EXHIBIT 10.1
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of March 12, 2003, by and among ARIAD
PHARMACEUTICALS, INC., a Delaware corporation, ARIAD CORPORATION, a Delaware
corporation, and ARIAD GENE THERAPEUTICS, INC., a Delaware corporation
(hereinafter sometimes referred to collectively as the "BORROWERS" and each
singly as a "BORROWER") and CITIZENS BANK OF MASSACHUSETTS, a Massachusetts bank
(the "LENDER").
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
All capitalized terms not defined herein but defined in APPENDIX A
attached hereto shall have the meanings given to such terms in Appendix A
attached hereto. All terms defined in this Agreement shall also have such
defined meanings when used in the other Financing Documents or any certificate
or other document made or delivered pursuant hereto or thereto, unless otherwise
specified herein or therein.
All references in this Agreement to Sections, Subsections, Exhibits,
Schedules and Appendices refer to the Sections, Subsections, Exhibits, Schedules
and Appendices of this Agreement unless otherwise indicated. All Exhibits,
Schedules and Appendices attached to this Agreement are incorporated herein and
made a part hereof.
SECTION 2. THE LOAN.
2.1 General.
(a) Subject to the terms and conditions hereof, the Lender
agrees to make a loan (the "LOAN") to the Borrowers on the Closing Date
in the original principal amount of Seven Million Five Hundred Thousand
and 00/100 Dollars ($7,500,000.00). The principal amount of the Loan
may from time to time be advanced as or converted to (i) LIBOR Loans,
(ii) Prime Rate Loans or (iii) a combination thereof, as determined by
the Borrowers and notified to the Lender in accordance with subsections
2.2 and 2.8.
(b) On the Closing Date, the Borrowers shall execute and
deliver to the Lender a certain Term Note of the Borrowers dated as of
the Closing Date evidencing the Loan, substantially in the form of
EXHIBIT A attached hereto (the "NOTE"). The Lender is hereby authorized
to record the date, Type and amount of the Loan made, the date and
amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to
another Type and, in the case of LIBOR Loans, the length of each
Interest Period and LIBOR Rate with respect thereto, on the schedule
(or any continuation of the schedule) annexed to and constituting a
part of the Note and any such recordation shall, to the extent
permitted by applicable law, constitute prima facie evidence of the
accuracy of the information so recorded (absent manifest error);
provided, however, that the failure to make any such recordation (or
any error therein) shall not affect the obligation of the Borrowers to
repay (with applicable interest) the Loan.
2.2 Procedure for Borrowing. If all or any part of the Loan is to be
initially LIBOR Loans, the Borrowers shall give the Lender irrevocable notice
thereof (which notice must be received by the Lender prior to 3:00 p.m., Boston,
Massachusetts time, three (3) Business Days prior to the Closing Date),
specifying (a) the amount of the Loan which is initially to be LIBOR Loans and
(b) the respective amounts thereof and the lengths of the initial Interest
Periods therefor. To the extent that the Borrowers do not deliver a notice
pursuant to the immediately preceding sentence, the Loan shall initially be
Prime Rate Loans. On the Closing Date, the Lender will credit the account of the
Borrowers on the books of the Lender with the amount so borrowed.
2.3 Use of Proceeds. The proceeds of the Loan shall be used by the
Borrowers to refinance existing indebtedness and for general corporate purposes.
2.4 Interest Rates.
(a) Each portion of the unpaid principal balance of the Loan
which is a LIBOR Loan shall bear interest, for each Interest Period
applicable thereto, at a rate per annum equal to the LIBOR Rate plus
2.00%.
(b) Each portion of the unpaid principal balance of the Loan
which is a Prime Rate Loan shall bear interest at a rate per annum
equal to the Prime Rate.
2.5 Payment of Term Loan. The Borrowers hereby unconditionally promise
to pay to the order of the Lender the principal amount of the Loan in
thirty-five monthly installments of One Hundred Twenty Five Thousand 00/100
Dollars ($125,000.00) commencing on April 30, 2003, and continuing on the last
day of each consecutive month thereafter until the Maturity Date. The Borrowers
hereby further agree to pay interest on the unpaid principal balance of the
Loan, in arrears, on each Interest Payment Date; provided, however, any such
interest accruing at the Late Rate shall be due and payable on demand. On the
Maturity Date (or such earlier date on which the Loan becomes due and payable
pursuant to subsection 7.1), the entire remaining outstanding balance of the
Loan (including, without limitation, all unpaid principal, all accrued but
unpaid interest and all unpaid fees, charges, costs and expenses) shall be
immediately due and payable in full.
2.6 Method of Payment. All payments (including prepayments) to be made
by the Borrowers hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 3:00 p.m., Boston, Massachusetts time, on the due date thereof to the Lender,
at the Lender's office specified in subsection 9.4 (or such other place as the
Lender may specify in writing from time to time), in Dollars and in immediately
available funds. Payments received by the Lender after such time shall be deemed
to have been received on the next Business Day. If any payment hereunder (other
than payments on LIBOR Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (and,
with respect to payments of principal, interest shall be payable thereon at the
then applicable rate during such extension) unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding
-2-
Business Day. The Borrowers hereby authorize the Lender to charge or debit any
deposit account of any Borrower with the Lender to effect any payment due
hereunder.
2.7 Prepayments.
(a) Optional Prepayment. The Borrowers may at any time and
from time to time prepay the Loan, in whole or in part, without premium
or penalty (other than as provided in subsection 2.16), upon
irrevocable notice to the Lender prior to 3:00 p.m., Boston,
Massachusetts time, one (1) Business Day prior to such prepayment,
specifying the date and amount of prepayment and whether the prepayment
is of LIBOR Loans, Prime Rate Loans or a combination thereof, and, if
of a combination thereof, the amount allocable to each; provided,
however, notwithstanding the foregoing to the contrary, no such notice
shall be required in connection with the prepayment of any Prime Rate
Loan. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with
any amounts payable pursuant to subsection 2.16. Amounts prepaid on
account of the Loan may not be reborrowed. Partial prepayments shall be
in the aggregate principal amount of One Hundred Thousand and 00/100
Dollars ($100,000.00) or a whole multiple of Fifty Thousand and 00/100
Dollars ($50,000.00) in excess thereof. No partial prepayment shall
postpone or extend the date on which any principal or interest is
otherwise due under any Loan hereunder.
(b) Application of Prepayments. All amounts received for the
prepayment of Loans shall be applied to the Obligations as follows, so
long as no Event of Default has occurred and is continuing: first, to
any fees, charges, costs and expenses then owed by any Borrower to the
Lender and second, to the unpaid principal balance of the Loan in
inverse order of maturity. The application of any prepayment pursuant
to this subsection shall be made first to the Prime Rate Loans and
second to the LIBOR Loans. Upon the occurrence and during the
continuation of any Event of Default, all amounts received for the
prepayment of Loans shall be applied to the Obligations in such manner
as the Lender may reasonably determine.
2.8 Conversion and Continuation Options.
(a) The Borrowers may elect from time to time to convert LIBOR
Loans to Prime Rate Loans by giving the Lender at least one (1)
Business Day's prior irrevocable notice of such election, provided that
any such conversion of LIBOR Loans may only be made on the last day of
an Interest Period with respect thereto (or on any other day if on the
date of such conversion the Borrowers pay to the Lender accrued
interest on such LIBOR Loans to the date of such conversion together
with all amounts payable under subsection 2.16). The Borrowers may
elect from time to time to convert Prime Rate Loans to LIBOR Loans by
giving the Lender at least three (3) Business Days' prior irrevocable
notice of such election. Any such notice of conversion to LIBOR Loans
shall specify the length of the initial Interest Period or Interest
Periods therefor. All or any part of outstanding LIBOR Loans and Prime
Rate Loans may be converted as provided herein; provided, however, that
(i) no Loan may be converted into a LIBOR Loan when any Event of
Default has occurred and is continuing and the Lender has determined
that such a conversion is not appropriate and (ii) no Loan may be
converted into a LIBOR Loan after the date that is one month prior to
the Maturity Date.
-3-
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrowers giving notice to the Lender, in accordance with the
applicable provisions of the term "Interest Period" set forth in
Appendix A, of the length of the next Interest Period to be applicable
to such Loans; provided, however, that no LIBOR Loan may be continued
as such (i) when any Event of Default has occurred and is continuing
and the Lender has determined that such a continuation is not
appropriate or (ii) after the date that is one month prior to the
maturity of the Loan; and provided further that if the Borrowers shall
fail to give such notice or if such continuation is not permitted, such
Loans shall be automatically converted to Prime Rate Loans on the last
day of such then expiring Interest Period.
2.9 Minimum Amounts and Maximum Number of LIBOR Loans. All borrowings,
conversions and continuations of LIBOR Loans and Prime Rate Loans hereunder and
all selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of the Loan comprising each LIBOR Loan shall be equal
to Five Hundred Thousand and 00/100 Dollars ($500,000.00) or a whole multiple of
One Hundred Thousand and 00/100 Dollars ($100,000.00) in excess thereof. In no
event shall there be more than Five (5) LIBOR Loans outstanding at any time.
2.10 Late Rate; Late Charge.
(a) Notwithstanding any provision contained in this Agreement
or any other Financing Document to the contrary, if all or a portion of
(i) the principal amount of the Loan, (ii) any interest payable thereon
or (iii) any fee or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise,
but taking into account any applicable grace period under subsection
Section 7(a)), such overdue amount shall bear interest at a rate per
annum (hereinafter referred to as the "LATE RATE") which is (x) in the
case of overdue principal, the rate that would otherwise be applicable
to the Loan under this Agreement, plus Three Percent (3.0%) or (y) in
the case of overdue interest, fees or other amounts due and payable
hereunder, the rate that would otherwise be applicable under this
Agreement to that portion of the unpaid principal amount of the Loan
that is a Prime Rate Loan, plus Three Percent (3.0%), in each case from
the date of such non-payment until such amount is paid in full (after
as well as before judgment).
(b) The Borrowers agree to pay, on demand and in addition to
all other amounts payable under this Agreement and the other Financing
Documents, a late charge on any payment that is more than ten (10)
calendar days late, which late charge shall be equal to Thirty Five and
00/100 Dollars ($35.00). The assessment or collection of late charges
is not intended and shall not be construed to permit payment of any
amount payable under this Agreement or any of the other Financing
Documents beyond the applicable due date thereof. The time period which
is allowed before the assessment of late charges is not intended and
shall not be construed as a grace or cure period with respect to
payment or performance of any obligation under this Agreement or any of
the other Financing Documents.
(c) Notwithstanding any provision contained in this Agreement
or any other Financing Document to the contrary, in no event shall the
amount paid or agreed to be
-4-
paid by the Borrowers (or any other Person) as interest or as a premium
on the Loan or any other Obligations exceed the highest lawful rate
permissible under any law applicable thereto.
