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Title: |
Acquisition Agreement |
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Entities: |
Abgenix, Inc.; Millennium Biotherapeutics, Inc.; O’Melveny & Myers; Wilson Sonsini Goodrich & Rosati |
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Date: |
2000 |
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Size: |
Preview shows 30KB of 195KB total |
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Price: |
$85 |
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ID: |
#352425 |
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement"), dated as of September 25,
2000 (the "Execution Date"), between Abgenix, Inc., a Delaware corporation
("Parent"), Abgenix Canada Corporation, an unlimited liability company organized
and existing under the laws of the Province of Nova Scotia ("Abgenix Canada"),
and ImmGenics Pharmaceuticals Inc., a corporation organized and existing under
the laws of the Province of British Columbia (the "Company").
The parties enter into this Agreement on the basis of the following facts,
understandings and intentions:
A. The Company is engaged in the business of research and development
relating to the generation of monoclonal antibodies, proteins and
other biological materials and derivatives thereof.
B. The Board, after pursuing and considering a number of strategic
alternatives, has determined that the Acquisition and the
Arrangement is fair to the Members and is in the best interests of
the Company and the Members, and wishes Parent to acquire all of the
voting securities of the Company on the terms and conditions set
forth in this Agreement (the "Acquisition").
C. Parent is prepared to purchase all of the voting securities of the
Company pursuant to an arrangement under the BC Act, subject to the
terms and conditions of this Agreement.
D. Certain Members of the Company, who in the aggregate own not less
than seventy-five percent (75%) of the outstanding shares of Company
Capital Stock (on an "as-converted" basis and assuming the full
exercise of all outstanding Company Options) as of the Execution
Date, have entered into the Shareholder Voting Agreement and
Irrevocable Proxy with Parent dated as of the Execution Date, and
shall enter into the Escrow Agreement on or prior to the Closing
Date, in which they agree, among other things, to provide a limited
indemnity to Parent against certain losses resulting from certain
breaches of this Agreement by the Company and to establish an escrow
fund as security therefor.
NOW, THEREFORE, in consideration of the mutual covenants and promises of
the parties, the parties hereto agree as follows:
1. DEFINITIONS
1.1 Definitions.
The following capitalized terms used throughout this Agreement shall have
the following meanings:
"1933 Act" means the United States Securities Act of 1933, as amended.
"1934 Act" means the United States Securities Exchange Act of 1934, as
amended.
"Abgenix Canada" has the meaning assigned it in the introductory
paragraph.
"Acquisition" has the meaning assigned it in the Recitals hereto.
1
{PAGE}
"Acquisition Proposal" has the meaning assigned it in Section 3.2(a).
"Agreement" means this agreement.
"Ancillary Agreements" means the Shareholder Voting Agreement and
Irrevocable Proxy, the Support Agreement, the Voting, Exchange and Cash Put
Trust Agreement, the Option Replacement Agreement, the Escrow Agreement and the
Plan of Arrangement.
"Applicable Corporate Laws" has the meaning specified in Section 2.1(g).
"Applicable Securities Laws" has the meaning specified in Section 2.1(g).
"Applicable Regulatory Approvals" means the Authorizations of Governmental
Entities or self-regulatory organizations set forth in Schedule 1.1 hereto.
"Arrangement" means the arrangement proposed under Section 252 of the BC
Act referred to in the Plan of Arrangement and attached hereto as Exhibit A, and
any amendments thereto or variations thereof made in accordance with its terms,
the terms of this Agreement and the Special Resolution.
"Authorization" means with respect to any Person, any order, permit,
approval, waiver, license, ruling, consent, exception or similar authorization
(including the lapse, without objection, of a prescribed time under a statute or
regulation that states that a transaction may be implemented if a prescribed
time lapses following the giving of notice without an objection being made) of
any Governmental Entity having jurisdiction over such Person.
"BC Act" means the Company Act (British Columbia).
"Board" means the Board of Directors of the Company.
"Budget 2001" means the budget of the Company attached to Section 3.1 of
the Company Disclosure Schedule.
"Closing Date" shall mean the date that is two (2) business days following
the satisfaction or waiver of the conditions set forth in this Agreement, or
such other date as the parties hereto shall mutually agree in writing.
