Execution Copy
Mundipharma International
Corporation Limited
Par La Ville Place
14 Par-La-Ville Road
P.O. Box HM 2332
Hamilton HM JX, Bermuda
August 25,
2009
Harry S.
Palmin, President & CEO
Novelos
Therapeutics, Inc.
One Gateway
Center, Suite #504
Newton, MA
02458
Dear Mr.
Palmin:
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.
(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.
(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).
(a) The
term “ NOV-002 Rights ” means the rights to
research, register, develop, make, have made, use,
warehous