2.11 Computation of Interest and Fees.
(a) Interest and all fees payable hereunder shall be computed
daily on the basis of a year of 360 days and paid for the number of
actual days for which due. The Lender shall as soon as practicable,
notify the Borrowers of each determination of a LIBOR Rate. Any change
in the interest rate on a Loan resulting from a change in the Prime
Rate or the LIBOR Reserve Requirement shall become effective as of the
opening of business on the day on which such change becomes effective.
The Lender shall, as soon as practicable, notify the Borrowers of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Lender
pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers in the absence of manifest error. The Lender
shall, at the request of the Borrowers, deliver to the Borrowers a
statement showing the quotations used by the Lender in determining any
interest rate hereunder.
2.12 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Lender shall have determined (which determination
shall be conclusive and binding upon the Borrowers) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the LIBOR Rate for such Interest
Period, or
(b) the Lender shall have determined (which determination
shall be conclusive and binding upon the Borrowers) that the LIBOR Rate
determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to the Lender of making or
maintaining its affected LIBOR Loans during such Interest Period,
the Lender shall give telecopy or telephonic notice thereof to the Borrowers as
soon as practicable thereafter. If such notice is given, (x) any LIBOR Loans
requested to be made on the first day of such Interest Period shall be made as
Prime Rate Loans, (y) any Prime Rate Loans that were to have been converted on
the first day of such Interest Period to LIBOR Loans shall be converted to or
continued as Prime Rate Loans and (z) any outstanding LIBOR Loans shall be
converted, on the first day of such Interest Period, to Prime Rate Loans. Until
such notice has been withdrawn by the Lender, no further LIBOR Loans shall be
made or continued as such, nor shall the Borrowers have the right to convert
Prime Rate Loans to LIBOR Loans.
2.13 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for the Lender to make or maintain
LIBOR Loans as contemplated by this Agreement, (a) the commitment of the Lender
hereunder to make LIBOR Loans, continue LIBOR Loans as such and convert Prime
Rate Loans to LIBOR Loans shall forthwith be suspended until such time as it
shall no longer be unlawful for the Lender to make or maintain LIBOR Loans as
contemplated by this Agreement and (b) the portion of the Lender's Loan then
outstanding as
-5-
LIBOR Loans, if any, shall be converted automatically to Prime Rate Loans on the
respective last days of the then current Interest Periods with respect to such
LIBOR Loans or within such earlier period as required by law. If any such
conversion of a LIBOR Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrowers shall pay to the
Lender such amounts, if any, as may be required pursuant to subsection 2.16.
2.14 Increased Costs; Changes in Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by the
Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority, in each
case made subsequent to the date hereof:
(i) shall subject the Lender to any tax of any
kind whatsoever with respect to this Agreement, the Note or
any LIBOR Loan made by it, or change the basis of taxation of
payments to the Lender in respect thereof (except for
Non-Excluded Taxes, changes in the rate of tax on the overall
net income of the Lender and taxes imposed as a result of any
future, present or former connection between the Lender and
the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof
or therein (other than any such connection arising solely from
the Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this
Agreement or the Note));
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of the Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on the Lender any other
condition;
and the result of any of the foregoing is to increase the cost to the
Lender, by an amount which the Lender reasonably deems to be material,
of making, converting into, continuing or maintaining LIBOR Loans or to
reduce any amount receivable hereunder in respect thereof, then, in any
such case, the Borrowers shall, within ten (10) Business Days after
receipt by the Borrowers of the Lender's written demand, pay the Lender
such additional amount or amounts as will compensate the Lender for
such increased cost or reduced amount receivable. If the Lender has
demanded such compensation under this subsection with respect to any
LIBOR Loan, the Borrowers shall have the option to convert immediately
such LIBOR Loan into a Prime Rate Loan until the circumstances giving
rise to such demand for compensation no longer apply; provided,
however, that (i) no such conversion shall affect the Borrowers'
obligation to pay compensation as provided herein which is due with
respect to the period prior to such conversion and (ii) on the date of
such conversion the Borrowers shall pay to the Lender accrued interest
on such LIBOR Loan to the date of conversion, together with any amounts
payable pursuant to subsection 2.16.
-6-
(b) If the Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or
in the interpretation or application thereof or compliance by the
Lender or any corporation controlling the Lender with any request or
directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority, in each case made subsequent
to the date hereof, shall have the effect of reducing the rate of
return on the Lender's or such corporation's capital as a consequence
of its obligations hereunder to a level below that which the Lender or
such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's or such
corporation's policies with respect to capital adequacy) by an amount
reasonably deemed by the Lender to be material, then from time to time,
within ten (10) Business Days after receipt by the Borrowers of the
Lender's written demand, the Borrowers shall pay to the Lender such
additional amount or amounts as will compensate the Lender for such
reduction.
2.15 Taxes.
(a) All payments made by the Borrowers under this Agreement
and the Note shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Lender as a result of any future, present or former connection between
the Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Lender
having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or the Note or any other
Financing Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("NON-EXCLUDED TAXES")
are required to be withheld from any amounts payable to the Lender
hereunder or under the Note, the amounts so payable to the Lender shall
be increased ("INCREASED AMOUNTS") to the extent necessary to yield to
the Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Non-Excluded Taxes are
payable by the Borrowers, the Borrowers shall promptly send to the
Lender, a certified copy of an original official receipt received by
the Borrowers showing payment thereof or other evidence of remittance
of Non-Excluded Taxes reasonably acceptable to the Lender. If the
Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fail to remit to the Lender the
required receipts or other reasonably acceptable evidence, the
Borrowers shall indemnify the Lender for any incremental taxes,
interest or penalties that may become payable by the Lender as a result
of any such failure. The Borrowers shall indemnify the Lender for the
amount of Non-Excluded Taxes paid by the Lender, and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. The agreements in this subsection 2.15 shall survive
the termination of this Agreement and the payment of the Loan and all
other amounts payable hereunder.
(b) If the Lender shall become aware that it is entitled to
claim a refund from a Governmental Authority in respect of Non-Excluded
Taxes as to which it has been indemnified by the Borrowers, or with
respect to which the Borrowers have paid
-7-
Increased Amounts, pursuant to this subsection, it shall promptly
notify the Borrowers of the availability of such refund claim and shall
make the appropriate claim to such Governmental Authority for such
refund. If the Lender receives a refund (including pursuant to a claim
for refund made pursuant to the preceding sentence) in respect of any
Non-Excluded Tax as to which it has been indemnified by the Borrowers,
or with respect to which the Borrowers have paid Increased Amounts
pursuant to this subsection, it shall within thirty (30) days from the
date of such receipt pay over such refund to the Borrowers, net of all
out-of-pocket third-party expenses of the Lender.
2.16 Breakage - Indemnity. The Borrowers agree to indemnify the Lender
and to hold the Lender harmless from any loss or expense which the Lender may
sustain or incur as a consequence of (a) default by the Borrowers in making a
borrowing of, conversion into or continuation of LIBOR Loans after the Borrowers
have given a notice requesting the same in accordance with the provisions of
this Agreement, (b) default by the Borrowers in making any prepayment after the
Borrowers have given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of LIBOR Loans or converting any
LIBOR Loans to Prime Rate Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the last day of the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such LIBOR Loans provided for herein over (ii)
the amount of interest (as reasonably determined by the Lender) which would have
accrued to the Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the London interbank market. This
covenant shall survive the termination of this Agreement and the payment of the
Loan and all other amounts payable hereunder.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Agreement and the agreement of the Lender to
make the initial Extension of Credit requested to be made by it is subject to
the satisfaction, immediately prior to or concurrently with the making of such
Extension of Credit on the Closing Date, of the following conditions precedent:
3.1 Financing Documents. The Lender shall have received the following
Financing Documents, each as duly executed by the parties thereto, with their
signatures properly witnessed and notarized thereon where indicated: (i) this
Agreement; (ii) the Note conforming to the requirements hereof; and (iii) the
Security Agreements.
3.2 Actions to Perfect Liens. The Lender shall have received evidence
in form and substance reasonably satisfactory to it that all filings, recordings
and registrations, including, without limitation, the filing of duly executed
financing statements on form UCC-1, necessary or, in the opinion of the Lender,
desirable to perfect the Liens created by the Security Documents shall have been
completed (or, to the extent that any such filings, recordings, registrations
and other actions shall not have been completed, arrangements satisfactory to
the Lender for the completion thereof shall have been made).
-8-
3.3 Intentionally Omitted.
3.4 Lien Searches. The Lender shall have received the results of a
recent search by a Person reasonably satisfactory to the Lender, of the UCC,
judgment and tax lien filings which may have been filed with respect to personal
property of the Borrower and each of its Subsidiaries in the jurisdictions set
forth in APPENDIX B, and the results of such search shall be satisfactory to the
Lender.
3.5 Payoff Letters. The Lender shall have received payoff letters from
Transamerica Business Credit Corporation, GE Capital Corporation and Fleet
National Bank, setting forth in reasonable detail the total amount of
Indebtedness owed by the Borrowers to said lenders as of the Closing Date,
together with appropriate wire instructions attached thereto.
3.6 UCC-3 Termination Statements. The Lender shall have received UCC-3
termination statements and any other instrument necessary to terminate the Liens
granted by the Borrowers to any Person (other than Permitted Liens) (or, to the
extent that any such UCC-3 termination statements or any other instrument shall
not have been obtained and filed, arrangements satisfactory to the Lender for
the obtaining and filing thereof shall have been made).
3.7 Corporate Proceedings of the Borrowers. The Lender shall have
received a copy of the resolutions, in form and substance satisfactory to the
Lender, of the Board of Directors of each Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the other Financing
Documents to which it is a party, (ii) the Extensions of Credit contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Security Documents to which it is a party, all as certified by the Secretary or
an Assistant Secretary of each Borrowers as of the Closing Date, which
certificates shall be in form and substance reasonably satisfactory to the
Lender and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
3.8 Borrowers Incumbency Certificates. The Lender shall have received a
certificate from each of the Borrowers, dated as of the Closing Date, as to the
incumbency and signature of the officers of such Borrower executing any
Financing Document reasonably satisfactory in form and substance to the Lender,
executed by the President or any Vice President and the Secretary or an
Assistant Secretary of such Borrower.
3.9 Corporate Documents. The Lender shall have received true and
complete copies of the Certificate of Incorporation and By-Laws of each of the
Borrowers, as certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of each of the Borrowers.
3.10 Legal Existence, Good Standing, Tax Good Standing and Foreign
Qualification Certificates. The Lender shall have received certificates of legal
existence, good standing, tax good standing and foreign qualification for each
of the Borrowers, all of recent date issued by the appropriate Governmental
Authorities.
3.11 Insurance. The Lender shall have received evidence in form and
substance satisfactory to it that all of the requirements of subsection 5.5 and
those Sections of the Security Documents requiring the maintenance of insurance
shall have been satisfied.