"Closing Time" means 10:00 a.m. (Vancouver time) on the Closing Date.
"Company" has the meaning assigned it in the introductory paragraph.
"Company Capital Stock" means, collectively, the Company Common Shares,
Company Class A Shares and Company Class B Shares.
"Company Class A Shares" means the Class A preferred shares without par
value in the capital of the Company outstanding from time to time.
"Company Class B Shares" means the Class B preferred shares with a par
value of CDN$1.00 per share in the capital of the Company outstanding from time
to time.
"Company Common Shares" means the common shares without par value in the
capital of the Company outstanding from time to time.
2
{PAGE}
"Company Consents and Waivers" has the meaning assigned it in Section
2.2(b)(vi).
"Company Convertible Debenture" means that certain debenture convertible
into 343,595 shares of Company Class A Shares held on the Execution Date by
Corixa Corporation.
"Company Disclosure Schedule" has the meaning assigned it in Section 5.
"Company Fully Diluted Shares" shall be the aggregate number of Company
Special Shares outstanding as of the Closing Date, plus the aggregate number of
Company Common Shares that would have been purchasable upon exercise of all
Company Options that are vested as of the Closing Date (after giving effect to
the acceleration of such Company Options contemplated hereby) were such Company
Options not replaced in accordance with the terms of the Option Replacement
Agreement.
"Company Optionholder" means any holder of a Company Option.
"Company Options" means outstanding options to purchase Company Common
Shares.
"Company Plan" means the ImmGenics 1996 Stock Option Plan, as amended.
"Company Special Shares" means the special shares of the Company to which
will be attached the rights, privileges, restrictions and conditions set forth
in the Special Resolution.
"Confidentiality Agreement" means the Confidentiality Agreement between
the Company and Parent dated August 18, 2000.
"Court" means the Supreme Court of British Columbia.
"Effective Date" means the date on which the Final Order is accepted for
filing by the Registrar of Companies for British Columbia under the BC Act
giving effect to the Arrangement.
"Effective Time" means the time of filing the certified Final Order
effecting the Arrangement, which is expected to be approximately 9:00 a.m.
(Vancouver time) on the Effective Date.
"Employee Benefit Plan" means any employee benefit or compensation plan,
program, agreement or arrangement whether written or unwritten, including any
profit-sharing, deferred compensation, bonus, change in control, stock option,
stock purchase, pension, retirement, severance, welfare, fringe benefit,
vacation, sick leave, sabbatical, parenting, medical, dental, hospitalization,
life or other insurance or incentive plan, program, agreement or arrangement
offered or sponsored by the Company covering the employees or former employees
of the Company in their capacities as such.
"Environmental Laws" means all applicable Laws and all agreements with
Governmental Entities relating to public health and occupational safety as they
relate to the environment, or the handling, storage, disposal and discharge of
Hazardous Substances, or the protection of the environment, and all
Authorizations issued pursuant to such Environmental Laws.
"Environmental Permits" has the meaning assigned it in Section 5.16.
"Escrow Agreement" means the Escrow Agreement substantially in the form
attached hereto as Exhibit B to be entered into on or prior to the Closing Date
by the Principal Members, the Company, Parent and the Escrow Agent party
thereto, concerning the limited indemnification of Parent against
3
{PAGE}
certain losses resulting from certain breaches of this Agreement by the Company
and the establishment of an escrow fund as security therefor.
"Exchange Ratio" means the ratio of Abgenix Common Stock issuable on
exchange of each Company Special Share that will be issued for each Company
Common Share pursuant to the Recapitalization which will be determined on the
SEC Effective Date. The "Exchange Ratio" shall be equal to the Purchase Price
per Share, divided by the Parent Stock Price.
"Execution Date" has the meaning assigned it in the introductory
paragraph.
"Fairness Opinion" means the opinion of SG Cowen Securities Corporation as
to the fairness of the consideration of the Acquisition from a financial point
of view to the Members.
"Final Order" means the order of the Court approving the Arrangement.
"Governmental Entity" means any (a) multinational, federal, provincial,
state, regional, municipal, local or other government, governmental or public
department, regulatory body, court or tribunal, domestic or foreign, (b) any
subdivision, arbitral body, commission, board, bureau, agency or authority of
any of the foregoing, or (c) any quasi-governmental or private body exercising
any regulatory, expropriation or taxing authority under or for the account of
any of the foregoing.
