Exhibit 10.39.1
Execution
AGREEMENT
This Agreement (this "Agreement"), dated as of February 28, 2003, is
entered into among DELTAGEN, INC., a Delaware corporation with a place of
business at 000 Xxx Xxxx, Xxxxxxx Xxxx, XX 00000 ("Deltagen"), and XXXXXXX-XXXXX
SQUIBB COMPANY, a Delaware corporation with a place of business at Route 206 and
Province Line Road, Princeton, NJ 08543 ("BMS").
WHEREAS, BMS would like to obtain a DeltaOne(TM) license from Deltagen;
WHEREAS, Deltagen would like BMS' affiliate, Xxxxxxx-Xxxxx Squibb
Pharma Company ("BMS Pharma", f/k/a DuPont Pharmaceuticals Company), to assume
that certain Lease dated February 23, 1999 (the "Lease") between Deltagen's
wholly owned subsidiary, Deltagen Research Laboratories, LLC ("DRL", f/k/a
CombiChem, Inc.), and LMC Executive Investment Company, LLC, as successor to LMC
Shoreham Investment Company, LLC and Convoy Court Investment Company, LLC, as
tenants in common (the "Landlord");
WHEREAS, concurrently with the execution of this Agreement, BMS and
Deltagen have caused BMS Pharma and DRL, respectively, to execute and deliver a
Lease Assignment and Assumption Agreement in the form annexed hereto as Exhibit
A (the "Assignment") pursuant to which DRL has assigned the Lease to BMS Pharma
and BMS Pharma has assumed the obligations of the tenant under the Lease,
subject in each case to receipt of Landlord's written consent thereto; and
WHEREAS, if Deltagen successfully raises additional debt or equity
financing as hereinafter provided, BMS and Deltagen have agreed that effective
as of the date of the consummation of such equity transaction:
(a) BMS shall release Deltagen from its obligations relating to
the Lease under (i) that certain Purchase Agreement dated as of February 8,
2002, as amended by that certain Amendment dated as of February 14, 2002
(collectively, the "Purchase Agreement") between Deltagen and BMS and (ii) the
Related Instruments (as such term is defined in the Purchase Agreement), in each
case except for obligations relating to the period between February 16, 2002 and
March 1, 2003 (the "Excluded Period") and (b) BMS shall terminate that certain
Guaranty dated February 16, 2002 (the "Guaranty") by Deltagen in favor of BMS
and the other Beneficiaries (as such term is defined in the Guaranty) with
respect to all obligations of Deltagen under the Guaranty except for obligations
relating to the Excluded Period. In addition, BMS shall release Deltagen from
any obligation to pay the $296,422.61 in rent and other charges due under the
Lease as of February 1, 2003 and any late charges or fees relating thereto not
paid by DRL (collectively, the "Outstanding Amount").
(b) Deltagen shall grant BMS a credit to be applied against any
fees due under the DeltaOneTM Agreement (defined below).
(c) BMS Pharma shall indemnify DRL and Deltagen against and hold
DRL and Deltagen harmless from any and all cost, liability, loss, damage or
expense,
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including, without limitation, attorneys' fees, (i) arising out of the tenant's
obligations under the Lease arising or accruing from and after March 1, 2003 and
(ii) any obligation to pay the Outstanding Amount.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. Concurrently with the execution of this Agreement, Deltagen and BMS
have entered into the DeltaOne(TM) Agreement attached hereto as Exhibit B (the
"DeltaOne(TM) Agreement").
