Mundipharma International Corporation Limited Par La Ville Place Hamilton HM JX, Bermuda
Execution Copy
Mundipharma
International Corporation Limited
Par La
Ville Place
14
Par-La-Ville Road
P.O. Box
HM 2332
▇▇▇▇▇▇▇▇
▇▇ JX, Bermuda
August
25, 2009
▇▇▇▇▇ ▇.
▇▇▇▇▇▇, President & CEO
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear ▇▇.
▇▇▇▇▇▇:
This
letter agreement sets out the understanding of the undersigned concerning a
proposed license agreement between Mundipharma International Corporation Limited
or one of its affiliates (“MICL”) and Novelos
Therapeutics, Inc. (the “Company”), under
which MICL would receive a license to, or otherwise acquire, the NOV-002 Rights
(defined below) in the Territory (as defined below). Subject to the
terms and conditions set forth below, the Company has agreed to grant MICL (i)
the right to exclusively negotiate with the Company for the NOV-002 Rights in
the Territory for a limited period of time, and (ii) the right to enter into a
definitive agreement with respect to the NOV-002 Rights on substantially the
same terms as a third party offer for the license or acquisition of the NOV-002
Rights.
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1.
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Exclusivity
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(a) From
the date of this letter agreement until the receipt by MICL from the Company of
the Data and Analysis (as defined in paragraph 3(b) below) of the Phase 3
clinical trial portion of the Novelos Trials (as defined in the Collaboration
Agreement (as defined below)) in the United States (“Exclusive Negotiation
Period”), the Company shall not negotiate with any third party other than
MICL for (i) the license or other acquisition of NOV-002 Rights (defined below)
in the United States (the “Proposed
Transaction”) or (ii) any transaction which would terminate the Rights of
First Refusal Period set forth in paragraph 3(c) below.
(b) The
Company and MICL agree that during the Exclusive Negotiation Period, neither the
Company nor any of its affiliates, or any of its or their respective directors,
officers, employees, financial advisors or counsel, agents or representatives or
any other party retained or engaged by the Company or any affiliate of the
Company to assist in the analysis, the arranging, brokering, financing,
negotiation or consummation of the Proposed Transaction at any time will (either
directly or through any intermediary) solicit, entertain offers or bids from,
respond to, negotiate with or consider any offer, bid or proposal of any other
person for a transaction that would conflict with or impede the Proposed
Transaction in any respect, or provide any non-public information to any third
party in connection with such an offer, bid or proposal except to the extent to
respond to unsolicited offers, bids or proposals as required by law, including
the fiduciary duties of the Board of Directors of the Company.
(c) Until
the first to occur of (i) such time as the Company is permitted to proceed with
the transaction proposed by the Offeror (as defined below) pursuant to paragraph
2(a)(iii), or (ii) the end of the Right of First Refusal Period, the Company
will (A) reasonably cooperate with MICL to provide access to MICL of the
Company’s books and records, and all other relevant documents and data, in each
case, to the extent related to the Proposed Transaction, (B) prepare, file,
prosecute and maintain all of its patents related to NOV-002 in the Territory,
and (C) keep MICL informed, in a timely manner, of material communications,
notifications or other information which it receives or provides (directly or
indirectly) with respect to NOV-002 or related patents and intellectual property
with any regulatory authorities in the Territory.
(d) In
the event any negotiations between the Company and MICL during such Exclusive
Negotiation Period results in a bona fide agreement in principle on terms to be
set forth in a definitive agreement, the Company will grant MICL an option, at
no cost other than as specified in such agreement, to enter into such definitive
agreement, such option to terminate upon the 30th day, or such longer period as
agreed to between the Company and MICL, following the end of the Exclusive
Negotiation Period.
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2.
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Right
of First Refusal
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(a) In
the event that a definitive agreement for the license or acquisition by MICL of
NOV-002 Rights is not entered into during the Exclusive Negotiation Period, the
Company will not enter into a definitive agreement to license, sell or otherwise
grant the NOV-002 Rights, in whole or in part, to a party other than MICL during
the Right of First Refusal Period (defined below) except in accordance with the
following procedure:
(i) Within
10 business days of approval by the Company’s Board of Directors of a bona fide
offer of a third party to license or otherwise acquire NOV-002 Rights (a “Bona
Fide Offer”) during the Right of First Refusal Period, the Company shall
communicate all material terms of the Bona Fide Offer (but not the identity of
the third party making the Bona Fide Offer (the “Offeror”)) to
MICL.