"Hazardous Substance" means any pollutant, contaminant, waste of any
nature, hazardous substance, hazardous material, toxic substance, dangerous
substance or dangerous good as defined or identified in or regulated by any
Environmental Laws.
"Information Circular" means the notice of special meeting and information
circular, including all schedules thereto, prepared by management of the Company
and approved by the Board and sent to Members in connection with the
solicitation of proxies by management of the Company for use at the Meeting.
"Intellectual Property Rights" means, with respect to an entity, patents
and applications for patents, trademarks, trade names, trade secrets, service
marks, and copyrights, and applications therefor, inventions, technology,
engineering or other processes, object code, products and processes under
development, databases, drawings, designs, formulae, prototypes, proprietary
know-how or information, other confidential information, or other rights or
materials with respect thereto owned or used by such entity, together with all
antecedent derivative works, or in which such entity has any rights or Licenses
to use in the business of such entity.
"Interim Order" means the order of the Court providing for, among other
things, the calling, holding and conduct of the Meeting and the application for
the Final Order as contemplated under the Plan of Arrangement.
"Knowledge of the Company" or "the Company's knowledge" or other words of
similar import mean the actual knowledge of any of directors and officers of the
Company, after due inquiry.
"Laws" means all statutes, regulations, statutory rules, orders,
decisions, written policies or guidelines, general principles of common law, and
terms and conditions of any grant of approval, permission, authority or license
of any Governmental Entity or self-regulatory authority, including NASDAQ, and
the term "applicable" with respect to such Laws and in the context that refers
to one or more Persons, means that such Laws apply to such Person or Persons or
its or their business,
4
{PAGE}
undertakings, property or securities and emanate from a Governmental Entity or
self-regulatory authority having jurisdiction over the Person or Persons or its
or their business, undertakings, property or securities.
"Licenses" means licenses, sublicenses, agreements, permissions,
undertaking and understandings pursuant to which any third party is licensed or
authorized to use any Intellectual Property Rights of a party hereto or pursuant
to which a party hereto is authorized to use the Intellectual Property Rights of
any third party (but not including material transfer agreements or
confidentiality agreements that would not otherwise by themselves constitute a
License, or any off-the-shelf shrink wrap licenses).
"Material Adverse Effect" or "Material Adverse Change" means any material
adverse effect on or change in the business, affairs, operations, assets
(whether tangible or intangible, including licenses, permits, rights, privilege
or other Intellectual Property Rights, whether contractual or otherwise),
capitalization, or financial condition, of the specified entity or on the
ability of such entity to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements; provided, however, that none of the
following shall be deemed either alone or in combination to constitute, and none
of the following shall be taken into account in determining whether there has
been or will be, a Material Adverse Effect or Material Adverse Change on an
entity: (a) any change in the market price or trading volume of such entity's
stock other than such change that is a result of an event or a fact that would
constitute a Material Adverse Effect or Material Adverse Change; (b) any failure
by such entity to meet internal projections, budgets or forecasts; (c) any
adverse change, event or effect, attributable or relating to the announcement or
pendency of this Agreement, the Acquisition or the Arrangement; other than with
respect to Intellectual Property Rights; (d) any adverse change, event or effect
attributable or relating to conditions affecting the industry or industry sector
in which such entity participates, or the U.S. or Canadian economy as a whole;
(e) any adverse change, event or effect attributable or relating to (i)
customary and usual out-of-pocket fees and expenses (including legal,
accounting, investment banking and other fees and expenses) incurred in
connection with the transactions contemplated by this Agreement, or (ii) the
payment of any amounts due to, or the provision of any other benefits to, any
officers or employees under such employment contracts, non-competition
agreements, employee benefit plans, severance arrangements or other arrangements
as set forth in Sections 5.11 and 5.13 of the Company Disclosure Schedule; (f)
any adverse change, event or effect attributable or relating to compliance with
the terms of, or the taking of any action required by, this Agreement or the
taking of any action consented to in writing by the other parties to this
Agreement; (g) any adverse change, event or effect attributable or relating to
actions required to be taken under applicable Laws applicable as of the
Execution Date, or, to the extent permitted under this Acquisition Agreement,
such contracts or agreements as set forth in Section 5.7 of the Company
Disclosure Schedule.