-9-
3.12 December 31, 2002 Financial Statements. The Lender shall have
received the audited consolidated financial statements of the Borrowers for the
year ended December 31, 2002 without a "going concern" or like qualification or
exception, or a qualification arising out of the scope of the audit, prepared by
Deloitte & Touche LLP in a draft form subject only to immaterial changes. A
change in the auditors' opinion shall constitute a material change under this
subsection.
3.13 Legal Opinion. The Lender shall have received an executed legal
opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the
Borrowers, covering such matters related to the transactions contemplated by
this Agreement and the other Financing Documents as the Lender may reasonably
request. Such legal opinion shall be in a form and substance reasonably
acceptable to the Lender and its counsel.
3.14 Fees and Expenses The Lender shall have received reimbursement or
payment of (i) all reasonable and documented legal fees incurred by the Lender
in connection with the transactions contemplated herein, and (ii) all other
reasonable and documented out-of-pocket costs and expenses incurred by the
Lender in connection with the transactions contemplated herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
To induce the Lender to enter into this Agreement and to make the Loan,
the Borrowers hereby jointly and severally represent and warrant to the Lender
that, except as otherwise described in the MASTER DISCLOSURE SCHEDULE attached
hereto:
4.1 Financial Condition. The Borrowers have furnished to the Lender the
financial statements of the Borrowers for the years ended December 31, 2000,
December 31, 2001 and December 31, 2002 (collectively, the "INITIAL FINANCIAL
STATEMENTS"). The Initial Financial Statements were prepared in accordance with
GAAP, consistently maintained and applied throughout the periods covered thereby
(except as may be noted therein) and fairly present the financial condition of
the Borrowers on the respective dates thereof and the results of the Borrowers'
operations for the respective periods covered thereby.
4.2 No Change. Since December 31, 2002, (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, (b) there has been no sale, transfer or other
disposition by the Borrowers of any material part of their respective businesses
or properties and no purchase or other acquisition of any business or property
(including any Capital Stock of any Borrower) material in relation to the
financial condition of the Borrowers on December 31, 2002, and (c) no dividends
or other distributions have been declared, paid or made upon the Capital Stock
of any Borrower (other than those dividends and distributions permitted pursuant
to subsection 6.9 nor has any of the Capital Stock of any Borrower been
redeemed, retired, purchased or otherwise acquired for value by such Borrower.
4.3 Existence; Compliance with Law. Each of the Borrowers (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified or licensed
to do business as a foreign company and in good standing under the laws of each
-10-
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except where the failure to be so
qualified and/or in good standing, in the aggregate could not reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law and applicable Charter Documents except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. Each of the
Borrowers has the power and authority, and the legal right, to make, deliver and
perform the Financing Documents to which it is a party and, to borrow hereunder.
Each of the Borrowers has taken all necessary action to authorize the Loan on
the terms and conditions of this Agreement and the Note and to authorize the
execution, delivery and performance by it of the Financing Documents to which it
is a party. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
to be obtained or made by any Borrower in connection with the Loan hereunder or
with the execution, delivery or performance by such Borrower or the validity or
enforceability with respect to or against such Borrower, as the case may be, of
the Financing Documents to which such Borrower is a party (other than the
filings of Uniform Commercial Code financing statements in order to perfect the
security interest that can be perfected by such filings). Each of the Financing
Documents, when executed and delivered, will constitute a legal, valid and
binding obligation of each of the Borrowers enforceable against each of them to
the extent that it is a party thereto, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of the
Financing Documents, the Loan hereunder and the use of the proceeds thereof by
the Borrowers will not violate any Requirement of Law, Charter Document or
Contractual Obligation of any Borrower which could reasonably be expected to
have a Material Adverse Effect and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law, Charter Document or
Contractual Obligation other than as contemplated in or permitted by the
Financing Documents.
4.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrowers, threatened by or against any Borrower or against any
of their respective properties or revenues which has a reasonable possibility of
an adverse determination, and if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. None of the Borrowers is in default under or with
respect to any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing hereunder.
4.8 Ownership of Property; Liens. Each of the Borrowers has good record
and marketable title in fee simple to, or a valid leasehold interest in, all of
its real property except for such matters as do not materially adversely affect
the use of the property in the conduct of the business as currently conducted,
and good title to, or a valid leasehold interest in, all its other material
property, and none of such property is subject to any Lien (other than Permitted
Liens). Set forth on the Master Disclosure Schedule is a true and complete list
of all of real property
-11-
owned or leased by the Borrowers as of the Closing Date and all Liens granted by
the Borrowers in respect of any real property owned or leased by the Borrowers
or any of them as of the Closing Date.
4.9 Intellectual Property. (a) Each of the Borrowers owns, or is
licensed to use, all Intellectual Property necessary for the conduct of its
business except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect and (b) no claim of
which any Borrower has been given notice has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Borrower know of any valid basis for any such claim, except for such claims
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation applicable to any Borrower could reasonably be expected to have a
Material Adverse Effect.
4.11 Taxes. Each Borrower has filed or caused to be filed all tax
returns which, to the knowledge of such Borrower, are required to be filed and
have paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property in respect of such periods
and all other material taxes imposed on it or any of its property by any
Governmental Authority (other than any taxes the amount or validity of which are
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Borrowers and other than any taxes which in the aggregate would not have a
Material Adverse Effect) in respect of such periods.
4.12 Federal Regulations. No part of the proceeds of any Loan will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulations G, U or X of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. If requested by the Lender, the Borrower will furnish to the Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.
4.13 ERISA. Each Borrower and each Commonly Controlled Entity is in
compliance in all material respects with ERISA and the provisions of the Tax
Code applicable to any Plans. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Tax Code or
Section 302 of ERISA) has occurred with respect to any Plan. Neither any
Borrower nor any Commonly Controlled Entity has incurred any liability to the
PBGC over and above premiums which are required by law and which would
constitute a Material Adverse Effect. Neither any Borrower nor any Commonly
Controlled Entity has terminated any Plan in a manner which could result in the
imposition of a Lien on the property of any Borrower.
4.14 Investment Company Act; Other Regulations. None of the Borrowers
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended. None of the Borrowers is subject to regulation under any
Federal or State statute or regulation which limits its ability to incur
Indebtedness as contemplated herein.
-12-
4.15 Subsidiaries. Set forth on the Master Disclosure Schedule is a
true and complete list of all of the Subsidiaries of each of the Borrowers as of
the Closing Date.
4.16 Environmental Matters. Except to the extent that the inaccuracy of
any of the following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, and to the knowledge of any Responsible Officer of any
Borrower:
(a) The facilities and properties owned, leased or operated by
any Borrower does not contain any Hazardous Materials in amounts or
concentrations which (i) constitute a violation of, or (ii) could give
rise to any liability under, any Environmental Law or could interfere
with the continued operation of the facilities and properties owned,
leased or operated by any of the Borrowers or could reasonably be
expected to impair the fair saleable value thereof.
(b) The Borrowers, together with all of the facilities and
properties owned, leased or operated by any of the Borrowers, are in
compliance, and to the knowledge of the Borrowers have in the last
three years been in compliance with all applicable Environmental Laws
and applicable Environmental Permits, and the Borrowers reasonably
believe that they will be able to comply with all applicable
Environmental Laws in the future and renew or obtain all Environmental
Permits necessary for their operations in the future.
(c) None of the Borrowers has received any written notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the facilities and properties
owned, leased or operated by any Borrower or the business of any
Borrower, nor to the knowledge of the Borrowers, is such notice being
threatened.
(d) Hazardous Materials have not been transported, disposed
of, emitted, discharged, or otherwise released or threatened to be
released, nor has their disposal been arranged for, (i) by any Borrower
in violation of, or (ii) in a manner or to a location which could
reasonably be expected to give rise to liability under, any applicable
Environmental Law; nor have any Hazardous Materials been generated,
treated, stored, emitted, discharged or otherwise released or
threatened to be released or disposed of at, on or under any of the
facilities and properties owned, leased or operated by any Borrower in
violation of, or in a manner that could reasonably be expected to give
rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of any of the Borrowers,
threatened, under any Environmental Law to which any Borrower is or to
the knowledge of any of the Borrowers will be named as a party, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to any Borrower, or any of the facilities and properties owned,
leased or operated by any Borrower.
4.17 Solvency. As of the Closing Date, after giving effect to the
transactions contemplated to occur on the Closing Date, each of the Borrowers is
Solvent.
-13-
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrowers hereby jointly and severally covenant and agree that so
long as all or any portion of the Loan is outstanding, that:
5.1 Financial Statements. The Borrowers shall furnish to the Lender the
following financial statements:
(a) As soon as available, but in any event within ninety (90)
days after the end of each fiscal year of the Borrowers, a copy of the
audited consolidated balance sheet of the Borrowers as at the end of
such fiscal year and the related audited consolidated statements of
income and retained earnings and of cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or a qualification arising out of the scope
of the audit, by Deloitte & Touche LLP or such other independent
certified public accountants reasonably satisfactory to the Lender (it
being understood that the requirements of the provisions of this clause
(a) for any fiscal year may be satisfied by delivery of a copy of ARIAD
Pharmaceuticals, Inc.'s annual report on Form 10-K for such fiscal
year); and
(b) As soon as available, but in any event not later than
forty-five (45) days after the end of each of the first 3 quarterly
periods of each fiscal year of the Borrowers, the management-prepared
consolidated balance sheet of the Borrowers as at the end of such
quarter and the related management-prepared consolidated statements of
income and retained earnings and of cash flows of the Borrowers for
such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer of each Borrower
as being fairly stated in all material respects (subject to normal
year-end audit adjustments) (it being understood that the requirements
of the provisions of this clause (b) for any quarterly period may be
satisfied by delivery of a copy of ARIAD Pharmaceuticals, Inc.'s
quarterly report on Form 10-Q for such fiscal year).
(c) Concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and 5.1(b), the Borrowers shall each
furnish to the Lender a compliance certificate ("COMPLIANCE
CERTIFICATE"), signed by the respective Chief Financial Officer of each
Borrower, certifying that as of the end of such quarter the Borrowers
are in full compliance with the terms and conditions of this Agreement.
Such Compliance Certificate shall be in the form attached hereto as
EXHIBIT B.
(d) As soon as available, but in any event, within ten (10)
days after the end of each month, a cash report summarizing the
Borrowers' cash investments in the form attached hereto as EXHIBIT C.
