Subject: DERM/LLY Merger Agreement Quick Summary
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Agreement Announced: 1/10/20
Agreement Dated: 1/10/20
Tender Commencement: 13 business days (1/30/20)
Minimum Condition: majority of outstanding
Tender/Support Agreement: ~13%
each of Bay City Capital Fund V, L.P., Bay City Capital Fund V Co-Investment Fund, L.P., Bay City Capital, LLC, New Enterprise Associates 13, L.P. and NEA Ventures 2011, Limited Partnership (collectively, the “BCC and NEA Stockholders”), in each case in its capacity as a stockholder of the Company and who, collectively, beneficially own approximately 13% of the outstanding Shares, entered into a Tender and Support Agreement (collectively, the “Tender and Support Agreements”) with Parent and Merger Sub. The Tender and Support Agreements provide, among other things, that each of the BCC and NEA Stockholders will tender all of the Shares held by it in the Offer.
Close: no later than 2nd business
Confidentiality Agreement: 9/10/19
Termination Date: 7/10/20
Termination Fee:
Company: $40M
Regulatory:
HSR (10 business days) (1/27/20) – only HSR mention as condition in Annex A
Foreign Antitrust (promptly)
A “business day” means any day on which the principal offices of the SEC in Washington, D.C., are open to accept filings or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized by Law to close in New York, New York.
Best Efforts:
(c)Parent and Merger Sub agree to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers under the HSR Act or any Foreign Antitrust Law that may be required by any Governmental Entity, so as to enable the parties to close the Transactions as promptly as practicable (and in any event by or before the Outside Date); provided, however that nothing in this Section 6.02 and notwithstanding anything to the contrary in this Agreement, neither Parent nor Merger Sub shall have any obligation to (or to cause any of their respective subsidiaries or affiliates or the Company or the Company Subsidiary to): (i) sell, license, divest or dispose of or hold separate the assets, Intellectual Property or businesses of any entity, (ii) terminate, amend or assign any existing relationships or contractual rights or obligations of any entity, (iii) change or modify any course of conduct regarding future operations of any entity, (iv) otherwise take any action that would limit the freedom of action with respect to, or the ability to retain, one or more businesses, assets or rights of any entity or interests therein or (v) commit to take any such action in the foregoing clause (i), (ii), (iii) or (iv); provided, however that Parent and Merger Sub shall take the actions in the foregoing clause (i), (ii), (iii) or (iv) with respect to the Company or the Company Subsidiary (including, after the Effective Time, the Surviving Corporation) if such action (A) is necessary to obtain required clearances or waiting period expirations or terminations as may be required under the HSR Act or any Foreign Antitrust Law by or before the Outside Date and (B) would not, individually or in the aggregate, reasonably be expected to be materially detrimental to the benefits to be derived by Parent and its affiliates as a result of the Transactions. In addition, the Company shall not offer or commit to take any of the actions referred to in clause (i), (ii), (iii) or (iv) of the immediately preceding sentence without Parent’s prior written consent. For the avoidance of doubt, Parent shall not require the Company to, and the Company shall not be required to, take any action with respect to any Judgment or any applicable Law that binds the Company prior to the Effective Time.