"Meeting" means the special meetings of the securityholders of the
Company, including any adjournment or postponements thereof, to be convened to
consider and, if thought advisable, to pass the Special Resolution.
"Members" means the shareholders of the Company.
"NASDAQ" means the Nasdaq National Market.
"Ordinary Shares" means the ordinary shares of the Company to be issued
pursuant to the Recapitalization and which has the rights, privileges,
restrictions and conditions set forth in the Special Resolution.
"Option Replacement Agreement" means an agreement substantially in the
form attached hereto as Exhibit C to be entered into among Parent and the
Company in connection with the Recapitalization.
5
{PAGE}
"Parent" has the meaning assigned it in the introductory paragraph.
"Parent Common Stock" means the common stock, par value $0.0001 per share,
of Parent.
"Parent Consents and Waivers" has the meaning assigned it in Section
2.2(c)(iv).
"Parent Disclosure Schedule" has the meaning assigned it in Section 4.
"Parent Material Adverse Effect" or "Parent Material Adverse Change" means
a material adverse effect on or change or material delay in the ability of
Parent to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements, including its obligations under Section 2.4(d), (e) and
(f) hereof, or any event that would cause the delisting of the Parent Common
Stock from NASDAQ.
"Parent Plan" shall mean the Abgenix 1999 Non-statutory Stock Option Plan,
as amended.
"Parent Special Voting Share" means the share of Parent Special Voting
Preferred Stock having substantially the rights, privileges, restrictions and
conditions described in the Voting, Exchange and Cash Put Trust Agreement.
"Parent Stock Price" shall be equal to the average of the closing prices
of one share of Parent Common Stock, as quoted on NASDAQ, for the five (5)
trading days ending on the day immediately preceding the SEC Effective Date.
"Patent Disclosure Agreement" means the agreement dated September 12, 2000
entered into by the Company and Parent, among others, relating to the review of
the intellectual property of the Company.
"Person" includes any individual, firm, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability company,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, Governmental Entity, syndicate or other entity,
whether or not having legal status.
"Plan of Arrangement" means the plan of arrangement proposed under Section
252 of the BC Act in the form attached as Exhibit A to this Agreement, as
amended, modified or supplemented from time to time in accordance herewith and
any order of the Court.
"Principal Members" means the Members of the Company who have entered into
the Shareholder Voting Agreement and Irrevocable Proxy and who will enter into
the Escrow Agreement.
"Purchase Price per Share" means Seventy-five million United States
dollars (US$75,000,000), plus the aggregate exercise price of all vested Company
Options to be replaced on the Closing Date, and then divided by the number of
Company Fully-Diluted Shares as of the Closing Date.
"Recapitalization" means the capital reorganization to be effected
pursuant to the Plan of Arrangement.
"Registration Statement" has the meaning assigned to it in Section 2.4(d).
"Replacement Options" means the options to purchase shares of Parent
Common Stock issued in exchange for the Company Options.
6
{PAGE}
"SEC" means the Unites States Securities and Exchange Commission.
"SEC Effective Date" means the date on which the Registration Statement
becomes effective.
"Shareholder Voting Agreement and Irrevocable Proxy" means the Shareholder
Voting Agreement and Irrevocable Proxy made and entered into as of the Execution
Date, by certain principal shareholders concerning the voting of their shares of
Company Capital Stock and Company Convertible Debentures to effect the
Recapitalization, the Arrangement and the Acquisition.
"Special Resolution" means the special resolution to effect the
Recapitalization and the Arrangement passed by 75% of the following: (i) persons
entitled to vote as holders of Company Common Shares and holders of Company
Options, (ii) holders of Company Class A Shares, (iii) holders of Company Class
B Shares, and (iv) holders of Company Convertible Debentures, in each case
present and voting at the Meeting.
"Support Agreement" means the support agreement substantially in the form
attached hereto as Exhibit D to be entered into among the Company, Parent, and
Abgenix Canada.
"Tax" has the meaning assigned it in Section 5.17.
"Trustee" means the trustee or any successor trustee as determined in
accordance with the Voting, Exchange and Cash Put Trust Agreement.
