of Preferred Stock of the Company or any purchase,
sale, redemption or trading of the common stock, preferred stock or other
securities (including the redemption of Series B Preferred Stock and Promethean
Group's purchases and sales of ARIAD common stock in accordance with Section 2
of this Agreement) of the Company; provided, however, that claims for breach of
this Agreement or any covenant, representation or warranty herein, or any rights
to indemnification or contribution pursuant to Section 8 of the Purchase
Agreement or Sections 6 and 7 of the Registration Rights Agreement or any
defenses to or grounds to oppose any such claim for indemnification or
contribution, or right to exercise any remedy provided for herein, are not
released and are expressly preserved.
7. Release by Promethean Group. Promethean Group, on behalf of
itself and themselves, and its and their former, present and future principals,
members, directors, officers, partners, investors and employees, subsidiaries,
affiliates, agents, attorneys, investment and financial advisors, accountants,
representatives, trustees, heirs, successors or predecessors in interest, and
assigns, for good and sufficient consideration, the receipt of which is hereby
acknowledged, remises, releases and forever discharges the Company and any and
all of its respective agents, servants, attorneys, former, present or future
directors, officers, partners and employees, subsidiaries, parents, affiliates,
associates, shareholders, investors, investment advisors and financial advisors,
accountants, auditors, representatives, commercial bankers, trustees, heirs,
successors or predecessors in interest, and assigns from any and all claims,
rights, debts, suits, losses, liabilities, demands, judgments, accounts,
obligations, promises, acts, agreements, damages, matters, issues, actions and
causes of action of whatsoever kind or nature, whether direct or indirect,
individual, class, derivative, or otherwise in any representative capacity,
known or unknown, asserted or unasserted, matured or unmatured, based on,
relating to (directly or indirectly), arising out of or in connection with (i)
the facts, transactions, events and occurrences referred to in or arising out
of, or in connection with, the complaints in the New York Federal Action or
Delaware Action, including the Transaction Documents, or (ii) any purchase,
sale, conversion or redemption of the Preferred Stock of the Company or any
purchase, sale, redemption or trading of the common stock, preferred stock, or
other securities (including the redemption of Series B Preferred Stock and
Promethean Group's purchases and sales of ARIAD common stock in accordance with
Section 2 of this Agreement) of the Company; provided, however, that claims for
breach of this Agreement or any covenant, representation or warranty herein, or
right to exercise any remedy provided for herein, or any rights to
indemnification or contribution pursuant to Section 8 of the Purchase Agreement
or Sections 6 and 7 of the Registration Rights Agreement or any defenses to or
grounds to oppose any such claim for indemnification or contribution, are not
released and are expressly preserved.
8. Standstill in Company Securities. Except as expressly
provided in Section 2 of this Agreement, for a period of four (4) years
following the date of this Agreement, Promethean Group and its and their
respective agents, representatives, affiliates, associates and all other persons
acting in concert with or under the control or direction of Promethean Group
shall not, directly or indirectly: (a) acquire, enter into any option to
acquire, offer to acquire,
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agree to acquire, become the beneficial owner of or obtain any rights in respect
to any ARIAD securities, by purchase, conversion, exchange or exercise of ARIAD
securities pursuant to their terms, or take any action in furtherance thereof;
(b) sell, short sell, enter into any option to sell, transfer any beneficial
interest in, assign, pledge, hypothecate or otherwise dispose of any interest in
or encumber any ARIAD securities; or (c) participate in any proxy solicitation
or become a member of any "group," within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") or the rules and
regulations of the SEC promulgated thereunder, with respect to ARIAD or any
ARIAD securities. As used herein, the terms "affiliate" and "associate" shall
have the meanings given such terms in Rule 12b-2 of the Exchange Act, and the
term "person" shall mean any individual, partnership, corporation, group (as
defined above), syndicate, trust or any other association or entity.
