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EXHIBIT 10.65
COOPERATION AGREEMENT
THIS COOPERATION AGREEMENT (this "Agreement") dated as of December 1,
1998, is by and among CHIROTECH TECHNOLOGY LIMITED (Registration No. 2667953), a
company organized and existing under the laws of England and Wales ("CT
Limited"); CHIROTECH LIMITED (Registration No. 3580272), a company organized and
existing under the laws of England and Wales and a wholly owned subsidiary of CT
Limited ("ChiroSub"); COMBICHEM, INC., a Delaware corporation ("CombiChem");
COMBICHEM JVR, INC., a Delaware corporation and wholly owned subsidiary of
CombiChem ("CombiSub"); AND CHIROCHEM DISCOVERY SERVICES LLC, a California
limited liability company ("ChiroChem").
RECITALS
WHEREAS, ChiroSub and CombiSub are the two members of ChiroChem, which
was formed pursuant to that certain Limited Liability Company Operating
Agreement dated as of December 1, 1998 (the "LLC Agreement");
WHEREAS, as such, each of ChiroSub and CombiSub will from time to time
be obligated to make Capital Contributions to ChiroChem pursuant to the LLC
Agreement;
WHEREAS, each of the parent companies of the members of ChiroChem
wishes, by this Agreement, to guarantee the prompt payment in full of said
Capital Contributions and the timely performance of the other obligations of its
wholly-owned subsidiary under the LLC Agreement;
WHEREAS, because of the nature of ChiroChem's businesses, any of the
parties hereto may become aware of or receive information concerning business
opportunities that are derived directly from but outside of the stated purposes
of ChiroChem as set forth in the LLC Agreement;
WHEREAS, the parties hereto wish to establish procedures and terms by
which each such business opportunity will be made available to one of the parent
companies in consideration for compensation to the other parent company;
WHEREAS, CT Limited and CombiChem are sometimes referred to individually
as a "Parent" and collectively as the "Parents," and ChiroSub and CombiSub are
sometimes referred to individually as a "Member" and collectively as the
"Members;" and
WHEREAS, terms not defined herein shall have the meanings given them in
the LLC Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Xxxx"). This Exhibit has been filed separately with
the Secretary of the Commission without the Xxxx pursuant to the Company's
Application Requesting Confidential Treatment under Rule 24b-2 under the Act.
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1. GUARANTEES.
1.1 DEFINITIONS. As used herein, the term "Guaranteed
Obligations" shall mean every debt, duty, undertaking, obligation, covenant and
condition to be paid or performed by a Member pursuant to the LLC Agreement,
including the obligation to make Capital Contributions from time to time.
1.2 GUARANTIES. Each Parent unconditionally guarantees and
promises (each a "Guarantee") to and for the benefit of ChiroChem the full,
prompt and complete payment and performance by the Member that is its wholly
owned subsidiary, as and when due, of that Member's Guaranteed Obligations.
1.3 NATURE OF GUARANTY. Each Guaranty is an original and
independent obligation of the Parent making it, separate and distinct from the
Guaranteed Obligations. A separate action may be brought or prosecuted against
the Parent, regardless of whether such an action is brought or prosecuted
against the corresponding Member or any other guarantor and regardless of
whether the Member or any other guarantor is joined in the action. Each Parent
acknowledges and agrees that its guaranty is a direct and absolute guarantee of
payment and performance and not merely a guarantee of collection. Each Parent
hereby waives any and all rights or legal requirements that ChiroChem institute
any action or proceeding, or exhaust any remedies, against the corresponding
Member or any collateral hereafter obtained by ChiroChem for the Guaranteed
Obligations or anyone else in respect of the Guaranteed Obligations as a
condition precedent to bringing an action against the Parent pursuant to this
Agreement.
