Exhibit 10.28
Idenix Pharmaceuticals, Inc.
000 XxxxxxxxxXxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
March 21, 2003
Novartis Pharma AG
Xxxxxxxxxxxx 00
XX-0000 Xxxxx
Xxxxxxxxxxx
Attention: Xxxxxx Xxxxxxx
Chief Executive Officer
Gentlemen:
We refer to the Stock Purchase Agreement (the "Agreement"), dated as of the date
hereof, by and among Idenix Pharmaceuticals, Inc. ("Idenix"), the Sellers (as
defined therein) and Novartis Pharma AG ("Novartis"). Unless otherwise indicated
herein, capitalized terms used but not defined herein shall have the respective
meanings assigned to such terms in the Agreement.
As a material inducement to, and in consideration of, Novartis's execution and
delivery of the Agreement, Idenix covenants and agrees that, from and after the
Closing Date until the earlier to occur of (x) such time that Novartis and its
Affiliates own less that 35% of the Voting Stock (as defined in, and as
calculated pursuant to, the Stockholders' Agreement) or (y) an initial public
offering ("IPO") of Common Stock of Idenix, provided that the members of
Idenix's board of directors designated by Novartis shall have approved such IPO
and, after giving effect to such IPO, Novartis and its Affiliates own less than
50% of the Voting Stock (as calculated pursuant to the Stockholders' Agreement),
(i) Novartis's consent shall be required in connection with the selection and
appointment of any Chief Financial Officer of Idenix and (ii) Idenix will
terminate the employment of any Chief Financial Officer if in the reasonable
judgment of Novartis such Chief Financial Officer has not satisfactorily
performed the duties of Chief Financial Officer.
In addition to the foregoing, Idenix covenants and agrees to prepare interim and
annual financial statements and provide financial reports in accordance with
accounting principles generally accepted in the United States of America ("US
GAAP") and in accordance with Novartis's internal financial reporting
requirements. As certain differences exist between US GAAP and International
Accounting Standards ("IAS"), as issued by the International Accounting
Standards Board, Idenix agrees to quantify, maintain and report known
differences between US GAAP and IAS, as it applies to Idenix, in order to enable
Novartis to prepare its consolidated financial statements in accordance with IAS
and US GAAP. Idenix agrees that Novartis's accounting policies should be
followed where US GAAP and IAS provide alternatives, as directed by Novartis
accounting personnel. Idenix explicitly agrees to follow the US GAAP and IAS
accounting principles and Novartis's internal financial reporting requirements
specific to
subsidiaries of public companies in the preparation of its reporting
requirements pursuant to Novartis's accounting requirements and policies and
separate company financial statements, in each case as long as Idenix is
consolidated by Novartis. For the avoidance of doubt, Idenix explicitly agrees
to apply the accounting principles for stock option accounting for public
companies and subsidiaries of public companies in the preparation of its
reporting requirements pursuant to Novartis's accounting policies and separate
company financial statements. Idenix further covenants and agrees to use
reasonable efforts to comply with terms and conditions set forth in this
paragraph as promptly as practicable after the Closing Date, but in no event
later than December 31, 2003.
This agreement shall be subject to and interpreted in accordance with the
substantive laws of the State of New York.
If the foregoing correctly states the agreement between Idenix and Novartis,
please countersign this letter in the space indicated below, whereupon this
letter shall constitute a binding agreement between Idenix and Novartis.
Very truly yours,
IDENIX PHARMACEUTICALS, INC.
By: /s/ Xxxx-Xxxxxx Sommadossi
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Xxxx-Xxxxxx Sommadossi, Ph.D
Chairman of the Board and Chief Executive Officer
Acknowledged and agreed as of the date first above written:
NOVARTIS PHARMA AG
By:
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Name:
Title:
By:
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Name:
Title:
If the foregoing correctly states the agreement between Idenix and Novartis,
please countersign this letter in the space indicated below, whereupon this
letter shall constitute a binding agreement between Idenix and Novartis.
Very truly yours,
IDENIX PHARMACEUTICALS, INC.
By:
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Xxxx-Xxxxxx Sommadossi, Ph.D
Chairman of the Board and Chief Executive Officer
Acknowledged and agreed as of the date first above written:
NOVARTIS PHARMA AG
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Head Business Development & Licensing Primary Care
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: General Counsel
Novartis Pharma AG