(e) As soon as available, but in any event, within forty five
(45) days after the issuance thereof, the Borrowers shall each furnish
to the Lender copies of such other financial statements, proxy
materials and reports as it shall send or make available to its
stockholders, and promptly upon the filing thereof, copies of all
reports and materials which any of the Borrowers file with any
governmental commission (including, without limitation the SEC),
department or agency or with any domestic or foreign stock
-14-
exchange or with the NASDAQ, including without limitation, copies of
(i) any registration statements, prospectuses and any amendments and
supplements thereto, and any regular and periodic reports (including,
without limitation, reports on Form 10-K, Form 10-Q and Form 8-K) filed
by ARIAD Pharmaceuticals, Inc. with the SEC or any domestic or foreign
stock exchange or with the NASDAQ; and (ii) any letter of comment or
correspondence with respect to filings or compliance matters sent to
any of the Borrowers by the SEC or the NASDAQ; provided that the
foregoing provisions shall not apply to reports, materials, letters or
correspondence (other than those filed with or received from the SEC)
filed or received by any of the Borrowers in the ordinary course of
business or which otherwise do not involve matters that could result in
a Material Adverse Effect.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or Responsible Officer, as the
case may be, and disclosed therein). For purposes of this Agreement, financial
statements shall be deemed delivered upon being posted on the Electronic Data
Gathering Analysis and Retrieval System.
5.2 Certificates; Other Information. The Borrowers shall furnish to the
Lender the following certificates and other information:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) not later than forty-five (45) days after the beginning of
each fiscal year of the Borrowers, a copy of the projections by the
Borrowers of the balance sheet, income statement and cash flow
statement of each of the Borrowers for such fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer
of each of the Borrowers to the effect that such projections have been
prepared using assumptions believed in good faith by management of each
respective Borrower to be reasonable at the time made and that such
Responsible Officer has no reason to believe that such projections are
incorrect or misleading in any material respect;
(c) within fifteen (15) calendar days after the same are sent,
copies of all other financial statements and reports which the
Borrowers send to the holders of any class of its debt securities or
public equity securities and within fifteen (15) calendar days after
the same are filed, copies of all other financial statements and
reports which the Borrowers may make to, or file with, the SEC or any
successor or analogous Governmental Authority; and
The Borrowers shall furnish to the Lender promptly, such additional
financial and other information within the possession of the Borrowers as the
Lender may from time to time reasonably request. All information supplied to the
Lender pursuant to this Agreement shall be treated as confidential information.
-15-
5.3 Payment of Obligations. The Borrowers shall pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all of the material obligations of each such Borrower, except as
contemplated by this Agreement or where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrowers, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. The Borrowers
shall: (a) continue to engage in the business of the same general type as now
conducted by each Borrower; (b) preserve, renew and keep in full force and
effect their existence and take all reasonable action to maintain in all
material respects all rights, privileges and franchises necessary or desirable
in the normal conduct of their businesses except as otherwise permitted pursuant
to subsection 6.56; and (c) comply in all material respects with all Contractual
Obligations and Requirements of Law, except where (i) any such Contractual
Obligation is being contested in good faith, a bona fide dispute exists with
respect to any such Contractual Obligation or failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect,
and (ii) any such Requirement of Law is being contested in good faith and the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Each Borrower shall: (a) keep
all property material to the conduct of its business in good working order and
condition; (b) maintain insurance with financially sound and reputable insurance
companies on such of its property and in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and (c) furnish to the
Lender, upon written request, full information as to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions. The
Borrowers shall: (a) keep proper financial records in conformity with GAAP and
all Requirements of Law; (b) permit representatives of the Lender to visit and
inspect any of their properties and examine and make abstracts from any of their
books and records at any reasonable time, upon reasonable notice, once per year
if no Event of Default has occurred and is continuing and as often as may
reasonably be desired if an Event of Default has occurred and is continuing; and
(c) permit, upon reasonable notice during normal business hours, representatives
of the Lender to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers charged with
management and/or oversight of the financial affairs of the Borrower and its
Subsidiaries.
5.7 Notices. The Borrowers shall give prompt notice to the Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Borrower or (ii) litigation, investigation or
proceeding which may exist at any time between any Borrower and any
Governmental Authority, which in either case, if not cured, or resolved
or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Borrower in
which the amount involved is not covered by insurance or in which
injunctive or similar relief is sought
-16-
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect;
(d) the following events, as soon as possible and in any event
within thirty (30) days after any Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or any Borrower or any Commonly Controlled
Entity with respect to the withdrawal from, or the termination,
reorganization or insolvency of, any Plan; and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrowers propose to take with
respect thereto.
5.8 Environmental Laws. The Borrowers shall:
(a) comply with, and use reasonable efforts to ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use
reasonable efforts to ensure that all tenants and subtenants, if any,
obtain and comply with and maintain, any and all Environmental Permits
required by applicable Environmental Laws; and
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that the same are being contested in good
faith by appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse Effect.
5.9 Maintenance of Liens of the Security Documents. The Borrowers shall
promptly, upon the reasonable request of the Lender, at the sole cost and
expense of the Borrowers, execute, acknowledge and deliver, or cause the
execution, acknowledgement and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise reasonably deemed by the Lender necessary
or desirable for the continued validity, perfection and priority of the Liens on
the Collateral covered thereby.
5.10 Pledge of After Acquired Property. If at any time following the
Closing Date, any Borrower shall acquire property of any nature whatsoever
having a value in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) which
is intended by the terms of the applicable Security Document to be, but is not,
subject to the Liens created by the Security Documents, such Borrower shall, as
soon as possible and in no event later than thirty (30) days after the relevant
acquisition date and, to the extent permitted by applicable law, grant to the
Lender a first priority (subject to Permitted Liens) Lien on such property as
collateral security for the Obligations pursuant to documentation reasonably
satisfactory in form and substance to the Lender. The Borrowers, at their sole
expense, shall execute, acknowledge and deliver, or cause
-17-
the execution, acknowledgement and delivery of, and thereafter register, file or
record in an appropriate governmental office, any document or instrument
(including legal opinions, title insurance, consents and corporate documents)
and take all such actions reasonably deemed by the Lender to be necessary or
desirable to ensure the creation, priority and perfection of such Lien.
5.11 New Subsidiaries. The Borrowers shall cause, at their sole cost
and expense, each new Subsidiary of a Borrower created or acquired on or after
the date hereof, promptly upon such creation or acquisition, to execute and
deliver to the Lender the following agreements and documents, which agreements
and documents shall be in form and substance reasonably satisfactory to the
Lender: (a) a joinder agreement in such form as the Lender shall require
pursuant to which such new Domestic Subsidiary shall become a co-borrower
hereunder; (b) a security agreement in such form as the Lender shall require,
pursuant to which, such Domestic Subsidiary shall grant to the Lender a first
priority perfected security interest in all of its assets in order to secure the
full and prompt payment and performance of the Obligations; (c) any and all UCC
financing statements which the Lender deems necessary and appropriate in order
to perfect its first priority perfected security interests in all of the assets
of such Domestic Subsidiary; and (d) such other agreements, documents, financing
statements, instruments, opinions and certificates and completion of such other
matters, as the Lender may reasonably deem necessary or appropriate.
Promptly upon the creation or acquisition of any Foreign Subsidiary
created or acquired after the date hereof, the Borrowers shall cause, at their
sole cost and expense, 65% of the Capital Stock, membership interests and other
equity interests of each such Foreign Subsidiary, to be pledged to the Lender so
that the Lender has a first priority perfected security interest in all such
shares, membership interests and other equity interests. Such pledge shall be
pursuant to a pledge agreement in a form and substance reasonably satisfactory
to the Lender.
5.12 Depository Accounts. Each Borrower shall maintain the Lender as
its primary bank for all depository accounts.
5.13 Cash, Cash Equivalents, Marketable Securities and Investments.
(a) During the term of this Agreement, the Borrowers shall
maintain, as evidenced on their consolidated balance sheet, not less
than Ten Million and 00/100 Dollars ($10,000,000.00) in Unrestricted
Cash, unrestricted Cash Equivalents, and unrestricted marketable
securities (the "LIQUID ASSETS").
(b) Not less than Eighty-Five Percent (85%) of the Borrowers'
total Liquid Assets shall be invested through and held by the Treasury
Desk in Cash Equivalents or such other debt investments as are offered
through the Treasury Desk and which are consistent with the Borrowers'
current investment policy, a copy of which is attached hereto as
EXHIBIT D, all of such investments to be in book entry form with
maturity dates of not less than thirty (30) days (each singly, a
"TREASURY DESK INVESTMENT" and collectively, the "TREASURY DESK
INVESTMENTS").
(c) Each Maturing Treasury Desk Investment shall automatically
be renewed for a like period and on market terms unless the Borrowers
have notified the Lender of their intent to change the Treasury Desk
Investment. To institute such a change, the Borrower
-18-
shall, not less than two (2) Business Days prior to the maturity of
such Treasury Desk Investment, provide special instructions to the
Treasury Desk regarding the maturing Treasury Desk Investment. The
Borrowers shall confirm such instructions to the Treasury Desk and the
Lender the same day by e-mail notification in the form attached hereto
as EXHIBIT E (the "CONFIRMATION NOTIFICATION"). The Confirmation
Notification shall contain, in addition to standard instructions, a
representation and warranty that the execution of the requested
instructions shall not cause a breach of any of the covenants contained
in this Agreement.
SECTION 6. NEGATIVE COVENANTS.
The Borrowers hereby jointly and severally covenant and agree that so
long as all or any portion of the Loan is outstanding, that:
6.1 Limitation on Changes in Fiscal Year. The Borrowers shall not
change their fiscal year.
6.2 Limitation on Indebtedness. The Borrowers shall not create, incur,
assume or suffer to exist any Indebtedness, except:
(a) Indebtedness to the Lender arising under any of the
Financing Documents;
(b) in addition to the Indebtedness listed in the other
subsections of this Section 6.2, Indebtedness of the Borrowers, on a
consolidated basis, not to exceed Two Hundred Fifty Thousand and 00/100
Dollars in the aggregate.
(c) current liabilities which are incurred in the ordinary
course of business and which are not incurred through (i) the borrowing
of money or (ii) the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection
with normal purchases of goods and services;
(d) Indebtedness with respect to taxes, assessments,
governmental charges or levies which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrowers in
conformity with GAAP; and
(e) Indebtedness of any Borrower to any Subsidiary and of any
Subsidiary to any Borrower or any other Subsidiary, so long as such
Indebtedness (i) is subordinated in right of payment to all
Obligations; and (ii) has terms and conditions as the Lender may
reasonably require.
6.3 Limitation on Contingent Liabilities. The Borrowers shall not
assume, guarantee, endorse or otherwise become directly or contingently liable
(including without limitation, liable by way of agreement, contingent or
otherwise to purchase or provide funds for payment, to supply funds to or
otherwise invest in any debtor or otherwise to assure any creditor against any
loss) in connection with any Indebtedness of any other Person, except for
liabilities to the Lender arising under any of the Financing Documents.