(ii) MICL
shall have 30 days, or such longer period as agreed to between the Company and
MICL, to enter into a definitive agreement with the Company to acquire the
NOV-002 Rights on substantially the same terms, which provide no lesser economic
benefit to the Company, as set forth in the Bona Fide Offer. For the
avoidance of doubt, neither MICL nor the Company shall have the right to
negotiate a more favorable provision for itself than the provision as set forth
in the Bona Fide Offer. If any usual or customary license provisions
are not set forth in the Bona Fide Offer, such provisions shall be negotiated in
good faith.
(iii) If
the definitive agreement is not entered into by MICL and the Company within 30
days, or such longer period as agreed to between the Company and MICL, of MICL’s
receipt from the Company of the terms of the Bona Fide Offer, then the Company
may proceed with the transaction proposed by the Offeror on terms no less
favorable to the Company than the terms set forth in the Bona Fide
Offer. If a definitive agreement for such transaction with the
Offeror is not entered into between the Company and the Offeror within 60 days
then the Company must re-offer the Bona Fide Offer to Purdue pursuant to the
procedures set forth in this paragraph 2(a).
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3.
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Definitions
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(a) The
term “NOV-002
Rights” means the rights to research, register, develop, make, have made,
use, warehouse, promote, market, sell, have sold, import, distribute, and offer
for sale NOV-002 in the Territory.
(b) The
term “Data and
Analysis” means the final tables, listings and figures, set forth in a
letter to MICL on even date herewith, from the Phase 3 clinical trial portion of
the Novelos Trials in the United States. The Data and Analysis will
be provided to MICL by the Company as soon as practically possible after the
Company's verification of such Data and Analysis, and in accordance with the
endpoints in the pre-specified Statistical Analysis Plan in the Special Protocol
Assessment agreed with the United States Food and Drug
Administration.
(c) The
term “Right of First
Refusal Period” means that period of time commencing as of the date of
the date hereof and terminating upon the later of (i) the closing or
effectiveness of a Business Combination (defined below) transaction and (ii) the
end of the Exclusive Negotiation Period. For the avoidance of doubt,
the Company may enter into a definitive agreement for a Business Combination
transaction subject to paragraph 1(a) but the Right of First Refusal Period will
not terminate until the later of (i) the closing or effectiveness of such
Business Combination transaction and (ii) the end of the Exclusive Negotiation
Period.
(d) The
term “Territory” means
Mexico, Central America, South America and the Caribbean.
(e) The
term “Business
Combination” means (i) the acquisition by a third party of a majority of
the outstanding shares of capital stock of the Company by tender, exchange offer
or otherwise where such third party shall have become, directly or indirectly,
the beneficial owner (within the meaning of Rule 13d-3 under the U.S. Securities
Exchange Act of 1934, as amended) of the securities of the Company representing
fifty percent (50%) or more of the Company’s capital stock, (ii) the
effectiveness of any merger of the Company with or into a third party, in which
the capital stock of the Company immediately prior to such merger represents
less than fifty percent (50%) of the voting power, (without
regard to the effect of any so-called “blocker provisions” of any convertible
securities), of the surviving entity (or, if the surviving entity is a wholly
owned subsidiary, its parent) immediately after such merger and (iii) the
closing of any sale of all or substantially all of the assets of the
Company.
(f) The
term “Collaboration
Agreement” refers to that agreement between the Company and MICL dated as
of February 11, 2009.
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4.
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Disclosure
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Except as
and to the extent required by law, without the prior written consent of the
other party, neither MICL nor the Company will, and each will direct and cause
its officers, directors, employees, attorneys, accountants and other agents and
representatives not to, directly or indirectly, make any public comment,
statement or communication with respect to, or otherwise publicly disclose or
permit the public disclosure of any of the terms, conditions or other aspects of
the Proposed Transaction which may be under negotiation between the parties
during the Exclusive Negotiation Period or the Right of First Refusal
Period. If a party is required by law to make any such disclosure, it
shall first provide to the other party the content of the proposed disclosure,
the reasons such disclosure is required by law and the time and place the
disclosure will be made and the opportunity to consult with respect
thereto. Disclosure shall be made only of that part of information
that counsel advises that the party is legally required to
disclose.