Notwithstanding the foregoing, it shall not be a violation of this Agreement for
Promethean Group or any of its or their agents, representatives, affiliates,
associates and all other persons acting in concert with, or under the control or
direction of, Promethean Group (i) to acquire debt or equity securities of ARIAD
pursuant to a merger by which debt or equity securities of another company (a
"Target Company") that were owned by Promethean Group or such other person or
entity prior to the announcement or any report in the media of any actual or
potential proposal for or statement of intent to enter into a merger,
acquisition or other extraordinary transaction by ARIAD with such Target
Company, are acquired in exchange for ARIAD securities, or (ii) to continue to
own securities or the right to acquire securities, or to exercise such right to
acquire securities or sell securities, of a Target Company or its successors
following a merger with, acquisition of, or other extraordinary transaction
involving such company by ARIAD.
9. Press Releases. Not earlier than 8:00 a.m. on January 18,
2000, the Company and Promethean Group will issue press releases, in the form
attached hereto as Exhibits E and F, respectively. Except as provided by law or
as set forth in Sections 2.c. and 10 hereof, the parties will not make any
further comment concerning this Agreement.
10. Non-Disparagement; Litigation. The Company agrees not to
directly or indirectly disparage, criticize, or make any negative public or
private comments about each of the Promethean Group or any of its or their
respective officers, employees, or affiliates to any person or entity or to
assist any person or entity to initiate or pursue, directly or indirectly, any
litigation, arbitration, suit, claim, or complaint against Promethean Group or
any of their respective officers, employees, or affiliates relating to any
matter whatsoever, excluding, however, any litigation, arbitration, suit, claim,
or complaint filed in connection with a breach of this Agreement or in
connection with a request for or in defense of or opposition to a request for
indemnification or contribution; provided, however, that nothing contained
herein shall limit the ability of the Company (or any officer, director,
employee or other representative thereof) to provide documents or information
responsive to legal process or legal proceedings, or requests from any
governmental entity, securities exchange or NASD in connection with any formal
or informal inquiry, investigation or proceeding, or in accordance with the
listing or membership requirements thereof, or as otherwise required by law; and
complete, accurate and responsive truthful statements may be made in connection
therewith. Promethean Group agrees not to directly or indirectly disparage,
criticize, or make any negative public or private comments about the Company or
any of its officers, directors, shareholders, employees, or affiliates or assist
any person or entity to initiate or pursue, directly or indirectly, any
litigation, arbitration, suit, claim, or complaint against the Company or any of
its officers, directors, principals, shareholders (in
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their capacity as ARIAD shareholders), partners, members, or affiliates relating
to any matters whatsoever, excluding, however, any litigation, arbitration,
suit, claim, or complaint filed in connection with a breach of this Agreement or
in connection with a request for or in defense of or opposition to a request for
indemnification or contribution; provided, however, that nothing contained
herein shall limit the ability of Promethean Group (or any officer, director,
employee or other representative thereof) to provide documents or information
responsive to legal process or legal proceedings, or requests from any
governmental entity, securities exchange or NASD in connection with any formal
or informal inquiry, investigation, or proceeding, or in accordance with the
listing or membership requirements thereof, or as otherwise required by law; and
complete, accurate and truthful responsive statements may be made in connection
therewith. In the event that any such statement is required to be made in any
legal proceeding or government investigation, the Company and/or the Promethean
Group, as the case may be, agree to request that such statement be treated
confidentially and not disclosed to any third party.
11. No Admission of Wrongdoing. This Agreement is entered into
for the sole purpose of resolving contested claims and disputes and avoiding the
substantial costs, expenses and uncertainties associated with disputes arising
from the Delaware Action and the New York Federal Action. Neither this
Agreement, the performance of any of its terms, nor any of its contents, shall
constitute or be construed or offered as evidence in any proceeding as an
admission of any liability or of any fact or any indication that any of the
claims, defenses, charges, allegations or conditions made in the Delaware Action
and the New York Federal Action has any merit, each of the parties thereto
denying any liability or wrongful conduct.