-19-
6.4 Limitation on Liens. The Borrowers shall not create, incur, assume
or suffer to exist any Lien upon any of their properties, assets or revenues,
whether now owned or hereafter acquired, except for the following (hereinafter
referred to collectively as "PERMITTED LIENS"):
(a) Liens created pursuant to the Security Documents;
(b) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrowers in conformity with GAAP;
(c) statutory landlords' liens and carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in
the ordinary course of business for sums which are not overdue for a
period of more than sixty (60) days or which are being contested in
good faith by appropriate proceedings;
(d) judgment Liens created by or resulting from any litigation
or legal proceeding if released or bonded within thirty (30) days of
the date of creation thereof, unless such litigation or legal
proceeding could reasonably be expected to have a Material Adverse
Effect;
(e) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(f) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(g) Liens consisting of easements, zoning restrictions,
flowage rights, rights-of-way, covenants, conditions, restrictions,
reservations, licenses, agreements and other similar matters, which, in
the aggregate, are not substantial in amount and which do not in any
case materially detract from the use of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(h) Liens to secure Indebtedness for Purchase Money
Indebtedness to the extent that such Indebtedness is permitted under
subsection 6.2(b); provided, however, that (i) each such Lien is given
only to secure the purchase price of the property which is the subject
of such Purchase Money Indebtedness, does not extend to any other
property and is given at the time of acquisition of the property; and
(ii) the Purchase Money Indebtedness secured thereby does not exceed
the lesser of the cost of such property or its fair market value at the
time of acquisition;
(i) Liens in favor of lessors under Capitalized Leases to the
extent that the Capitalized Lease Obligations thereunder is
Indebtedness permitted under subsection 6.2; provided, however, that
each such Lien extends only to the property which is subject of such
Capitalized Lease, is given only to secure the Capitalized Lease
Obligations under such Capitalized Lease, and is given at the
commencement date of such Capitalized Lease; and
-20-
(j) Liens in existence on the date hereof listed on the Master
Disclosure Schedule; provided, however, that no such Lien encumbers any
additional property after the Closing Date and that the amount of
Indebtedness secured thereby shall not subsequently be increased.
6.5 Limitation on Negative Pledges. The Borrowers shall not enter into
with any Person any agreement (other than this Agreement and the other Financing
Documents) which prohibits or limits the ability of the Borrowers to create,
incur, assume or suffer to exist any Lien upon any of their properties, assets
or revenues, whether now owned or hereafter acquired.
6.6 Limitation on Fundamental Changes. The Borrowers shall not enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve themselves (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of
their property, business or assets, or make any material change in their present
method of conducting business, except pursuant to any sale of assets expressly
permitted by subsection 6.7.
6.7 Limitation on Sale of Assets. The Borrowers shall not convey, sell,
lease, assign, transfer or otherwise dispose of any of their properties,
businesses or assets (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, except:
(a) the conveyance, sale, lease, assignment, transfer or other
disposition of Obsolete Property or surplus property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) the sale or discount for fair value, without recourse and
consistent with sound business practices of accounts receivable arising
in the ordinary course of business in connection with the compromise or
collection thereof;
(d) the partnering or collaboration with respect to, or the
licensing, sublicensing or other sharing of, Intellectual Property in
the ordinary course of business; and
(e) leases or subleases of property not materially interfering
with the ordinary course of conduct of the business of the Borrower and
its Subsidiaries.
6.8 Limitation on Sales and Leasebacks. The Borrowers shall not enter
into any arrangement with any Person providing for the leasing by any such
Borrower of real or personal property which has been or is to be sold or
transferred by such Borrower to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of such Borrower.
6.9 Restricted Payments. The Borrowers shall not declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
any Borrower or any warrants or options to purchase any such shares of Capital
Stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrowers (such
-21-
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called "RESTRICTED
PAYMENTS").
6.10 Limitation on Investments, Loans and Advances. The Borrowers shall
not make any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (an "INVESTMENT"), except:
(a) investments in Cash Equivalents;
(b) securities held by the Borrowers prior to the Closing Date
and listed on the Master Disclosure Schedule; and
(c) extensions of trade credit and endorsements of negotiable
instruments and other negotiable documents in the ordinary course of
business.
6.11 Limitation on Transactions with Affiliates. The Borrowers
shall not enter into any transaction (including, without limitation,
any purchase, sale, lease or exchange of property or the rendering of
any service) with any Affiliate unless such transaction is (a)
otherwise permitted under this Agreement; (b) in the ordinary course of
the business of such Borrower; and (c) upon fair and reasonable terms
no less favorable to the Borrowers, than they would obtain in a
comparable arm's length transaction with a Person which is not an
Affiliate; provided, however, that the foregoing restriction shall not
prohibit (i) any employment agreement entered into by any Borrower in
the ordinary course of business; (ii) any issuance of securities in
connection with employment arrangements, stock options and stock
ownership plans of any Borrower entered into in the ordinary course of
business; (iii) transactions between any of the Borrowers; and (iv) the
transactions contemplated by the agreements listed on the Master
Disclosure Schedule.
6.12 Limitation on Lines of Business. The Borrowers shall not
enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Borrowers are engaged on the
date of this Agreement or which are reasonably related thereto.
6.13 Negative Pledge on Intellectual Property. The Borrowers
shall not create, incur, assume or suffer to exist any Lien upon the
Intellectual Property of the Borrowers whether now owned or hereafter acquired,
except for encumbrances which may be deemed to arise from licensing,
sublicensing or other sharing arrangements permitted under subsection 6.7(d).
SECTION 7. EVENTS OF DEFAULT.
7.1 Events of Default; Acceleration. If any of the following
events shall occur:
(a) the Borrowers shall fail to pay when due: (i) any
principal of the Loan in accordance with the terms of this Agreement
and the other Financing Documents; (ii) any interest on any Loan; or
(iii) any other amount payable hereunder; or
-22-
(b) any representation or warranty made or deemed made by any
Borrower or any other Loan Party herein or in any other Financing
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Financing Document
shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) the failure by any Borrower or any other Loan Party to
punctually perform, observe, comply with or satisfy any covenant,
agreement or condition contained in (i) Section 5 or Section 6 of this
Agreement or (ii) Sections 4.1 and 5.6(a)-(c) of each of the Security
Agreements; or
(d) any Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Financing Document (other than as provided in paragraphs (a)
through (c) of this Section), and such default shall continue
unremedied for a period of thirty (30) days after the earlier of (i)
the date on which a Responsible Officer of such Borrower gives notice
of such default to the Lender or (ii) the date on which written notice
thereof shall have been given to the Borrowers by the Lender; or
(e) any Borrower shall fail to pay when due (after any
applicable period of grace) any Indebtedness of such Borrower (other
than Indebtedness comprising the Obligations), which together with all
such other due but unpaid Indebtedness, exceeds the sum of Fifty
Thousand and 00/100 Dollars ($50,000.00), or shall fail (after any
applicable period of grace) to observe or perform any term, covenant or
agreement evidencing or securing such Indebtedness, which, if uncured
or unwaived, permits the acceleration of such Indebtedness, or any
default or event of default shall have been declared under any
agreement relating to such Indebtedness; or
(f) any Borrower or any other Loan Party shall (i) apply for
or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar official of itself
or of all or a substantial part of its property, (ii) be generally not
paying its debts as such debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a voluntary
case under the United States Bankruptcy Code, as amended from time to
time, (v) take any action or commence any case or proceeding under any
law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or any other law providing for the
relief of debtors, (vi) fail to contest in a timely or appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the United States Bankruptcy Code, as amended
from time to time or other law, (vii) take any action under the laws of
its jurisdiction of incorporation or organization similar to any of the
foregoing, or (viii) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) a proceeding or case shall be commenced against any
Borrower or any other Loan Party, without the application or consent of
any Borrower or such Loan Party, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution,
winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like
of it or of all or any substantial part of its assets, or (iii) similar
relief in respect of it, under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of
debts or any
-23-
other law providing for the relief of debtors, and such proceeding or
case shall continue undismissed, or unstayed and in effect, for a
period of forty-five (45) days; or an order for relief shall be entered
in an involuntary case under the United States Bankruptcy Code, as
amended from time to time, against any Borrower or any other Loan
Party; or action under the laws of the jurisdiction of incorporation or
organization of any Borrower or any other Loan Party similar to any of
the foregoing shall be taken with respect to any Borrower or any other
Loan Party and shall continue unstayed and in effect for a period of
forty-five (45) days; or
(h) (i) any Borrower or any Commonly Controlled Entity shall
fail to pay when due any amount that it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA, unless (A) such
liability is being contested in good faith by appropriate proceedings,
such Borrower or such Commonly Controlled Entity, as the case may be,
has established and is maintaining adequate reserves in accordance with
GAAP and no lien shall have been filed to secure such liability or (B)
which would not have a Material Adverse Effect; (ii) the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any such Plan or Plans; or
(iii) a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans
must be terminated; or
(i) one or more judgments or decrees shall be entered against
any Borrower or any of its Subsidiaries involving individually a
liability of Fifty Thousand and 00/100 Dollars ($50,000.00) (not paid
or fully covered by insurance) or in the aggregate a liability (not
paid or fully covered by insurance) of One Hundred Thousand and 00/100
Dollars ($100,000.00) or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal
within thirty (30) days from the entry thereof; or
(j) service of any process upon the Lender, seeking to attach
by Lien, levy, mesne, trustee or other process, any funds of any
Borrower on deposit with, or in possession or control of the Lender; or
(k) if any of the Financing Documents (or any provision
contained therein) shall be cancelled, terminated, revoked, curtailed
or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the
Lender, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke, curtail or rescind any of the Financing
Documents shall be commenced by or on behalf of any Borrower or any of
its officers, director or stockholders, or any Governmental Authority
of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any of the
Financing Documents (or any provision contained therein) is illegal,
invalid or unenforceable in accordance with the terms thereof; or
(l) any of the Security Documents shall, at any time after
their execution and delivery for any reason, cease to create a valid
and perfected first priority security interest in and to all of the
Collateral pledged or granted thereunder; or
(m) a material portion of the property of the Borrowers
(whether or not Collateral) is damaged by fire or other casualty, or
otherwise lost or stolen, the restoration or
-24-
replacement cost of which property exceeds, in the aggregate, the
amount of insurance proceeds readily available for such restoration or
replacement, and such loss would have a Material Adverse Effect; or
(n) any default shall exist and remains unwaived or uncured
with respect to any of the Subordinated Debt if, as a result of such
default, any holder of the Subordinated Debt, is entitled to cause any
such Subordinated Debt to become due prior to its stated date of
maturity; or
(o) any of the subordination provisions contained in any of
the Subordination Agreements ceases to be enforceable in accordance
with its terms; or
(p) there shall be a change in record or the beneficial
ownership of an aggregate of more than 30% of the outstanding shares of
Capital Stock of any of the Borrowers, in one or more transactions,
compared to the ownership of outstanding shares of Capital Stock of
such Borrower in effect on the date hereof, as evidenced by the filing
by one Person or a group of Persons of a Schedule 13-D with the SEC;
then, and in any such event, so long as the same may be continuing, the Lender
may, by notice in writing to the Borrowers, declare all amounts owing with
respect to this Agreement, the Notes and the other Financing Documents to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
Event of Default specified in subsections 7.1(c), Section 7(f), Section 7(g) or
7.1(j), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Lender.
