EXHIBIT 10.65
December 30, 2004
Celltrion, Inc.
1001-5, Dongchun-Dong, Yeonsu-Gu
Incheon, 406-130, Korea
Attention: Mr. Jung-Jin Seo, CEO
Re: Exercise of Call
Option on Shares of VCI
Dear Mr. Seo:
Reference is made to Section 7.2
of that certain Joint Venture Agreement (the “ VCI JVA
”), dated June 7, 2002, between Celltrion, Inc., a
corporation organized under the laws of the Republic of Korea
(“ Celltrion ”), and VaxGen, Inc., a Delaware
corporation (“ VaxGen ”), pursuant to which
VaxGen has an exclusive option (the “ Option ”)
to purchase all of the shares of Common Stock of VaxGen-Celltrion,
Inc., a California corporation (“ VCI ”), that
are held by Celltrion.
As you are aware, on July 5,
2002, Celltrion invested US $3.0 million in VCI in exchange for 3.0
million shares of Common Stock of VCI, and on December 23, 2002,
Celltrion invested an additional US $4.0 million in VCI, in
exchange for 4.0 million shares of Common Stock of VCI (the 7.0
million shares of Common Stock of VCI owned by Celltrion are
collectively referred to herein as the “ VCI Shares
,” and the US $7.0 million investment is referred to herein
as the “ VCI Investment ”). The VCI Investment
was used for capital expenses related to the construction of a
1,000 liter-scale pilot manufacturing facility located in South San
Francisco, California (the “ Pilot Plant
”).
As you are also aware, on even
date herewith, VaxGen and Celltrion are entering into a certain
Termination Agreement (“ Termination Agreement
”), pursuant to which the parties are terminating certain
agreements between them. In order to induce each other to enter
into the Termination Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto are hereby entering into this
letter agreement (this “ Agreement ”) and agree
to be bound by the following terms:
1.
Exercise of Option . No later than seven (7) days after the
execution and delivery of this Agreement (the “ Exercise
Date ”), VaxGen shall exercise the Option to purchase all
of the VCI Shares by delivering written notice of such exercise to
Celltrion in accordance with Section 7.1 of this
Agreement.
2.
Purchase of VCI Shares . No later than the Exercise Date,
VaxGen shall purchase the VCI Shares from Celltrion by delivering
to Celltrion, by wire transfer, check or other immediately
available funds, an amount (the “ Purchase Price
”) equal to US $7.0 million ( i.e. , US $1 per share),
plus simple interest at the U.S. prime rate (as determined with
reference to the United States Federal Reserve Daily Rate),
accruing (a) from (i) July 5, 2002, with respect to $3.0 million of
the VCI Investment, and (ii) December 23, 2002, with respect to
$4.0 million of the VCI Investment, to (b) the date immediately
prior to the date on which the Purchase Price is
delivered. Concurrently with the
receipt by Celltrion of the Purchase Price, Celltrion shall sell,
transfer, convey, and assign the VCI Shares to VaxGen.
3.
Termination of VCI JVA . Notwithstanding anything to the
contrary set forth in the VCI JVA, concurrently with the execution
and delivery of this Agreement and the delivery of the Purchase
Price to Celltrion by VaxGen, (a) the VCI JVA and any and all other
agreements entered into between the parties hereto in respect of
VCI or the Pilot Plant, but excluding this Agreement (collectively,
the “ VCI Agreements ”), shall, automatically
and without any further action by any party, terminate in their
entirety, including any provisions thereof which purport to survive
a termination thereof, and shall not have any force and effect, and
(b) neither VaxGen nor Celltrion shall have any further rights or
obligations thereunder; provided , that nothing in this
Section 3 shall in any way affect VaxGen’s rights and
obligations to exercise the Option and to acquire the VCI Shares,
or Celltrion’s obligation to sell, transfer, convey, and
assign the VCI Shares or its right to receive the Purchase Price
therefor; it being understood that the rights and obligations set
forth in the proviso of this Section 3 shall be the
parties’ sole remedy for a breach of any of the VCI
Agreements.
4.
Standstill . Prior to the Exercise Date, Celltrion shall not
sell, transfer, pledge, hypothecate, or in any way dispose of any
portion of the VCI Shares, and further agrees not to take or fail
to take any action that would prevent or in any way hinder or
impede VaxGen from exercising the Option or purchasing the VCI
Shares in accordance with this Agreement.
5.
Effectiveness . This Agreement shall become effective on the
date on which the following three (3) conditions are satisfied: (a)
it has been executed and delivered by the parties hereto, (b) the
parties have executed and delivered the Termination Agreement and
that certain Technical Support & Services Agreement, dated on
even date herewith, and (c) that certain Amended and Restated Joint
Venture Agreement, among Va