12. Entire Agreement; Modification; Successors and Assigns.
This Agreement is intended by the parties hereto as a complete and final
expression of their agreement with respect to the subject matter hereof;
provided, however, that notwithstanding the foregoing, Section 8 of the
Securities Purchase Agreement and Sections 6 and 7 of the Registration Rights
Agreement shall remain in full force and effect. This Agreement may not be
modified, rescinded, waived or terminated orally, and no modification,
rescission, termination or attempted waiver of any of the terms, provisions or
conditions hereof (including this section) shall be valid unless in writing,
supported by consideration, and signed by the party against whom the same is
sought to be enforced. In entering into this Agreement, no party has relied on
any representation or warranty other than as set forth herein, and each party
disclaims any such representation or warranty. This Agreement shall apply to, be
binding in all respects upon, and inure to the benefit of the respective
successors, permitted assigns and legal representatives of the parties hereto.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, directly or indirectly, by Promethean Group or the Company
without the prior written consent of the other party hereto.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provisions in any other
jurisdiction.
14. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York and
9
10
without regard to its principles of choice of law. Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the non-exclusive jurisdiction of any New York State or Federal court sitting in
New York City, and any appellate court therein from any appeal thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment rendered in such action or
proceeding, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court, or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any New York State or federal court sitting in New York City. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
15. Counterparts. This Agreement may be executed in any number
of original or facsimile counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterparts and delivering such
executed Agreement by facsimile (with original to follow by hand or overnight
delivery service).
16. Specific Performance. The parties hereto agree that solely
a remedy at law for breach of this Agreement is inadequate and that any party by
whom this Agreement is enforceable shall be entitled to institute and prosecute
proceedings, either at law or in equity, to enforce the specific performance of
the terms and conditions of this Agreement, in addition to any other appropriate
relief or remedy, and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief. Such remedies shall,
however, be cumulative and not exclusive and shall be in addition to any other
remedies which a party may have under this Agreement or at law.
[INTENTIONALLY LEFT BLANK]
10
11
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be duly executed as of the day and year first above written.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx, M.D.
Title: Chairman and Chief Executive
Officer
PROMETHEAN INVESTMENT GROUP LLC
By: /s/ Xxxxx X. X'Xxxxx, Xx.
-----------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Title: Managing Member
HFTP INVESTMENTS LLC
By: /s/ Xxxxx X. X'Xxxxx, Xx.
-----------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Title: Managing Member
for: Promethean Investment Group LLC
Manager to: HFTP Investment LLC
12
EXHIBIT A
N 8820 [ARIAD LOGO] 13290
N 8820 ***1078038*
ARIAD PHARMACEUTICALS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK ARINC
THIS CERTIFICATE IS TRANSFERABLE SEE REVERSE FOR CERTAIN DEFINITIONS,
IN BOSTON OR IN NEW YORK CITY LIMITATIONS AND RESTRICTIONS
ON TRANSFER
THIS CERTIFIES THAT CUSIP 04033A 10 0
HFTP INVESTMENTS LLC
*1078038*******
**1078038******
***1078038*****
****1078038****
*****1078038***
*ONE MILLION SEVENTY-EIGHT THOUSAND THIRTY-EIGHT*
is the owner of
Fully paid and non-assessable shares of the COMMON STOCK, $.001 par value, of
==========================ARIAD Pharmaceuticals, Inc.===========================
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this certificate properly
endorsed.
This certificate and the shares of Common Stock represented hereby are received
and held subject to the laws of the State of Delaware and to the Certificate of
Incorporation and the Bylaws of the Corporation, each as from time to time
amended, and the owner of this certificate by accepting the same expressly
assents thereto. This certificate is not valid unless countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by
the facsimile signatures of its duly authorized officers and a facsimile of its
corporate seal to be hereunto affixed.
ARIAD PHARMACEUTICALS, INC.
Dated:
ARIAD PHARMACEUTICALS, INC.
CORPORATE
01/07/00 Xxx X. XxXxxxxx SEAL Xxxxxx Xxxxxx
1991
DELAWARE
TREASURER CHAIRMAN AND CHIEF EXECUTIVE OFFICER
COUNTERSIGNED
STATE STREET BANK AND TRUST COMPANY
(BOSTON)
By: TRANSFER AGENT
[ILLEGIBLE SIGNATURE]
AUTHORIZED SIGNATURE
13
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT-- ____________
(CUST)
Custodian ________________
Minor
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as
tenants in common Act ______________________
(State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
For value received, the holder identified on the face of this certificate
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
_____________________________________________________________________________
_____________________________________________________________________________
_________________________________________________________________________shares
of the common stock represented by this certificate, and do hereby irrevocably
constitute and appoint the duly authorized transfer agent of the Corporation,
attorney-in-fact to transfer such common stock on the books of the Corporation
with full power of substitution in the premises.
