LP Clover Limited Par La Ville Place Hamilton HM JX, Bermuda
Execution
Copy
LP Clover
Limited
Par La
Ville Place
14
Par-La-Ville Road
P.O. Box
HM 2332
Xxxxxxxx
XX JX, Bermuda
August
25, 2009
Xxxxx X.
Xxxxxx, President & CEO
Xxx
Xxxxxxx Xxxxxx, Xxxxx #000
Xxxxxx,
XX 00000
Dear Xx.
Xxxxxx:
This letter agreement sets out the
understanding of the undersigned concerning a proposed license agreement between
LP Clover Limited or one of its affiliates (“Clover”) and Novelos
Therapeutics, Inc. (the “Company”), under
which Clover would receive a license to, or otherwise acquire, the NOV-002
Rights (defined below) in the territory of Canada. Subject to the
terms and conditions set forth below, the Company has agreed to grant Clover (i)
the right to exclusively negotiate with the Company for the NOV-002 Rights in
Canada 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.
1. Exclusivity
(a) From
the date of this letter agreement until the receipt by Clover 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
Clover 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 Clover 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 Clover to provide access to Clover 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 Canada, and (C)
keep Clover 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 authority in Canada, including, without limitation, the
Canadian Intellectual Property Office, Health Canada and the Patent Medicines
Price Review Board.
(d) In
the event any negotiations between the Company and Clover 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 Clover 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 Clover, following the end of the Exclusive
Negotiation Period.
2. Right
of First Refusal
(a) In
the event that a definitive agreement for the license or acquisition by Clover
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
Clover 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
Clover.
(ii) Clover
shall have 30 days, or such longer period as agreed to between the Company and
Clover, 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 Clover 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 Clover and the Company within 30
days, or such longer period as agreed to between the Company and Clover, of
Clover’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. Definitions
(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 Canada.
(b) The
term “Data and
Analysis” means the final tables, listings and figures, set forth in a
letter to LP Clover 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 Clover 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 “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.
(e) The
term “Collaboration
Agreement” refers to that agreement between the Company and Mundipharma
International Corporation Limited dated as of February 11, 2009.
4. Disclosure
Except as and to the extent required by
law, without the prior written consent of the other party, neither Clover 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. Termination of
Rights
The Company has provided an affiliate
of Clover 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 Clover’s receipt of
written notice from Novelos.
6. Representations and
Warranties
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 Clover and its
affiliates and any of their respective successors and assigns from any and all
such claims.
7. Fees
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.
8. Entire
Agreement
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. Obligations
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.
10. Notices
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:
Xxx Xxxxxxx Xxxxxx, Xxxxx
000
Xxxxxx, XX 00000
XXX
Attention: Chief Executive
Officer
Fax: (000)
000-0000
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With a copy to:
Xxxxx Xxxx LLP
Seaport World Trade Center
West
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
XXX
Attn: Xxxx
Xxxx
Fax: (000)
000-0000
If to Clover:
LP Clover
Limited
Par La
Ville Place
14
Par-La-Ville Road
P.O. Box
HM 2332
Xxxxxxxx
XX JX, Bermuda
Attention: Xxxxxxx
Xxxxxxx
Fax: x(000)
000 0000
With a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXX
Attention: Xxxxxx X.
Xxxxx
Fax: (000) 000-0000
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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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LP
CLOVER LIMITED
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By:
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/s/ Xxxxxxx Xxxxxxx
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Name:
Xxxxxxx Xxxxxxxx
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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/ Xxxxx X. Xxxxxx
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Title: President
& CEO
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