Governing Law: DE
Superior Proposal Notice: 4 business days ( 2 business days for changes)
“Company Material Adverse Effect” means any change, event, condition, development, circumstance, state of facts, effect or occurrence that (i) has a material adverse effect on the business, assets, financial condition or results of operations of the Company and the Company Subsidiary, taken as a whole, or (ii) prevents the ability of the Company to consummate the Transactions on or before the Outside Date; provided that, for purposes of clause (i), none of the following, and no change, event, condition, development, circumstance, state of facts, effect or occurrence that results from or arises in connection with the following, either alone or in combination, shall be deemed to constitute a Company Material Adverse Effect and none of the following shall be taken into account in determining whether there has been a Company Material Adverse Effect: any change, event, condition, development, circumstance, state of facts, effect or occurrence to the extent resulting from or arising in connection with (A) general conditions (or changes therein) in the industries in which the Company and the Company Subsidiary operate, (B) general economic or regulatory, legislative or political conditions (or changes therein), including any actual or potential stoppage, shutdown, default or similar event or occurrence affecting a national or federal government, or securities, credit, financial or other capital markets conditions (including changes generally in prevailing interest rates, currency exchange rates, credit markets or equity price levels or trading volumes), in each case in the United States, the European Union or elsewhere in the world, (C) any change or prospective change in applicable Law or GAAP (or the authoritative interpretation or enforcement thereof), (D) geopolitical conditions, the outbreak or escalation of hostilities, any acts or threats of war (whether or not declared), sabotage, cyber-intrusion, terrorism or any epidemics, or any escalation or worsening of any such acts or threat of war (whether or not declared), sabotage, cyber-intrusion, terrorism or any epidemics, (E) any hurricane, tornado, flood, fire, volcano, earthquake or other natural or man-made disaster or any other national or international calamity, crisis or disaster, (F) the failure, in and of itself, of the Company to meet any internal or external projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics before, on or after the date of this Agreement, or changes in the market price or trading volume of the Company Common Stock or the credit rating of the Company (it being understood that the underlying facts giving rise or contributing to such failure or change may be taken into account in determining whether there has been a Company Material Adverse Effect if such facts are not otherwise excluded under this definition), (G) the announcement, pendency or performance of any of the Transactions, including any stockholder Proceeding (direct or derivative) in respect of this Agreement or any of the Transactions and any loss of or change in relationship, contractual or otherwise, with any customer, Governmental Entity, supplier, vendor, service provider, collaboration partner, licensor, licensee or any other party having business dealings with the Company (including the exercise, or prospective exercise, by any party of any rights that arise upon a change of control), or departure of any employee or officer, of the Company, (H) the compliance with the express covenants contained in this Agreement (excluding the requirement that the Company operate in the ordinary course of business), (I) any action taken by the Company at Parent’s written request or with Parent’s written consent,
(J) any conditions or events that occur in connection with the Company’s, or its competitors’ or potential competitors’, preclinical or clinical studies (including regulatory changes that may affect such studies and/or the market for any particular product) or the results of, or data derived from, such studies or announcements thereof or in connection therewith,
(K) the identity of, or any facts or circumstances relating to, Parent, Merger Sub or their respective affiliates,
(L) the effects or consequences of any matter set forth on the Company Disclosure Letter, to the extent such effects or consequences were known or reasonably foreseeable by Parent,
(M) the determination by, or the delay of a determination by, a non-U.S. Governmental Entity in connection with any filing, designation, approval or clearance applied for, prosecuted or sought by any licensee of the Company with respect to any Company Products,
(N) approval by the FDA or any other Governmental Entity (or other preclinical or clinical or regulatory developments), market entry or threatened market entry of any product competitive with or related to any of the Company’s products or product candidates or
(O) any recommendations, statements, decisions or other pronouncements made, published or proposed by professional medical organizations or payors, or any Governmental Entity or representative thereof, or any panel or advisory body empowered or appointed by any of the foregoing, relating to any products or product candidates of the Company or of any competitors or potential competitors of the Company, or the pricing, reimbursement or insurance coverage thereof, except (x) in the case of clause (A), (B), (C), (D) or (E), to the extent that the Company and the Company Subsidiary, taken as a whole, are disproportionately affected thereby as compared with other participants in the industries in which the Company and the Company Subsidiary operate (in which case the incremental disproportionate impact or impacts may be taken into account in determining whether there has been a Company Material Adverse Effect) and (y) in the case of clauses (J), (M) and (O), to the extent such condition or event results from (1) fraud by the Company or (2) any order issued by the FDA to the Company causing it to suspend its ongoing clinical trial relating to Lebrikizumab (in which case such condition or event, to the extent resulting from fraud by the Company or such order issued by the FDA may be taken into account in determining whether there has been a Company Material Adverse Effect)
“Company Products” means, together, QBREXZA (glycopyrronium) cloth and Lebrikizumab.