"Voting, Exchange and Cash Put Trust Agreement" means the voting, exchange
and cash put trust agreement substantially in the form attached as Exhibit E to
be entered into among Parent, Abgenix Canada, the Company and the Trustee.
1.2 Accounting Matters.
Unless otherwise stated, all accounting terms used in this Agreement
regarding the Company shall have the meanings attributable thereto under
Canadian generally accepted accounting principles and all determinations of an
accounting nature regarding the Company required to be made shall be made in a
manner consistent with Canadian generally accepted accounting principles. Unless
otherwise stated herein, all accounting terms used in this Agreement regarding
Parent shall have the meanings attributable thereto under United States
generally accepted accounting principles and all determinations of an accounting
nature required to be made regarding Parent shall be made in a manner consistent
with United States generally accepted accounting principles.
2. THE ACQUISITION
2.1 The Acquisition.
The parties agree to effect the transaction pursuant to the Arrangement,
pursuant to which the Company shall recapitalize its share capital so that all
holders of shares of Company Capital Stock and the holder of the Company
Convertible Debenture shall become holders of Company Special Shares and the
Company shall create a new class of Ordinary Shares to be acquired by Abgenix
Canada at US$1.00 payable in cash.
(a) Under the Arrangement, on the Closing Date (i) the vesting
date of all outstanding Company Options under the Company Plan
(except for Company Options granted to employees hired after
the Execution Date) shall accelerate by
7
{PAGE}
twelve (12) full months and they otherwise shall continue to
vest in accordance with their terms at the same rate as prior
to the Closing Date, (ii) all other Company Options shall
accelerate and/or vest in accordance with their terms, and
(iii) the period of exercisability for all Company Options
shall be extended by the number of days between the Closing
Date and the SEC Effective Date. The Company Plan shall be
terminated on the Closing Date and references to the Company
Plan in existing option agreements shall be deemed to refer to
the Parent Plan.
(b) Pursuant to the Option Replacement Agreement, on the Closing
Date, Parent shall grant new options (the "Replacement
Options") to acquire shares of Parent Common Stock to all
Company Optionholders in replacement for each Company Option,
whether or not vested and whether or not granted under the
Company Plan. No Company Options shall be exercisable during
the period between the Closing Date and the SEC Effective
Date. On and after the SEC Effective Date, (i) each
Replacement Option will be exercisable for that number of
whole shares of Parent Common Stock equal to the number of
Company Common Shares that were issuable upon exercise of such
Company Option immediately prior to the Closing Date,
multiplied by the Exchange Ratio, plus cash in lieu of any
fractional shares of Parent Common Stock determined in
accordance with Section 2.1(i), and (ii) the per share
exercise price for the shares of Parent Common Stock issuable
upon exercise of such Replacement Option will be equal to the
quotient determined by dividing the exercise price per Company
Common Share at which such Company Option was exercisable
immediately prior to the Closing Date by the Exchange Ratio,
rounded up to the nearest whole cent. Parent shall take all
corporate actions necessary to reserve for issuance a
sufficient number of shares of Parent Common Stock for
delivery upon exercise of Replacement Options on the terms set
forth in the Option Replacement Agreement.
(c) Parent may elect, in its sole discretion, to make the
Acquisition itself, or through Abgenix Canada. In the event
that Abgenix Canada makes the Acquisition, the term "Parent"
as used herein shall include, as appropriate, Abgenix Canada,
provided, however, Parent shall be liable to the Company for
any default in performance by Abgenix Canada to the extent
Abgenix Canada cannot or does not meet its obligations.
(d) The Arrangement shall be effected in accordance with all
Applicable Corporate Laws and shall be subject only to the
conditions set forth in this Agreement. Each of the parties to
this Agreement shall use its reasonable best efforts to
consummate the Acquisition, subject only to the terms and
conditions of this Agreement. Each of the parties to this
Agreement shall use its reasonable best efforts to obtain all
of the Applicable Regulatory Approvals, waivers and consents
required for consummation of the Acquisition and to satisfy
the conditions precedent to the Acquisition to the extent they
are within its power.
(e) The matters described in this Agreement shall be initiated on
an expeditious basis and each party shall, and shall use its
reasonable best efforts to cause third parties to, meet the
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