2. Deltagen (a) represents and warrants to BMS that (i) the Lease has
not been amended or modified since the closing under the Purchase Agreement and
(ii) to the best knowledge of Deltagen and DRL, except for (x) the failure of
DRL to pay the Outstanding Amount and (y) the claim made by the landlord under
the Lease which is described in Section 4.13 of the Disclosure Schedule to the
Purchase Agreement, there are currently no defaults of the either the tenant or
the landlord under the Lease and no event which, with notice or lapse of time or
both, would constitute a default of the tenant or the landlord under the Lease,
(b) agrees that, unless Sections 3(a), 3(b), 3(c), 3(d) and 3(e) of this
Agreement become effective, the Assignment does not (i) release Deltagen from,
or operate as a waiver by BMS of any of, Deltagen's obligations and agreements
under the Purchase Agreement, the Guaranty or any other Related Instrument (as
such term is defined in the Purchase Agreement), whether such obligations or
agreements relate to the Lease or other matters, or (ii) preclude any exercise
of any right or power by BMS under the Purchase Agreement, the Guaranty or any
other Related Instrument and (c) consents to any amendment or modification of
the Lease entered into by BMS Pharma or its successors and assigns after the
date hereof in order to facilitate the subleasing of the premises demised by the
Lease or the further assignment of the Lease and agrees that, except as
expressly provided in this Agreement, no such amendment or modification shall
(i) release Deltagen from, or operate as a waiver by BMS of, any of Deltagen's
obligations and agreements under the Purchase Agreement, the Guaranty or any
other Related Instrument, whether such obligations or agreements relate to the
Lease or other matters, or (ii) preclude any exercise of any right or power by
BMS under the Purchase Agreement, the Guaranty or any other Related Instrument,
provided that notwithstanding anything to the contrary in this Agreement, the
Purchase Agreement, the Guaranty or in any Related Instrument, in no event shall
Deltagen be responsible or liable to BMS for any increase in the obligations of
the tenant under the Lease resulting from any such amendment, modification or
assignment. Notwithstanding the foregoing, BMS agrees that BMS shall not assert
a claim or take any legal action against Deltagen under the Purchase Agreement,
the Guaranty or any Related Instrument, or otherwise, in each case with respect
to the Lease, prior to March 31, 2003 (the "Outside Date"), provided that if
Sections 3(a), 3(b), 3(c), 3(d) and 3(e) of this Agreement do not become
effective, this limitation shall not affect the rights of BMS to assert such
claims or to take such actions after the Outside Date with regard to the period
prior to the Outside Date. If Sections 3(a), 3(b), 3(c), 3(d) and 3(e) of this
Agreement do become effective, BMS's rights to make such claims will be limited
only by Sections 3(a), 3(b), 3(c) and 3(d) of this Agreement.
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3. Notwithstanding anything in this Agreement to the contrary, the
effectiveness of the provisions of Sections 3(a), 3(b), 3(c), 3(d) and 3(e) of
this Agreement are expressly conditioned on Deltagen's consummation, on or prior
to the Outside Date, of one or more debt or equity investments in Deltagen (by
persons other than subsidiaries of, or other entities controlled by, Deltagen)
which provide Deltagen with net cash proceeds in an aggregate amount of not less
than $2,000,000 in immediately available funds. Deltagen shall provide BMS with
written evidence of both (i) the consummation of such equity investments and
(ii) the date of such consummation which, in each case, is reasonably
satisfactory to BMS. If it is on or prior to the Outside Date, the date upon
which such equity investments are consummated shall be the date upon which
Sections 3(a), 3(b), 3(c), 3(d) and 3(e) of this Agreement shall automatically
become effective.
(a) BMS, for itself and for the other Beneficiaries, (i) hereby agrees
that the Guaranty shall be terminated and no longer in effect but only with
respect to (x) the obligation to pay the Outstanding Amount and (y) all
obligations of Deltagen under the Guaranty except for obligations relating to
the Excluded Period and (ii) hereby forever and irrevocably releases, discharges
and acquits Deltagen and its affiliates, partners, officers, directors, agents,
trustees, beneficiaries, and employees of and from any and all claims, acts,
damages, liabilities, rights of action and causes of action which BMS or the
other Beneficiaries may have against Deltagen under the Guaranty which relate to
or arise from (A) periods other than the Excluded Period and (B) the obligation
to pay the Outstanding Amount.
(b) BMS hereby forever and irrevocably releases, discharges and acquits
Deltagen and its affiliates, partners, officers, directors, agents, trustees,
beneficiaries, and employees of and from all of Deltagen's obligations and
agreements arising from or relating to (i) the Lease under the Purchase
Agreement and the Related Instruments relating to or arising during periods
other than the Excluded Period and (ii) the obligation to pay the Outstanding
Amount.
(c) Except for the matters expressly released above, the foregoing
releases shall not (i) apply to Deltagen's remaining obligations and agreements
under the Purchase Agreement or any Related Instrument, all of which Deltagen
hereby ratifies and confirms, (ii) operate as a waiver by BMS of any such
remaining obligations and agreements of Deltagen under the Purchase Agreement or
any Related Instrument or (iii) preclude any exercise of any right or power by
BMS in respect of such remaining obligations and agreements under the Purchase
Agreement or any Related Instrument.
(d) BMS Pharma hereby indemnifies DRL and Deltagen against and holds
DRL and Deltagen harmless from any and all cost, liability, loss, damage or
expense, including without limitation, attorneys' fees, arising out of the
tenant's obligations under the Lease relating to or arising from (i) the period
from and after March 1, 2003 and (ii) the obligation to pay the Outstanding
Amount.
(e) Deltagen hereby grants BMS a credit of Five Million Dollars
($5,000,000.00) (the "Credit"), which Credit may only be applied against fees
due at any time and from
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time to time under the DeltaOne(TM) Agreement during the term of the
DeltaOne(TM) Agreement. The Credit, or any portion thereof, shall not be
transferred or assigned (whether voluntarily, by operation of law or otherwise)
by BMS to any other party without the prior written consent of Deltagen, which
consent shall be granted or withheld in Deltagen's sole and absolute discretion.