1.4 BANKRUPTCY NO DISCHARGE. Notwithstanding anything to the
contrary herein contained, this Agreement shall continue to be effective or
shall be reinstated, as the case may be, if at any time payment or performance
of all or any part of the Guaranteed Obligations is avoided or must otherwise be
restored or returned by ChiroChem upon the insolvency, bankruptcy or
reorganization of a Member or otherwise, all as though such payment or
performance had not been made. Notwithstanding any modification, discharge or
extension of the Guaranteed Obligations or any amendment, modification, stay or
cure of ChiroChem's rights which may occur in any bankruptcy or reorganization
case or proceeding concerning the Member, whether permanent or temporary, and
whether or not assented to by ChiroChem, the corresponding Parent shall be
obligated hereunder to pay all sums payable under the LLC Agreement and this
Agreement in performance of all duties now or hereafter arising.
1.5 WAIVER OF DEFENSES. Each Parent hereby waives any defense
arising by reason of any disability of the corresponding Member or by reason of
the cessation from any cause whatsoever (other than full payment) of the
liability of the Member for any of the Guaranteed Obligations. Each Parent shall
be liable and remain liable for the payment and performance of the Guaranteed
Obligations to the full extent provided herein notwithstanding (a) any previous
discharge (partial or total) of the Member from any further liability; (b) any
bar (temporary, partial or total) to the pursuit by the Parent of any right or
claim for indemnification from the Member; (c) loss of any right or claim by the
Parent to be subrogated to the rights or claims of ChiroChem against the Member;
(d) any action or inaction or delay in acting by ChiroChem; or (e) ChiroChem's
failure to enforce, or delay in enforcing, any of its rights under the LLC
Agreement or otherwise.
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1.6 AMENDMENTS TO DOCUMENTS. Each Parent authorizes ChiroChem,
without notice, demand or consideration and without affecting the Parent's
liability hereunder, from time to time, to: (a) amend, change, release or cancel
any of the provisions of the LLC Agreement, by further agreement among ChiroChem
and the Members at any time, or by operation of law, without the consent of or
notice to the Parent; (b) extend the maturity, grant any indulgence or
forbearance or postpone the time of payment of any of the Guaranteed
Obligations; and (c) take and hold additional guarantees or collateral as
security for the performance and payment of the Guaranteed Obligations, and
apply, enforce, exchange, waive and release any guaranty now or hereafter held
by ChiroChem.
1.7 WAIVER OF ACCEPTANCE, PRESENTMENTS AND NOTICES. Each Parent
waives notice of acceptance of this guaranty and all grace, demands for
performance, presentments, notices of default, protests, notices of protest, and
notices of dishonor.
1.8 ATTORNEYS FEES. Each Parent agrees to pay all expenses,
including without limitation reasonable attorneys fees and costs, paid or
incurred by ChiroChem in any action to enforce, interpret or defend Section 1 or
any subsection thereof of this Agreement.
2. REFERRALS OF BUSINESS OPPORTUNITIES.
2.1 DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"Production Gross Profits" means all revenues received from the ***
resulting from a Production Opportunity less all expenses directly associated
with (as determined by U.S. Generally Accepted Accounting Procedures ("GAAP"))
the generation of such revenues including, but not limited to, withholding taxes
that are not recoverable in the foreseeable future.
"Production Opportunity" means an expression of interest from a
potential customer or other apparent opportunity to *** to one or more third
party customers, *** (in *** ) derived directly from the activities of
ChiroChem.
"Research Gross Profits" means all revenue received from *** resulting
from a Research Opportunity less all expenses directly associated with (as
determined by GAAP) the generation of such revenues including, but not limited
to, withholding taxes that are not recoverable in the foreseeable future. ***
received from collaborators *** and all expenses associated with the *** are
specifically excluded from the definition of Research Gross Profits for such
collaborative agreements structured to *** on such service.
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Confidential Treatment and filed separately with the Commission.
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"Research Opportunity" means *** from a potential customer or other
apparent opportunity to *** for the account of one or more third party customers
for compensation, *** activities to facilitate *** using *** derived directly
from the activities of ChiroChem.