SECTION 8. RIGHTS AND REMEDIES.
8.1 Rights and Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Lender
shall have accelerated the maturity of the Loan pursuant to subsection 7.1, the
Lender, if owed any amount with respect to the Loan may proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations to the Lender are evidenced, including as
permitted by applicable law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Lender.
8.2 Setoff. Regardless of the adequacy of any of the Collateral, upon
the occurrence and during the continuance of any Event of Default, any deposits
or other sums credited by or due from the Lender to any Borrower and any
securities or other property of any Borrower in the possession of the Lender may
be applied to or set off by the Lender against the payment of Obligations and
any and all other liabilities, direct, or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, of any Borrower to the
Lender, without any requirement of prior notice from the Lender.
8.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder or under the other
-25-
Financing Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
8.4 Distribution of Collateral Proceeds. In the event that, following
the occurrence or during the continuance of any Event of Default, the Lender
receives any monies in connection with the enforcement of any of the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows: (a)
first, to the Obligations in such order or preference as the Lender may
determine; (b) second, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lender of all of the Obligations, to the
payment of any obligations required to be paid pursuant to Section 9-504(l)(c)
of the UCC; and (c) third, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
SECTION 9. MISCELLANEOUS.
9.1 Survival of Covenants. Except for those which by their terms
survive termination of the Financing Documents, all agreements, representations,
covenants and warranties made by the Borrowers and any Loan Party in the
Financing Documents shall remain in full force and effect until all Obligations
to the Lender have been paid in full and satisfied.
9.2 Prior Discussions; Amendments in Writing; Counterparts. The
Financing Documents incorporate all discussions and negotiations among the
Lender, the Borrower and the other Loan Parties and either express or implied,
concerning the Obligations, notwithstanding any custom, usage or oral agreement
or understanding to the contrary. This Agreement may be amended or modified only
in writing signed by the parties hereto, and in the case of the Lender signed by
a duly authorized officer thereof. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but such counterparts
together shall constitute one and the same instrument. Any proof of this
Agreement shall require production of only one such counterpart.
9.3 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.4 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given when delivered by hand, or when sent by
facsimile transmission or by telex, answer back received, or on the first
Business Day after delivery to any overnight delivery service, freight prepaid,
or three (3) Business Days after being sent by certified or registered mail,
return receipt requested, postage prepaid, and addressed as follows in the case
of the Borrowers and the Lender, or to such other address as may be hereafter
notified by the respective parties hereto:
-26-
(a) If to the Borrowers
then: ARIAD Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq., Senior Vice
President and Chief Legal Counsel
Telecopier No: (000) 000-0000
with copies to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No: 617-542-2241
(b) If to the Lender, then: Citizens Bank of Massachusetts
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Vice President
Telecopier No: (000) 000-0000
with copies to: Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLC
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Telecopier No: 000-000-0000
provided that any notice, request or demand to or upon the Lender pursuant to
subsection 2.2, 2.6, 2.7 or 2.8 shall not be effective until received.
9.5 Expenses. The Borrowers agree jointly and severally to pay (a) the
reasonable costs of producing and reproducing this Agreement, the other
Financing Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto) payable
by the Lender (other than taxes based upon the Lender's net income) on or with
respect to the transactions contemplated by this Agreement (the Borrowers hereby
agreeing to indemnify the Lender with respect thereto), (c) the reasonable fees,
expenses and disbursements of counsel to the Lender incurred in connection with
the preparation, negotiation, administration or interpretation of the Financing
Documents and other instruments mentioned herein, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the reasonable fees,
expenses and disbursements of the Lender incurred by the Lender in connection
with the preparation, negotiation, administration or interpretation of the
Financing Documents and other instruments mentioned herein, including all title
insurance premiums and surveyor, engineering and appraisal charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs of outside legal counsel, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by the Lender in connection with (i) the enforcement of or
preservation of rights under any of the Financing Documents against the
Borrowers or the administration thereof after the occurrence of a Default or
Event of Default (including engineering appraiser and investment banking
charges) and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Lender's relationship with the
Borrowers and (f) all
-27-
reasonable fees, expenses and disbursements of the Lender incurred in connection
with UCC searches, UCC filings or mortgage recordings. The covenants contained
in this subsection shall survive payment or satisfaction in full of all other
Obligations.
9.6 Indemnification. The Borrowers agree jointly and severally to
indemnify and hold harmless the Lender from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Agreement or any of the other Financing Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrowers of the proceeds of the Loan, (b) any actual or
alleged infringement of any patent, copyright, trademark, service xxxx or
similar right of any Borrower or any other Loan Party comprised in the
Collateral, (c) all liabilities, obligations, claims, damages, costs, losses and
expenses (including court costs and attorney's reasonable fees and expenses)
that the Lender may sustain or incur by reason of, relating to or arising out of
the preparation of this Agreement, the defending or protecting of any Collateral
or the priority of the Lender's interest therein, or in collecting or enforcing
the Obligations, or in enforcing any of the Lender's rights or remedies, or in
the prosecution or defense of any action or proceeding concerning any matter
growing out of or connected with this Agreement, any of the other Financing
Documents, the Obligations, the Collateral, or on account of the Lender's
relationship with any Borrower or any other Loan Party (except for such claims
which have been determined by a court of competent jurisdiction to have arisen
out of the Lender's actual bad faith, willful misconduct or gross negligence) or
(d) with respect to any Borrower or any other Loan Party and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding; provided however that such indemnification shall not apply to claims
which have been determined by a court of competent jurisdiction to have arisen
out of the Lender's actual bad faith, willful misconduct or gross negligence. In
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrowers,
jointly and severally, agree to pay promptly the reasonable fees and expenses of
such counsel. If, and to the extent that the obligations of the Borrowers under
this subsection are unenforceable for any reason, the Borrowers hereby agree to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The covenants contained in this
subsection shall survive payment or satisfaction in full of all other
Obligations.
9.7 Acknowledgements. The Borrowers hereby acknowledge that (a) the
Borrowers have been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Financing Documents; (b) the Lender has
no fiduciary relationship with or duty to the Borrowers arising out of or in
connection with this Agreement or any of the other Financing Documents, and the
relationship of the Lender, on the one hand, and the Borrowers, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and (c) no joint venture is created hereby or by the other Financing Documents
or otherwise exists by virtue of the transactions contemplated hereby between
the Borrowers and the Lender.
-28-
9.8 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Lender and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of their rights or obligations under this Agreement.
9.9 Loss, Theft, Destruction or Mutilation of any Note. Upon receipt of
an affidavit of an officer of the Lender as to the loss, theft, destruction or
mutilation of any Note or any other Financing Document which is not of public
record, and, in the case of any such loss, theft, destruction or mutilation,
upon cancellation of such Note or other Financing Document, the Borrowers will
issue, in lieu thereof, a replacement note or other Financing Document in the
same principal amount thereof and otherwise of like tenor.
9.10 Joint and Several Liability. All of the obligations and
liabilities of the Borrowers under this Agreement and the other Financing
Documents are joint and several.
9.11 WAIVER OF JURY TRIAL. EACH BORROWER AND THE LENDER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER FINANCING DOCUMENTS OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.
9.12 Governing Law; Jurisdiction. This Agreement and the other
Financing Documents are executed and delivered under seal and shall be construed
in accordance with and governed by the laws of The Commonwealth of
Massachusetts, without giving effect to the conflict of law provisions thereof.
Each Borrower submits itself to the non-exclusive jurisdiction of the courts of
The Commonwealth of Massachusetts for all purposes with respect to the Financing
Documents and such Borrower's relationship with the Lender.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]
-29-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered under seal by their proper and duly authorized
officers as of the day and year first above written.
WITNESS AS TO ALL: ARIAD PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
___________________________________ -----------------------------------
Name: Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
ARIAD CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
ARIAD GENE THERAPEUTICS, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx, M.D.
Title: Chief Executive Officer
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Xxxxx Xxxxxxx, Vice President
-00-
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX, ss.
On this 12th day of March, 2003, appeared before me the above-named
Xxxxxx X. Xxxxxxxxxx, Chief Financial Officer of ARIAD Pharmaceuticals, Inc.,
who proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument, and acknowledged the
foregoing instrument to be his free act and deed and the free act and deed of
ARIAD Pharmaceuticals, Inc.
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Notary Public
My Commission Expires: May 7, 0000
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX, ss.
On this 12th day of March, 2003, appeared before me the above-named
Xxxxxx X. Xxxxxxxxxx, Chief Financial Officer of ARIAD Corporation, who proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument, and acknowledged the foregoing instrument
to be his free act and deed and the free act and deed of ARIAD Corporation.
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Notary Public
My Commission Expires: May 7, 0000
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX, ss.
On this 12th day of March, 2003, appeared before me the above-named
Xxxxxx X. Xxxxxx, M.D., Chief Executive Officer of ARIAD Gene Therapeutics,
Inc., who proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument, and acknowledged
the foregoing instrument to be his free act and deed and the free act and deed
of ARIAD Gene Therapeutics, Inc..
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Notary Public
My Commission Expires: May 7, 2006
-31-
COMMONWEALTH OF MASSACHUSETTS
Suffolk County, ss. March 14, 2003
Then personally appeared the above-named Xxxxx Xxxxxxx as Vice
President of Citizens Bank of Massachusetts, and acknowledged the foregoing
instrument to be his free act and deed and the free act and deed of Citizens
Bank of Massachusetts, before me.
/s/ Xxxx X. Xxxxxxx
--------------------------------------------
Notary Public
My commission expires: 1/30/09
[AFFIX NOTARIAL SEAL]
-32-
EXHIBIT 10.1
--------------------------------------------------------------------------------
CREDIT AGREEMENT
(the "AGREEMENT")
by and between
CITIZENS BANK OF MASSACHUSETTS
(the "LENDER")
and
ARIAD PHARMACEUTICALS, INC., ARIAD
CORPORATION and ARIAD GENE THERAPEUTICS, INC.
(each individually, a "BORROWER" and collectively, the "BORROWERS")
--------------------------------------------------------------------------------
MASTER DISCLOSURE SCHEDULE
The Borrowers, jointly and severally, represent and warrant to the
Lender that the statements contained in Section 4 of the Agreement are true,
correct and complete as of the date of the Agreement, except as set forth in
this Master Disclosure Schedule (as the same may be supplemented, from time to
time, the "MASTER DISCLOSURE SCHEDULE"). The Master Disclosure Schedule is
arranged in sections corresponding to the lettered and numbered sections
contained in Section 4 of the Agreement.
