Exhibit
2.1
MASTER SEPARATION AND DISTRIBUTION
AGREEMENT
BETWEEN
PHARMACOPEIA, INC.,
ACCELRYS INC.
AND
PHARMACOPEIA DRUG DISCOVERY, INC.
TABLE OF CONTENTS
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MASTER
SEPARATION AND DISTRIBUTION AGREEMENT
THIS MASTER SEPARATION
AND DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of
April 30, 2004, between Pharmacopeia, Inc., a Delaware corporation
(“Pharmacopeia”), Accelrys Inc., a Delaware corporation (“Accelrys”), and
Pharmacopeia Drug Discovery, Inc., a Delaware corporation (“PDD”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in
Article VI hereof.
RECITALS
WHEREAS, the Board of
Directors of Pharmacopeia (the “Pharmacopeia Board”) has determined that it is
appropriate and desirable and in the best interest of the stockholders of
Pharmacopeia for Pharmacopeia to separate the PDD Group from the Pharmacopeia
Group in a manner that would permit Pharmacopeia to divest its entire ownership
interest in PDD through a pro-rata distribution of all of the outstanding
shares of common stock, par value $0.01 per share, of PDD (the “PDD Common
Stock”) to the holders of common stock, par value $0.0001 per share, of
Pharmacopeia (the “Pharmacopeia Common Stock”), pursuant to the terms and
subject to the conditions of this Agreement (the “Distribution”);
WHEREAS, the Distribution
is intended to qualify as a tax-free transaction (except as to the payment of
cash in lieu of fractional shares) to Pharmacopeia and its stockholders
pursuant to Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986,
as amended (the “Code”), and this Agreement is intended to constitute a “plan
of reorganization” within the meaning of Section 368 of the Code;
WHEREAS, PDD has filed
with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form 10 to effect the registration of the PDD Common Stock
pursuant to the Exchange Act in connection with the Distribution (the “Form
10”); and
WHEREAS, the parties
intend in this Agreement, including the Schedule and Exhibits hereto, to
set forth the principal arrangements between them regarding the Distribution;
NOW, THEREFORE, in
consideration of the foregoing and the covenants and agreements set forth
below, the parties hereto agree as follows:
ARTICLE I
CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTION DATE
Section 1.1. Corporate
Restructuring Transactions. Prior
to the Distribution, Pharmacopeia and PDD shall, and shall cause each of their
respective Subsidiaries to, as applicable, take such actions as are necessary
to cause, effect and consummate the Corporate
Restructuring Transactions. Pharmacopeia and PDD hereby agree that any one or more of the
Corporate Restructuring Transactions may be modified, amended, supplemented or
eliminated; provided such modification, amendment, supplement or
elimination (a) is necessary or appropriate to divide the existing business of
Pharmacopeia so that the PDD Business shall be owned, directly or indirectly,
by PDD, and (b) does not, individually or in the aggregate, materially
adversely affect the Accelrys Business.
Section 1.2. Charter
and Bylaws. Pharmacopeia and PDD
shall each take all actions that may be required to provide for the adoption by
PDD, at or prior to the Distribution Date, of the Amended and Restated
Certificate of Incorporation and the Amended and Restated Bylaws in
substantially the same forms attached hereto as Exhibits A and B,
respectively.
Section 1.3. Documents
to Be Delivered By Pharmacopeia and PDD.
Prior to the Distribution, Pharmacopeia will execute and deliver (and
where applicable cause a member of the Pharmacopeia Group to execute and
deliver) to PDD (and/or to the appropriate member of the PDD Group), and PDD
will execute and deliver (and where applicable cause a member of the PDD Group
to execute and deliver) to Pharmacopeia (and/or to the appropriate member of
the Pharmacopeia Group), all of the following items and agreements
(collectively, together with all agreements and documents contemplated by this Agreement,
including the agreements listed in Section 1.4, as such agreements may be
amended from time to time, the “Ancillary Agreements”):
(a) an
Employee Matters Agreement substantially in the form attached hereto as Exhibit
C (the “Employee Matters Agreement”);
(b) a
Tax Sharing and Indemnification Agreement substantially in the form attached
hereto as Exhibit D (the “Tax Agreement”);
(c) a
Transition Services Agreement substantially in the form attached hereto as Exhibit
E (the “Transition Services Agreement”);
(d) a
Patent and Software License Agreement substantially in the form attached hereto
as Exhibit F (the “IP Agreement”); and
(e) such
other agreements, documents or instruments as the parties may agree are
necessary or desirable in order to achieve the purposes hereof.
Unless otherwise provided
herein, the document deliveries contemplated in this Section 1.3 shall
occur prior to the Distribution.
Section 1.4. Transfer
and Assignment of Certain Licenses and Permits.
(a) Licenses
and Permits Relating to the PDD Business.
Prior to Distribution, Pharmacopeia shall (and, if applicable, shall
cause any other Person over which it has legal or effective direct or indirect
control to) duly and validly transfer or cause to be duly
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and validly transferred to the appropriate member of
the PDD Group (as directed by PDD) all material transferable licenses, permits
and authorizations issued by any governmental authority that relate exclusively
to the PDD Business but which are held in the name of any member of the
Pharmacopeia Group, or any of their respective employees, officers, directors,
stockholders or agents, including without limitation the licenses and permits
set forth on Schedule 1.4(a) hereto.
(b) Licenses
and Permits Relating to the Accelrys Business. Prior to the Distribution, PDD shall (and, if applicable, shall
cause any other Person over which it has legal or effective direct or indirect
control to) duly and validly transfer or cause to be duly and validly
transferred to Accelrys (or such other member of the Pharmacopeia Group as may
be directed by Pharmacopeia) all material transferable licenses, permits and
authorizations issued by any governmental authority that relate exclusively to
the Accelrys Business but which are held in the name of any member of the PDD
Group, or any of their respective employees, officers, directors, stockholders
or agents, including without limitation the licenses and permits set forth on
Schedule 1.4(b) hereto.
(c) Joint
Licenses and Permits. Subject to
the provisions of Section 1.14 below, any license or permit to which any
party hereto (or any other member of such party’s Group) is a party that inures
to the benefit of both the Accelrys Business and the PDD Business is hereby
assigned in part so that each party (or such other member of such party’s
Group) is entitled to the rights and benefits inuring to its business under
such agreement. Notwithstanding the
foregoing, to the extent that any such license or permit contains a mandatory
arbitration clause, non-solicitation or non-competition covenant or provision
restricting disclosure of confidential information (i) for the benefit of the
Accelrys Business, the full benefit of such clause, covenant or provision is
hereby retained by or assigned to the applicable member of the Pharmacopeia
Group and (ii) exclusively for the benefit of the PDD Business, the full
benefit of such clause, covenant or provision is hereby retained or assigned to
the applicable member of the PDD Group.
Section 1.5. Transfer
and Assignment of Certain Agreements.
(a) Transfer
and Assignment of Accelrys Business Agreements. Subject to the limitations set forth in this Section 1.5 and
in Section 1.14, PDD hereby, on behalf of itself and any of the other
members of its Group over which it has, or upon completion of the Distribution
will have, legal or effective direct or indirect control, assigns, transfers
and conveys to Accelrys (or such other member of the Pharmacopeia Group as Pharmacopeia
shall direct) all of its (or such other member of its Group’s) right, title and
interest in and to any and all agreements that relate exclusively to the
Accelrys Business or any member of the Pharmacopeia Group, including without
limitation the licenses and agreements set forth on Schedule 1.5(a)
hereto.
(b) Transfer
and Assignment of PDD Business Agreements.
Subject to the limitations set forth in this Section 1.5 and in
Section 1.14, Pharmacopeia hereby, on behalf of itself and any of the
other members of its Group over which it has legal or effective direct or
indirect control, assigns, transfers and conveys to PDD (or such other member
of the
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PDD Group as PDD shall direct) all of its (or such
member of its Group’s) right, title and interest in and to any and all
agreements that relate exclusively to the PDD Business or any member of the PDD
Group, including without limitation the licenses and agreements set forth on
Schedule 1.5(b) hereto.
(c) Joint
Agreements. Subject to the
provisions of Section 1.14 below, any agreement to which any party hereto
(or any other member of such party’s Group) is a party that inures to the
benefit of both the Accelrys Business and the PDD Business is hereby assigned
in part so that each party (or such other member of such party’s Group) is
entitled to the rights and benefits inuring to its business under such
agreement. Notwithstanding the foregoing, to the extent that any such agreement
contains a mandatory arbitration clause, non-solicitation or non-competition
covenant or provision restricting disclosure of confidential information (i)
for the benefit of the Accelrys Business, the full benefit of such clause,
covenant or provision is hereby retained by or assigned to the applicable
member of the Pharmacopeia Group and (ii) exclusively for the benefit of the
PDD Business, the full benefit of such clause, covenant or provision is hereby
retained or assigned to the applicable member of the PDD Group.
(d) Obligations
of Assignees. The assignee of any
agreement assigned, in whole or in part, hereunder (an “Assignee”), hereby
assumes and agrees to pay, perform and fully discharge all obligations of the
assignor under such agreement (whether such obligations arose or were incurred
prior to, on or subsequent to the Distribution Date and irrespective of whether
such obligations have been asserted as of the Distribution Date) or, in the
case of a partial assignment under Section 1.5(c) above, such Assignee’s
related portion of such obligations as determined in accordance with the terms
of the relevant agreement, where determinable on the face thereof, and
otherwise as determined in accordance with the practice of the parties prior to
the Distribution. Furthermore, the Assignee shall indemnify and hold harmless
such assignor to the extent such assignor is not released from its obligations
under the assigned agreements.