2.2 REFERRALS. In the event any party to this Agreement, *** a
Production Opportunity or a Research Opportunity which arises directly from the
activities of ChiroChem, it shall maintain the confidentiality of such
information and make it available to third parties only as provided herein. All
such information concerning a Production Opportunity shall be promptly provided
by the holder thereof to CT Limited, and all such information regarding a
Research Opportunity shall be promptly provided by the holder thereof to
CombiChem. The party receiving such information hereunder may consider whether
it wishes to pursue the described opportunity, which it may accept or reject in
its sole discretion, and it is under no obligation to any other party to do so.
If the opportunity is pursued, the receiving party shall periodically keep the
other parties reasonably informed of its business activities in pursuit of the
opportunity.
2.3 COMPENSATION FOR PRODUCTION OPPORTUNITIES. If CT Limited
pursues a Production Opportunity and, as a result thereof, it earns Production
Gross Profits from the *** of *** in *** *** , it shall pay to CombiChem, as
consideration hereunder, a fee equal to *** of all such Production Gross
Profits. Said fee shall be paid in quarterly installments, made not later than
the 30th day after the close of each calendar quarter with respect to Production
Gross Profits earned during that calendar quarter. Each such payment shall be
made in U.S. dollars to the addresses or bank accounts designated by CombiChem.
If any currency conversion is required in connection with the payment of such
fees hereunder, such conversion shall be made by using the exchange rate as
quoted in the Wall Street Journal (U.S.A. edition) on the last business day of
the calendar quarter to which such payments relate. Such payments shall be
subject to any applicable legally required withholding or other taxes.
2.4 COMPENSATION FOR RESEARCH OPPORTUNITIES. If CombiChem pursues
a Research Opportunity and, as a result thereof, it earns Research Gross Profits
from the conduct of *** using *** to facilitate *** , it shall pay to CT
Limited, as consideration hereunder, a fee equal to *** of all such Research
Gross Profits. Said fee shall be paid in quarterly installments, made not later
than the 30th day after the close of each calendar quarter with respect to
Research Gross Profits earned during that calendar quarter. Each such payment
shall be made in pounds sterling to the addresses or bank accounts designated by
CT Limited. If any currency conversion is required in connection with the
payment of such fees hereunder, such conversion shall be made by using the
exchange rate as quoted in the Wall Street Journal (U.S.A. edition) on the last
business day of the calendar quarter to which such payments relate. Such
payments shall be subject to any applicable legally required withholding or
other taxes.
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Confidential Treatment and filed separately with the Commission.
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2.5 CT LIMITED REPORTS. Within thirty (30) days after the end of
each whole or partial calendar quarter during the term of this Agreement in
which CT Limited earns Production Gross Profits from the pursuit of a Production
Opportunity, CT Limited shall deliver to CombiChem a true and accurate report
giving such particulars of the businesses conducted by CT Limited during the
preceding whole or partial calendar quarter as the result of Production
Opportunities under this Agreement as are pertinent to a fee accounting under
this Agreement. Each such report shall include, for the reporting period, at
least the following:
a. For each Production Opportunity, the *** of each *** in
*** during the report period;
b. For each customer (identified by name) the Production
Gross Profits earned from such ***
c. Total fees due to CombiChem hereunder for such period;
and
d. The aggregate amount of any withholding taxes deducted
from the payment made in satisfaction of the fees stated pursuant to (c) above.
2.6 COMBICHEM REPORTS. Within thirty (30) days after the end of
each whole or partial calendar quarter during the terms of this Agreement in
which CombiChem earns Research Gross Profits from the pursuit of a Research
Opportunity, CombiChem shall deliver to CT Limited a true and accurate report
giving such particulars of the businesses conducted by CombiChem during the
preceding whole or partial calendar quarter as the result of Research
Opportunities under this Agreement as are pertinent to a fee accounting under
this Agreement. Each such report shall include at least the following:
a. For each Research Opportunity, the *** of the ***
activities conducted;
b. For each customer (identified by name), the Research
Gross Profits earned on account of such activities (however denominated);
c. Total fees due to CT Limited hereunder for such period;
and
d. The aggregate amount of any withholding taxes deducted
from the payment made in satisfaction of the fees stated pursuant to (c) above.