4.6 No exceptions except ongoing litigation as a plaintiff against
Xxx Xxxxx and Company as described in ARIAD Pharmaceuticals,
Inc.'s Form 10-Q for the fiscal quarter ended September 30,
2002, filed on November 14, 2002, and its draft Form 10-K for
the year ended December 31, 2002.
4.15 ARIAD Pharmaceuticals, Inc. has the following subsidiaries:
ARIAD Corporation (100% owned)
ARIAD Gene Therapeutics, Inc. (80% owned)
Neither ARIAD Corporation nor ARIAD Gene Therapeutics, Inc.
has any subsidiaries.
EXHIBIT 10.1
--------------------------------------------------------------------------------
CREDIT AGREEMENT
(the "AGREEMENT")
by and between
CITIZENS BANK OF MASSACHUSETTS
(the "LENDER")
and
ARIAD PHARMACEUTICALS, INC., ARIAD
CORPORATION and ARIAD GENE THERAPEUTICS, INC.
(each individually, a "BORROWER" and collectively, the "BORROWERS")
--------------------------------------------------------------------------------
APPENDIX A
1. Definitions. As used in the Agreement, the following terms
shall have the following meanings:
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"ASSET SALE": with respect each of the Loan Parties, any
voluntary or involuntary sale or other disposition subsequent to the
Closing Date of any Collateral.
"BOARD OF GOVERNORS": the Board of Governors of the Federal
Reserve System and any Governmental Authority which succeeds to the
powers and functions thereof.
"BORROWERS": as defined in the preamble to this Agreement.
"BORROWING DATE": any Business Day specified in a notice
pursuant to subsection 2.2 as a date on which the Borrowers request the
Lender to make Loans hereunder.
"BUSINESS DAY": (a) for all purposes other than as described
by clause (b) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of The Commonwealth of
Massachusetts, or is a day on which banking institutions
located in The Commonwealth of Massachusetts are required or authorized
by any Requirement of Law to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with LIBOR
Loans, any day which is a Business Day described in clause (a) and
which is also a day for trading in dollar deposits by and between banks
in the London interbank market.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"CAPITALIZED LEASE": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"CAPITALIZED LEASE OBLIGATIONS": as to any Person, the
obligations of such Person to pay rent or other amounts under any
Capitalized Leases; the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance
with GAAP.
"CASH EQUIVALENTS": (a) securities issued or directly and
fully guaranteed or insured by the United States Government, or any
agency or instrumentality thereof, having maturities of not more than
one year from the date of acquisition, (b) marketable general
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof
and, at the time of acquisition thereof, having a credit rating of "A"
or better from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.; (c) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers'
acceptances having maturities of not more than one year from the date
of acquisition thereof of the Lender, or of any domestic commercial
bank the long-term debt of which is rated at the time of acquisition
thereof at least A or the equivalent thereof by Standard & Poor's
Ratings Group, or A or the equivalent thereof by Xxxxx'x Investors
Service, Inc., and having capital and surplus in excess of Five Hundred
Million and 00/100 Dollars ($500,000,000.00), (d) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (a), (b) and (c) entered
into with any bank meeting the qualifications specified in clause (c)
above, (e) commercial paper rated at the time of acquisition thereof at
least A-2 or the equivalent thereof by Standard & Poor's Ratings Group
or P-2 or the equivalent thereof by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency,
if both of the two named rating agencies cease publishing ratings of
investments, and in either case maturing within three hundred sixty
five (365) days after the date of acquisition thereof and (f) other
investment instruments approved in writing by the Lender and offered by
the Lender or by any financial institution which has a combined capital
and surplus of not less than One Hundred Million and 00/100 Dollars
($100,000,000.00).
-2-
"CHARTER DOCUMENTS": as to any Person, the Certificate (or
Articles) of Incorporation (or Organization) and By-laws or other
organizational or governing documents of such Person.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 3 shall be satisfied or waived.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with any Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes any Borrower and which is treated as a single employer under
Section 414(b) or (c) of the Tax Code or, solely for purposes of
determining liability under Section 412 of the Tax Code, which is
treated as a single employer under Section 414(b), (c), (m) or (o) of
the Tax Code.
"COMPLIANCE CERTIFICATE": as defined in subsection 5.1(c).
"CONFIRMATION NOTIFICATION": as defined in subsection 5.13(c).
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"COPYRIGHTS": means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work
of authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade
secret, now or hereafter existing, created, acquired or held.
"DEFAULT": any of the events specified in subsection 7.1,
whether or not any requirement contained therein for the giving of
notice, the lapse of time or both, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARY": any Subsidiary that is organized under
the laws of any jurisdiction within the United States.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ENVIRONMENTAL PERMITS": all permits, licenses, registrations,
notifications, exemptions, and other authorizations required under
Environmental Laws.
-3-
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EVENT OF DEFAULT": any of the events specified in subsection
7.1, provided, however, that any requirement contained therein for the
giving of notice, the lapse of time or both, has been satisfied.
"EXTENSION OF CREDIT": the making of any Loan by the Lender.
"FINANCING DOCUMENTS": this Agreement, the Note, the Security
Documents, the Subordination Agreements, and any and all other
agreements, guaranties, instruments, documents, certificates, financing
statements, powers of attorney, consents and filings, whether
heretofore, now, or hereafter executed by or on behalf of any Borrower
or any of such Borrower's Subsidiaries or any other Person and
delivered to the Lender in connection with the Loan, all as may be
amended, modified, supplemented, restated or extended from time to
time.
"FOREIGN SUBSIDIARY": Any Subsidiary that is organized under
the laws of any jurisdiction outside the United States.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"HAZARDOUS MATERIALS": any petroleum (including crude oil or
any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos and asbestos-containing
materials, pollutants, contaminants, and all other materials and
substances including but not limited to radioactive materials regulated
pursuant to any Environmental Laws or that could result in liability
under any Environmental Law.
"INCREASED AMOUNTS": as defined in subsection 2.15(a).
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business
and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Capitalized Leases, (d) all obligations of such Person in respect
of acceptances issued or created for the account of such Person and (e)
all indebtedness of others of the types described in (a) through (d)
above secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof (the amount of such indebtedness with respect to such
Person being deemed to be the lesser of the value of such property or
the amount of indebtedness of others so secured).
-4-
"INITIAL FINANCIAL STATEMENTS": as defined in subsection 4.1.
"INTELLECTUAL PROPERTY": means (a) any and all Copyrights, (b)
any and all trade secrets, and any and all intellectual property rights
in computer software and computer software products now or hereafter
existing, created, acquired or held; (c) any and all Patents; (d) any
and all Trademarks; (e) any and all claims for damages by way of past,
present and future infringements of any of the rights included above,
with the right, but not the obligation, to xxx for and collect such
damages for said use or infringement of the intellectual property
rights identified above; (f) any and all licenses or other rights to
use any of the Copyrights, Patents, or Trademarks and all license fees
and royalties arising from such use to the extent permitted by such
license or rights; (g) any and all amendments, extensions, renewals and
extensions of any of the Copyrights, Trademarks, or Patents; (h) any
and all proprietary biological materials, including without limitation,
cell lines, DNA, RNA, plasmids, and vectors; (i) any and all licenses
granting the Borrowers the right to use any Copyrights, Patents,
Trademarks, trade secrets, computer software, or biological materials
of third parties; and (j) any and all proceeds and products of the
foregoing, including without limitation, all payments under insurance
or any indemnity or warranty payable in respect of any of the
foregoing.
"INTEREST PAYMENT DATE":
(a) as for any Prime Rate Loans, the last day of
each calendar month, commencing in April, 2003;
(b) as for any LIBOR Loan having an Interest
Period of three (3) months or less, the last day of such
Interest Period; and
(c) as for any LIBOR Loan having an Interest
Period longer than three months, each day which is three (3)
months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any LIBOR Loan:
(a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such LIBOR Loan and ending thirty (30), sixty (60), ninety
(90) or one hundred eighty (180) days thereafter, as selected
by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto;
and
(b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such LIBOR Loan and ending thirty (30), sixty (60), ninety
(90) or one hundred eighty (180) days, as selected by the
Borrower by irrevocable notice to the Lender not less than
three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided, however, that, all of the foregoing provisions relating to
Interest Periods are subject to the following: (i) if any Interest
Period pertaining to a LIBOR Loan would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended
-5-
to the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day; (ii) the Borrowers shall not select any Interest Period
for the Loan that would otherwise extend beyond the Maturity Date;
(iii) any Interest Period pertaining to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar
month; and (iv) the Borrowers shall select Interest Periods so as not
to require a payment or prepayment of any LIBOR Loan during an Interest
Period for such LIBOR Loan.
"INVENTORY": all "inventory" (as that term is defined in the
UCC) of the Borrowers, and to the extent not included in such
definition, shall also mean and include all raw materials and other
materials and supplies, work-in-process and finished goods of any
Borrower and any products made or processed therefrom and all
substances, if any, commingled therewith or added thereto.
"INVESTMENT": as defined in subsection 6.10.
"LATE RATE": as defined in subsection 2.10.
"LENDER": as defined in the preamble to this Agreement.
"LIBOR BASE RATE": with respect to each day during each
Interest Period pertaining to a LIBOR Loan, the rate per annum equal to
the average rate at which the Lender is offered Dollar deposits at or
about 10:00 A.M., Boston, Massachusetts time, three (3) Business Days
prior to the beginning of such Interest Period by prime banks in the
London interbank market where foreign currency and exchange operations
in respect of its LIBOR Loans are then being conducted for delivery on
the first day of such Interest Period for a period comparable to the
number of days comprised therein and in an amount comparable to the
amount of its LIBOR Loan to be outstanding during such Interest Period.
"LIBOR LOANS": the portion of the unpaid principal amount of
the Loan for which the applicable rate of interest is based upon the
LIBOR Rate.
"LIBOR RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such
day in accordance with the following formula (rounded upward to the
nearest 0.0005%):
LIBOR Base Rate
---------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR RESERVE REQUIREMENTS": for any day as applied to a
LIBOR Loan, the aggregate (without duplication) of the rates (expressed
as a decimal to the fourth digit) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
or other Governmental Authority having jurisdiction with respect,
thereto)
-6-
prescribed for London interbank market funding (currently referred to
as "LIBOR Liabilities" in Regulation D of the Board of Governors)
maintained by a member bank of the Federal Reserve System and
applicable with respect to such LIBOR Loan.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capitalized Lease having substantially the
same economic effect as any of the foregoing).
"LIQUID ASSETS": as defined in subsection 5.13(a).
"LOAN": as defined in subsection 2.1.