Section 1.6. Transfer
and Assignment of Intellectual Property.
(a) Transfer
and Assignment of Accelrys Intellectual Property. Subject to the limitations set forth in this Section 1.6 and
in Section 1.14, PDD hereby, on behalf of itself and any of the other
members of its Group over which it has, or upon completion of the Distribution
will have, legal or effective direct or indirect control, assigns, transfers
and conveys to Accelrys (or such other member of the Pharmacopeia Group as
Pharmacopeia shall direct) all of its (or such other member of its Group’s)
right, title and interest in and to any and all intellectual property that
relates exclusively to the Accelrys Business or any member of the Pharmacopeia
Group, including without limitation the Intellectual Property set forth on
Schedule 1.6(a) hereto.
(b) Transfer
and Assignment of PDD Intellectual Property. Subject to the limitations set forth in this Section 1.6 and
in Section 1.14, Pharmacopeia hereby, on behalf of itself and any of the
other members of its Group over which it has legal or effective direct or
indirect control, assigns, transfers and conveys to PDD (or such other member
of the PDD Group
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as PDD shall direct) all of its (or such member of its
Group’s) right, title and interest in and to any and all intellectual property
that relates exclusively to the PDD Business or any member of the PDD Group,
including without limitation the Intellectual Property set forth on
Schedule 1.6(b) hereto.
(c) Joint
Intellectual Property. Subject to
the provisions of Section 1.14 below, any intellectual property to which
any party hereto (or any other member of such party’s Group) is a party that
inures to the benefit of both the Accelrys Business and the PDD Business is
hereby assigned in part so that each party (or such other member of such
party’s Group) is entitled to the rights and benefits inuring to its business
under such intellectual property.
Section 1.7. Transfer
and Assignment of Inventory, Machinery and Books.
(a) Transfer
and Assignment of Accelrys Inventory, Machinery and Books. Subject to the limitations set forth in this
Section 1.7 and in Section 1.14, PDD hereby, on behalf of itself and
any of the other members of its Group over which it has, or upon completion of
the Distribution will have, legal or effective direct or indirect control,
assigns, transfers and conveys to Accelrys (or such other member of the
Pharmacopeia Group as Pharmacopeia shall direct) all of its (or such other
member of its Group’s) right, title and interest in and to any and all
Inventory, Machinery and Books that relate exclusively to the Accelrys Business
or any member of the Pharmacopeia Group, including without limitation the
Inventory, Machinery and Books set forth on Schedule 1.7(a) hereto.
(b) Transfer
and Assignment of PDD Inventory, Machinery and Books. Subject to the limitations set forth in this
Section 1.7 and in Section 1.13, Pharmacopeia hereby, on behalf of
itself and any of the other members of its Group over which it has legal or
effective direct or indirect control, assigns, transfers and conveys to PDD (or
such other member of the PDD Group as PDD shall direct) all of its (or such
member of its Group’s) right, title and interest in and to any and all
Inventory, Machinery and Books that relate exclusively to the PDD Business or
any member of the PDD Group, including without limitation the Inventory,
Machinery and Books set forth on Schedule 1.7(b) hereto.
(c) Joint
Inventory, Machinery and Books.
Subject to the provisions of Section 1.14 below, any Inventory,
Machinery or Books to which any party hereto (or any other member of such
party’s Group) is a party that inures to the benefit of both the Accelrys
Business and the PDD Business is hereby assigned in part so that each party (or
such other member of such party’s Group) is entitled to the rights and benefits
inuring to its business under such Inventory, Machinery and Books.
Section 1.8. Transfer
and Assignment of Remaining Assets.
(a) Transfer
and Assignment of Accelrys Remaining Assets. Subject to the limitations set forth in this Section 1.8 and
in Section 1.14, PDD hereby, on behalf of itself and any of the other
members of its Group over which it has, or upon completion of the
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Distribution will have, legal or effective direct or
indirect control, assigns, transfers and conveys to Accelrys (or such other
member of the Pharmacopeia Group as Pharmacopeia shall direct) all of its (or
such other member of its Group’s) right, title and interest in and to any and
all Remaining Assets that relate exclusively to the Accelrys Business or any
member of the Pharmacopeia Group.
(b) Transfer
and Assignment of PDD Remaining Assets.
Subject to the limitations set forth in this Section 1.8 and in
Section 1.14, Pharmacopeia hereby, on behalf of itself and any of the
other members of its Group over which it has legal or effective direct or
indirect control, assigns, transfers and conveys to PDD (or such other member
of the PDD Group as PDD shall direct) all of its (or such member of its
Group’s) right, title and interest in and to any and all Remaining Assets that
relate exclusively to the PDD Business or any member of the PDD Group.
(c) Joint
Remaining Assets. Subject to the
provisions of Section 1.14 below, any Remaining Assets to which any party
hereto (or any other member of such party’s Group) is a party that inures to
the benefit of both the Accelrys Business and the PDD Business is hereby
assigned in part so that each party (or such other member of such party’s
Group) is entitled to the rights and benefits inuring to its business under
such Remaining Assets. Notwithstanding the foregoing, to the extent that any
such agreement contains a mandatory arbitration clause, non-solicitation or
non-competition covenant or provision restricting disclosure of confidential
information (i) for the benefit of the Accelrys Business, the full benefit of
such clause, covenant or provision is hereby retained by or assigned to the
applicable member of the Pharmacopeia Group and (ii) exclusively for the
benefit of the PDD Business, the full benefit of such clause, covenant or
provision is hereby retained or assigned to the applicable member of the PDD
Group.
Section 1.9. Consents. The parties hereto shall use their
commercially reasonable efforts to obtain any third-party consents or approvals
that are required to consummate the Corporate Restructuring Transactions, the
Distribution and the other transactions contemplated herein.
Section 1.10. Other
Transactions. Prior to the
Distribution, Pharmacopeia and PDD shall have consummated those other
transactions in connection with the Corporate Restructuring Transactions and
the Distribution that are contemplated by the Information Statement and not
specifically referred to in Sections 1.1 through 1.9 above; provided, however,
that such other transactions do not, individually or in the aggregate,
materially adversely affect the Accelrys Business.
Section 1.11. Certain
Financial and Other Arrangements.
(a) Settlement
of Intercompany Accounts Between the Pharmacopeia Group and the PDD Group. All intercompany receivables, payables and
loans outstanding as of the Distribution Date (other than receivables, payables
and loans otherwise specifically provided for in any of this Agreement or the
Ancillary Agreements), including, without limitation, in
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respect of any cash balances, any cash balances
representing deposited checks or drafts for which only a provisional credit has
been allowed or any cash held in any centralized cash management system,
between any member of the Pharmacopeia Group and any member of the PDD Group
shall, as of the close of business on the Distribution Date, be offset against
each other. To the extent that there is
a net intercompany payable balance from the PDD Group to the Pharmacopeia
Group, the intercompany balance remaining shall be forgiven in its entirety and
treated as a capital contribution from Pharmacopeia to PDD. To the extent that there is a net intercompany
payable balance from the Pharmacopeia Group to the PDD Group, the intercompany
balance remaining shall be deemed to have been satisfied in its entirety by a
portion of the cash contributed to PDD pursuant to Section 1.11(b) equal
to the amount of the intercompany balance.
(b) Contribution
of Cash to PDD Group.
Notwithstanding any provision herein to the contrary, prior to the
Distribution, the Pharmacopeia Group shall contribute an amount of cash and
investment securities to the PDD Group sufficient such that upon consummation
of the Distribution, the PDD Group shall have a positive cash balance of
$46,500,000 (FORTY-SIX MILLION FIVE HUNDRED THOUSAND DOLLARS). Any investment securities so contributed
shall be deposited in a brokerage account specified by PDD.
(a) As
of the Distribution Date, PDD hereby agrees to assume and discharge all of the
PDD Liabilities.
(b) Each
of Pharmacopeia and Accelrys acknowledges its responsibility to discharge all
of the Pharmacopeia Liabilities.
Section 1.13. Bulk
Assignment by Pharmacopeia to Accelrys.
Prior to the Distribution, but after giving effect to all transactions
described in Sections 1.1 through 1.11 hereof, all assets held by Pharmacopeia
(other than the stock of PDD) shall be transferred to Accelrys.
Section 1.14. Transfer
Not Effected Prior to the Distribution; Transfer Deemed Effective as of the
Distribution Date. To the extent
that any transfer contemplated by Sections 1.1 through 1.12 shall not have been
consummated prior to the Distribution, the parties hereto shall cooperate (and
shall cause each of their respective Affiliates and each member of their
respective Groups over which they have legal or effective direct or indirect
control to cooperate) to effect such transfers as promptly following the
Distribution Date as shall be practicable.
