RE: Letter9 Jun 2020 21:44
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Midatech Pharma : Letter to Deyan Spiridonov re Midatech-mail
06/09/2020 | 10:23am BST
RE: DEMAND FOR RETRACTION OF PURPORTED TERMINATION NOTICE
Dear Mr. Spiridonov:
This office represents Midatech Pharma plc ("Midatech") and Midatech Limited, which are now in receipt of your letter dated June 1, 2020 purporting to terminate the License Agreement (the "License Agreement") between Midatech Limited and Novartis Pharma AG ("Novartis"), dated as of June 5, 2017, as amended by the Novation Agreement, dated February 18, 2019.1
Secura Bio, Inc. ("Secura Bio") has no basis to terminate under Section 9.2.4(v) or under any other provision of the License Agreement. Our clients therefore demand that the purported termination notice be retracted immediately.
As an initial matter, Section 9.2.4(v) requires proposing or participation in a liquidation or dissolution by a "Party" to the License Agreement. "Party" is a defined term in the initial paragraph of that agreement. The April 20, 2020 press release (the "Press Release") that you reference is not that of a "Party" to the License Agreement. It was made solely by Midatech, not by Midatech Limited. On that basis alone, the termination is meritless.
Further, your letter knowingly misrepresents the content of the Press Release with the intention of harming Midatech, which as you know, is required by law promptly to disclose to the market that Secura Bio has purported to terminate the License Agreement.
Neither Midatech nor Midatech Limited has proposed, is proposing or intends to propose any form of liquidation. Midatech has instead merely disclosed its interest in the potential sale of certain of its assets. As you again know, the bulk of the Press Release references MTD 201, a separate Midatech program that has no relation whatsoever to the License Agreement.
Pursuant to Section 10.3(B)(ii) of the License Agreement, the sale and assignment of MTX110 assets (those actually covered by the License Agreement) are expressly authorized. Therefore, a proposed sale of MTX110 assets provides no possible basis for termination of the License Agreement.
Your letter also intentionally mischaracterizes the Press Release as a liquidation "proposal." Under Delaware law, which governs the License Agreement, the Board of Directors of a company seeking to liquidate must approve dissolution and then "propose" it to the company's stockholders for approval. Neither of these prerequisite actions has occurred. No dissolution has been approved at the Board level and no liquidation
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