2.7 RECORDS. Each Parent shall keep (for at least six (6) years
after the making of a fee payment hereunder) complete and accurate books of
account containing all particulars which may be reasonably necessary for the
other Parent to confirm the accuracy of all payments of fees and reports due
hereunder. At the written request of the other Parent, each Parent shall make
such books and particulars available during normal business hours, upon
reasonable notice, for inspection by an independent certified public accountant
retained by the
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Confidential Treatment and filed separately with the Commission.
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other Parent for the purpose of verifying payments of fees and reports related
thereto. Such inspections shall be limited solely to those matters directly
related to fee and referral obligations under this Agreement.
2.8 INSPECTION COSTS. If an inspection conducted by either
CombiChem or CT Limited pursuant to Section 2.7 reveals that CT Limited or
CombiChem, as the case may be, has made an error of seven percent (7%) or more
in favor of CT Limited or CombiChem, respectively, in the payment due either
CombiChem or CT Limited for the year to which the inspection pertains, CT
Limited shall reimburse CombiChem, and CombiChem shall reimburse CT Limited, as
the case may be, for the cost of the inspection.
3. CORPORATE OPPORTUNITIES. Allocation and pursuit of business
opportunities as hereinabove described shall not constitute a misappropriation
of the corporate opportunities available to or belonging to ChiroChem. CT
Limited shall make available to CombiChem such of its own intellectual property
as may be necessary or convenient for CombiChem to pursue a Research
Opportunity, by technology license or otherwise, on commercially reasonable
terms. CombiChem shall make available to CT Limited such of its own intellectual
property as may be necessary or convenient for CT Limited to pursue a Production
Opportunity, by technology license or otherwise, on commercially reasonable
terms.
4. TERM. The term of this Agreement shall commence on the date hereof
and end on the earlier of (i) the date on which ChiroChem terminates and (ii)
the date on which it is no longer the case that both ChiroSub (or an Affiliate)
and CombiSub (or an Affiliate) are members in ChiroChem. Notwithstanding the
foregoing, each Parent's guaranty obligations under Section 1 shall survive
beyond the end of the term of this Agreement to the extent that Guaranteed
Obligations of the corresponding Member survive beyond said date, and the
obligations of Section 2 shall survive indefinitely beyond the end of the term
of this Agreement with respect to all Production Gross Profits or Research Gross
Profits earned at any time from Production Opportunities or Research
Opportunities.
5. CONFIDENTIALITY. Except as provided herein, and except as reasonably
necessary to pursue a Production Opportunity or a Research Opportunity, during
the term of this Agreement all parties shall hold, and each party shall require
its Affiliates to hold, in confidence and not use for any purpose, or disclose
to any third party, information involving a Production Opportunity or a Research
Opportunity. The obligations of confidentiality set forth in this Section 5
shall not apply to the extent that (a) a disclosing party can demonstrate that
the information disclosed to a third party was in the public domain at the time
of disclosure, or thereafter became part of the public domain, other than as a
result of actions of the disclosing party or (b) the disclosure is required by
law, regulation or government or judicial order.
6. MISCELLANEOUS
6.1 AMENDMENT. Except as provided herein, this Agreement may be
amended only with the written consent of all parties.
6.2 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
transmission (receipt
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verified), or upon receipt if mailed by registered or certified mail (return
receipt requested), postage prepaid, or sent by express courier service (receipt
verified), to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice; provided, that notices of a
change of address shall be effective only upon receipt thereof):
If to CombiChem, addressed to: CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attn: President
With a copy to: Chirotech Limited
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Attn: Secretary
And to: Xxxxxxx Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
If to CombiSub, addressed to: CombiChem JVR, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attn: President
With a copy to: Chirotech Limited
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Attn: Secretary
And to: Xxxxxxx Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
If to CT Limited, addressed to: Chirotech Technology Limited
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX
England
Attention: Secretary
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With a copy to: CombiChem JVR, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attn: President
And to: Chiroscience R&D, Inc.