Nothing herein shall be deemed to transfer or require the transfer of
any assets or the assumption of any Liabilities which by their terms or
operation of law cannot be transferred or assumed (including, without
limitation, the assignment of any agreement if the consent, waiver or approval
of another party is required for such assignment which consent, waiver, or
approval has not been given or if such assignment otherwise would constitute a
breach of, or cause a loss of benefits (except as specifically provided in
Section 1.5(c)) under, any such agreement); provided, however,
that the parties hereto shall cooperate (and shall cause each of their
respective Affiliates and each member of their respective Groups over which
they have legal or effective
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direct or indirect control to cooperate) to seek to
obtain any necessary consents, waivers or approvals for the transfer of all
assets and Liabilities contemplated to be transferred or assigned pursuant to
this Article I. In the event that
any such transfer of assets or Liabilities has not been consummated or any
required consent, waiver or approval has not been obtained, from and after the
Distribution Date, the party retaining such asset or Liability (or, as
applicable, such other member or members of such party’s Group) shall hold such
asset in trust for the use and benefit of the party entitled thereto (at the
expense of the party entitled thereto) or retain such Liability for the account
of the party by whom such Liability is to be assumed pursuant hereto, as the
case may be, and take such other action as may be reasonably requested by the
party to whom such asset is to be transferred or by whom such Liability is to
be assumed (including the enforcement, for the benefit of the intended assignee
hereunder, of any provision of any agreement the assignment of which has not
occurred as contemplated in this Agreement), as the case may be, in order to
place such party, insofar as is reasonably possible, in the same position as
would have existed had such asset or Liability been transferred or assumed as
contemplated hereby. As and when any
such asset or Liability becomes transferable or assumable, such transfer shall
be effected forthwith. As of the
Distribution Date, each party hereto (or, if applicable, such other members of
such party’s Group) shall be deemed to have acquired (or as applicable,
retained) complete and sole beneficial ownership over all of the assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of
the Liabilities, and all duties, obligations and responsibilities incident
thereto, which such party (or any other member of such party’s Group) is
entitled to acquire or required to assume pursuant to the terms of this
Agreement.
(a) Cooperation. PDD shall cooperate with Pharmacopeia to
accomplish the Distribution and shall, at Pharmacopeia’s direction, promptly
take any and all actions necessary or desirable to effect the
Distribution. Pharmacopeia may select
any investment bank or manager in connection with the Distribution, as well as
any financial printer, solicitation and/or exchange agent and financial, legal,
accounting and other advisors for Pharmacopeia; provided, that, nothing
herein shall prohibit PDD from engaging (at its own expense) its own financial,
legal, accounting and other advisors in connection with the Distribution. PDD and Pharmacopeia, as the case may be,
will provide to the distribution or exchange agent to be appointed by
Pharmacopeia (the “Distribution Agent”) all share certificates and any information
required in order to complete the Distribution.
(b) Distribution
Mechanics.
(i) Subject
to Sections 2.3, 2.4 and 2.5, on or prior to the Distribution Date,
Pharmacopeia will deliver to the Distribution Agent for the benefit of holders
of Pharmacopeia Common Stock on the Record Date, a single stock certificate,
endorsed by Pharmacopeia in blank, representing all of the outstanding shares
of PDD Common Stock then
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owned by Pharmacopeia, and shall cause the transfer
agent for the Pharmacopeia Common Stock to instruct the Distribution Agent to
distribute on or as soon as practicable after the Distribution Date the
appropriate number of such shares of PDD Common Stock to each such holder or
designated transferee or transferees of such holder of Pharmacopeia Common
Stock. The Distribution shall be
effective at 11:59 p.m. Eastern Standard Time on the Distribution Date.
(ii) Subject
to Sections 2.3, 2.4 and 2.5, each holder of Pharmacopeia Common Stock on the
Record Date (or such holder’s designated transferee or transferees) will be
entitled to receive in the pro-rata distribution a number of shares of PDD
Common Stock equal to the number of shares of Pharmacopeia Common Stock held by
such holder on the Record Date multiplied by the distribution ratio determined
by the Pharmacopeia Board when it declares the Distribution. Pharmacopeia and PDD, as the case may be,
will provide to the Distribution Agent all share certificates and any
information required in order to complete the Distribution on the basis
specified above.
Section 2.2. Actions
In Connection with the Distribution.
(a) Form
10. PDD shall file such amendments
and supplements to the Form 10, and such amendments as may be necessary in
order to cause the same to become and remain effective as required by Law,
including filing such amendments and supplements to the Form 10 as may be
required by the Commission or federal, state or foreign securities Laws. PDD shall mail to the holders of Pharmacopeia
Common Stock, at such time on or prior to the Distribution Date as Pharmacopeia
shall determine, the Information Statement included in the Form 10, as well as
any other information concerning PDD, its business, operations and management,
the Distribution and such other matters as Pharmacopeia shall reasonably
determine are necessary and as may be required by Law.
(b) Other
Documentation. Pharmacopeia and PDD
shall also cooperate in preparing, filing with the Commission and causing to
become effective registration statements or amendments thereof which are
required to reflect the establishment of, or amendments to, any employee
benefit and other plans necessary or appropriate in connection with the
Distribution or other transactions contemplated by this Agreement and the
Ancillary Agreements, including the Employee Matters Agreement. Promptly after receiving a request to do so
from Pharmacopeia, to the extent requested by Pharmacopeia, PDD shall prepare
and, to the extent required under applicable Law, file with the Commission any
such documentation that Pharmacopeia determines are necessary or desirable to
effectuate the Distribution, and Pharmacopeia and PDD shall each use its
reasonable commercial efforts to obtain all necessary approvals from the
Commission with respect thereto as soon as practicable.
(c) Blue
Sky. Promptly after receiving a
request to do so from Pharmacopeia, PDD shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable Laws under any foreign jurisdiction) in connection
with the Distribution.
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(d) Nasdaq
Listing. Promptly after receiving a
request to do so from Pharmacopeia, PDD shall prepare and file, and shall use
its reasonable commercial efforts to have approved and made effective, an
application for the original listing of the PDD Common Stock to be distributed
in the Distribution on the Nasdaq National Market.
(e) Resignation
of Directors and Officers. Except
as set forth on Schedule 2.2(e) hereto, immediately prior to the final
consummation of the Distribution, (i) each person who is an officer, director
or employee of any member of the Pharmacopeia Group and an officer, director or
employee of any member of the PDD Group immediately prior to the Distribution
Date (each a “Shared Employee”) and who is to continue as an officer, director
or employee of any member of the Pharmacopeia Group after the Distribution Date
shall resign from each of such person’s positions with each member of the PDD
Group, and (ii) each such Shared Employee who is to continue as an officer,
director or employee of any member of the PDD Group after the Distribution
Date, shall resign from each of such person’s positions with each member of the
Pharmacopeia Group;
(f) Conditions. PDD shall take all reasonable steps
necessary and appropriate to cause the conditions set forth in Section 2.4
to be satisfied and to effect the Distribution, or any portion thereof, on the
Distribution Date.
Section 2.3. Sole
Discretion of Pharmacopeia.
Pharmacopeia shall, in its sole and absolute discretion, determine the
date of the consummation of the Distribution and all terms of the Distribution,
including, without limitation, the form, structure and terms of any transaction(s)
and/or offering(s) to effect the Distribution and the timing of and conditions
to the consummation thereof. In addition, Pharmacopeia may at any time and from
time to time until the completion of the Distribution decide to abandon the
Distribution or modify or change the terms of the Distribution, including,
without limitation, by accelerating or delaying the timing of the consummation
of all or part of the Distribution.
Section 2.4. Conditions
To Distribution. Subject to
Section 2.3, the following are conditions to the consummation of any part
of the Distribution. The conditions are for the sole benefit of Pharmacopeia
and shall not give rise to or create any duty on the part of Pharmacopeia or
the Pharmacopeia Board to waive or not waive any such condition.
(a) Effective
Form 10. The Form 10 shall have
been declared effective under the Exchange Act, with no stop order in effect
with respect thereto, and the Information Statement shall have been mailed to
the holders of Pharmacopeia Common Stock.
(b) Blue
Sky Laws. The actions and filings
with regard to state securities and blue sky laws of the United States (and any
comparable Laws under any foreign jurisdictions) described in
Section 2.2(c) shall have been taken and, where applicable, have become
effective or been accepted.
(c) Nasdaq
Listing. The PDD Common Stock to be
delivered in the Distribution shall have been approved for listing on the
Nasdaq National Market.
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(d) Charter
and Bylaws. PDD’s Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws in
substantially the forms attached hereto as Exhibits A and B,
respectively, shall be in effect.
(e) Ancillary
Agreements. Each of the Ancillary
Agreements shall have been duly executed and delivered by the parties thereto
and shall be in full force and effect.
(f) Governmental
Approvals. Any material
Governmental Approvals necessary to consummate the Distribution or any portion
thereof shall have been obtained and be in full force and effect.
(g) No
Legal Restraints. No order,
injunction or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of all or any
portion of the Distribution shall be in effect, and no other event outside the
control of Pharmacopeia shall have occurred or failed to occur that prevents
the consummation of all or any portion of the Distribution.
(h) No
Inadvisable Event. The Pharmacopeia
Board shall have approved the Distribution and shall have not determined that
any events or developments shall have occurred that make it inadvisable to
effect the Distribution.
Section 2.5. Fractional
Shares. No certificates
representing fractional shares of PDD Common Stock will be distributed in the
Distribution. As soon as practicable after the consummation of any portion of
the Distribution, Pharmacopeia shall direct the Distribution Agent to determine
the number of whole shares and fractional shares of PDD Common Stock allocable
to each holder of record or beneficial owner of Pharmacopeia Common Stock
otherwise entitled to fractional shares of PDD Common Stock, to aggregate all
such fractional shares and sell the whole shares obtained thereby at the
direction of Pharmacopeia, in open market transactions or otherwise, in each
case at then prevailing trading prices, and to cause to be distributed to each
such holder or for the benefit of each such beneficial owner to which a
fractional share shall be allocable such holder or owner’s ratable share of the
proceeds of such sale, after making appropriate deductions for any amount
required to be withheld for United States federal income tax purposes and to
repay expenses reasonably incurred by the Distribution Agent, including all brokerage
charges, commissions and transfer taxes, in connection with such sale. Pharmacopeia and the Distribution Agent
shall use their reasonable commercial efforts to aggregate the shares of
Pharmacopeia Common Stock that may be held by any beneficial owner thereof
through more than one account in determining the fractional share allocable to
such beneficial owner.
ARTICLE III
COVENANTS AND OTHER MATTERS
Section 3.1. Further
Assurances and Agreements. In
addition to the actions specifically provided for elsewhere in this Agreement
and the specific agreements, documents and instruments annexed to this
Agreement, each of Pharmacopeia and PDD shall use its
11
reasonable efforts, prior to, on and after the Distribution
Date, to take, or cause to be taken, all actions, and do, or cause to be done,
all things, and agree to execute, or cause to be executed, by the appropriate
parties and deliver, as appropriate, such other agreements, instruments and
other documents, as such action, thing, agreement, instrument or other document
may be necessary or desirable in order to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements.
(a) Each
of Pharmacopeia and PDD, in their respective capacities as a Transferring
Party, at the request of the Receiving Party and without further consideration,
will execute and deliver, and will cause its applicable Subsidiaries to execute
and deliver, to the Receiving Party and its Subsidiaries such other instruments
of transfer, conveyance, assignment, substitution and confirmation and take
such action as the Receiving Party may reasonably deem necessary or desirable
in order more effectively to transfer, convey and assign to the Receiving Party
and its Subsidiaries and confirm the Receiving Party’s and its Subsidiaries’
title to all of the assets, rights and other things of value contemplated to be
transferred or allocated to the Receiving Party and its Subsidiaries pursuant
to this Agreement, the Ancillary Agreements, or any documents referred to
herein or therein, to put the Receiving Party and its Subsidiaries in actual
possession and operating control thereof and to permit the Receiving Party and
its Subsidiaries to exercise all rights with respect thereto (including,
without limitation, rights under contracts and other arrangements as to which
the consent of any third party to the transfer thereof shall not have
previously been obtained).
(b) Each
of Pharmacopeia and PDD, in their respective capacities as a Receiving Party,
at the request of the Transferring Party and without further consideration,
will execute and deliver, and will cause its applicable Subsidiaries to execute
and deliver, to the Transferring Party and its Subsidiaries all instruments,
assumptions, novations, undertakings, substitutions or other documents and take
such other action as the Transferring Party may reasonably deem necessary or
desirable in order to have the Receiving Party fully and unconditionally assume
and discharge the liabilities contemplated to be assumed by or allocated to the
Receiving Party under this Agreement, the Ancillary Agreements, or any document
in connection herewith or therewith, and to relieve the Group of the
Transferring Party of any liability or obligation with respect thereto and
evidence the same to third parties. Furthermore, each of the Transferring Party
and the Receiving Party, at the request of another party hereto, shall execute
and deliver such other instruments and do and perform such other acts and
things as may be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby.
Section 3.3. Agreement
for Exchange of Information.
(a) Provision
of Information. Each of
Pharmacopeia and PDD, on behalf of its respective Group, agrees to provide, or
cause to be provided, to the other Group, at any time before or after the
Distribution Date, as soon as reasonably practicable after written request
therefor, any Information in the possession or under the control of such
respective Group
12
which the requesting party requests (i) to comply with
reporting, disclosure, filing or other requirements imposed on the requesting
party (including under applicable securities or tax Laws) by a Governmental
Authority having jurisdiction over the requesting party, (ii) for use in
connection with any other judicial, regulatory, administrative, tax or other
proceeding or in order to satisfy audit, accounting, claims, regulatory,
litigation, tax or other similar requirements, in each case other than claims
or allegations that one party to this Agreement has against the other, (iii)
subject to the foregoing clause (ii) above, to comply with its obligations
under this Agreement or any Ancillary Agreement, or (iv) in connection with the
ongoing businesses of Pharmacopeia or PDD as it relates to the conduct of such
businesses prior to the Distribution Date, as the case may be; provided,
however, that in the event that any party determines that any such
provision of Information could be commercially detrimental, violate any Law or
agreement, or waive any attorney-client privilege, the parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
(b) Internal
Accounting Controls. After the
Distribution Date, each of Pharmacopeia and PDD, on behalf of its respective
Group, shall maintain in effect, at its own cost and expense, adequate systems
and controls for its business, to the extent necessary to enable members of the
other Group to satisfy their respective reporting, accounting, audit and other
obligations.
(c) Ownership
of Information. Any Information
owned by one Group that is provided to a requesting party pursuant to this
Section 3.3 shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in this Agreement shall
be construed as granting or conferring rights of license or otherwise in any
such Information.
(d) Record
Retention. To facilitate the
possible exchange of Information pursuant to this Section 3.3 and other
provisions of this Agreement after the Distribution Date, each party agrees to
use its reasonable commercial efforts to retain all Information in its
respective possession or control on the Distribution Date substantially in
accordance with its policies as in effect on the Distribution Date. PDD shall retain, in a manner allowing for
reasonable access, Information constituting audit work papers and work papers
from internal audits, in each case relating to periods prior to the
Distribution Date for at least six years thereafter. Except as set forth in the Tax Agreement, at any time after the
Distribution Date, each party may amend their respective record retention
policies at such party’s discretion; provided, however, that if a
party desires to effect the amendment within three years after the Distribution
Date, the amending party must give thirty days prior written notice of such
change in the policy to the other party to this Agreement. No party will
destroy, or permit any of its Subsidiaries to destroy, any Information that
exists on the Distribution Date (other than Information that is permitted to be
destroyed under the current record retention policy of such party) without
first using its reasonable commercial efforts to notify the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction.
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(e) Limitation
of Liability. No party shall have
any liability to any other party in the event that any Information exchanged or
provided pursuant to this Section 3.3 is found to be inaccurate, in the
absence of willful misconduct by the party providing such Information. No party shall have any liability to any
other party if any Information is destroyed or lost after reasonable commercial
efforts by such party to comply with the provisions of Section 3.3(d).
(f) Other
Agreements Providing For Exchange of Information. The rights and obligations granted under this Section 3.3
are subject to any specific limitations, qualifications or additional
provisions on the sharing, exchange or confidential treatment of Information
set forth in this Agreement and any Ancillary Agreement.
(g) Production
of Witnesses; Records; Cooperation.
After the Distribution Date, each party hereto shall use its reasonable
commercial efforts to make available to the other party, upon written request,
the former, current and future officers, employees, other personnel and agents
of the members of its respective Group as witnesses and any books, records or
other documents within its control or which it otherwise has the ability to
make available, to the extent that any such person (giving consideration to
business demands of such officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any legal, regulatory, administrative or other proceeding in which the
requesting party may from time to time be involved, regardless of whether such
legal, regulatory, administrative or other proceeding is a matter with respect
to which indemnification may be sought hereunder. The requesting party shall
bear all costs and expenses in connection therewith.
Section 3.4. Auditors
and Audits; Annual and Quarterly Statements and Accounting. On behalf of the PDD Group, PDD agrees that:
(a) Selection
of Auditors. For PDD’s fiscal year
2004, PDD shall select to audit its and its Subsidiaries’ financial statements
and serve as the PDD Group’s independent certified public accountants (the “PDD
Auditors”) for purposes of providing an opinion with respect to PDD’s
consolidated financial statements the same accounting firm as is selected by
Pharmacopeia to audit Pharmacopeia’s consolidated financial statements and to
serve as the Pharmacopeia Group’s independent certified public accountants
(“Pharmacopeia Auditors”) for purposes of providing an opinion with respect to
Pharmacopeia’s consolidated financial statements.
(b) Annual
and Quarterly Financial Statements.
PDD shall provide, or cause to be provided, to Pharmacopeia on a timely
basis all Information that Pharmacopeia reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination
of each of the Pharmacopeia Group’s annual and quarterly financial statements
that include a Consolidated Period.
Without limiting the generality of the foregoing, PDD will provide all
required financial Information with respect to PDD and its Subsidiaries to the
PDD Auditors in a sufficient and reasonable time and in sufficient detail to
permit the PDD Auditors to take all steps and perform all reviews necessary,
and PDD shall provide sufficient assistance
14
to the Pharmacopeia Auditors with respect to
Information to be included or contained in each of the Pharmacopeia Group’s
annual and quarterly financial statements that includes a Consolidated
Period. Pharmacopeia shall provide, or
cause to be provided, to PDD on a timely basis all information that PDD
reasonably requires to meet its schedule for the preparation, printing,
filing and public dissemination of each of the PDD Group’s annual and quarterly
financial statements for PDD’s fiscal year 2004.
Section 3.5. Expenses. Except as otherwise provided in this
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Distribution, all out-of-pocket costs and expenses of the
parties in connection with the Distribution shall be the responsibility of
Pharmacopeia.
Section 3.6. Governmental
Approvals. The parties acknowledge
that certain of the transactions contemplated by this Agreement and the
Ancillary Agreements may be subject to certain conditions established by
applicable regulations, orders, and approvals of Governmental Authorities
(“Existing Authority”). The parties intend to implement this Agreement, the
Ancillary Agreements and the transactions contemplated thereby consistent with
and to the extent permitted by applicable Existing Authority and to cooperate
toward obtaining and maintaining in effect such Governmental Approvals as may
be required in order to implement this Agreement and each of the Ancillary
Agreements as fully as possible in accordance with their respective terms. To
the extent that any of the transactions contemplated by this Agreement or any Ancillary
Agreement require any Governmental Approvals, the parties will use their
reasonable commercial efforts to obtain any such Governmental Approvals.
Section 3.7. Use
of Pharmacopeia Name and Mark.
Pharmacopeia hereby conveys to PDD as of the Distribution Date all
rights, title and interest in and to (a) the PHARMACOPEIA trademark and service
mark, including all logotypes or stylized variations of the foregoing, the
ECLIPS trademark and service mark and associated logos, and all related
tradenames and marks of Pharmacopeia (other than ACCELRYS), including the
goodwill of the business appurtenant to the PHARMACOPEIA, ECLIPS and other
Pharmacopeia marks, in each case wherever existing in the world, and (b) the
domain names listed on Schedule 3.7 hereto. As of the Distribution Date, PDD hereby grants Pharmacopeia a
worldwide, non-transferable and non-royalty-bearing right to use the
“Pharmacopeia” name and logo used by Pharmacopeia prior to the Distribution
Date and related tradenames and marks from the Distribution Date until the
earlier to occur of: (y) Pharmacopeia’s stockholders approval of a change in
the name of Pharmacopeia and after such change “Pharmacopeia” is not part of
the changed name, or (z) six (6) months from the Distribution Date. If Pharmacopeia’s stockholders do not
approve such change in the name of Pharmacopeia, PDD shall grant Pharmacopeia a
worldwide, non-transferable, and non-royalty-bearing license to use the
“Pharmacopeia” name and logo used by Pharmacopeia prior to the Distribution
Date and related tradenames and marks, for an additional six (6) months. Pharmacopeia hereby acknowledges and agrees
that the “PCOP” ticker symbol is PDD’s ticker symbol and Pharmacopeia shall not
use the “PCOP” ticker symbol.
15
Section 3.8. Agreements Not at Arm’s Length; Waiver of
Conflicts Regarding Common Advisors. Each of the parties hereto does
hereby, for itself and its respective successors and assigns, and shall cause
the members of its Group over which it has legal or effective direct or
indirect control to, for itself and its respective successors and assigns, (a)
acknowledge and agree (i) that this Agreement and the Ancillary Agreements have
been made in the context of a parent-subsidiary relationship and have been
negotiated in the overall context of the Distribution, (ii) that this Agreement
and the Ancillary Agreements are not on arm’s length terms and are not
representative of the terms that either party or any member of its Group
might have reached with unaffiliated third
parties or of the terms of future agreements that either party or any
member of its Group may enter into with
unaffiliated third parties and (iii) not to seek (A) to disqualify any common
consultant, advisor, accountant, attorney and representative (“Common
Advisors”) because of any past, present or future representation or (B) at any
time assert any conflict of interest with respect thereto, and (b) forever
remise, release and forever discharge all claims against all Common Advisors,
and their respective heirs, executors, administrators, successors and assigns,
arising from the commonality of such representations or any conflicts arising
therefrom.
Section 4.1. Release
of Pre-Distribution Claims.
(a) Except
as provided in Section 4.1(c), effective as of the Distribution Date, PDD
does hereby, for itself and each other member of the PDD Group, their
respective Affiliates (other than any member of the Pharmacopeia Group),
successors and assigns, remise, release and forever discharge each of
Pharmacopeia, the members of the Pharmacopeia Group, their Affiliates (other
than any member of the PDD Group), successors and assigns, and all Persons who
at any time prior to the Distribution Date have been stockholders, directors,
officers, agents or employees of any member of the Pharmacopeia Group (in each
case, in their respective capacities as such), and their respective heirs,
executors, administrators, successors and assigns, from any and all Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Distribution Date,
including in connection with the Corporate Restructuring Transactions and all
other activities to implement the Distribution.
(b) Except
as provided in Section 4.1(c), effective as of the Distribution Date,
Pharmacopeia does hereby, for itself and each other member of the Pharmacopeia
Group, their respective Affiliates (other than any member of the PDD Group),
successors and assigns, remise, release and forever discharge PDD, the members
of the PDD Group, their Affiliates (other than any member of the Pharmacopeia
Group), successors and assigns, and all Persons who at any time prior to the
Distribution Date have been stockholders, directors, officers, agents or
employees of any member of the PDD Group (in each case, in their
16
respective capacities as such), and their respective
heirs, executors, administrators, successors and assigns, from any and all
Liabilities whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by operation of
law or otherwise, existing or arising from any acts or events occurring or failing
to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Distribution
Date, including in connection with the Corporate Restructuring Transactions and
all other activities to implement the Distribution.
(c) Nothing
contained in Section 4.1(a) or 4.1(b) shall impair any right of any Person
to enforce this Agreement or any Ancillary Agreement, in each case in
accordance with its terms. Nothing contained in Section 4.1(a) or 4.1(b)
shall release any Person from:
(i) any
Liability assumed, transferred, assigned or allocated to the Group of which
such Person is a member in accordance with, or any other Liability of any
member of any Group under, this Agreement or any Ancillary Agreement;
(ii) any
Liability for Taxes to the extent set forth in the Tax Separation Agreement;
(iii) any
Liability that the parties may have with respect to indemnification or
contribution pursuant to this Agreement for claims brought against the parties
by third Persons, which Liability shall be governed by the provisions of this
Article IV and, if applicable, the appropriate provisions of the Ancillary
Agreements; or
(iv) any
Liability the release of which would result in the release of any Person other
than a Person released pursuant to this Section 4.1.
In addition, nothing
contained in Section 4.1(a) shall release Pharmacopeia from honoring its
existing obligations to indemnify any director, officer or employee of PDD who
was a director, officer or employee of Pharmacopeia or its Subsidiaries on or
prior to the Distribution Date, to the extent such director, officer or
employee becomes a named defendant in any litigation involving Pharmacopeia and
was entitled to such indemnification pursuant to then existing
obligations. Pharmacopeia shall use
commercially reasonable efforts to purchase and maintain insurance on behalf of
any person who was serving as a director or officer of PDD prior to the
Distribution Date against any liability asserted against him and incurred by
him in any such capacity or arising from his status as such, whether or not
Pharmacopeia has the power to indemnify him against such liability. If Pharmacopeia is not able to maintain such
coverage, Pharmacopeia must provide written notice to PDD at least thirty (30)
days before such coverage is terminated.
(d) PDD
shall not make, and shall not permit any member of the PDD Group to make, any
claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification, against
Pharmacopeia or any member of the Pharmacopeia Group or any other Person
released pursuant to Section 4.1(a), with respect to any Liabilities
released pursuant to Section 4.1(a).
Pharmacopeia shall not make, and
17
shall not permit any member of the Pharmacopeia Group
to make, any claim or demand, or commence any Action asserting any claim or
demand, including any claim of contribution or any indemnification against PDD
or any member of the PDD Group, or any other Person released pursuant to
Section 4.1(b), with respect to any Liabilities released pursuant to
Section 4.1(b).
(e) It
is the intent of Pharmacopeia and PDD by virtue of the provisions of this
Section 4.1 to provide for a full and complete release and discharge of
all Liabilities existing or arising from all acts and events occurring or
failing to occur or alleged to have occurred or to have failed to occur and all
conditions existing or alleged to have existed on or before the Distribution
Date, between or among PDD or any member of the PDD Group on the one hand, and
Pharmacopeia or any member of the Pharmacopeia Group on the other hand
(including any contractual agreements or arrangements existing or alleged to
exist between or among any such members on or before the Distribution Date),
except as expressly set forth in Section 4.1(c). At any time, at the
request of any other party, each party shall cause each member of its
respective Group to execute and deliver releases reflecting the provisions
hereof.
Section 4.2. PDD
Indemnification of the Pharmacopeia Group.
(a) Subject
to Section 4.4, on and after the Distribution Date, PDD shall indemnify,
defend and hold harmless the Pharmacopeia Group and the respective directors,
officers and Affiliates of each Person in the Pharmacopeia Group (the
“Pharmacopeia Indemnitees”) from and against any and all Losses incurred or
suffered by any of the Pharmacopeia Indemnitees arising out of, or due to the
failure of any Person in the PDD Group to pay, perform or otherwise discharge
any of the PDD Liabilities.
(b) Subject
to Section 4.4, PDD shall indemnify, defend and hold harmless each of the
Pharmacopeia Indemnitees from and against any and all Losses to the extent such
Losses relate to, arise out of or result from any breach by PDD or any member
of the PDD Group of the Distribution Agreement or any of the Ancillary
Agreements (except for the Tax Agreement, Transition Services Agreement and IP
Agreement).
(c) Subject
to Section 4.4, PDD shall indemnify, defend and hold harmless each of the
Pharmacopeia Indemnitees and each Person, if any, who controls any Pharmacopeia
Indemnitee within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all Losses
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Form 10 or any amendment thereof or the Information Statement
(as amended or supplemented if PDD shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such Losses are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information set forth in the Form 10
discussing the business rational for the Distribution.
18
Section 4.3. Pharmacopeia
Indemnification of the PDD Group.
(a) Subject
to Section 4.4, on and after the Distribution Date, Pharmacopeia shall
indemnify, defend and hold harmless the PDD Group and the respective directors,
officers and Affiliates of each Person in the PDD Group (the “PDD Indemnitees”)
from and against any and all Losses incurred or suffered by any of the PDD
Indemnitees arising out of, or due to the failure of any Person in the
Pharmacopeia Group to pay, perform or otherwise discharge any of the
Pharmacopeia Liabilities.
(b) Subject
to Section 4.4, Pharmacopeia shall indemnify, defend and hold harmless
each of the PDD Indemnitees from and against any and all Losses to the extent
such Losses relate to, arise out of or result from any breach by Pharmacopeia
or any member of the Pharmacopeia Group of the Distribution Agreement or any of
the Ancillary Agreements (except for the Tax Agreement, Transition Services
Agreement and IP Agreement).
Section 4.4. Insurance;
Third Party Obligations; Tax Benefits.
The parties intend that any Liability subject to indemnification
pursuant to Sections 4.2 or 4.3 shall be paid net of the amount of any
insurance or other amounts that actually reduce the amount of the Liability (“Proceeds”). Accordingly, the amount which the
Indemnifying Party (as defined below) is required to pay to any Indemnified
Party (as defined below) will be reduced by any Proceeds actually recovered by
or on behalf of the Indemnified Party in reduction of the related Liability. If an Indemnified Party receives an
indemnity payment required by this Agreement from an Indemnifying Party in
respect of any Liability and subsequently receives Proceeds, then the
Indemnified Party will pay to the Indemnifying Party an amount equal to the
excess of such indemnity payment received over the amount of the indemnity
payment that would have been due if the Proceeds had been received, realized or
recovered before the indemnity payment was made. Any indemnification pursuant to Sections 4.2 or 4.3 shall be paid
net of any Tax Benefit to the Indemnified Party attributable to the relevant
payment or Liability when, as, and to the extent such Tax Benefit is actually
realized. Such indemnification shall be
increased to reflect any tax liability of the Indemnified Party so that the
Indemnified Party receives 100% of the after-tax amount of any payment or
liability. It is expressly agreed that
no insurer or any other third party shall be (a) entitled to a benefit it would
not be entitled to receive in the absence of the foregoing indemnification
provisions, (b) relieved of the responsibility to pay any claims to which it is
obligated or (c) entitled to any subrogation rights with respect to any
obligation hereunder.
Section 4.5. Notice
and Payment of Claims. If any
Pharmacopeia Indemnitee or PDD Indemnitee (the “Indemnified Party”) determines
that it is or may be entitled to indemnification by any party (the
“Indemnifying Party”) under Article IV (other than in connection with any
Action subject to Section 4.6), the Indemnified Party shall deliver to the
Indemnifying Party a written notice specifying, to the extent reasonably
practicable, the basis for its claim for indemnification and the amount for
which the Indemnified Party reasonably believes it is entitled to be
indemnified. Within 30 days after
receipt of such notice, the Indemnifying Party shall pay the Indemnified Party
such amount in cash or other immediately available funds unless the
Indemnifying Party objects to the claim for indemnification or the amount
thereof. If the Indemnifying Party does
not give the Indemnified Party written notice objecting to such
19
indemnity claim and setting forth the grounds therefor
within such 30-day period, the Indemnifying Party shall be deemed to have
acknowledged its liability for such claim and the Indemnified Party may
exercise any and all of its rights under applicable law to collect such
amount. In the event of such a timely
objection by the Indemnifying Party, the amount, if any, that is finally
determined by a court of competent jurisdiction to be required to be paid by
the Indemnifying Party in respect of such indemnity claim shall be paid by the
Indemnifying Party to the Indemnified Party in cash within 15 days after such
indemnity claim has been so finally determined by a court of competent
jurisdiction.
Section 4.6. Notice
and Defense of Third-Party Claims.
Promptly following the earlier of (a) receipt of notice of the
commencement by a third party of any Action against or otherwise involving any
Indemnified Party or (b) receipt of information from a third party alleging the
existence of a claim against an Indemnified Party, in either case, with respect
to which indemnification may be sought pursuant to this Agreement (a
“Third-Party Claim”), the Indemnified Party shall give the Indemnifying Party
written notice thereof. The failure of the Indemnified Party to give notice as
provided in this Section 4.6 shall not relieve the Indemnifying Party of
its obligations under this Agreement, except to the extent that the
Indemnifying Party is prejudiced by such failure to give notice. Within 15 days after receipt of such notice,
the Indemnifying Party may (i) by giving written notice thereof to the Indemnified
Party, acknowledge liability for such indemnification claim and at its option
elect to assume the defense of such Third-Party Claim at its sole cost and
expense or (ii) object to the claim for indemnification set forth in the notice
delivered by the Indemnified Party pursuant to the first sentence of this
Section 4.6; provided that if the Indemnifying Party does not
within such 15-day period give the Indemnified Party written notice objecting
to such indemnification claim and setting forth the grounds therefor, the
Indemnifying Party shall be deemed to have acknowledged its liability for such
indemnification claim. If the
Indemnifying Party has elected to assume the defense of a Third-Party Claim,
(x) the defense shall be conducted by counsel retained by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party, provided
that the Indemnified Party shall have the right to participate in such
proceedings and to be represented by counsel of its own choosing at the
Indemnified Party’s sole cost and expense; and (y) the Indemnifying Party may
settle or compromise the Third-Party Claim without the prior written consent of
the Indemnified Party so long as such settlement includes an unconditional
release of the Indemnified Party from all claims that are the subject of such
Third-Party Claim; provided that the Indemnifying Party may not agree to
any such settlement pursuant to which any remedy or relief, other than monetary
damages for which the Indemnifying Party shall be responsible hereunder, shall
be applied to or against the Indemnified Party, without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld. If the Indemnifying Party
does not assume the defense of a Third-Party Claim for which it has
acknowledged liability for indemnification hereunder, the Indemnified Party may
require the Indemnifying Party to reimburse it on a current basis for its
reasonable expenses of investigation, reasonable attorneys’ fees and reasonable
out-of-pocket expenses incurred in defending against such Third-Party Claim and
the Indemnifying Party shall be bound by the result obtained with respect
thereto by the Indemnified Party; provided that the Indemnifying Party
shall not be liable for any settlement effected without its consent, which
consent shall not be unreasonably withheld.
The
20
Indemnifying Party shall pay to the Indemnified Party
in cash the amount, if any, for which the Indemnified Party is entitled to be
indemnified hereunder, plus its reasonable expenses of investigation,
reasonable attorneys’ fees and reasonable out-of-pocket expenses incurred in
defending against such Third-Party Claim, within 15 days after such Third-Party
Claim has been finally determined by a court of competent jurisdiction, in the
case of an indemnity claim as to which the Indemnifying Party has acknowledged
liability or, in the case of any indemnity claim as to which the Indemnifying
Party has not acknowledged, or has objected to, liability, within 15 days after
it has been finally determined by a court of competent jurisdiction that such
Indemnifying Party has liability hereunder.
Section 4.7. Contribution. If for any reason the indemnification
provided for in Section 4.2 or 4.3 is unavailable to any Indemnified
Party, or insufficient to hold it harmless, then the Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on
the other hand, in connection with those actions, conduct, statements or
omissions, which relative fault shall be determined by reference to the member
of the PDD or Pharmacopeia Group to which those actions, conduct, statements or
omissions are primarily related, as well as any other relevant equitable
considerations.
Section 4.8. Survival
of Indemnities. Subject to
Section 5.6, the rights and obligations of the members of the Pharmacopeia
Group and the PDD Group under this Article IV shall survive the sale or
other transfer by any party of any assets or businesses or the assignment by it
of any Liabilities or the sale by any member of the Pharmacopeia Group or the
PDD Group of the capital stock or other equity interests of any Subsidiary to
any Person.
Section 4.9. Non-Exclusivity
of Remedies. The remedies provided
for in this Article IV are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or in
equity.
Section 5.1. Entire
Agreement. The agreement of the
Parties, which is comprised of this Agreement and the Exhibits hereto and the
Ancillary Agreements, sets forth the entire agreement and understanding between
the Parties and supersedes any prior agreement or understanding, written or
oral, relating to the subject matter of this Agreement.
Section 5.2. Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, ITS RULES OF CONFLICT OF
LAWS NOTWITHSTANDING.
Section 5.3. Termination. This Agreement and all Ancillary Agreements
may be terminated at any time prior to the Distribution by and in the sole
discretion of Pharmacopeia without the approval of PDD nor the stockholders of
Pharmacopeia. In the event of
termination
21
pursuant to this Section 5.3, no party shall have
any liability of any kind to the other party or any other Person, except to the
extent otherwise agreed by the parties.
Section 5.4. Notices. All notices or other communications
hereunder will be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended, if
delivered by registered or certified mail, return receipt requested, or by
Federal Express or other “overnight” courier service, or if sent by fax, provided
that the fax is promptly confirmed by telephone confirmation thereof, to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
If to Pharmacopeia, to:
Pharmacopeia, Inc.
c/o Acclerys, Inc
9685 Scranton Road
San Diego, CA 92122
Attention: Chief Financial Officer
Phone: (858) 799-5000
Fax No.: (858) 799-5100
If to PDD, to:
Pharmacopeia Drug
Discovery, Inc.
3000 Eastpark Boulevard
Cranbury, NJ 08512
Attention: Chief Financial Officer
Phone: (609) 452-3600
Fax No.: (609) 452-3672
Section 5.5. Execution
in Counterparts. This Agreement may
be executed in two or more counterparts, each of which will be deemed an
original, and all of which will constitute one and the same agreement.
Section 5.6. Binding
Effect; Assignment; Third-Party Beneficiaries. This Agreement shall not be assigned, or assignable, by either
party hereto without the prior written consent of the other party, and any such
attempted assignment shall be void and without force or effect; provided,
however, that not withstanding the foregoing, either party may, without
such consent, assign this Agreement and its rights and obligations hereunder to
an Affiliate or in connection with the transfer or sale of all or substantially
all of its business or assets, or in the event of its merger, reorganization,
acquisition, sale, consolidation or change in control or similar
transaction. Without limiting the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their permitted successors and assigns. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its legal representatives
22
and successors and assigns and, with respect to the
provisions set forth in Article IV, to the Pharmacopeia Indemnities and
the PDD Indemnitees, as applicable, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
Section 5.7. Severability. If any term or other provision of this
Agreement is determined by a court or administrative agency of competent
jurisdiction or arbitrator in any binding arbitration, to be invalid, illegal
or incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties hereto as closely
as possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible. If the parties are unable to reach agreement on any such modification,
a court of competent jurisdiction shall have the authority to determine any
modification.
Section 5.8. Failure
or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of either party hereto in the
exercise of any right hereunder shall impair such right or be construed to be a
waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and remedies existing under this Agreement or the Schedules or Exhibits
attached hereto are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
Section 5.9. Amendment. This Agreement may be amended at any time
prior to the Distribution Date by and in the sole discretion of Pharmacopeia,
without the approval of PDD nor the stockholders of Pharmacopeia. From and after the Distribution, no change
or amendment will be made to this Agreement except by an instrument in writing
signed on behalf of each of the parties to such agreement.
Section 5.10. Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement and each Ancillary Agreement, (b)
the execution, delivery and performance by it of this Agreement and each
Ancillary Agreement have been duly authorized by all necessary corporate or
other actions, (c) it has duly and validly executed and delivered this
Agreement and each Ancillary Agreement, and (d) this Agreement and each
Ancillary Agreement is a legal, valid and binding obligation, enforceable
against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting
creditors’ rights generally and general equity principles.
Section 5.11. Interpretation. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Pharmacopeia
23
and PDD have participated jointly in the drafting and
negotiation of this Agreement. In the
event any ambiguity or question of interpretation or intent arises, this
Agreement shall be construed as if drafted jointly by Pharmacopeia and PDD and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any provisions of this Agreement. Any capitalized term used in any
Schedule or Exhibit but not otherwise defined therein shall have the
meaning assigned to such term in this Agreement. When a reference is made in this Agreement to an Article or
a Section, Exhibit or Schedule, such reference shall be to an Article or
Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated.
Section 5.12. Conflicting
Agreements. In the event of conflict
between this Agreement and any Ancillary Agreement or other agreement executed
in connection herewith, the provisions of such other agreement shall prevail; provided,
however, that in the event of conflict between the indemnity provisions
of this Agreement and the indemnity provisions of any Ancillary Agreement or
other agreement executed in connection herewith, the indemnity provisions of
this Agreement shall prevail.
Section 6.1. Accelrys
Business. “Accelrys Business” means
the development and commercialization of molecular modeling and simulation
software for the life sciences and materials research markets, cheminformatics
and decision support systems, and bioinformatics tools including gene sequence
analysis.
Section 6.2. Affiliate. “Affiliate” means, with respect to any
specified Person, a Person that controls, is controlled by, or is under common
control with such specified Person. As used herein, “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities or other interests, by contract or otherwise.
Section 6.3. Ancillary
Agreements. “Ancillary Agreements”
has the meaning set forth in Section 1.3 hereof.
Section 6.4. Assignee. “Assignee” has the meaning set forth in
Section 1.5(d) hereof.
Section 6.5. Books. “Books” means all books, records, ledgers,
files (including personnel files), documents (including originally executed
copies of all contracts to be assigned pursuant to this Agreement),
correspondence, memoranda, forms, lists, new product or service development
materials, creative materials, advertising and promotional materials, studies,
reports, whether in hard copy or magnetic format, all tax returns, reports and
estimates of information related exclusively or primarily to the Accelrys
Business or PDD Business, as applicable, required to tally and accurately
prepare employment tax returns, and all workpapers and other materials used in
preparation of such tax returns, reports and other estimates.
24
Section 6.6. Business
Day. “Business Day” means a day
other than a Saturday, a Sunday or a day on which banking institutions located
in the State of New Jersey are authorized or obligated by Law or executive
order to close.
Section 6.7. Code. “Code” has the meaning set forth in the
Recitals hereof.
Section 6.8. Commission. “Commission” has the meaning set forth in
the Recitals hereof.
Section 6.9. Common
Advisors. “Common Advisors” has the
meaning set forth in Section 3.9 hereof.
Section 6.10. Consolidated
Period. “Consolidated Period” has
the meaning set forth in Section 3.5(b) hereof.
Section 6.11. Corporate
Restructuring Transactions.
“Corporate Restructuring Transactions” means the distributions,
transfers, conveyances, contributions, assignments and other transactions that
are required to be accomplished, effected or consummated by Pharmacopeia, PDD
or any of their respective Subsidiaries or Affiliates in order to separate and
divide, in a series of transactions that, to the extent possible, shall qualify
for tax-free treatment under the Code, the existing business of Pharmacopeia so
that, except as otherwise provided in this Agreement or the Ancillary
Agreements, (i) the business, assets and liabilities necessary for the
continuing of the PDD Business shall be owned, directly or indirectly, by PDD,
and (ii) the business, assets and liabilities of the Pharmacopeia Group that
remain after the separations and divisions described above, including, without
limitation, the business, assets and liabilities necessary for the continuing
operation of the Accelrys Business, are, after giving effect to the
Distribution, owned, directly or indirectly, by Accelrys.
Section 6.12. Distribution. “Distribution” has the meaning set forth in
the Recitals hereof.
Section 6.13. Distribution
Agent. “Distribution Agent” has the
meaning set forth in Section 2.1(a) hereof.
Section 6.14. Distribution
Date. “Distribution Date” means the
date as so determined by Pharmacopeia in its sole and absolute discretion in
accordance with Article II hereof on which the Distribution is effective.
Section 6.15. Employee
Matters Agreement. “Employee
Matters Agreement” has the meaning set forth in Section 1.3(a) hereof.
Section 6.16. Exchange
Act. “Exchange Act” means the
Securities and Exchange Act of 1934.
25
Section 6.17. Existing
Authority. “Existing Authority” has the meaning set forth in
Section 3.6 hereof.
Section 6.18. Form
10. “Form 10” has the meaning set
forth in the Recitals hereof.
Section 6.19. Governmental
Approvals. “Governmental Approvals” means any notices, reports or other
filings to be made, or any consents, registrations, approvals, permits or
authorizations to be obtained from, any Governmental Authority.
Section 6.20. Governmental
Authority. “Governmental Authority” shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
Section 6.21. Group.
“Group” means the Pharmacopeia Group or the PDD Group, as the context requires.
Section 6.22. Indemnified
Party. “Indemnified Party” has the
meaning set forth in Section 4.5 hereof.
Section 6.23. Indemnifying
Party. “Indemnifying Party” has the
meaning set forth in Section 4.5 hereof.
Section 6.24. Information. “Information” means information, whether or
not patentable or copyrightable, in written, oral, electronic or other tangible
or intangible forms, stored in any medium, including studies, reports, records,
books, audit work papers, work papers from internal audits, contracts,
instruments, surveys, discoveries, ideas, concepts, know-how, techniques,
designs, specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes, computer
programs or other software, marketing plans, customer names, communications by
or to attorneys (including attorney-client privileged communications), memos
and other materials prepared by attorneys or under their direction (including
attorney work product), and other technical, financial, employee or business
information or data.
Section 6.25. Information
Statement. “Information Statement”
means the information statement forming a part of the Form 10.
Section 6.26. Inventory. “Inventory” means all inventory, including
all finished goods, consigned goods, work-in-process, materials, parts,
chemicals, supplies, storehouse stocks and containers owned by Pharmacopeia and
used or held for use in the conduct of the Accelrys Business or PDD Business ,
as applicable.
Section 6.27. IP
Agreement. “IP Agreement” has the
meaning set forth in Section 1.3(d) hereof.
26
Section 6.28. Law. “Law” means any applicable federal, state,
local or foreign law, statute, ordinance, directive, rule, regulation,
judgment, order, injunction, decree, arbitration award, agency requirement,
license or permit of any Governmental Authority.
Section 6.29. Liabilities. “Liabilities” means any and all claims,
debts, liabilities and obligations, absolute or contingent, matured or not
matured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever arising, including all costs and expenses relating thereto, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, any action, order, injunction or consent
decree of any governmental agency or entity, or any award of any arbitrator of
any kind, and those arising under any agreement, commitment or undertaking.
Section 6.30. Losses. “Losses” means, with respect to any Person,
any and all damage, loss, liability and expense incurred or suffered by such
Person (including, without limitation, reasonable expenses of investigation and
reasonable attorney’s fees and expenses in connection with claims brought under
Article IV hereof).
Section 6.31. Machinery. “Machinery” means all machinery, equipment,
motor vehicles, goods, furnishings, furniture, fixtures, leasehold
improvements, plant and office equipment, office supplies, computer hardware
and software, engineering and design equipment, computer networking equipment,
production and other supplies and spare and repair parts, tools, stores, and
other tangible personal property, owned or leased and used or held for use in
the conduct of the Acclerys Business or PDD Business, as applicable, together
with any rights, claims and interests arising out of maintenance or service
contracts relating thereto or the breach of any express or implied warranty by
the manufacturers of any such assets or component part thereof.
Section 6.32. PDD
Auditors. “PDD Auditors” has the meaning set forth in Section 3.4(a)
hereof.
Section 6.33. PDD
Board. “PDD Board” has the meaning
set forth in the Recitals hereof.
Section 6.34. PDD
Business. “PDD Business” means
Pharmacopeia’s drug discovery business which integrates proprietary small
molecule combinatorial and medicinal chemistry, high-throughput screening,
in-vitro pharmacology, computational methods and informatics to discover and
optimize lead compounds.
Section 6.35. PDD
Common Stock. “PDD Common Stock”
has the meaning set forth in the Recitals hereof.
Section 6.36. PDD
Group. “PDD Group” means PDD and each other Subsidiary and Affiliate of PDD
immediately after the Distribution Date and each Person that becomes a
Subsidiary or Affiliate of PDD (other than members of the Pharmacopeia Group)
after the Distribution Date.
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Section 6.37. PDD
Indemnitees. “PDD Indemnitees” has
the meaning set forth in Section 4.3(a) hereof.
Section 6.38. PDD
Liabilities. “PDD Liabilities”
means all (a) Liabilities of the PDD Group under this Agreement and (b) except
as otherwise specifically provided herein or in any Ancillary Agreement, other
Liabilities, whether arising before, on or after the Distribution Date, of or
relating to the PDD Group or arising from or in connection with the conduct of
the PDD Business or the ownership or use of assets in connection therewith,
including any Liabilities under the provisions of any joint agreement assigned
to the PDD Group pursuant to Section 1.6(c). Notwithstanding the foregoing, “PDD Liabilities” shall exclude
(i) any Liabilities for taxes (which are governed by the Tax Agreement), (ii)
any Liabilities specifically retained or assumed by Pharmacopeia pursuant to
this Agreement, and (iii) the Liabilities set forth on Schedule 6.44
hereto.
Section 6.39. Pharmacopeia
Auditors. “Pharmacopeia Auditors” has the meaning set forth in
Section 3.4(a) hereof.
Section 6.40. Pharmacopeia
Board. “Pharmacopeia Board” has the meaning set forth in the Recitals
hereof.
Section 6.41. Pharmacopeia
Common Stock. “Pharmacopeia Common Stock” has the meaning set forth in the
Recitals hereof.
Section 6.42. Pharmacopeia
Group. “Pharmacopeia Group” means Pharmacopeia and each Subsidiary and
Affiliate of Pharmacopeia immediately after the Distribution Date and each
Person that becomes a Subsidiary or an Affiliate of Pharmacopeia (other than
any member of the PDD Group) after the Distribution Date.
Section 6.43. Pharmacopeia
Indemnitees. “Pharmacopeia
Indemnitees” has the meaning set forth in Section 4.2(a) hereof.
Section 6.44. Pharmacopeia
Liabilities. “Pharmacopeia
Liabilities” means all (a) Liabilities of the Pharmacopeia Group under this
Agreement, (b) except as otherwise specifically provided herein or in any
Ancillary Agreement, other Liabilities, whether arising before, on or after the
Distribution Date, of or relating to the Pharmacopeia Group or arising from or
in connection with the conduct of the Accelrys Business and any other business
of the Pharmacopeia Group (other than the PDD Business) or the ownership or use
of assets in connection therewith, including any Liabilities under the
provisions of any joint agreement assigned to the Pharmacopeia Group pursuant
to Section 1.5(c), and (c) the Liabilites set forth on Schedule 6.44
hereto. Notwithstanding the foregoing,
“Pharmacopeia Liabilities” shall exclude (i) any Liabilities for taxes (which
are governed by the Tax Agreement) and (ii) any Liabilities specifically retained
or assumed by Pharmacopeia pursuant to this Agreement.
Section 6.45. Person. “Person” means an individual, a partnership,
a corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an
28
unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
Section 6.46. Proceeds. “Proceeds” has the meaning set forth in
Section 4.4 hereof.
Section 6.47. Record
Date. “Record Date” means the close
of business on the date to be determined by the Pharmacopeia Board as the
record date for determining the stockholders of Pharmacopeia entitled to
receive shares of PDD Common Stock pursuant to a pro-rata distribution of
shares of PDD Common Stock as part of the Distribution.
Section 6.48. Receiving
Party. “Receiving Party” means,
with respect to any asset or liability to be transferred or that is allocated
to a party pursuant to, or as contemplated by, this Agreement, the Ancillary
Agreements or any document in connection herewith or therewith, the party to
which such asset or liability is to be transferred or allocated.
Section 6.49. Remaining
Assets. “Remaining Assets” means
(a) all
accounts, credits, notes, receivables and accounts receivable, related to the
Accelrys Business or PDD Business, as applicable;
(b) all
materials, chemistries, molecular structures and data related thereto which
comprise the libraries of small molecules owned or controlled by Pharmacopeia
and used in the conduct of the Accelrys Business or PDD Business, as
applicable;
(c) all
contracts, agreements and instruments (written or oral) relating to the sale of
any assets, services, properties, materials or products (including all collaboration
agreements and other contracts or licenses with pharmaceutical or biotechnology
companies or other third parties relating to the provision of drug discovery
services in the conduct of the Accelrys Business or PDD Business, as
applicable, operating contracts, distribution and sales representative
contracts and franchise agreements) relating to the Accelrys Business or PDD
Business, as applicable;
(d) all
orders, contracts, supply agreements, equipment leases and other agreements to
the extent relating primarily to the purchase or lease of any assets, services,
properties, materials, or products for the Accelrys Business or PDD Business,
as applicable;
(e) all
other contracts, indemnification agreements, and instruments (written or oral)
to the extent relating to the Accelrys Business or PDD Business, as applicable;
(f) all
rights to receive payments for products sold or services rendered, and to
receive goods and services, pursuant to such contracts and to assert claims and
to take other actions in respect of breaches, defaults and other violations
thereunder in connection with the Accelrys Business or PDD Business, as
applicable;
29
(g) all
rights or choses in action arising out of occurrences before or after the date
hereof, including third party warranties and guaranties and other similar
contractual rights as to third parties held by or in favor of Pharmacopeia and
related to the Accelrys Business or PDD Business, as applicable;
(h) copies
of general books of account and books of original entry that comprise
Pharmacopeia’s permanent or tax records and books and records that Pharmacopeia
is required to retain pursuant to any Law which relates to the Accelrys
Business or PDD Business, as applicable; and
(i) all
other assets that relate to the Accelrys Business or PDD Business, as
applicable.
Section 6.50. Securities
Act. “Securities Act” means the
Securities Act of 1933, as amended.
Section 6.51. Shared
Employee. “Shared Employee” has the
meaning set forth in Section 2.2(e) hereof.
Section 6.52. Subsidiary. “Subsidiary” means with respect to any
specified Person, corporation, limited liability company, partnership or other
legal entity of which such Person or its Subsidiaries owns, directly or indirectly,
more than 50% of the stock or other equity interest entitled to vote on the
election of the members of the board of directors or similar governing body.
Section 6.53. Tax
Agreement. “Tax Agreement” has the
meaning set forth in Section 1.3(b) hereof.
Section 6.54. “Tax
Benefit.” Tax Benefit means a reduction in the tax liability of a taxpayer
(whether a member of the Pharmacopeia Group or the PDD Group) for any taxable
period. Except as otherwise provided in
this Agreement, a Tax Benefit shall be deemed to have been realized or received
in a taxable period only if and to the extent that the tax liability of the
taxpayer for such period, after taking into account the effect of the relevant
item on the tax liability of such taxpayer in all prior periods, is less than
it would have been if such tax liability were determined without regard to such
item.
Section 6.55. Third
Party Claim. “Third Party Claim”
has the meaning set forth in Section 4.6 hereof.
Section 6.56. Transferring
Party. “Transferring Party” means,
with respect to any asset or liability to be transferred or that is allocated
to a party pursuant to, or as contemplated by this Agreement, the Ancillary
Agreements or any document in connection herewith or therewith, the party from
which such asset or liability is to be transferred or allocated.
30
Section 6.57. Transition
Services Agreement. “Transition
Services Agreement” has the meaning set forth in Section 1.3(c) hereof.
31
WHEREFORE, the parties
have signed this Distribution Agreement effective as of the date first set
forth above.
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PHARMACOPEIA, INC.
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PHARMACOPEIA DRUG
DISCOVERY, INC.
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By:
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/s/ John J. Hanlon
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By:
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/s/ Joseph A. Mollica,
Ph.D.
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Name: John J. Hanlon
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Name: Joseph A.
Mollica, Ph.D.
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Title: Chief Executive
Officer
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Title: President and
Chief Executive Officer
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ACCELRYS, INC.
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By:
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/s/ Mark J. Emkjer
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Name: Mark J. Emkjer
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Title: President and
Chief Executive Officer
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