EXHIBIT 99.5
CELGENE CORPORATION
0 Xxxxxx Xxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
December 31, 2002
EntreMed, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated as of the date
hereof between Celgene Corporation ("Celgene") and EntreMed, Inc. ("EntreMed").
In consideration of the undertakings of Celgene contained in the Asset
Purchase Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged by EntreMed, EntreMed agrees as
follows:
1. For a period of ninety (90) days from the date hereof (the "Review
Period"), neither EntreMed nor any of its affiliates will enter into any
agreement, arrangement or understanding with respect to any merger,
consolidation or other business combination involving EntreMed or the
acquisition of all or any significant portion of the assets or capital stock of
EntreMed (an "Acquisition Transaction"); provided, however, that an Acquisition
Transaction shall not be deemed to include any such transaction that only
involves MaxCyte, Inc. However, EntreMed or any of its affiliates, and the
respective directors, officers, employees, agents or representatives of the
foregoing (including, without limitation, any investment banker, attorney or
accountant retained by EntreMed) may, directly or indirectly, solicit, initiate,
facilitate or encourage (including by way of furnishing or disclosing non-public
information) any inquiries or the making of any proposal with respect to or
which may reasonably be expected to lead to an Acquisition Transaction, or
negotiate, explore or otherwise engage in discussions with any corporation,
partnership, person, other entity or "group" (as defined in Section 13(d)(2) of
the Securities Exchange Act of 1934, as amended) in furtherance of such
inquiries or with respect to any Acquisition Transaction. EntreMed may also
enter into any transaction exclusively regarding non-oncology indications.
During the Review Period, EntreMed shall immediately advise Celgene in writing
of any proposals (or desire to make a proposal) received by (or indicated to)
it, any of its affiliates, or any of the respective directors, officers,
employees, agents or representatives of any of the foregoing, from a
corporation, partnership, person or other entity or group (other than Celgene
and its representatives) with respect to an Acquisition Transaction, and the
terms thereof, including the identity of such third party, and to update on an
ongoing basis or upon Celgene's request the status thereof; provided, however,
that no such notice is required for any transactions exclusively regarding
non-oncology indications.
2. During the Review Period, except as contemplated by the Asset
Purchase Agreement, the Related Instruments (as defined therein) or the Investor
and Registration Rights Agreement, dated as of the date hereof (the "Investor
and Registration Rights Agreement"), between EntreMed and Celgene, or unless
Celgene shall otherwise consent in writing, EntreMed shall, and shall cause its
Subsidiaries (as defined in the Asset Purchase Agreement) to, (x) operate its
and their businesses in the ordinary course consistent with past practice and
(y) use its and their reasonable best efforts to preserve such businesses
substantially intact. Without limiting the generality of the foregoing, and
except as otherwise contemplated by the Asset Purchase Agreement, the Related
Instruments (as defined therein) or the Investor and Registration Rights
Agreement, during the Review Period, without the prior written consent of
Celgene, EntreMed shall not, and shall cause its Subsidiaries not to:
(i) subject any of its or their assets to any Lien, other than
Permitted Liens (as these terms are defined in the Asset Purchase
Agreement);
(ii) sell, assign, transfer, lease, sublease, license,
sublicense or otherwise dispose of any material assets, other than in
connection with any transaction exclusively regarding non-oncology
indications;
(iii) transfer to any third party any material rights, whether
under licenses, sublicenses, other agreements or otherwise, with
respect to any material assets, other than in connection with any
transaction exclusively regarding non-oncology indications;
(iv) enter into, terminate or amend any material contract, other
than in the ordinary course of business or in connection with any
transaction exclusively regarding non-oncology indications;
(v) abandon or terminate any clinical trials relating to its or
their respective businesses other than in the ordinary course of
business (including for safety concerns), in accordance with the terms
of existing arrangements with respect to such clinical trials, or as
EntreMed reasonably believes is necessary to manage such trials or
related costs;
(vi) surrender, revoke or otherwise terminate any permit,
authorization, license, registration, certificate, approval or
clearance of any Governmental Entity (as that term is defined in the
Asset Purchase Agreement), other than in the ordinary course of
business;
(vii) incur indebtedness for borrowed money, or incur any other
liabilities, other than in the ordinary course of business;
(viii) waive, release or assign any material rights in connection
with its or their respective businesses, other than in the ordinary
course of business or in connection with any transaction exclusively
regarding non-oncology indications;
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(ix) issue or sell any capital stock or rights to acquire
capital stock, other than pursuant to (a) the exercise or conversion of
warrants, options, convertible securities or similar rights outstanding
on the date hereof, (b) any stock option plan currently in effect or as
may be subsequently approved by EntreMed's Board of Directors, (c) any
employment termination agreement, (d) work-out agreements with the
Company's existing creditors in connection with liabilities outstanding
on the date hereof, or (e) in connection with any transaction
exclusively regarding non-oncology indications if such issuance does
not exceed 5% of EntreMed's then-outstanding common stock;
(x) merge or consolidate with another entity;
(xi) acquire an equity interest in or a substantial portion of
the assets of another entity;
(xii) incur any obligation for capital expenditures in excess of
$500,000 in the aggregate;
(xiii) allow any insurance policy naming EntreMed or any of its
Subsidiaries as a beneficiary, insured or loss payee to be cancelled or
terminated;
(xiv) form any Subsidiary; or
(xv) agree, whether in writing or otherwise, to do any of the
foregoing.
[SIGNATURE PAGE FOLLOWS]
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Kindly acknowledge your agreement with the foregoing by executing and delivering
to Celgene at least one copy of this letter agreement.
CELGENE CORPORATION
By: /s/ Xxxxxx X. Hugin
----------------------------
Senior Vice President
and Chief Financial Officer
Agreed to and accepted:
ENTREMED, INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------
President
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