Any such transfer or assignment of the Credit, or any portion thereof, without
Deltagen's prior written consent shall be null and void. Notwithstanding
anything else contained in this Agreement, Deltagen's consent shall not be
required for the transfer or assignment of all or any portion of the Credit to
one or more Affiliates (as such term is defined in the Purchase Agreement) of
BMS. The parties agree that the Credit represents fair and adequate
consideration to BMS for entering into this Agreement.
4. Notwithstanding anything else contained in this Agreement, BMS and
Deltagen agree to cooperate to require the applicable insurance carrier to pay
and/or defend any claim covered by liability insurance that was carried by DRL,
f/k/a BMSPRL, L.L.C., a Delaware limited liability company, successor by
conversion pursuant to Section 266 of the Delaware General Corporation Law to
Xxxxxxx-Xxxxx Squibb Pharma Research Labs, Inc., a Delaware corporation, f/k/a
Dupont Pharmaceuticals Research Laboratories, Inc., a Delaware corporation,
f/k/a CombiChem, Inc., including any claim for indemnification made by the
Landlord relating to such a claim. This Section 4 is not intended to alter the
ultimate responsibility for any such claim pursuant to this Agreement, and the
party ultimately responsible for any such claim under this Agreement shall bear
any out-of-pocket costs associated with requiring any such insurance carrier to
pay such a claim. Insurance carriers are not intended to be subrogated to the
rights of any party to this Agreement under this Agreement.
5. Deltagen and BMS agree that this Agreement will not be effective
unless and until (a) BMS Pharma and DRL have executed and delivered the
Assignment, (b) BMS and Deltagen have executed and delivered the DeltaOne(TM)
Agreement and (c) the Landlord has executed and delivered the Landlord Consent
in substantially the form annexed to the Assignment.
6. Except as otherwise expressly provided under this Agreement, neither
this Agreement nor any right or obligation hereunder may be assigned or
otherwise transferred (whether voluntarily, by operation of law or otherwise),
without the prior express written consent of the other party; provided, however,
that without such consent, (a) a party may assign this Agreement and its rights
and obligations hereunder in connection with the transfer or sale of all or
substantially all of its business, or in the event of its merger, consolidation,
change in control or similar transaction, and (b) a party may assign this
Agreement and its rights and obligations hereunder, in whole or part, to an
affiliate. Any permitted successor or assignee shall assume all obligations of
its transferor or assignor under this Agreement. Any purported assignment or
transfer in violation of this Section 6 shall be void.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflicts of law
principles thereof.
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8. This Agreement, including all Exhibits hereto, contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied representations, agreements and understandings, either oral
or written, heretofore made are expressly superseded by this Agreement. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by all of the parties hereto. In the event that there
is a conflict between the terms and conditions set out in the body of this
Agreement and those set forth on any Exhibits hereto, the terms and conditions
set forth in the body of this Agreement shall control.
9. Each party hereby acknowledges that the parties shall be
independent contractors and that the relationship between the parties shall not
constitute a partnership, joint venture or agency. Neither party shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other party, without the prior
consent of the other party to do so.
10. If any provision of this Agreement, or the application thereof to
any person, entity, place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provisions as applied to other persons, entities, places and
circumstances shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth herein. In such event, the parties shall
negotiate, in good faith, a substitute, valid and enforceable provision or
agreement that most nearly effects the parties' intent in entering into this
Agreement.
11. Each of BMS and Deltagen represents and warrants to the other that
its execution and delivery of this Agreement has been duly authorized by all
requisite corporate action and that this Agreement constitutes a legal, valid
and binding obligation of BMS and Deltagen, respectively, enforceable in
accordance with its terms.
12. This Agreement shall be binding upon the parties when executed and
delivered by facsimile transmission or by delivery of original executed
counterparts, whether executed by the parties on the same or on separate
counterparts, and each fully executed counterpart and/or each complete set of
executed counterparts shall be deemed an original, but all of which together
shall constitute one and the same instrument.
13. The parties agree that no public release or announcement concerning
the transactions contemplated hereby (including, without limitation, execution
of the DeltaOne(TM) Agreement) shall be issued by either party without the
consent of the other party (which consent shall not be unreasonably withheld),
except as such release may be required by applicable laws or the rules or
regulations of any United States or foreign securities exchange, in which case
the party required to make the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in advance of
such issuance; provided, however, that each of the parties may make internal
announcements to their respective employees that are consistent with the
parties' prior public disclosures regarding the transactions contemplated
hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
DELTAGEN, INC.
By:_____________________________
Name:___________________________
Title:__________________________
XXXXXXX-XXXXX SQUIBB COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
BMS Pharma executes this Agreement below for the sole purpose of accepting and
agreeing to its obligation to indemnify DRL as provided in Section 3(d) hereof
upon satisfaction of the condition set forth in Section 3.
XXXXXXX-XXXXX SQUIBB PHARMA COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
