SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
ZOGENIX, INC.
(Name of Subject Company (Issuer))
Zinc Merger Sub, Inc.
an indirect wholly owned subsidiary of
UCB S.A.
(Names of Filing Persons (Offerors))
Common Stock, par value $0.001 per share
(Title of Class of Securities)
98978L204
(CUSIP Number of Class of Securities (Underlying Common Stock))
Bill Silbey
Executive Vice President and General Counsel
UCB S.A.
Allée de la Recherche, 60
1070 Brussels
Tel: 32 2 559 99 99
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copies to:
J. D. Weinberg, Esq.
Kyle Rabe, Esq.
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018-1405
+1 (212) 841 1000
Calculation of Filing Fee
Transaction Valuation* | Amount of Filing Fee** | |
$1,670,581,276 | $154,863 | |
* | Estimated solely for purposes of calculating the filing fee. This calculation is based on the offer to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, of Zogenix, Inc. (Zogenix), at a purchase price of $26.00 per share, net to the seller in cash, without interest and less any applicable tax withholding. As of January 27, 2022 (the most recent practicable date): (i) 56,125,822 shares of Zogenix common stock were issued and outstanding, (ii) 6,637,422 shares of Zogenix common stock were subject to outstanding Zogenix stock options, (iii) 804,112 shares of Zogenix common stock were subject to outstanding Zogenix restricted stock unit awards, (iv) 300,255 shares of Zogenix common stock were subject to outstanding Zogenix performance stock unit awards (at maximum), and (v) rights to purchase a maximum of 385,515 shares of Zogenix common stock pursuant to Zogenixs 2010 Employee Stock Purchase Plan were outstanding. |
** | The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2022, issued August 23, 2021, by multiplying the transaction value by .0000927. |
☐ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
Amount Previously Paid: N/A | Filing Party: N/A | |
Form or Registration No.: N/A | Date Filed: N/A |
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
☒ | Third-party tender offer subject to Rule 14d-1. |
☐ | Issuer tender offer subject to Rule 13e-4. |
☐ | Going-private transaction subject to Rule 13e-3. |
☐ | Amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
☐ | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Tender Offer Statement on Schedule TO (together with any amendments and supplements hereto, this Schedule TO) is filed by Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and an indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), and Parent. This Schedule TO relates to the offer by Purchaser to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)(A) and (a)(1)(B), respectively.
All information contained in the Offer to Purchase (including Schedule I to the Offer to Purchase) and the accompanying Letter of Transmittal is hereby expressly incorporated herein by reference in response to Items 1 through 9 and Item 11 of this Schedule TO.
The Agreement and Plan of Merger dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser, a copy of which is attached as Exhibit (d)(1) hereto, is incorporated herein by reference with respect to Items 4, 5, 6 and 11 of this Schedule TO.
Item 1. | Summary Term Sheet. |
The information set forth in the Summary Term Sheet of the Offer to Purchase is incorporated herein by reference.
Item 2. | Subject Company Information. |
(a) The name of the subject company and the issuer of the securities to which this Schedule TO relates is Zogenix, Inc., a Delaware corporation. Zogenixs principal executive offices are located at 5959 Horton Street, Suite 500, Emeryville, CA 94608. Zogenixs telephone number is (510) 550-8300.
(b) This Schedule TO relates to the outstanding Shares. Zogenix has advised Purchaser and Parent that, as of January 27, 2022 (the most recent practicable date): (i) 56,125,822 shares of Zogenix common stock were issued and outstanding, (ii) 6,637,422 shares of Zogenix common stock were subject to outstanding Zogenix stock options, (iii) 804,112 shares of Zogenix common stock were subject to outstanding Zogenix restricted stock unit awards, (iv) 300,255 shares of Zogenix common stock were subject to outstanding Zogenix performance stock unit awards (at maximum), and (v) rights to purchase a maximum of 385,515 shares of Zogenix common stock pursuant to Zogenixs 2010 Employee Stock Purchase Plan were outstanding.
(c) The information set forth in Section 6 (entitled Price Range of Shares; Dividends on the Shares) of the Offer to Purchase is incorporated herein by reference.
Item 3. | Identity and Background of the Filing Person. |
(a) - (c) This Schedule TO is filed by Purchaser and Parent. The information set forth in Section 8 (entitled Certain Information Concerning Parent and Purchaser) of the Offer to Purchase and Schedule I to the Offer to Purchase is incorporated herein by reference.
Item 4. | Terms of the Transaction. |
(a)(1)(i) - (viii), (xii), (a)(2)(i) - (iv), (vii) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Introduction |
| the Summary Term Sheet |
| Section 1 - Terms of the Offer |
| Section 2 - Acceptance for Payment and Payment for Shares |
| Section 3 - Procedures for Accepting the Offer and Tendering Shares |
| Section 4 - Withdrawal Rights |
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| Section 5 - Material U.S. Federal Income Tax Consequences |
| Section 11 - The Merger Agreement; CVR Agreement |
| Section 12 - Purpose of the Offer; Plans for Zogenix |
| Section 13 - Certain Effects of the Offer |
| Section 15 - Conditions of the Offer |
| Section 16 - Certain Legal Matters; Regulatory Approvals |
| Section 17 - Appraisal Rights |
| Section 19 - Miscellaneous |
(a)(1)(ix) - (xi), (a)(2)(v) - (vi) Not applicable.
Item 5. | Past Contacts, Transactions, Negotiations and Agreements. |
(a), (b) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Introduction |
| the Summary Term Sheet |
| Section 8 - Certain Information Concerning Parent and Purchaser |
| Section 10 - Background of the Offer; Past Contacts or Negotiations with Zogenix |
| Section 11 - The Merger Agreement; CVR Agreement |
| Section 12 - Purpose of the Offer; Plans for Zogenix |
| Schedule I |
Item 6. | Purposes of the Transaction and Plans or Proposals. |
(a), (c)(1) - (7) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Introduction |
| the Summary Term Sheet |
| Section 10 - Background of the Offer; Past Contacts or Negotiations with Zogenix |
| Section 11 - The Merger Agreement; CVR Agreement |
| Section 12 - Purpose of the Offer; Plans for Zogenix |
| Section 13 - Certain Effects of the Offer |
| Section 14 - Dividends and Distributions |
| Schedule I |
Item 7. | Source and Amount of Funds or Other Consideration. |
(a), (b), (d) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Summary Term Sheet |
| Section 9 - Source and Amount of Funds |
Item 8. | Interest in Securities of the Subject Company. |
(a) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Summary Term Sheet |
| Section 8 - Certain Information Concerning Parent and Purchaser |
| Section 11 - The Merger Agreement; CVR Agreement |
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| Section 12 - Purpose of the Offer; Plans for Zogenix |
| Schedule I |
(b) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 8 - Certain Information Concerning Parent and Purchaser |
| Schedule I |
Item 9. | Persons/Assets, Retained, Employed, Compensated or Used. |
(a) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| the Summary Term Sheet |
| Section 3 - Procedures for Accepting the Offer and Tendering Shares |
| Section 10 - Background of the Offer; Past Contacts or Negotiations with Zogenix |
| Section 18 - Fees and Expenses |
Item 10. | Financial Statements. |
Not applicable.
Item 11. | Additional Information. |
(a)(1) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 8 - Certain Information Concerning Parent and Purchaser |
| Section 10 - Background of the Offer; Past Contacts or Negotiations with Zogenix |
| Section 11 - The Merger Agreement; CVR Agreement |
| Section 12 - Purpose of the Offer; Plans for Zogenix |
(a)(2) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 12 - Purpose of the Offer; Plans for Zogenix |
| Section 15 - Conditions of the Offer |
| Section 16 - Certain Legal Matters; Regulatory Approvals |
(a)(3) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 15 - Conditions of the Offer |
| Section 16 - Certain Legal Matters; Regulatory Approvals |
(a)(4) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 13 - Certain Effects of the Offer |
(a)(5) The information set forth in the following sections of the Offer to Purchase is incorporated herein by reference:
| Section 16 - Certain Legal Matters; Regulatory Approvals |
(c) The information set forth in the Offer to Purchase is incorporated herein by reference.
Item 12. | Exhibits. |
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* | Filed herewith. |
** | Certain schedules have been omitted pursuant to Instruction 1 to Item 1016 of Regulation M-A. Parent hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC. |
Item 13. | Information Required by Schedule 13E-3. |
Not applicable.
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SIGNATURES
After due inquiry and to the best knowledge and belief of the undersigned, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Zinc Merger Sub, Inc. | ||
By: | /s/ Jennifer Trevett | |
Name: Jennifer Trevett | ||
Title: Vice President & Secretary |
UCB S.A. | ||
By: | /s/ Charl van Zyl | |
Name: Charl van Zyl | ||
Title: Executive Vice President |
Date: February 1, 2022
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Exhibit (a)(1)(A)
Offer To Purchase
All Outstanding Shares of Common Stock
of
ZOGENIX, INC.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents the right to receive a contingent cash payment of $2.00 upon the achievement of a specified milestone
by
Zinc Merger Sub, Inc.,
an indirect wholly owned subsidiary of
UCB S.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON MARCH 1, 2022, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and an indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), is offering to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in this Offer to Purchase (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase) and in the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal, which, together with this Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer).
The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser, pursuant to which, after consummation of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into Zogenix, upon the terms and subject to the conditions set forth in the Merger Agreement, with Zogenix continuing as the surviving corporation (the Surviving Corporation) and becoming an indirect wholly owned subsidiary of Parent (the Merger). The Merger will be governed by Section 251(h) of the Delaware General Corporation Law (the DGCL) and will be effected by Purchaser and Zogenix without a stockholder vote pursuant to the DGCL as soon as practicable following the consummation of the Offer.
At the effective time of the Merger (the Effective Time), each Share issued and outstanding immediately prior to the Effective Time (other than (i) Shares held in the treasury of Zogenix or owned by Zogenix or any wholly owned subsidiary of Zogenix and Shares owned by Parent, Purchaser or any other wholly owned subsidiary of Parent immediately prior to the Effective Time and (ii) Shares outstanding immediately prior to the Effective Time and held by stockholders who are entitled to demand, and properly demand, appraisal for such Shares in accordance with Section 262 of the DGCL) will be converted into the right to receive the Offer Price, without interest (the Merger Consideration), and less any applicable tax withholding. As a result of the Merger, Zogenix will cease to be a publicly traded company and will become an indirect wholly owned subsidiary of Parent.
As of the Effective Time, all options to purchase Shares granted under a Zogenix equity plan, agreement or arrangement that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, and that: (i) have an exercise price per Share that is less than the Cash Amount will be cancelled and the
holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (A) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (B) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; (ii) have an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash (less the applicable exercise price per Share subject to such stock option); and (iii) have an exercise price equal to or greater than $28.00, will be cancelled for no consideration.
As of the Effective Time, all Zogenix restricted stock units (RSUs) and Zogenix performance stock units (PSUs) that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU and PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU or PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to the PSUs) multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU or PSU immediately prior to the Effective Time.
Under no circumstances will interest be paid on the purchase price for the Shares, including by reason of any extension of the Offer or any delay in making payment for Shares.
The Offer is subject to the conditions set forth in Section 15Conditions of the Offer (collectively, the Offer Conditions), including (i) there having been validly tendered and received (as such term is defined in Section 251(h) of the DGCL), and not validly withdrawn, that number of Shares that, when added to the Shares then owned by Parent and Purchaser, would represent at least a majority of the Shares outstanding as of the consummation of the Offer (the Minimum Condition), (ii) the termination or expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act) (and any extension thereof, including under any agreement entered into in compliance with the Merger Agreement between a party and a governmental authority agreeing not to consummate the Offer or the Merger prior to a certain date) applicable to the Offer or the Merger, and the receipt of any other clearance, approval or consent under any other applicable antitrust law (or the failure by any relevant governmental authority exercising jurisdiction under any other applicable antitrust law to render a decision in the relevant time period, so that the transactions contemplated by the Merger Agreement are deemed to be cleared, approved or consented to under such other applicable antitrust law) (the Antitrust Approval Condition), (iii) there being no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority of competent jurisdiction, and no law, rule, regulation, judgment, decree, injunction, ruling, order, decision, or other legal or regulatory requirement in effect, in each case that prohibits or makes illegal the acquisition of or payment for Shares pursuant to the Offer or the consummation of the Merger, or that imposes certain remedies or restrictions on the ability of Parent to own or operate Zogenix, its businesses or assets (the Governmental Impediment Condition), and (iv) the Merger Agreement not having been terminated in accordance with its terms (the Termination Condition). The Offer is not subject to any financing condition.
The board of directors of Zogenix (the Zogenix Board) has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
A summary of the principal terms and conditions of the Offer appears in the Summary Term Sheet beginning on page 1 of this Offer to Purchase. You should read this entire document carefully before deciding whether to tender your Shares in the Offer.
IMPORTANT
If you wish to tender all or a portion of your Shares to Purchaser pursuant to the Offer, you must either (i) complete and sign the Letter of Transmittal that accompanies this Offer to Purchase in accordance with the instructions in the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to the Depositary (as defined below in the Summary Term Sheet) together with certificates representing the Shares tendered or follow the procedure for book-entry transfer set forth in Section 3Procedures for Accepting the Offer and Tendering Shares or (ii) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact that institution in order to tender your Shares to the Purchaser before the expiration of the Offer.
Questions and requests for assistance should be directed to the Information Agent (as defined below in the Summary Term Sheet) at the address and telephone numbers set forth below and on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer may also be obtained at our expense from the Information Agent. Additionally, copies of this Offer to Purchase, the related Letter of Transmittal and any other material related to the Offer may be found at www.sec.gov. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.
This Offer to Purchase and the related Letter of Transmittal contain important information, and you should read both carefully and in their entirety before making a decision with respect to the Offer.
Neither the Offer nor the Merger has been approved or disapproved by the United States Securities and Exchange Commission (the SEC) or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of the Offer or the Merger or upon the accuracy or adequacy of the information contained in this Offer to Purchase or the Letter of Transmittal. Any representation to the contrary is unlawful and a criminal offense.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (888) 750-5835
Banks and Brokers may call collect: (212) 750-5833
TABLE OF CONTENTS
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17 | ||||
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25 | ||||
26 | ||||
26 | ||||
28 | ||||
10. Background of the Offer; Past Contacts or Negotiations with Zogenix |
29 | |||
32 | ||||
58 | ||||
59 | ||||
60 | ||||
60 | ||||
61 | ||||
17. Appraisal Rights |
64 | |||
65 | ||||
19. Miscellaneous |
65 |
The information contained in this Summary Term Sheet is a summary only and is not meant to be a substitute for the more detailed description and information contained in the remainder of this Offer to Purchase (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase), the Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal) and other related materials. You are urged to read carefully this Offer to Purchase, the Letter of Transmittal and other related materials in their entirety. This Summary Term Sheet includes cross-references to other sections of this Offer to Purchase where you will find more complete descriptions of the topics mentioned below. The information concerning Zogenix contained in this Summary Term Sheet and elsewhere in this Offer to Purchase has been provided to Parent and Purchaser by Zogenix or has been taken from, or is based upon, publicly available documents or records of Zogenix on file with the Securities and Exchange Commission (the SEC) or other public sources at the time of the Offer (as defined below). Parent and Purchaser have not independently verified the accuracy and completeness of such information.
Securities Sought |
Subject to certain conditions, as described in Section 15Conditions of the Offer, including the satisfaction of the Minimum Condition (as defined below), all of the issued and outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix. |
Price Offered Per Share |
$26.00, in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable withholding taxes, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price). |
Scheduled Expiration of Offer |
One minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the Offer is otherwise extended or earlier terminated (Expiration Time). |
Purchaser |
Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and an indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent). |
Who is offering to buy my securities?
Purchaser, which is an indirect wholly owned subsidiary of Parent, is offering to purchase for the Offer Price all Shares of Zogenix.
Purchaser is a Delaware corporation that was formed for the sole purpose of facilitating the acquisition of Zogenix by Parent. Parent is a global biopharmaceutical company focused on the discovery and development of innovative medicines and solutions to transform the lives of people living with severe diseases of the immune system or of the central nervous system. Parent has agreed pursuant to the Merger Agreement (as defined below) to cause Purchaser to, upon the terms and subject to the conditions in this Offer to Purchase and the related Letter of Transmittal, accept and pay for Shares tendered and not validly withdrawn in the Offer.
1
Unless the context indicates otherwise, in this Offer to Purchase, we use the terms us, we and our to refer to Purchaser and, where appropriate, Parent. We use the term Purchaser to refer to Zinc Merger Sub, Inc. alone, the term Parent to refer to UCB S.A. alone and the term Zogenix to refer to Zogenix.
See Section 8Certain Information Concerning Parent and Purchaser.
What is the class and amount of securities sought pursuant to the Offer?
Purchaser is offering to purchase all of the outstanding Shares of Zogenix on the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal. In this Offer to Purchase, we use the term Offer to refer to this offer and the term Shares to refer to the Shares that are the subject of the Offer.
See Section 1Terms of the Offer.
Why are you making the Offer?
We are making the Offer because we want to acquire control of, and ultimately own the entire equity interest in, Zogenix. If the Offer is consummated pursuant to the Merger Agreement, we intend to complete the Merger (as defined below) as soon as practicable. Upon completion of the Merger, Zogenix will become an indirect wholly owned subsidiary of Parent. In addition, we intend after completion of the Merger to cause the Shares to be delisted from the Nasdaq Global Market (Nasdaq) and deregistered under the Securities Exchange Act of 1934, as amended (the Exchange Act).
See Section 12Purpose of the Offer; Plans for Zogenix.
Who can participate in the Offer?
The Offer is open to all holders and beneficial owners of Shares.
How much are you offering to pay?
Purchaser is offering to pay (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable tax withholding, plus (ii) one CVR per Share, which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, if a specified milestone is achieved on or prior to December 31, 2023. We refer to the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, as the Offer Price.
See the Introduction to this Offer to Purchase and Section 1Terms of the Offer.
Will I have to pay any fees or commissions?
If you are the record owner of your Shares and you directly tender your Shares to us in the Offer, you will not have to pay brokerage fees or similar expenses. If you own your Shares through a broker or other nominee, and your broker or other nominee tenders your Shares on your behalf, your broker or other nominee may charge you a fee for doing so. You should consult your broker or other nominee to determine whether any charges will apply.
See the Introduction to this Offer to Purchase and Section 18Fees and Expenses.
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Is there an agreement governing the Offer?
Yes. Zogenix, Parent and Purchaser have entered into an Agreement and Plan of Merger dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement). The Merger Agreement contains the terms and conditions of the Offer and the subsequent merger of Purchaser with and into Zogenix, with Zogenix surviving such merger as an indirect wholly owned subsidiary of Parent if the Offer is completed (such merger, the Merger).
See Section 11The Merger Agreement; CVR Agreement and Section 15Conditions of the Offer.
What is the CVR and how does it work?
Each CVR represents a non-transferable contractual contingent right to receive a cash payment of $2.00, without interest and less any applicable withholding taxes (the Milestone Payment), if, and only if, no later than December 31, 2023, the European Commission approves Zogenixs product Fintepla® as an orphan medicinal product for treatment of seizures associated with Lennox-Gastaut syndrome, following an opinion rendered by the Committee for Orphan Medicinal Products of the European Medicines Agency (EMA) recommending that fenfluramine hydrochloride for the treatment of Lennox-Gastaut syndrome not be removed from the Community Register of Orphan Medicinal Products (the Milestone).
The right to payment described above is solely a contractual right governed by the terms and conditions of a Contingent Value Rights Agreement to be entered into among Parent and a rights agent mutually agreeable to Parent and Zogenix (the CVR Agreement). The CVRs will not be evidenced by a certificate or other instrument, will not have any voting or dividend rights and will not represent any equity or ownership interest in Parent, Purchaser or Zogenix. No interest will accrue or be payable in respect of any of the amounts that may be payable in respect of the CVRs. As a holder of a CVR, you will have no greater rights against Parent than those accorded to general, unsecured creditors with respect to the Milestone Payment amounts that may be payable. For more information on the CVRs, see Section 11The Merger Agreement; CVR Agreement.
Is it possible that no payment will become payable to the holders of CVRs?
Yes. It is possible that the Milestone described above will not be achieved, in which case you will receive only the Cash Amount for any Shares you tender in the Offer and no payment with respect to your CVRs. It is not possible to know whether a payment will become payable with respect to the CVRs. The CVR Agreement requires Parent to undertake Commercially Reasonable Efforts (as defined in the CVR Agreement) to achieve the Milestone, but there can be no assurance that the Milestone will be achieved or that the payment described above will be made.
For more information on the CVRs, see Section 11The Merger Agreement; CVR Agreement.
May I transfer my CVRs?
The CVRs will not be transferable by you except:
| upon your death, by will or intestacy; |
| pursuant to a court order; |
| by operation of law (including by consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; or |
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| in the case of CVRs held in book-entry or other similar nominee form, from a nominee to a beneficial owner and, if applicable, through an intermediary, as allowable, by the Depository Trust Company |
In addition, you may abandon the CVRs by transfer to Parent without consideration, via delivery of a written abandonment notice to Parent.
What are the material U.S. federal income tax consequences of tendering my Shares in the Offer or having my Shares exchanged for cash and CVRs pursuant to the Merger?
The receipt of cash and CVRs in exchange for Shares in the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes. The amount of gain or loss recognized, and the timing and character of such gain or loss, depend on the U.S. federal income tax treatment of the CVRs, with respect to which there is a significant amount of uncertainty. Parent intends to treat a stockholders receipt of the CVRs pursuant to the Offer or the Merger for all U.S. federal and applicable state and local income tax purposes as additional consideration paid for the Shares pursuant to the Offer or the Merger.
We recommend that you consult your own tax advisors to determine the tax consequences to you of tendering your Shares in the Offer or having your Shares exchanged for cash and CVRs pursuant to the Merger in light of your particular circumstances (including the application and effect of any U.S. federal, state, local or non-U.S. income and other tax laws).
See Section 5Material U.S. Federal Income Tax Consequences.
Do you have the financial resources to pay for all of the Shares that Purchaser is offering to purchase pursuant to the Offer?
Yes. We estimate that we will need approximately $1,808 million to purchase all of the Shares pursuant to the Offer to complete the Merger, to make payments in respect of outstanding Zogenix stock options, RSUs and PSUs pursuant to the Merger Agreement and in connection with the repurchase or conversion, as applicable, of Zogenixs 2.75% Convertible Senior Notes due 2027 (the Convertible Notes). In addition, Parent estimates that it will need approximately $144 million to pay the maximum aggregate amount that the holders of CVRs may be entitled to receive if the Milestone is achieved. Parent has, or will have, available to it, through a variety of sources, including cash on hand and new debt issuances, including borrowings under the Facility Agreement (as defined in Section 9Source and Amount of FundsThe Facility Agreement), funds necessary to satisfy all of Purchasers payment obligations under the Merger Agreement and resulting from the Offer. The Offer is not conditioned upon Parents or Purchasers ability to finance the purchase of the Shares pursuant to the Offer.
See Section 9Source and Amount of Funds.
Is Purchasers financial condition relevant to my decision to tender my Shares in the Offer?
No. We do not believe Purchasers financial condition is relevant to your decision whether to tender Shares and accept the Offer because:
| the Offer is being made for all outstanding Shares solely for cash (including the right to receive any amounts payable with respect to the CVRs, which will be paid in cash); |
| Purchaser will have through Parent sufficient funds available to purchase all Shares validly tendered (and not withdrawn) in the Offer and, if we consummate the Offer and the Merger, all Shares converted into the right to receive the Offer Price in the Merger, as well as the funds available to pay the maximum aggregate amount that you may be entitled to receive with respect to the CVRs; |
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| the CVRs represent contractual contingent obligations of Parent, and not Purchaser, as Parent will enter into the CVR Agreement with a rights agent mutually agreeable to Parent and Zogenix, which will be executed by the time Purchaser has irrevocably accepted for payment all Shares tendered and not validly withdrawn pursuant to the Offer (the Acceptance Time); and |
| the Offer and the Merger are not subject to any financing or funding condition. |
See Section 9Source and Amount of Funds and Section 11The Merger Agreement; CVR Agreement.
Is there a minimum number of Shares that must be tendered in order for you to purchase any securities?
Yes. The obligation of Purchaser to accept for payment and pay for Shares validly tendered (and not properly withdrawn) pursuant to the Offer is subject to the conditions set forth in Section 15Conditions of the Offer, including the Minimum Condition. The Minimum Condition means that there will have been validly tendered and received (as such term is defined in Section 251(h) of the DGCL), and not validly withdrawn, that number of Shares that, when added to the Shares then owned by Parent and Purchaser, would represent at least a majority of the Shares outstanding as of the consummation of the Offer.
See Section 1Terms of the Offer and Section 15Conditions of the Offer.
How long do I have to decide whether to tender my Shares in the Offer?
You will have until the Expiration Time to tender your Shares in the Offer. The term Expiration Time means one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the expiration of the Offer is extended to a subsequent time in accordance with the terms of the Merger Agreement, in which event the term Expiration Time means such subsequent time.
See Section 1Terms of the Offer and Section 3Procedures for Accepting the Offer and Tendering Shares.
Can the Offer be extended and under what circumstances?
Yes. The Merger Agreement contains provisions that govern the circumstances under which Purchaser is required or permitted to extend the Offer. Specifically, the Merger Agreement provides that:
| if as of the scheduled Expiration Time any of the Offer Conditions (as defined below in Section 15Conditions of the Offer), other than the Minimum Condition, has not been satisfied or, to the extent waivable by Purchaser or Parent, waived by Purchaser or Parent, then Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, to permit such conditions to be satisfied; |
| Purchaser will extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq applicable to the Offer; and |
| if as of the scheduled Expiration Time, all of the Offer Conditions have been satisfied or waived by Purchaser or Parent, other than the Minimum Condition, Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, except that Purchaser will not be required to so extend the Offer for more than 20 business days from the date on which all of the Offer Conditions (other than the Minimum Condition) were satisfied or the End Date, whichever is earlier. |
The Merger Agreement provides that Purchaser will not be required to, and may not without Zogenixs prior written consent, extend the Offer beyond the earlier of the termination of the Merger Agreement and the End
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Date. The End Date means July 18, 2022, unless otherwise extended to October 18, 2022 pursuant to the terms of the Merger Agreement, as summarized below in Section 11The Merger Agreement; CVR AgreementTermination.
See Section 1Terms of the Offer and Section 11The Merger Agreement; CVR Agreement.
How will I be notified if the Offer is extended?
If we extend the Offer, we will inform American Stock Transfer & Trust Company, LLC, which is the depositary for the Offer (the Depositary), of any extension, and will issue a press release announcing the extension no later than 9:00 a.m., Eastern time, on the business day after the previously scheduled expiration date of the Offer.
See Section 1Terms of the Offer.
What are the most significant conditions to the Offer?
The Offer is subject to the conditions set forth in Section 15Conditions of the Offer, including, but not limited to:
| the Minimum Condition; |
| the Antitrust Approval Condition; |
| Governmental Impediment Condition; and |
| the Termination Condition. |
The Offer is not subject to any financing condition.
See Section 1Terms of the Offer and Section 15Conditions of the Offer.
How do I tender my Shares?
If you hold your Shares directly as the registered owner and such Shares are represented by stock certificates, you may tender your Shares in the Offer by delivering the certificates representing your Shares, together with a properly completed and signed Letter of Transmittal and any other documents required by the Letter of Transmittal, to the Depositary, not later than the Expiration Time. If you hold your Shares as registered owner and such Shares are represented by book-entry positions, you may follow the procedures for book-entry transfer set forth in Section 3Procedures for Accepting the Offer and Tendering Shares of this Offer to Purchase, not later than the Expiration Time. The Letter of Transmittal is enclosed with this Offer to Purchase.
We are not providing for guaranteed delivery procedures. Therefore, Zogenix stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the Expiration Time. In addition, for Zogenix stockholders who are registered holders, the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Letter of Transmittal (or in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents) must be received by the Depositary prior to the Expiration Time. Zogenix stockholders must tender their Shares in accordance with the procedures set forth in this Offer to Purchase and the Letter of Transmittal. Tenders received by the Depositary after the Expiration Time will be disregarded and of no effect.
If you hold your Shares in street name through a broker, dealer, commercial bank, trust company or other nominee, you must contact the institution that holds your Shares and give instructions that your Shares be tendered. You should contact the institution that holds your Shares for more details.
See Section 3Procedures for Accepting the Offer and Tendering Shares.
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If I accept the Offer, how will I get paid?
If the conditions are satisfied and we accept your validly tendered Shares for payment, payment will be made by deposit of the aggregate purchase price for the Shares accepted in the Offer with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Purchaser and transmitting payments subject to any tax withholding required by applicable law, to tendering stockholders whose Shares have been accepted for payment.
See Section 1Terms of the Offer and Section 3Procedures for Accepting the Offer and Tendering Shares.
Until what time may I withdraw previously tendered Shares?
You may withdraw your previously tendered Shares at any time until the Expiration Time. In addition, if we have not accepted your Shares for payment within 60 days after commencement of the Offer, you may withdraw them at any time after April 2, 2022, the 60th day after commencement of the Offer, until we accept your Shares for payment.
See Section 1Terms of the Offer and Section 4Withdrawal Rights.
How do I withdraw previously tendered Shares?
To withdraw previously tendered Shares you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the Depositary while you still have the right to withdraw Shares. If you tendered Shares by giving instructions to a broker, banker or other nominee, you must instruct the broker, banker or other nominee to arrange for the withdrawal of your Shares.
See Section 4Withdrawal Rights.
Has the Offer been approved by the board of directors of Zogenix?
Yes. The Zogenix Board has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
More complete descriptions of the reasons for the Zogenix Boards recommendation and approval of the Offer are set forth in Zogenixs Solicitation/Recommendation Statement on Schedule 14D-9 (the Schedule 14D-9) that is being mailed to you together with this Offer to Purchase. Stockholders should carefully read the information set forth in the Schedule 14D-9, including the information set forth in Item 4 thereof under the sub-headings Background of the Offer and the Merger and Reasons for the Recommendation.
If Shares tendered pursuant to the Offer are purchased by Purchaser, will Zogenix continue as a public company?
No. We expect to complete the Merger as soon as practicable following the consummation of the Offer. Once the Merger takes place, Zogenix will be an indirect wholly owned subsidiary of Parent. Following the Merger, we intend to cause the Shares to be delisted from Nasdaq and deregistered under the Exchange Act.
See Section 13Certain Effects of the Offer.
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Will a meeting of Zogenixs stockholders be required to approve the Merger?
No. Section 251(h) of the DGCL provides that, unless expressly required by its certificate of incorporation, no vote of stockholders will be necessary to authorize the merger of a constituent corporation which has a class or series of stock listed on a national securities exchange or held of record by more than 2,000 holders immediately prior to the execution of the applicable agreement of merger by such constituent corporation if, subject to certain statutory provisions:
| the agreement of merger expressly permits or requires that the merger will be effected by Section 251(h) of the DGCL and provides that such merger be effected as soon as practicable following the consummation of the tender offer; |
| an acquiring corporation consummates a tender offer for all of the outstanding stock of such constituent corporation on the terms provided in such agreement of merger that, absent the provisions of Section 251(h) of the DGCL, would be entitled to vote on the adoption or rejection of the agreement of merger; provided, however, that such tender offer may be conditioned on the tender of a minimum number or percentage of shares of the stock of such constituent corporation, or any class or series thereof, and such offer many exclude any excluded stock; |
| immediately following the consummation of the tender offer, the stock that the acquiring corporation irrevocably accepts for purchase, together with the stock otherwise owned by the acquiring corporation or its affiliates, equals at least the percentage of shares of each class of stock of such constituent corporation that would otherwise be required to adopt the agreement of merger for such constituent corporation; |
| the acquiring corporation merges with or into such constituent corporation pursuant to such agreement of merger; and |
| each outstanding share (other than shares of excluded stock) of each class or series of stock of the constituent corporation that is the subject of and not irrevocably accepted for purchase in the offer is converted in such merger into, or into the right to receive, the same amount and type of consideration in the merger as was payable in the tender offer. |
If the conditions to the Offer and the Merger are satisfied or waived (to the extent waivable), we are required by the Merger Agreement to effect the Merger pursuant to Section 251(h) of the DGCL without a meeting of Zogenixs stockholders and without a vote or any further action by the stockholders.
If I do not tender my Shares but the Offer is consummated, what will happen to my Shares?
If the Offer is consummated and certain other conditions are satisfied, Purchaser is required under the Merger Agreement to effect the Merger pursuant to Section 251(h) of the DGCL. At the effective time of the Merger (the Effective Time), each Share issued and outstanding immediately prior to the Effective Time (other than (i) Shares held in the treasury of Zogenix or owned by Zogenix or any wholly owned subsidiary of Zogenix and Shares owned by Parent, Purchaser or any other wholly owned subsidiary of Parent immediately prior to the Effective Time and (ii) Shares outstanding immediately prior to the Effective Time and held by stockholders who are entitled to demand, and properly demand, appraisal for such Shares in accordance with Section 262 of the DGCL) will be converted by virtue of the Merger into the right to receive the Offer Price without interest, less any applicable tax withholding.
If the Merger is completed, Zogenixs stockholders who do not tender their Shares pursuant to the Offer (other than stockholders who properly exercise appraisal rights) will receive the same Offer Price per Share that they would have received had they tendered their Shares in the Offer. Therefore, if the Offer is consummated and the Merger is completed, the only differences to you between tendering your Shares and not tendering your Shares in
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the Offer are that (i) you may be paid earlier if you tender your Shares in the Offer and (ii) appraisal rights will not be available to you if you tender Shares in the Offer, but will be available to you in the Merger if you do not tender Shares in the Offer. See Section 17Appraisal Rights. However, in the unlikely event that the Offer is consummated but the Merger is not completed, the number of Zogenixs stockholders and the number of Shares that are still in the hands of the public may be so small that there will no longer be an active public trading market (or, possibly, there may not be any public trading market) for the Shares. Also, in such event, it is possible that the Shares will be delisted from Nasdaq and Zogenix will no longer be required to make filings with the SEC under the Exchange Act or will otherwise not be required to comply with the rules relating to publicly held companies to the same extent as it is now.
See the Introduction to this Offer to Purchase, Section 11The Merger Agreement; CVR Agreement and Section 13Certain Effects of the Offer.
What will happen to my stock options and other equity awards in the Offer?
The Offer is being made only for Shares and not for outstanding Zogenix stock options or other Zogenix equity awards. Holders of outstanding Zogenix stock options that are outstanding and unvested immediately prior to the Effective Time will receive payment, if any, for such stock options following the Effective Time as provided in the Merger Agreement without participating in the Offer. Holders of outstanding vested Zogenix stock options may participate in the Offer only if they first exercise such stock options, to the extent the same are or become exercisable, in accordance with the terms of the applicable Zogenix equity plan, agreement or arrangement, and tender the Shares, if any, issued upon such exercise. Any such exercise should be completed sufficiently in advance of the Expiration Time to assure the holder of such outstanding Zogenix stock option will have sufficient time to comply with the procedures for tendering Shares described below in Section 3Procedures for Accepting the Offer and Tendering Shares.
As of the Effective Time, Zogenix stock options that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, will be treated as follows:
| each such stock option that has an exercise price per Share that is less than the Cash Amount will be cancelled and the holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, (A) an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (1) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (2) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and (B) one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; |
| each such stock option that has an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash less the applicable exercise price per Share subject to such stock option; and |
| each such stock option that has an exercise price equal to or greater than $28.00, will be cancelled for no consideration. |
As of the Effective Time, all Zogenix RSUs and PSUs that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU and PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU or PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to the PSUs)
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multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU or PSU immediately prior to the Effective Time.
See Section 11The Merger Agreement; CVR Agreement.
What is the market value of my Shares as of a recent date?
On January 18, 2022, the last full day of trading before we announced the Merger Agreement, the reported closing sales price of the Shares on Nasdaq was $15.64 per Share. On January 28, 2022, the last full day of trading before commencement of the Offer, the reported closing sales price of the Shares on Nasdaq was $26.02 per Share. We encourage you to obtain a recent market quotation for Shares before deciding whether to tender your Shares.
See Section 6Price Range of Shares; Dividends on the Shares.
Will I have appraisal rights in connection with the Offer?
No appraisal rights will be available to holders of Shares who tender such Shares in connection with the Offer. However, if Purchaser purchases Shares pursuant to the Offer and the Merger is completed, holders of Shares immediately prior to the Effective Time who (i) did not tender their Shares pursuant to the Offer, (ii) follow the procedures set forth in Section 262 of the DGCL and (iii) do not thereafter lose such holders appraisal rights (by withdrawal, failure to perfect or otherwise), will be entitled to have their Shares appraised by the Delaware Court of Chancery and to receive payment of the fair value of such shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest thereon. The fair value could be greater than, less than or the same as the Offer Price.
See Section 17Appraisal Rights.
Whom should I call if I have questions about the Offer?
You may call Innisfree M&A Incorporated, the information agent for the Offer (the Information Agent), toll free at (888) 750-5835. See the back cover of this Offer to Purchase for additional contact information.
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Zinc Merger Sub Inc., a Delaware corporation (Purchaser) and an indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), is offering to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable withholding taxes, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in this Offer to Purchase (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase) and in the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal, which, together with this Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer).
The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser pursuant to which, after consummation of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into Zogenix upon the terms and subject to the conditions set forth in the Merger Agreement, with Zogenix continuing as the surviving corporation (the Surviving Corporation) and becoming an indirect wholly owned subsidiary of Parent (the Merger). The Merger will be governed by Section 251(h) of the Delaware General Corporation Law (the DGCL) and will be effected by Purchaser and Zogenix without a stockholder vote pursuant to the DGCL as soon as practicable following the consummation of the Offer.
At the effective time of the Merger (the Effective Time), each Share issued and outstanding immediately prior to the Effective Time (other than (i) Shares held in the treasury of Zogenix or owned by Zogenix or any wholly owned subsidiary of Zogenix and Shares owned by Parent, Purchaser or any other wholly owned subsidiary of Parent immediately prior to the Effective Time and (ii) Shares outstanding immediately prior to the Effective Time and held by stockholders who are entitled to demand, and properly demand, appraisal for such Shares in accordance with Section 262 of the DGCL) will be converted into the right to receive the Offer Price, without interest (the Merger Consideration) and less any applicable tax withholding. As a result of the Merger, Zogenix will cease to be a publicly traded company and will become an indirect wholly owned subsidiary of Parent.
As of the Effective Time, all options to purchase Shares granted under an Zogenix equity plan, agreement or arrangement that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, will be treated as follows:
| each such stock option that has an exercise price per Share that is less than the Cash Amount will be cancelled and the holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, (A) an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (1) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (2) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and (B) one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; |
| each such stock option that has an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash less the applicable exercise price per Share subject to such stock option; and |
| each such stock option that has an exercise price equal to or greater than $28.00, will be cancelled for no consideration. |
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As of the Effective Time, all Zogenix restricted stock units (RSUs) and Zogenix performance stock units (PSUs) that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU and PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU or PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to the PSUs) multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU or PSU immediately prior to the Effective Time.
Under no circumstances will interest be paid on the purchase price for the Shares, including by reason of any extension of the Offer or any delay in making payment for the Shares.
The Merger Agreement is more fully described in Section 11The Merger Agreement; CVR Agreement.
The Offer is subject to the conditions set forth in Section 15Conditions of the Offer (collectively, the Offer Conditions), including (i) there having been validly tendered and received (as such term is defined in Section 251(h) of the DGCL), and not validly withdrawn, that number of Shares that, when added to the Shares then owned by Parent and Purchaser, would represent at least a majority of the Shares outstanding as of the consummation of the Offer (the Minimum Condition), (ii) the termination or expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act) (and any extension thereof, including under any agreement entered into in compliance with the Merger Agreement between a party and a governmental authority agreeing not to consummate the Offer or the Merger prior to a certain date) applicable to the Offer or the Merger, and the receipt of any other clearance, approval or consent under any other applicable antitrust law (or the failure by any relevant governmental authority exercising jurisdiction under any other applicable antitrust law to render a decision in the relevant time period, so that the transactions contemplated by the Merger Agreement are deemed to be cleared, approved or consented to under such other applicable antitrust law (the Antitrust Approval Condition), (iii) there being no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority of competent jurisdiction, and no law, rule, regulation, judgment, decree, injunction, ruling, order, decision, or other legal or regulatory requirement in effect, in each case that prohibits or makes illegal the acquisition of or payment for Shares pursuant to the Offer or the consummation of the Merger, or that imposes certain remedies or restrictions on the ability of Parent to own or operate Zogenix, its businesses or assets (the Governmental Impediment Condition), and (iv) the Merger Agreement not having been terminated in accordance with its terms (the Termination Condition). The Offer is not subject to any financing condition.