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5.
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Termination of
Rights
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The
Company has provided an affiliate of MICL rights for the United States similar
to those set forth in this letter agreement. If, at any time after
the date hereof, such similar rights in respect of the NOV-002 Rights granted by
the Company to such affiliate expire or terminate, then the corresponding rights
set forth in this letter agreement shall be deemed expired or terminated,
accordingly, upon MICL’s receipt of written notice from Novelos.
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6.
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Representations and
Warranties
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The
Company represents and warrants that the Company has not
and will not incur any liability in connection with the Proposed Transaction to
any third party with whom the Company has had discussions, at any
time prior to the date of this letter agreement, regarding any other transaction
or the Proposed Transaction, and the Company shall indemnify and hold
harmless MICL and its affiliates and any of their respective successors and
assigns from any and all such claims.
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7.
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Fees
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Each
party will be responsible for and bear all of its own fees and expenses
(including any broker’s or finder’s fees and the fees and expenses of its
attorneys and other advisors) incurred at any time in connection with pursuing
or consummating the Proposed Transaction.
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8.
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Entire
Agreement
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The
provisions of this letter agreement constitute the entire agreement between the
parties and supersede all prior oral or written agreements, understandings,
representations and warranties and courses of conduct or dealings between the
parties on the subject matter set forth herein. The provisions of
this letter agreement may only be amended or modified by a writing executed by
each of the parties. This letter agreement will be governed by and
construed under the laws of the State of New York, without regard to conflict of
laws principles. This letter agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which,
taken together, will constitute one and the same agreement. This
letter agreement will be binding on each party’s successors or
assigns. Any successor of a party or assignee of a party’s rights
and/or obligations hereunder will expressly assume performance of such rights
and/or obligations.
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9.
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Obligations
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Neither
party will be obligated to proceed with the Proposed Transaction unless and
until it is approved by both parties’ respective boards of directors and a
definitive transaction agreement is signed, it being the express intent of the
parties hereto that neither party shall be bound in the absence of such board
approvals and such definitive agreement. Neither party will have any
obligation of any sort under this letter agreement or in connection with the
Proposed Transaction except (a) as may be agreed in writing by the parties
hereafter in a definitive transaction agreement and (b) as provided explicitly
in this letter agreement (the “Binding
Obligations”). In all other respects, this letter will not
bind any party to enter into the Proposed Transaction. Except as may
be expressly provided in the Binding Obligations, no past or future action,
course of conduct or failure to act relating to the Proposed Transaction, or
relating to the negotiation of, or the failure to negotiate, the terms of the
Proposed Transaction will give rise to any obligation or other liability on the
part of the parties hereto. In the event the parties enter into a
definitive agreement with respect to the Proposed Transaction, such agreement
will supersede this letter agreement in all respects. In the event
this letter agreement is terminated prior to entering into a definitive
agreement relating to the Proposed Transaction, numbered paragraphs 4, 6, 7, 8
and 9 shall survive such termination.
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10.
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Notices
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Unless
otherwise provided, any notice required or permitted under this letter agreement
shall be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three (3) Business Days
after such notice is deposited in first class mail, postage prepaid, and (iv) if
given by a nationally recognized overnight air courier, then such notice shall
be deemed given one (1) Business Day after delivery to such
carrier. All notices shall be addressed to the party to be notified
at the address as follows, or at such other address as such party may designate
by ten (10) days’ advance written notice to the other party:
If to the
Company:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
Attention: Chief
Executive Officer
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
5
With a
copy to:
▇▇▇▇▇
▇▇▇▇ LLP
Seaport
World Trade Center West
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇
Attn: ▇▇▇▇
▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
If to
MICL:
Mundipharma
International Corporation Limited
Par La
Ville Place
14
Par-La-Ville Road
P.O. Box
HM 2332
▇▇▇▇▇▇▇▇
▇▇ JX, Bermuda
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: ▇(▇▇▇)
▇▇▇ ▇▇▇▇
With a
copy to:
▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇ LLP
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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If the
foregoing correctly sets forth our entire understanding, please sign and return
the enclosed copy of this letter agreement in the space provided
below.
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Very
truly yours,
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MUNDIPHARMA
INTERNATIONAL
CORPORATION
LIMITED
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: General
Manager
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Accepted and Agreed to:
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By:
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title: President
& CEO
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