0000 000xx Xxxxxx XX
Xxxxxxx, XX 00000 XXX
Attention: Vice President and
General Counsel
If to ChiroSub, addressed to: Chirotech Limited
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX
England
Attention: Secretary
With a copy to: CombiChem JVR, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attn: President
And to: Chiroscience R&D, Inc.
0000 000xx Xxxxxx XX
Xxxxxxx, XX 00000 XXX
Attention: Vice President and
General Counsel
If to ChiroChem, addressed to: ChiroChem Discovery Services LLC
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attention: Board of Managers
With a copy to: CombiChem JVR, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Attention: President
And to: Chirotech Limited
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Attn: Secretary
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And to: Xxxxxxx Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
Any copy of a notice shall be sent at the same time as the original
notice.
6.3 FURTHER ASSURANCES. The parties agree to execute and deliver
any further instruments or documents and perform any additional acts that are or
may become necessary to effectuate and carry out the obligations created by this
Agreement.
6.4 CONSTRUCTION. Every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party.
6.5 TIME. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall not be included, but the time shall begin to run on
the next succeeding day. The last day of the period so computed shall be
included, unless it is not a business day, in which event the period shall run
until the end of the next business day.
6.6 HEADINGS. Section and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof.
6.7 SEVERABILITY. Except as otherwise provided in the succeeding
sentence, every provision of this Agreement is intended to be severable, and, if
any term or provision of this Agreement is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement. The preceding sentence of this
Section shall be of no force or effect if the consequence of enforcing the
remainder of this Agreement without such illegal or invalid term or provision
would be to cause any party to lose the material benefit of its economic
bargain.
6.8 VARIATION OF TERMS. All terms and any variations thereof
shall be deemed to refer to masculine, feminine, or neuter, singular or plural,
as the identity of the Person or Persons may require.
6.9 GOVERNING LAW. The laws of the State of California shall
govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties arising hereunder.
6.10 ARBITRATION. Any controversy between the parties hereto
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration in San Francisco, California in accordance with the
then-applicable commercial arbitration rules of the American Arbitration
Association. Judgment upon the award rendered may be entered into any court
having jurisdiction thereof. The losing party shall bear the costs and expenses
of such arbitration.
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6.11 BINDING EFFECT. This Agreement shall be binding on and
inures to the benefit of the parties and their respective transferees,
successors, assigns and legal representatives.
6.12 ENTIRE AGREEMENT. Without limiting the effect of the LLC
Agreement, the CT License, the CombiChem License, the CombiChem Services
Agreement, the CT Limited Services Agreement or the Chirotech Services
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject MATTER HEREIN.
6.13 COUNTERPARTS.This Agreement may be executed in one or more
counterparts with the same force and effect as if each of the signatories had
executed the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date set forth above.
CHIROTECH TECHNOLOGY CHIROTECH LIMITED, a company
LIMITED, a company organized organized and existing under the
and existing under the laws of England laws of England and Wales
and Wales
By: /s/ Xxxxxxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxx X. Xxxxx Name: Xxxxxxxxx X. Xxxxx
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Title: Director Title: Director
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[SIGNATURE PAGE TO COOPERATION AGREEMENT]
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COMBICHEM, INC., a Delaware COMBICHEM JVR, INC., a Delaware
corporation corporation
By: /s/ Xxxxxxx Xxxxx, Xx. By: /s/ Xxxxxxx Xxxxx, Xx.
-------------------------------- -----------------------------------
Name: Xxxxxxx Xxxxx, Xx. Name: Xxxxxxx Xxxxx, Xx.
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Title: President & CEO Title: President & CEO
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CHIROCHEM DISCOVERY SERVICES LLC, a
California limited liability company
By CHIROTECH LIMITED, a company
organized and existing under the laws
of England and Wales, Member
By: /s/ Xxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxx X. Xxxxx
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Title: Director
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And by COMBICHEM JVR, INC., a
Delaware corporation,
Member
By: /s/ Xxxxxxx Xxxxx, Xx.
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Name: Xxxxxxx Xxxxx, Xx.
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Title: President & CEO
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[CONTINUED SIGNATURE PAGE TO COOPERATION AGREEMENT]