Tendering stockholders who are record owners of their Shares and who tender directly to the Depositary (as defined above in the Summary Term Sheet) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker, banker or other nominee should consult such institution as to whether it charges any service fees or commissions.
The Zogenix Board has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
Descriptions of the Zogenix Boards reasons for authorizing and approving the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement are set forth in Zogenixs
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Solicitation/Recommendation Statement on the Schedule 14D-9 (the Schedule 14D-9) that is being mailed to you together with this Offer to Purchase. Stockholders should carefully read the information set forth in the Schedule 14D-9, including the information set forth in Item 4 under the sub-headings Background of the Offer and the Merger and Reasons for the Recommendation.
Zogenix has advised Parent that at a meeting of the Zogenix Board held on January 18, 2022, (i) BofA Securities, Inc. (BofA) rendered to the Zogenix Board its oral opinion, subsequently confirmed in its written opinion dated January 18, 2022, to the effect that, as of the date of BofAs written opinion and based on and subject to various assumptions and limitations described in the written opinion, the Offer Price to be received pursuant to the Merger Agreement by the holders of Shares (other than Shares held in the treasury of Zogenix or owned by Zogenix or any wholly owned of Zogenix and each Share owned by Parent, Purchaser or any other wholly owned subsidiary of Parent immediately prior to the Effective Time (Excluded Shares)) was fair, from a financial point of view, to such holders and (ii) SVB Leerink LLC (SVB Leerink) rendered to the Zogenix Board its oral opinion, subsequently confirmed in its written opinion dated January 18, 2022, to the effect that, as of the date of SVB Leerinks written opinion and based upon and subject to the factors and assumptions set forth in SVB Leerinks written opinion, the consideration per Share to be paid pursuant to the Merger Agreement to the holders of Shares (other than (a) Excluded Shares and (b) Shares outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and properly demands appraisal for such Shares in accordance with Section 262 of the DGCL) was fair from a financial point of view to such holders. The full text of the written opinion of BofA dated January 18, 2022, sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by BofA in connection with its opinion and is attached as Annex I to the Schedule 14D-9. The full text of the written opinion of SVB Leerink dated January 18, 2022, sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by SVB Leerink in connection with its opinion and is attached as Annex II to the Schedule 14D-9.
This Offer to Purchase and the related Letter of Transmittal contain important information that should be read carefully in its entirety before any decision is made with respect to the Offer.
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Purchaser is offering to purchase all of the outstanding Shares at the Offer Price, net to the seller in cash, without interest and less any applicable tax withholding. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), Purchaser will, promptly after the Expiration Time of the Offer, irrevocably accept for payment all Shares tendered (and not validly withdrawn as described in Section 4Withdrawal Rights) pursuant to the Offer (the time of such acceptance being referred to herein as the Acceptance Time) and, promptly after the Acceptance Time, pay for all such Shares.
The Offer is subject to the Offer Conditions set forth in Section 15Conditions of the Offer, including, but not limited to, the Minimum Condition, the Antitrust Approval Condition, the Governmental Impediment Condition and the Termination Condition.
Purchaser expressly reserves the right at any time, or from time to time, in its sole discretion, to waive any Offer Condition or modify or amend the terms of the Offer, including the Offer Price, except that Zogenixs prior written consent is required (unless otherwise provided by the Merger Agreement) for Purchaser to:
| waive or change the Minimum Condition or the Termination Condition; |
| decrease the Offer Price; |
| change the form of consideration payable in the Offer; |
| decrease the maximum number of Shares sought pursuant to the Offer; |
| extend or change the Expiration Time except as required or permitted by the terms of the Merger Agreement as described in Section 11The Merger Agreement; CVR AgreementThe Offer.; or |
| amend, modify or supplement any of the Offer Conditions or other terms of the Offer in a manner materially adverse to the Zogenix stockholders. |
The Merger Agreement contains provisions that govern the circumstances under which Purchaser is required to extend the Offer. Specifically, the Merger Agreement provides that:
| if as of the scheduled Expiration Time any of the Offer Conditions (as defined below in Section 15Conditions of the Offer), other than the Minimum Condition, has not been satisfied or waived by Purchaser or Parent, then Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, to permit such conditions to be satisfied; |
| Purchaser will extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq applicable to the Offer; and |
| if as of the scheduled Expiration Time, all of the Offer Conditions have been satisfied or waived by Purchaser or Parent, other than the Minimum Condition, Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, except that Purchaser will not be required to so extend the Offer for more than 20 business days from the date on which all of the Offer Conditions (other than the Minimum Condition) were satisfied or the End Date, whichever is earlier. |
The Merger Agreement provides that Purchaser will not be required to, and may not without Zogenixs prior written consent, extend the Offer beyond the earlier of the termination of the Merger Agreement and the End Date. The End Date means July 18, 2022, unless otherwise extended to October 18, 2022 pursuant to the terms of the Merger Agreement, as summarized below in Section 11The Merger Agreement; CVR AgreementTermination.
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If we extend the Offer, are delayed in our acceptance for payment of or payment for Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in Section 4Withdrawal Rights. However, our ability to delay the payment for Shares that we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires us to pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.
Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., Eastern time, on the business day after the previously scheduled expiration date of the Offer. Without limiting the manner in which we may choose to make any public announcement, we intend to make announcements regarding the Offer by issuing a press release and making any appropriate filing with the SEC.
If we make a material change in the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer, in each case, if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. We understand that in the SECs view an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to holders of Shares, and with respect to a change in price or a change in the percentage of securities sought, a minimum 10 business day period generally is required to allow for adequate dissemination to holders of Shares and investor response.
If, on or before the Expiration Time, we increase the consideration being paid for Shares accepted for payment in the Offer, such increased consideration will be paid to all holders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.
The obligation of Purchaser to accept for payment and pay for Shares validly tendered (and not properly withdrawn) pursuant to the Offer is subject to the satisfaction of the Offer Conditions. Notwithstanding any other term of the Offer or the Merger Agreement, Purchaser will not be required to, and Parent will not be required to cause Purchaser to, accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, pay for any tendered Shares if any of the Offer Conditions has not been satisfied at the scheduled Expiration Time.
Under certain circumstances described in the Merger Agreement, Parent or Zogenix may terminate the Merger Agreement and Parent and Purchaser may terminate the Offer. The Offer may not be terminated prior to the Expiration Time unless the Merger Agreement is validly terminated in accordance with the Merger Agreement. If Parent and Purchaser terminate the Offer, the Depositary will promptly return, in accordance with applicable law, all Shares that have been tendered in the Offer to the registered holders of such Shares.
Zogenix has provided us with its stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal, as well as the Schedule 14D-9, will be mailed to record holders of Shares whose names appear on the stockholder list and will be furnished for subsequent transmittal to beneficial owners of Shares to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security position listing.
2. Acceptance for Payment and Payment for Shares
Subject to the terms of the Offer and the Merger Agreement and the satisfaction or, to the extent waivable by Parent or Purchaser, waiver of each of the Offer Conditions set forth in Section 15Conditions of the Offer,
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we will accept for payment all Shares validly tendered and not properly withdrawn pursuant to the Offer promptly after expiration of the Offer and promptly after such acceptance, pay for all such Shares. Subject to compliance with Rule 14e-1(c) under the Exchange Act, as applicable, and with the Merger Agreement, we expressly reserve the right to delay payment for Shares in order to comply in whole or in part with any applicable law or regulation. See Section 16Certain Legal Matters; Regulatory Approvals.
In all cases, we will pay for Shares validly tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the Share Certificates) or confirmation of a book-entry transfer of such Shares into the Depositarys account at The Depository Trust Company (DTC) (such a confirmation, a Book-Entry Confirmation) pursuant to the procedures set forth in Section 3Procedures for Accepting the Offer and Tendering Shares, (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees and (iii) any other documents required by the Letter of Transmittal or, in the case of a book-entry transfer, an Agents Message (as defined below) in lieu of the Letter of Transmittal and such other documents. Accordingly, tendering stockholders may be paid at different times depending upon when the Share Certificates and Letter of Transmittal, or Book-Entry Confirmations and Agents Message, in each case, with respect to Shares are actually received by the Depositary.
The term Agents Message means a message transmitted through electronic means by DTC in accordance with the normal procedures of DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of, the Letter of Transmittal, and that Purchaser may enforce such agreement against such participant. The term Agents Message also includes any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositarys office.
For purposes of the Offer, we will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered to the Purchaser and not properly withdrawn as, if and when we give oral or written notice to the Depositary of our acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price for such Shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from us and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. If we extend the Offer, are delayed in our acceptance for payment of Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer and the Merger Agreement, the Depositary may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in Section 4Withdrawal Rights and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will we pay interest on the Offer Price for Shares, including by reason of any extension of the Offer or any delay in making such payment.
At or prior to the Acceptance Time, Parent will execute a Contingent Value Rights Agreement with a rights agent mutually agreeable to Zogenix and Parent (the CVR Agreement) governing the terms of the CVRs. Neither Purchaser nor Parent will be required to deposit any funds related to the CVRs with the rights agent unless and until such deposit is required pursuant to the terms of the CVR Agreement. For more information on the CVRs, see Section 11The Merger Agreement; CVR Agreement.
If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates representing unpurchased shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositarys account at DTC pursuant to the procedure set forth in Section 3Procedures for Accepting the Offer and Tendering Shares, such Shares will be credited to an account maintained at DTC), as promptly as practicable following the expiration or termination of the Offer.
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3. Procedures for Accepting the Offer and Tendering Shares
Valid Tenders. In order for a stockholder to validly tender Shares pursuant to the Offer, the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Letter of Transmittal (or, in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents) must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either (i) the Share Certificates evidencing tendered Shares must be received by the Depositary at such address or (ii) such Shares must be tendered pursuant to the procedure for book-entry transfer described below under Book-Entry Transfer and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the expiration of the Offer.
Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at DTC for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of DTC may make a book-entry delivery of Shares by causing DTC to transfer such Shares into the Depositarys account at DTC in accordance with DTCs procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other required documents, or an Agents Message in lieu of the Letter of Transmittal and such other documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Time. Delivery of documents to DTC does not constitute delivery to the Depositary.
No Guaranteed Delivery. We are not providing for guaranteed delivery procedures. Therefore, Zogenix stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the Expiration Time. In addition, for Zogenix stockholders who are registered holders, the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Letter of Transmittal (or, in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents) must be received by the Depositary prior to the Expiration Time. Zogenix stockholders must tender their Shares in accordance with the procedures set forth in this Offer to Purchase and the Letter of Transmittal. Tenders received by the Depositary after the Expiration Time will be disregarded and of no effect.
Signature Guarantees for Shares. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 3, includes any participant in DTCs systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such holder or holders have completed either the box entitled Special Delivery Instructions or the box entitled Special Payment Instructions on the Letter of Transmittal or (ii) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Security Transfer Agents Medallion Program or any other eligible guarantor institution, as such term is defined in Rule 17Ad-15 of the Exchange Act (each an Eligible Institution and collectively Eligible Institutions). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signers of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued in, the name(s) of a person or persons other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
Notwithstanding any other provision of this Offer, payment for Shares accepted for payment pursuant to the Offer will in all cases only be made after timely receipt by the Depositary of (i) Share Certificates or a Book-Entry Confirmation of a book-entry transfer of such Shares into the Depositarys account at DTC pursuant to the
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procedures set forth in this Section 3, (ii) the Letter of Transmittal, properly completed and duly executed, with any required signature guarantees and (iii) any other documents required by the Letter of Transmittal or, in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents. Accordingly, tendering stockholders may be paid at different times depending upon when the Share Certificates and Letter of Transmittal, or Book-Entry Confirmations and Agents Message, in each case, with respect to Shares are actually received by the Depositary.
The method of delivery of the Shares (or Share Certificates), the Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering stockholder. Delivery of the Shares (or Share Certificates), the Letter of Transmittal and all other required documents will be deemed made, and risk of loss thereof shall pass, only when they are actually received by the Depositary (including, in the case of a book-entry transfer of Shares, by Book-Entry Confirmation with respect to such Shares). If such delivery is by mail, it is recommended that the Shares (or Share Certificates), the Letter of Transmittal and all other required documents be sent by properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery.
Tender Constitutes Binding Agreement. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholders acceptance of the Offer, as well as the tendering stockholders representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. Our acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Offer.
Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our sole discretion, which determination will be final and binding on all parties, subject to any judgment of any court of competent jurisdiction. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of which may, in our opinion, be unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to our satisfaction. None of Purchaser, Parent or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Subject to applicable law as applied by a court of competent jurisdiction and the terms of the Merger Agreement, our interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding.
Appointment as Proxy. By executing the Letter of Transmittal as set forth above, the tendering stockholder will irrevocably appoint designees of Purchaser as such stockholders attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholders rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, we accept for payment the Shares tendered by such stockholder as provided herein. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective). The designees of Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of Zogenixs stockholders,
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actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper. We reserve the right to require that, in order for Shares to be deemed validly tendered, immediately upon our acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares and other related securities or rights, including voting at any meeting of stockholders of Zogenix.
Stock Options and Other Equity Awards. The Offer is being made only for Shares, and not for outstanding Zogenix stock options or other equity awards. Holders of outstanding Zogenix stock options that are outstanding and unvested immediately prior to the Effective Time will receive payment, if any, for such stock options following the Effective Time as provided in the Merger Agreement without participating in the Offer. Holders of outstanding vested Zogenix stock options may participate in the Offer only if they first exercise such stock options, to the extent the same are or become exercisable, in accordance with the terms of the applicable Zogenix equity plan, agreement or arrangement, and tender the Shares, if any, issued upon such exercise. Any such exercise should be completed sufficiently in advance of the Expiration Time to assure the holder of such outstanding Zogenix stock option will have sufficient time to comply with the procedures for tendering Shares described below in Section 3Procedures for Accepting the Offer and Tendering Shares.
As of the Effective Time, all options to purchase Shares granted under a Zogenix equity plan, agreement or arrangement that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, and that: (i) have an exercise price per Share that is less than the Cash Amount will be cancelled and the holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (A) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (B) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; (ii) have an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash (less the applicable exercise price per Share subject to such stock option); (iii) have an exercise price equal to or greater than $28.00, will be cancelled for no consideration.
As of the Effective Time, all Zogenix RSUs and PSUs that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU and PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU or PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to the PSUs) multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU or PSU immediately prior to the Effective Time.
Information Reporting and Backup Withholding. Payments made to stockholders of Zogenix in the Offer or the Merger generally will be subject to information reporting and may be subject to backup withholding of U.S. federal income tax on payments for Shares made in the Offer or the Merger (currently at a rate of 24%). To avoid backup withholding, any stockholder that is a U.S. person that does not otherwise establish an exemption from U.S. federal backup withholding must complete and return the Internal Revenue Service (IRS) Form W-9 included in the Letter of Transmittal. Any stockholder that is not a U.S. person should submit an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable IRS Form W-8) attesting to such stockholders exempt foreign status in order to qualify for an exemption from information reporting and backup withholding. Stockholders that are not U.S. persons should consult their own tax advisors to determine which IRS Form W-8 is appropriate. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund from the IRS or a credit against a stockholders U.S. federal income tax liability, if any; provided the required information is timely furnished to the IRS.
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Except as otherwise provided in this Section 4, or as provided by applicable law, tenders of Shares made pursuant to the Offer are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Time. Thereafter, tenders are irrevocable, except that if we have not accepted your Shares for payment within 60 days after commencement of the Offer, you may withdraw them at any time after April 2, 2022, the 60th day after commencement of the Offer, until Purchaser accepts your Shares for payment.
For a withdrawal of Shares to be effective, the Depositary must timely receive a written or facsimile transmission notice of withdrawal at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the names in which the Share Certificates are registered, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3Procedures for Accepting the Offer and Tendering Shares, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Shares. If Share Certificates representing the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the name of the registered owners and the serial numbers shown on such Share Certificates must also be furnished to the Depositary.
Withdrawals of tenders of Shares may not be rescinded and any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer. Withdrawn Shares may, however, be retendered by following one of the procedures for tendering Shares described in Section 3Procedures for Accepting the Offer and Tendering Shares at any time prior to the Expiration Time.
Purchaser will determine, in its sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal, and such determination will be final and binding, subject to any judgment of any court of competent jurisdiction. No withdrawal of Shares will be deemed to have been properly made until all defects and irregularities have been cured or waived. None of Purchaser, Parent or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification.
5. Material U.S. Federal Income Tax Consequences
The following is a discussion of the material U.S. federal income tax consequences of the Offer and the Merger to holders that tender their Shares, and whose tender of the Shares is accepted, in exchange for the Offer Price pursuant to the Offer and holders whose Shares are converted into the right to receive the Offer Price pursuant to the Merger. This discussion is based on the Internal Revenue Code of 1986, as amended (the Code), Treasury regulations promulgated thereunder and administrative guidance and judicial interpretations thereof, each in effect as of the date of this Offer to Purchase, and all of which are subject to change, possibly with retroactive effect. We have not sought, and do not intend to seek, any ruling from the Internal Revenue Service (the IRS) or any opinion of counsel with respect to the statements made and the conclusions reached in the following summary. No assurance can be given that the IRS will agree with the views expressed herein or that a court will not sustain any challenge by the IRS in the event of litigation.
This discussion applies to a holder only if the holder holds its Shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). It does not address all aspects of U.S. federal
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income taxation that may be relevant to a holder of Shares in light of its particular circumstances, or that may apply to a holder subject to special treatment under U.S. federal income tax laws, including, but not limited to:
| a holder that is a regulated investment company, real estate investment trust, cooperative, bank or certain other financial institution, insurance company, tax-exempt organization (including a private foundation), governmental organization, retirement or pension plan, dealer in securities or foreign currency, trader that uses the mark-to-market method of accounting with respect to its securities, expatriate or former long-term resident of the United States; |
| a holder that is, or holds Shares through, a partnership, S corporation or other pass-through entity for U.S. federal income tax purposes; |
| a holder that holds Shares as part of a straddle, hedging, constructive sale, conversion or other integrated transaction, or that is required to recognize income or gain with respect to the Offer or the Merger no later than such income or gain is required to be reported on an applicable financial statement; |
| a holder that holds or has held, directly, indirectly or constructively by attribution, more than 5 percent of the Shares; |
| a holder that holds Shares as qualified small business stock for purposes of Sections 1045 or 1202 of the Code; |
| a holder that exercises appraisal rights in the Merger, or received the Shares as compensation, pursuant to the exercise of employee stock options, stock purchase rights or stock appreciation rights, or as restricted stock; and |
| a U.S. Holder (as defined below) whose functional currency is not the U.S. dollar. |
In addition, this discussion does not address the alternative minimum tax or net investment income tax, or any tax considerations under state, local or non-U.S. laws or U.S. federal laws other than those pertaining to the U.S. federal income tax.
If a partnership, or another entity or arrangement treated as a partnership, or other pass-through entity for U.S. federal income tax purposes holds Shares, the tax treatment of its partners or members generally will depend on the status of the partner or member and the activities of the partnership or other entity. Accordingly, partnerships and other entities or arrangements treated as partnerships or other pass-through entities for U.S. federal income tax purposes that hold Shares, and partners or members in those entities or arrangements, are urged to consult their tax advisors regarding the specific U.S. federal income tax consequences to them of the Offer and the Merger.
This discussion of the material U.S. federal tax consequences of the Offer and the Merger to holders of Shares is for general information only and is not, is not intended to be, and may not be construed as, tax advice to holders of Shares. Because individual circumstances may differ, each holder of Shares is urged to consult his, her, or its own tax advisors as to the applicability and effect of the rules discussed below and the particular tax consequences of the Offer and the Merger, including the application of the alternative minimum tax and any U.S. federal, state, local and non-U.S. tax laws.
Tax Consequences to U.S. Holders.
For purposes of this discussion, a U.S. Holder is any beneficial owner of Shares that, for U.S. federal income tax purposes, is (i) an individual who is a citizen or resident of the United States; (ii) a domestic corporation; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust, if (A) a U.S. court is able to exercise primary supervision over the trusts administration and one or more U.S. persons have authority to control all of the trusts substantial decisions or (B) the trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.
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The exchange of a Share for the Offer Price, i.e., the Cash Amount plus a CVR, pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes.
The amount of gain or loss a U.S. Holder recognizes, and the timing and potential character of a portion of such gain or loss, depends on the U.S. federal income tax treatment of the CVRs, which is subject to some uncertainty. The receipt of the CVRs pursuant to the Offer or the Merger should be treated as either a closed transaction or as an open transaction for U.S. federal income tax purposes, each as discussed in more detail below. The installment method of reporting any gain attributable to the receipt of or payments on the CVRs will not be available because the Shares are traded on an established securities market.
There is no legal authority expressly addressing whether contingent payment rights with characteristics similar to the rights under the CVRs should be treated as open transactions or closed transactions, and this determination is inherently factual in nature. Treasury regulations state that only in rare and extraordinary cases would the value of contingent payment obligations not be reasonably ascertainable and, therefore, be subject to the open transaction method. Under U.S. Treasury regulations addressing contingent payment obligations analogous to the CVRs, if the fair market value of the CVRs is reasonably ascertainable, a U.S. Holder should treat the transaction as a closed transaction and include the fair market value of the CVRs as additional consideration received in the Offer or the Merger for purposes of determining gain or loss. Parent intends to treat the CVRs received with respect to the Shares pursuant to the Offer or the Merger for all U.S. federal and applicable state and local income tax purposes as additional consideration paid for the Shares pursuant to the Offer or the Merger as part of a closed transaction. U.S. Holders are urged to consult their own tax advisors regarding this proper method of tax accounting with respect to the CVR and how to accurately report their income under the closed transaction method or open transaction method, as applicable in their respective case.
Treatment as Closed Transaction. If the receipt of a CVR is part of a closed transaction for U.S. federal income tax purposes, a U.S. Holder who sells or exchanges Shares pursuant to the Offer or the Merger generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between (i) the amount of cash received plus the fair market value (determined as of the closing of the Offer or the Effective Time, as the case may be) of the CVRs received and (ii) the U.S. Holders adjusted tax basis in the Shares sold or exchanged. No express guidance under current U.S. federal income tax law is available regarding the proper method for determining the fair market value of the CVRs. Parent may use the trading price of a Share prior to the closing of the Offer as the combined fair market value of the Cash Amount and a CVR. Any capital gain or loss recognized will be long-term capital gain or loss if the U.S. Holders holding period for such Shares exceeds one year. The deductibility of capital losses is subject to limitations. Gain or loss generally will be determined separately for each block of Shares (that is, Shares acquired at the same cost in a single transaction) tendered pursuant to the Offer or exchanged pursuant to the Merger.
The character of any gain, income or loss recognized with respect to a payment on a CVR is uncertain. Such payments may be treated as payments with respect to a sale or exchange of a capital asset or as giving rise to ordinary income, including in part as imputed interest, as described more fully below. Parent intends to treat any payment received by a U.S. Holder in respect of a CVR (except to the extent any portion of such payment is required to be treated as imputed interest, as described below) as an amount realized on the disposition of the applicable CVR by the U.S. Holder. Under this method of reporting, a U.S. Holder should recognize gain equal to the difference between such payment (less any portion of such payment required to be treated as imputed interest, as described below) and the U.S. Holders adjusted tax basis in the applicable CVR and, if the CVR expires without the Milestone being achieved, loss equal to the U.S. Holders adjusted tax basis in the applicable CVR. A U.S. Holders adjusted basis in a CVR generally will equal the CVRs fair market value when the CVR was received pursuant to the Offer or the Merger. The gain or loss will be long-term capital gain or loss if the U.S. Holder has held the applicable CVR (or possibly the Share in respect of which such CVR was received) for more than one year at the time of such payment or expiry. The deductibility of capital losses is subject to limitations.
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Treatment as Open Transaction. If the receipt of a CVR pursuant to the Offer or the Merger is treated under the open transaction method of accounting for U.S. federal income tax purposes, the fair market value of the CVR will not be treated as additional consideration for the Shares at the time the CVR is received, and the U.S. Holder will not have any tax basis in the CVR. Instead, the U.S. Holder will take payments under a CVR into account when made or deemed made in accordance with the U.S. Holders regular method of accounting for U.S. federal income tax purposes. Generally, a portion of such payments will be treated as imputed interest, as described in more detail below, and the balance as additional consideration recognized in exchange for the Shares. The Cash Amount and the portion of payment on any CVR that is not treated as imputed interest will generally be applied first against a U.S. Holders adjusted tax basis in the Shares and any excess thereafter treated as capital gain. A U.S. Holder will recognize capital loss with respect to a Share to the extent that the holders adjusted tax basis in such Share exceeds the Cash Amount plus the payment (other than imputed interest), if any, in respect of the CVR, and a U.S. Holder may not be able to recognize such loss until the resolution of all contingencies under the CVR. Any such capital gain or loss will be long-term capital gain or loss if the U.S. Holders holding period in the Share exceeds one year. The deductibility of capital losses is subject to limitations. Gain or loss generally will be determined separately for each block of Shares (that is, Shares acquired at the same cost in a single transaction) tendered pursuant to the Offer or exchanged pursuant to the Merger.
Imputed Interest. If payment with respect to a CVR is made more than one year after the closing of the Offer or the Effective Time (as applicable), a portion of the payment may be treated as imputed interest that is ordinary income to a U.S. Holder. The portion of any payment made with respect to a CVR treated as imputed interest will be determined at the time such payment is made and generally should equal the excess of (i) the amount of the payment in respect of the CVR over (ii) the present value of such amount as of the closing of the Offer or the Effective Time, as the case may be, calculated using the applicable federal rate as the discount rate. A U.S. Holder must include in its taxable income imputed interest using such stockholders regular method of accounting for U.S. federal income tax purposes.
Tax Consequences to Non-U.S. Holders.
For purposes of this discussion, a Non-U.S. Holder is any beneficial owner of Shares that is not a partnership (or other entity or arrangement treated as a partnership) for U.S. federal income tax purposes and that is not a U.S. Holder.
Any gain realized by a Non-U.S. Holder upon the tender of Shares pursuant to the Offer or the exchange of Shares pursuant to the Merger, as the case may be, generally will not be subject to U.S. federal income tax unless (i) the gain is effectively connected with a U.S. trade or business of such Non-U.S. Holder (and, if an applicable treaty so provides, is also attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case the Non-U.S. Holder generally will be taxed in the same manner as a U.S. Holder (as described above under Tax Consequences to U.S. Holders), except that if the Non-U.S. Holder is a foreign corporation, an additional branch profits tax may apply at a rate of 30% (or a lower applicable treaty rate) or (ii) the Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the closing of the Offer or the Effective Time, as the case may be, and certain other conditions are met, in which case the Non-U.S. Holder may be subject to a 30% U.S. federal income tax (or a tax at a reduced rate under an applicable income tax treaty) on such gain (net of certain U.S. source losses).
Generally, if payments are made to a Non-U.S. Holder with respect to a CVR, such Non-U.S. Holder may be subject to withholding at a rate of 30% (or a lower applicable treaty rate) of the portion of any such payments treated as imputed interest (as discussed above under Tax Consequences to U.S. HoldersImputed Interest), unless such Non-U.S. Holder establishes its entitlement to exemption from or a reduced rate of withholding under an applicable tax treaty by providing the appropriate documentation (generally, IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8) to the applicable withholding agents.
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Application of Section 304
Notwithstanding the discussion above, if one or more persons in the aggregate control both Zogenix and Parent before the Merger, then Section 304 of the Code will apply to treat any holder that owns (actually or constructively) Parent stock as deriving dividend income if one of the tests under Section 302 of the Code applies to such holder. Control for this purpose generally means actual and constructive ownership of more than 50 percent of the outstanding stock, by vote or by value, aggregating shares of stock held by all holders of Shares and of shares of stock of Parent, regardless of whether such holders are related.
To Zogenixs and Parent current knowledge, it is not the case that one or more persons control Zogenix and Parent for purposes of Section 304 of the Code. However, Zogenix and Parent currently do not have sufficient information to definitely determine that Section 304 of the Code will not apply to the Offer and Merger. If Section 304 applies, the U.S. federal income tax consequences will depend on each holders particular circumstances. Holders of Shares that are also holders of shares of stock of Parent are therefore urged to consult their own tax advisors regarding the application of Section 304 and Section 302 of the Code to them (including whether it may be desirable to sell their Shares before the Merger and not in the Offer).
Information Reporting, Backup Withholding and FATCA
Information reporting generally will apply to payments to a stockholder pursuant to the Offer or the Merger, unless such stockholder is an entity that is exempt from information reporting and, when required, properly demonstrates its eligibility for exemption. In addition, payments with respect to the CVRs may be subject to information reporting and backup withholding. Tax information provided to a U.S. Holder and the IRS on IRS Form 1099-B for the year of the Offer or the Merger, as applicable, may reflect only the cash amounts paid to the U.S. Holder in the Offer or the Merger, and not the fair market value of the CVRs. Accordingly, a U.S. Holder that treats the Offer or the Merger as a closed transaction for U.S. federal income tax purposes may receive an IRS Form 1099-B reporting an amount that is less than the amount such U.S. Holder will realize in the year of the Offer or the Merger, as applicable. In addition, any IRS Form 1099-B that a U.S. Holder receives with respect to payments on the CVRs may reflect the entire amount of the CVR payments made to the U.S. Holder (other than imputed interest), and therefore may not take into account the fact that the U.S. Holder already included the value of such payments in such U.S. Holders amount realized in the year of the Offer or the Merger, as applicable. As a result, U.S. Holders reporting under the closed transaction method should not necessarily rely on the amounts reported to them on IRS Forms 1099-B with respect to the Offer or the Merger, as applicable. U.S. Holders are urged to consult their tax advisors regarding how to accurately report their income under the closed transaction method. On the other hand, tax information provided to a U.S. Holder and the IRS on IRS Form 1099-B for the year of the Offer or the Merger, as applicable, may reflect both the cash amounts paid to the U.S. Holder in the Offer or the Merger and the fair market value of the CVRs. U.S. Holders that treat the Offer or the Merger, as applicable, as an open transaction for U.S. federal income tax purposes are urged to consult their own tax advisors regarding how to accurately report their income under this method.
Any payment to a U.S. Holder that is subject to information reporting generally will also be subject to backup withholding, unless such U.S. Holder (i) provides the appropriate documentation (generally, IRS Form W-9) to the applicable withholding agent certifying that, among other things, its taxpayer identification number is correct, or otherwise establishes an exemption and (ii) with respect to payments on the CVRs, provides the rights agent with the certification documentation in clause (i) of this sentence or otherwise establishes an exemption from backup withholding.
The information reporting and backup withholding rules that apply to payments to a stockholder pursuant to the Offer and Merger generally will not apply to payments to a Non-U.S. Holder if such Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person (generally by providing an IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8) or otherwise establishes an exemption. Non-U.S. Holders should consult their own tax advisors to determine which IRS Form W-8 is appropriate.
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Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holders U.S. federal income tax liability if the required information is properly and timely furnished by such U.S. Holder to the IRS.
U.S. Holders should consult their own tax advisors to determine their qualification for exemption from backup withholding and the procedure for obtaining such exemption.
Under the Foreign Account Tax Compliance Act provisions of the Code, related U.S. Treasury guidance and related intergovernmental agreements (FATCA), Parent or another applicable withholding agent will be required to withhold tax at a rate of 30% on the portion of payments on the CVRs treated as imputed interest and paid to foreign financial institutions or non-financial foreign entities (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and information reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any substantial United States owners (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. In general, no such withholding will be required with respect to a person that timely provides certifications that establish an exemption from FATCA withholding on a valid IRS Form W-8. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. A Non-U.S. Holder may be able to claim a credit or refund of the amount withheld under certain circumstances.
Under currently proposed Treasury Regulations, FATCA withholding would no longer apply to payments of gross proceeds from the sale or other disposition of property of a type that can generate U.S. source interest or dividends, including the Shares. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.
Non-U.S. Holders should consult their tax advisors regarding the possible implications of the FATCA rules on their receipt of, and payments with respect to, the CVRs.
6. Price Range of Shares; Dividends on the Shares
The Shares currently trade on Nasdaq under the symbol ZGNX. The following table sets forth the high and low intraday sale prices per Share for each quarterly period within the two preceding fiscal years, as reported by Nasdaq:
High | Low | |||||||
Fiscal Year Ending December 31, 2022 |
||||||||
First Quarter (through January 28, 2022) |
$ | 26.57 | $ | 15.12 | ||||
Fiscal Year Ending December 31, 2021 |
||||||||
Fourth Quarter |
$ | 16.74 | $ | 11.03 | ||||
Third Quarter |
$ | 18.49 | $ | 13.01 | ||||
Second Quarter |
$ | 20.80 | $ | 16.73 | ||||
First Quarter |
$ | 23.69 | $ | 17.80 | ||||
Fiscal Year Ending December 31, 2020 |
||||||||
Fourth Quarter |
$ | 23.36 | $ | 17.42 | ||||
Third Quarter |
$ | 30.10 | $ | 17.20 | ||||
Second Quarter |
$ | 32.42 | $ | 21.99 | ||||
First Quarter |
$ | 57.22 | $ | 16.65 |
On January 18, 2022, the last full day of trading before we announced the Merger Agreement, the reported closing sales price of the Shares on Nasdaq was $15.64 per Share. On January 31, 2022, the last full day of
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trading before commencement of the Offer, the reported closing sales price of the Shares on Nasdaq was $26.01 per Share. We encourage you to obtain a recent market quotation for Shares before deciding whether to tender your Shares.
Zogenix has never declared or paid cash dividends on the Shares and does not intend to declare or pay cash dividends on the Shares in the foreseeable future.
7. Certain Information Concerning Zogenix
The summary information set forth below is qualified in its entirety by reference to Zogenixs public filings with the SEC (which may be obtained and inspected as described below under Additional Information) and should be considered in conjunction with the financial and other information in such filings and other publicly available information. Neither Parent nor Purchaser has any knowledge that would indicate that any statements contained in this Offer to Purchase based on such filings and information is untrue. However, neither Parent nor Purchaser assumes any responsibility for the accuracy or completeness of the information concerning Zogenix, whether furnished by Zogenix or contained in such filings, or for any failure by Zogenix to disclose events that may have occurred or that may affect the significance or accuracy of any such information but which are unknown to Parent or Purchaser.
General. Zogenix is a Delaware corporation. According to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and other publicly available information, Zogenix is a global biopharmaceutical company committed to developing and commercializing therapies with the potential to transform the lives of patients and their families living with rare diseases.
The address of Zogenixs principal executive offices and Zogenixs phone number at its principal executive offices are as set forth below:
Zogenix, Inc.
5959 Horton Street, Suite 500
Emeryville, California
(510) 550-8300
Additional Information. The Shares are registered under the Exchange Act. Accordingly, Zogenix is subject to the information reporting requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports and other information with the SEC relating to its business, financial condition and other matters. Information as of particular dates concerning Zogenixs directors and officers, their compensation, stock options granted to them, the principal holders of Zogenixs securities any material interests of such persons in transactions with Zogenix and other matters is required to be disclosed in proxy statements distributed to Zogenixs stockholders and filed with the SEC. Such information also will be available in the Schedule 14D-9. Copies of such reports, proxy statements and other information filed electronically by Zogenix with the SEC are available and may be obtained at no charge at the SECs website at www.sec.gov.
8. Certain Information Concerning Parent and Purchaser
UCB S.A., a société anonyme formed under the laws of Belgium (Parent), is a global biopharmaceutical company focused on the discovery and development of innovative medicines and solutions to transform the lives of people living with severe diseases of the immune system or of the central nervous system.
The address of Parents principal executive offices and Parents phone number at its principal executive offices are as set forth below:
UCB S.A.
Allée de la Recherche, 60
1070 Brussels, Belgium
Tel.: +32 2 559 99 99
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Purchaser is a Delaware corporation and direct wholly owned subsidiary of UCB Biosciences, Inc. (UCB Biosciences, which itself is an indirect wholly owned subsidiary of Parent), and was formed solely for the purpose of facilitating an acquisition by Parent. Purchaser is an indirect wholly owned subsidiary of Parent. Purchaser has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Until immediately before the time Purchaser accepts Shares for purchase in the Offer, it is not anticipated that Purchaser will have any significant assets or liabilities or engage in any activities other than those incidental to the Offer and the Merger. Upon consummation of the Merger, Purchaser will merge with and into Zogenix, whereupon the separate corporate existence of Purchaser will cease and Zogenix will continue as the Surviving Corporation.
The address of Purchasers principal executive offices and Purchasers phone number at its principal executive offices are as set forth below:
Zinc Merger Sub, Inc.
1950 Lake Park Drive
Smyrna, GA 30080
Tel.: +770 970 7500
The name, business address, citizenship, current principal occupation or employment, and five-year material employment history of each director and executive officer of Purchaser, UCB Biosciences and Parent and certain other information are set forth in Schedule I to this Offer to Purchase.
Except as set forth in Schedule I to this Offer to Purchase, during the last five years, none of Purchaser, UCB Biosciences, or Parent, to the best knowledge of Purchaser, UCB Biosciences and Parent, any of the persons listed in Schedule I to this Offer to Purchase, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
Except as set forth elsewhere in this Offer to Purchase or Schedule I to this Offer to Purchase, none of Purchaser, UCB Biosciences, or Parent or, to the best knowledge of Purchaser, UCB Biosciences, and Parent, the persons listed in Schedule I hereto or any associate or other majority-owned subsidiary of Purchaser, UCB Biosciences, or Parent or of any of the persons so listed (i) beneficially owns or has a right to acquire any Shares or any other equity securities of Zogenix; (ii) has effected any transaction with respect to the Shares or any other equity securities of Zogenix during the past 60 days. Except as set forth elsewhere in this Offer to Purchase or Schedule I to this Offer to Purchase, none of Purchaser, UCB Biosciences, or Parent or, to the best knowledge of Purchaser, UCB Biosciences, and Parent, the persons listed in Schedule I hereto has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Zogenix (including any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations).
Except as set forth elsewhere in this Offer to Purchase, during the two years before the date of this Offer to Purchase, there have been (i) no transactions between any of Purchaser, UCB Biosciences, Parent, their subsidiaries or, to the best knowledge of Purchaser, UCB Biosciences, and Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Zogenix or any of its executive officers, directors or affiliates, on the other hand, that would require reporting under SEC rules and regulations; and (ii) no negotiations, transactions or material contacts between Purchaser, UCB Biosciences, Parent, their subsidiaries or, to the best knowledge of Purchaser, UCB Biosciences, and Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Zogenix or any of its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets.
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Additional Information. Pursuant to Rule 14d-3 under the Exchange Act, Parent and the Purchaser have filed with the SEC a Tender Offer Statement on Schedule TO (as it may be amended, supplemented or otherwise modified from time to time, the Schedule TO), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by Parent and the Purchaser with the SEC, are available and may be obtained at no charge at the SECs website at www.sec.gov.
We estimate that we will need approximately $1,808 million to purchase all of the Shares pursuant to the Offer, to complete the Merger, to make payments in respect of outstanding Zogenix stock options, RSUs and PSUs pursuant to the Merger Agreement and in connection with the repurchase or conversion, as applicable, of Zogenixs 2.75% Convertible Senior Notes due 2027 (the Convertible Notes). In addition, Parent estimates that it will need approximately $144 million to pay the maximum aggregate amount that the holders of CVRs may be entitled to receive if the Milestone is achieved. Parent has, or will have, available to it, through a variety of sources, including cash on hand and new debt issuances, including borrowings under the Facility Agreement (as defined below), funds necessary to satisfy all of Purchasers payment obligations under the Merger Agreement and resulting from the transactions contemplated by the Merger Agreement.
The Offer is not conditioned upon Parents or Purchasers ability to finance the purchase of Shares pursuant to the Offer.
The Facility Agreement
Parent and certain of its subsidiaries, as borrowers and/or guarantors, have entered into a facility agreement (the Facility Agreement) dated January 19, 2022, with BNP Paribas Fortis SA/NV and Barclays Bank Plc as the arrangers (the Arrangers), among other parties, for an unsecured term loan facility of up to $800,000,000 maturing five years after the closing of the Merger (the Facility). The Facility is able to be converted from U.S. dollars to euros at the election of the borrower. The obligations of the borrowers under the Facility are guaranteed by certain subsidiaries of Parent.
The Facility is available for a period of six months after entry into the Merger Agreement, unless the End Date is extended in accordance with the terms thereof and as summarized below in Section 11The Merger Agreement; CVR AgreementTermination. In the event of such extension, the Facility will be available for nine months after entry into the Merger Agreement.
The interest rate on the Facility is (i) in respect of loans denominated in U.S. dollars, equal to the non-cumulative compounded secured overnight financing rate plus a margin of between 0.80% to 1.50% per annum and (ii) in respect of loans denominated in euro, equal to EURIBOR plus a margin of between 0.55% to 1.25% per annum, in each case varying by reference to the Parent groups leverage ratio. In addition, a ticking fee (as a percentage of the margin) is payable by the borrower.
The Arrangers have committed to provide the full amount of the Facility and have indicated their intention to form a syndicate of banks that would become lenders under the Facility Agreement.
The Facility Agreement contains representations and warranties, covenants and events of default customary for term facilities of this nature, including (i) representations as to the status of the borrowers and guarantors, no conflict with other obligations and the validity and admissibility in evidence of the finance documents, (ii) covenants that limit liens, financial indebtedness of non-guarantors and amendments to the Merger Agreement and (iii) events of default with regards to the insolvency of, and commencement of insolvency proceedings by, Parent and its material subsidiaries. The commitments of the lenders under the Facility Agreement are conditioned upon, among other things, satisfaction of the Offer Conditions and there being no amendments to the Merger Agreement in a manner that would reasonably be expected to be materially adverse to the interest of the lenders under the Facility.
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10. Background of the Offer; Past Contacts or Negotiations with Zogenix
Background of the Offer and the Merger
The following is a description of contacts between representatives of Parent and its affiliates and representatives of Zogenix and other persons that resulted in the entry into the Merger Agreement. For a review of Zogenixs additional activities, please refer to the Schedule 14D-9 that will be filed by Zogenix with the SEC and mailed to stockholders of Zogenix.
From time to time in the ordinary course of business, Parent evaluates various business opportunities to enhance shareholder value. These evaluations have included periodic assessments of potential strategic transactions as part of the growth of Parents existing business.
On July 19, 2021, a representative of SVB Leerink reached out to David Flint, Head of M&A of Parent, to introduce him to Michael P. Smith, Zogenixs Chief Financial Officer, and they held preliminary discussions regarding a potential partnership opportunity for Fintepla® in the European Union (the EU). On July 20, 2021, Mr. Smith called Mr. Flint to further discuss the potential partnership opportunity in the EU.
On August 25, 2021, Zogenix and UCB Biopharma SPRL, a subsidiary of Parent, entered into a confidentiality agreement to facilitate further discussions regarding the potential partnership opportunity in the EU. The confidentiality agreement did not include a standstill provision. Thereafter, Zogenix provided Parent access to the virtual data room created by Zogenix for the same purpose.
Following entry into the confidentiality agreement, Parent and its advisors participated in video conferences and calls with Zogenixs senior management and its representatives as part of Parents due diligence investigation, in addition to Parents review of the virtual data room,. Such due diligence calls and conferences and Parents due diligence investigation continued through the entry into the Merger Agreement.
On September 23, 2021, Mr. Flint, Anna Lisa Picciolo-Lehrke, Ph.D., Head of Global Business Development Neurology of Parent, and certain other representatives of Parent had a conference call with Mr. Smith and certain other representatives of Zogenix to inform Zogenix that Parent was interested in acquiring Zogenix and would be making a non-binding proposal to that effect.
Later that day, Charl van Zyl, Executive Vice President Neurology & Head of Europe/International Markets of Parent, called Stephen Farr, Ph.D., Zogenixs President and Chief Executive Officer, to express that Parent would be offering to acquire Zogenix at a price of $20.50 per share, all in the form of upfront cash consideration. Dr. Farr indicated that Zogenix was not pursuing a company sale and instead that Zogenixs management was focused on an EU partnership transaction, but would review Parents offer with the Zogenix Board. Parent subsequently submitted a written non-binding offer the same day that included such price. Mr. van Zyl informed Dr. Farr that he would be in the United States during the week of October 4, 2021 and would be available to meet with Dr. Farr at such time.
On September 29, 2021, Dr. Farr and Mr. van Zyl had a call, during which Dr. Farr indicated that the offer price was materially inadequate and not attractive enough of a starting point to warrant further discussions regarding a strategic transaction between the parties or to allow access by Parent to due diligence information and that Zogenix would only consider allowing such access with a materially higher offer, and further that Zogenix had no interest in an in-person meeting to discuss alternative strategic arrangements at the proposed valuation level. Dr. Farr also indicated that Zogenix would be willing to meet with Parents representatives to discuss potential partnerships, as Dr. Farrs view was that both companies had similar objectives in serving patients with epilepsy. On that same day, Mr. Smith and Mr. Flint held another call where Mr. Smith reiterated the statement made by Dr. Farr to Mr. van Zyl, indicated that the Zogenix Board was not providing guidance on an acceptable valuation and explained that, in light of the Zogenix Boards view expressed by Dr. Farr, Zogenix was still planning to move forward with a strategic partnership for the EU, with offers for a partnership expected in the coming weeks.
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On October 6, 2021, Mr. van Zyl and Mr. Flint called Dr. Farr and Mr. Smith to discuss a revised non-binding proposal which Parent was prepared to submit to Zogenix at a price of $23.00 per share, all in the form of upfront cash consideration, which was reflected in a revised written revised non-binding offer submitted to Zogenix later on the same day.
On October 13, 2021, Dr. Farr and Mr. Smith called Mr. van Zyl and Mr. Flint to inform them that Parents revised offer continued to undervalue Zogenix and therefore was not acceptable to Zogenix, and that Zogenix was still working towards a EU partnership transaction.
On October 25, 2021, Mr. van Zyl called Dr. Farr to notify him that Parent was still interested in acquiring Zogenix and that Jean-Christophe Tellier, M.D., the Chief Executive Officer of Parent, would be reaching out to Cam Garner, Chairman of the Zogenix Board, noting that Dr. Tellier desired to discuss with Mr. Garner whether an offer structure involving consideration in the form of upfront cash and contingent value rights would be attractive to the Zogenix Board. Mr. van Zyl also indicated that it would be important for Parent to have access to additional confidential information of Zogenix in order to progress its due diligence review in certain key areas.
On October 26, 2021, Dr. Tellier called Mr. Garner and expressed his view that there was a strategic fit between the parties and that Parent had a strong interest in acquiring Zogenix, and requested an opportunity to undertake limited, additional due diligence in order to prepare a potential new offer. Mr. Garner responded that further limited diligence would be acceptable if the information was necessary for Parent to improve its offer.
On October 28, 2021, Mr. Flint and Mr. Smith had another call in which Mr. Flint indicated that Parent would be sending a list of high-priority diligence questions, which were key to help Parent assess certain key assumptions and value drivers before potentially making a new non-binding offer to acquire Zogenix. These questions were provided to Zogenix after the call on October 28, 2021.
On November 2, 2021, Mr. Flint and Mr. Smith spoke again to discuss key diligence questions from Parent and to organize upcoming calls and the opening of a more detailed virtual data room with the information requested by Parent. Mr. Flint also reiterated Parents interest in acquiring Zogenix.
Throughout the month of November 2021, Parents financial advisors, Lazard and Barclays, had calls with Zogenixs financial advisors, BofA and SVB Leerink, to cover the discussions between the parties, the status of diligence activities, upcoming transaction milestones and overall timeline for a potential transaction.
During that month, Parents representatives also had a number of due diligence calls with representatives of Zogenix to discuss the high-priority questions posed by Parent, and Zogenix made available to Parent and its representatives certain additional documents and information requested by Parent in the virtual data room.
After the due diligence calls and review of additional information made available by Zogenix, Parent submitted to Zogenix on December 3, 2021 an updated written, non-binding offer to acquire Zogenix for up to $27.00 per share, with $23.00 per share in upfront cash, plus (i) a $2.00 contingent value right payable if Fintepla® retains orphan drug designation at the time of its EU approval for treatment of Lennox-Gastaut syndrome (LGS), such approval to occur no later than April 30, 2023, and (ii) an additional $2.00 contingent value right payable if aggregate global annual net sales of Fintepla® (excluding Japan) are at least $700 million in calendar year 2026. The non-binding offer from Parent was accompanied by a draft of an exclusivity agreement providing that Zogenix would not negotiate a strategic transaction with any party other than Parent through December 31, 2021. On the same day Mr. Smith, Mr. Flint, Loïc Hameon, Head of Business Development, M&A and Alliance Management of Parent, representatives from BofA and SVB Leerink and representatives from Lazard and Barclays had a call to discuss the revised offer submitted by Parent.
On December 10, 2021, a call was held among Zogenix, BofA and SVB Leerink, and Lazard and Barclays, where Zogenixs representatives informed Parents financial advisors that Zogenix was seeking a price of $25.00
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per share in upfront cash and a $2.00 contingent value right payable if Fintepla® retains orphan drug designation at the time of its EU approval for treatment of LGS, with no time limitation for obtaining such EU approval.
On December 13, 2021, Lazard and Barclays had a call with BofA and SVB Leerink to inform them that Parent was prepared to submit a further revised non-binding offer, which was submitted to Zogenix on the following day, providing for two options: (i) the first option being $25.00 per share in upfront cash; and (ii) the second option being $24.00 in upfront cash with a $2.00 contingent value right, payable if Fintepla® retains orphan drug designation at the time of its EU approval for treatment of LGS (such approval to occur no later than December 31, 2023). Parent also proposed a four week period of exclusivity.
On December 15, 2021, Dr. Farr called Dr. Tellier and Mr. van Zyl and requested that Parent increase the offer to $26.00 in upfront cash. On the same day, on a telephone conference with BofA and SVB Leerink, Lazard and Barclays acknowledged such request for a higher per share price but expressed disagreement regarding the valuation proposed by Zogenix.
On December 19, 2021, BofA and SVB Leerink called Barclays and Lazard to inform them that Zogenix had received a more attractive offer from another party and was moving forward with a potential transaction for the acquisition of Zogenix with that party.
On December 20, 2021, Parent submitted to Zogenix a revised written, non-binding offer, which included a maximum value of $28.00 per share, with $26.00 per share in upfront cash and a $2.00 contingent value right payable if Fintepla® retains orphan drug designation at the time of its EU approval for treatment of LGS (such approval to occur no later than December 31, 2023) and proposed an exclusivity period of four weeks. Parents offer indicated that it would expire at the close of business the next day if not accepted by that time by Zogenix.
On the same day, Parents outside legal counsel, Covington & Burling LLP (Covington), provided to representatives of BofA and Latham & Watkins LLP (Latham), Zogenixs legal advisor, drafts of the Merger Agreement and the CVR Agreement, and representatives from Parent and Zogenix held an introductory call regarding the transaction, where they discussed the definitive agreements and the potential antitrust approvals applicable to the proposed transaction. The Merger Agreement draft provided for, among other things, Parent to acquire Zogenix via a tender offer and a customary fiduciary out enabling the Zogenix Board to entertain potential alternative, unsolicited offers following entry into the Merger Agreement (with a termination fee of 3.5% of the aggregate equity value associated with the upfront consideration in the transaction, which fee would be payable by Zogenix to Parent under certain circumstances including as a condition to Zogenix terminating the Merger Agreement to accept a superior acquisition proposal). The draft of the CVR Agreement did not require Parent to use, and contained a disclaimer of, any level of efforts to achieve the milestone specified therein.
On December 21, 2021, representatives of Covington provided a draft exclusivity agreement to Latham, which included the right for Parent to negotiate a transaction with Zogenix on an exclusive basis for four weeks.
On December 22, 2021, Dr. Farr called Dr. Tellier, on which call Dr. Tellier confirmed that Parents diligence of Zogenix was largely complete other than confirmatory diligence. Dr. Farr informed Dr. Tellier that while Zogenix was still reviewing the drafts of the Merger Agreement and the CVR Agreement, Zogenix planned to add an obligation for Parent to use commercially reasonable efforts to achieve the milestone specified in the CVR Agreement. Dr. Farr also expressed that the exclusivity period requested by Parent should end on January 9, 2022, but Dr. Tellier indicated the need for a longer term of up to four weeks due to the holiday period during the proposed exclusivity period. Later on the same day, Parent and Zogenix entered into an exclusivity agreement providing for such four-week period for exclusive negotiations between the parties.
During the ensuing weeks, Parent submitted numerous confirmatory diligence requests, and Zogenix provided Parents advisors and representatives access to a more comprehensive virtual data room, where it made available various documents and information in response to Parents and its advisors requests. Zogenix also organized a number of due diligence calls among the parties and their advisors, to discuss numerous due diligence matters.
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On December 30, 2021, representatives of Latham provided representatives of Covington a revised draft of the Merger Agreement, which draft provided for, among other things, Parents obligation to litigate or accept remedies to obtain antitrust clearances, a reverse termination fee of 5.0% of the aggregate equity value associated with the upfront consideration in the transaction, in the event that the transaction did not close due to failure to obtain antitrust clearance and a proposal to revise the amount of the termination fee payable by Zogenix to Parent to 2.5% of the aggregate equity value associated with the upfront consideration in the transaction. Representatives of Latham also provided representatives of Covington with a revised draft of the CVR Agreement, which draft provided for, among other things, Parents obligation to use commercially reasonable efforts to achieve the milestone set forth therein.
On January 6, 2022, representatives of Covington delivered a further revised draft of the Merger Agreement to representatives of Latham, which draft provided for, among other things, a proposal to remove Parents obligation to litigate or accept remedies for antitrust clearance and the reverse termination fee proposed by Zogenix. Such draft also proposed to revert to a 3.5% termination fee payable by Zogenix. Representatives of Covington also provided representatives of Latham with a revised draft of the CVR Agreement, which draft accepted the commercially reasonable efforts standard to achieve the milestone set forth therein, subject to specified exceptions.
On January 10, 2022, a call was held among representatives of Covington and Latham during which they discussed the remaining key open issues in the Merger Agreement and the CVR Agreement. At the end of the call, Latham indicated that it would provide revised drafts of the agreements to Covington.
On January 11, 2022, Mr. van Zyl, Mr. Flint, Dr. Farr and Mr. Smith had a conference call to discuss certain remaining key open issues in the Merger Agreement and the CVR Agreement. On the call, it was agreed, among other things, that the Merger Agreement would provide for a termination fee payable by Zogenix of 3.25% of the equity value associated with the upfront consideration in the transaction, that Parent would not be obligated to litigate or accept remedies to obtain antitrust clearances and that, in the event that the transaction did not close due to failure to obtain antitrust clearance, Parent would reimburse certain of Zogenixs external advisor fees up to an aggregate amount of $5,000,000.
On January 12, 2022, representatives of Latham delivered further revised drafts of the Merger Agreement and CVR Agreement to representatives of Covington, which drafts reflected the key terms that had been agreed between the parties in their negotiations the day prior. Over the ensuing days, Covington and Latham worked together to finalize the remaining outstanding issues in the drafts.
On January 18, 2022, after the parties had finalized negotiations on the drafts of the Merger Agreement and CVR Agreement, representatives of Zogenix informed representatives of Parent that the Zogenix Board had, at a meeting held on that day, unanimously approved the entry into the Merger Agreement by Zogenix and resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
Later during the evening on January 18, 2022, following the Zogenix Boards approval of the Merger Agreement (including the form of the CVR Agreement), and transactions contemplated thereby, Parent, Purchaser and Zogenix executed and delivered the Merger Agreement (which included as an exhibit the form of the CVR Agreement). Thereafter, on January 19, 2022, before the opening of the markets in the U.S. and Belgium, Parent and Zogenix issued a joint press release announcing the execution and delivery of the Merger Agreement.
11. The Merger Agreement; CVR Agreement
Merger Agreement
The following summary of certain provisions of the Merger Agreement and all other provisions of the Merger Agreement discussed herein are qualified by reference to the Merger Agreement itself, which is incorporated
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herein by reference. A copy of the Merger Agreement is filed as Exhibit (d)(1) to the Schedule TO. Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below. Capitalized terms used in this Section 11 and not otherwise defined in this Offer to Purchase have the respective meanings set forth in the Merger Agreement.
The Merger Agreement has been filed with the SEC and incorporated by reference herein to provide investors and stockholders with information regarding the terms of the Merger Agreement. It is not intended to provide any other factual information about Parent, Purchaser or Zogenix. The representations, warranties and covenants contained in the Merger Agreement were made only as of specified dates for the purposes of such agreement, were solely for the benefit of the parties to such agreement and may be subject to qualifications and limitations agreed upon by such parties. In particular, in reviewing the representations, warranties and covenants contained in the Merger Agreement and any description thereof contained or incorporated by reference herein, it is important to bear in mind that such representations, warranties and covenants were negotiated with the principal purpose of allocating risk between the parties, rather than establishing matters as facts. Such representations, warranties and covenants may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC, and in some cases were qualified by disclosures set forth in a confidential disclosure schedule that was provided by Zogenix to Parent but is not filed with the SEC as part of the Merger Agreement (the Disclosure Schedule). Investors are not third-party beneficiaries under the Merger Agreement. Accordingly, investors should not rely on such representations, warranties and covenants as characterizations of the actual state of facts or circumstances described therein. Information concerning the subject matter of such representations, warranties and covenants, which do not purport to be accurate as of the date of this Offer to Purchase, may have changed since January 18, 2022, which subsequent information may or may not be fully reflected in the parties public disclosures.
The Offer.
If the Merger Agreement has not been terminated and Zogenix has timely provided information required to be provided by it under the Merger Agreement, Parent has agreed to commence the Offer as promptly as practicable, and in no event later than February 1, 2022, unless otherwise agreed by Parent and Zogenix. Purchasers obligation to accept for payment and pay for Shares validly tendered in the Offer is subject only to the satisfaction or, to the extent waivable by Parent or Purchaser, waiver of each of the Offer Conditions.
On the terms and subject to the conditions set forth in this Agreement and to the satisfaction, or (to the extent waivable by Parent or Purchaser) waiver by Parent or Purchaser, of the Offer Conditions, Purchaser shall (and Parent shall cause Purchaser to) (i) promptly after the expiration of the offer, irrevocably accept for payment all Shares tendered (and not validly withdrawn) pursuant to the Offer and (ii) promptly after the Acceptance Time, pay for such Shares. Purchaser expressly reserves the right (in its sole discretion) at any time and from time to time to waive, in whole or in part, any of the Offer Conditions and to make any change in the terms of or conditions to the Offer, except that Zogenixs prior written consent is required for Purchaser to:
| waive or change the Minimum Condition or the Termination Condition; |
| decrease the Offer Price; |
| change the form of consideration payable in the Offer; |
| decrease the maximum number of Shares sought pursuant to the Offer; |
| extend or change the Expiration Time except as required or permitted by the terms of the Merger Agreement as described in Section 11The Merger Agreement; CVR AgreementThe Offer.; or |
| amend, modify or supplement any of the Offer Conditions or other terms of the Offer in a manner materially adverse to the Zogenix stockholders. |
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The Merger Agreement contains provisions that govern the circumstances under which Purchaser is required to extend the Offer. Specifically, the Merger Agreement provides that:
| if at the scheduled Expiration Time any of the Offer Conditions other than the Minimum Condition has not been satisfied or waived by Purchaser or Parent, then Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, to permit such conditions to be satisfied; |
| Purchaser will extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq applicable to the Offer; and |
| if as of the scheduled Expiration Time, all of the Offer Conditions have been satisfied or waived by Purchaser or Parent, other than the Minimum Condition, Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, except that Purchaser will not be required to so extend the Offer for more than 20 business days from the date on which all of the Offer Conditions (other than the Minimum Condition) were satisfied or the End Date, whichever is earlier. |
The Merger Agreement provides that Purchaser will not be required to, and may not without Zogenixs prior written consent, extend the Offer beyond the earlier of the termination of the Merger Agreement and the End Date. The End Date means July 18, 2022, unless otherwise extended to October 18, 2022 pursuant to the terms of the Merger Agreement, as summarized below in this Section 11The Merger AgreementTermination.
If the Merger Agreement is terminated, Purchaser will terminate the Offer, will not acquire any Shares pursuant to the Offer and will promptly return, and cause the Depositary to return, all tendered Shares to the registered holders thereof.
When the Merger Becomes Effective
The closing of the Merger will take place as promptly as practicable pursuant to Section 251(h) of the DGCL, by electronic exchange of signatures, as soon as possible after, but in any event no later than the third business day after, the satisfaction or waiver of the conditions set forth in the Merger Agreement (other than those conditions that by their terms are to be satisfied at the closing of the Merger (so long as such conditions are reasonably capable of being satisfied), but subject to the satisfaction or waiver of such conditions at such time), unless another time, date or place is agreed to in writing by Zogenix and Parent. Concurrently with the closing of the Merger, Zogenix and Purchaser will cause to be filed a certificate of merger with respect to the Merger with the Secretary of State of the State of Delaware in accordance with the DGCL and will make all other filings or recordings required by the DGCL in connection with the Merger. The Merger will become effective upon the filing of such certificate of merger, or at such later time as may be agreed in writing by Zogenix and Parent and specified in such certificate of merger.
Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers
Pursuant to the terms and conditions of the Merger Agreement, at the Effective Time, Purchaser will be merged with and into Zogenix and the separate corporate existence of Purchaser will cease. Zogenix will continue as the Surviving Corporation and an indirect wholly owned subsidiary of Parent. At the Effective Time, the certificate of incorporation of Zogenix will be amended and restated in its entirety as set forth in Exhibit B of the Merger Agreement and such amended and restated certificate of incorporation will be the certificate of incorporation of the Surviving Corporation until thereafter amended. Zogenix, Parent and Purchaser will take all actions necessary such that the bylaws of Purchaser in effect immediately prior to the Effective Time will be the bylaws of the Surviving Corporation until thereafter amended, except that (i) references to Purchasers name will be replaced with references to the Surviving Corporations name and (ii) the bylaws of the Surviving Corporation will
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include the provisions in the amended and restated bylaws of Zogenix as of January 18, 2022 related to indemnification, advancement of expenses and exculpation from liability. From and after the Effective Time, the directors of Purchaser immediately before the Effective Time will be the initial directors of, and the officers of Zogenix immediately before the Effective Time will be the initial officers of, the Surviving Corporation and, in each case, will hold office until their respective successors are duly elected or appointed and qualified in accordance with the Surviving Corporations certificate of incorporation and bylaws, applicable law and the terms of the Merger Agreement.
Effect of the Merger on Zogenix Common Stock
At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and Shares outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and properly demands appraisal for such Shares in accordance with Section 262 of the DGCL) will automatically be cancelled and cease to exist and will be converted into the right to receive (i) the Cash Amount, plus (ii) one CVR representing the right to receive a contingent payment, net to the seller in cash, without interest, upon the achievement of the milestone set forth in, and subject to and in accordance with the terms and conditions of, the CVR Agreement.
At the Effective Time, any Shares held in the treasury of Zogenix or owned by Zogenix or any direct or indirect wholly owned of Zogenix and each Share owned by Parent, Purchaser or any direct or indirect wholly owned subsidiary of Parent or Purchaser immediately prior to the Effective Time will automatically be cancelled and will cease to exist, and no consideration or payment will be delivered in exchange for such shares.
The Merger Consideration and any other amount payable pursuant the Merger Agreement will be equitably adjusted to reflect the effect of any reclassification, recapitalization, exchange, stock split (including reverse stock split) or combination or readjustment of shares or any stock dividend or stock distribution with a record date occurring on or after January 18, 2022 and prior to the Effective Time.
Treatment of Equity Awards; ESPP
Options. Under the Merger Agreement, for each Zogenix stock option that has an exercise price equal to or above $28.00, Zogenix will take all reasonably necessary steps to provide each holder of such option that is not currently exercisable, the opportunity to exercise, for a period of at least five business days prior to, and conditional upon the occurrence of, the Effective Time, any portion of such option in full. Zogenix will further take all reasonably necessary action to ensure that no holder of Zogenix stock options will be able to exercise their option at any time between at least the date that is three days prior to the Effective time and the Effective Time.
As of the Effective Time, all options to purchase Shares granted under a Zogenix equity plan, agreement or arrangement that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, and that: (i) have an exercise price per Share that is less than the Cash Amount will be cancelled and the holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (A) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (B) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; (ii) have an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash (less the applicable exercise price per Share subject to such stock option); (iii) have an exercise price equal to or greater than $28.00, will be cancelled for no consideration.
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Restricted Stock Units. The Merger Agreement also provides that as of the Effective Time, all RSUs that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU immediately prior to the Effective Time multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU immediately prior to the Effective Time.
Performance Stock Units. The Merger Agreement also provides that as of the Effective Time, all PSUs that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to such PSUs) multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such PSU immediately prior to the Effective Time.
ESPP. The Merger Agreement provides that Zogenix, the Zogenix Board and the compensation committee of the Zogenix Board, as applicable, must take all actions reasonably necessary to terminate the 2010 Employee Stock Purchase Plan, as amended (the ESPP) and all outstanding rights thereunder as of the day immediately prior to the Closing Date, contingent upon the occurrence of the closing of the Merger. From and after January 18, 2022, (i) no new participants have been or will be permitted to participate in the ESPP, (ii) participants have not been and will not be permitted to increase their payroll deductions or purchase elections from those in effect on January 18, 2022 and (iii) except for the offering periods under the ESPP that was in effect on January 18, 2022 (referred to as the Final Offering Periods), no new offering periods has commenced. If the Effective Time occurs during the one or more of the Final Offering Periods, (w) the final exercise date(s) under the ESPP will be such date as Zogenix determines in its sole discretion (which date must be no later than the date that is five days prior to the Acceptance Time), (x) each ESPP participants accumulated contributions under the ESPP will be used to purchase whole Shares in accordance with the terms of the ESPP as of such final exercise date, which Shares, to the extent outstanding immediately prior to the Effective Time and not constituting Excluded Shares, will be cancelled as of immediately prior to the Effective Time in exchange for the right to receive the Merger Consideration, (y) after the end of both of the Final Offering Periods, all amounts allocated to each participants account under the ESPP at the end of each of the Final Offering Periods will thereupon be used to purchase whole Shares under the terms of the ESPP for such offering periods, which Shares, to the extent outstanding immediately prior to the Effective Time and not constituting Excluded Shares, will be cancelled as of immediately prior to the Effective time in exchange for the right to receive the Merger Consideration. As promptly as practicable following the purchase of Shares in accordance with the preceding clause (w) or (x), Zogenix is required to return to each participant the funds, if any, that remain in such participants account after such purchase.
Convertible Notes
Pursuant to the terms of the Indenture dated September 28, 2020 (the Convertible Notes Indenture) which governs the Convertible Notes, each holder of Convertible Notes will be entitled, subject to the terms and conditions of the Convertible Notes Indenture (as modified by any supplemental indenture), to: (a) convert such holders Convertible Notes only into the right to receive the Merger Consideration in respect of each Share into which the Convertible Notes would have been convertible pursuant to the applicable conversion rate under the Convertible Notes Indenture, including any make-whole adjustment in connection with the Merger as may be applicable under the Convertible Notes Indenture, except that the portion of such Merger Consideration consisting of the CVR (i) shall be paid in cash in the event that such conversion occurs after the achievement of the Milestone and (ii) shall not be paid in the event that such conversion shall occur after December 31, 2023 and the Milestone shall not have been achieved; (b) require Zogenix to repurchase such holders Convertible Notes or any portion of principal amount thereof for cash on a date specified by Zogenix in accordance with the Convertible Notes Indenture at a repurchase price equal to 100% of the principal amount of the Convertible
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Notes to be repurchased, together with accrued and unpaid interest thereon to, but excluding, such repurchase date; or (c) continue to hold such holders Convertible Notes.
Prior to the Effective Time, Zogenix is required to take all actions required by, or reasonably requested by Parent pursuant to and in compliance with, the Convertible Notes Indenture, or actions required by applicable law with respect to the Convertible Notes or the Convertible Notes Indenture, as a result of the transactions contemplated in the Merger Agreement, including giving applicable notices and delivering documents as may be required by the trustee for the Convertible Notes.
Dissenting Shares
The Merger Agreement provides that Shares outstanding immediately prior to the Effective Time and held by a holder who is entitled to demand and properly demands appraisal for such Shares in accordance with Section 262 of the DGCL will not be converted into the right to receive the Merger Consideration, but instead at the Effective Time will be entitled only to such rights as granted by Section 262. If any Zogenix stockholder fails to perfect, waives, withdraws or otherwise loses the right to appraisal of the fair value of such Shares under Section 262, then the right of such holder to be paid the fair value of such Shares will cease and such Shares will be deemed to have been converted as of the Effective Time into the right to receive, without interest or duplication, the Merger Consideration.
Payment for Shares
Promptly after the Effective Time, Parent will deposit, or cause to be deposited, with a paying agent designated by Parent that is reasonably acceptable to Zogenix, cash in an amount necessary to pay the aggregate Cash Amount payable to holders of Shares.
Promptly (and in any event not later than the third business day) after the Effective Time, Parent will send or cause the paying agent to send to each holder of record of Certificates that immediately prior to the Effective Time represented outstanding Shares (i) a notice advising such holder of the effectiveness of the Merger, (ii) a letter of transmittal in customary form, which will specify that delivery will be effected, and risk of loss and title to the Certificates, will pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu thereof), to the paying agent, and (iii) instructions for effecting the surrender of the Certificates (or affidavits of loss in lieu thereof) in exchange for cash in an amount equal to the Cash Amount multiplied by the number of Shares previously represented by such Certificates.
Upon surrender of a Certificate (or an affidavit of loss in lieu thereof) to the paying agent, together with a duly executed and completed letter of transmittal and such other documents as may reasonably be required by the paying agent pursuant to such instructions, Parent will cause the paying agent to pay and deliver, as promptly as reasonably practicable after the Effective Time, the Cash Amount payable for each Share represented by such Certificate (without interest).
With respect to Book-Entry Shares, Zogenix and Parent will cooperate to establish procedures with the paying agent and DTC to ensure that the paying agent will transmit to DTC or its nominees, or to holders of Book-Entry Shares as soon as practicable after the Effective Time, upon surrender of Shares held of record by DTC or its nominees in accordance with DTCs customary surrender procedures, (i) any notice with respect to the effectiveness of the Merger and any instructions for surrendering Book-Entry Shares, and (ii) the Merger Consideration payable for each such Book-Entry Share.
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Representations and Warranties
The Merger Agreement contains representations and warranties of each of Zogenix, Parent and Purchaser (subject to certain qualifications or exceptions in the Merger Agreement and the Disclosure Schedule) as to, among other things:
| corporate organization, existence, good standing and corporate power and authority to conduct its business as presently conducted; |
| corporate power and authority to enter into the Merger Agreement (and, in the case of Parent, the CVR Agreement), to perform its obligations thereunder and to complete the transactions contemplated thereby; |
| required regulatory filings or actions and authorizations, consents or approvals of governmental entities and other persons; |
| the absence of certain violations, defaults or consent requirements under certain contracts, organizational documents and applicable law, in each case arising out of the execution, delivery or performance of, or consummation of the transactions contemplated by, the Merger Agreement; |
| matters relating to information to be included in required filings with the SEC in connection with the Merger; and |
| the absence of any fees owed to investment bankers or brokers in connection with the Merger, other than those specified in the Merger Agreement. |
The Merger Agreement also contains representations and warranties of Zogenix (subject to certain qualifications or exceptions in the Merger Agreement and the Disclosure Schedule) as to, among other things:
| the capitalization of Zogenix, including the authorized and outstanding capital stock, outstanding stock options and RSUs, Shares reserved for issuance under Zogenixs equity incentive plans and Shares reserved for issuance under the ESPP or upon conversion of the Convertible Notes; |
| all Shares having been, or being when issued pursuant to any Zogenix equity award, Zogenix equity incentive plan or other employee benefit plan or the ESPP in accordance with the respective terms thereof, duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights; |
| the exercise price of each Zogenix stock option as compared to fair market value and the exemption of Zogenix stock options under Section 409A of the Code; |
| the issuance of Shares or other equity interests; |
| except as otherwise disclosed, the absence of (i) outstanding bonds, debentures, notes or other indebtedness of Zogenix having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) on any matters on which stockholders of Zogenix may vote, (ii) other equity interests of Zogenix, (iii) outstanding obligations of Zogenix or any of its subsidiaries to repurchase, redeem or otherwise acquire any equity interests of Zogenix, other than under the Convertible Notes and (iv) voting, registration or transfer obligations of equity interests of Zogenix; |
| all outstanding shares, capital stock or other voting securities of, or ownership interests in, each subsidiary of Zogenix having been duly authorized and validly issued, fully paid and non-assessable and free of preemptive rights; |
| except as otherwise disclosed, the absence of other equity interests of any subsidiary of Zogenix; |
| the full payment of all dividends or distributions on securities of subsidiaries of Zogenix that have been declared or authorized; |
| the issuance and transfer of any equity interests in any subsidiary of Zogenix in accordance with such subsidiarys organizational documents and applicable law; |
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| the corporate actions required to be taken, and taken, in connection with the execution, delivery and performance of the Merger Agreement by Zogenix; |
| the timeliness and accuracy of Zogenixs filings with the SEC and of the financial statements included in its SEC filings, and the compliance of such filings and financial statements with SEC rules, GAAP (in the case of financial statements), the Sarbanes-Oxley Act of 2002, and the applicable rules and regulations of Nasdaq; |
| the absence of outstanding or unresolved comments received from the SEC staff with respect to Zogenixs SEC filings; |
| Zogenixs disclosure controls and procedures and internal control over financial reporting; |
| the absence of certain changes from December 31, 2020 through January 18, 2022, including the conduct of the businesses of Zogenix and its subsidiaries in the ordinary course consistent with past practice, and the absence of a Company Material Adverse Effect (as defined below); |
| the absence of certain undisclosed liabilities of Zogenix; |
| the compliance by Zogenix and its subsidiaries with applicable laws, permits and other authorizations; |
| compliance with anti-bribery and anti-corruption laws, rules and regulations, including the Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78m(b), 78dd-1, 78dd-2, 78ff) and any other applicable anti-corruption, anti-bribery, anti-kickback, sanctions or export control laws; |
| the possession by Zogenix and its subsidiaries of all licenses, permits and other authorizations necessary to conduct their respective businesses in the places and in the manner in which such businesses are presently conducted, and compliance by Zogenix with the terms and requirements of such licenses, permits and other authorizations; |
| the absence of certain litigation, orders and judgments and governmental proceedings and investigations related to Zogenix and its subsidiaries; |
| real property owned or leased by Zogenix or any of its subsidiaries; |
| Zogenixs intellectual property rights, IT systems, and related data privacy and cybersecurity matters; |
| the payment of taxes, filing of tax returns, absence of tax audits or proceedings and other tax matters related to Zogenix and its subsidiaries, including compliance with certain provisions of the CARES Act; |
| Zogenixs employee benefit plans and other agreements with its employees; |
| labor matters related to Zogenix and its subsidiaries and Zogenixs employees; |
| environmental matters and compliance with environmental laws by Zogenix and its subsidiaries; |
| the effectiveness and absence of breach or default under certain categories of specified material contracts of Zogenix and its subsidiaries; |
| the absence of payments due to brokers, finders or other intermediaries in connection with the transactions contemplated by the Merger Agreement; |
| the receipt by the Zogenix Board of opinions of BofA and SVB Leerink as to the fairness of the consideration per Share to be paid pursuant to the Merger Agreement, from a financial point of view, to the holders of Shares; |
| non-applicability of certain anti-takeover laws to the Merger Agreement, the CVR Agreement, the Offer and the Merger; |
| the absence of an opt out of Section 251(h) of the DGCL in Zogenixs certificate of incorporate or any other action taken to limit or preclude the use by Zogenix of Section 251(h) of the DGCL; |
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| certain regulatory matters, including with respect to regulatory approvals and enforcement actions from the United States Food and Drug Administration (the FDA) or any comparable regulatory authority, and the compliance with various applicable rules of such regulatory authorities applicable to the conduct of the business of Zogenix and its subsidiaries; |
| compliance by Zogenix with certain laws pertaining to healthcare laws and healthcare programs; |
| transactions with affiliates of Zogenix or its subsidiaries; and |
| insurance policies of Zogenix or any of its subsidiaries. |
The Merger Agreement also contains representations and warranties of Parent and Purchaser (subject to certain qualifications or exceptions in the Merger Agreement) as to, among other things:
| the corporate actions required to be taken, and taken, in connection with the execution, delivery and performance of the Merger Agreement and the CVR Agreement by Parent and Purchaser; |
| the absence of payments due to brokers, finders or other intermediaries in connection with the transactions contemplated by the Merger Agreement; |
| the availability to Parent, as of the Acceptance Time, the Closing and the Milestone Payment Date, of sufficient funds to consummate the Merger and the other transactions contemplated by the Merger Agreement and the CVR Agreement that require payment on the relevant payment date, and the enforceability of the Facility Agreement; |
| actions of Purchaser prior to the closing of the Merger; and |
| the absence during the last three years of any ownership by Parent, Purchaser or any of their respective affiliates of Zogenix common stock or securities convertible into or exchangeable for Zogenix common stock. |
Some of the representations and warranties in the Merger Agreement are qualified by materiality qualifications or a Company Material Adverse Effect or Parent Material Adverse Effect clause.
For purposes of the Merger Agreement, a Company Material Adverse Effect means any event, state of facts, circumstance, change, occurrence, development, condition or effect that, individually or in the aggregate, is materially adverse to:
(i) the condition (financial or otherwise), business, assets, liabilities or results of operations of Zogenix and its subsidiaries; provided that, none of the following shall be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur:
| changes in general economic conditions in the United States or any other country or region, or in the global economy generally |
| changes or conditions generally affecting the industry in which Zogenix and its subsidiaries operate, including changes of applicable law (or the interpretation thereof) or in general regulatory conditions or changes in GAAP or other applicable accounting standards (or the interpretation thereof) (except with respect to any representation or warranty concerning compliance with applicable laws, GAAP or any other accounting standards); |
| changes in general political conditions in the United States or any other country or region in the world or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism), or epidemics or pandemics (including COVID-19 and any COVID-19 Measures) or earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world; |
| the announcement of the Merger Agreement or the pendency of the transactions contemplated by the Merger Agreement or the identity of Parent (or any of its affiliates) as the acquirer of Zogenix, |
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including, in each case to the extent directly resulting therefrom, (A) any termination or potential termination of (or the failure or potential failure to renew or enter into) any contract, or (B) other negative development (or potential negative development) in any relationship with, in each case of this subclause (A) or (B), any customer, supplier, distributor or other business partner of Zogenix or any of its subsidiaries (except with respect to any representation or warranty concerning the execution and delivery of the Merger Agreement and the consummation or performance of the obligations contemplated thereby); |
| any action taken by Zogenix at the written request of Parent that is not expressly required to be taken by the terms of the Merger Agreement, the taking of most actions expressly required by the terms of the Merger Agreement, or the failure of Zogenix to take any action that Zogenix is expressly prohibited by the terms of the Merger Agreement from taking; |
| changes in the market price or trading volume of the Shares, in and of itself, or any failure by Zogenix to meet any estimates or expectations of Zogenixs revenue, earnings or other financial performance or financial results of operations for any period, in and of itself, or any failure by Zogenix to meet any internal budgets, financial plans or forecasts of its revenues, earnings or other financial performance or financial results of operations, in and of itself (but not, in each case, the underlying cause of such changes or failures, unless such underlying cause would otherwise be excepted); |
| changes in general conditions in the securities markets, capital markets, credit markets, currency markets or other financial markets in the United States or any other country or region in the world, including changes in exchange rates for the currencies of any country and any suspension of trading in securities generally on any securities exchange or over-the-counter market; |
provided, further, that with respect to the foregoing 1st, 2nd, 3rd and 7th bullets, any such matter will be taken into account in determining whether a Company Material Adverse Effect has occurred if it disproportionately adversely affects Zogenix and its subsidiaries, taken as a whole, compared to other participants in the industries in which Zogenix and its subsidiaries operate, but, in such event, only the incremental disproportionate impact of any such occurrence will be taken into account in determining whether a Company Material Adverse Effect has occurred; or
(ii) Zogenixs ability to consummate the transactions contemplated by the Merger Agreement on or before the End Date.
For purposes of the Merger Agreement, a Parent Material Adverse Effect means a material adverse effect on Parents or Purchasers ability to consummate the transactions contemplated by the Merger Agreement on or before the End Date.
Conduct of Business Pending the Merger
The Merger Agreement provides that except (i) as required by applicable law, (ii) as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), (iii) to the extent necessary to comply with COVID-19 Measures, (iv) as expressly required by the Merger Agreement, or (v) as set forth in the Disclosure Schedule, during the period from January 18, 2022 until the Effective Time or the earlier termination of the Merger Agreement in accordance with its terms, Zogenix is required to, and to cause each of its subsidiaries to, (a) conduct its business in the ordinary course consistent with past practice, (b) use reasonable best efforts to preserve intact its present business organization, keep available the services of its directors, officers, key employees and key consultants and maintain its existing business relationships and goodwill with those persons having significant business relationships with it, and (c) without limiting the generality of the foregoing, not:
| amend its certificate of incorporation, amended and restated bylaws or other similar organizational documents (whether by merger, consolidation or otherwise); |
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| split, combine or reclassify any shares of its capital stock or any other equity securities (including Zogenix common stock), (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends payable by any wholly owned subsidiary of Zogenix or (iii) redeem, repurchase or otherwise acquire, or offer to redeem, repurchase or otherwise acquire, any securities of Zogenix or any of its subsidiaries, in each case as set out in clause (iii) of this paragraph , other than (a) as provided by any Zogenix equity incentive plan or other employee benefit plan, (b) the acquisition by Zogenix of Shares in connection with the surrender of Shares by holders of Zogenix stock options in order to pay the exercise price of such Zogenix stock options, (c) the withholding of Shares to satisfy tax obligations with respect to Zogenix stock options, RSUs or PSUs, (d) the acquisition by Zogenix of RSUs or PSUs in connection with the forfeiture of such RSUs or PSUs, or (e) settlements in cash (in whole or in part) or conversion (in whole or in part) of any of the Convertible Notes; |
| (i) issue, sell or otherwise deliver, or authorize the issuance, sale or other delivery of, any securities of Zogenix or any of its subsidiaries, other than the issuance of (a) any Shares upon the exercise of Zogenix stock options or purchase rights under the ESPP, in each case, that are outstanding on January 18, 2022 in accordance with their respective terms on January 18, 2022 and in compliance with the terms of the Merger Agreement, (b) any Shares upon the vesting of any RSUs or PSUs, in each case that are outstanding on January 18, 2022 in accordance with their respective terms on January 18, 2022, (c) any Zogenix common stock upon conversion of any Convertible Notes and (d) any securities of any subsidiary of Zogenix to Zogenix or any other wholly owned subsidiary of Zogenix; or (ii) amend any term of any security of Zogenix or any of its subsidiaries (in each case, whether by merger, consolidation or otherwise); |
| incur any capital expenditures (or any obligations or liabilities in respect thereof), other than (i) those set forth in the capital expenditure plan included in the Disclosure Schedule or (ii) unbudgeted capital expenditures in an amount not to exceed, in the aggregate, $1.0 million; |
| acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than supplies in the ordinary course of business of Zogenix and its subsidiaries in a manner that is consistent with past practice; |
| adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization; |
| sell, assign, lease, license or otherwise transfer, abandon, dispose of or permit to lapse, or create or incur any lien (subject to certain exceptions) on, any of Zogenixs or its subsidiaries assets (including any intellectual property rights owned by or licensed to Zogenix or any of its subsidiaries), securities, properties, interests or businesses, other than (i) sales of obsolete equipment in the ordinary course of business consistent with past practice, (ii) non-exclusive licenses of intellectual property rights in the ordinary course of business consistent with past practice that are not material to Zogenix or its subsidiaries, (iii) the abandonment or lapsing of any intellectual property rights which Zogenix has decided in its good faith business judgment are no longer economically justifiable or needed for the conduct of the business or (iv) pursuant to contracts existing as of January 18, 2022 and listed on the Disclosure Schedule; |
| extend, amend, waive, cancel or modify any material rights in or to the intellectual property of Zogenix or any of its subsidiaries in a manner that is adverse to Zogenix or its subsidiaries, (ii) fail to diligently prosecute any material patent application owned by Zogenix or any of its subsidiaries or the intellectual property rights licensed by Zogenix or any of its subsidiaries for which Zogenix or any of its subsidiaries controls the prosecution thereof as of January 18, 2022, except for such applications which Zogenix has decided in its good faith business judgment are no longer economically justifiable or needed for the conduct of the business, or (iii) divulge, furnish or make accessible any material intellectual property rights owned by Zogenix or any of its subsidiaries that constitute trade secrets, |
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other than in the ordinary course of business (consistent with past practice) to any third party that is subject to an enforceable written agreement to maintain the confidentiality of such trade secrets; |
| make any loans, advances or capital contributions to, or investments in, any other person (other than Zogenix or any of its wholly owned subsidiaries), or re-invest any funds or monies in any assets or securities with a credit rating lower than those assets or securities into which such funds or monies are invested as of January 18, 2022, in each case, in an amount in excess of $0.5 million in the aggregate; |
| create, incur, assume, suffer to exist or otherwise become liable with respect to any indebtedness for borrowed money or guarantees thereof, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Zogenix or any of its subsidiaries; |
| other than in the ordinary course of business consistent with past practice, renew, enter into, amend or modify in any material respect or terminate any material contract or any contract that would constitute a material contract if it were in effect on January 18, 2022 (except the expiration or renewal of any material contract in accordance with its terms); provided that the renewal, entry into, amendment or modification in any material respect, or termination of certain categories of contracts specified in the Merger Agreement is not deemed to be in the ordinary course of business consistent with past practice; or (ii) waive, release or assign any material rights, claims or benefits of Zogenix or any of its subsidiaries; |
| except as required by applicable law or any Zogenix equity incentive plan or other employee benefit plan, employment agreement or consulting agreement as in effect on January 18, 2022: (i) with respect to any current or former service provider of Zogenix or any of its subsidiaries, (a) grant any increase in compensation, bonus, severance, retention, change in control, termination pay, welfare or other benefits to any such service provider, or grant any new bonus right or entitlement to any such service provider, other than annual increases in base compensation (and corresponding increases in target bonus compensation) in the ordinary course of business consistent with past practice (and corresponding increases in target bonus compensation) or the execution of new service agreements with independent contractors that provide for an annual base retainer of $200,000 or less and the payment of retainers thereunder, (b) discretionarily accelerate the vesting or payment of any equity or equity-based awards held by any current or former service provider of Zogenix or any of its subsidiaries, (c) grant any equity or equity-based awards to any current or former service provider of Zogenix or any of its subsidiaries, (d) enter into, establish, adopt or amend any employment, consulting services, severance, retention, change in control agreement or arrangement, other than the execution of new services agreements with independent contractors that provide for an annual base retainer of $200,000 or less and the payment of retainers thereunder, or (e) establish, adopt, enter into, or materially amend any Zogenix equity incentive plan or other employee benefit plan or collective bargaining agreement; (ii) recognize any new union, works council or similar employee representative with respect to any current or former service provider of Zogenix or any of its subsidiaries; (iii) enter into any plan or agreement to, or otherwise commit to, gross up or indemnify, or otherwise reimburse any current or former service provider of Zogenix or any of its subsidiaries for any tax incurred by such service provider of Zogenix or any of its subsidiaries, including under Section 409A or Section 4999 of the Code; or (iv)(A) hire or engage the services of any individual as a service provider of Zogenix or any of its subsidiaries whose target annual base salary or base retainer and total target cash bonus opportunity, if any, in the aggregate, is $200,000 or more or (B) or terminate the service of any such service provider of Zogenix or any of its subsidiaries whose target annual base salary or base retainer and total target cash bonus opportunity, if any, in the aggregate, is $200,000 or more other than for cause; |
| fail to keep in full force and effect all material insurance policies maintained by Zogenix and its subsidiaries, other than such policies that expire or are terminated by their terms (in which event Zogenix or its applicable subsidiary are required to use reasonable best efforts to renew, replace or extend such policies) or changes to such policies made in the ordinary course consistent with past practice; |
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| change Zogenixs methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X as promulgated under the Exchange Act, as agreed to by its independent public accountants; |
| settle, or offer or propose to settle, (i) any action (except with respect to immaterial routine matters in the ordinary course of business) in excess of $0.5 million individually or $2.0 million in the aggregate, (ii) any stockholder lawsuit, claim or other proceeding against Zogenix or any of its officers or directors or (iii) any other lawsuit, claim or other proceeding or dispute that relates to the transactions contemplated by the Merger Agreement; |
| unless required by applicable tax law or consistent with past practice, (i) make, adopt, change or revoke any material tax election, material tax accounting period or material method of tax accounting, (ii) amend any income tax return or other material tax return, (iii) enter into any tax sharing agreement, (iv) extend or waive the application of any statute of limitations regarding the assessment or collection of any income taxes or other material tax with respect to Zogenix or any of its subsidiaries, or (v) without the prior written consent of Parent, enter into any closing agreement with respect to taxes, settle any material tax claim, audit or assessment, or surrender any right to claim a material tax refund, offset or other reduction in tax liability; |
| take any action that would result in a change to the Conversion Rate (as defined in the Convertible Notes Indenture) of the Convertible Notes; or |
| agree, resolve or commit to do any of the foregoing. |
Notwithstanding the foregoing, nothing contained in the Merger Agreement is intended to give Parent, directly or indirectly, the right to control or direct Zogenixs or its subsidiaries operations prior to the Effective Time. Prior to the Effective Time, Zogenix and its subsidiaries will exercise, consistent with the Merger Agreement, complete control and supervision over their respective businesses, assets and properties.
Other Covenants and Agreements
Access and Information
Subject to certain exceptions and limitations, from January 18, 2022 until the Effective Time or the earlier termination of the Merger Agreement in accordance with its terms, subject to applicable law and except to the extent necessary to comply with COVID-19 Measures (only for the duration of any such COVID-19 Measure), Zogenix will (i) give Parent and its representatives reasonable access during normal business hours, upon reasonable advance notice, to the offices, properties, books, records, officers, employees, consultants and agents of Zogenix and any of its subsidiaries and (ii) furnish to Parent and its representatives such financial and operating data and other information as such persons may reasonably request, (iii) instruct the employees, consultants, agents, counsel, financial advisors, auditors and other representatives of Zogenix and its subsidiaries to cooperate with Parent in its investigation of Zogenix and its subsidiaries and (iv) (a) diligently conduct its patent prosecution practice in the ordinary course consistent with past practice and in compliance with applicable law, (b) provide Parent with copies of non-confidential correspondence, filings and written communications between Zogenix, any of its affiliates and any of their respective representatives and the U.S. Patent and Trademark Office or similar foreign office and (c) consider in good faith Parents comments and input with respect to submissions to the U.S. Patent and Trademark Office or similar foreign office.
Regulatory Matters
From January 18, 2022 until the earlier to occur of the termination of the Merger Agreement in accordance with its terms and the Effective Time, subject to applicable law, Zogenix will:
| (i) continue to pursue approval by the European Commission of a variation application in the European Union for Fintepla® for the treatment of Lennox-Gastaut syndrome (LGS) in accordance |
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with Zogenixs regulatory development plan; and (ii) timely and diligently take all actions as may be reasonably necessary to obtain such approval as an orphan medical product, including through a number of actions specified in the Merger Agreement. In addition, Zogenix shall not, without Parents prior written consent, take any actions in connection with or in furtherance of such approval in deviation from Zogenixs regulatory development plan; and |
| in connection with the matters specified in the bullet above and also more generally as it relates to interactions with other relevant regulatory authorities, and subject to certain promptness, timeliness, reasonableness and other qualifications: (i) provide Parent with advance notice of and an opportunity for one designated representative of Parent to participate as an observer in any meetings or conference calls Zogenix has with the EMA, FDA or any other similar governmental authority; (ii) provide Parent with advance notice of any inspection or other audit by the EMA, FDA or any other similar governmental authority, and after such inspection or audit provide Parent with a summary thereof and a copy of the full report in respect thereof; (iii) consider and incorporate any comments or other input provided by Parent in respect of the foregoing; (iv) notify Parent of any notice or other communication to Zogenix from the EMA, FDA or any other governmental authority, or a review board, and permit Parent to review in advance any proposed written communication to such governmental authority, and consider Parents comments, in each case in connection with the foregoing; (vi) furnish Parent with non-confidential copies of all correspondence, filings and written communications between Zogenix, its affiliates and their respective representatives, on one hand, and any such governmental authority or its staff, on the other hand, in each case relating to any of the foregoing; (vii) consult with Parent prior to making any significant submission to the EMA, the European Commission, the FDA or any similar governmental authority relating to any of the foregoing, or supplement or amendment thereto; (viii) give Parent opportunity to review and comment on any such submission prior to its submission to such governmental authority, and consider Parents comments thereto; and (ix) use reasonable best efforts to keep available the services of its employees and consultants who are involved in any material respect with any of the foregoing actions. |
No Solicitation; Zogenix Acquisition Proposals
From January 18, 2022 until the earlier to occur of the termination of the Merger Agreement in accordance with its terms and the Effective Time, Zogenix cannot, and must cause its subsidiaries not to, and must use its reasonable best efforts to cause its and its subsidiaries respective representatives not to, directly or indirectly:
| initiate, solicit, propose, knowingly encourage or knowingly take any action designed to facilitate any inquiry regarding, or the making of any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to, an Acquisition Proposal (in each case, other than discussions solely to clarify and understand the terms and conditions of any unsolicited inquiry, proposal or offer, to the extent necessary to determine whether such inquiry, proposal or offer constitutes or would reasonably be expected to result in an Acquisition Proposal); |
| engage in, continue or otherwise participate in any discussions or negotiations relating to any Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal (in each case, other than (i) to state that the Merger Agreement prohibits such discussions or negotiations, or (ii) discussions solely to clarify and understand the terms and conditions of any unsolicited inquiry, proposal or offer, to the extent necessary to determine whether such inquiry, proposal or offer constitutes or would reasonably be expected to result in an Acquisition Proposal); |
| furnish any nonpublic information relating to Zogenix or any of its subsidiaries, or afford access to nonpublic information relating to the business, properties, assets, books or records of Zogenix or any of its subsidiaries to any third party in connection with any Acquisition Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal; |
| amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of Zogenix or any of its subsidiaries, except that, if the Zogenix Board determines |
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in good faith, after consultation with its outside legal counsel, that the failure to amend or grant any waiver or release would be inconsistent with the directors fiduciary duties under the DGCL, Zogenix may then amend or grant a waiver or release under such standstill or similar agreement, solely to the extent necessary to permit a third party to make, on a confidential basis to the Zogenix Board, an Acquisition Proposal, conditioned upon such third party agreeing to disclosure of such Acquisition Proposal to Parent; or |
| otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal or any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal (in each case, other than discussions solely to clarify and understand the terms and conditions of any unsolicited inquiry, proposal or offer, to the extent necessary to determine whether such inquiry, proposal or offer constitutes or would reasonably be excepted to result in an Acquisition Proposal). |
In addition, Zogenix must, and must cause its subsidiaries and must use its reasonable best efforts to cause their respective representatives to, immediately cease and terminate all existing activities, discussions or negotiations, if any, with any third party, its representatives and its financing sources conducted prior to January 18, 2022 with respect to any Acquisition Proposal, or proposal that would reasonably be expected to lead to an Acquisition Proposal.
Notwithstanding the limitations in the preceding paragraphs or any other provision in the Merger Agreement, at any time prior to the Acceptance Time, in response to a bona fide written Acquisition Proposal received after January 18, 2022 that did not arise from or in connection with a breach of Zogenixs obligations related to non-solicitation as set forth in the Merger Agreement, Zogenix may: (i) furnish information in response to a request from the person who made such Acquisition Proposal or its representatives, as long as (a) such information is or was made available to Parent prior to or substantially concurrently with the time such information is made available to such person and (b) prior to furnishing any such information, the person making such Acquisition Proposal enters into a customary confidentiality agreement that contains confidentiality and non-use provisions that are not, in the aggregate, materially less favorable to Zogenix than the terms of the confidentiality agreement entered into with Parent or one of its subsidiaries; and (ii) engage or participate in any discussions or negotiations with any such person regarding such Acquisition Proposal, in each case, as long as the Zogenix Board determines in good faith after consultation with its outside legal counsel and its financial advisor that such Acquisition Proposal constitutes a Superior Proposal or could reasonably be expected to result in a Superior Proposal.
Zogenix must promptly (and, in any event, within 24 hours) give notice to Parent if, (i) any inquiries, proposals or offers with respect to an Acquisition Proposal are received by, (ii) any information is requested in connection with any Acquisition Proposal from, or (iii) any discussions or negotiations with respect to an Acquisition Proposal are sought to be initiated or continued with, in each case of clauses (i) through (iii), it or any of its representatives, setting forth in such notice the name of such person and the material terms and conditions of any proposals or offers (including, if applicable, complete copies of any material written requests, proposals or offers, including proposed agreements) and thereafter must continue promptly (and in any event, within 24 hours) to keep Parent informed on a reasonably current basis of the status and material terms of any such proposals or offers (including any material amendments thereto).
Except as expressly permitted by the Merger Agreement in respect of a Superior Proposal or an Intervening Event, neither the Zogenix Board nor any committee thereof are permitted to: (i) withhold, withdraw, qualify or modify (or publicly propose or resolve to withhold, withdraw, qualify or modify) the Zogenix Board recommendation that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer, in each case in a manner adverse to Parent or Purchaser; (ii) fail to include such recommendation in the Schedule 14D-9; (iii) fail to (a) reaffirm such recommendation, and (b) recommend against acceptance of a tender or exchange offer by Zogenixs stockholders, in each case, subject to certain conditions; (iv) approve or recommend, publicly or privately, any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement,
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merger agreement, option agreement, license agreement, joint venture agreement, partnership agreement or other agreement (other than an acceptable confidentiality agreement, as described above) relating to any Acquisition Proposal (each of the actions set forth in the foregoing clauses (i), (ii), (iii) and (iv) is referred to as an Adverse Recommendation Change); or (v) cause or permit Zogenix to enter into any such agreement described in clause (iv).
At any time prior to the Acceptance Time, the Zogenix Board may effect an Adverse Recommendation Change or terminate the Merger Agreement in order to enter into a binding and definitive written agreement with respect to a Superior Proposal, in each case only if: (i) (a) Zogenix receives a bona fide written Acquisition Proposal after January 18, 2022 that is not withdrawn and that does not result from or arise in connection with a breach of Zogenixs obligations related to non-solicitation as set forth in the Merger Agreement, and the Zogenix Board determines in good faith, after consultation with its outside legal counsel and its financial advisor, that such Acquisition Proposal constitutes a Superior Proposal or (b) an Intervening Event has occurred; and (ii) the Zogenix Board determines in good faith, after consultation with its outside legal counsel and its financial advisor, that failure to take such action in response to such Superior Proposal or Intervening Event, as applicable, would be inconsistent with the directors fiduciary duties under the DGCL. However, prior to taking such action, Zogenix must give Parent written notice of such action and the basis therefor five business days in advance, which notice must include certain details regarding such Superior Proposal or Intervening Event. Thereafter, Zogenix must negotiate in good faith with Parent (to the extent Parent wishes to negotiate) for such five business day-period, to make such revisions to the terms of the Merger Agreement as would cause such Acquisition Proposal to cease to be a Superior Proposal or cause such Intervening Event to cease to warrant an Adverse Recommendation Change. Any amendment to the financial terms and any other material amendment to any Acquisition Proposal will be deemed to be a new Acquisition Proposal and require a new notice from the Zogenix Board, except that Zogenix will only be required to negotiate with Parent for an additional three business days in such case. Prior to taking any action in response to a Superior Proposal or Intervening Event, the Zogenix Board is required to take into account any changes to the terms of the Merger Agreement proposed by Parent during the negotiation periods described above, and must determine in good faith, after consultation with its outside legal counsel and its financial advisor that, (x) in the case of a Superior Proposal, such Superior Proposal continues to constitute a Superior Proposal and, in the case of an Intervening Event, such Intervening Event remains in effect and continues to warrant an Adverse Recommendation Change and (y) the failure to take appropriate action in response to such Superior Proposal or Intervening Event, as applicable, would be inconsistent with the directors fiduciary duties under the DGCL.
For purposes of the Merger Agreement:
| Acquisition Proposal means any indication of interest, offer or proposal (other than as made or submitted by Parent, Purchaser or their affiliates) from any person or group that contemplates or relates to: (i) any merger, consolidation, amalgamation, share exchange, business combination, asset purchase, issuance of securities, acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction that would result in such person or group, directly or indirectly, acquiring beneficial ownership of (a) 20% or more of any class of voting equity securities of Zogenix or of the surviving entity in a merger or the resulting direct or indirect parent of Zogenix or such surviving entity or (b) businesses or assets (including capital stock of the subsidiaries of Zogenix) that constitute 20% or more of the consolidated revenues, net income or assets of Zogenix and its subsidiaries, taken as a whole; or (ii) any sale or license of, or joint venture or partnership with respect to, Fintepla®. |
| Intervening Event means any material event, state of facts, circumstance, change, occurrence, development, condition or effect that was neither known to, nor reasonably foreseeable by, Zogenix as of or prior to January 18, 2022, and which becomes known to the Zogenix Board after January 18, 2022 and prior to the Acceptance Time, except that none of the following constitute or contribute to an Intervening Event: (i) changes in the market price or trading volume of the Shares, in and of itself (but not the underlying cause of such changes, unless such underlying cause would otherwise be excepted |
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from this definition); or (ii) the receipt, existence or terms of any Acquisition Proposal or any inquiry, offer, request or proposal that would reasonably be expected to lead to an Acquisition Proposal. |
| Superior Proposal means a bona fide written Acquisition Proposal made after January 18, 2022 that: (i) did not result from or arise in connection with a breach of Zogenixs obligations related to non-solicitation as set forth in the Merger Agreement; (ii) if consummated, would result in any person or group (other than Parent or its affiliates) becoming the beneficial owner, directly or indirectly, of more than 50% of the consolidated assets of Zogenix and its subsidiaries or more than 50% of the total voting power of the equity securities of Zogenix; and (iii) the Zogenix Board determines in good faith, after considering the advice of an independent financial advisor of nationally recognized reputation and outside legal counsel, (a) if consummated, would result in a transaction more favorable (taking into account all legal, regulatory and financing aspects of the proposal and all other factors the Zogenix Board deems relevant) to Zogenixs stockholders (solely in their capacity as such) than the transactions contemplated by the Merger Agreement (including any revisions to the terms of the Merger Agreement proposed by Parent) and (b) is reasonably likely to be consummated on the terms proposed, taking into account all legal, regulatory and financing aspects of the proposal and all other factors considered relevant by the Zogenix Board. |
The Merger Agreement provides that nothing will prevent Zogenix from (i) taking or disclosing a position, or making a statement, in each case to the extent required under Rule 14e-2(a) or Rule 14d-9 under the Exchange Act or Item 1012(a) of Regulation M-A promulgated under the Exchange Act with regard to an Acquisition Proposal so long as such position or statement is consistent with Zogenixs no solicitation obligations and expressly reaffirms the Zogenix Board recommendation that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.
Employee Matters
During the period commencing on the Effective Time and ending on the first anniversary thereof, Parent will provide, or will cause the Surviving Corporation to provide, to each continuing employee (during such employees employment) with:
| base salary or base wages and an annual target bonus opportunity that, in each case, is no less than those provided to such continuing employee immediately prior to the Effective Time (excluding any retention or other special or non-recurring bonus); |
| other compensation and employee benefits that are substantially comparable in the aggregate to those offered by Zogenix to the continuing employees as of immediately prior to the Effective Time (excluding equity or equity based compensation and any retention, change in control or transaction-based compensation); and |
| severance pay to continuing employees terminated without cause equal to the severance benefits that would have been provided under the relevant Zogenix plan as in effect immediately prior to the Effective Time had such termination occurred at the Effective Time. |
With respect to certain employee benefit plans maintained by Parent or any of its controlled affiliates, in each case, in which any continuing employee will participate on or after the Effective Time, Parent is required to, and to cause the Surviving Corporation to, recognize all service with Zogenix or any of its controlled affiliates rendered prior to the Effective Time by such continuing employee for purposes of vesting, eligibility and benefit accrual (other than under any defined benefit pension plans) under the terms of such employee benefit plan. However, Parent is not required to recognize service with Zogenix or any of its controlled affiliates rendered prior to the Effective Time if doing so would result in the duplication of benefits. In addition, Parent is required to use reasonable best efforts to (i) waive, or cause to be waived, any limitations on benefits relating to pre-existing conditions to the same extent such limitations are waived under any analogous plan of Zogenix or any of its controlled affiliates applicable to such continuing employee prior to the Effective Time, (ii) recognize,
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for purposes of annual deductible, co-payment and out-of-pocket limits under its health and welfare plans, deductible, co-payment and out-of-pocket expenses paid by a continuing employee in the plan year in which the Effective Time occurs, and (iii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a continuing employee and eligible covered dependents on or after the Effective Time, to the extent such continuing employee or eligible covered dependent satisfies any similar limitation or requirement under an analogous Zogenix plan prior to the Effective Time.
From and after the Effective Time, the Surviving Corporation will (and Parent will cause the Surviving Corporation to) honor all Zogenix employee benefit plans and employment agreements in accordance with their terms as in effect immediately prior to the Acceptance Time, but without prohibiting Parent or the Surviving Corporation from amending or terminating any of them in accordance with their terms or as required by law.
Prior to the Effective Time, Zogenix will take all actions necessary or appropriate to terminate Zogenixs equity incentive plans and 401k plans (unless Parent provides notice to Zogenix at least 10 business days prior to the Effective Time requesting otherwise), effective as of the day immediately prior to, and contingent upon, the closing of the Merger.
Efforts to Consummate the Merger
Each of Zogenix and Parent must use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Merger Agreement, including (i) taking all acts necessary to cause the conditions to the other partys obligation to close to be satisfied as promptly as practicable (and prior to the End Date), (ii) obtaining all necessary consents, approvals or waivers from, and giving all required notices to, any third party, (iii) preparing and filing as promptly as practicable with any governmental authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents and (iv) obtaining and maintaining all permits required to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate the transactions contemplated by the Merger Agreement.
Notwithstanding the foregoing, neither Parent nor any of its affiliates are required to (i) initiate, litigate, challenge, defend or otherwise participate or take any action with respect to any action, suit, investigation or similar proceeding by, against or involving any third party or governmental authority, (ii) enter into any settlement, undertaking, consent decree, stipulation or agreement with any governmental authority, (iii) otherwise take any other steps or actions to defend against, vacate, modify or suspend any injunction or order of any governmental authority, including any injunction related to a private cause of action that would prevent the consummation of the transactions contemplated by the Merger Agreement, (iv) agree, propose, negotiate, offer, sell, divest, lease, license, transfer, dispose of or otherwise encumber or hold separate (including by establishing a trust, licensing any intellectual property rights or otherwise), or take any other action (including by providing its consent to permit Zogenix or any of its subsidiaries to take any such actions), or otherwise proffer or agree to do any of the foregoing, with respect to any of the businesses, assets or properties of Parent, Zogenix, the Surviving Corporation or any of their respective affiliates or subsidiaries, (v) terminate any existing relationships or contractual rights or obligations or (vi) otherwise offer to take or offer to commit to take any action that would limit Parents or any of its affiliates freedom of action with respect to, or ability to retain, operate or otherwise exercise full rights of ownership with respect to, businesses, assets or properties of Parent, Zogenix, the Surviving Corporation or any of their respective affiliates or subsidiaries (or equity interests held by Parent or any of its affiliates in entities with businesses, assets or properties). At the request of Parent, Zogenix is required to agree to divest, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, services, or assets of Zogenix or any of its subsidiaries, as long as such action described in this sentence is conditioned on, and effective upon or after, the occurrence of the closing of the Merger.
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Zogenix and Parent are required to as promptly as practicable, and in any event within 10 business days following January 18, 2022, make their respective filings under the HSR Act. Zogenix, Parent and their respective affiliates expect to file their respective HSR Act notifications on or about February 1, 2022. Zogenix and Parent are required to make appropriate filings pursuant to any other applicable antitrust law with respect to the Merger as promptly as practicable after January 18, 2022. Zogenix and Parent have determined they will make a filing with Germanys Federal Cartel Office. From that time and thereafter, Zogenix and Parent are required to supply as promptly as practicable any additional information or documentary material, and use reasonable best efforts to take all other actions necessary, to cause the expiration or termination of the applicable waiting periods under any antitrust law.
To the extent permitted by applicable law, each of Parent and Zogenix must use its reasonable best efforts to (i) keep the other party apprised of the status of matters relating to the completion of the transactions contemplated by the Merger Agreement and cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any lawsuit, claim or similar proceeding initiated by a third party, (ii) promptly inform the other party of any communication received from, or given to, any governmental authority and of any material communication received or given in connection with any lawsuit, claim or similar proceeding by a third party, in each case regarding any of the transactions contemplated by the Merger Agreement, and (iii) permit the other party to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any such governmental authority or, in connection with any lawsuit, claim or similar proceeding by a third party, with any other person, and to the extent reasonably practicable, give the other party the opportunity to attend and participate in such meetings and conferences.
Liquidation of Investments
Prior to the Effective Time, Zogenix will use its reasonable best efforts to liquidate or otherwise convert all of its funds or investments held in the form of marketable securities such that, immediately after the Effective Time, the proceeds thereof shall be held in readily available cash.
Indemnification of Directors and Officers; Insurance
For six years after the Effective Time, Parent is required to cause the Surviving Corporation and its subsidiaries as of the Effective Time to (i) honor and fulfill in all respects the obligations of Zogenix and its subsidiaries under the indemnification, expense advancement and exculpation provisions in the certificate of incorporation or amended and restated bylaws or comparable organizational documents of Zogenix or such subsidiary, in each case, in effect on January 18, 2022, and (ii) indemnify and hold harmless each current or former director, officer or employee of Zogenix or any of its subsidiaries against any losses incurred by such person in respect of any lawsuit, claim or other similar proceeding based upon or arising out of the fact that such person was a director, officer or employee of Zogenix or any of its subsidiaries at or prior to the Effective Time to the fullest extent permitted by the DGCL and any other applicable law and the certificate of incorporation and amended and restated bylaws (or other similar organizational documents) of Zogenix and its subsidiaries in effect on January 18, 2022 (subject to any limitation imposed from time to time under applicable law). In addition, for six years after the Effective Time, Parent is required to cause to be maintained in effect provisions in the certificate of incorporation and bylaws (and other similar organizational documents) of the Surviving Corporation and its subsidiaries regarding elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on January 18, 2022, and during such six-year period, such provisions cannot be repealed, amended or otherwise modified in any manner adverse to such indemnified persons, except as required by applicable law.
Parent is required to, or to cause the Surviving Corporation to, purchase directors and officers insurance policies and fiduciary liability insurance policies or tail insurance policies with a claims period of six years from the Effective Time. In each case, such policies must have terms, conditions, retentions and limits of liability
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that are at least as favorable as those contained in Zogenixs equivalent insurance policies in effect as of January 18, 2022 with respect to matters arising on or before the Effective Time. However, (i) the Surviving Corporation may substitute therefor policies of at least the same coverage and amounts containing terms no less advantageous to such former directors or officers so long as such substitution does not result in gaps or lapses of coverage with respect to matters occurring at or prior to the Effective Time, and (ii) in no event will Parent or the Surviving Corporation be required to expend for such policies an annual premium amount in excess of 300% of the annual premium amount paid by Zogenix for such insurance in its last full fiscal year prior to January 18, 2022. If such insurance coverage cannot be obtained at an annual premium equal to or less than such amount, the Surviving Corporation will obtain the greatest coverage available for a cost not exceeding such amount. Parent also has the option to satisfy the above obligations by directing Zogenix to, prior to the Effective Time, purchase a prepaid tail policy with the coverage described in this paragraph.
Financing Covenants
The Merger Agreement requires that Parent use its reasonable best efforts to obtain the funds that its financing sources have agreed to lend to Parent or one of its affiliates on the terms and conditions provided in the Facility Agreement (referred to as the Financing). Parent is prohibited, without the prior written consent of Zogenix (which consent shall not be unreasonably withheld, conditioned or delayed), from permitting certain amendments or modifications to, or granting waivers of any provision under, the Facility Agreement, that would (i) reduce (or could have the effect of reducing) the aggregate amount of any portion of the Financing below the amount required, when taken together with all other sources of funding available for payment thereof, to pay the aggregate Cash Amount at the Acceptance Time and on the Closing Date, (ii) impose new or additional conditions precedent to the availability of the Financing or otherwise expand, amend or modify any of the conditions thereof in a manner that could reasonably be expected to delay or prevent or make less likely to occur the funding of the Financing (or satisfaction of such conditions) on the Closing Date or (iii) adversely impact Parents ability to enforce its rights against other parties to the Facility Agreement. Notwithstanding anything to the contrary contained in the Merger Agreement, Parent and Purchaser have the right to replace all or any portion of the Financing with any other debt or equity financing, from the same or any alternative financing sources, so long as such substitute financing would not impose new, revised or additional conditions precedent to the availability of such alternative financing relative to the Financing in a manner that would reasonably be expected to delay or prevent or make less likely to occur the funding of such alternative financing relative to the Financing or otherwise adversely impact the ability of Parent and Purchaser to consummate the transactions contemplated by the Merger Agreement at the Acceptance Time and on the Closing Date.
Prior to the Acceptance Time, Zogenix must, and must cause its subsidiaries to, use reasonable best efforts to provide Parent and Purchaser such cooperation in connection with obtaining the Financing as may be reasonably requested by Parent or Purchaser, including, but not limited to: (i) assisting in the preparation for and participating in meetings and calls relating to the Financing; (ii) assisting in the preparation of bank information memoranda and similar marketing documents; (iii) reasonably cooperating with customary marketing efforts; (iv) delivering information regarding Zogenix and its subsidiaries required by the financing sources to prepare pro forma financial statements and projections; (v) delivering financial statements of Zogenix and its subsidiaries within 40 days of the end of each fiscal quarter (other than the fourth fiscal quarter in any fiscal year) and with 75 days of the end of each fiscal year; (vi) obtaining customary consents, approvals and authorizations required in connection with the Financing; (vii) reasonably cooperating in any customary process required for due diligence and verification; and (viii) taking all customary corporate actions reasonably requested by Parent or Purchaser that are necessary or advisable to permit the consummation of the Financing.
Notwithstanding the foregoing, none of Zogenix, its subsidiaries or any of their respective directors, officers, employees, agents or representatives is required to: (i) take any action or provide any assistance (a) that unreasonably interferes in any material respect with the ongoing operations of Zogenix or its subsidiaries, (b) to the extent it would reasonably be expected to cause any representation or warranty of Zogenix in the Merger Agreement to be breached or any Offer Condition to fail to be satisfied or (c) that Zogenix reasonably believes
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would result in a violation by it or any of its subsidiaries of certain contracts entered into by Zogenix or its subsidiaries, or any material confidentiality arrangement, or the loss of any legal or other applicable privilege by Zogenix or any of its subsidiaries in a manner that would be materially adverse to their respective interests; (ii) execute or deliver any contract that by its terms becomes effective prior to the Closing Date or is not capable of being terminated without liability to Zogenix or any of its affiliates upon the termination of the Merger Agreement; (iii) except as otherwise expressly provided in the Merger Agreement, take any corporate or similar action in connection with the Financing that is not conditioned on the occurrence of the Acceptance Time; (iv) except as set forth in clause (i)(c) above, agree to any amendment or modification, effective prior to the closing of the Merger, of any existing contract to which it is a party; or (v) pay any commitment or other similar fee in connection with the Financing prior to the Acceptance Time.
Obtaining the Financing is not a condition to closing the Merger.
Miscellaneous Covenants
The Merger Agreement contains additional agreements among Zogenix, Parent and Purchaser relating to, among other matters:
| the coordination of press releases and other public announcements or filings relating to the transactions; |
| notification upon the occurrence or non-occurrence of certain matters; |
| actions necessary to cause Purchaser to perform its obligations under the Merger Agreement; |
| reporting requirements under Section 16 of the Exchange Act; |
| the delisting of the Shares from Nasdaq and the deregistration of Zogenix common stock under the Exchange Act; |
| anti-takeover statutes that become applicable to the transactions; |
| the delivery by Zogenix of a certification that Zogenix is not a United States real property holding corporation as defined under the Code and any other materials required by the IRS with respect thereto; and |
| any litigation against Zogenix and/or its directors or its officers relating to or in connection with the Merger Agreement, the Merger or any other transactions contemplated by the Merger Agreement. |
Conditions to the Merger and Offer
The obligations of Zogenix, Parent and Purchaser to consummate the Merger are subject to the satisfaction (or, to the extent permitted by law, the waiver in writing by each such party) prior to the Effective Time of the following conditions:
| the absence of any (i) temporary restraining order, preliminary or permanent injunction or other order, in each case issued by a governmental authority, that prohibits or makes illegal the consummation of the Merger or (ii) any law applicable to the merger that prohibits or makes illegal the consummation of the Merger; and |
| Purchaser, or Parent on Purchasers behalf, having accepted for payment all of the Shares validly tendered and not validly withdrawn. |
| the expiration or termination of any applicable waiting period under the HSR Act and (ii) any other clearance, approval or consent that is required under any other applicable antitrust law. |
The obligations of Purchaser to accept for payment for any Shares validly tendered and not validly withdrawn pursuant to the Offer are subject to the satisfaction of the Offer Conditions, as described in in Section 15Conditions of the Offer.
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Termination
The Merger Agreement may be terminated and the transactions contemplated thereby may be abandoned, at any time prior to the Acceptance Time, as follows:
| by mutual written agreement of Zogenix and Parent; |
| by either Zogenix or Parent, if: |
○ | the Acceptance Time has not occurred at or before 5:00 p.m. (New York City time) on the End Date, which may be extended by either party from July 18, 2022 to October 18, 2022, if on July 18, 2022, all of the Offer Conditions (except those Offer Conditions that by their nature are to be satisfied at the Acceptance Time, so long as such conditions are reasonably capable of being satisfied), other than the (i) Antitrust Approval Condition (B) the Governmental Impediment Condition solely as it relates to antitrust laws, except that the right to terminate the Merger Agreement as described in this bullet will not be available to any party that has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that is the primary cause of or primarily results in the failure of the Acceptance Time to have occurred at or before the End Date; |
○ | a governmental authority has issued an order, a decree or a ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acceptance for payment of Shares pursuant to the Offer or the Merger or making the consummation of the Offer or the Merger illegal, which order, decree, ruling or other action shall be final and non-appealable, except that the party seeking to terminate the Merger Agreement as described in this bullet must have used reasonable best efforts to prevent the entry of and to remove such final and non-appealable order, decree, ruling or other action, and this right to terminate the Merger Agreement will not be available to any party that has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that is the primary cause of or primarily results in the issuance of such order, decree, ruling or taking such action by a governmental authority; or |
○ | following the Effective Time, Purchaser has not accepted for payment all Shares validly tendered (and not withdrawn) pursuant to the Offer promptly after the expiration of the Offer. |
| by Parent, if: |
○ | an Adverse Recommendation Change occurs; or |
○ | Zogenix breaches or fails to perform any representation, warranty, covenant or agreement set forth in the Merger Agreement, which breach or failure to perform would cause any of the Offer Conditions not to be satisfied, and such breach or failure is incapable of being cured by the End Date or, if curable by the End Date, is not cured by Zogenix within the earlier of (i) 30 days of receipt by Zogenix of written notice from Parent of such breach or failure or (ii) three business days prior to the End Date, except that Parent will not have the right to terminate the Merger Agreement as described in this bullet if Parent or Purchaser has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that is the primary cause of or primarily results in the failure of Offer Condition to be satisfied; |
| by Zogenix, if: |
○ | Zogenix accepts a Superior Proposal and enters into, immediately following such termination, a binding and definitive written agreement with respect to such Superior Proposal, except that the right to terminate the Merger Agreement as described in this bullet is only available if (i) Zogenix has materially complied with its obligations related to non-solicitation and as more fully described under The Merger AgreementNo Solicitation; Zogenix Acquisition Proposals beginning on |
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page 45 of this Offer to Purchase and (ii) Zogenix pays to Parent the termination fee as more fully described under The Merger AgreementTermination Fee; Certain Expenses beginning on page 54 of this Offer to Purchase; or |
○ | Parent or Purchaser breaches or fails to perform any representation, warranty, covenant or agreement set forth in the Merger Agreement, which breach or failure to perform would cause any of the conditions to Zogenixs obligations to consummate the Merger not to be satisfied, and such breach or failure is incapable of being cured by the End Date or, if curable by the End Date, is not cured by Parent or Purchaser within the earlier of (i) 30 days of receipt by Parent or Purchaser from Zogenix of written notice of such breach or failure or (ii) three business days prior to the End Date, except that Zogenix will not have the right to terminate the Merger Agreement as described in this bullet if Zogenix has breached in any material respect any of its representations, warranties, covenants or agreements set forth in the Merger Agreement in any manner that is the primary cause of or primarily results in the failure of a condition to the consummation of the Merger to be satisfied. |
Termination Fee; Certain Expenses
Zogenix must pay to Parent a termination fee of $59.0 million in cash in the event that the Merger Agreement is terminated:
| (i) by either Zogenix or Parent because the Acceptance Time has not occurred by the End Date, (ii) by either Zogenix or Parent because, following the expiration of the Offer, Purchaser has not accepted for payment all Shares validly tendered (and not withdrawn) pursuant to the Offer or (iii) by Parent because Zogenix breached or failed to perform any representation, warranty, covenant or agreement set forth in the Merger Agreement and fails to timely cure such breach or failure, if curable, and in each case: |
○ | an Acquisition Proposal had been publicly made directly to Zogenixs stockholders or had otherwise become publicly known, or any person had publicly announced an intention (whether or not conditional) to make an Acquisition Proposal; |
○ | such Acquisition Proposal or public announcement had not been publicly withdrawn without qualification, in each case, (x) prior to the date of termination (with respect to clauses (i) or (iii) above) or (y) prior to the expiration of the Offer (with respect to clause (ii) above); and |
○ | at any time within 12 months after such termination, (1) Zogenix or any of its subsidiaries enters into a binding agreement with respect to any Acquisition Proposal that is ultimately consummated (whether during such 12-month period or thereafter) or (2) any Acquisition Proposal is consummated (provided that for purposes of this provision, each reference to 20% in the definition of Acquisition Proposal is a reference to 50%); |
| by Parent because the Zogenix Board made an Adverse Recommendation Change; |
| at a time when Parent had the right to terminate the Merger Agreement because the Zogenix Board made an Adverse Recommendation Change, but the Merger Agreement is terminated: |
○ | by Zogenix because the Acceptance Merger has not occurred by the End Date; or |
○ | by either Zogenix or Parent because, following the expiration of the Offer, Purchaser has not accepted for payment all Shares validly tendered (and not withdrawn) pursuant to the Offer; or |
| by Zogenix in order to accept a Superior Proposal and enter into, immediately following such termination, a binding and definitive written agreement with respect to such Superior Proposal. |
The Merger Agreement further provides that in the event Zogenix fails to pay any termination fee to Parent within the time frame provided in the Merger Agreement, and Parent or Purchaser commences a suit resulting in
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a judgment against Zogenix for any portion of the fees or expenses due, Zogenix will be required to pay to Parent or its designee the costs and expenses (including reasonable attorneys fees) in connection with such suit, together with interest on the amount of the termination fee for the date such payment was required to be made until the date of payment. Zogenix is not obligated to pay the termination fee on more than one occasion.
Other than in the case or fraud or a willful breach of the Merger Agreement, any termination fee payable by Zogenix will be Parents sole and exclusive remedy for damages against Zogenix and its former, current or future stockholders, directors, officers, affiliates, agents or other representatives for any loss suffered as a result of any breach of any representation, warranty, covenant or agreement set forth in the Merger Agreement or the failure of the Merger to be consummated.
Expenses Generally
Except as otherwise described above or provided in the Merger Agreement, whether or not the Merger is consummated, Zogenix and Parent are each responsible for all of their respective costs and expenses incurred in connection with the Merger and the transactions contemplated by the Merger Agreement.
The Merger Agreement also provides that Parent will be required to reimburse Zogenix for the fees and expenses of counsel, accountants and consultants incurred by Zogenix or on Zogenixs behalf in connection with or related to the entry into the Merger Agreement in an amount, in the aggregate, not to exceed $5.0 million, in the event that the Merger Agreement is terminated by either Zogenix or Parent because (i) the Acceptance Time has not occurred by the End Date and, at the time of such termination, either or both of the Antitrust Approval Condition and the Governmental Impediment Condition (solely as it relates to antitrust laws) has not or have not been satisfied, or (ii) as a result of any order, decree, ruling or other action of or by a governmental authority arising under any antitrust law, and, in the case of each of clauses (i) or (ii), at the time of such termination, (a) all of the other Offer Conditions other than those described in clause (i) have been satisfied or waived (except for (x) those Offer Conditions that by their nature are to be satisfied at the Acceptance Time, so long as such conditions are reasonably capable of being satisfied, and (y) the Minimum Condition) and (b) Zogenix is not in breach in any material respect of its obligations under the Merger Agreement in any manner that primarily contributed to the failure of the Offer Conditions referred to in clause (i) above or the imposition of the order, decree, ruling or other action that resulted in the termination referred to in the foregoing clause (ii) above, as applicable.
Specific Performance
The parties to the Merger Agreement are entitled (in addition to any other remedy to which they may be entitled in law or equity) to an injunction to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement.
Amendments; Waiver
Any provision of the Merger Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to the Merger Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. After the Acceptance Time, no such amendment will be made that (i) decreases the amount, or changes the form, of the Offer Price or the Merger Consideration or (ii) would require the approval of the Zogenix stockholders under applicable law, unless such approval has been obtained
The amendment or modification of certain limited provisions of the Merger Agreement that benefit Parents financing sources in connection with the Financing, which amendment or modification is materially adverse to such financing sources, requires the prior written consent of such materially and adversely affected financing sources.
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Governing Law and Jurisdiction
The Merger Agreement is governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
Any action or lawsuit seeking to enforce any provision of, or based on any matter arising out of or in connection with, the Merger Agreement or the transactions contemplated thereby (whether brought by any party or any of its affiliates or against any party or any of its affiliates) is required to be brought in the Delaware Chancery Court or, if such court does not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court.
Notwithstanding the foregoing, any action against Parents financing sources in connection with the Financing (in their capacities as such) arising out of, or relating to, the transactions contemplated by the Merger Agreement, the Financing or the performance of services thereunder or related thereto will be, except as expressly provided otherwise in the definitive documentation pertaining to such Financing, governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of law rules of such jurisdiction that would result in the application of the laws of any other jurisdiction, and will be required to be brought in the United States District Court for the Southern District of New York.
CVR Agreement
Each CVR represents a non-transferable contractual contingent right to receive a cash payment of $2.00, without interest and less any required withholding taxes, upon the achievement of the applicable milestone (each such amount, a Milestone Payment) in accordance with the terms of a Contingent Value Rights Agreement to be entered into between Parent and a rights agent (the Rights Agent) mutually agreeable to Parent and Zogenix (the CVR Agreement).
The Milestone Payment is payable (subject to certain terms and conditions) if, and only if, no later than December 31, 2023, the European Commission approves Zogenixs product Fintepla® as an orphan medicinal product for treatment of seizures associated with Lennox-Gastaut syndrome, following an opinion rendered by the Committee for Orphan Medicinal Products of the European Medicines Agency (EMA) recommending that fenfluramine hydrochloride for the treatment of LGS not be removed from the Community Register of Orphan Medicinal Products (the Milestone).
From the Effective Time until the earlier of (x) such date on which the European Commission grants approval of a marketing authorisation application or variation application in the European Union for Fintepla® for the treatment of LGS and (y) December 31, 2023, the CVR Agreement requires Parent to, and to cause its assignees, licensees, any subsidiaries of the foregoing and their respective transferees, successors or assignees to, use commercially reasonable efforts to achieve the Milestone described above. However, Parent and such other entities (i) may, in their sole discretion, withdraw such variation application if the Committee for Orphan Medicinal Products of the EMA renders an opinion with respect to such application that recommends that fenfluramine hydrochloride for the treatment of LGS be removed from the Community Register of Orphan Medicinal Products (any such opinion, an Adverse COMP Opinion) and (ii) will not have any duty or be required to (A) take any action that would, or would reasonably be expected to, result in the loss of the orphan drug designation for Fintepla® for the treatment of Dravet syndrome in the European Union, (B) conduct, or commit to conduct, any additional efficacy studies (including any randomized controlled trial) in connection with obtaining such approval or (C) appeal any Adverse COMP Opinion.
As used in the CVR Agreement, commercially reasonable efforts means the level of efforts and resources that are consistent with the level of efforts and resources normally used, in good faith, by Parent to obtain a marketing
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authorization for an orphan medicinal product by the European Commission for a product which is at a similar stage in development and has a similar market potential as Fintepla®, taking into account all scientific, commercial and other relevant factors that Parent, exercising good faith, would normally take into account with such similar products that it owns or has in-licensed, including patent coverage, expiration and term extension, regulatory and other exclusivity, manufacturing and supply chain, product profile, safety and efficacy, anticipated product labeling, the competitiveness of alternative products in the marketplace or under development, the regulatory structure involved, the regulatory environment, the availability of coverage and reimbursement, and the expected profitability of the applicable product (including development costs and time lines, cost of goods and all other costs associated with the applicable product and time lines associated with commercial entry). Commercially reasonable efforts are to be determined without taking into account the Milestone Payment.
There can be no assurance that the Milestone described above will be achieved on or prior to December 31, 2023 and that the resulting payment will be required of Parent with respect to the Milestone.
If the Milestone is achieved on or prior to December 31, 2023, Parent will deliver as promptly as practicable (and in any event no later than 30 days) after the date on which the Milestone is achieved, to the Rights Agent, a written notice indicating that the Milestone has been achieved, any letter of instruction required to be delivered to the Rights Agent and cash, by wire transfer of immediately available funds to an account specified by the Rights Agent, equal to the aggregate amount necessary to pay the Milestone Payment to all holders of the CVRs, except to former holders of Zogenix equity awards (in which case payment shall be made through payroll no later than the earlier of (i) the second regular payroll date following the date of payment of the Milestone and (ii) the date that is 75 days following the date on which the Milestone is achieved). If the Milestone is not achieved by December 31, 2023, Parent will within 30 days thereafter deliver to the Rights Agent a written notice indicating the Milestone was not achieved and that no payment is due to the holders of the CVRs.
The CVRs will not be transferable except (i) upon death of a holder by will or intestacy; (ii) pursuant to a court order; (iii) by operation of law (including a consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; (iv) in the case of CVRs held in book-entry or similar nominee form, from a nominee to a beneficial owner and, if applicable, through an intermediary, to the extent allowable by DTC. In addition, CVRs may be abandoned by the holder by transfer to Parent without consideration, via delivery of a written abandonment notice to Parent.
The rights to payment described above are solely contractual rights governed by the terms and conditions of the CVR Agreement. The CVRs will not be evidenced by a certificate or other instrument, will not have any voting or dividend rights and will not represent any equity or ownership interest in Parent, Purchaser, or Zogenix. The CVRs will not be registered or listed for trading. No interest will accrue or be payable in respect of any of the amounts that may become payable on the CVRs.
The Rights Agent will keep a register for the purpose of (i) identifying the holders of CVRs and (ii) registering CVRs and permitted transfers thereof. The register will initially show one position for Cede & Co. representing all the Shares held by DTC on behalf of the street holders of the Shares as of immediately prior to the Effective Time. The Rights Agent will have no responsibility whatsoever directly to the street name holders with respect to transfers of CVRs unless and until such CVRs are transferred into the name of such street name holders in accordance with the terms of the CVR Agreement. Parent will furnish to the Rights Agent (i) the names and addresses of the holders of Shares within 30 business days after the Effective Time, in such form as Parent receives from Zogenixs transfer agent, (b) the names and addresses of the holders of Convertible Notes within 10 business days after any conversion of Convertible Notes, in such form as Parent receives from the trustee for the Convertible Notes and (c) in the case of holders of Zogenix equity awards, the name and address of the holder set forth in the books and records of Zogenix at the Effective Time and in accordance with the terms of the Merger Agreement.
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Except in certain limited circumstances, Parent may not, without the consent of holders of not less than a majority of the outstanding CVRs, amend the terms of the CVR Agreement in a manner that would be materially adverse to the interest of the holders of CVRs.
Only the holders of at least a majority of the outstanding CVRs or the Rights Agent will have the right, on behalf of all Holders to institute any action or proceeding with respect to the CVR Agreement. No individual holder of CVRs or other group of holders of CVRs will be entitled to exercise such rights.
The foregoing description of the CVR Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the CVR Agreement, a form of which is filed as Exhibit (d)(2) of the Schedule TO.
Other Agreements
Confidentiality Agreement
UCB Biopharma SPRL, a wholly owned subsidiary of Parent (UCB Biopharma) and Zogenix entered into a Confidentiality Agreement dated as of August 25, 2021 (the Confidentiality Agreement), in connection with a possible commercial relationship in Europe related to Zogenixs product Fintepla®, further amended as of January 3, 2022, to expand such scope to include the evaluation, discussion and negotiating of a potential acquisition of Zogenix by UCB Biopharma or one of its affiliates. Pursuant to the Confidentiality Agreement, subject to certain customary exceptions, UCB Biopharma and Zogenix agreed to, and to cause their respective affiliates to, keep confidential certain proprietary or non-public information disclosed by or on behalf of the other party Zogenixor its representatives for a period of six years, and to use any such information only for the stated purposes described in this paragraph.
This summary of the Confidentiality Agreement is only a summary and is qualified in its entirety by reference to the Confidentiality Agreement, filed as Exhibit (d)(3) of the Schedule TO, and the First Amendment to the Confidentiality Agreement, filed as Exhibit (d)(4) of the Schedule TO, each incorporated herein by reference.
12. Purpose of the Offer; Plans for Zogenix
Purpose of the Offer
The purpose of the Offer is for Parent, through Purchaser, to acquire control of, and the entire equity interest in, Zogenix. The Offer, as the first step in the acquisition of Zogenix, is intended to facilitate the acquisition of all outstanding Shares. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. If the Offer is consummated, Purchaser intends to complete the Merger as soon as practicable thereafter.
The Zogenix Board has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the Acceptance Time; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
If the Offer is consummated, we are not required to and will not seek the approval of Zogenixs remaining stockholders before effecting the Merger. Section 251(h) of the DGCL provides that following the consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the acquirer holds at least the amount of shares of each class of stock of such corporation that would otherwise be required to approve a merger for such corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquirer can effect a merger without a vote of the other
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stockholders of such corporation. Accordingly, if we consummate the Offer, we are required pursuant to the Merger Agreement to complete the Merger without a vote of Zogenixs stockholders in accordance with Section 251(h) of the DGCL.
Plans for Zogenix
After completion of the Offer and the Merger, Zogenix will be an indirect wholly owned subsidiary of Parent. Except as set forth in this Offer to Purchase and the Merger Agreement, Parent and Purchaser have no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving Zogenix (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of Zogenix, (iii) any material change in Zogenixs capitalization or dividend policy or (iv) any other material change in Zogenixs corporate structure or business, (v) any change to the board of directors or management of Zogenix, (vi) a class of securities of Zogenix being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of Zogenix being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act.
13. Certain Effects of the Offer
Because the Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger. Promptly after the consummation of the Offer, and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, we and Zogenix will consummate the Merger as soon as practicable following the Acceptance Time pursuant to Section 251(h) of the DGCL. Immediately following the Merger, all of the outstanding shares of Zogenixs common stock will be held by UCB Biosciences, Inc., an indirect wholly owned subsidiary of Parent.
Market for the Shares. If the Offer is successful, there will be no market for the Shares because Purchaser intends to consummate the Merger as soon as practicable and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement.
Stock Quotation. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued listing on Nasdaq if, among other things, Zogenix does not meet the requirements for the number of publicly held Shares, the aggregate market value of the publicly held Shares or the number of market makers for the Shares. Parent will seek to cause the listing of the Shares on Nasdaq to be discontinued as promptly as practicable after the Effective Time as the requirements for termination of the listing are satisfied.
If Nasdaq were to delist the Shares, it is possible that the Shares would continue to trade on other securities exchanges or in the over-the-counter market and that price or other quotations of the Shares would be reported by other sources. The extent of the public market for such Shares and the availability of such quotations would depend, however, upon such factors as the number of stockholders and the aggregate market value of such securities remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act, and other factors.
Margin Regulations. The Shares are currently margin securities under the Regulations of the Board of Governors of the Federal Reserve System (the Federal Reserve Board), which has the effect, among other things, of allowing brokers to extend credit based on the use of Shares as collateral. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is possible that, following the Offer, the Shares would no longer constitute margin securities for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.
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Exchange Act Registration. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of Zogenix to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by Zogenix to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Zogenix, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to going private transactions. Furthermore, the ability of affiliates of Zogenix and persons holding restricted securities of Zogenix to dispose of such securities pursuant to Rule 144 under the Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be margin securities or be eligible for listing on Nasdaq. We intend to cause the delisting of the Shares from Nasdaq and the termination of the registration of the Shares under the Exchange Act as soon after completion of the Merger as the requirements for such delisting and termination of registration are satisfied.
14. Dividends and Distributions
The Merger Agreement provides that from January 18, 2022 to the Effective Time, without the prior written consent of Parent, Zogenix will not declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock or shares.
For purposes of this Section 15, capitalized terms used in this Section 15 and defined in the Merger Agreement have the meanings set forth in the Merger Agreement, a copy of which is filed as Exhibit (d)(1) of the Schedule TO and is incorporated herein by reference. The obligation of Purchaser to accept for payment and pay for Shares validly tendered and not properly withdrawn pursuant to the Offer is subject to the satisfaction of the conditions below (the Offer Conditions).
Purchaser is not required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchasers obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for, and may delay the acceptance for payment of or, subject to any such rules and regulations, the payment for, any Shares validly tendered and not validly withdrawn in connection with the Offer unless, immediately prior to the then applicable Expiration Time:
(i) | there having been validly tendered and received (as such term is defined in Section 251(h) of the DGCL), and not validly withdrawn, that number of Shares that, when added to the Shares then owned by Parent and Purchaser, would represent at least a majority of the Shares outstanding as of the consummation of the Offer (the Minimum Condition); |
(ii) | the termination or expiration of any applicable waiting period under the HSR Act (and any extension thereof, including under any agreement entered into in compliance with the Merger Agreement between a party and a governmental authority agreeing not to consummate the Offer or the Merger prior to a certain date) applicable to the Offer or the Merger, and the receipt of any other clearance, approval or consent under any other applicable antitrust law (or the failure by any relevant governmental authority exercising jurisdiction under any other applicable antitrust law to render a decision in the relevant time period, so that the transactions contemplated by the Merger Agreement are deemed to be cleared, approved or consented to under such other applicable antitrust law (the Antitrust Approval Condition) has been obtained; |
(iii) | there being no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority of competent jurisdiction, and no law, rule, regulation, judgment, |
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decree, injunction, ruling, order, decision, or other legal or regulatory requirement in effect, that prohibits or makes illegal the acquisition of or payment for Shares pursuant to the Offer or the consummation of the Merger, or that imposes certain remedies or restrictions on the ability of Parent to own or operate Zogenix, its businesses or assets (the Governmental Impediment Condition); |
(iv) | the Merger Agreement has not been terminated in accordance with its terms (the Termination Condition); |
(v) | there shall not have occurred an event that has or would reasonably be expected to have, individually or in the aggregate with over events, a Company Material Adverse Effect that is continuing; |
(vi) | the representations and warranties of Zogenix in the Merger Agreement: |
(1) relating to the absence of certain changes constituting a Company Material Adverse Effect are true and correct as of immediately prior to the Acceptance Time as though made as of such time;
(2) relating to the authorized and issued capital stock of Zogenix are true and correct as of immediately prior to the Acceptance Time as though made as of such time (except that representations and warranties that expressly speak as of the date of the Merger Agreement or another date shall be true and correct as of such date), except for de minimis inaccuracies;
(3) relating to corporate existence and power, corporate authorization, governmental authorizations, finders fees, opinions of financial advisors, and antitakeover statutes that are (A) qualified as to materiality or Company Material Adverse Effect and other qualifications based upon the concept of materiality or similar phrases contained therein are true and correct in all respects and (B) not qualified as to materiality or Company Material Adverse Effect and other qualifications based upon the concept of materiality or similar phrases contained therein are true and correct in all material respects, in each case ((A) and (B)) as of the date of the Merger Agreement and as of immediately prior to the Acceptance Time as though made as of such time (except that representations and warranties that expressly speak as of the date of the Merger Agreement or another date shall be so true and correct as of such date); and
(4) relating to any other matters shall be true and correct (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) as of the date of the Merger Agreement and as of immediately prior to the Acceptance Time as though made as of such time (except that representations and warranties that expressly speak as of the date of the Merger Agreement or another date shall be true and correct as of such date), except where any failures of any such representations and warranties to be true and correct has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
(vii) | Zogenix has performed or complied in all material respects with all its obligations, agreements and covenants to be performed or complied with in the Merger Agreement at or prior to the Acceptance Time pursuant to the terms of the Merger Agreement; and |
(viii) | Parent shall have received a certificate signed by the Chief Executive Officer or the Chief Financial Officer of Zogenix dated as of the date on which the Acceptance Time occurs, to the effect that the conditions set forth in (v), (vi) and (vii) above have been satisfied. |
The foregoing conditions are for the sole benefit of Parent and Purchaser and may be waived by Parent or Purchaser in whole or in part at any time at the sole discretion of Parent or Purchaser, except that the Minimum Condition and the condition that the Merger Agreement has not been terminated in accordance with its terms may be waived by Parent and Purchaser only with the prior written consent of Zogenix, and in each case, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC.
16. Certain Legal Matters; Regulatory Approvals
General. Based on our examination of publicly available information filed by Zogenix with the SEC, other publicly available information concerning Zogenix and certain confidential information provided to us by
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Zogenix in connection with the negotiations for the transactions contemplated by the Merger Agreement, we are not aware of any governmental license or regulatory permit that appears to be material to Zogenixs business that would be adversely affected by our acquisition of Shares pursuant to the Offer or, except as set forth below in this Section 16, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for our purchase of Shares pursuant to the Offer. Should any such approval or other action be required or desirable, we currently contemplate that, except for takeover laws in jurisdictions other than Delaware as described below under State Takeover Laws, such approval or other action will be sought. However, except for observance of the waiting periods and the obtaining of the required approvals summarized under Antitrust Compliance below in this Section 16, we do not anticipate delaying the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or action, if needed, will be obtained or, if obtained, that it will be obtained without substantial conditions; and there can be no assurance that, in the event that such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Zogenixs business or that certain parts of Zogenixs business might not have to be disposed of or held separate, any of which may give us the right to terminate the Offer at any Expiration Time without accepting for payment any Shares validly tendered (and not properly withdrawn) pursuant to the Offer. Our obligation under the Offer to accept for payment and pay for Shares is subject to the Offer Conditions, including, among other conditions, the Antitrust Approval Condition. See Section 15Conditions of the Offer.
Antitrust Compliance
Compliance with the HSR Act. Under the HSR Act (including the related rules and regulations that have been promulgated thereunder by the FTC), certain acquisition transactions, including Purchasers purchase of Shares pursuant to the Offer, may not be consummated until certain information and documentary material has been furnished for review by the FTC and the Antitrust Division of the DOJ (the Antitrust Division) and certain waiting period requirements have been satisfied. Parent and Zogenix expect to file their respective Premerger Notification and Report Forms with the FTC and the Antitrust Division on or about February 1, 2022.
Under the HSR Act, Purchasers purchase of the Shares pursuant to the Offer is subject to an initial waiting period that will expire at 11:59 p.m., Eastern time, on the date that is 30 days after such filing. However, the initial waiting period may be terminated prior to such date and time by the FTC or the Antitrust Division, or Purchaser and Zogenix may receive a request (a Second Request) for additional information or documentary material from either the FTC or the Antitrust Division prior to such expiration. If the FTC or the Antitrust Division issues a Second Request, the waiting period with respect to the Offer will be extended for an additional period of 30 days, which will begin on the date on which Purchaser has substantially complied with the Second Request. Complying with a Second Request can take a significant period of time. Even though the waiting period is not affected by a Second Request to Zogenix or by Zogenix supplying the requested information, Zogenix is obliged to respond to the request within a reasonable time. If the 30-day waiting period expires on a Saturday, Sunday or federal holiday, then such waiting period will be extended until 11:59 p.m. of the next day that is not a Saturday, Sunday or federal holiday. Only one extension of the waiting period pursuant to a Second Request is authorized by the HSR Act. After that time, the waiting period may be extended only by court order or with our consent. The FTC or the Antitrust Division may terminate the additional 30-day waiting period before its expiration.
The FTC and the Antitrust Division frequently scrutinize the legality under the U.S. antitrust laws of transactions like the Offer and the Merger. At any time, the FTC or the Antitrust Division could take any action under the antitrust laws that it considers necessary or desirable in the public interest, including seeking (i) to enjoin the purchase of Shares pursuant to the Offer, (ii) to enjoin the Merger, (iii) to require Purchaser (or, after completion of the Merger, Parent) to divest the Shares, or (iv) to require us or Zogenix to divest substantial assets or seek other conduct relief. Private parties, as well as state attorneys general, also may bring legal actions under the antitrust laws under certain circumstances. At any time before or after the consummation of the Merger, notwithstanding the early termination of the applicable waiting period under the HSR Act, any state or private party could seek to enjoin the consummation of the Merger or seek other structural or conduct relief or damages.
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Foreign Antitrust Filings in Germany. Parent and Zogenix are active outside of the United States. Based on a review of the information currently available about the businesses of Parent and Zogenix, a filing with Germanys Federal Cartel Office (FCO) and observation of the applicable waiting period under the German Act Against Restraints of Competition is required before the transactions contemplated by the Merger Agreement may close. Parent submitted the notification to the FCO on February 1, 2022. The review period will expire one month after the date of filing, unless the FCO notifies Parent within the one month review period of the initiation of an in-depth investigation. If the FCO initiates an in-depth investigation, the review period is extended for an additional three months, and neither the Offer nor the Merger may be consummated until the acquisition is approved by the FCO, within the extended period.
Based upon an examination of publicly available information and other information relating to the businesses in which Zogenix is engaged, Parent and Zogenix believe that neither the purchase of Shares by Purchaser pursuant to the Offer nor the consummation of the Merger should violate applicable antitrust laws. Nevertheless, neither Parent nor Zogenix can be certain that a challenge to the Offer or the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be. See Section 15Conditions of the Offer.
State Takeover Laws
Zogenix is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents a Delaware corporation from engaging in a business combination (defined to include mergers and certain other actions) with an interested stockholder (including a person who owns or has the right to acquire 15% or more of a corporations outstanding voting stock) for a period of three years following the date such person became an interested stockholder unless, among other things, the business combination is approved by the board of directors of such corporation before such person became an interested stockholder. The Zogenix Board approved the Merger Agreement and the transactions contemplated therein, and the restrictions on business combinations described in Section 203 of the DGCL are inapplicable to the Merger Agreement and the transactions contemplated by the Merger Agreement.
Zogenix conducts business in a number of states throughout the United States, some of which have enacted takeover laws. We do not know whether any of these laws will, by their terms, apply to the Offer or the Merger and have not attempted to comply with any such laws. Should any person seek to apply any state takeover law, we will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event any person asserts that the takeover laws of any state are applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, we may be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, we may be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, we may not be obligated to accept for payment any Shares tendered in the Offer. See Section 15Conditions of the Offer.
Going Private Transactions
The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain going private transactions and which may under certain circumstances be applicable to the Merger or another business combination following the purchase of Shares pursuant to the Offer in which we seek to acquire the remaining Shares not then held by us. We believe that Rule 13e-3 under the Exchange Act will not be applicable to the Merger because: (i) we were not, at the time the Merger Agreement was executed, and are not, an affiliate of Zogenix for purposes of the Exchange Act; (ii) we anticipate that the Merger will be effected as soon as practicable after the consummation of the Offer (and in any event within one year following the consummation of the Offer); and (iii) in the Merger, stockholders will receive the same price per Share as the Offer Price.
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Stockholder Approval Not Required
Section 251(h) of the DGCL generally provides that stockholder approval of a merger is not required if certain requirements are met, including that (i) the acquiring company consummates a tender offer for any and all of the outstanding common stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be entitled to vote on the adoption of the merger agreement and (ii) following the consummation of such tender offer, the acquiring company owns at least such percentage of the stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be required to adopt the merger. If the Minimum Condition is satisfied and we accept Shares for payment pursuant to the Offer, we will hold a sufficient number of Shares to consummate the Merger under Section 251(h) of the DGCL without submitting the adoption of the Merger Agreement to a vote of the Zogenix stockholders. Following the consummation of the Offer and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, Parent, Purchaser and Zogenix will take all necessary action to cause the Merger to become effective as soon as practicable following the consummation of the Offer without a vote of Zogenix stockholders, as provided in Section 251(h) of the DGCL.
No appraisal rights are available to the holders of Shares who tender such Shares in connection with the Offer. If the Offer and the Merger are consummated, the holders of Shares who: (i) did not tender their Shares pursuant to the Offer; (ii) follow the procedures set forth in Section 262; and (iii) do not thereafter lose their appraisal rights (by withdrawal, failure to perfect or otherwise), in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court of Chancery and receive payment of the fair value of such Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest thereon, if any, as determined by such court. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment.
In determining the fair value of any Shares, the Court of Chancery will take into account all relevant factors. Holders of Shares should recognize that fair value so determined could be higher or lower than, or the same as, the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price) and that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to, and does not otherwise address, fair value under Section 262. Moreover, we may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such Shares is less than the Offer Price.
Section 262 provides that, if a merger was approved pursuant to Section 251(h) of the DGCL, either a constituent corporation before the effective date of the merger or the surviving corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262. The Schedule 14D-9 constitutes the formal notice by Zogenix to its stockholders of appraisal rights in connection with the Merger under Section 262.
As described more fully in the Schedule 14D-9, if a stockholder wishes to elect to exercise appraisal rights under Section 262 in connection with the Merger, such stockholder must do all of the following:
| prior to the later of the consummation of the Offer and 20 days after the date of mailing of the Schedule 14D-9, deliver to Zogenix a written demand for appraisal of Shares held, which demand must reasonably inform Zogenix of the identity of the stockholder and that the stockholder is demanding appraisal; |
| not tender such stockholders Shares in the Offer; and |
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| continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Effective Time. |
The foregoing summary of the appraisal rights of stockholders under the DGCL does not purport to be a complete statement of the procedures to be followed by the stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence to the applicable provisions of the DGCL. A copy of Section 262 of the DGCL will be included as Annex III to the Schedule 14D-9.
The information provided above is for informational purposes only with respect to your alternatives if the Merger is consummated. If you tender your Shares into the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares, but, instead, upon the terms and subject to the conditions to the Offer, you will receive the Offer Price for your Shares.
Purchaser has retained Innisfree M&A Incorporated to be the Information Agent and American Stock Transfer & Trust Company, LLC, to be the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telecopy and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares.
The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws.
None of Parent or Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. In those jurisdictions where applicable laws or regulations require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
The Offer is not being made to (nor will tenders be accepted from or on behalf of holders of) Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where applicable laws or regulations require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
No person has been authorized to give any information or to make any representation on behalf of Parent or Purchaser not contained herein or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized. No broker, dealer, bank, trust company, fiduciary or other person shall be deemed to be the agent of Parent, Purchaser, the Depositary or the Information Agent for the purposes of the Offer.
Purchaser has filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, Zogenix has filed or will file, pursuant to Rule 14d-9 under the Exchange Act,
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the Schedule 14D-9 with the SEC, together with exhibits, setting forth the recommendation of the Zogenix Board with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC in the manner set forth in Section 7Certain Information Concerning Zogenix above.
Zinc Merger Sub, Inc.
February 1, 2022
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of Parent are set forth below. The business address of each director and officer is Allée de la Recherche, 601070 Brussels, Belgium. Directors of Parent are identified by an asterisk.
Name |
Citizenship | Current Principal Occupation or Employment and 5-Year | ||
Stefan Oschmann* | Germany | Stefan Oschmann has served as Director and Chairman of the Board of Parent from 2021 to present and Chairman of the Executive Board and Chief Executive Officer of Merck Group from 2016 to 2021. | ||
Fiona du Monceau* | Belgium | Fiona du Monceau has served as Director of Parent from 2021 to present, Chief Operating Officer of ExeVir Bio from 2020 to present and several roles including Venture Partner and Head of the Bone Patient Value Unit for Europe of UCB Ventures from 2016 to present. | ||
Jean-Christophe Tellier* | France | Jean-Christophe Tellier has served as Chief Executive Officer and Director of Parent from 2016 to present. | ||
Jan Berger* | United States | Jan Berger has served as Director of Parent from 2019 to present and Chief Executive Officer of Health Intelligence Partners from 2016 to present. | ||
Kay Davis* | United Kingdom | Kay Davis has served as Director of Parent from 2016 to present and Director of Biotech Growth Trust from 2016 to present. | ||
Albrecht De Graeve* | Belgium | Albrecht De Graeve has served as Director of Parent from 2016 to present and Chairman of the Board of NV Bekaert SA from 2016 to present. | ||
Susan Gasser* | Switzerland | Susan Gasser has served as Director of Parent from 2021 to present and Director of the Friedrich Miescher Institute for Biomedical Research from 2016 to 2019. | ||
Pierre Gurdjian* | Belgium | Pierre Gurdjian has served as Director of Parent from 2016 to present andPresident of the Board of Directors of the Université Libre de Bruxelles from 2016 to present. | ||
Charles-Antoine Janssen* | Belgium | Charles-Antoine Janssen has served as Director of Parent from 2016 to present and Managing Partner of Kois s.a. from 2016 to present. | ||
Cyril Janssen* | Belgium | Cyril Janssen has served as Director of Parent from 2016 to present, Director of FEJ SRL from 2016 to present and Director of Financière de Tubize SA from 2016 to present. | ||
Viviane Monges* | France | Viviane Monges has served as Director of Parent from 2017 to present and Chief Financial Officer of the Nestlé Business Excellence Division at Nestlé from 2016 to 2017. |
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Name |
Citizenship | Current Principal Occupation or Employment and 5-Year | ||
Jonathan Peacock* | United Kingdom | Jonathan Peacock has served as Director of Parent from 2021 to present, Director of Avantor, Inc. from 2017 to present and Chairman of Arix Bioscience PLC from 2016 to present. | ||
Cedric van Rijckevorsel* | Belgium | Cedric van Rijckevorsel has served as Director of Parent from 2016 to present and Chief Executive Officer of IDS Capital (UK) Ltd. from 2016 to present. | ||
Ulf Wiinberg* | Sweden | Ulf Wiinberg has served as Director of Parent from 2016 to present and Chief Executive Officer of X-Vax Therapy Inc. from 2017 to present. | ||
Emmanuel Caeymaex | Belgium | Emmanuel Caeymaex has served as Executive Vice President, Immunology Solutions of Parent from 2016 to present. | ||
Sandrine Dufour | France | Sandrine Dufour has served as Executive Vice President, Chief Financial Officer and Head of Corporate Development of Parent from 2020 to present and previously served as Chief Financial Officer of Proximus from 2016 to 2020. | ||
Jean Luc Fleurial | France | Jean Luc Fleurial has served as Executive Vice President, Chief Talent Officer of Parent from 2017 to present and previously held various positions at Bristol-Myers Squibb from 2016 to 2017. | ||
Iris Loew-Friedrich | Germany | Iris Loew-Friedrich has served as Executive Vice President, Chief Medical Officer of Parent from 2016 to present. | ||
Kirsten Lund-Jurgensen | Germany & United States |
Kirsten Lund-Jurgensen has served as Executive Vice President, Head of Supply & Technology Unit of Parent from 2019 to present and previously served as President, Pfizer Global Supply of Pfizer Inc. from 2016 to 2018. | ||
Dhavalkumar Patel | United States | Dhavalkumar Patel has served as Executive Vice President, Chief Scientific Officer of Parent from 2017 to present, and previously served as Head of Research for the Novartis Institutes for BioMedical Research Europe from 2016 to 2017. | ||
William Silbey | United States | William Silbey has served as Executive Vice President, General Counsel of Parent from 2019 to present and previously served as Legal Head of M&A and Venture Investments of Parent from 2016 to 2019. | ||
Charl van Zyl | United Kingdom | Charl van Zyl has served as Executive Vice President, Head of Neurology Solutions of Parent from 2017 to present and previously served as Executive Vice President of BSN Medical from 2016 to 2017. |
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DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER AND UCB BIOSCIENCES
The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years, of each director and executive officer of Purchaser and UCB Biosciences are set forth below. The business address of each director and officer is 1950 Lake Park Drive, Smyrna, GA 30080. Directors of Purchaser are identified by an asterisk.
Name |
Citizenship | Current Principal Occupation or Employment and 5-Year Employment History | ||
Iris Loew-Friedrich* | Germany | Iris Loew-Friedrich has served as Executive Vice President, Chief Medical Officer of Parent from 2016 to present. | ||
Jennifer Trevett* | United States | Jennifer Trevett has served as Vice President, Head of Legal, U.S. & Global Immunology of UCB Inc. from 2020 to present and previously served as Associate General Counsel of UCB Inc. from 2016 to 2020. | ||
Thiyagaraja Ravindran* | Canada | Thiyagaraja Ravindran has served as Controller, Finance Business Partner, Head of Business Services of Parent from 2016 to present. | ||
Kai Zheng | United States | Kai Zheng has served as Tax Americas Lead of UCB Inc. from 2018 to present, and previously served as Associate Tax Director of UCB Inc. from 2016 to 2018. |
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The Letter of Transmittal, properly completed, will be accepted. The Letter of Transmittal and certificates evidencing Shares and any other required documents should be sent by each holder or such holders broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
If delivering by mail:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
If delivering by express mail
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers listed below. Additional copies of this Offer to Purchase, the Letter of Transmittal and other materials may also be obtained from the Information Agent. Stockholders may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (888) 750-5835
Banks and Brokers may call collect: (212) 750-5833
Exhibit (a)(1)(B)
Letter of Transmittal
to Tender Shares of Common Stock of
Zogenix, Inc.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents the right to receive a contingent cash payment of $2.00 upon the achievement, if any, of a specified milestone
Pursuant to the Offer to Purchase dated February 1, 2022
by
Zinc Merger Sub, Inc.
an indirect wholly owned subsidiary of
UCB S.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON MARCH 1, 2022, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The Depositary for the Offer is:
Method of delivery of the certificate(s) is at the option and risk of the owner thereof. See Instruction 2. Mail or deliver this Letter of Transmittal, together with the certificate(s) representing your shares, to:
If delivering by mail: | If delivering by express mail or other expedited mail service: | |
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219
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American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
DESCRIPTION OF SHARES TENDERED
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Name(s) and Address(es) of Registered Owner(s) (If blank, please fill in exactly as name(s) appear(s) |
Shares Tendered (attach additional list if necessary) | |||||||||||||||
Certificated Shares* | Book Entry Shares** | |||||||||||||||
Certificate Number(s) |
Total Number of Shares Represented by Certificates |
Number of Shares Represented by Certificate(s) Tendered |
Number of Shares Held in Book-Entry Form Tendered |
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Total Shares | ||||||||||||||||
* Unless otherwise indicated, it will be assumed that all shares of common stock represented by certificates described above are being tendered hereby. See Instruction 4. ** Unless otherwise indicated, it will be assumed that all shares of common stock held in book-entry form are being tendered hereby.
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The instructions accompanying this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.
Delivery of this Letter of Transmittal to an address other than as set forth above for the Depositary will not constitute valid delivery. You must sign this Letter of Transmittal in the appropriate space provided below, with signature guarantee, and complete the IRS Form W-9 set forth below or the applicable IRS Form W-8, if required.
All questions regarding the Offer should be directed to the Information Agent, Innisfree M&A Incorporated, at (888) 750-5835 or the address set forth on the back page of the Offer to Purchase. If you would like additional copies of this Letter of Transmittal or any of the other offering documents, you should contact the Information Agent, Innisfree M&A Incorporated, at (888) 750-5835.
The Offer is not being made to (nor will tender of shares be accepted from or on behalf of) stockholders in any jurisdiction where it would be illegal to do so.
This Letter of Transmittal is being delivered to you in connection with the offer by Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and an indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in this Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal) and the related Offer to Purchase by Purchaser, dated February 1, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase, which, together with this Letter of Transmittal, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer). The Offer expires at the Expiration Time. Expiration Time means one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the expiration of the Offer is extended to a subsequent date and time in accordance with the terms of the Agreement and Plan of Merger, dated as of January 18, 2022, among Parent, Zogenix and Purchaser, in which event the term Expiration Time means such subsequent date and time.
You should use this Letter of Transmittal to deliver to American Stock Transfer & Trust Company, LLC (the Depositary) Shares represented by stock certificates, or held in book-entry form on the books of Zogenix, or its stock transfer agent, for tender. If you are delivering your Shares by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company (DTC), you must use an Agents Message (as defined in Instruction 2 below). Delivery of documents to DTC will not constitute delivery to the Depositary.
If any certificate representing any Shares you are tendering with this Letter of Transmittal has been lost, stolen, destroyed or mutilated, you should contact Zogenixs stock transfer agent, American Stock Transfer & Trust Company, LLC (the Transfer Agent) at (877) 248-6417 (toll free in the United States) regarding the requirements for replacement. You will be required to make an affidavit of fact and may be required to post a bond to secure against the risk that such certificates may be subsequently recirculated. You are urged to contact the Transfer Agent immediately in order to receive further instructions, for a determination of whether you will need to post a bond and to permit timely processing of this documentation. See Instruction 10.
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If tendered shares are being delivered by book-entry transfer to the account maintained by the Depositary with DTC, complete the following (only financial institutions that are participants in DTC may deliver shares by book-entry transfer):
Name of Tendering Institution: |
DTC Participant Number: |
Transaction Code Number: |
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
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Ladies and Gentlemen:
The undersigned hereby tenders to Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), the above-described shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in the Offer to Purchase by Purchaser, dated February 1, 2022, which the undersigned hereby acknowledges the undersigned has received (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase, which, together with this Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal, as they may be amended, supplemented or otherwise modified from time to time), collectively constitute the Offer). The Offer expires at the Expiration Time. Expiration Time means one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the expiration of the Offer is extended to a subsequent date and time in accordance with the terms of the Agreement and Plan of Merger, dated as of January 18, 2022, among Parent, Zogenix and Purchaser, in which event the term Expiration Time means such subsequent date and time.
The undersigned hereby acknowledges that Purchaser reserves the right to transfer or assign, from time to time, in whole or in part, to one or more of its direct or wholly owned subsidiaries of Parent, without the consent of Zogenix, the right to purchase the Shares tendered herewith.
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), subject to, and effective upon, acceptance for payment of the Shares validly tendered herewith and not properly withdrawn prior to the Expiration Time in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser, all right, title and interest in and to all of the Shares being tendered hereby and any and all dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such Shares on or after the date hereof (collectively, Distributions). In addition, the undersigned hereby irrevocably appoints Purchaser as the true and lawful agent and attorney-in-fact and proxy of the undersigned with respect to such Shares and any and all Distributions with full power of substitution (such proxies and power of attorney being deemed to be an irrevocable power coupled with an interest in the tendered Shares and any Distributions) to the full extent of such stockholders rights with respect to such Shares and any Distributions (a) to deliver certificates representing such Shares (the Share Certificates) and any and all Distributions, or transfer of ownership of such Shares and any and all Distributions on the account books maintained by The Depository Trust Company (DTC), together, in either such case, with all accompanying evidence of transfer and authenticity, to or upon the order of Purchaser, (b) to present such Shares and any and all Distributions for transfer on the books of Zogenix and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and any Distributions, all upon the terms and subject to the conditions of the Offer.
By executing this Letter of Transmittal (or taking action resulting in the delivery of an Agents Message), the undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to the full extent of such stockholders rights with respect to the Shares tendered hereby and not properly withdrawn which have been accepted for payment and with respect to any and all Distributions. The designees of Purchaser will, with respect to such Shares and Distributions, be empowered to exercise all voting and any other rights of such stockholder, as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of Zogenixs stockholders, by written consent in lieu of any such meeting or otherwise as such designee, in its, his or her sole discretion, deems proper with respect to all Shares and any and all Distributions. This proxy and power of attorney shall be irrevocable and coupled with an interest in the tendered Shares and any and all Distributions. Such appointment is effective when, and only to the extent that, Purchaser accepts the Shares tendered with this Letter of Transmittal for payment pursuant to the Offer. Upon the effectiveness of such appointment, without further action, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares and any and all associated Distributions (other than prior powers of attorney, proxies or consent given by the undersigned to Purchaser or Zogenix) will be revoked, and no subsequent powers of attorney, proxies, consents or revocations (other than powers of attorney, proxies, consents or revocations given to Purchaser or Zogenix) may be given (and, if given, will not be deemed effective).
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Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchasers acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights, to the extent permitted under applicable law, with respect to such Shares and any and all Distributions, including voting at any meeting of stockholders or executing a written consent concerning any matter.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any and all of the Shares tendered hereby and any and all Distributions and, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that the same will not be subject to any adverse claim. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Share Certificate(s) have been endorsed to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of any and all of the Shares tendered hereby and any and all Distributions. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of any and all of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of any such Distributions and may withhold the entire Offer Price or deduct from such Offer Price the amount or value thereof, as determined by Purchaser in its sole discretion.
It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until the Share Certificate(s) owned by the undersigned are received by the Depositary at the address set forth above, together with such additional documents as the Depositary may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary.
It is understood that the method of delivery of the Shares, the Share Certificate(s) and all other required documents (including delivery through DTC) is at the option and risk of the undersigned and that the risk of loss of such Shares, Share Certificate(s) and other documents shall pass only after the Depositary has actually received the Shares or Share Certificate(s) (including, in the case of a book-entry transfer, by Book-Entry Confirmation (as defined below)). If delivery is by mail, it is recommended that all such documents be sent by properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery.
All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal representatives, successors and assigns of the undersigned. Except upon the terms and subject to the conditions of the Offer, this tender is irrevocable.
The undersigned understands that the acceptance for payment by Purchaser of Shares tendered pursuant to one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances, upon the terms and subject to the conditions of the Offer, Purchaser may not be required to accept for payment any of the Shares tendered hereby.
Unless otherwise indicated herein under Special Payment Instructions, please issue the check for the Offer Price in the name(s) of, and/or return any Share Certificates representing Shares not validly tendered or accepted for payment to, the registered owner(s) appearing under Description of Shares Tendered. Similarly, unless otherwise indicated under Special Delivery Instructions, please mail the check for the Offer Price and/or return any Share Certificates representing Shares not validly tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered owner(s) appearing under Description of Shares Tendered.
In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, please issue the check for the Offer Price and/or issue any Share Certificates representing Shares not validly tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such Share Certificates (and any accompanying documents, as appropriate) to, the person or persons
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so indicated. Unless otherwise indicated herein in the box titled Special Payment Instructions, please credit any Shares validly tendered hereby or by an Agents Message and delivered by book-entry transfer, but which are not purchased, by crediting the account at DTC designated above. The undersigned recognizes that Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered owner thereof if Purchaser does not accept for payment any of the Shares so validly tendered.
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SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 4, 5, and 7)
To be completed ONLY if Share Certificate(s) not validly tendered or not accepted for payment and/or the check for the Offer Price in consideration of Shares validly tendered and accepted for payment are to be issued in the name of someone other than the undersigned or if Shares validly tendered by book-entry transfer which are not accepted for payment are to be returned by credit to an account maintained at DTC other than that designated above. |
Issue: ☐ Check and/or ☐ Shares to: |
Name |
(Please Print) |
Address |
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(Include Zip Code) |
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(Tax Identification or Social Security Number) |
(Please additionally complete IRS Form W-9 (attached) or the applicable IRS Form W-8, available at irs.gov) |
SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4, 5, and 7) |
To be completed ONLY if Share Certificate(s) not validly tendered or not accepted for payment and/or the check for the Offer Price in consideration of Shares validly tendered and accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled Description of Shares Tendered above. |
Deliver: ☐ Check and/or ☐ Shares to:
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Name |
(Please Print) |
Address |
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(Include Zip Code) |
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IMPORTANT- SIGN HERE
Signature(s) of Stockholder(s): |
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Dated: |
, 2022 |
(Must be signed by registered owner(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of a corporation or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.)
Name(s): |
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(Please Print) | ||
Capacity (Full Title): |
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Address: |
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(Include Zip Code) | ||
Area Code and Telephone Number: |
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Tax Identification or Social Security No.: |
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(Please additionally complete IRS Form W-9 (attached) or the applicable IRS Form W-8, available at irs.gov)
GUARANTEE OF SIGNATURE(S)
(For use by Eligible Institutions only;
see Instructions 1 and 5)
Name of Firm: |
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Address: |
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(Include Zip Code) | ||
Authorized Signature: |
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Name: |
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(Please Print) | ||
Area Code and Telephone Number |
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Dated: , 2022 |
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Place medallion guarantee in space below: |
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INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures for Shares. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 1, includes any participant in DTCs systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such holder or holders have completed either the box entitled Special Delivery Instructions or the box entitled Special Payment Instructions on the cover of this Letter of Transmittal or (b) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Security Transfer Agents Medallion Program or any other eligible guarantor institution, as such term is defined in Rule 17Ad-15 of the Exchange Act (each an Eligible Institution and collectively Eligible Institutions) (for example, the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates or Book-Entry Confirmations. This Letter of Transmittal is to be completed by stockholders if Share Certificates are to be forwarded herewith. If Shares represented by Share Certificates are being tendered, such Share Certificates, as well as this Letter of Transmittal properly completed and duly executed with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein on or prior to the Expiration Time. If Shares are to be tendered by book-entry transfer, the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase must be followed, and an Agents Message and confirmation of a book-entry transfer into the Depositarys account at DTC of Shares tendered by book-entry transfer (such a confirmation, a Book-Entry Confirmation) must be received by the Depositary on or prior to the Expiration Time.
The term Agents Message means a message, transmitted through electronic means by DTC in accordance with the normal procedures of DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of, this Letter of Transmittal, and that Purchaser may enforce such agreement against such participant. The term Agents Message also includes any hard copy printout evidencing such message generated by a computer terminal maintained at the Depositarys office.
The method of delivery of the Shares (or Share Certificates), this Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering stockholder. Delivery of the Shares (or Share Certificates), this Letter of Transmittal and all other required documents will be deemed made, and risk of loss thereof shall pass, only when they are actually received by the Depositary (including, in the case of a book-entry transfer of Shares, by Book-Entry Confirmation with respect to such Shares). If such delivery is by mail, it is recommended that the Shares (or Share Certificates), this Letter of Transmittal and all other required documents be sent by properly insured registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery.
No Guaranteed Delivery. We are not providing for guaranteed delivery procedures. Therefore, Zogenix stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the Expiration Time. In addition, for Zogenix stockholders who are registered holders, the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Letter of Transmittal (or, in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents) must be received by the Depositary prior to the Expiration Time.
No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal, waive any right to receive any notice of the acceptance of their Shares for payment.
All questions as to validity, form and eligibility (including time of receipt) of the surrender of any Share Certificate hereunder, including questions as to the proper completion or execution of any Letter of Transmittal or other required documents and as to the proper form for transfer of any certificate of Shares, will be determined
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by Purchaser in its sole and absolute discretion (which may be delegated in whole or in part to the Depositary), which determination will be final and binding, subject to any judgment of any court of competent jurisdiction. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the surrender of any Shares or Share Certificate(s) whether or not similar defects or irregularities are waived in the case of any other stockholder. A surrender will not be deemed to have been validly made until all defects and irregularities have been cured or waived.
3. Inadequate Space. If the space provided on the cover page to this Letter of Transmittal is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed.
4. Partial Tenders. Unless otherwise indicated, it will be considered that all Shares represented by a certificate(s) delivered with the Letter of Transmittal or held in the account in book-entry form are to be tendered.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered owner(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration or any other change whatsoever.
If any Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in the names of different holder(s), it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares.
If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to, or Share Certificates representing Shares not tendered or accepted for payment are to be issued in the name of, a person other than the registered owner(s), in which case the Share Certificates representing the Shares tendered by this Letter of Transmittal must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered owner(s) or holder(s) appear(s) on the Share Certificates. Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Share(s) listed, the Share Certificate(s) must be endorsed or accompanied by the appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear(s) on the Share Certificate(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
6. Transfer Taxes. Except as otherwise provided in this Instruction 6, all transfer taxes with respect to the transfer and sale of Shares contemplated hereby shall be paid or caused to be paid by Purchaser. If payment of the Offer Price is to be made to, or (in the circumstances permitted hereby) if Share Certificates not validly tendered or accepted for payment are to be registered in the name of, any person other than the registered owner(s), or if tendered Share Certificates are registered in the name of any person other than the person signing this Letter of Transmittal, the amount of any transfer taxes whether imposed on the registered owner(s) or such person payable on account of the transfer to such person will be deducted from the Offer Price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted.
7. Special Payment and Delivery Instructions. If a check for the Offer Price is to be issued, and/or Share Certificates representing Shares not validly tendered or accepted for payment are to be issued or returned to, a person other than the signer(s) of this Letter of Transmittal or to an address other than that shown in the box titled Description of Shares Tendered above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders delivering Shares tendered hereby or by Agents Message by book-entry transfer may request that Shares not purchased be credited to an account maintained at DTC as such stockholder may designate in the box titled Special Payment Instructions herein. If no such instructions are given, all such Shares not purchased will be returned by crediting the same account at DTC as the account from which such Shares were delivered.
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8. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to Innisfree M&A Incorporated (the Information Agent) at its address and telephone number set forth below or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchasers expense.
9. U.S. Federal Backup Withholding. Under U.S. federal income tax laws, the Depositary will be required to withhold a portion of the amount of any payments made to certain stockholders (or other payees) pursuant to the Offer (including the value of the CVR as determined for U.S. federal income tax purposes). To avoid backup withholding, each tendering stockholder (or other payee) that is or is treated as a United States person (for U.S. federal income tax purposes) and that does not otherwise establish an exemption from U.S. federal backup withholding must complete and return the attached Internal Revenue Service (IRS) Form W-9, certifying that such stockholder (or other payee) is a United States person, that the taxpayer identification number (TIN) provided is correct, and that such stockholder (or other payee) is not subject to backup withholding. If such stockholder (or other payee) is a U.S. individual, the TIN is such stockholders (or other payees) social security number.
Certain stockholders and other payees (including, among others, corporations, non-resident foreign individuals and foreign entities) are not subject to these backup withholding and reporting requirements. To avoid backup withholding, exempt U.S. persons should furnish their TIN and indicate their exempt status on IRS Form W-9 and sign, date and return the IRS Form W-9 to the Depositary. A tendering stockholder (or other payee) that is a foreign individual or a foreign entity should complete, sign, and submit to the Depositary the appropriate IRS Form W-8 attesting to such stockholders (or payees) foreign status or should otherwise establish an exemption. Special rules apply for foreign entities or arrangements treated as partnerships for U.S. federal income tax purposes. The appropriate IRS Form W-8 may be downloaded from the Internal Revenue Services website at the following address: http://www.irs.gov. Failure to complete the IRS Form W-9 or the appropriate IRS Form W-8 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold a portion of the amount of any payments made of the Offer Price pursuant to the Offer. Tendering stockholders (or other payees) should consult their own tax advisors as to any qualification for exemption from backup withholding, and the procedure for obtaining the exemption.
If backup withholding of U.S. federal income tax on payments for Shares made in the Offer or under the Merger Agreement applies, the Depositary is required to withhold 24% of any payments of the Offer Price made to the stockholder (or other payee). Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a stockholders U.S. federal income tax liability, if any; provided that such stockholder timely furnishes the required information to the IRS.
Note: Failure to complete and return the IRS Form W-9 (or appropriate IRS Form W-8, as applicable) may result in backup withholding of a portion of any payments made to you pursuant to the Offer.
10. Lost, Destroyed, Mutilated or Stolen Share Certificates. If any Share Certificate has been lost, destroyed, mutilated or stolen, the stockholder should promptly notify the Transfer Agent, at (877) 248-6417 (toll free in the United States). The stockholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen Share Certificates have been followed.
11. Waiver of Conditions. Purchaser expressly reserves the right at any time, or from time to time, in its sole discretion, to waive any Offer Condition or modify or amend the terms of the Offer, including the Offer Price, except that Zogenixs prior written consent is required for Purchaser to: (i) decrease the Offer Price or change the form of consideration to be paid in the Offer; (ii) decrease the maximum number of Shares sought to be purchased pursuant to the Offer; (iii) waive or change the Minimum Condition or the Termination Condition (each as defined in the Offer to Purchase); (iv) impose conditions on the Offer other than the Offer Conditions; (v) otherwise amend, modify or supplement any of the Offer Conditions or other terms of the Offer in a manner materially adverse to the Zogenix stockholders; or (vi) extend or otherwise change the Expiration Time other than as required or permitted by the terms of the Merger Agreement.
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Important: This Letter of Transmittal or an Agents Message, together with Share Certificate(s) or Book-Entry Confirmation and all other required documents, must be received by the Depositary prior to the Expiration Time.
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Form W-9
(Rev. October 2018) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification
u Go to www.irs.gov/FormW9 for instructions and the latest information. |
Give Form to the requester. Do not send to the IRS.
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Print or type See Specific Instructions on page 3.
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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3 Check appropriate box for federal tax classification of the
person whose name is entered on line 1. Check only one of the
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4 Exemptions (codes apply only to
Exempt payee code (if any)
Exemption from FATCA reporting code (if any)
(Applies to accounts maintained outside the U.S.)
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☐ Individual/sole proprietor or single-member LLC
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☐ | C Corporation | ☐ | S Corporation | ☐ | Partnership | ☐ | Trust/estate | ||||||||||||||
☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) u
Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC
☐ Other (see instructions) u
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5 Address (number, street, and apt. or suite no.) See instructions.
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Requesters name and address (optional) | |||||||||||||||||||||
6 City, state, and ZIP code
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7 List account number(s) here (optional)
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Part I |
Taxpayer Identification Number (TIN) | |
Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.
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Social security number
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or |
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter. |
Employer identification number |
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Part II | Certification |
Under penalties of perjury, I certify that:
1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
3. | I am a U.S. citizen or other U.S. person (defined below); and |
4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.
Sign Here |
Signature of U.S. person u |
Date u |
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.
Purpose of Form
An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to
report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.
Form 1099-INT (interest earned or paid)
Form 1099-DIV (dividends, including those from stocks or mutual funds)
Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
Form 1099-S (proceeds from real estate transactions)
Form 1099-K (merchant card and third party network transactions)
Cat. No. 10231X | Form W-9 (Rev. 10-2018) |
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Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
Form 1099-C (canceled debt)
Form 1099-A (acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information.
Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requesters form if it is substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
An individual who is a U.S. citizen or U.S. resident alien;
A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;
An estate (other than a foreign estate); or
A domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States.
In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;
In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and
In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.
Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a saving clause. Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
Backup Withholding
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called backup withholding. Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the instructions for Part II for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information.
Also see Special rules for partnerships, earlier.
What is FATCA Reporting?
The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a
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Form W-9 (Rev. 10-2018) |
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C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or doing business as (DBA) name on line 2.
c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entitys name as shown on the entitys tax return on line 1 and any business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a disregarded entity. See Regulations section 301.7701-2(c)(2)(iii). Enter the owners name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner's name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity's name on line 2, Business name/disregarded entity name. If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3.
IF the entity/person on line 1 is a(n) . . . |
THEN check the box for . . . | |||
Corporation | Corporation | |||
Individual
Sole proprietorship, or
Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes. |
Individual/sole proprietor or single-member LLC | |||
LLC treated as a partnership for U.S. federal tax purposes,
LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or
LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes. |
Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation) | |||
Partnership | Partnership | |||
Trust/estate | Trust/estate |
Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.
Exempt payee code.
Generally, individuals (including sole proprietors) are not exempt from backup withholding.
Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.
Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.
Corporations are not exempt from backup withholding with respect to attorneys fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)
2The United States or any of its agencies or instrumentalities
3A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4A foreign government or any of its political subdivisions, agencies, or instrumentalities
5A corporation
6A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7A futures commission merchant registered with the Commodity Futures Trading Commission
8A real estate investment trust
9An entity registered at all times during the tax year under the Investment Company Act of 1940
10A common trust fund operated by a bank under section 584(a)
11A financial institution
12A middleman known in the investment community as a nominee or custodian
13A trust exempt from tax under section 664 or described in section 4947
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Form W-9 (Rev. 10-2018) |
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The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.
IF the payment is for . . . | THEN the payment is exempt for . . . | |
Interest and dividend payments | All exempt payees except for 7 | |
Broker transactions | Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012. | |
Barter exchange transactions and patronage dividends | Exempt payees 1 through 4 | |
Payments over $600 required to be reported and direct sales over $5,0001 | Generally, exempt payees 1 through 52 | |
Payments made in settlement of payment card or third party network transactions | Exempt payees 1 through 4 |
1 | See Form 1099-MISC, Miscellaneous Income, and its instructions. |
2 | However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency. |
Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with Not Applicable (or any similar indication) written or printed on the line for a FATCA exemption code.
AAn organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
BThe United States or any of its agencies or instrumentalities
CA state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
DA corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)
EA corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)
FA dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state
GA real estate investment trust
HA regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940
IA common trust fund as defined in section 584(a)
JA bank as defined in section 581
KA broker
LA trust exempt from tax under section 664 or described in section 4947(a)(1)
MA tax exempt trust under a section 403(b) plan or section 457(g) plan
Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.
Line 5
Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.
Line 6
Enter your city, state, and ZIP code.
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owners SSN (or EIN, if the owner has one). Do not enter the disregarded entitys EIN. If the LLC is classified as a corporation or partnership, enter the entitys EIN.
Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write Applied For in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note: Entering Applied For means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.
Signature requirements. Complete the certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct
16
Form W-9 (Rev. 10-2018) |
Page 5 |
TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. Other payments include payments made in the course of the requesters trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
What Name and Number To Give the Requester
For this type of account: | Give name and SSN of: | |||||
1. | Individual | The individual | ||||
2. | Two or more individuals (joint account) other than an account maintained by an FFI | The actual owner of the account or, if combined funds, the first individual on the account1 | ||||
3. | Two or more U.S. persons (joint account maintained by an FFI) |
Each holder of the account | ||||
4. | Custodialaccount of a minor (Uniform Gift to Minors Act) | The minor2 | ||||
5. | a. The usual revocable savings trust (grantor is also trustee) | The grantor-trustee1 | ||||
b. So-called trust account that is not a legal or valid trust under state law | The actual owner1 | |||||
6. | Sole proprietorship or disregarded entity owned by an individual | The owner3 | ||||
7. | Grantortrust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A)) | The grantor* | ||||
For this type of account: | Give name and EIN of: | |||||
8. | Disregarded entity not owned by an individual | The owner | ||||
9. | A valid trust, estate, or pension trust | Legal entity4 | ||||
10. | Corporation or LLC electing corporate status on Form 8832 or Form 2553 | The corporation | ||||
11. | Association, club, religious, charitable, educational, or other tax-exempt organization | The organization | ||||
12. | Partnership or multi-member LLC | The partnership | ||||
13. | A broker or registered nominee | The broker or nominee | ||||
14. | Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments | The public entity | ||||
15. | Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B)) | The trust |
1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that persons number must be furnished.
2 Circle the minors name and furnish the minors SSN.
3 You must show your individual name and you may also enter your business or DBA name on the Business name/disregarded entity name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier.
*Note: The grantor also must provide a Form W-9 to trustee of trust.
Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records From Identity Theft
Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
Protect your SSN,
Ensure your employer is protecting your SSN, and
Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Pub. 5027, Identity Theft Information for Taxpayers.
Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027.
Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.
17
Form W-9 (Rev. 10-2018) |
Page 6 |
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and
criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.
18
The Depositary for the Offer is:
If delivering by mail: | If delivering by express mail or other expedited mail service:
| |
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Any questions or requests for assistance may be directed to the Information Agent at its telephone number and location listed below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its telephone number and location listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (888) 750-5835
Banks and Brokers may call collect: (212) 750-5833
19
Exhibit (a)(1)(C)
Offer to Purchase
All Outstanding Shares of Common Stock
of
ZOGENIX, INC.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents
the right to receive a contingent cash payment of $2.00 upon the achievement, if any, of a specified milestone
Pursuant to the Offer to Purchase dated February 1, 2022
by
Zinc Merger Sub, Inc.,
an indirect wholly owned subsidiary of
UCB S.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M.,
|
February 1, 2022
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), to act as information agent (the Information Agent) in connection with Purchasers offer to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions of the Offer to Purchase, dated February 1, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase) and the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal, which, together with the Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer). Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.
The conditions to the Offer are described in Section 15 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:
1. | The Offer to Purchase; |
2. | The Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on IRS Form W-9) for your use in accepting the Offer and tendering Shares and for the information of your clients; |
3. | A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients instructions with regard to the Offer; |
4. | Zogenixs Solicitation/Recommendation Statement on Schedule 14D-9; and |
5. | A return envelope addressed to the Depositary for your use only. |
We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the Offer is extended or earlier terminated. We are not providing for guaranteed delivery procedures.
1
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser pursuant to which, after consummation of the Offer and the satisfaction or waiver of certain conditions, Purchaser will merge with and into Zogenix pursuant to Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the DGCL), upon the terms and subject to the conditions set forth in the Merger Agreement, with Zogenix continuing as the surviving corporation and becoming an indirect wholly owned subsidiary of Parent (the Merger).
The board of directors of Zogenix (the Zogenix Board) has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer. The Zogenix Board unanimously recommends that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
For Shares to be properly tendered to Purchaser pursuant to the Offer, the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an Agents Message (as defined in the Offer to Purchase) in the case of book-entry transfer, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary.
Purchaser will not pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the undersigned at the address and telephone numbers set forth below and on the back cover of the Offer to Purchase.
Very truly yours,
Innisfree M&A Incorporated
Nothing contained herein or in the enclosed documents shall render you, the agent of Purchaser, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (888) 750-5835
Banks and Brokers may call collect: (212) 750-5833
2
Exhibit (a)(1)(D)
Offer to Purchase
All Outstanding Shares of Common Stock
of
ZOGENIX, INC.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents the right to receive a contingent cash payment of $2.00 upon the achievement, if any, of a specified milestone Pursuant to the Offer to Purchase dated February 1, 2022
by
Zinc Merger Sub, Inc.,
an indirect wholly owned subsidiary of
UCB S.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE
MINUTE AFTER 11:59 P.M.,
|
February 1, 2022
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated February 1, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase), and the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal) in connection with the offer by Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares) of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions of the Offer to Purchase and the related Letter of Transmittal (which, together with the Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer).
Also enclosed is Zogenixs Solicitation/Recommendation Statement on Schedule 14D-9. The Board of Directors of Zogenix unanimously recommends that you tender all of your Shares in the Offer.
We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.
Please note carefully the following:
1. | The offer price for the Offer is (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023, upon the terms and subject to the conditions of the Offer. |
2. | The Offer is being made for all outstanding Shares. |
1
3. | The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser. The Merger Agreement provides, among other things, that following the consummation of the Offer and subject to certain conditions, Purchaser will be merged with and into Zogenix pursuant to Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the DGCL), with Zogenix continuing as the surviving corporation and becoming an indirect wholly owned subsidiary of Parent (the Merger). |
4. | The board of directors of Zogenix (the Zogenix Board) has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer. The Zogenix Board unanimously recommends that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer. |
5. | The Offer and withdrawal rights will expire one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the Offer is extended or earlier terminated. |
6. | The Offer is not subject to a financing condition. The Offer is subject to the conditions described in Section 15 of the Offer to Purchase. |
If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the Instruction Form.
Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf before the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.
2
INSTRUCTION FORM
With Respect to the Offer to Purchase
All Outstanding Shares of Common Stock
of
ZOGENIX, INC.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents the right to receive a contingent cash payment of $2.00 upon the achievement, if any, of a specified milestone Pursuant to the Offer to Purchase dated February 1, 2022
by
Zinc Merger Sub, Inc.,
an indirect wholly owned subsidiary of
UCB S.A.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated February 1, 2022, and the related Letter of Transmittal, in connection with the offer by Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares) of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions of the Offer to Purchase, dated February 1, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase) and the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase, which, together with the Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer).
The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below (or, if no number is indicated, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The undersigned understands and acknowledges that all questions as to validity, form and eligibility of the surrender of any certificate representing Shares submitted on the undersigneds behalf will be determined by Purchaser and such determination shall be final and binding, subject to any judgment of any court of competent jurisdiction.
The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
NUMBER OF SHARES TO BE TENDERED: | SIGN HERE |
|
Shares* |
| ||
(Signature(s)) | ||||
| ||||
Please Type or Print Name(s) | ||||
| ||||
| ||||
Address(es) | ||||
| ||||
| ||||
Area Code and Telephone Number | ||||
| ||||
Tax Identification Number or Social Security Number |
Dated: |
|
|||
Account Number: |
|
|||
*Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.
|
3
Exhibit (a)(1)(E)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made only by the Offer to Purchase dated February 1, 2022, and the related Letter of Transmittal and any amendments, supplements or other modifications thereto, and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser (as defined below) by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
Notice of Offer to Purchase
All Outstanding Shares of Common Stock
of
ZOGENIX, INC.
at
$26.00 per share, net in cash, plus one non-transferable contingent value right per share, which represents the
right to receive a contingent cash payment of $2.00 upon the achievement, if any, of a specified milestone
by
Zinc Merger Sub, Inc.,
an indirect wholly owned subsidiary of
UCB S.A.
Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) and indirect wholly owned subsidiary of UCB S.A., a société anonyme formed under the laws of Belgium (Parent), is offering to purchase all of the outstanding shares of common stock, par value $0.001 per share (the Shares), of Zogenix, Inc., a Delaware corporation (Zogenix), in exchange for (i) $26.00 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the Cash Amount), plus (ii) one non-transferable contingent value right per Share (each, a CVR), which CVR represents the right to receive a contingent payment of $2.00, net to the seller in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023 (the Cash Amount plus one CVR, collectively, or any greater amount per Share that may be paid pursuant to the Offer, being hereinafter referred to as the Offer Price), upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 1, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Offer to Purchase), and in the related Letter of Transmittal (as it may be amended, supplemented or otherwise modified from time to time, the Letter of Transmittal, which, together with the Offer to Purchase, as they may be amended, supplemented or otherwise modified from time to time, collectively constitute the Offer). Stockholders of record who tender directly to American Stock Transfer & Trust Company, LLC (the Depositary) will not be obligated to pay brokerage fees or commissions or, except as may be set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker, dealer, commercial bank, trust company or other nominee should consult such institution as to whether it charges any service fees or commissions.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON MARCH 1, 2022, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED. |
The Offer is being made pursuant to an Agreement and Plan of Merger dated as of January 18, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the Merger Agreement), among Zogenix, Parent and Purchaser. The Merger Agreement provides, among other things, that, following the consummation of the Offer and subject to certain conditions, Purchaser will be merged with and into Zogenix pursuant to Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the DGCL), with Zogenix continuing as the surviving corporation and becoming an indirect wholly owned subsidiary of Parent (the Merger). In the Merger, each outstanding Share (other than (i) Shares held in the treasury of Zogenix or owned by
1
Zogenix or any direct or indirect wholly owned subsidiary of Zogenix and Shares owned by Parent, Purchaser or any direct or indirect wholly owned subsidiary of Parent or Purchaser immediately prior to the effective time of the Merger (the Effective Time) and (ii) Shares outstanding immediately prior to the Effective Time and held by stockholders who are entitled to demand, and properly demand, appraisal for such Shares in accordance with Section 262 of the DGCL) will be cancelled and converted into the right to receive an amount in cash equal to the Offer Price, without interest (the Merger Consideration), less any applicable tax withholding. As of the Effective Time, all options to purchase Shares granted under a Zogenix equity plan, agreement or arrangement that are outstanding immediately prior to the Effective Time, whether or not then exercisable or vested, and that: (i) have an exercise price per Share that is less than the Cash Amount will be cancelled and the holder of each such stock option will be entitled to receive (without interest), in consideration for the cancellation of such stock option, an amount in cash (less applicable withholding of taxes required by applicable law) equal to the product of (A) the total number of Shares subject to such stock option immediately prior to the Effective Time multiplied by (B) the excess of the Cash Amount over the applicable exercise price per Share under such stock option and one CVR with respect to each Share subject to such stock option immediately prior to the Effective Time; (ii) have an exercise price per Share of at least the Cash Amount but less than $28.00, will be cancelled and the holder of each such stock option will be entitled to receive, if and when (and only if and when) payments in respect of CVRs are required to be made, $28.00 in cash, less the applicable exercise price per Share subject to such stock option; (iii) have an exercise price equal to or greater than $28.00, will be cancelled for no consideration. As of the Effective Time, all Zogenix restricted stock units (RSUs) and Zogenix performance stock units (PSUs) that are outstanding immediately prior to the Effective Time will be cancelled and the holder of each RSU and PSU will be entitled, in exchange therefor, to receive an amount in cash, without interest and less any applicable withholding taxes, equal to (i) the product of (A) the total number of Shares subject to (or deliverable under) such RSU or PSU immediately prior to the Effective Time (with any performance conditions deemed achieved at maximum levels with respect to the PSUs) multiplied by (B) the Cash Amount, and (ii) one CVR with respect to each Share subject to such RSU or PSU immediately prior to the Effective Time.
The Offer is subject to the conditions set forth in Section 15 of the Offer to Purchase (collectively, the Offer Conditions), including (i) there having been validly tendered and received (as such term is defined in Section 251(h) of the DGCL), and not validly withdrawn, that number of Shares that, when added to the Shares then owned by Parent and Purchaser, would represent at least a majority of the Shares outstanding as of the consummation of the Offer (the Minimum Condition), (ii) the termination or expiration of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (and any extension thereof, including any agreement entered into in compliance with the Merger Agreement between a party and a governmental body agreeing not to consummate the Offer or Merger prior to a certain date) applicable to the Offer or the Merger, and the receipt of any other clearance, approval or consent under any other applicable antitrust law (or the failure by any relevant governmental authority exercising jurisdiction under any other applicable antitrust law to render a decision in the relevant time period, so that the transactions contemplated by the Merger Agreement are deemed to be cleared, approved or consented to under such other applicable antitrust law), (iii) there being no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental authority of competent jurisdiction, and no law, rule, regulation, judgment, decree, injunction, ruling, order, decision, or other legal or regulatory requirement in effect, in each case that prohibits or makes illegal the acquisition of or payment for Shares pursuant to the Offer or the consummation of the Merger, or that imposes certain remedies or restrictions on the ability of Parent to own or operate Zogenix, its businesses or assets, and (iv) the Merger Agreement not having been terminated in accordance with its terms (the Termination Condition). There is no financing condition to the Offer.
The term Expiration Time means one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless the expiration of the Offer is extended to a subsequent date and time in accordance with the terms of the Merger Agreement, in which event the term Expiration Time means such subsequent date and time.
The board of directors of Zogenix (the Zogenix Board) has unanimously: (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Zogenix and its stockholders; (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger; (iii) resolved that
2
the Merger shall be effected pursuant to Section 251(h) of the DGCL as soon as practicable following the acceptance by Purchaser of the Shares tendered in the Offer following completion thereof; and (iv) resolved to recommend that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer. The Zogenix Board unanimously recommends that Zogenixs stockholders accept the Offer and tender their Shares pursuant to the Offer.
The Merger Agreement contains provisions that govern the circumstances under which Purchaser is required to extend the Offer. Specifically, the Merger Agreement provides that:
| if at the scheduled Expiration Time any of the Offer Conditions other than the Minimum Condition has not been satisfied or, to the extent waivable, waived by Purchaser or Parent, then Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, to permit such conditions to be satisfied; |
| Purchaser will extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq applicable to the Offer; and |
| if as of the scheduled Expiration Time, all of the Offer Conditions have been satisfied or waived by Purchaser or Parent, other than the Minimum Condition, Purchaser may (and, if requested by Zogenix, shall) extend the Offer for one or more consecutive increments of up to 10 business days (or such longer period of time agreed by Parent and Zogenix) per extension, except that Purchaser will not be required to so extend the Offer for more than 20 business days from the date on which all of the Offer Conditions (other than the Minimum Condition) were satisfied or the End Date, whichever is earlier. |
The Merger Agreement provides that Purchaser will not be required to, and may not without Zogenixs prior written consent, extend the Offer beyond the earlier of the termination of the Merger Agreement and the End Date. The End Date means July 18, 2022, unless otherwise extended to October 18, 2022 pursuant to the terms of the Merger Agreement.
If the Offer is consummated, Purchaser will not seek the approval of Zogenixs remaining stockholders before effecting the Merger. Parent, Purchaser and Zogenix have elected to have the Merger Agreement and the transactions contemplated thereby governed by Section 251(h) of the DGCL and agreed that the Merger will be effected as soon as practicable following the consummation of the Offer. Under Section 251(h) of the DGCL, the consummation of the Merger does not require a vote or action by written consent of Zogenixs stockholders.
Purchaser expressly reserves the right at any time, or from time to time, in its sole discretion, to waive any Offer Condition or modify or amend the terms of the Offer, including the Offer Price, except that Zogenixs prior written consent is required for Purchaser to: (i) decrease the Offer Price or change the form of consideration to be paid in the Offer; (ii) decrease the maximum number of Shares sought to be purchased pursuant to the Offer; (iii) waive or change the Minimum Condition or the Termination Condition; (iv) impose conditions on the Offer other than the Offer Conditions; (v) otherwise amend, modify or supplement any of the Offer Conditions or other terms of the Offer in a manner materially adverse to the Zogenix stockholders; or (vi) extend or otherwise change the Expiration Time other than as required or permitted by the terms of the Merger Agreement.
The Offer may not be terminated prior to the Expiration Time (or any rescheduled Expiration Time), unless the Merger Agreement is validly terminated in accordance with its terms.
Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., Eastern time, on the business day after the previously scheduled Expiration Time.
Purchaser is not providing for guaranteed delivery procedures. Therefore, Zogenix stockholders must allow sufficient time for the necessary tender procedures to be completed prior to the Expiration Time. In addition, for Zogenix stockholders who are registered holders, the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Letter of Transmittal (or in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents) must be received by the Depositary prior to the Expiration Time.
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For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when it gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price for such Shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Parent and Purchaser and transmitting such payments to tendering stockholders. Under no circumstances will Parent or Purchaser pay interest on the Offer Price, regardless of any extension of the Offer or any delay in making such payment.
In all cases, Purchaser will pay for Shares validly tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the Share Certificates) or timely confirmation of a book-entry transfer of such Shares into the Depositarys account at The Depository Trust Company (DTC) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal, properly completed and duly executed, with all required signature guarantees and (iii) any other documents required by the Letter of Transmittal or, in the case of a book-entry transfer, an Agents Message in lieu of the Letter of Transmittal and such other documents.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Time. Thereafter, tenders are irrevocable, except that if Purchaser has not accepted your Shares for payment within 60 days after commencement of the Offer, you may withdraw them at any time after April 2, 2022, the 60th day after commencement of the Offer, until Purchaser accepts your Shares for payment.
For a withdrawal of Shares to be effective, the Depositary must timely receive a written or facsimile transmission notice of withdrawal at one of its addresses set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the names in which the Share Certificates are registered, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an eligible institution, unless such Shares have been tendered for the account of an eligible institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Shares. If Share Certificates representing the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the name of the registered owners and the serial numbers shown on such Share Certificates must also be furnished to the Depositary.
Withdrawals of tenders of Shares may not be rescinded and any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer. Withdrawn Shares may, however, be retendered by following one of the procedures for tendering Shares described in Section 3 of the Offer to Purchase at any time prior to the scheduled expiration of the Offer.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference.
Zogenix has provided Purchaser with Zogenixs stockholder list and security position listings for the purpose of disseminating the Offer to Purchase, the related Letter of Transmittal and related documents to holders of Shares. The Offer to Purchase and related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Zogenixs stockholder list and will be furnished for subsequent transmittal to beneficial owners of Shares to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security position listing.
The receipt of cash by a holder of Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes. See Section 5 of the Offer to Purchase for a more detailed discussion of the material U.S. federal income tax consequences of the Offer and the Merger. You are urged to consult with your own tax advisor as to the particular tax consequences to you of the Offer and the Merger in light of your particular
4
circumstances (including the application and effect of any U.S. federal, state, local or non-U.S. income and other tax laws).
The Offer to Purchase and the related Letter of Transmittal contain important information. Stockholders should carefully read both documents in their entirety before any decision is made with respect to the Offer.
Questions or requests for assistance may be directed to Innisfree M&A Incorporated (the Information Agent) at the address and telephone numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchasers expense. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent or the Depositary) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th floor
New York, New York 10022
Stockholders may call toll free: (888) 750-5835
Banks and Brokers may call collect: (212) 750-5833
February 1, 2022
5
Exhibit (a)(1)(F)
UCB Commences Tender Offer to Acquire Zogenix, Inc.
Brussels (Belgium) 1 February 2022, 18:00 CET UCB (Euronext: UCB) is commencing today, through its indirect wholly owned subsidiary, Zinc Merger Sub, Inc., a tender offer to purchase all outstanding shares of common stock of Zogenix, Inc. (Nasdaq: ZGNX) for US$ 26.00 in cash at closing plus a contingent value right (CVR) for a potential cash payment of US$ 2.00 upon EU approval by December 31, 2023, of FINTEPLA® (fenfluramine) as an orphan medicine for treatment of Lennox-Gastaut syndrome, without interest and less any required tax withholding. The tender offer is being made pursuant to the previously-announced merger agreement between UCB and Zogenix entered into on January 18, 2022.
Following a successful closing of the tender offer, Zinc Merger Sub will be merged into Zogenix with Zogenix surviving as an indirect wholly owned subsidiary of UCB.
UCB will file today with the U.S. Securities and Exchange Commission (the SEC) a tender offer statement on Schedule TO that provides the terms of the tender offer. Additionally, Zogenix will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 that includes the recommendation of the Zogenix board of directors that Zogenix stockholders accept the tender offer and tender their shares.
The tender offer will expire one minute after 11:59 p.m., Eastern Time, on March 1, 2022, unless extended in accordance with the merger agreement and the applicable rules and regulations of the SEC. The closing of the tender offer is subject to certain conditions, including the tender of shares representing at least a majority of the total number of Zogenixs outstanding shares, receipt of required antitrust clearances and other customary conditions. The transaction is expected to close by the end of the second quarter of 2022.
About UCB
UCB, Brussels, Belgium (www.ucb.com) is a global biopharmaceutical company focused on the discovery and development of innovative medicines and solutions to transform the lives of people living with severe diseases of the immune system or of the central nervous system.
With more than 8,000 people in approximately 40 countries, the company generated revenue of 5.3 billion in 2020. UCB is listed on Euronext Brussels (symbol: UCB). Follow us on Twitter: @UCB_news.
Important Information About the Tender Offer
This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Zogenix, Inc. (Zogenix) or any other securities, nor is it a substitute for the tender offer materials described herein. A tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, will be filed today by UCB S.A. (UCB) and Zinc Merger Sub, Inc., an indirect wholly owned subsidiary of UCB, with the Securities and Exchange Commission (the SEC), and a solicitation/recommendation statement on Schedule 14D-9 will be filed by Zogenix with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER MATERIALS CAREFULLY (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO TIME, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES.
Investors and security holders may obtain a free copy of the Offer to Purchase, the related Letter of Transmittal, certain other tender offer documents and the Solicitation / Recommendation Statement (when available) and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to the Information Agent for the Offer, which will be named in the tender offer statement. In addition, Zogenix files annual, quarterly and current reports and other information with the SEC, which is available to the public from commercial document-retrieval services and at the SECs website at www.sec.gov. Copies of the documents filed with the SEC by UCB in connection with the Offer may be obtained at no charge on UCBs internet website at www.ucb.com or by contacting UCB at Allée de la Recherche, 60 1070 Brussels, Belgium, or Tel: +32 2 559 99 99. Copies of the documents filed with the SEC by Zogenix may be obtained at no charge on Zogenixs internet website at www.zogenix.com or by contacting Zogenix at 5959 Horton St Fl 5, Emeryville, California, 94608, USA, or Tel: +1 (510) 550 8300.
Forward-Looking Statement of UCB S.A.
This news release of UCB, S.A., Brussels, Belgium (the company) includes statements that are not statements of historical fact, or forward-looking statements, including with respect to the companys proposed acquisition of Zogenix. Such forward-looking statements include, but are not limited to, the ability of the company and Zogenix to complete the transactions contemplated by the merger agreement, including the parties ability to satisfy the conditions to the consummation of the offer contemplated thereby and the other conditions set forth in the merger agreement, statements about the expected timetable for completing the transaction, the companys and Zogenixs beliefs and expectations and statements about the benefits sought to be achieved in the companys proposed acquisition of Zogenix, the potential effects of the acquisition on both the company and Zogenix, the possibility of any termination of the merger agreement, as well as the expected benefits and success of Zogenixs product candidates. These statements are based upon the current beliefs and expectations of the companys management and are subject to significant risks and uncertainties. There can be no guarantees that the conditions to the closing of the proposed transaction will be satisfied on the expected timetable or at all or that pipeline products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, uncertainties as to the timing of the offer and the subsequent merger; uncertainties as to how many of Zogenixs shares will be tendered in the offer by Zogenixs stockholders; the risk that competing offers or acquisition proposals will be made; the possibility that various conditions to the consummation of the offer and the merger may not be satisfied or waived; the effects of disruption from the transactions contemplated by the merger agreement and the impact of the announcement and pendency of the transactions on Zogenixs business; the risk that stockholder litigation in connection with the offer or the merger may result in significant costs of defense, indemnification and liability; the risks related to non-achievement of the CVR milestone and that holders of the CVRs will not receive payments in respect of the CVRs; the global spread and impact of COVID-19, changes in general economic, business and competitive conditions, the inability to obtain necessary regulatory approvals or to obtain them on acceptable terms or within expected timing, costs associated with research and development, changes in the prospects for products in the
pipeline or under development by the company, effects of future judicial decisions or governmental investigations, safety, quality, data integrity or manufacturing issues; potential or actual data security and data privacy breaches, or disruptions of our information technology systems, product liability claims, challenges to patent protection for products or product candidates, competition from other products including biosimilars, changes in laws or regulations, exchange rate fluctuations, changes or uncertainties in tax laws or the administration of such laws, and hiring and retention of its employees.
The company expressly disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law.
# # #
For further information
UCB
Investor Relations
Antje Witte
T +32 2 559 94 14 | antje.witte@ucb.com
Media/Corporate Communications
Laurent Schots
T +32 2 559 9264 | laurent.schots@ucb.com
Nick Francis
T +44 7769 307745 | nick.francis@ucb.com
Erica Puntel (U.S. Media)
T +404 938 5359 | erica.puntel@ucb.com
Exhibit (b)
TERM FACILITY AGREEMENT
USD 800,000,000
dated 19 January 2022
for
UCB SA
arranged by
BNP PARIBAS FORTIS SA/NV and BARCLAYS BANK PLC
with
BNP PARIBAS FORTIS SA/NV
acting as Agent
CONTENTS
Clause | Page | |||||
1. |
DEFINITIONS AND INTERPRETATION | 2 | ||||
2. |
THE FACILITY | 32 | ||||
3. |
PURPOSE | 36 | ||||
4. |
CONDITIONS OF UTILISATION | 36 | ||||
5. |
UTILISATION | 40 | ||||
6. |
REPAYMENT | 43 | ||||
7. |
PREPAYMENT AND CANCELLATION | 43 | ||||
8. |
INTEREST | 48 | ||||
9. |
INTEREST PERIODS | 49 | ||||
10. |
CHANGES TO THE CALCULATION OF INTEREST | 51 | ||||
11. |
FEES | 53 | ||||
12. |
TAX GROSS UP AND INDEMNITIES | 55 | ||||
13. |
INCREASED COSTS | 66 | ||||
14. |
OTHER INDEMNITIES | 67 | ||||
15. |
MITIGATION BY THE LENDERS | 69 | ||||
16. |
COSTS AND EXPENSES | 70 | ||||
17. |
GUARANTEE AND INDEMNITY | 71 | ||||
18. |
REPRESENTATIONS | 80 | ||||
19. |
INFORMATION UNDERTAKINGS | 85 | ||||
20. |
FINANCIAL COVENANTS | 89 | ||||
21. |
GENERAL UNDERTAKINGS | 93 | ||||
22. |
EVENTS OF DEFAULT | 97 | ||||
23. |
CHANGES TO THE LENDERS | 103 | ||||
24. |
DEBT PURCHASE TRANSACTIONS | 110 | ||||
25. |
CHANGES TO THE OBLIGORS | 112 | ||||
26. |
ROLE OF THE AGENT AND THE ARRANGER | 116 | ||||
27. |
CONDUCT OF BUSINESS BY THE FINANCE PARTIES | 123 | ||||
28. |
SHARING AMONG THE FINANCE PARTIES | 123 | ||||
29. |
PAYMENT MECHANICS | 126 | ||||
30. |
SET-OFF | 130 |
31. |
NOTICES | 130 | ||||
32. |
CALCULATIONS AND CERTIFICATES | 133 | ||||
33. |
PARTIAL INVALIDITY | 133 | ||||
34. |
REMEDIES AND WAIVERS | 133 | ||||
35. |
AMENDMENTS AND WAIVERS | 134 | ||||
36. |
CONFIDENTIALITY | 139 | ||||
37. |
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS | 142 | ||||
38. |
COUNTERPARTS | 144 | ||||
39. |
U.S. PATRIOT ACT | 144 | ||||
40. |
GOVERNING LAW | 145 | ||||
41. |
ENFORCEMENT | 145 | ||||
42. |
WAIVER OF JURY TRIAL | 145 | ||||
43. |
CONTRACTUAL RECOGNITION OF BAIL-IN | 146 | ||||
SCHEDULE 1 THE PARTIES |
147 | |||||
SCHEDULE 2 CONDITIONS PRECEDENT |
149 | |||||
SCHEDULE 3 REQUESTS |
154 | |||||
SCHEDULE 4 FORM OF TRANSFER CERTIFICATE |
157 | |||||
SCHEDULE 5 FORM OF ASSIGNMENT AGREEMENT |
161 | |||||
SCHEDULE 6 FORM OF ACCESSION LETTER |
165 | |||||
SCHEDULE 7 FORM OF RESIGNATION LETTER |
167 | |||||
SCHEDULE 8 FORM OF COMPLIANCE CERTIFICATE |
168 | |||||
SCHEDULE 9 TIMETABLES |
169 | |||||
SCHEDULE 10 FORM OF INCREASE CONFIRMATION |
170 | |||||
SCHEDULE 11 REFERENCE RATE TERMS |
174 | |||||
SCHEDULE 12 DAILY NON-CUMULATIVE COMPOUNDED RFR RATE |
177 | |||||
SCHEDULE 13 CUMULATIVE COMPOUNDED RFR RATE |
179 | |||||
SCHEDULE 14 FORM OF BORROWER SUBSTITUTION CERTIFICATE |
180 | |||||
SCHEDULE 15 PRICING |
182 |
THIS AGREEMENT is dated 19 January 2022 and made between:
(1) | UCB SA, a limited liability company (société anonyme) incorporated under the laws of Belgium, having its registered office at Allée de la Recherche 60, B-1070 Brussels, enterprise number 0403.053.608, RLP Brussels (the Company); |
(2) | THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 as borrowers (together with the Company, the Original Borrowers); |
(3) | THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 as guarantors (together with the Company, the Original Guarantors); |
(4) | BNP PARIBAS FORTIS SA/NV and BARCLAYS BANK PLC as bookrunners and mandated lead arrangers (whether acting individually or together, the Bookrunners); |
(5) | BNP PARIBAS FORTIS SA/NV as documentation agent (and together with the Bookrunners, whether acting individually or together, the Arrangers); |
(6) | BNP PARIBAS FORTIS SA/NV and BARCLAYS BANK PLC as underwriter (whether acting individually or together, the Underwriter); |
(7) | THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as lenders (the Original Lenders); and |
(8) | BNP PARIBAS FORTIS SA/NV as agent of the other Finance Parties (the Agent). |
IT IS AGREED as follows:
- 1 -
SECTION 1
INTERPRETATION
1. | DEFINITIONS AND INTERPRETATION |
1.1 | Definitions |
In this Agreement:
Acceptable Bank means:
(a) | a bank or financial institution which has a rating of BBB or higher by Standard & Poors or Fitch Ratings Ltd or Baa2 or higher by Moodys or a comparable rating from an internationally recognised credit rating agency for its long-term debt obligations; or |
(b) | any Finance Party or other bank or financial institution which has been approved by the Agent. |
Acceptance Time has the meaning given to that term in the Merger Agreement.
Accession Letter means a document substantially in the form set out in Schedule 6 (Form of Accession Letter).
Accounting Principles means:
(a) | in relation to members of the Group incorporated in the U.S., U.S. GAAP or IFRS; |
(b) | in relation to the consolidated financial statements of the Company, IFRS; and |
otherwise, | the generally accepted accounting principles in the jurisdiction of incorporation of the relevant member of the Group. |
Accounting Reference Date means 31 December.
Acquisition means the acquisition by the Company of the Target, to be effected through a tender offer for the shares of common stock of the Target in accordance with applicable securities laws of the U.S. and applicable rules promulgated by the SEC, followed as promptly as practicable by the merger of Merger Sub with and into the Target in accordance with the General Corporation Law of the State of Delaware, U.S., and in each case pursuant to the Merger Agreement.
Additional Borrower means a company which becomes an Additional Borrower in accordance with Clause 25 (Changes to the Obligors).
Additional Business Day means any day specified as such in the Reference Rate Terms.
Additional Guarantor means a company which becomes an Additional Guarantor in accordance with Clause 25 (Changes to the Obligors).
Additional Obligor means an Additional Borrower or an Additional Guarantor.
- 2 -
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
Agents Spot Rate of Exchange means in respect of the conversion of one currency (the First Currency) into another currency (the Second Currency):
(a) | the Agents spot rate of exchange; or |
(b) | (if the Agent does not have an available spot rate of exchange) any other publicly available spot rate of exchange selected by the Agent (acting reasonably), |
for the purchase of the Second Currency with the First Currency in the London foreign exchange market at or about 11:00 a.m. London time on a particular day for settlement 2 London Business Days later.
Anti-Terrorism Law means each of:
(a) | Executive Order No. 13224 of September 23, 2001 - Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism (the Executive Order); |
(b) | the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act); |
(c) | the Money Laundering Control Act of 1986, Public Law 99-570; |
(d) | the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. §§ 1 et seq., any Executive Order or regulation promulgated thereunder and administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury; and |
(e) | any similar law enacted in the United States of America and / or the European Union subsequent to the date of this Agreement. |
Arranger Information Package means the information package provided to the Arrangers entitled Project Zorro dated 22 November 2021.
Article 55 BRRD means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
Assignment Agreement means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee and the Company.
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
Availability Period means the Certain Funds Period.
Available Commitment means a Lenders Commitment minus:
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(a) | the amount of its participation in any outstanding Loans (or, in relation to any Loan which has been redenominated into euro pursuant to Clause 5.4 (Refinancing of the Facility), the original USD amount of its participation); and |
(b) | in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date. |
Available Facility means the aggregate for the time being of each Lenders Available Commitment.
Bail-In Action means the exercise of any Write-down and Conversion Powers.
Bail-In Legislation means:
(a) | in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; |
(b) | in relation to the United Kingdom, the UK Bail-In Legislation; and |
(c) | in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation. |
Borrower means an Original Borrower or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 25 (Changes to the Obligors).
Borrower Substitution Certificate means a certificate substantially in the form set out in Schedule 14 (Form of Borrower Substitution Certificate) or any other form agreed between the relevant Borrowers and the Agent.
Break Costs means:
(a) | in respect of any Loan denominated in euro, the amount (if any) by which: |
(i) | the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; |
exceeds: |
(ii) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period., or |
(b) | in respect of any Loan denominated in USD, any amount specified as such in the Reference Rate Terms. |
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Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Brussels, New York and the jurisdiction of the relevant Obligor and:
(a) | (in relation to any date for payment or purchase of a currency other than euro) the principal financial centre of the country of that currency; or |
(b) | (in relation to any date for payment or purchase of euro) any TARGET Day; and |
(c) | (in relation to: |
(i) | any date for payment or purchase of an amount relating to a Loan denominated in USD; or |
(ii) | the determination of the first day or the last day of an Interest Period for a Loan denominated in USD, or otherwise in relation to the determination of the length of such an Interest Period), |
which is an Additional Business Day relating to that Loan or Unpaid Sum.
Central Bank Rate has the meaning given to that term in the Reference Rate Terms.
Central Bank Rate Adjustment has the meaning given to that term in the Reference Rate Terms.
Certain Funds Period means the period commencing on and including the date of this Agreement and ending on and including the third Business Day after the earliest of:
(a) | the Closing Date; |
(b) | the Long Stop Date; and |
(c) | the date on which the Merger Agreement is terminated. |
Certain Funds Utilisation means a Utilisation made or to be made under the Facility during the Certain Funds Period.
Clean-Up Event of Default mean each and any Event of Default other than an Event of Default under Clause 22.1 (Non-payment).
Clean-Up Period has the meaning given to that term in Clause 22.13(a) (Clean-Up Period).
Closing has the meaning given to that term in the Merger Agreement.
Closing Date has the meaning given to that term in the Merger Agreement.
Code means, at any date, the U.S. Internal Revenue Code of 1986 and the regulations promulgated and the judicial and administrative decisions rendered under it, all as the same may be in effect at such date.
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Commitment means:
(a) | in relation to an Original Lender, the amount set opposite its name under the heading Commitment in Part II of Schedule 1 (The Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and |
(b) | in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
to the extent not cancelled, reduced or transferred by it under this Agreement, and as such Commitments may be redenominated into euro from time to time by operation of Clause 5.4 (Refinancing of the Facility).
Compliance Certificate means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate).
Compounded Reference Rate means, in relation to any RFR Banking Day during the Interest Period of a Loan denominated in USD, the percentage rate per annum which is the Daily Non-Cumulative Compounded RFR Rate for that RFR Banking Day.
Compounding Methodology Supplement means, in relation to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate, a document which:
(a) | is agreed in writing by the Company, the Agent (in its own capacity) and the Agent (acting on the instructions of the Majority Lenders); |
(b) | specifies a calculation methodology for that rate; and |
(c) | has been made available to the Company and each Finance Party. |
Confidential Information means all information relating to the Company, any Obligor, the Group, the Target Group, the Acquisition, the Merger Agreement, the CVR Agreement, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents from either:
(a) | any member of the Group, any member of the Target Group or any of their advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group, any member of the Target Group or any of their advisers, |
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 (Confidentiality); |
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(ii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (i) or (ii) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group or the Target Group (as applicable) and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Company and the Agent.
Cumulative Compounded RFR Rate means, in relation to an Interest Period for a Loan denominated in USD, the percentage rate per annum determined by the Agent in accordance with the methodology set out in Schedule 13 (Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
CVR Agreement means a Contingent Value Rights Agreement substantially in the form of Exhibit A to the Merger Agreement, and as such form may be revised in accordance with the Merger Agreement.
Daily Non-Cumulative Compounded RFR Rate means, in relation to any RFR Banking Day during an Interest Period for a Loan denominated in USD, the percentage rate per annum determined by the Agent in accordance with the methodology set out in Schedule 12 (Daily Non-Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
Daily Rate means the rate specified as such in the Reference Rate Terms.
Debt Purchase Transaction means, in relation to a person, a transaction where such person:
(a) | purchases by way of assignment or transfer; |
(b) | enters into any sub-participation in respect of; or |
(c) | enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of, |
any Commitment or amount outstanding under this Agreement.
Declared Default means an Event of Default in respect of which a notice has been served by the Agent in accordance with Clause 22.12 (Acceleration).
Default means an Event of Default or any event or circumstance specified in Clause 22 (Events of Default) which would (with the expiry of a grace period or the giving of notice (in each case pursuant to the Clause 22 (Events of Default)) or any combination of any of the foregoing) be an Event of Default.
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Defaulting Lender means any Lender:
(a) | which has failed to make its participation in a Loan available or has notified the Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.5 (Lenders participation); |
(b) | which has otherwise rescinded or purported to rescind or repudiated or purported to repudiate a Finance Document or evidenced an intention to rescind or repudiate a Finance Document or which has notified the Agent, or stated publicly, that it will not comply with its funding obligations under the Finance Documents or any other loan agreement; |
(c) | with respect to which an Insolvency Event has occurred and is continuing; or |
(d) | with respect to which any regulatory or other governmental authority has (after the date of this Agreement) (directly or indirectly through any agency or otherwise) taken any steps to, or requires the transfer of, the whole or substantially all of the business, rights or obligations of that Lender by reason of actual or anticipated financial difficulties, |
unless, in the case of paragraphs (a) above:
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event; and |
payment is made within 2 Business Days of its due date; or
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
Disruption Event means either or both of:
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
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EEA Member Country means any member state of the European Union, Iceland, Liechtenstein and Norway.
Eligible Institution means any Lender or other bank, financial institution, trust, fund or other entity selected by the Company and which, in each case, is not a member of the Group.
Employee Plan means an employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which a U.S. Obligor or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); |
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and |
(c) | land (including, without limitation, land under water). |
Environmental Law means any applicable law or regulation in any jurisdiction in which a member of the Group conducts its business and which is binding on that member of the Group which relates to:
(a) | the pollution or protection of the Environment; |
(b) | the conditions of the workplace; or |
(c) | the generation, handling, storage, use, release or spillage of any substance which is capable of causing harm to the Environment, including, without limitation, any waste. |
ERISA means, at any date, the United States Employee Retirement Income Security Act of 1974 and the regulations promulgated and rulings issued thereunder, all as the same may be in effect at such date.
ERISA Affiliate means any person (as defined in Section 3(9) of ERISA) that for purposes of Title I and Title IV of ERISA and Section 412 of the Code would be deemed at any relevant time to be a single employer with an Obligor, pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
ERISA Event means
(a) | any reportable event, as defined in Section 4043 of ERISA, with respect to an Employee Plan, as to which PBGC has not by regulation waived the requirement of Section 4043 of ERISA that it be notified of such event; |
(b) | the filing of a notice of intent to terminate any Employee Plan, if such termination would require material additional contributions in order to be considered a standard |
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termination within the meaning of Section 4041(b) of ERISA or the termination of any Employee Plan under Section 4041(c) of ERISA;
(c) | the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment of a trustee thereunder to administer, any Employee Plan; |
(d) | the failure to make a required contribution to any Employee Plan that would result in the imposition of a lien under Section 430(k) of the Code or Section 303(k) of ERISA or the filing of any request for a minimum funding waiver under Section 412 of the Code with respect to any Employee Plan or Multiemployer Plan; |
(e) | an engagement in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA; |
(f) | the complete or partial withdrawal of any U.S. Obligor or any ERISA Affiliate from a Multiemployer Plan; |
(g) | an Obligor or an ERISA Affiliate incurring any liability under Title IV of ERISA with respect to any Employee Plan (other than premiums due and not delinquent under Section 4007 of ERISA); |
(h) | A determination that any Employee Plan is in at risk status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); and |
(i) | The receipt by an Obligor or any of its ERISA Affiliates of any notice of the imposition of withdrawal liability or of a determination that a Multiemployer Plan is, or is expected to be, in endangered or critical status within the meaning of Section 305 of ERISA. |
EU Bail-In Legislation Schedule means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
EURIBOR means, in relation to any Loan in euro:
(a) | the applicable Screen Rate; |
(b) | if no Screen Rate is available for EURIBOR for the Interest Period of that Loan, the applicable EURIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan; |
(c) | if: |
(i) | no Screen Rate is available for EURIBOR for the Interest Period of that Loan; and |
(ii) | it is not possible to calculate the Interpolated Screen Rate, |
the Interest Period of that Loan shall (if it is longer than the applicable Fallback Interest Period) be shortened to the applicable Fallback Interest Period and the applicable EURIBOR for that shortened Interest Period shall be determined pursuant to the relevant definition;
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(d) | if the Interest Period of that Loan is, after giving effect to paragraph (c) above, either the applicable Fallback Interest Period or shorter than the applicable Fallback Interest Period and, in either case, no Screen Rate is available for EURIBOR for the Interest Period of that Loan and it is not possible to calculate the Interpolated Screen Rate, the applicable EURIBOR shall be the Historic Screen Rate for that Loan; |
(e) | if paragraph (d) above applies but no Historic Screen Rate is available for the Interest Period of that Loan, the applicable EURIBOR shall be the Interpolated Historic Screen Rate for a period equal in length to the Interest Period of that Loan; or |
(f) | if paragraph (e) above applies but it is not possible to calculate the Interpolated Historic Screen Rate, the Interest Period of that Loan shall, if it has been shortened pursuant to paragraph (c) above, revert to its previous length and the applicable EURIBOR shall be the Reference Bank Rate as of the Specified Time for a period equal in length to the Interest Period of that Loan, |
as of, in the case of paragraph (a) above, the Specified Time on the Quotation Day for euro and for a period equal in length to the Interest Period of that Loan and, if, in all cases above, that rate is less than zero, EURIBOR shall be deemed to be zero.
Event of Default means any event or circumstance specified as such in Clause 22 (Events of Default).
Existing Lender has the meaning given to it in Clause 23 (Changes to the Lenders).
Facility means the term loan facility made available under this Agreement as described in Clause 2.1 (The Facility).
Facility Office means:
(a) | the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days written notice) as the office or offices through which it will perform its obligations under this Agreement; or |
(b) | in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes. |
Fallback Interest Period means three (3) Months.
FATCA means:
(a) | sections 1471 to 1474 of the Code (including any amended or successor version that is substantively comparable and not materially more onerous to comply with) or any associated regulations or other official guidance; |
(b) | any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the U.S. and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or |
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(c) | any agreement pursuant to the implementation of paragraphs (a) or (b) above with the U.S. Internal Revenue Service, the U.S. government or any governmental or taxation authority in any other jurisdiction. |
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.
FATCA Exempt Party means a Finance Party that is entitled to receive payments free from any FATCA Deduction.
Fee Letter means any letter or letters dated on or about the date of this Agreement between the Arrangers and the Company and / or Borrowers (or the Agent and the Company and or / Borrowers) setting out any of the fees referred to in Clause 11 (Fees).
Finance Document means this Agreement, any Fee Letter, any Accession Letter, any Resignation Letter, any Reference Rate Supplement, any Compounding Methodology Supplement and any other document designated as such by the Agent and the Company.
Finance Party means the Agent, the Arrangers or a Lender.
Financial Indebtedness means, without double counting, any indebtedness for or in respect of:
(a) | moneys borrowed; |
(b) | any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; |
(c) | any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument in each case evidencing borrowed money; |
(d) | the capital element of any lease or hire purchase contract to the extent it would, in accordance with the then prevailing Accounting Principles as adopted by the Group, be treated as a finance or capital lease; |
(e) | receivables sold or discounted (but only to the extent of any recourse against any member of the Group for non-payment of such receivables by the receivable counterparty); |
(f) | any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; |
(g) | any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market net value shall be taken into account); |
(h) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
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(i) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above. |
In determining whether any indebtedness exists for or in respect of any of the items referred to in paragraphs (a) to (i) above and, therefore, constitutes Financial Indebtedness, reference should be made to the treatment of the relevant item in accordance with the then prevailing Accounting Principles as adopted by the Group.
Funding Rate means any individual rate notified by a Lender to the Agent pursuant to paragraph (a)(ii) of Clause 10.4 (Cost of funds).
Group means the Company and its Subsidiaries for the time being but not, for the avoidance of doubt, any member of the Target Group prior to the Closing Date.
Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 25 (Changes to the Obligors).
Historic Screen Rate means, in relation to any Loan denominated in euro, the most recent applicable Screen Rate for the currency of that Loan and for a period equal in length to the Interest Period of that Loan and which is as of a day which is no more than five Business Days before the Quotation Day.
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
Impaired Agent means the Agent at any time when:
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Agent otherwise rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document; |
(c) | (if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of Defaulting Lender; |
(d) | an Insolvency Event has occurred and is continuing with respect to the Agent; or |
(e) | any regulatory or other governmental authority has (directly or indirectly through any agency or otherwise) taken any steps to, or requires the transfer of, the whole or substantially all of the business, rights or obligations of it by reason of actual or anticipated financial difficulties, |
unless, in the case of paragraph (a) above:
(i) | its failure to pay is caused by: |
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(A) | administrative or technical error; or |
(B) | a Disruption Event; and |
payment is made within 5 Business Days of its due date; or
(ii) | the Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
Increase Confirmation means a confirmation substantially in the form set out in Schedule 10 (Form of Increase Confirmation).
Increase Lender has the meaning given to that term in Clause 2.2 (Increase).
Indemnified Person has the meaning given to that term in Clause 14.2(b) (Other indemnities).
Information Packages means the Lender Information Package and the Arranger Information Package.
Insolvency Event in relation to a Finance Party means that the Finance Party:
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
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(f) | has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009; |
(g) | has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(h) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; |
(i) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(j) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or |
(k) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
Interest Payment means the aggregate amount of interest that:
(a) | is, or is scheduled to become, payable under any Finance Document; and |
(b) | relates to a Loan denominated in USD. |
Interest Period means, in relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.4 (Default interest).
Interpolated Historic Screen Rate means, in relation to any Loan denominated in euro, the rate which results from interpolating on a linear basis between:
(a) | the most recent applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and |
(b) | the most recent applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan, |
each of which is as of a day which is no more than five Business Days before the Quotation Day.
Interpolated Screen Rate means, in relation to any Loan denominated in euro, the rate which results from interpolating on a linear basis between:
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(a) | the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and |
(b) | the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan, |
each as of the Specified Time for the currency of that Loan.
IRS means the U.S. Internal Revenue Service or any successor thereto.
Legal Opinion means any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent) or Clause 25 (Changes to the Obligors).
Legal Reservations means:
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court, the principle of reasonableness and fairness, the limitation of enforcement by laws relating to penalties, bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration, other laws generally affecting the rights of creditors and any other laws of public policy relevant in the jurisdiction of incorporation of the relevant Obligor; |
(b) | the time barring of claims under applicable limitation laws (including the Limitation Acts or equivalent legislation in any applicable jurisdiction), the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void, defences of set-off or counterclaim; and |
(c) | any other general principles which are set out as qualifications as to matters of law in the Legal Opinions. |
Lender means:
(a) | any Original Lender; and |
(b) | any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 2.2 (Increase), Clause 23 (Changes to the Lenders) or Clause 24 (Debt Purchase Transactions), |
which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.
Lender Information Package means the information package to be provided to the Lenders in connection with the syndication of the Facility in form and content agreed between the Company and the Arrangers.
Lender Information Package Date means the date that Company approves the Lender Information Package for circulation to the Lenders in connection with the syndication of the Facility.
Leverage Ratio has the meaning given to that term in Clause 20.1 (Financial definitions).
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Limitation Acts means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.
LMA means the Loan Market Association.
Loan means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that Loan.
Long Stop Date means:
(a) | if the initial End Date (as defined in the Merger Agreement) has been extended in accordance with Section 11.01(b)(i) of the Merger Agreement, the date falling nine Months after signing of the Merger Agreement; and |
(b) | otherwise, the date falling six Months after signing of the Merger Agreement. |
Lookback Period means the number of days specified as such in the Reference Rate Terms.
Majority Lenders means a Lender or Lenders whose Commitments aggregate more than 662/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3% of the Total Commitments immediately prior to the reduction).
Margin has the meaning given to it in Schedule 15 (Pricing).
Margin Stock means margin stock as defined under Regulation U.
Market Disruption Rate means, in relation to a Loan denominated in USD, the rate (if any) specified in the Reference Rate Terms.
Material Adverse Effect means a material adverse effect on:
(a) | the business, assets or financial condition of the Group taken as a whole; or |
(b) | the ability of the Group, taken as a whole, to perform its payment obligations under the Finance Documents. |
Material Subsidiary means:
(a) | each Obligor other than the Company; and |
(b) | in addition, at any time after the publication of the audited consolidated accounts of the Group in respect of the financial year ended 31 December 2020, each Subsidiary of the Company which then has earnings before interest, tax, depreciation and amortisation (calculated on an unconsolidated basis and ignoring intra-Group items but otherwise on the same basis as Consolidated EBITDA) representing more than 7.5 per cent. of Consolidated EBITDA, or has turnover (on an unconsolidated basis and ignoring intra-Group items) representing more than 7.5 per cent. of turnover of the Group as a whole. |
The contribution of a Subsidiary of the Company set out in paragraph (b) above shall be determined from its financial statements which were consolidated into the latest audited consolidated financial statements of the Company (or if it has become a Subsidiary after the date of the latest audited consolidated financial statements of the Company were prepared, from
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the Subsidiarys latest financial statements). The financial condition of the Group will be determined from the latest audited consolidated financial statements of the Company.
However, if a Material Subsidiary disposes of all or substantially all of its assets to another member of the Group, it will immediately cease to be a Material Subsidiary and the other member of the Group will immediately become a Material Subsidiary until delivery of the next set of financial statements for that member of the Group at which time the assessment of whether such member of the Group is a Material Subsidiary shall be made in accordance with paragraph (b) above.
A certificate from the auditors of the Company that a Subsidiary is or is not a Material Subsidiary shall be conclusive and binding on all Parties.
Merger Agreement means the agreement and plan of merger among the Company (as parent thereunder), Merger Sub and Target, dated on or around the date of this Agreement and as amended from time to time.
Merger Sub means Zinc Merger Sub, Inc., an indirect wholly owned Subsidiary of the Company incorporated in the State of Delaware, U.S..
Month means, in relation to an Interest Period (or any other period for the accrual of commission or fees), a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a) | other than where paragraph (b) below applies: |
(i) | (subject to paragraph (iii) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; |
(ii) | if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and |
(iii) | if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end; and |
(b) | in relation to an Interest Period for any Loan denominated in USD (or any other period for the accrual of commission or fees) for which there are rules specified as Business Day Conventions in the Reference Rate Terms, those rules shall apply. |
The above rules will only apply to the last Month of any period.
Monthly shall be construed accordingly to the definition of Month.
Multiemployer Plan means a multiemployer plan (as defined in Section (3)(37) of ERISA) to which a U.S. Obligor or any ERISA Affiliate makes or is obliged to make contributions, or during the preceding five plan years, has made or been obliged to make contributions.
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New Lender has the meaning given to it in Clause 23 (Changes to the Lenders).
Non-Controlled Subsidiary means a member of the Group, other than an Obligor or Material Subsidiary, in which neither the Company nor any Subsidiary owns more than half the issued voting share capital.
Non-Cooperative Jurisdiction means a tax haven country, a low-tax jurisdiction or a non-cooperative jurisdiction within the meaning of article 307, §1, fifth subparagraph of the Belgian Income Tax Code 1992 (Wetboek van de inkomstenbelastingen 1992 / Code des impots sur les revenus 1992) or any successor provision.
Non-Cooperative Jurisdiction Tax Event means:
(a) | a Lender which is incorporated, has its place of effective management, or acts through a Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction fails to comply with its obligations set out in Clause 12.9 (Non-Cooperative Jurisdiction); or |
(b) | the information provided by a Lender which is incorporated, has its place of effective management, or acts through a Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction is not sufficient to demonstrate to the satisfaction of the Belgian authorities that it cannot be considered as an artificial construction within the meaning of article 198 §1, 10° of the Belgian Income Tax Code, |
as a result of which payments made by any Obligor to such Lender are not tax deductible,
Obligor means a Borrower or a Guarantor.
Obligors Agent means UCB SA, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.4 (Obligors Agent).
Original Borrower means each entity listed in Part I of Schedule 1 (The Parties) as an original borrower.
Original Financial Statements means:
(a) | in relation to the Company, the audited consolidated financial statements of the Group for the financial year ended 31 December 2020; and |
(b) | in relation to each Original Obligor other than the Company, its financial statements for its financial year ended 31 December 2020, audited, if such financial statements are audited. |
Original Guarantor means each entity listed in Part I of Schedule 1 (The Parties) as an original guarantor.
Original Lender means each financial institution listed in Part II of Schedule 1 (The Parties) as an original lender.
Original Obligor means an Original Borrower or an Original Guarantor.
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Participating Member State means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
Party means a party to this Agreement.
PBGC means the U.S. Pension Benefit Guaranty Corporation, or any entity succeeding to all or any of its functions under ERISA.
Permitted Financial Indebtedness means any Financial Indebtedness:
(a) | arising under a limited liability joint venture or a limited liability partnership provided the terms are arms-length or better for the member of the Group and provided that there is no recourse against any assets of any other member of the Group for non-payment of such Financial Indebtedness; |
(b) | owed to an Obligor; |
(c) | owed by a non-Obligor to another member of the Group which is a non-Obligor; |
(d) | of any person acquired by a member of the Group after the date of this Agreement which is incurred under arrangements in existence at the date of acquisition, but not incurred (other than by way of rolling over existing commitments) or increased in contemplation of, or since, that acquisition, and outstanding only for a period of six Months following the date of acquisition; |
(e) | in respect of performance bonds, bid bonds, completion guarantees and similar obligations incurred in the ordinary course of business up to a maximum amount of EUR 75,000,000 (or its equivalent) at any time; |
(f) | arising in connection with the cash pooling activities of the Group entered into in the ordinary course of business; |
(g) | in connection with indemnities, adjustment of purchase price, conditional deferred consideration or similar conditional obligations incurred in connection with an acquisition or a disposal (including for this purpose any sale, lease, license or other disposal not constituting a disposal for IFRS purposes) not otherwise prohibited by this Agreement (but excluding for the avoidance of doubt any unconditional deferred consideration payments which are not conditional and any similar unconditional obligations); |
(h) | arising under a Treasury Transaction provided that such Treasury Transaction is connected to the business of the Group and is not for purely speculative purposes; |
(i) | of a Non-Controlled Subsidiary; |
(j) | arising under the Revolving Credit Facilities Agreement; and |
(k) | any financial indebtedness not falling within paragraphs (a) to (j) above, the aggregate outstanding principal amount of which does not at the time of its incurrence exceed |
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the higher of 20% of total Financial Indebtedness of the Group and 50% of the Consolidated EBITDA in respect of the then last preceding Financial Year. |
Permitted Merger means:
(a) | an acquisition by way of merger provided that if either entity was a Guarantor and the surviving entity is not a Guarantor, it becomes an Additional Guarantor; and |
(b) | a solvent merger, amalgamation, demerger or corporate reconstruction. |
Permitted Reorganisation means:
(a) | a reorganisation or merger on a solvent basis between one or more members of the Group incorporated in the same jurisdiction (or in different jurisdictions but within the European Union or the United Kingdom) where if one of such members of the Group was an Obligor, the surviving entity remains an Obligor or becomes an Obligor on the same terms as such original Obligor; and |
(b) | any other reorganisation or merger of one or more members of the Group approved by the Agent (acting on the instructions of the Majority Lenders). |
Permitted Security means:
(a) | Security provided under the Finance Documents; |
(b) | Security arising by operation of law or arising in the ordinary course of day-to-day business (including liens in respect of assets imposed by law, title retention, netting, set-off, other encumbrances arising as part of hedging, operation of bank accounts and trading relationships or arising as part of letter of credit transactions, and rental deposits) or escrow arrangements on sales and acquisitions not otherwise restricted by this Agreement; |
(c) | any netting or set-off arrangement entered into by a member of the Group in the ordinary course of its banking arrangements or in connection with the cash pooling activities of the Group entered into in the ordinary course of business; |
(d) | any Security over or affecting any asset acquired by a member of the Group after the date of this Agreement if: |
(i) | the Security was not created in contemplation of the acquisition of that asset by a member of the Group; |
(ii) | the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group; and |
(iii) | the Security is removed or discharged within six Months of the date of acquisition of such asset; |
(e) | any Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security is created prior to the date on which that company becomes a member of the Group if: |
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(i) | the Security was not created in contemplation of the acquisition of that company; |
(ii) | the principal amount secured has not increased in contemplation of or since the acquisition of that company; and |
(iii) | the Security is removed or discharged within six Months of that company becoming a member of the Group; |
(f) | Security existing as at the date of this Agreement except to the extent that the principal amount secured exceeds the amount it secured at the date of this Agreement; |
(g) | Security or cash cover relating to a hedging agreement; |
(h) | Security over interests in a limited liability joint venture or limited liability partnership to secure the obligations of the relevant member of the Group party to that joint venture or partnership to other joint venture (or other) partners; |
(i) | Security arising pursuant to court proceedings and assessments by authorities (including tax and environmental) being contested in good faith with appropriate reserves; |
(j) | any easements, rights of way, restrictions, encroachments and other defects in title; |
(k) | Security granted by a member of the Group in favour of an Obligor; |
(l) | Security granted by a member of the Group in respect of the pension obligations of any member of the Group; |
(m) | Security granted by a member of the Group to the holders of freehold or leasehold interests (including to beneficiaries of rental income, if different) in real property to secure the obligations of any member of the Group under any lease held by it; |
(n) | Security arising under hire purchase agreements, conditional sale arrangements in respect of goods supplied to a member of the Group in the ordinary course of day-to-day business and under suppliers standard or usual terms or arrangements having similar effect; |
(o) | Security in favour of tax or customs authorities in connection with the importation of goods; |
(p) | Security over goods, inventory or documents of title where the shipment or storage price is financed by a documentary credit; |
(q) | cash cover relating to a letter of credit or by way of replacement for a letter of credit; |
(r) | Security arising as a consequence of finance leases or capital leases or any refinancing of the same provided that the aggregate outstanding principal amount secured by such Security does not exceed at the time of its incurrence 50% of the Consolidated EBITDA in respect of the then last preceding Financial Year; |
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(s) | Security in relation to which the Majority Lenders have granted their approval; |
(t) | Security granted by any Non-Controlled Subsidiary; and |
(u) | any additional Security which exists in respect of any asset other than permitted under paragraphs (a) to (t) above securing indebtedness the outstanding principal amount of which in aggregate does not at any time exceed EUR 65,000,000 (or its equivalent). |
Qualifying Lender has the meaning given to it in Clause 12 (Tax Gross Up and Indemnities).
Quotation Day means, in relation to any period for which an interest rate is to be determined:
(a) | (if the currency is euro) two TARGET Days before the first day of that period; or |
(b) | (for any other currency) two Business Days before the first day of that period, |
unless market practice differs in the Relevant Market for that currency, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market practice in the Relevant Market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).
Quoted Tenor means, in relation to the Screen Rate applicable to Loans denominated in euro, any period for which that Screen Rate is customarily displayed on the relevant page or screen of an information service.
Reference Bank Quotation means any quotation supplied to the Agent by a Reference Bank.
Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks in relation to EURIBOR:
(a) | (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank believes one prime bank is quoting to another prime bank for interbank term deposits in euro within the Participating Member States for the relevant period; or |
(b) | if different, as the rate (if any and applied to the relevant Reference Bank and the relevant period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator. |
Reference Banks means in relation to EURIBOR any Lender or such other entity as may be appointed by the Company and the Agent provided that no party shall be appointed as a Reference Bank without its consent.
Reference Rate Supplement means, in relation to a Loan denominated in USD, a document which:
(a) | is agreed in writing by the Company, the Agent (in its own capacity) and the Agent (acting on the instructions of the Majority Lenders); |
(b) | specifies the relevant terms which are expressed in this Agreement to be determined by reference to Reference Rate Terms; and |
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(c) | has been made available to the Company and each Finance Party. |
Reference Rate Terms means, in relation to:
(a) | USD; |
(b) | a Loan or an Unpaid Sum in USD; |
(c) | an Interest Period for that Loan or Unpaid Sum (or other period for the accrual of commission or fees in USD); or |
(d) | any term of this Agreement relating to the determination of a rate of interest in relation to such a Loan or Unpaid Sum, |
the terms set out in Schedule 11 (Reference Rate Terms) or in any Reference Rate Supplement.
Regulations T, U and X means, respectively, Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States (or any successor) as now and from time to time in effect from the date of this Agreement.
Related Fund in relation to a fund (the first fund), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
Relevant Market means:
(a) | in relation to euro, the European interbank market; and |
(b) | in relation to USD, the market specified as such in the Reference Rate Terms. |
Repeating Representations means each of the representations set out in Clause 18.1 (Status) to 18.6 (No default).
Reporting Day means the day (if any) specified as such in the Reference Rate Terms.
Reporting Time means the relevant time (if any) specified as such in the Reference Rate Terms.
Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
Resignation Letter means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter).
Resolution Authority means any body which has authority to exercise any Write-down and Conversion Powers.
Restricted Party means any person listed:
(a) | in the Annex to the Executive Order; |
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(b) | on the Specially Designated Nationals and Blocked Persons list maintained by the OFAC; or |
(c) | in any successor list to either of the foregoing. |
Revolving Credit Facilities Agreement means the revolving facilities agreement dated 14 December 2009 (as amended, restated and/or refinanced from time to time, including on 5 December 2019 and 3 December 2021) between, amongst others, UCB SA, UCB Biopharma SRL, UCB Pharma GmbH, UCB GmbH and UCB, Inc. as borrowers and BNP Paribas Fortis SA/NV as agent.
RFR means the rate specified as such in the Reference Rate Terms.
RFR Banking Day means any day specified as such in the Reference Rate Terms.
Screen Rate means in relation to EURIBOR, the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Company.
SEC means the United States Securities and Exchange Commission or any successor thereto.
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
Selection Notice means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).
Specified Time means a day or time determined in accordance with Schedule 9 (Timetables).
Subsidiary means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006.
Target means Zogenix, Inc., a corporation incorporated under the laws of the State of Delaware, U.S..
TARGET Day means any day on which TARGET2 is open for the settlement of payments in euro.
Target Group means the Target and each of its Subsidiaries.
TARGET2 means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
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Term SOFR means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).
Termination Date means the date falling five (5) years after the Closing Date.
Total Commitments means the aggregate of the Commitments, being USD 800,000,000 at the date of this Agreement.
Transaction Costs means all fees, costs and expenses, stamp, registration and other taxes incurred by the Company or any other member of the Group in connection with the Acquisition and the Finance Documents.
Transfer Certificate means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Company.
Transfer Date means, in relation to an assignment or a transfer, the later of:
(a) | the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and |
(b) | the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate. |
Treasury Transaction means any derivative transaction entered into in connection with the protection against or benefit from fluctuation in any rate or price and, including, without limitation, any repo of treasury shares.
UK Bail-In Legislation means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
Unfunded Pension Liability means the excess of an Employee Plans benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that plans assets, determined in accordance with the assumptions used for funding the Employee Plan pursuant to Section 412 of the Code for the applicable plan year.
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.
U.S. and United States means the United States of America, its territories, possessions and other areas subject to the jurisdiction of the United States of America.
U.S. Bankruptcy Code means Title 11 of the United States Code, 11 U.S.C. 101 et seq., entitled Bankruptcy.
U.S. Borrower means a Borrower whose jurisdiction of organisation, incorporation or formation is a state in the United States or the District of Colombia.
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U.S. Debtor Relief Laws means the U.S. Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganisation, judicial management or similar debtor relief laws of the United States from time to time in effect and affecting the rights of creditors generally.
U.S. Guarantor means a Guarantor whose jurisdiction of organisation, incorporation or formation is a state in the United States or the District of Colombia.
U.S. Obligor means any U.S. Borrower or any U.S. Guarantor.
U.S. Tax Obligor means:
(a) | a Borrower which is resident for tax purposes in the United States of America; or |
(b) | an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for U.S. federal income tax purposes. |
Utilisation means a utilisation of the Facility.
Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is to be made.
Utilisation Request means a notice substantially in the form set out in Part I of Schedule 3 (Requests).
Variable Percentage has the meaning given to that term in Clause 11.1 (Ticking fee).
VAT means:
(a) | any value added tax imposed by the Value Added Tax Act 1994; |
(b) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and |
(c) | any other tax of a similar nature, whether imposed in the United Kingdom or in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraphs (a) or (b) above, or imposed elsewhere. |
Write-down and Conversion Powers means:
(a) | in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; |
(b) | in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been |
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exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and |
(c) | in relation to any other applicable Bail-In Legislation: |
(i) | any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and |
(ii) | any similar or analogous powers under that Bail-In Legislation. |
1.2 | Construction |
(a) | Unless a contrary indication appears, any reference in this Agreement to: |
(i) | the Agent, the Arranger, the Bookrunners, any Finance Party, any Lender, any Obligor, any Party or the Underwriters shall be construed so as to include its successors in title, permitted assigns and permitted transferees; |
(ii) | assets includes present and future properties, revenues and rights of every description; |
(iii) | a Lenders cost of funds in relation to its participation in a Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in that Loan for a period equal in length to the Interest Period of that Loan; |
(iv) | unless otherwise expressly stated in this Agreement, disposal means a sale, lease, licence, transfer or other disposal to the extent such transactions would be construed as a disposal for the purposes of IFRS (but, in any event, does not include the making or repayment of a loan or a disposal of cash) and dispose shall be construed accordingly; |
(v) | the European interbank market means the interbank market for euro operating in Participating Member States; |
(vi) | a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated; |
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(vii) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; |
(viii) | a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality); |
(ix) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law, but if not having the force of law, being of a type with which persons to whom it is directed are expected and accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation; |
(x) | a provision of law is a reference to that provision as amended or re-enacted from time to time; and |
(xi) | a time of day is a reference to London time. |
(b) | The determination of the extent to which a rate is for a period equal in length to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement. |
(c) | Section, Clause and Schedule headings are for ease of reference only. |
(d) | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. |
(e) | A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been remedied or waived. |
(f) | A reference in this Agreement to a page or screen of an information service displaying a rate shall include: |
(i) | any replacement page of that information service which displays that rate; and |
(ii) | the appropriate page of such other information service which displays that rate from time to time in place of that information service, |
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Agent after consultation with the Company.
(g) | A reference in this Agreement to a Central Bank Rate shall include any successor rate to, or replacement rate for, that rate. |
(h) | Any Reference Rate Supplement overrides anything in: |
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(i) | Schedule 11 (Reference Rate Terms); or |
(ii) | any earlier Reference Rate Supplement. |
(i) | A Compounding Methodology Supplement relating to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate overrides anything relating to that rate in: |
(i) | Schedule 12 (Daily Non-Cumulative Compounded RFR Rate) or Schedule 13 (Cumulative Compounded RFR Rate), as the case may be; or |
(ii) | any earlier Compounding Methodology Supplement. |
(j) | For the avoidance of doubt it is agreed that any Default in the form of the failure to deliver a document or perform an act within a period of time shall be capable of remedy and shall cease to be continuing once that document has been delivered or act performed. |
(k) | For all purposes under the Finance Documents, in connection with any division or plan of division under Delaware law: |
(i) | if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person; and |
(ii) | if any new Person comes into existence, such new Person shall be deemed to have been organised on the first date of its existence by the holders of its shares at such time. |
1.3 | Currency Symbols and Definitions |
$, USD and dollars denote the lawful currency of the United States of America and , EUR and euro denote the single currency unit of the Participating Member States.
1.4 | Third Party Rights |
(a) | Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of any Finance Document. |
(b) | Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary any Finance Document at any time. |
1.5 | Operation of certain financial metric limits |
(a) | For the purposes of determining compliance by any member of the Group with any limit specified in any Basket by reference to a percentage of total Financial Indebtedness of the Group or Consolidated EBITDA, the Group shall be entitled to rely on the fact that the relevant transaction or action was permitted by reference to total Financial Indebtedness or Consolidated EBITDA as determined at the time that such |
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transaction or, as the case may be, action was first entered into and no change in total Financial Indebtedness or Consolidated EBITDA subsequent to such transaction or, as the case may be, action first being entered into will, in and of itself, cause any breach of that limit. |
(b) | For the purposes of paragraph (a) above, Basket means each of the basket amounts set out in: |
(i) | paragraph (k) of the definition of Permitted Financial Indebtedness; and |
(ii) | paragraph (r) of the definition of Permitted Security. |
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SECTION 2
THE FACILITY
2. | THE FACILITY |
2.1 | The Facility |
Subject to the terms of this Agreement, the Lenders make available to the Borrowers a USD term loan facility in an aggregate amount equal to the Total Commitments.
2.2 | Increase |
(a) | The Company may by giving notice to the Agent on or after: |
(i) | the Company receiving notification from the Agent that the Commitments of a Lender will be immediately cancelled pursuant to Clause 7.1 (Illegality) or Clause 7.2(b)(iv) (Change of control); or |
(ii) | the giving of notice by the Company to the Agent of cancellation of a Lenders Commitments pursuant to paragraph (a) of Clause 7.5 (Right of cancellation and repayment in relation to a single Lender) or paragraph (a) of Clause 7.7 (Right of cancellation in relation to a Defaulting Lender), |
request that the Commitments under the Facility be increased (and the Commitments under such Facility shall be so increased) in an aggregate amount up to the amount of the Commitments so cancelled (and in the currency of the respective Commitments so cancelled) as follows:
(iii) | the increased Commitments will be assumed by one or more Eligible Institutions (each an Increase Lender) each of which confirms in writing (whether in the relevant Increase Confirmation or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender in respect of those Commitments; |
(iv) | each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; |
(v) | each Increase Lender shall become a Party as a Lender and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; |
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(vi) | the Commitments of the other Lenders shall continue in full force and effect; |
(vii) | any increase in the Commitments shall take effect on the date (the Increase Date) which shall be the later (A) the date specified by the Company in the notice referred to above, being not earlier than the effective date of the relevant cancellation of Commitments to which the Increase Confirmation relates and the (B) date on which the Agent executes an otherwise duly completed Increase Confirmation delivered to it by the relevant Increase Lender; and |
(viii) | upon the Increase Date, to the extent that the Commitments cancelled by operation of the Clauses referred to in Clause 2.2(a)(i) and (ii) above included participations in one or more Loans that were repaid as a result of such cancellation, the Increase Lender shall advance to the relevant Borrower(s) such amounts equal to and in the same currency as the amounts so repaid, which amounts shall constitute participations in such Loan(s) each with an Interest Period starting on the Increase Date and ending on the last day of the current Interest Period for the relevant Loan. If, since the cancellation (the Trigger Cancellation) of the Commitments by operation of the Clauses referred to in Clause 2.2(a)(i) and (ii) above, a relevant Loan (the Subdivided Loan) has been subdivided by operation of Clause 9.3 (Consolidation and division of Loans) into more than one Loan (the Loans derived from such subdivision being the Derived Loans), the amount of the Increase Lenders participation attributable to the Subdivided Loan shall be allocated among each of the Derived Loans in the same percentage as the percentage of the amount of that Derived Loan has to the Subdivided Loan. To the extent that since the Trigger Cancellation all or part of the relevant Loan has been transferred to another Borrower or re-denominated into EUR, the amount of the increased Commitment shall be allocated between each Loan and each Borrower of such Loan on a pro rata basis adopting the forgoing provisions of this paragraph (viii) mutatis mutandis. The amount of any increase in Commitments shall take into account any prepayment occurring before the Increase Date. For the purposes of this Clause 2.2(viii), the requirements of Clause 3.1 (Purpose), Clause 4.2 (Further conditions precedent), Clause 4.3 (Maximum number of Loans), Clause 5.1 (Delivery of a Utilisation Request) and Clause 5.3 (Currency and amount) shall deemed to have been satisfied. |
(b) | The Agent shall, subject to paragraph (c) below, as soon as reasonably practicable after receipt by it of a duly completed Increase Confirmation appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Increase Confirmation. |
(c) | The Agent shall only be obliged to execute an Increase Confirmation delivered to it by an Increase Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender. |
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(d) | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as it would have been had it been an Original Lender. |
(e) | The Company shall promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2. |
(f) | The Increase Lender shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee in an amount equal to the fee which would be payable under Clause 23.3 (Assignment or transfer fee) if the increase was a transfer pursuant to Clause 23.5 (Procedure for transfer) and if the Increase Lender was a New Lender. |
(g) | The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph (g). |
(h) | Neither the Agent nor any Lender shall have any obligation to find an Increase Lender and in no event shall any Lender whose Commitment is replaced by an Increase Lender be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents. |
(i) | Clause 23.4 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(i) | an Existing Lender were references to all the Lenders immediately prior to the relevant increase; |
(ii) | the New Lender were references to that Increase Lender; and |
(iii) | a re-transfer and re-assignment were references to respectively a transfer and assignment. |
2.3 | Finance Parties rights and obligations |
(a) | The obligations of each Finance Party under the Finance Documents are several. Except as otherwise agreed by the Borrowers and the relevant Underwriters (i) failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents, and (ii) no Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
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(b) | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Partys participation in the Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor. |
(c) | A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents. |
2.4 | Obligors Agent |
(a) | Each Obligor (other than the Company) by its execution of this Agreement or an Accession Letter irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: |
(i) | the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to make any Currency Change Request, to execute on its behalf any Accession Letter, Selection Notice, and any other notice or document contemplated by this Agreement, and to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and |
(ii) | each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company, |
and in each case the Obligor shall be bound as though the Obligor itself had supplied the information concerning itself, given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication. For this purpose each Obligor incorporated in Germany releases the Company to the fullest extent possible from the restrictions of section 181 of the German Civil Code (Bürgerliches Gesetzbuch).
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors Agent or given to the Obligors Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event
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of any conflict between any notices or other communications of the Obligors Agent and any other Obligor, those of the Obligors Agent shall prevail.
3. | PURPOSE |
3.1 | Purpose |
Each Borrower shall apply all amounts borrowed by it under the Facility towards:
(a) | the consideration (including the Offer Price and the Merger Consideration, each as defined in the Merger Agreement) and any other amounts payable by the Company or any other member of the Group under the Merger Agreement; |
(b) | the repayment, refinancing, settlement, defeasance, discharge, purchase, redemption or repurchase of any existing debt of the Target Group (including any settlements upon conversion of the Convertible Notes, as defined in the Merger Agreement); |
(c) | payments in respect of the termination of any existing hedging arrangements of the Target Group; and |
(d) | related fees, costs and expenses incurred for the purpose of, or in connection with, the financing contemplated by this Agreement, the Acquisition, any other transactions contemplated in this Agreement, in the Merger Agreement or the CVR Agreement, the refinancing of any existing debt of the Target Group, the termination of any existing hedging arrangements of the Target Group and the associated transaction documents, |
provided that a Borrower may for any such purpose on-lend or otherwise (including by way of one or several equity contributions, repayments of intra-group loans and/or other settlements of intra-group balances) remit amounts borrowed by it under any Facility to any other member of the Group and/or any member of the Target Group.
3.2 | Monitoring |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4. | CONDITIONS OF UTILISATION |
4.1 | Initial conditions precedent |
(a) | Each Lender will only be obliged to comply with Clause 5.5 (Lenders participation) in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Agent has received, except to the extent it has waived the same, all of the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent (acting reasonably). The Agent shall notify the Company and the Lenders promptly upon being so satisfied and shall, if requested by the Company, prior to the satisfaction or waiver of all such conditions precedent, promptly give irrevocable notification of the satisfaction of such conditions precedent as are satisfied or waived at that time. |
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(b) | Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification. |
4.2 | Further conditions precedent |
(a) | Subject to Clause 4.1 (Initial conditions precedent), Clause 4.4 (Utilisation during the Certain Funds Period) and Clause 22.13 (Clean-Up Period), the Lenders will only be obliged to comply with Clause 5.5 (Lenders participation) if on the date of the Utilisation Request and on the proposed Utilisation Date: |
(i) | no Default is continuing or would result from the proposed Loan; and |
(ii) | the Repeating Representations to be made by each Obligor are true in all material respects. |
4.3 | Maximum number of Loans |
(a) | A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than three (3) Loans would be outstanding. |
(b) | A Borrower may not request that a Loan be divided or refinanced pursuant to Clause 5.4 (Refinancing of the Facility) if, as a result of the proposed division or refinancing three (3) or more Loans would be outstanding. |
4.4 | Utilisation during the Certain Funds Period |
(a) | In this Clause 4.4: |
Major Event of Default means an Event of Default arising under:
(i) | Clause 22.1 (Non-payment) in respect of principal or interest under this Agreement; |
(ii) | Clause 22.2 (Other obligations) insofar as it relates to a breach of any of Clause 21.4 (Negative pledge) and Clause 21.16 (Financial indebtedness of non-Obligors) by the Company or a Borrower itself (and for the avoidance of doubt, ignoring any obligation the Company or the Borrower would have to procure compliance by any of their Subsidiaries); |
(iii) | Clause 22.2 (Other obligations) insofar as it relates to a breach of Clause 21.18(c) (Acquisition related undertakings); |
(iv) | Clause 22.3 (Misrepresentation) insofar as it relates to a breach of any Major Representation; |
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(v) | Clause 22.5 (Insolvency), Clause 22.6 (Insolvency proceedings) or Clause 22.7 (Creditors process) insofar as they relate to the Company or a Borrower itself (and not, for the avoidance of doubt, any of their Subsidiaries); |
(vi) | Clause 22.8(a) (Unlawfulness or invalidity) insofar as it relates to the Company or a Borrower itself (and not, for the avoidance of doubt, any of their Subsidiaries) and only in respect of (i) this Agreement or (ii) any Fee Letter; |
(vii) | provided that the Company or a Borrower has not, within 20 Business Days of becoming aware of the relevant cessation, entered into alternative arrangements that put the Lenders in substantially the same position as if the relevant cessation had not occurred, Clause 22.8(b) (Unlawfulness or invalidity) insofar as it relates to the Company or a Borrower itself (and not, for the avoidance of doubt, any of their Subsidiaries) and only in respect of (i) this Agreement or (ii) any Fee Letter; or |
(viii) | Clause 22.9 (Repudiation) insofar as they relate to the Company or a Borrower itself (and not, for the avoidance of doubt, any of their Subsidiaries); |
Major Representation means any of the following representations in respect of the Company or a Borrower itself (and for the avoidance of doubt, ignoring any representation insofar as it relates to any of their Subsidiaries): (i) Clause 18.1 (Status), (ii) Clause 18.2 (Binding obligations), (iii) Clause 18.3 (Non-conflict with other obligations), (iv) Clause 18.4 (Power and authority) and (v) Clause 18.5 (Validity and admissibility in evidence).
(b) | Subject to Clause 4.1 (Initial conditions precedent), during the Certain Funds Period, the Lenders will be obliged to comply with Clause 5.5 (Lenders participation) in relation to a Certain Funds Utilisation, unless on the date of the Utilisation Request and/or on the proposed Utilisation Date: |
(i) | a Major Event of Default is continuing or would result from the proposed Certain Funds Utilisation; |
(ii) | any Major Representation is not true in any material respect or would not be true in any material respect immediately after such Certain Funds Utilisation is made in respect of the Company or a Borrower; or |
(iii) | it is unlawful for that Lender to perform any of its obligations as contemplated by this Agreement or to fund its participation in the Certain Funds Utilisation (provided that such event shall not itself release the other Lenders from their obligation to make available the Facility for the purpose of a Certain Funds Utilisation in accordance with this Clause 4.4). |
(c) | During the Certain Funds Period (save in circumstances where, pursuant to paragraph (b) above, a Lender is not obliged to comply with Clause 5.5 (Lenders participation)), none of the Finance Parties shall be entitled to: |
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(i) | cancel any of its Commitments to the extent to do so would prevent or limit the making of a Certain Funds Utilisation; |
(ii) | rescind, terminate or cancel this Agreement or the Facility or exercise any similar right or remedy or make or enforce any claim under the Finance Documents it may have to the extent to do so would prevent or limit the making of a Certain Funds Utilisation; |
(iii) | refuse to participate in, or prevent or limit, the making of a Certain Funds Utilisation; |
(iv) | exercise any right of set-off or counterclaim to the extent to do so would prevent or limit the making of a Certain Funds Utilisation; or |
(v) | cancel, accelerate or cause repayment or prepayment of any amounts owning under this Agreement or under any other Finance Document to the extent to do so would prevent or limit the making of a Certain Funds Utilisation, |
provided that immediately upon the expiry of the Certain Funds Period all such rights, remedies and entitlements shall be available for the Finance Parties notwithstanding that they may not have been used or been available for use during the Certain Funds Period (but without prejudice to Clause 22.13 (Clean-Up Period)).
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SECTION 3
UTILISATION
5. | UTILISATION |
5.1 | Delivery of a Utilisation Request |
A Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request (which may be completed by the Company on its behalf) not later than the Specified Time.
5.2 | Completion of a Utilisation Request |
(a) | Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless: |
(i) | the proposed Utilisation Date is a Business Day within the Availability Period; |
(ii) | the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and |
(iii) | the proposed Interest Period complies with Clause 9 (Interest Periods). |
(b) | Multiple Loans may be requested in a Utilisation Request. |
5.3 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be USD. |
(b) | The amount of the proposed Loan must be a minimum of USD 100,000,000 or, if less, the Available Facility. |
5.4 | Refinancing of the Facility |
(a) | In this Agreement: |
Conversion Date has the meaning given to that term in Clause 5.4(b) (Refinancing of the Facility).
Currency Change Event means the conversion of a Loan denominated in USD into a Loan denominated in EUR pursuant to this Clause 5.4.
Currency Change Request has the meaning given to that term in Clause 5.4(b) (Refinancing of the Facility).
Exchange Amount has the meaning given to that term in Clause 5.4(c) (Refinancing of the Facility).
Exchange Contract has the meaning given to that term in Clause 5.4(c) (Refinancing of the Facility).
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Refinancing Advance has the meaning given to that term in Clause 5.4(e) (Refinancing of the Facility).
USD Refinance Amount has the meaning given to that term in Clause 5.4(b) (Refinancing of the Facility).
(b) | Provided that: |
(i) | not more than four (4) Currency Change Events have occurred previously; |
(ii) | the relevant Borrower (or the Company on behalf of the Borrower) has notified the Agent of its intention to make the request at least eight (8) Business Days before the proposed Conversion Date; and |
(iii) | the Agent (acting reasonably) has not notified the relevant Borrower (or the Company as applicable) in writing, within four (4) Business Days of receipt of the notice referred to in (ii) above, that it will refuse such request, |
the relevant Borrower (or the Company on behalf of that Borrower) to whom a Loan has been made which is then denominated in USD may request (a Currency Change Request) in a Selection Notice that all or part of that Loan (being (i) a minimum amount of USD 125,000,000 or, if less, the outstanding amount of that Loan and (ii) a maximum amount of USD 250,000,000) be converted into a Loan denominated in EUR on the first day (the Conversion Date) of the Interest Period in respect of that Loan to which that Selection Notice relates. The Selection Notice shall specify the USD amount of the Loan that is to be so converted (the USD Refinance Amount). The Agent, subject to the satisfaction of the foregoing conditions in this Clause 5.4(b), shall promptly notify each Lender participating in the relevant Loan of the Currency Change Request and the USD Refinance Amount.
(c) | If a Borrower (or the Company on behalf of a Borrower) makes a Currency Change Request in accordance with Clause 5.4(b) above, that Borrower and the Agent shall, two Business Days prior to the start of the relevant Interest Period, enter into a spot foreign exchange contract (an Exchange Contract) under which the Agent agrees to sell an amount in USD to the Borrower equal to the USD Refinance Amount in exchange for the amount (the Exchange Amount) of EUR required to buy USD in an amount equal to the USD Refinance Amount using the Agents Spot Rate of Exchange. |
(d) | On ascertaining the Exchange Amount, the Agent will promptly notify the Company and each relevant Lender of the same and the relevant spot rate of exchange. |
(e) | On the Conversion Date: |
(i) | the relevant Lenders shall advance (the Refinancing Advance) to the Borrower, by way of payment to the Agent on behalf of the Borrower, an amount in EUR equal to the Exchange Amount; |
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(ii) | each relevant Lenders share of the Refinancing Advance shall be such percentage of the Exchange Amount as is equal to the percentage of its Commitment under the Loan the subject of the Currency Change Request; |
(iii) | the Agent shall apply the proceeds of the Refinancing Advance in settlement of the amount owed to it under the Exchange Contract; |
(iv) | the Agent shall pay amounts it is to pay under the Exchange Contract to the relevant Lenders pro rata to their respective Commitments under the USD denominated Loan the subject of the Currency Change Request to be applied in repayment of such Loan; and |
(v) | for the avoidance of doubt, the Refinancing Advance shall be a Loan denominated in EUR. |
(f) | In relation to a Refinancing Advance, the requirements of Clause 3.1 (Purpose), Clause 4.2 (Further conditions precedent), Clause 5.1 (Delivery of a Utilisation Request) and Clause 5.3 (Currency and amount) shall be deemed to have been satisfied. |
5.5 | Lenders participation |
(a) | If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office. |
(b) | The amount of each Lenders participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan. |
(c) | The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time. |
5.6 | Cancellation of Commitment |
The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.
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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6. | REPAYMENT |
The Borrowers shall repay the aggregate Loans in full on the Termination Date.
7. | PREPAYMENT AND CANCELLATION |
7.1 | Illegality |
(a) | If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan: |
(i) | that Lender shall promptly notify the Agent upon becoming aware of that event; |
(ii) | upon the Agent notifying the Company, the Available Commitment of that Lender will be immediately cancelled; and |
(iii) | to the extent that the Lenders participation has not been transferred pursuant to paragraph (d) of Clause 7.5 (Right of cancellation and repayment in relation to a single Lender), each Borrower shall repay that Lenders participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lenders corresponding Commitment(s) shall be immediately cancelled in the amount of the participations repaid. |
7.2 | Change of control |
(a) | For the purpose of this Clause 7.2: |
change of control means any person or group of persons acting together (other than an Excepted Person) becomes the beneficial owner of more than 50 per cent. of the issued share capital of the Company or otherwise gains control of the Company where control means the power to direct the management and policies of any entity, whether through the ownership of voting capital, by contract or otherwise; and
Excepted Person means Financière de Tubize S.A., either by itself or acting together with (i) any other shareholder of the Company with whom, as at the date of this Agreement, Financière de Tubize S.A. has notified the Company (who in turn notifies the Agent) is acting in concert separately in accordance with article 3, §1, 13°, c) of the Belgian law of 2 May 2007 on the disclosure of large shareholdings in issuers whose securities are admitted to trading on a regulated market and/or (ii) any person or persons controlled by Financière de Tubize S.A. or any of the persons listed under (i) above.
(b) | If a change of control occurs: |
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(i) | the Company shall promptly notify the Agent upon becoming aware of that event; |
(ii) | the Company shall promptly make an official public announcement of that event; |
(iii) | if either: |
(A) | in a Lenders opinion the change of control has an adverse effect on its credit assessment of the Company; or |
(B) | the change of control results in a breach of a Lenders credit exposure limits (whether resulting from any regulation or internal guidelines), |
the Agent (acting upon the instructions of any Lender) may request, no later than one Month after the date of the official public announcement of the relevant change of control made pursuant to paragraph (ii) above, that the Company enter into discussions with the Agent for a period of one Month with a view to agreeing any remedial action which may be required to place the Company and the Lenders in the same position as they would have been in if the change of control had not happened; and
(iv) | if no agreement is reached pursuant to paragraph (iii) above and a Lender so requires and notifies the Agent, the Agent shall, by not less than 45 days notice to the Company (or such lesser period as the Agent and the Company may agree), cancel the Available Commitment of that Lender and declare the participation of that Lender in all Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents immediately due and payable, whereupon each such Available Commitment will be immediately cancelled, the Commitment of that Lender shall immediately cease to be available for further utilisation and all such Loans of that Lender, accrued interest and other amounts shall become immediately due and payable. |
7.3 | Voluntary cancellation |
The Company may, if it gives the Agent not less than three (3) Business Days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 10,000,000) of an Available Facility. Any cancellation under this Clause 7.3 shall reduce the Commitments of the Lenders rateably.
7.4 | Voluntary prepayment of Loans |
The Borrower to which a Loan has been made may, if it gives the Agent not less than:
(a) | in the case of a Loan denominated in euro, three (3) Business Days (or such shorter period as the Majority Lenders may agree) prior notice; or |
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(b) | in the case of a Loan denominated in USD, five (5) RFR Banking Days (or such shorter period as the Majority Lenders may agree) prior notice, |
prepay the whole or any part of any Loan but, if in part, being an amount that reduces the Loan by a minimum amount of USD 10,000,000 or EUR 10,000,000, if the loan is then denominated in euro.
7.5 | Right of cancellation and repayment in relation to a single Lender |
(a) | If: |
(i) | any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up); |
(ii) | any Lender claims indemnification from the Company or an Obligor under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs); or |
(iii) | a Non-Cooperative Jurisdiction Tax Event occurs in relation to any Lender, |
the Company may, whilst the circumstance giving rise to the event or the requirement for indemnification or increase continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lenders participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.
(b) | On receipt of a notice of cancellation referred to in paragraph (a) above in relation to a Lender, the Available Commitment(s) of that Lender shall immediately be reduced to zero. |
(c) | On the last day of each Interest Period which ends after the Company has given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Loan is outstanding shall repay that Lenders participation in that Loan and that Lenders corresponding Commitment(s) shall be immediately cancelled in the amount of the participations repaid. |
(d) | If: |
(i) | any of the circumstances set out in paragraph (a) above apply to a Lender; or |
(ii) | an Obligor becomes obliged to pay any amount in accordance with Clause 7.1 (Illegality) to any Lender, |
the Company may, on three (3) Business Days prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 23 (Changes to the Lenders) for a purchase price in cash payable at the time of the transfer in an amount equal to the
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outstanding principal amount of such Lenders participation in the outstanding Loans and all accrued interest (to the extent that the Agent has not given a notification under Clause 23.10 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents.
(e) | The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions: |
(i) | the Company shall have no right to replace the Agent; |
(ii) | neither the Agent nor any Lender shall have any obligation to find a replacement Lender; |
(iii) | in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and |
(iv) | the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (d) above once it is satisfied that it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to that transfer. |
(f) | A Lender shall perform the checks described in paragraph (e)(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (d) above and shall notify the Agent and the Company when it is satisfied that it has complied with those checks. |
7.6 | Restrictions and timing of payments |
(a) | Any notice of cancellation or prepayment given by any Party under Clause 7.1 (Illegality); Clause 7.3 (Voluntary cancellation) or Clause 7.4 (Voluntary prepayment of Loans) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment provided that a notice of cancellation or prepayment may state that such notice is conditional upon the effectiveness of other credit facilities or the receipt of certain proceeds, in which case such notice of prepayment may be revoked by or on behalf of the relevant Borrower (by notice to the Agent no less than (two) 2 Business Days prior to the specified prepayment date) if such condition is not satisfied. |
(b) | Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. |
(c) | Unless a contrary indication appears in this Agreement, no Borrower may reborrow any part of the Facility which is prepaid or repaid. |
(d) | The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. |
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(e) | Subject to Clause 2.2 (Increase), no amount of Total Commitments cancelled under this Agreement may be subsequently reinstated. |
(f) | If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Company or the affected Lender, as appropriate. |
(g) | Except as provided elsewhere in this Agreement, if all or part of any Lenders participation in a Loan is repaid or prepaid an amount of that Lenders Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. |
7.7 | Right of cancellation in relation to a Defaulting Lender |
(a) | If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days notice of cancellation of each Available Commitment of that Lender provided that such cancellation will not be deemed to be a waiver or release of any claim the Company, any other Obligor, the Agent or any Lender may have against such Defaulting Lender. |
(b) | On the receipt of a notice referred to in paragraph (a), each Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
(c) | The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders. |
7.8 | Application of prepayments |
Any prepayment of a Loan pursuant to Clause 7.4 (Voluntary prepayment of Loans) shall be applied pro rata to each Lenders participation in that Loan.
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SECTION 5
COSTS OF UTILISATION
8. | INTEREST |
8.1 | Calculation of interest Loans denominated in euro |
(d) | The rate of interest on each Loan denominated in euro for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: |
(i) | Margin; and |
(ii) | EURIBOR. |
8.2 | Calculation of interest Loans denominated in USD |
(a) | The rate of interest on each Loan denominated in USD for any day during an Interest Period is the percentage rate per annum which is the aggregate of the applicable: |
(i) | Margin; and |
(ii) | Compounded Reference Rate for that day. |
(b) | If any day during an Interest Period for a Loan denominated in USD is not an RFR Banking Day, the rate of interest on that Loan for that day will be the rate applicable to the immediately preceding RFR Banking Day. |
8.3 | Payment of interest |
The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six-Monthly intervals after the first day of the Interest Period).
8.4 | Default interest |
(a) | If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 1 per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.4 shall be immediately payable by the Obligor on demand by the Agent. |
(b) | If any overdue amount consists of all or part of a Loan denominated in euro which became due on a day which was not the last day of an Interest Period relating to that Loan: |
(i) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and |
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(ii) | the rate of interest applying to the overdue amount during that first Interest Period shall be 1 per cent. per annum higher than the rate which would have applied if the overdue amount had not become due. |
(c) | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
8.5 | Notifications |
(a) | The Agent shall promptly notify the Lenders and the relevant Borrower of a determination of a rate of interest relating to any Loan denominated in euro. |
(b) | The Agent shall promptly upon an Interest Payment in relation to a Loan denominated in USD being determinable notify: |
(i) | the relevant Borrower of that Interest Payment; |
(ii) | each relevant Lender of the proportion of that Interest Payment which relates to that Lenders participation in the relevant Loan denominated in USD; and |
(iii) | the relevant Lenders and the relevant Borrower of: |
(A) | each applicable rate of interest relating to the determination of that Interest Payment; and |
(B) | to the extent it is then determinable, the Market Disruption Rate (if any) relating to the relevant Loan denominated in USD. |
This paragraph (b) shall not apply to any Interest Payment determined pursuant to Clause 10.4 (Cost of funds).
(c) | The Agent shall promptly notify the relevant Borrower of each Funding Rate relating to a Loan. |
(d) | The Agent shall promptly notify the relevant Lenders and the relevant Borrower of the determination of a rate of interest relating to a Loan denominated in USD to which Clause 10.4 (Cost of funds) applies. |
(e) | This Clause 8.5 shall not require the Agent to make any notification to any Party on a day which is not a Business Day. |
9. | INTEREST PERIODS |
9.1 | Selection of Interest Periods |
(a) | A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan has already been borrowed) in a Selection Notice. |
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(b) | Each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrower (or the Company on behalf of the Borrower) to which that Loan was made not later than the Specified Time. |
(c) | If a Borrower (or the Company) fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will, be for the same number of Months as the Interest Period then ending in respect to that Loan. |
(d) | Subject to this Clause 9, a Borrower (or the Company) may select an Interest Period: |
(i) | in relation to a Loan denominated in euro, of one (1), three (3) or six (6) Months or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan); and |
(ii) | in relation to a Loan denominated in USD, of any period specified in the Reference Rate Terms or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan). |
(e) | An Interest Period for a Loan shall not extend beyond the Termination Date applicable to its Facility. |
(f) | Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period. |
(g) | In respect of a Loan denominated in USD, no Interest Period shall be longer than six Months. |
9.2 | Non-Business Days |
(a) | In respect of a Loan denominated in euro, if an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). |
(b) | In respect of a Loan or Unpaid Sum denominated in USD, any rules specified as Business Day Conventions in the Reference Rate Terms shall apply to each Interest Period for that Loan or Unpaid Sum. |
9.3 | Consolidation and division of Loans |
(a) | Subject to paragraph (b) below, if two or more Interest Periods: |
(i) | relate to Loans in the same currency made to the same Borrower; and |
(ii) | end on the same date, |
those Loans will, unless that Borrower (or the Company on its behalf) specifies to the contrary in the Selection Notice for the next Interest Period, be consolidated into, and
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treated as, a single Loan on the last day of the Interest Period for all purposes including for the interpretation of Clause 4.3(b) (Maximum number of Loans).
(b) | Subject to paragraph (c) below, Clause 4.3 (Maximum number of Loans) and Clause 5.3 (Currency and amount), if a Borrower (or the Company on its behalf) requests in a Selection Notice that a Loan be divided into two or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in that Selection Notice, being Loans in the same currency as the divided Loan and in amounts (being not less than USD 100,000,000 or EUR 100,000,000 as applicable) that aggregate the principal amount of the Loan so divided. |
(c) | A Loan cannot be divided if as a result of the proposed division three (3) or more Loans would be outstanding. |
10. | CHANGES TO THE CALCULATION OF INTEREST |
10.1 | Absence of quotations |
(a) | Subject to paragraph (b) below, if EURIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable EURIBOR shall be determined on the basis of the quotations of the remaining Reference Banks. |
(b) | If at or about noon on the Quotation Day, none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period. |
10.2 | Interest calculation if no RFR or Central Bank Rate |
If:
(a) | there is no applicable RFR or Central Bank Rate for the purposes of calculating the Daily Non-Cumulative Compounded RFR Rate for an RFR Banking Day during an Interest Period for a Loan denominated in USD; and |
(b) | Cost of funds will apply as a fallback is specified in the Reference Rate Terms, |
Clause 10.4 (Cost of funds) shall apply to that Loan for that Interest Period.
10.3 | Market disruption |
(a) | In respect of any Loan denominated in euro, if a Market Disruption Event occurs in relation to such Loan for any Interest Period, then Clause 10.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period. |
(b) | In respect of any Loan denominated in USD, if: |
(i) | a Market Disruption Rate is specified in the Reference Rate Terms; and |
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(ii) | before the Reporting Time the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 30 per cent. of that Loan) that its cost of funds relating to its participation in that Loan would be in excess of that Market Disruption Rate, |
then Clause 10.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period.
(c) | In this Agreement Market Disruption Event means: |
(i) | at or about noon on the Quotation Day for the relevant Interest Period, EURIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine EURIBOR for the relevant currency and Interest Period; or |
(ii) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 30 per cent. of that Loan) that the cost to it of obtaining matching deposits in the Relevant Market would be in excess of EURIBOR. |
10.4 | Cost of funds |
(a) | If this Clause 10.4 applies to a Loan for an Interest Period, neither Clause 8.1 (Calculation of interest Loans denominated in euro) nor Clause 8.2 (Calculation of interest Loans denominated in USD) shall apply to that Loan for that Interest Period and the rate of interest on each Lenders share of that Loan for that Interest Period shall be the percentage rate per annum which is the sum of: |
(i) | the applicable Margin; and |
(ii) | the rate notified to the Agent by that Lender as soon as practicable and in any event, (i) in respect of a Loan denominated in euro, not later than three (3) