Document:

Unassociated Document

    

      Exhibit
        10.1

    

     

    INVESTOR
      RIGHTS AGREEMENT

     

    This
      Investor Rights Agreement (this “Agreement”) is made and entered into as of June
      15, 2007, by and among Pro Elite, Inc., a New Jersey corporation (the
“Company”), Mark Burnett (“Holder”) and Santa Monica Capital Partners II, LLC,
      (“SMCP”) with reference to the following.

     

    A. Pursuant
      to the binding agreement related to a reality show dated as of June 15, 2007
      between the Company and JMBP, Inc. (“MBP”), the Company has issued to Burnett
      warrants to purchase shares of the Company’s Common Stock (the “Warrants”)
      pursuant to a Warrant Agreement of even date herewith (“Warrant Agreement”) and
      a Subscription Agreement.

     

    B. SMCP
      is
      one of the founding shareholders of the Company.

     

    C. The
      parties desire to enter into this Agreement providing for certain registration
      rights with respect to the shares of the Company’s Common Stock issuable upon
      exercise of the Warrants (the “Warrant Shares”), co-sale rights, restrictions on
      resale, and board observation rights. 

     

    The
      Company, the Holder and SMCP hereby agree as follows:

     

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Warrant Agreement shall have the meanings given such terms in the Warrant
      Agreement. As used in this Agreement, the following terms shall have the
      following meanings:

     

    “Acquisition”
means
      a
      transaction where the principal purpose thereof is the acquisition of assets
      or
      equity interests of a target company, but does not include transactions the
      principal purpose of which is the entering into of joint ventures, license
      agreements, service agreements or similar arrangements.

     

    “Closing”
means
      the closing of the transactions contemplated by the Purchase
      Agreement.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      shares of the Company’s Common Stock.

     

    “Derivative
      Securities”
means
      any securities or rights convertible into, or exercisable or exchangeable for,
      Common Stock, including options, warrants and convertible
      securities.

     

    “Filing
      Date”
means,
      with respect to the S-8 Registration Statement referred to in Section 2, the
      date when the Company is eligible to file an S-8 Registration
      Statement.

     

    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time, of Registrable
      Securities. 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5(c).

     

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5(c).

     

    “Losses”
shall
      have the meaning set forth in Section 5(a).

     

    “Ownership
      Percentage”
means
      and includes the number of Registrable Shares held by Holder (assuming the
      exercise of all vested Warrants) divided by the aggregate of the total number
      of
      all other securities entitled to registration pursuant to any agreement with
      the
      Company and held by others participating in the underwriting (other than shares
      with Prior Registration Rights). 

     

    “Permitted
      Transferee”
shall
      have the meaning set forth in the Subscription Agreement as of the date hereof
      between Holder and the Company.

     

    “Person”
means
      any individual, partnership, corporation, group, trust or other legal
      entity.

     

    “Plan
      of Distribution”
shall
      have the meaning set forth in Section 2.2.

     

    “Prior
      Registration Rights”
shall
      mean (i) any registration rights existing as of the date hereof, or (ii) any
      registration rights granted after the date hereof in connection with bona fide
      financing transactions or Acquisitions.

     

    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened. 

     

    “Proportionate
      Percentage”
as
      to a
      party hereto means for the purposes of Section 7, the pro rata
      percentage of the number of Shares to which a Section 7 Offer relates which
pro rata
      percentage shall be the percentage figure which expresses the ratio, on a Common
      Stock equivalent basis, between the number of Shares owned by a Section 7
      Offeree (assuming exercise of all outstanding Derivative Securities which are
      then vested) and the aggregate number of Shares owned (assuming exercise of
      all
      outstanding Derivative Securities which are then vested) by all Section 7
      Offerees at the date of determination.

     

    “Prospectus”
means
      the prospectus included in the Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by the Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus. 

     

    “Registrable
      Securities”
means,
      as to this Agreement only, all of the Warrant Shares, together with any shares
      of the Company’s Common Stock issued or issuable upon any stock split, dividend
      or other distribution, recapitalization or similar event with respect to the
      foregoing. 

     

    
      
         

      

      
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    “Registration
      Statement”
means
      the registration statements required to be filed hereunder, including (in each
      case) the Prospectus, amendments and supplements to the registration statement
      or Prospectus, including pre- and post-effective amendments, all exhibits
      thereto, and all material incorporated by reference or deemed to be incorporated
      by reference in the registration statement. 

     

    “Rule
      415”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule. 

     

    “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule. 

     

    “Securities
      Act”
means
      to Securities Act of 1933, as amended.

     

    “Selling
      Shareholder Questionnaire”
shall
      have the meaning set forth in Section 3(a).

     

    “Transfer”
means
      any assignment, sale, disposition or any other like transfer of
      securities.

     

    2. Registration.

     

    2.1 S-8
      Registration Statement.

     

    (a) As
      soon
      as practicable after the Filing Date, the Company shall prepare and file with
      the Commission, and in accordance with the Securities Act and all applicable
      regulations promulgated thereunder, an S-8 Registration Statement covering
      the
      resale of all of the Registrable Securities. The S-8 Registration Statement
      required hereunder shall contain a
      reoffer
      prospectus as defined in the General Instructions to such form.

     

    (b) Notwithstanding
      the foregoing obligations, if, on advice from the Company’s counsel that an S-8
      Registration Statement is not then available for the resale of the Registrable
      Securities, the Company shall not be obligated to file such Registration
      Statement, or if so filed, the Company shall have the right to withdraw such
      Registration Statement, in each case until such time as counsel to the Company
      advises the Company that such Registration Statement is so available.

     

    2.2 “Piggy
      Back” Registration.
      If at
      any time the Company shall determine to register under the Securities Act
      (including pursuant to a demand of any stockholder of the Company exercising
      registration rights) any of its common stock (other than a registration relating
      solely to the sale of securities to participants in a Company employee benefits
      plan, or a registration on any form which does not include substantially the
      same information as would be required to be included in a registration statement
      covering the sale of the Registrable Shares), it shall send to Holder written
      notice of such determination and, if within ten (10) business days after receipt
      of such notice, Holder shall so request in writing, the Company shall use its
      best efforts to include in such registration statement all of the Registrable
      Shares that Holder requests to be registered, except that if, in connection
      with
      any offering involving an underwriting of common stock to be issued by the
      Company, the managing underwriter shall impose a limitation on the number of
      shares of common stock included in any such registration statement because,
      in
      such underwriter’s judgment, such limitation is necessary based on market
      conditions, the Company shall be obligated to include in such registration
      statement, with respect to the requesting Holder, only an amount of Registrable
      Shares equal to the product of (i) the total number of shares of Common Stock
      to
      be included in such registration statement after (x) the underwriter’s cut back,
      if any, (y) any securities which have Prior Registration Rights and (z)
      securities offered by the Company for its own account, and (ii) Holder’s
      Ownership Percentage. If Holder disapproves of the terms of such underwriting,
      he may elect to withdraw therefrom by written notice to the Company and the
      underwriter. Notwithstanding the foregoing, in the event that the Company,
      in
      its reasonable judgment, concludes that the number of shares otherwise to be
      included in the Registration Statement exceeds the number of shares allowable
      pursuant to Rule 145, the right of Holder hereunder shall be subordinate to
      any
      Prior Registration Rights. In addition, except in connection with a registration
      statement for an underwritten offering, the rights set forth in this Section
      2.2
      shall not apply during any period that an S-8 Registration is available to
      cover
      the resale of the Registrable Securities. 

    
      
         

      

      
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    3. Registration
      Procedures.

     

    In
      connection with the Company’s registration obligations pursuant to this
      Agreement, the Company shall:

     

    (a) Not
      less
      than five trading days prior to the filing of the Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto, the Company shall
      furnish to Holder copies of any disclosure relating to Holder, including but
      not
      limited to the Selling Stockholder and Plan of Distribution sections which
      sections shall be subject to the review of Holder. Prior to any filing relating
      to the Registration Statement pursuant to Section 2.2, Holder agrees to furnish
      to the Company a completed Questionnaire substantially in the form attached
      to
      this Agreement as Annex B (a “Selling
      Shareholder Questionnaire”)
      within
      five trading days of written request by the Company.

     

    (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to the Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep the Registration Statement continuously
      effective for the period described in the Plan of Distribution set forth in
      the
      Registration Statement and cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424;
      (ii)
      respond as promptly as reasonably practicable to any comments received from
      the
      Commission with respect to the Registration Statement or any amendment thereto
      and, as promptly as reasonably practicable, upon request, provide the Holders
      upon request true and complete copies of all correspondence from and to the
      Commission relating to the Registration Statement; (iii) comply in all material
      respects with the provisions of the Securities Act and the Exchange Act with
      respect to the disposition of all Registrable Securities covered by the
      Registration Statement during the applicable period in accordance with the
      intended methods of disposition by the Holder set forth in the Registration
      Statement as so amended or in such Prospectus as so supplemented; and (iv)
      take
      all other actions as may be reasonably necessary or appropriate in furtherance
      of the matters required by this Section 3(b).

    
      
         

      

      
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    (c) Notify
      Holder as promptly as reasonably practicable following the day (i) with respect
      to the Registration Statement or any post-effective amendment, when the same
      has
      become effective; (ii) of the issuance by the Commission or any other federal
      or
      state governmental authority of any stop order suspending the effectiveness
      of
      the Registration Statement covering any or all of the Registrable Securities
      or
      the initiation of any Proceedings for that purpose; (iii) of the receipt by
      the
      Company of any notification with respect to the suspension of the qualification
      or exemption from qualification of any of the Registrable Securities for sale
      in
      any jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; and (iv) of the occurrence of any event or passage of time that makes
      the financial statements included in the Registration Statement ineligible
      for
      inclusion therein or any statement made in the Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      the
      Registration Statement, Prospectus or other documents so that, in the case
      of
      the Registration Statement or the Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not
      misleading. 

     

    (d) Use
      commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
      the withdrawal of (i) any order suspending the effectiveness of the Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

     

    (e) Promptly
      deliver to Holder, without charge and upon request, as many copies of the
      Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Persons may reasonably request in
      connection with resales by Holder. Subject to the terms of this Agreement,
      the
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by Holder in connection with the offering and sale of the
      Registrable Securities covered by such Prospectus and any amendment or
      supplement thereto, except after the giving on any notice pursuant to Section
      3(c) until the Company has delivered the Advice and either the supplemented
      prospectus or the amended Registration Statement as contemplated by Section
      6(c).

     

    (f) Prior
      to
      any resale of Registrable Securities by the Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the Holder in
      connection with the registration or qualification (or exemption from the
      Registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep the
      Registration or qualification (or exemption therefrom) effective during the
      distribution period described in the Registration Statement and to do any and
      all other acts or things reasonably necessary to enable the disposition in
      such
      jurisdictions of the Registrable Securities covered by the Registration
      Statement, provided, that the Company shall not be required to qualify generally
      to do business in any jurisdiction where it is not then so qualified, subject
      the Company to any tax in any such jurisdiction where it is not then so subject
      or file a general consent to service of process in any such
      jurisdiction.

    
      
         

      

      
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    (g) If
      requested by the Holder, cooperate with the Holder to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to the Registration Statement, which
      certificates shall be free, to the extent permitted by any applicable purchase
      agreement, of all restrictive legends, and to enable such Registrable Securities
      to be in such denominations and registered in such names as any such Holders
      may
      request.

     

    (h) Upon
      the
      occurrence of any event contemplated by Section 3(c)(iv), as promptly as
      reasonably possible, prepare a supplement or amendment, including a
      post-effective amendment, to the Registration Statement or a supplement to
      the
      related Prospectus or any document incorporated or deemed to be incorporated
      therein by reference, and file any other required document so that, as
      thereafter delivered, neither the Registration Statement nor such Prospectus
      will contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not
      misleading.

     

    (i) Comply
      with all applicable rules and regulations of the Commission.

     

    4. Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to any Registration Statement. The
      fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses with respect to filings required to be made with the trading
      market on which the Common Stock is then listed for trading, (ii) printing
      expenses (including, without limitation, expenses of printing certificates
      for
      Registrable Securities and of printing prospectuses if the printing of
      prospectuses is reasonably requested by the holders of a majority of the
      Registrable Securities included in the Registration Statement), (iii) messenger,
      telephone and delivery expenses, (iv) fees and disbursements of counsel for
      the
      Company, (v) Securities Act liability insurance, if the Company so desires
      such
      insurance, and (vi) fees and expenses of all other Persons retained by the
      Company in connection with the consummation of the transactions contemplated
      by
      this Agreement. In addition, the Company shall be responsible for all of its
      internal expenses incurred in connection with the consummation of the
      transactions contemplated by this Agreement (including, without limitation,
      all
      salaries and expenses of its officers and employees performing legal or
      accounting duties), the expense of any annual audit and the fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange as required hereunder. In no event shall the Company be
      responsible for any broker or similar commissions or any legal fees or other
      costs of Holder. 

    
      
         

      

      
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    5. Indemnification.

     

    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless Holder, the officers, directors, agents, managers, members,
      partners, shareholders and employees of Holder, each Person who controls Holder
      (within the meaning of Section 15 of the Securities Act or Section 20 of the
      Exchange Act) and the officers, directors, agents and employees of each such
      controlling Person, to the fullest extent permitted by applicable law, from
      and
      against any and all losses, claims, damages, liabilities, costs (including,
      without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”),
      as
      incurred, arising out of or relating to any untrue or alleged untrue statement
      of a material fact contained in the Registration Statement, any Prospectus
      or
      any form of prospectus or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein (in the case of any Prospectus or form of prospectus
      or
      supplement thereto, in light of the circumstances under which they were made)
      not misleading, except to the extent, but only to the extent, that (i) such
      untrue statements or omissions are based solely upon information regarding
      Holder furnished in writing to the Company by Holder expressly for use therein,
      or to the extent that such information relates to Holder or Holder’s proposed
      method of distribution of Registrable Securities and was reviewed and expressly
      approved in writing by such Holder expressly for use in the Registration
      Statement, such Prospectus or such form of Prospectus or in any amendment or
      supplement thereto (it being understood that Holder has approved Annex A hereto
      for this purpose) or (ii) in the case of an occurrence of an event of the type
      specified in Section 3(c), the use by Holder of an outdated or defective
      Prospectus after the Company has notified Holder in writing that the Prospectus
      is outdated or defective. The Company shall notify Holder promptly of the
      institution, threat or assertion of any Proceeding of which the Company is
      aware
      in connection with the transactions contemplated by this Agreement. 

     

    (b) Indemnification
      by Holder.
      Holder
      shall, severally and not jointly, indemnify and hold harmless the Company,
      its
      directors, officers, agents and employees, each Person who controls the Company
      (within the meaning of Section 15 of the Securities Act and Section 20 of the
      Exchange Act), and the directors, officers, agents or employees of such
      controlling Persons, to the fullest extent permitted by applicable law, from
      and
      against all Losses, as incurred, to the extent arising out of or based solely
      upon: (i) Holder’s failure to comply with the prospectus delivery requirements
      of the Securities Act or (ii) any untrue or alleged untrue statement of a
      material fact contained in any Registration Statement, any Prospectus, or any
      form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading, in each case (A) to the extent, but
      only
      to the extent, that such untrue statement or omission is contained in any
      information so furnished in writing by Holder to the Company specifically for
      inclusion in the Registration Statement or such Prospectus or (B) to the extent
      that (x) such untrue statements or omissions are based solely upon information
      regarding Holder furnished in writing to the Company by such Holder expressly
      for use therein, or (C) to the extent that such information relates to Holder
      or
      Holder’s proposed method of distribution of Registrable Securities and was
      reviewed and expressly approved in writing by Holder expressly for use in the
      Registration Statement (it being understood that Holder has approved Annex
      A
      hereto for this purpose), such Prospectus or such form of Prospectus or in
      any
      amendment or supplement thereto or (y) in the case of an occurrence of an event
      of the type specified in Section 3(c), the use by Holder of an outdated or
      defective Prospectus after the Company has notified Holder in writing that
      the
      Prospectus is outdated or defective; provided,
      however,
      that
      the indemnity agreement contained in this Section 5(b) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of Holder. In no event shall
      the liability of any selling Holder hereunder be greater in amount than the
      dollar amount of the net proceeds received by Holder upon the sale of the
      Registrable Securities giving rise to such indemnification
      obligation. 

    
      
         

      

      
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    (c) Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the
      right to assume the defense thereof, including the employment of counsel
      reasonably satisfactory to the Indemnified Party and the payment of all fees
      and
      expenses incurred in connection with defense thereof; provided, that the failure
      of any Indemnified Party to give such notice shall not relieve the Indemnifying
      Party of its obligations or liabilities pursuant to this Agreement, except
      (and
      only) to the extent that it shall be finally determined by a court of competent
      jurisdiction (which determination is not subject to appeal or further review)
      that such failure shall have prejudiced the Indemnifying Party. 

     

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (ii) the Indemnifying Party shall have failed promptly to assume
      the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (iii) the named parties to any
      such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and such Indemnified Party shall reasonably believe
      that a material conflict of interest is likely to exist if the same counsel
      were
      to represent such Indemnified Party and the Indemnifying Party (in which case,
      if such Indemnified Party notifies the Indemnifying Party in writing that it
      elects to employ separate counsel at the expense of the Indemnifying Party,
      the
      Indemnifying Party shall not have the right to assume the defense thereof and
      the reasonable fees and expenses of one separate counsel shall be at the expense
      of the Indemnifying Party). The Indemnifying Party shall not be liable for
      any
      settlement of any such Proceeding effected without its written consent, which
      consent shall not be unreasonably withheld. No Indemnifying Party shall, without
      the prior written consent of the Indemnified Party, effect any settlement of
      any
      pending Proceeding in respect of which any Indemnified Party is a party, unless
      such settlement includes an unconditional release of such Indemnified Party
      from
      all liability on claims that are the subject matter of such Proceeding.

     

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten trading days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is not entitled
      to
      indemnification hereunder, determined based upon the relative faults of the
      parties. 

    
      
         

      

      
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    (d) Contribution.
      If a
      claim for indemnification under Section 5(a) or 5(b) is unavailable to an
      Indemnified Party (by reason of public policy or otherwise), then each
      Indemnifying Party, in lieu of indemnifying such Indemnified 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 and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Agreement, any reasonable attorneys’ or other reasonable fees or
      expenses incurred by such party in connection with any Proceeding to the extent
      such party would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party in
      accordance with its terms. 

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission, except in the case of fraud
      by
      such Holder. 

     

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties. 

     

    6. Rights
      and Obligations of Holder and the Company.
      

     

    (a) Remedies.
      In the
      event of a breach by the Company or by Holder of any of their obligations under
      Sections 2 and 3 of this Agreement, Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement will be entitled to specific performance of its rights
      under this Agreement. The parties agree that monetary damages would not provide
      adequate compensation for any losses incurred by reason of a breach by it of
      any
      of the provisions of this Agreement and hereby further agrees that, in the
      event
      of any action for specific performance in respect of such breach, it shall
      waive
      the defense that a remedy at law would be adequate. 

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (b) Compliance.
      Holder
      covenants and agrees that he will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to the Registration Statement. 

     

    (c) Discontinued
      Disposition.
      Holder
      agrees by his acquisition of such Registrable Securities that, upon receipt
      of a
      notice from the Company of the occurrence of any event of the kind described
      in
      Section 3(c), Holder will forthwith discontinue disposition of such Registrable
      Securities under the Registration Statement until Holder’s receipt of the copies
      of the supplemented Prospectus and/or amended Registration Statement or until
      it
      is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company will use its best efforts to ensure that
      the
      use of the Prospectus may be resumed as promptly as it practicable.

     

    7. Right
      of Co-Sale.

     

    (a) In
      the
      event that SMCP or any member thereof, on the one hand, or Holder, on the other
      hand, (each, a “Section
      7 Offeree”)
      receives a bona fide arms length offer (the “Section 7
      Offer”)
      from a
      Person (the “Section 7
      Offeror”)
      to
      acquire any shares of Common Stock (the “Shares”) owned by such Section 7
      Offeree for a specified price payable in cash or otherwise and on specified
      terms and conditions, such Section 7 Offeree shall promptly forward a notice
      (the “Section 7
      Notice”)
      complying with Section 7(b) to the other party (the “Notified Party”).
      Subject to Section 7(c) and (d), such Section 7 Offeree shall not Transfer
      any Shares to the Section 7 Offeror unless the terms of the Section 7
      Offer are extended to the Notified Party with respect to its Proportionate
      Percentage of Common Stock to which the Section 7 Offer relates, whereupon
      the Notified Party shall be entitled to Transfer to the Section 7 Offeror
      pursuant to the Section 7 Offer such other party’s Proportionate Percentage
      of Common Stock to which the Section 7 Offer relates.

     

    (b) The
      Section 7 Notice shall set forth (i) the number of Shares to which the
      Section 7 Offer relates and the name of the Section 7 Offeree, (ii)
      the name and address of the Section 7 Offeror, (iii) the proposed amount
      and type of consideration including, if the consideration consists in whole
      or
      in part of non-cash consideration, such information available to such Section
      7
      Offeree as may be reasonably necessary for the Notified Party to properly
      analyze the economic value and investment risk of such non-cash consideration
      and the terms and conditions of payment offered by the Section 7 Offeror,
      and (iv) that the Section 7 Offeror has been informed of the co-sale rights
      provided for in this Section 7 and has agreed to purchase Shares in
      accordance with the terms of this Section 7. 

     

    (c) The
      provisions of this Section 7 shall not apply to any sale by a Section 7 Offeree
      in a brokers’ transaction (as such term is defined in Rule 144), pursuant to an
      effective resale registration statement, in connection with the transfer to
      any
      affiliate of such Section 7 Offeree, in connection with a bona fide gift, for
      compensation purposes, or pursuant to any hedging or similar transaction,
      provided, however, any affiliate transferee or donee shall be subject to the
      provisions of this Section 7.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (d) The
      obligations of SMCP and its members pursuant to this Section 7 shall apply
      only
      to sales of at least 5,625,000 Shares in one transaction or series of related
      transactions, and the obligations of Holder pursuant to this Section 7 shall
      apply to sales of at least 8,500,000 Shares. The covenants set forth in this
      Section 7 shall terminate and be of no further force or effect at such time
      as
      (a) in the case of SMCP and its members, the aggregate number of Shares owed
      is
      less than 5,625,000, and (b) in the case of Holder, the aggregate number of
      Shares (including Shares issuable upon the exercise of Warrants which have
      not
      been forfeited) is less than 8,500,000.

     

    8. Board
      Observer Right.

     

    Holder
      shall have the right to designate one person as an observer to Company’s board
      of directors which person shall be either Mark Burnett or Conrad Riggs. The
      Company shall provide such designee with as much advance notice as reasonably
      practicable as to the time and place of board meetings. Holder shall be
      responsible for all costs and expenses related to such designee’s observer
      status. Such designee shall be subject to the Company’s Insider Trading Policy
      with respect to any securities beneficially owned by such designee.

     

    9. Sale
      Restrictions.

     

    9.1 Lock-up.
      During
      the period beginning on the date hereof and ending April 3, 2008 (the “Lock-up
      Period”), Holder will not sell, transfer, assign, pledge or hypothecate any
      Warrants or Warrant Shares (the “Covered
      Securities”),
      unless it is to a Permitted Transferee that agrees to be subject to the terms
      and conditions of this Section. In addition, during the Lock-Up Period, the
      Covered Securities shall not be the subject of any hedging, short sale,
      derivative, put, or call transactions that would result in the effective
      economic disposition of the Covered Securities by any person. The obligations
      of
      the Holder that are contained in herein also apply (i) to all Covered
      Securities that Holder may receive as a stock dividend or other distribution
      on
      the Covered Securities and (ii) to all other securities of the Company that
      Holder may receive in a recapitalization or similar transaction in exchange
      for
      Covered Securities acquired by Holder. The Company represents and warrants
      to
      the Holder that 24,250,000 shares of Common Stock of the Company (identified
      on
      Schedule A to the Subscription Agreement) are subject to the restrictions set
      forth in this Section 9.1 and that such restrictions may not be waived without
      the consent of Hunter World Markets, Inc.

     

    9.2 Leakage.
      In
      addition to the provisions of Section 9.1, during any period that a Registration
      Statement pursuant to Section 2.1 that includes the Registrable Securities
      is
      effective and available (and not unavailable due to any factors mentioned in
      Section 3(c)), Holder shall not sell (a) any Warrant Shares in excess of the
      amount permitted under Rule 144(e) whether such Rule is then applicable to
      such
      sales, (b) in any trading day, Warrant Shares in excess of 20% of the volume
      of
      trading of the Company’s securities during such day, and (c) any Warrant Shares
      during the last three trading days of any month. The provisions of this Section
      9.2 shall not apply to (i) private sales of the Warrant Shares (including sales
      in connection with cosale rights or in connection with a Change of Control),
      (ii) sales in connection with an underwritten offering or (iii) transfers to
      Permitted Transferees provided that any such Person agrees to be bound by the
      provisions of this Section. Notwithstanding the foregoing, the provisions set
      forth in this Section 9.2 shall expire once the Holder beneficially owns less
      than 4,000,000 Shares (adjusted for any stock splits, recapitalizations or
      similar events).

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    10. Miscellaneous.

     

    (a) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. Each Holder may assign their respective rights hereunder to its
      Permitted Transferees.

     

    (b) Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    (c) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be with the internal laws of the State of California,
      without giving effect to the principles of conflicts of law. All actions arising
      out of or relating to this Agreement shall be heard and determined exclusively
      in any California federal court sitting in the City of Los Angeles.

     

    (d) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law. 

     

    (e) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

     

    (f) Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof. 

     

    (g) Term.

     

    (a) The
      obligations of the Company pursuant to Sections 2 and 3 hereunder shall extend
      until all the Registrable Securities have been sold or may be sold without
      regard to the volume restrictions of Rule 144.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (b) This
      Agreement shall terminate and be of no further force and effect if a License
      Agreement is not entered into within the one-year period following the date
      hereof.

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as
      of
      the date first written above. 

     

    
      	 	
              PRO
                ELITE, INC.

               

               

              By:
                ________________________________

                    
                Name: Douglas DeLuca

                    
                Title: Chief Executive Officer

               

              By:
                ________________________________

                    
                Name: Mark Burnett

               

            
	 	
               

               

            
	 	
              SANTA
                MONICA CAPITAL PARTNERS II, LLC

               

              By:
                Santa Monica Capital, LLC

               

                    
                By: _____________________________

                           
                Name: David Marshall

                           
                Title: Manager

               

            
	 	 
	 	
              DAVID
                MARSHALL, as
                to Section 7 only

               

              ____________________________________

               

            
	 	 
	 	
              KURT
                BRENDLINGER, as
                to Section 7 only

               

              ____________________________________

               

            
	 	 
	 	
              ERIC
                PULIER, as
                to Section 7 only

               

              ____________________________________

               

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    ANNEX
      A

     

    PLAN
      OF DISTRIBUTION

     

    The
      Selling Stockholders (the “Selling
      Stockholders”)
      of the
      common stock (“Common
      Stock”)
      of Pro
      Elite, Inc., a New Jersey corporation (the “Company”)
      and
      any of their pledgees, assignees and successors-in-interest may, from time
      to
      time, sell any or all of their shares of Common Stock on any stock exchange,
      market or trading facility on which the shares are traded or in private
      transactions. These sales may be at fixed or negotiated prices. The Selling
      Stockholders may use any one or more of the following methods when selling
      shares: 

     

    
      	 	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers; 

            

    

     

    
      	 	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction; 

            

    

     

    
      	 	
              ·

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account; 

            

    

     

    
      	 	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            

    

     

    
      	 	
              ·

            	
              settlement
                of short sales entered into after the date of this
                prospectus;

            

    

     

    
      	 	
              ·

            	
              broker-dealers
                may agree with the Selling Stockholders to sell a specified number
                of such
                shares at a stipulated price per share;

            

    

     

    
      	 	
              ·

            	
              a
                combination of any such methods of
                sale;

            

    

     

    
      	 	
              ·

            	
              through
                the writing or settlement of options or other hedging transactions,
                whether through an options exchange or otherwise; or
                

            

    

     

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable law.
                

            

    

     

    The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended (the “Securities
      Act”),
      if
      available, rather than under this prospectus. 

     

    Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. Each
      Selling Stockholder does not expect these commissions and discounts relating
      to
      its sales of shares to exceed what is customary in the types of transactions
      involved. 

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    In
      connection with the sale of our common stock or interests therein, the Selling
      Stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume. The Selling
      Stockholders may also sell shares of our common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The Selling
      Stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such transaction).

     

    The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Each Selling Stockholder has informed the
      Company that it does not have any agreement or understanding, directly or
      indirectly, with any person to distribute the Common Stock. 

     

    The
      Company is required to pay certain fees and expenses incurred by the Company
      incident to the registration of the shares. The Company has agreed to indemnify
      the Selling Stockholders against certain losses, claims, damages and
      liabilities, including liabilities under the Securities Act.

     

    Because
      Selling Stockholders may be deemed to be “underwriters” within the meaning of
      the Securities Act, they will be subject to the prospectus delivery requirements
      of the Securities Act. In addition, any securities covered by this prospectus,
      which qualify for sale pursuant to Rule 144 under the Securities Act, may be
      sold under Rule 144 rather than under this prospectus. Each Selling Stockholder
      has advised us that they have not entered into any agreements, understandings
      or
      arrangements with any underwriter or broker-dealer regarding the sale of the
      resale shares. There is no underwriter or coordinating broker acting in
      connection with the proposed sale of the resale shares by the Selling
      Stockholders. 

     

    We
      agreed
      to keep this prospectus effective until the earlier of (i) the date on which
      the
      shares may be resold by the Selling Stockholders without registration and
      without regard to any volume limitations by reason of Rule 144(k) under the
      Securities Act or any other rule of similar effect or (ii) all of the shares
      have been sold pursuant to the prospectus or Rule 144 under the Securities
      Act
      or any other rule of similar effect. The resale shares will be sold only through
      registered or licensed brokers or dealers if required under applicable state
      securities laws. In addition, in certain states, the resale shares may not
      be
      sold unless they have been registered or qualified for sale in the applicable
      state or an exemption from the registration or qualification requirement is
      available and is complied with. 

     

    Under
      applicable rules and regulations under the Exchange Act, any person engaged
      in
      the distribution of the resale shares may not simultaneously engage in market
      making activities with respect to our common stock for a period of two business
      days prior to the commencement of the distribution. In addition, the Selling
      Stockholders will be subject to applicable provisions of the Exchange Act and
      the rules and regulations thereunder, including Regulation M, which may limit
      the timing of purchases and sales of shares of our common stock by the Selling
      Stockholders or any other person. We will make copies of this prospectus
      available to the Selling Stockholders and have informed them of the need to
      deliver a copy of this prospectus to each purchaser at or prior to the time
      of
      the sale. 