Dated:______________________________ _______________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the certificate, in
every particular, without alteration or
enlargement, or any changes whatsoever.
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN ARIAD PHARMACEUTICALS, INC. AND STATE
STREET BANK AND TRUST COMPANY, DATED AS OF DECEMBER 30, 1994 (THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF ARIAD
PHARMACEUTICALS, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. ARIAD PHARMACEUTICALS, INC. WILL MAIL
TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE
PROMPTLY FOLLOWING RECEIPT OF A WRITTEN REQUEST THEREFOR, UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.
00
XXXXXXX X
XXXXXX XXXXXX DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------
Xx. 00 Xxx. 00000 (KMW)
ARIAD PHARMACEUTICALS, INC., STIPULATION
AND ORDER OF
Plaintiff, DISCONTINUANCE
WITH PREJUDICE
- against -
PROMETHEAN INVESTMENT GROUP LLC, and
HFTP INVESTMENTS LLC,
Defendants.
--------------------------------
IT IS HEREBY STIPULATED AND AGREED that this action is
dismissed with prejudice and without costs as to all parties.
Dated: New York, New York
January 14, 2000
------------------------------ -------------------------------------------
Xxxxx X. Xxxxxx (IW-1168) Xxxxx X. Xxxxxx (AP-7805)
Weil, Gotshal & Xxxxxx LLP Xxxxxxx Xxxxx (MB-0354)
000 Xxxxx Xxxxxx Xxxx, Scholer, Fierman, Xxxx & Xxxxxxx, XXX
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxx Xxxxxx
(000) 000-0000 Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Counsel for Plaintiff
ARIAD Pharmaceuticals, Inc. Counsel for Defendants
Promethean Investment Group LLC
and HFTP Investments LLC
SO ORDERED:
---------------------------------
Xxxxx X. Xxxx
United States District Judge
15
EXHIBIT C
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
HFTP INVESTMENTS, L.L.C., )
a New York limited liability company, )
)
Plaintiff, )
)
v. ) C.A. No. 17501-NC
)
ARIAD PHARMACEUTICALS, INC., )
a Delaware corporation, )
)
Defendant. )
STIPULATION AND ORDER OF DISMISSAL
IT IS HEREBY STIPULATED AND AGREED, by and between the parties hereto,
that the above-captioned proceeding shall be and hereby is dismissed with
prejudice, each side to bear its respective costs.
Of Counsel:
-------------------------------------
Xxxxx X. Xxxxxx
Xxxxxxx Xxxxx Xxxxx Xxxxxxx
Xxxx, Scholer, Fierman, Xxxx & Xxxxx Xxxxxxxxxxx Xxxxxx LLP
Handler, LLP 000 Xxxxxxxx Xxxxxx
000 Xxxx Xxxxxx X.X. Xxx 000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (000) 000-0000
Attorneys for Plaintiff HFTP
Investments, LLC
Of Counsel:
-------------------------------------
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
Xxxx, Gotshal & Xxxxxx LLP Xxxxxxxx, Xxxxxx & Finger
000 Xxxxx Xxxxxx Xxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 X.X. Xxx 000
(000) 000-0000 Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
Dated: January 14, 2000 Attorneys for Defendant ARIAD
Pharmaceuticals, Inc.
SO ORDERED, this ____ day of January 2000.
-------------------------------------
Vice Chancellor
16
EXHIBIT D
OFFICER'S CERTIFICATE
Xxxxx X. X'Xxxxx, Xx., hereby certifies as follows:
1. I am the Managing Member of Promethean Investment Group
LLC.
2. I submit this certification pursuant to Section 2.b. of the
Settlement and Purchase Agreement dated as of January 14, 2000 (the
"Agreement"), and do so recognizing that ARIAD Pharmaceuticals, Inc. ("ARIAD"),
on behalf of itself and its shareholders, is relying upon the completeness and
accuracy of this certification and that the provision of a complete and accurate
certification is a requirement of the Agreement.
3. I hereby certify, based on personal knowledge, that
Promethean Group has complied with all of the provisions of Sections 2.a. and
2.b. of the Agreement, including but not limited to the following: [i]
Promethean Group (as such term is defined in the Agreement) has sold all of the
Settlement Shares (as such term is defined in the Agreement); [ii] all sales of
the Settlement Shares were effected not later than the close of business on the
Trading Termination Date (as defined in the Agreement); and [iii] Promethean
Group has covered the entire Short Position (as defined in the Agreement); and
all of Promethean Group's sales and purchases of common stock of ARIAD in
accordance with Section 2.b. were effected on the NASDAQ - NMS, not later than
the close of business on the Trading Termination Date.
----------------------------------
Xxxxx X. X'Xxxxx, Xx.
17
EXHIBIT E
ARIAD NEWS RELEASE
ARIAD SETTLES LEGAL ACTIONS WITH
PROMETHEAN GROUP
CAMBRIDGE, MA, JANUARY 18, 2000 -- ARIAD Pharmaceuticals, Inc. (Nasdaq: "ARIA")
today announced that it has agreed with the Promethean Group to settle the
previously announced legal actions between them pending in Delaware and New
York. As part of, and subject to the terms of, the settlement, ARIAD agreed to
honor Promethean's notice to convert 612 shares of ARIAD's series C convertible
preferred stock into 1,078,038 shares of ARIAD common stock, and Promethean
agreed to completely cover its 1,078,100 share short position in ARIAD common
stock by February 7, 2000. In addition, ARIAD acquired Promethean's remaining
2,388 shares of ARIAD's series C preferred stock and Promethean's right to
purchase additional shares of series C preferred stock from ARIAD, for the
aggregate purchase price of $6.925 million. As part of the settlement, the
parties also agreed to a four-year standstill agreement.
Pursuant to the settlement, all allegations against Promethean by ARIAD and all
claims by Promethean against ARIAD are being dismissed with prejudice.
After the closing of this agreement, ARIAD expects to have approximately 23.1
million shares of common stock outstanding and no shares of preferred stock
outstanding. As of December 15, 1999, the total outstanding short position in
ARIAD common stock as reported by Nasdaq was 1,088,158 shares.
"ARIAD is proceeding with this settlement to avoid the distraction and expense
of litigation and to allow us to focus on ARIAD's important business and product
development opportunities," said Xxxxxx X. Xxxxxx, M.D., chairman and chief
executive officer of ARIAD. "Combined with the recent sale of our interest in
our genomics joint venture to Aventis, the acquisition of rights to our
osteoporosis drug candidates, and very exciting progress in our regulated gene
therapy program, this represents an important step in redefining our business
and financial structure," added Xx. Xxxxxx.
ARIAD Pharmaceuticals (xxx.xxxxx.xxx) 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.
18
Some of the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties, including, but not limited to,
risks and uncertainties regarding the successful completion of the transaction
described above, 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 discussed 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 Exchange Commission.
19
EXHIBIT F
PROMETHEAN PRESS RELEASE
PROMETHEAN SETTLES LEGAL ACTIONS
WITH ARIAD PHARMACEUTICALS, INC.
Promethean announced today that it settled the lawsuit it
brought against ARIAD in Delaware and ARIAD's counter-suit in New York.
Xxxxx X. X'Xxxxx, Xx., Promethean's principal owner, said that
he was pleased that Promethean had achieved its objectives through the
settlement.
O'Brien noted that Promethean had maintained all along that
there was no substance to ARIAD's claims of market manipulation or xxxxxxx
xxxxxxx. X'Xxxxx added that, at Promethean's request, its trading records were
examined by a former SEC official with more than 20 years experience with the
Division of Market Regulation investigating, among other things, suspected
market manipulations, and he concluded that there was no evidence of any
manipulation or xxxxxxx xxxxxxx by Promethean.