"LOAN PARTIES": the Borrowers and any Subsidiary which is now
or hereafter becomes a party to any Financing Document.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE": a
material adverse effect or change on (a) the business, operations,
property or condition (financial or otherwise) of the Borrowers taken
as a whole or (b) the validity or enforceability of this Agreement or
any of the other Financing Documents or the rights or remedies of the
Lender hereunder or thereunder.
"MATURITY DATE": March 30, 2006
"NON-EXCLUDED TAXES": as defined in subsection 2.15(a).
"NOTE": as defined in subsection 2.1(b).
"OBLIGATIONS": all Indebtedness, obligations and liabilities
of the Borrowers to the Lender, individually or collectively, now
existing or hereafter arising, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of
law or otherwise, arising or incurred under this Agreement or any of
the other Financing Documents or in respect of the Loan or the Note or
other instruments at any time evidencing any thereof.
"OBSOLETE PROPERTY": any property of any Borrower which is
obsolete, outdated or worn out or the useful life of which has ended,
in each case in the good faith determination of such Borrower.
"PATENTS": means all patents, patent applications and like
protections including without limitation improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part
of the same.
-7-
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any Governmental
Authority which succeeds to the powers and functions thereof.
"PERMITTED LIENS": as defined in subsection 6.4.
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which any Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PRIME RATE": for any day, a rate equal to the variable rate
of interest per annum, most recently announced by the Lender at its
headquarters in Boston, Massachusetts, as its "prime rate," with the
understanding that the Lender's "prime rate" is one of its interest
rates and serves as a basis upon which effective rates of interest are
calculated for loans making reference thereto and may not be the lowest
of the Lender's interest rates. Any change in the Prime Rate shall be
effective as of the effective date stated in the announcement by the
Lender of such change.
"PRIME RATE LOANS": the portion of the unpaid principal amount
of the Loan for which the rate of interest is based upon the Prime
Rate.
"PURCHASE MONEY INDEBTEDNESS": any Indebtedness incurred by
any Borrower in connection with the acquisition by such Borrower of any
real or personal property.
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"REQUIREMENT OF LAW": as to any Person, any law, treaty, rule
or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"RESPONSIBLE OFFICER": as to any Person, the chief executive
officer and the president of such Person or, with respect to financial
matters, the chief financial officer of such Person or, in either case,
such other executive officers as may be designated from time to time by
such Person in writing to the Lender.
"RESTRICTED CASH": as defined in accordance with GAAP.
"RESTRICTED PAYMENTS": as defined in subsection 6.9.
-8-
"SEC": the United States Securities and Exchange Commission or
any other federal governmental agency which may hereafter perform its
functions.
"SECURITY AGREEMENTS": collectively, the Security Agreement -
All Assets to be executed and delivered by each Borrower, substantially
in the form of EXHIBIT F as the same may be amended, supplemented or
otherwise modified from time to time.
"SECURITY DOCUMENTS": collectively, the Security Agreements
and all other security agreements, pledge agreements, financing
statements, assignments, mortgages, agreements, documents and
instruments now or hereafter delivered to the Lender granting a Lien on
any asset or assets of any Person to secure the Obligations or to
secure any guarantee of any such Obligations and, including, without
limitation, any such document delivered pursuant to subsections 5.10
and 5.11.
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount that will be required to pay all "liabilities of such
Person, contingent or otherwise", as of such date (as such quoted terms
are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors) as such debts
become absolute and matured, (b) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (c) such Person will be able to pay its debts as they
mature, taking into account the timing of and amounts of cash to be
received by such Person and the timing of and amounts of cash to be
payable on or in respect of indebtedness of such Person; in each case
after giving effect to (A) as of the Closing Date the making of the
extensions of credit to be made on the Closing Date and to the
application of the proceeds of such extensions of credit and (B) on any
date after the Closing Date, the making of any extension of credit to
be made on such date, and to the application of the proceeds of such
extension of credit. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"SUBORDINATED DEBT": any and all Indebtedness, liabilities and
obligations of each of the Borrowers to any Person (other than the
Lender) which is subordinated to the Obligations upon terms and
conditions which are reasonably satisfactory to the Lender.
"SUBORDINATION AGREEMENTS": any subordination agreement (or
provision) by which the Subordinated Debt is subordinated to the
Obligations upon terms and conditions which are reasonably satisfactory
to the Lender.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other
-9-
than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"TAX CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"TRADEMARKS": means any trademark and service xxxx rights,
whether registered or not, applications to register and registrations
of the same and like protections, and the entire goodwill of the
business of the Borrowers connected with and symbolized by such
trademarks.
"TREASURY DESK" the Government Securities Division of Citizens
Bank.
"TREASURY DESK INVESTMENT": as defined in subsection 5.13(b).
"TYPE": as to any Loan, its nature as a Prime Rate Loan or a
LIBOR Loan.
"UCC": the Uniform Commercial Code as from time to time in
effect in The Commonwealth of Massachusetts.
"UNRESTRICTED CASH": any cash that is not Restricted Cash.
2. Use of Terms. The use of the singular of terms which are
defined in the plural shall mean and refer to any one of them; and pronouns used
herein shall be deemed to include the singular and the plural and all genders.
The use of the connective "or" is not intended to be exclusive; the term "may
not" is intended to be prohibitive and not permissive; use of "includes" and
"including" is intended to be interpreted as expansive and amplifying and not as
limiting in any way.
The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All references in this
Agreement to Articles, Sections, Exhibits, Schedules and Appendices refer to
Articles, Sections, Exhibits, Schedules and Appendices of this Agreement unless
otherwise indicated. All Exhibits, Schedules and Appendices attached to this
Agreement are incorporated herein and made a part hereof.
-10-
EXHIBIT 10.1
--------------------------------------------------------------------------------
CREDIT AGREEMENT
(the "AGREEMENT")
by and between
CITIZENS BANK OF MASSACHUSETTS
(the "LENDER")
and
ARIAD PHARMACEUTICALS, INC., ARIAD
CORPORATION and ARIAD GENE THERAPEUTICS, INC.
(each individually, a "BORROWER" and collectively, the "BORROWERS")
--------------------------------------------------------------------------------
LIEN SEARCHES
APPENDIX B
EXHIBIT B
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
Reference is hereby made to a certain Credit Agreement, dated as of
March ___, 2003 (as the same may be amended, modified, supplemented, extended or
restated, from time to time, the "CREDIT AGREEMENT") by and between ARIAD
PHARMACEUTICALS, INC., a Delaware corporation, ("API"), ARIAD CORPORATION, a
Delaware corporation ("AC"), and ARIAD GENE THERAPEUTICS, INC., a Delaware
corporation ("AGTI"), (API, AC and AGTI are sometimes hereinafter referred to
collectively as the "BORROWERS" and each singly as a "BORROWER") and CITIZENS
BANK OF MASSACHUSETTS, a Massachusetts bank (the "LENDER"). All capitalized
terms not defined herein but defined in the Credit Agreement shall have the
meanings given to such terms in the Credit Agreement.
The undersigned hereby certify that they are Responsible Officers of
the respective Borrowers and as such, are authorized, for and on behalf of the
Borrowers, to execute and deliver this Compliance Certificate to the Lender in
accordance with the provisions of the Credit Agreement. Pursuant to the
provisions of subsection 5.1(c) of the Credit Agreement, the undersigned hereby
certifies to the Lender as follows:
1. Each of the representations and warranties made by
the Borrowers pursuant to the Financing Documents is true and correct
in all material respects on and as of the date hereof, as if made on
and as of the date hereof, except (a) to the extent such
representations and warranties expressly relate to an earlier date in
which case such representations and warranties shall be true and
correct in all material respects as of such earlier date, and (b) as
follows:
[Describe divergences, if any]
2. Since the end of the last fiscal quarter of the
Borrowers, no Material Adverse Change has occurred except:
[Describe, if any]
3. Except as set forth in the certificates attached
hereto and except as heretofore disclosed to the Lender in previous
Compliance Certificates, there has been no change (i) in the
Certificate of Incorporation or By-laws of any of the Borrowers, or
(ii) in the incumbency of the officers of Borrowers whose signatures
have heretofore been certified to the Lender.
4. The financial statements submitted herewith (if any)
are in compliance with the applicable provisions of subsections 5.1 and
5.2 of the Credit Agreement.
5. The undersigned has reviewed or caused to be reviewed
all of the Financing Documents, and based upon such review and to the
knowledge of the undersigned, no Default or Event of Default has
occurred and is continuing as of the date
hereof (or if applicable, will occur after giving effect to the making
of the Loans requested to be made on the date hereof), except as
follows:
[Describe Defaults or Events of Default]
6. Attached hereto as APPENDIX A are calculations
demonstrating that, based upon the financial statements of the
Borrowers submitted herewith (if any), the Borrowers were in compliance
as of the date of such financial statements with all financial
covenants set forth in subsection 5.13 of the Credit Agreement to be
measured as of such date, except as noted on Appendix A attached
hereto.
7. Any changes in the chief executive office and chief
place of business of any of the Borrowers which have occurred and/or
any additional locations at which any of the Inventory or equipment are
kept, notice of which has not yet been provided to the Lender, in
accordance with the provisions of the Security Documents, are set forth
below:
[Describe]
EXECUTED under seal as of this ________ day of March, 2003.
ARIAD PHARMACEUTICALS, INC.
By:___________________________________
Name:
Title:
Its duly authorized officer
ARIAD CORPORATION
By:___________________________________
Name:
Title:
Its duly authorized officer
ARIAD GENE THERAPEUTICS, INC.
By:___________________________________
Name:
Title:
Its duly authorized officer
APPENDIX A TO COMPLIANCE CERTIFICATE
ARIAD PHARMACEUTICALS, INC.
ARIAD CORPORATION
ARIAD GENE THERAPEUTICS, INC.
I. TOTAL BALANCE SHEET CASH & INVESTMENTS:
1. Total Cash & Investments:
________________________
2. Required Total Cash & Investments: $10,000,000
________________________
II. CITIZENS TREASURY DESK INVESTMENTS:
________________________
3. Treasury Desk Investments*:
________________________
4. Treasury Investment Portion (#3/#1):
________________________
5. Required Treasury Investment Portion: 85%
________________________
III. TREASURY DESK INVESTMENT SUMMARY:
* Government Securities:
________________________
Commercial Paper:
________________________
Citizens Certificate of Deposits:
________________________
Treasury Bills:
________________________
Total (Equals #3):
________________________
EXHIBIT C
ARIAD PHARMACEUTICALS, INC.
ARIAD CORPORATION
ARIAD GENE THERAPEUTICS, INC.
SUMMARY CASH REPORT
FINANCIAL INSTITUTION INVESTMENTS ($000S)
--------------------- -----------
[Name of Institution] [Type of Investment] ($)
------------------------------------------------------------------------------------------------------
Institution Total ($) Total
[Name of Institution] [Type of Investment] ($)
Institution Total ($) Total
---------------
Total: ($)