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    ANNEX
      B

     

    Pro
      Elite, Inc.

     

    SELLING
      SECURITYHOLDER NOTICE AND QUESTIONNAIRE

     

    The
      undersigned beneficial owner of common stock, (the “Common
      Stock”),
      of
      Pro Elite, Inc., a New Jersey corporation (the “Company”),
      (the
“Registrable
      Securities”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “Commission”)
      a
      registration statement on Form SB-2 (the “Registration Statement”) for the
      registration and resale under Rule 415 of the Securities Act of 1933, as amended
      (the “Securities
      Act”),
      of
      the Registrable Securities, in accordance with the terms of the Investor Rights
      Agreement, dated as of June 15, 2007 (the “Investor
      Rights Agreement”),
      among
      the Company and the holder named therein. A copy of the Investor Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms not otherwise defined herein shall have the
      meanings ascribed thereto in the Investor Rights Agreement. 

     

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Registration Statement and the related
      prospectus. 

     

    NOTICE

     

    The
      undersigned beneficial owner (the “Selling
      Securityholder”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it and listed below in Item 3 (unless otherwise specified under such Item
      3)
      in the Registration Statement. 

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    QUESTIONNAIRE

     

    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate: 

     

    
      	
              1. 

            	
              Name.

            
	 	 	 
	 	
              (a) 

            	
              Full
                Legal Name of Selling Securityholder 

               

               

            
	 	 	 
	 	
              (b) 

            	
              Full
                Legal Name of Registered Holder (if not the same as (a) above) through
                which Registrable Securities Listed in Item 3 below are held:

               

               

            
	 	 	 
	 	
              (c) 

            	
              Full
                Legal Name of Natural Control Person (which means a natural person
                who
                directly or indirectly alone or with others has power to vote or
                dispose
                of the securities covered by the questionnaire): 

               

               

            
	 	 
	
              2. 

            	
              Address
                for Notices to Selling Securityholder: 

               

              Telephone:__________________________________________________

               

              Fax:________________________________________________________

               

              Contact
                Person:_______________________________________________

            
	 	 
	
              3. 

            	
              Beneficial
                Ownership of Registrable Securities: 

            
	 	 	 
	 	
              (a) 

            	
              Type
                and Number of Registrable Securities beneficially owned: 

               

               

            
	 	 	 
	 	 	 
	 	 
	
              4. 

            	
              Broker-Dealer
                Status:

            
	 	 	 
	 	
              (a) 

            	
              Are
                you a broker-dealer?

            
	 	 	 	 	 	 
	 	 	
              Yes

            	
               ̈

            	
              No

            	
               ̈

            
	 	 	 
	 	 	
              Note: If
                yes, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	 	
              (b) 

            	
              Are
                you an affiliate of a broker-dealer?

            
	 	 	 	 	 	 
	 	 	
              Yes

            	
               ̈

            	
              No

            	
               ̈

            
	 	 	 
	 	
              (c) 

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable Securities?

            
	 	 	 	 	 	 
	 	 	
              Yes

            	
               ̈

            	
              No

            	
               ̈

            
	 	 	 
	
              5. 

            	 	
              Beneficial
                Ownership of Other Securities of the Company Owned by the Selling
                Securityholder. 

            
	 	 	 
	 	 	
              Except
                as set forth below in this Item 5, the undersigned is not the beneficial
                or registered owner of any securities of the Company other than the
                Registrable Securities listed above in Item 3.

            
	 	 	 
	 	
              (a) 

            	
              Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder:

               

               

            
	 	 	 
	 	 	 
	
              6. 

            	 	
              Relationship
                with the Company:

            
	 	 	 
	 	 	
              Except
                as set forth below, neither the undersigned nor any of its affiliates,
                officers, directors or principal equity holders (owners of 5% of
                more of
                the equity securities of the undersigned) has held any position or
                office
                or has had any other material relationship with the Company (or its
                predecessors or affiliates) during the past three years. State any
                exceptions here:

            
	 	 	 
	 	 	
              State
                any exceptions here:

               

               

            
	 	 	 

    

     

     

    The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 6 and the inclusion of such
      information in the Registration Statement and the related prospectus. The
      undersigned understands that such information will be relied upon by the Company
      in connection with the preparation or amendment of the Registration Statement
      and the related prospectus. 

     

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent. 

     

    

    
      	
              Dated: ________________

            	
              Beneficial
                Owner

               

              ________________________________

               

               

              By:__________________________________

              Name:_____________________________

              Title:______________________________

            

    

    

    

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO: 

     

    
      
         

      

      
        20Exhibit 10.1

                                  June 19, 2007

PRIVATE AND CONFIDENTIAL

Mr. Peter J. Nelson
Chair, Audit Committee of the Board of Directors
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, Massachusetts 02139-4234

Dear Pete:

       In connection with our discussions concerning a potential strategic or
business combination transaction (the "Possible Transaction") between ARIAD
Pharmaceuticals, Inc. ("ARIAD" or the "Company")) and ARIAD Gene Therapeutics,
Inc. ("AGTI") or the stockholders of AGTI other than ARIAD, the undersigned,
Harvey J. Berger, M.D. ("Berger") and Jay R. LaMarche ("LaMarche" and, together
with Berger, the "AGTI Stockholders"), acting in their respective individual
capacities as minority stockholders of AGTI as more fully described herein, have
requested certain information concerning ARIAD and AGTI and the ability to
disclose such information to their financial and legal advisors for the purpose
of evaluating a Possible Transaction. This information is confidential and
proprietary to ARIAD and AGTI and not otherwise available. The purpose of this
agreement together with Exhibit A and Exhibit B attached hereto (collectively,
the "Agreement") is to confirm our understanding with ARIAD with regard to our
use of and access to confidential information and the other matters set forth
herein. In that connection, we and ARIAD agree as follows:

       1.  Individual Capacity. Solely with respect to the discussions and
negotiations concerning a Possible Transaction, ARIAD acknowledges and agrees
that the AGTI Stockholders are acting in their individual capacities as minority
stockholders of AGTI and not on behalf of or in any capacity (whether as an
officer, director or other fiduciary or otherwise) with regard to AGTI or any
other stockholder of AGTI, or ARIAD or any stockholder of ARIAD. ARIAD further
acknowledges and agrees that neither AGTI Stockholder, acting in his individual
capacity as a minority stockholder of AGTI, has the authority to bind or
obligate AGTI or any of the other stockholders of AGTI (such stockholders, other
than ARIAD, the "Other Minority AGTI Stockholders") to enter into any Possible
Transaction.

       2.  Confidentiality Agreement. The AGTI Stockholders (each, a "Receiving
Party") hereby agree to treat and keep all information, whether written or oral,
concerning ARIAD and AGTI (each, a "Disclosing Party"), or any of their
respective affiliates, subsidiaries or divisions, which the Disclosing Party or
any of its Representatives furnishes, whether before or after the date of this
Agreement, to each Receiving Party and/or its Representatives, together with all
originals or copies of all notes, reports, records, forecasts, analyses,
compilations, data, studies and other materials which contain or otherwise
reflect or are generated from such information (collectively, the "Evaluation
Material"), confidential and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the term "Evaluation Material" shall
not for the purposes of this Agreement include any information which (a) at the
time of disclosure or thereafter is generally available to and/or known by the
public other than as a result of a disclosure by the Receiving Party or its
Representatives in breach of this Agreement, or (b) has been independently
acquired by the Receiving Party without violating any of the obligations of the
Receiving Party or its Representatives under this Agreement. "Representatives"
of any person shall mean the financial advisors, marketing consultants and legal
advisors of such person and its affiliates.

<PAGE>

       3.  Use of Evaluation Material and Confidentiality.

           (a) Subject to Paragraph 3(b) below, the Evaluation Material will be
kept confidential by the Receiving Party and its Representatives and will not,
without the prior written consent of ARIAD, be disclosed, in whole or in part,
to any third party by the Receiving Party or any of its Representatives in any
manner whatsoever. In addition, the Receiving Party hereby agrees that it will
transmit Evaluation Material only to those of its Representatives who need to
know the information for the purpose of rendering professional advice to the
Receiving Party in connection with the Receiving Party's evaluation of a
Possible Transaction and who agree in advance in writing with ARIAD to be bound
by the confidentiality provisions contained in this Agreement as if a party
hereto with respect to such provisions; provided, however, that this Section
3(a) shall not limit the Receiving Party's (or its Representatives') right to
disclose Evaluation Material in connection with disclosure of Possible
Transaction Discussions to Other Minority AGTI Stockholders in compliance with
Section 4. Notwithstanding anything to the contrary provided in any other
agreement to which ARIAD or AGTI, on the one hand, and one or more of the AGTI
Stockholders, on the other hand, is a party, in the event that there is any
inconsistency with or conflict between the terms of such other agreement and the
terms of this Agreement with regard to the use and/or the disclosure of
confidential or proprietary information or property of ARIAD or AGTI by the AGTI
Stockholders, the terms of this Agreement shall govern.

           (b) In the event that the Receiving Party or any of its
Representatives is requested or required in a civil, investigative, or other
proceeding initiated by a private third party or by a governmental or other
regulatory body (by means of interrogatories, requests for information or
documents, subpoena, deposition notice, civil investigative demand or similar
process) to disclose (i) any Evaluation Material, (ii) any information relating
to the opinion, judgment or recommendation of any such person concerning the
Disclosing Party, its affiliates or subsidiaries, or (iii) any other information
supplied to the Receiving Party in the course of the Receiving Party's, or its
Representatives', dealings with the Disclosing Party, the Receiving Party will
promptly notify ARIAD of such request or requirement so that the Disclosing
Party or other party in interest may seek an appropriate protective order or
waive compliance with the provisions of this Agreement, and/or take any other
mutually agreed action. If, in the absence of a protective order or the receipt
of a waiver hereunder, the Receiving Party or any of its Representatives is
compelled to disclose information or else stand liable for contempt or suffer
other censure or sanction, the Receiving Party or such Representative may
disclose that portion of the requested information that such person is compelled
to disclose.

       4.  Nondisclosure of Negotiations. Except as otherwise expressly
permitted hereby, without the prior written consent of the other party, each
party hereby agrees that it will not, and will direct its Representatives not
to, disclose to any person the fact that any discussions or negotiations with
respect to a Possible Transaction are taking, have taken or are proposed to take
place or other facts with respect to such discussions, including the status
thereof, or the fact that any Evaluation Material has been made available to
either party, nor otherwise make any public disclosure, whether written or oral,
with respect to this Agreement or the actions or transactions contemplated
hereby (collectively, the "Possible Transaction Discussions"), except as such
party reasonably believes is required by applicable law; provided, however, that
the Receiving Party (and its Representatives) may, without the prior consent of
ARIAD, disclose Possible Transaction Discussions to any Other Minority AGTI
Stockholder and participate in discussions with such Other Minority AGTI
Stockholder concerning a Possible Transaction provided that in each such case
such Other Minority AGTI Stockholder is under a written obligation to ARIAD to
maintain the confidentiality thereof (and attached to this Agreement as Exhibit
A is the form of confidentiality agreement to be used with respect to those
Other Minority AGTI Stockholders who as of the date of this Agreement are not
under such a written confidentiality obligation to ARIAD); and provided further,
however, that notwithstanding the foregoing, the Receiving Party shall not be
authorized to act on behalf of ARIAD or AGTI in connection with any Possible
Transaction Discussions with Other Minority AGTI Stockholders. Notwithstanding
anything to the contrary provided in this Agreement, this Agreement shall not
(i) restrict ARIAD from communicating with, making a proposal to, providing
confidential information to, or soliciting votes or consents from any of the
Other Minority AGTI Stockholders in connection with a Possible Transaction, or
(ii) prohibit or restrict Harvey J. Berger, M.D. ("Berger") from making any
disclosure regarding AGTI or a Possible Transaction Discussions that is
consistent with any disclosure made by ARIAD in its filings with the Securities
and Exchange Commission or in connection with other disclosure made in
compliance with Regulation FD at the direction of the Board of Directors of
ARIAD.

                                       2
<PAGE>

       5.  Return of Evaluation Material. Upon termination of discussions
concerning the Possible Transaction without a transaction having been
consummated, the Receiving Party and its Representatives will promptly return or
destroy the Evaluation Material and any analyses, compilations, studies or other
documents prepared by the Receiving Party and its Representatives that include,
utilize or reflect the Evaluation Material, except in each case as may otherwise
be prohibited under any applicable document retention policy. Notwithstanding
the return or destruction of the Evaluation Material, the Receiving Party and
its Representatives will continue to be bound by its obligations of
confidentiality hereunder.

       6.  Accuracy of Evaluation Material. ARIAD acknowledges and agrees that
it has endeavored, and shall continue to endeavor, to include in the Evaluation
Material information known to it that it believes is relevant to the Receiving
Party's evaluation of the Possible Transaction; provided, however, that ARIAD
shall not be required to include in the Evaluation Material any analyses or
reports prepared by its professional advisors concerning a Possible Transaction.
The Receiving Party understands, acknowledges and agrees that neither ARIAD,
AGTI nor any of their Representatives make any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material. The Receiving Party agrees that neither ARIAD, AGTI, nor any of their
Representatives shall have any liability to the Receiving Party or its
Representatives relating to or resulting from the use of the Evaluation Material
or any errors therein or omissions therefrom, and only those representations or
warranties or other agreements which are made in a final definitive agreement
regarding any Possible Transaction, when, as and if executed and delivered, and
subject to such limitations and restrictions as may be specified therein, will
have any legal effect. The Receiving Party acknowledges and agrees that it has
endeavored, and shall continue to endeavor, to cooperate and make itself
available to ARIAD (including by providing information known to it concerning or
relating to ARIAD's and AGTI's business and operations) in connection with
ARIAD's evaluation of a Possible Transaction; provided, however, that the
Receiving Party shall not be required to disclose to ARIAD or AGTI any analyses
or reports prepared by the Receiving Party's Representatives concerning a
Possible Transaction. Each of ARIAD and AGTI understand, acknowledge and agree
that neither the Receiving Party nor any of its Representatives make any
representation or warranty, express or implied, as to the accuracy or
completeness of any information provided to ARIAD or AGTI. Each of ARIAD and
AGTI agree that neither the Receiving Party nor any of its Representatives shall
have any liability to ARIAD and AGTI or their Representatives relating to or
resulting from the use of such information or any errors therein or omissions
therefrom, and only those representations or warranties or other agreements
which are made in a final definitive agreement regarding any Possible
Transaction, when, as and if executed and delivered, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.

       7.  Expense Reimbursement. ARIAD agrees to reimburse the AGTI
Stockholders for their reasonable and documented expenses, whether incurred
before or after the date of this Agreement, consistent with the engagement
letters of the AGTI Stockholders' Representatives previously provided to ARIAD,
in each case promptly after the AGTI Stockholders have presented invoices
therefor to ARIAD; provided, however, that the AGTI Stockholders agree that they
will (i) consider a Possible Transaction whereby all AGTI stockholders pay their
pro rata share of the amounts required to be paid by ARIAD pursuant to this
Section 7 and (ii) encourage the Other Minority AGTI Stockholders to bear their
pro rata share of the amounts required to be paid by ARIAD pursuant to this
Section 7. All such invoices and other expense reimbursement requests shall be
directed to Peter J. Nelson, Chairman of the Audit Committee of the Board of
Directors of ARIAD. Notwithstanding the foregoing, ARIAD agrees to consider in
good faith any request by the AGTI Stockholders to further reimburse the AGTI
Stockholders for their reasonable and documented expenses in excess of the
amounts set forth in the engagement letters of the AGTI Stockholders'
Representatives.

                                       3
<PAGE>

       8.  Indemnification of AGTI Stockholders. ARIAD shall indemnify, defend
and hold harmless, to the fullest extent permitted under applicable law, each
AGTI Stockholder (each, an "Indemnitee") with respect to all claims, demands,
causes of action, rights, obligations, liabilities, losses, damages, judgments,
fines, penalties, costs (including amounts paid in settlement or compromise) and
Expenses (collectively, "Losses") in connection with any Proceeding, whenever
asserted, based on, relating to, or arising out of, in whole or in part, any
acts or omissions by an Indemnitee in the Indemnitee's individual capacity as
described in Section 1 of this Agreement relating to or arising out of the
Possible Transaction (including, but not limited to, acts or omissions with
respect to the negotiation, preparation, execution or performance of this
Agreement and the negotiation, preparation, execution or performance of any
agreement relating to the Possible Transaction) (herein referred to as the
Indemnitee's "Covered Capacity"); provided, however, that ARIAD shall not be
obligated to indemnify any AGTI Stockholder hereunder to the extent of any such
Losses that are determined in a final non-appealable judgment by a court of
competent jurisdiction in a Proceeding (including a shareholder derivative
action) to have resulted primarily from (i) the intentional misconduct of or a
knowing violation of law by such AGTI Stockholder, (ii) bad faith conduct by
such AGTI Stockholder, or (iii) the gross negligence of such AGTI Stockholder.
In addition, ARIAD shall advance funds for all Expenses of any Indemnitee in
accordance with the Supplemental Indemnification Provisions set forth in Exhibit
B attached to this Agreement. ARIAD and the AGTI Stockholders agree that they
shall be bound by the terms set forth in said Exhibit B and that such terms are
incorporated by reference into this Section 8 and shall form an integral part of
this Agreement.

       9.  Supplemental Insurance. ARIAD shall maintain liability insurance
coverage, at its sole expense, for the benefit of the AGTI Stockholders, in
their individual capacities as described in Section 1 hereof, in accordance with
the terms of the endorsement entered into on or prior to the date of this
Agreement between ARIAD and the insurers signatory thereto. ARIAD represents and
warrants to the AGTI Stockholders that the premiums relating to such insurance
coverage have been fully paid on or prior to the date of this Agreement and that
it shall not take any action to cancel or reduce the benefits afforded to the
AGTI Stockholders by such coverage.

       10. Remedies. Each party agrees that monetary damages would not be a
sufficient remedy for any breach of this Agreement and that in addition to all
other remedies, each party shall be entitled to equitable relief, including,
without limitation, injunction and specific performance, as a remedy for any
such breach. Such remedies shall not be deemed to be the exclusive remedies for
a breach of this Agreement but shall be in addition to all other remedies
available at law or equity. The parties further agree not to raise as a defense
or objection to the request or granting of such relief that any breach of this
Agreement is or would be compensable by an award of monetary damages, and agree
to waive any requirements for the securing or posting of any bond in connection
with such remedy.

       11. Material Non-Public Information. Each of the Receiving Party and
ARIAD acknowledge and agree that it is aware (and that its Representatives are
aware or, upon receipt of any Evaluation Material, will be advised by the
Receiving Party or ARIAD, as applicable) that (i) the Evaluation Material being
furnished contains or may itself be material, non-public information regarding
ARIAD and/or AGTI and (ii) federal and state securities laws, rules and
regulations prohibit any persons who have material, nonpublic information
concerning ARIAD and/or AGTI, including the Evaluation Material, from purchasing
or selling securities of ARIAD and AGTI or from communicating such information
to any person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities in reliance upon such
information.

       12. No Agreement. The parties agree that no contract or agreement
providing for any Possible Transaction shall be deemed to exist between them
unless and until a final definitive agreement has been executed and delivered,
and hereby waive, in advance, any claims (including, without limitation, breach
of contract) in connection with any Possible Transaction (other than claims
arising out of or relating to the parties' respective obligations under this
Agreement) unless and until the AGTI Stockholders and ARIAD shall have entered
into a final definitive agreement concerning a Possible Transaction. The parties
also agree that unless and until a final definitive agreement regarding a
Possible Transaction has been executed and delivered, no party will be under any
legal obligation of any kind whatsoever with respect to such a Possible
Transaction by virtue of this Agreement except for the matters specifically
agreed to herein.

                                       4
<PAGE>

       13. No Third Party Beneficiaries. This Agreement does not and is not
intended to confer any rights or remedies upon any person other than the parties
signatory hereto.

       14. No License. Nothing in this Agreement shall be deemed to grant a
license, whether directly or by implication, estoppel or otherwise, to any
Evaluation Material disclosed pursuant to this Agreement.

       15. Waiver and Amendment. Each party understands and agrees that no
failure or delay by the other party or any of its Representatives in exercising
any right, power or privilege hereunder will operate as a waiver thereof, nor
will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder. The
agreements set forth herein may only be waived, amended or modified by an
agreement in writing signed on behalf of all of the parties.

       16. Successors and Assigns. This Agreement shall inure to the benefit of
and be enforceable by each of the parties and their successors and permitted
assigns. No party may assign any rights or delegate any performance under this
Agreement without obtaining the prior written consent of each of the other
parties, except that ARIAD shall not be required to obtain the consent of the
other parties to make any assignment or delegation in connection with a merger
or sale of substantially all of ARIAD's assets.

       17. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section, paragraph
or sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.

       18. Governing Law; Venue. This Agreement and the transactions
contemplated by this Agreement, and all disputes between the parties under or
related to this Agreement or the facts and circumstances leading to its
execution, whether in contract, tort or otherwise, shall be governed by and
construed in accordance with the Laws of the State of Delaware, without
reference to conflict of laws principles. Each of the parties to this Agreement
(i) irrevocably submits itself to the personal jurisdiction of any state or
federal court sitting in Wilmington, Delaware, as well as to the jurisdiction of
all courts to which an appeal may be taken from such courts, in any suit, action
or proceeding arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that all claims in
respect of such suit, action or proceeding shall be brought, heard and
determined exclusively in the Court of Chancery of the State of Delaware
(provided that, in the event that subject matter jurisdiction is unavailable in
that court, then all such claims shall be brought, heard and determined
exclusively in any other state or federal court sitting in Wilmington,
Delaware), (iii) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from such court, (iv)
agrees not to bring any action or proceeding arising out of or relating to this
Agreement or any of the transactions contemplated by this Agreement in any other
court, and (v) expressly waives, and agrees not to plead or to make any claim
that any such action or proceeding is subject (in whole or in part) to a jury
trial. Each of the parties hereto waives any defense of inconvenient forum to
the maintenance of any action or proceeding so brought. Each of the parties
further agrees to waive any bond, surety or other security that might be
required of any other party with respect to any action or proceeding, including
an appeal thereof. Each of the parties agrees that service of any process,
summons, notice or document by U.S. registered mail to its address set forth in
Section 22 hereof shall be effective service of process for any action, suit or
proceeding brought against it.

                                       5
<PAGE>

       19. Authority of AGTI Stockholders. The AGTI Stockholders represent and
warrant that this Agreement has been duly executed and delivered by them and,
assuming due authorization, execution and delivery of this Agreement by ARIAD,
constitutes the legal, valid and binding obligation of the AGTI Stockholders
enforceable against them in accordance with its terms, except to the extent that
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws, now or hereafter in effect,
affecting creditors' rights generally.

       20. Authority of ARIAD. ARIAD represents and warrants that it has the
requisite corporate power and authority to enter into this Agreement and perform
its obligations hereunder. ARIAD further represents and warrants that the
execution and delivery of this Agreement by ARIAD and the performance by it of
its obligations hereunder have been duly authorized by all necessary corporate
action on the part of ARIAD, including by (i) the Board of Directors of ARIAD by
the affirmative vote of a majority of the directors of ARIAD (with Berger and
LaMarche abstaining), (ii) the independent and disinterested directors of ARIAD
with respect to a Possible Transaction by the affirmative vote of a majority of
such directors, (iii) the Audit Committee of the Board of Directors of ARIAD by
the affirmative vote of the directors who are members of that committee, and
(iv) the Nominating and Corporate Governance Committee of the Board of Directors
of ARIAD by the affirmative vote of the directors who are members of that
committee (with LaMarche abstaining), for purposes of compliance with ARIAD's
Corporate Code of Conduct and Ethics policy as in effect on the date hereof,
including with respect to Sections II, III and VII thereof, and no other
additional corporate proceedings on the part of ARIAD are necessary to authorize
the execution and delivery of this Agreement and the performance of ARIAD's
obligations hereunder. ARIAD also represents and warrants that this Agreement
has been duly executed and delivered by it and, assuming due authorization,
execution and delivery of this Agreement by the AGTI Stockholders, constitutes
the legal, valid and binding obligation of ARIAD enforceable against ARIAD in
accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws, now or hereafter in effect, affecting creditors' rights
generally.

       21. Consent of ARIAD. For purposes of this Agreement, any requirement
that ARIAD shall have consented to or approved any action shall mean the consent
or approval, as the case may be, of the independent directors of ARIAD acting
through their duly appointed designee(s), together with any required approval by
any of the constituencies referred to in clauses (i), (iii) and (iv) of Section
20 hereof.

       22. Notice. Each party giving or making any notice, request, demand or
other communication (a "Communication") pursuant to this Agreement shall address
such Communication to the receiving party at the address below:

           (a)     If to the AGTI Stockholders:

                   Harvey J. Berger, M.D.

                   Jay R. LaMarche

                   With a copy to:

                   Goodwin Procter LLP
                   53 State Street
                   Exchange Place
                   Boston, MA 02109
                   Attn:  Brian E. Pastuszenski, Esq.
                          James A. Matarese, Esq.

                                       6
<PAGE>

           (b)     If to ARIAD:

                   ARIAD Pharmaceuticals, Inc.
                   26 Landsdowne Street
                   Cambridge, MA 02139-4234
                   Attn:  Laurie Allen, Esq.

                   With a copy to:

                   Abrams & Laster LLP
                   Brandywine Plaza West
                   1521 Concord Pike, Suite 303
                   Wilmington, DE 19803
                   Attn:  Kevin G. Abrams, Esq.

                   ARIAD Pharmaceuticals, Inc.
                   26 Landsdowne Street
                   Cambridge, MA 02139-4234
                   Attn:  Peter Nelson

                   Morgan, Lewis & Bockius LLP
                   101 Park Avenue
                   New York, NY 10178-0060
                   Attn:  Howard L. Shecter, Esq.

                   Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
                   One Financial Center
                   Boston, MA 02111
                   Attn:  Jeffrey M. Wiesen, Esq.

       23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.

                                       7
<PAGE>

Please acknowledge your agreement to the foregoing by countersigning this
Agreement in the place provided below and returning it to the undersigned.

                                         Very truly yours,

                                         By: /s/ Harvey J. Berger, M.D.
                                             --------------------------
                                             Harvey J. Berger, M.D.

                                         By: /s/ Jay R. LaMarche
                                             -------------------
                                             Jay R. LaMarche

Accepted and Agreed to,
this 19th day of June, 2007

INDEPENDENT AND DISINTERESTED DIRECTORS OF
ARIAD PHARMACEUTICALS, INC. WITH RESPECT TO AGTI

By: /s/ Peter J. Nelson
    -------------------
    Name:  Peter J. Nelson
    Title:  Chairman, Audit Committee of the Board of Directors of
            ARIAD Pharmaceuticals, Inc.

ARIAD PHARMACEUTICALS, INC.

By: /s/ Edward M. Fitzgerald
    ------------------------
    Name:  Edward M. Fitzgerald
    Title:  Senior Vice President, Finance and Corporate
            Operations, Chief Financial Officer

                                       8
<PAGE>

                                    Exhibit A

       [Form of Other Minority AGTI Stockholder Confidentiality Agreement]

                               ____________, 2007

PRIVATE AND CONFIDENTIAL

ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, Massachusetts 02139-4234

       In connection with discussions concerning a potential strategic or
business combination transaction (the "Possible Transaction") between ARIAD
Pharmaceuticals, Inc. ("ARIAD") and ARIAD Gene Therapeutics, Inc. ("AGTI") or
the stockholders of AGTI other than ARIAD, the undersigned stockholder of AGTI
(the "AGTI Stockholder") has requested certain information for the purpose of
evaluating a Possible Transaction. This information is confidential and
proprietary to ARIAD and AGTI and not otherwise available. In that connection,
the AGTI Stockholder and ARIAD agree as follows:

       1.  Confidentiality Agreement. The AGTI Stockholder hereby agrees to (i)
treat and keep all information, whether written or oral, concerning ARIAD and
AGTI, or any of their respective affiliates, subsidiaries or divisions, which
ARIAD furnishes or which Harvey J. Berger, M.D. ("Berger") or Jay R. LaMarche
("LaMarche") or any of their representatives furnishes in accordance with the
terms of that certain confidentiality agreement dated June 19, 2007 among ARIAD,
Berger and LaMarche, whether before or after the date of this Agreement, to the
AGTI Stockholder (collectively, the "ARIAD Confidential Information"),
confidential and in accordance with the provisions of this Agreement, and (ii)
treat and keep all information, whether written or oral, relating to Berger's
and LaMarche's evaluation and analysis of the Possible Transaction, which Berger
or LaMarche furnishes, whether before or after the date of this Agreement, to
the AGTI Stockholder (collectively, the "Berger/LaMarche Confidential
Information"), confidential and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, neither the term "ARIAD Confidential
Information" nor the term "Berger/LaMarche Confidential Information" shall for
the purposes of this Agreement include any information which (a) at the time of
disclosure or thereafter is generally available to and/or known by the public
other than as a result of a disclosure by the AGTI Stockholder in breach of this
Agreement, (b) was within the AGTI Stockholder's possession prior to being
furnished to the AGTI Stockholder, (c) becomes available to the AGTI Stockholder
on a nonconfidential basis, or (d) has been independently acquired by the AGTI
Stockholder without violating any of the obligations of the AGTI Stockholder
under this Agreement.

       2.  Confidentiality and Non-Use. Subject to the following sentence and
except as otherwise expressly provided herein, the ARIAD Confidential
Information and Berger/LaMarche Confidential Information will be kept
confidential by the AGTI Stockholder and will not, without the prior written
consent of ARIAD or Berger and LaMarche, as the case may be, be disclosed, in
whole or in part, to any third party by the AGTI Stockholder in any manner
whatsoever. In the event that the AGTI Stockholder is requested or required by
law, government regulation or court order to disclose any ARIAD Confidential
Information or Berger/LaMarche Confidential Information, the AGTI Stockholder
will promptly notify ARIAD or Berger and LaMarche, as the case may be, of such
request or requirement so that ARIAD or Berger and LaMarche, as the case may be,
may seek an appropriate protective order or waive compliance with the provisions
of this Agreement, and/or take any other action mutually agreed to between the
AGTI Stockholder and ARIAD or Berger and LaMarche, as the case may be.

                                       9
<PAGE>

       3.  Nondisclosure of Negotiations. Except as otherwise expressly
permitted hereby and except to the extent known by the public other than as a
result of a disclosure by the AGTI Stockholder in breach of this Agreement,
without the prior written consent of ARIAD, the AGTI Stockholder hereby agrees
that it will not disclose to any person the fact that any discussions or
negotiations with respect to a Possible Transaction are taking, have taken or
are proposed to take place or other facts with respect to such discussions,
including the status thereof, or the fact that any ARIAD Confidential
Information or Berger/LaMarche Confidential Information has been made available
to the AGTI Stockholder, nor otherwise make any public disclosure, whether
written or oral, with respect to this Agreement or the actions or transactions
contemplated hereby (collectively, the "Possible Transaction Discussions");
provided, however, that the AGTI Stockholder may, without the prior consent of
ARIAD, disclose Possible Transaction Discussions to any other stockholder of
AGTI and participate in discussions with such other AGTI stockholder concerning
a Possible Transaction provided that in each such case such other AGTI
stockholder is under a written obligation to ARIAD to maintain the
confidentiality of the ARIAD Confidential Information; and, provided further,
however, that in connection therewith no Berger/LaMarche Confidential
Information may be disclosed by the AGTI Stockholder to any other AGTI
stockholder without the prior written consent of Berger and LaMarche.

       4.  Return of Confidential Information. Upon termination of discussions
concerning the Possible Transaction without a transaction having been
consummated, the AGTI Stockholder will promptly return (to ARIAD or Berger and
LaMarche, as the case may be) or destroy the ARIAD Confidential Information and
Berger/LaMarche Confidential Information and any analyses, compilations, studies
or other documents prepared by the AGTI Stockholder that include, utilize or
reflect the ARIAD Confidential Information or Berger/LaMarche Confidential
Information. Notwithstanding the return or destruction of the ARIAD Confidential
Information and Berger/LaMarche Confidential Information, the AGTI Stockholder
will continue to be bound by its obligations of confidentiality hereunder.

       5.  Accuracy of Confidential Information. The AGTI Stockholder
understands, acknowledges and agrees that neither ARIAD, AGTI, Berger or
LaMarche nor any of their representatives makes any representation or warranty,
express or implied, as to the accuracy or completeness of the ARIAD Confidential
Information or Berger/LaMarche Confidential Information. The AGTI Stockholder
agrees that neither ARIAD, AGTI, Berger or LaMarche nor any of their
representatives shall have any liability to the AGTI Stockholder relating to or
resulting from the use of the ARIAD Confidential Information or Berger/LaMarche
Confidential Information or any errors therein or omissions therefrom, and only
those representations or warranties or other agreements which are made in a
final definitive agreement regarding any Possible Transaction, when, as and if
executed and delivered, and subject to such limitations and restrictions as may
be specified therein, will have any legal effect.

       6.  Remedies; Severability. Each party agrees that monetary damages would
not be a sufficient remedy for any breach of this Agreement and that in addition
to all other remedies, each party shall be entitled to equitable relief,
including, without limitation, injunction and specific performance, as a remedy
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement but shall be in addition to all other
remedies available at law or equity. The parties further agree not to raise as a
defense or objection to the request or granting of such relief that any breach
of this Agreement is or would be compensable by an award of monetary damages,
and agree to waive any requirements for the securing or posting of any bond in
connection with such remedy. In case provisions of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.

       7.  Material Non-Public Information. The AGTI Stockholder acknowledges
and agrees that it is aware that (i) the ARIAD Confidential Information and
Berger/LaMarche Confidential Information being furnished contains or may itself
be material, non-public information regarding ARIAD and/or AGTI and (ii) federal
and state securities laws, rules and regulations prohibit any persons who have
material, nonpublic information concerning ARIAD and/or AGTI, including the
ARIAD Confidential Information or Berger/LaMarche Confidential Information, from
purchasing or selling securities of ARIAD and AGTI or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities in
reliance upon such information.

                                       10
<PAGE>

       8.  Waiver and Amendment; Successors and Assigns. Each party understands
and agrees that no failure or delay by the other party in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder. The
agreements set forth herein may only be waived, amended or modified by an
agreement in writing signed on behalf of all of the parties. This Agreement
shall inure to the benefit of and be enforceable by each of the parties and
their successors and permitted assigns. No party may assign any rights or
delegate any performance under this Agreement without obtaining the prior
written consent of the other parties, except that ARIAD shall not be required to
obtain the consent of the AGTI Stockholder or Berger or LaMarche to make any
assignment or delegation in connection with a merger or sale of substantially
all of ARIAD's assets.

       9.  Governing Law. This Agreement and the transactions contemplated by
this Agreement, and all disputes between the parties under or related to this
Agreement or the facts and circumstances leading to its execution, whether in
contract, tort or otherwise, shall be governed by and construed in accordance
with the Laws of the State of Delaware, without reference to conflict of laws
principles.

       10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same agreement.

       Please acknowledge your agreement to the foregoing by countersigning this
Agreement in the place provided below and returning it to the undersigned.

                                         Very truly yours,

                                         By: _________________________

Accepted and Agreed to,
this ____ day of _____________, 2007

ARIAD PHARMACEUTICALS, INC.

By: _________________________
      Name:
      Title:

By: _________________________
      Harvey J. Berger, M.D.

By: _________________________
     Jay R. LaMarche

                                       11
<PAGE>

                                    Exhibit B

                     Supplemental Indemnification Provisions

The following Supplemental Indemnification Provisions are incorporated by
reference into the agreement dated June 19, 2007 among ARIAD Pharmaceuticals,
Inc. ("ARIAD" or the "Company")) and ARIAD Gene Therapeutics, Inc. ("AGTI"), and
Harvey J. Berger, M.D. ("Berger") and Jay R. LaMarche ("LaMarche" and, together
with Berger, the "AGTI Stockholders"), to which these provisions are attached as
Exhibit B (such agreement together with Exhibit A thereto and this Exhibit B,
constitute the "Agreement"). Capitalized terms used in this Exhibit B without
definition shall have the meanings assigned to them elsewhere in the Agreement.

       1.    Definitions. As used in these Supplemental Indemnification
Provisions and Section 8 of the Agreement:

             (a) References to "agent" shall mean any person who is or was a
director, officer, or employee of the Company or a subsidiary of the Company or
other person authorized by the Company to act for the Company, to include such
person serving in such capacity as a director, officer, employee, fiduciary or
other official of another corporation, partnership, limited liability company,
joint venture, trust or other enterprise at the request of, for the convenience
of, or to represent the interests of the Company or a subsidiary of the Company.

             (b) "Delaware Court" shall mean the Court of Chancery of the State
of Delaware.

             (c) "Disinterested Director" shall mean a director of the Company
who is not and was not a party to the Proceeding (as defined below) in respect
of which indemnification is sought by Indemnitee.

             (d) "Enterprise" shall mean the Company or AGTI and any other
corporation, constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which the Company or AGTI
(or any of their wholly owned subsidiaries) is a party.

             (e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

             (f) "Expenses" shall include attorneys' fees and costs, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or otherwise participating in, a
Proceeding (as defined below). Expenses also shall include Expenses incurred in
connection with any appeal resulting from any Proceeding (as defined below),
including without limitation the premium, security for, and other costs relating
to any cost bond, supersedeas bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or
the amount of judgments or fines against Indemnitee.

             (g) "Independent Counsel" shall mean a law firm or a member of a
law firm that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under the Agreement, or of other
indemnitees under similar indemnification agreements); or (ii) any other party
to the Proceeding (as defined below) giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under the Agreement.

             (h) The term "Person" shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof;
provided, however, that "Person" shall exclude: (i) the Company; (ii) any
Subsidiaries (as defined below) of the Company; (iii) any employment benefit
plan of the Company or of a Subsidiary (as defined below) of the Company or of
any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company; and (iv) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a Subsidiary (as defined below) of
the Company or of a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company.

                                       12
<PAGE>

             (i) The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by reason of the
Indemnitee's Covered Capacity or by reason of any action (or failure to act)
taken by him or of any action (or failure to act) on his part in connection with
his Covered Capacity.

             (j) The term "Subsidiary," with respect to any Person, shall mean
any corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
that Person.

       2.    Indemnification For Expenses Of A Party Who Is Wholly Or Partly
Successful. Notwithstanding any other provisions of the Agreement, to the extent
that Indemnitee is a party to (or a participant in) and is successful, on the
merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify and hold
harmless Indemnitee against all Expenses actually and reasonably incurred by him
in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify and hold harmless Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section 2 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.

       3.    Indemnification For Expenses Of A Witness. Notwithstanding any
other provision of the Agreement, to the extent that Indemnitee is, by reason of
his Covered Capacity, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified and held harmless against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.

       4.    Contribution In The Event Of Joint Liability.

             (a) To the fullest extent permissible under applicable law, if the
indemnification and hold harmless rights provided for in the Agreement are
unavailable to Indemnitee in whole or in part for any reason whatsoever (other
than as a result of the application of the proviso in the first sentence of
Section 8 of the Agreement), the Company, in lieu of indemnifying and holding
harmless Indemnitee, shall pay, in the first instance, the entire amount
incurred by Indemnitee, whether for judgments, liabilities, fines, penalties,
amounts paid or to be paid in settlement and/or for Expenses, in connection with
any Proceeding without requiring Indemnitee to contribute to such payment, and
the Company hereby waives and relinquishes any right of contribution it may have
at any time against Indemnitee.

             (b) The Company shall not enter into any settlement of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding) unless such settlement provides for a full and
final release of all claims asserted against Indemnitee.

             (c) The Company hereby agrees to fully indemnify and hold harmless
Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.

       5.    Exclusions. Notwithstanding any provision in the Agreement, the
Company shall not be obligated under the Agreement to make any indemnification,
hold harmless or exoneration payments in connection with any claim made against
Indemnitee:

                                       13
<PAGE>

             (a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy, contract, agreement, other indemnity provision or otherwise; or

             (b) except as otherwise provided in Sections 10(e)-(f) of these
Supplemental Indemnification Provisions, in connection with any Proceeding (or
any part of any Proceeding) initiated by Indemnitee, including any Proceeding
(or any part of any Proceeding) initiated by Indemnitee against the Company or
its directors, officers, employees or other indemnitees, unless (i) the Board
authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, hold harmless or
exoneration payment, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.

       6.    Advances Of Expenses; Defense Of Claim.

             (a) Notwithstanding any provision of the Agreement to the contrary,
and to the fullest extent permitted by applicable law, the Company shall advance
the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be
incurred by Indemnitee within three months) in connection with any Proceeding
within ten (10) days after the receipt by the Company of a statement or
statements requesting such advances from time to time, whether prior to or after
final disposition of any Proceeding. Advances shall be unsecured and interest
free. Advances shall be made without regard to Indemnitee's ability to repay the
Expenses and without regard to Indemnitee's ultimate entitlement to be
indemnified, held harmless or exonerated under the other provisions of the
Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing a Proceeding to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed. The Indemnitee shall qualify for advances, to the fullest
extent permitted by applicable law, solely upon the execution and delivery to
the Company of an undertaking providing that the Indemnitee undertakes to repay
the advance to the extent that it is ultimately determined that Indemnitee is
not entitled to be indemnified by the Company under the provisions of the
Agreement. This Section 6(a) shall not apply to any claim made by Indemnitee for
which an indemnification, hold harmless or exoneration payment is excluded
pursuant to Section 5 of these Supplemental Indemnification Provisions.

             (b) The Company will be entitled to participate in the Proceeding
at its own expense.

             (c) The Company shall not settle any action, claim or Proceeding
(in whole or in part) which would impose any Expense, judgment, fine, penalty or
limitation on the Indemnitee without the Indemnitee's prior written consent.

       7.    Procedure For Notification And Application For Indemnification.

             (a) Indemnitee agrees to notify promptly the Company in writing
upon being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification, hold harmless or exoneration rights, or advancement
of Expenses covered hereunder. The failure of Indemnitee to so notify the
Company shall not relieve the Company of any obligation which it may have to the
Indemnitee under the Agreement, or otherwise.

             (b) Indemnitee may deliver to the Company a written application to
indemnify and hold harmless Indemnitee in accordance with the Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(a) of
these Supplemental Indemnification Provisions.

       8.    Procedure Upon Application For Indemnification.

             (a) A determination, if required by applicable law, with respect to
Indemnitee's entitlement to indemnification shall be made in the specific case
by one of the following methods, which shall be at the election of Indemnitee:
(i) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board or (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee. The Company promptly
will advise Indemnitee in writing with respect to any determination that
Indemnitee is or is not entitled to indemnification, including a description of
any reason or basis for which indemnification has been denied. If it is so
determined that Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made within ten (10) days after such determination. Indemnitee shall
reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or Expenses (including
attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

                                       14
<PAGE>

             (b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 8(a) of
these Supplemental Indemnification Provisions, the Independent Counsel shall be
selected as provided in this Section 8(b) of these Supplemental Indemnification
Provisions. The Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected and certifying that the Independent
Counsel so selected meets the requirements of "Independent Counsel" as defined
in Section 1 of these Supplemental Indemnification Provisions. If the
Independent Counsel is selected by the Board, the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so
selected and certifying that the Independent Counsel so selected meets the
requirements of "Independent Counsel" as defined in Section 1 of these
Supplemental Indemnification Provisions. In either event, Indemnitee or the
Company, as the case may be, may, within ten (10) days after such written notice
of selection shall have been received, deliver to the Company or to Indemnitee,
as the case may be, a written objection to such selection; provided, however,
that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of "Independent Counsel" as
defined in Section 1 of these Supplemental Indemnification Provisions, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit. If, within
twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) of these Supplemental Indemnification
Provisions, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition the Delaware Court for resolution
of any objection which shall have been made by the Company or Indemnitee to the
other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Delaware Court, and the person
with respect to whom all objections are so resolved or the person so appointed
shall act as Independent Counsel under Section 8(a) of these Supplemental
Indemnification Provisions. Upon the due commencement of any judicial proceeding
or arbitration pursuant to Section 10(a) of these Supplemental Indemnification
Provisions, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

             (c) The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify and hold harmless such Independent
Counsel against any and all Expenses, claims, liabilities and damages arising
out of or relating to the Agreement or its engagement pursuant hereto.

       9.    Presumptions and Effect Of Certain Proceedings.

             (a) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
the Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 7(b) of these Supplemental Indemnification Provisions,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption. Neither the failure of the Company (including by
its directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to the Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of conduct.

                                       15
<PAGE>

             (b) If the person, persons or entity empowered or selected under
Section 8 of these Supplemental Indemnification Provisions to determine whether
Indemnitee is entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the request therefor,
the requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a final
judicial determination that any or all such indemnification is expressly
prohibited under applicable law; provided, however, that such 30-day period may
be extended for a reasonable time, not to exceed an additional fifteen (15)
days, if the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information relating
thereto.

             (c) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in of these Supplemental Indemnification Provisions) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not meet the applicable standard of conduct for
indemnification hereunder.

             (d) For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee's action is based on
the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected by the Enterprise. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in the Agreement.

             (e) The knowledge and/or actions, or failure to act, of any other
director, officer, trustee, partner, managing member, fiduciary, agent or
employee of the Enterprise or other Indemnitee shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under the
Agreement.

       10.   Remedies Of Indemnitee.

             (a) In the event that (i) a determination is made pursuant to
Section 8 of these Supplemental Indemnification Provisions that Indemnitee is
not entitled to indemnification under the Agreement, (ii) advancement of
Expenses, to the fullest extent permitted by applicable law, is not timely made
pursuant to Section 10 of these Supplemental Indemnification Provisions, (iii)
no determination of entitlement to indemnification shall have been made pursuant
to Section 8(a) of these Supplemental Indemnification Provisions within thirty
(30) days after receipt by the Company of the request for indemnification, (iv)
payment of indemnification is not made pursuant to Sections 2 or 3 or the last
sentence of Section 8(a) of these Supplemental Indemnification Provisions within
ten (10) days after receipt by the Company of a written request therefor, (v) a
contribution payment is not made in a timely manner pursuant to Section 4 of
these Supplemental Indemnification Provisions, (vi) payment of indemnification
pursuant to Section 8 of the Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification, or
(vii) payments to Indemnitee pursuant to any hold harmless or exoneration rights
under the Agreement or otherwise is not made within ten (10) days after receipt
by the Company of a written request therefor, Indemnitee shall be entitled to an
adjudication by the Delaware Court to such indemnification, hold harmless,
exoneration, contribution or advancement rights. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Except as set forth herein, the provisions of Delaware
law (without regard to its conflict of laws rules) shall apply to any such
arbitration. The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.

                                       16
<PAGE>

             (b) In the event that a determination shall have been made pursuant
to Section 8(a) of these Supplemental Indemnification Provisions that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 10 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced
by reason of that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this Section 10, Indemnitee shall be presumed
to be entitled to be indemnified, held harmless, exonerated and to receive
advances of Expenses under the Agreement and the Company shall have the burden
of proving Indemnitee is not entitled to be indemnified, held harmless,
exonerated or receive advances of Expenses as the case may be, and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(a) of these Supplemental Indemnification Provisions adverse to
Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 10, Indemnitee shall not be required to
reimburse the Company for any advances pursuant to Section 6 of these
Supplemental Indemnification Provisions until a final determination is made with
respect to Indemnitee's entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed).

             (c) If a determination shall have been made pursuant to Section
8(a) of these Supplemental Indemnification Provisions that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in
any judicial proceeding or arbitration commenced pursuant to this Section 10,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

             (d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of the Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of the Agreement.

             (e) The Company shall indemnify and hold harmless Indemnitee to the
fullest extent permitted by law against all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after the Company's receipt of such
written request) advance to Indemnitee, to the fullest extent permitted by
applicable law, such Expenses which are incurred by Indemnitee in connection
with any judicial proceeding or arbitration brought by Indemnitee (i) to enforce
his rights under, or to recover damages for breach of, the Agreement; or (ii)
for recovery or advances under any insurance policy maintained for the benefit
of Indemnitee pursuant to Section 9 of the Agreement, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance, contribution or insurance recovery, as the case may be.

             (f) Interest shall be paid by the Company to Indemnitee at the
legal rate under Delaware law for amounts which the Company indemnifies, holds
harmless or exonerates or is obliged to indemnify, hold harmless or exonerate
for the period commencing with the date on which Indemnitee requests
indemnification, to be held harmless, exonerated, contribution, reimbursement or
advancement of any Expenses and ending with the date on which such payment is
made to Indemnitee by the Company.

       11.   Security. Notwithstanding anything herein to the contrary, to the
extent requested by the Indemnitee and approved by the Board, the Company may at
any time and from time to time provide security to the Indemnitee for the
Company's obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once provided to the
Indemnitee, may not be revoked or released without the prior written consent of
the Indemnitee.

       12.   Non-Exclusivity; Survival Of Rights; Insurance; Subrogation.

             (a) The rights of Indemnitee as provided by the Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the Company's Bylaws, any agreement,
a vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of the Agreement or of any provision hereof shall limit or
restrict any right of Indemnitee under the Agreement in respect of any action
taken or omitted by such Indemnitee in his individual capacity as described in
Section 1 of the Agreement in connection with the evaluation of the Possible
Transaction prior to such amendment, alteration or repeal. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

                                       17
<PAGE>

             (b) The DGCL, the Charter and the Company's Bylaws permit the
Company to purchase and maintain insurance or furnish similar protection or make
other arrangements including, but not limited to, providing a trust fund, letter
of credit, or surety bond ("Indemnification Arrangements") on behalf of
Indemnitee against any liability asserted against him or incurred by or on
behalf of him or in such capacity as a director, officer, employee or agent of
the Company, or arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under the
provisions of the Agreement or under the DGCL, as it may then be in effect. The
purchase, establishment, and maintenance of any such Indemnification Arrangement
shall not in any way limit or affect the rights and obligations of the Company
or of the Indemnitee under the Agreement except as expressly provided herein,
and the execution and delivery of the Agreement by the Company and the
Indemnitee shall not in any way limit or affect the rights and obligations of
the Company or the other party or parties thereto under any such Indemnification
Arrangement.

             (c) If, at the time the Company receives notice from any source of
a Proceeding as to which Indemnitee is a party or a participant (as a witness or
otherwise), the Company has liability insurance in effect as provided in Section
9 of the Agreement, the Company shall give prompt notice of such Proceeding to
the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Proceeding in accordance with the terms of such policies.

             (d) In the event of any payment under the Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

       13.   Duration of Agreement. Notwithstanding anything contained in the
Agreement to the contrary, all agreements and obligations of the Company
contained in the Agreement shall continue thereafter so long as Indemnitee shall
be subject to any possible Proceeding (including any rights of appeal thereto
and any Proceeding commenced by Indemnitee pursuant to Section 10 of these
Supplemental Indemnification Provisions) by reason of his Covered Capacity,
whether or not he is acting in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement

       14.   Enforcement And Binding Effect.

             (a) The indemnification, hold harmless, exoneration and advancement
of expenses rights provided by or granted pursuant to the Agreement shall be
binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), shall continue as to an Indemnitee who has ceased to
be acting in his individual capacity as described in Section 1 of the Agreement
in connection with the evaluation of the Possible Transaction, and shall inure
to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.

             (b) The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform the Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.

                                       18

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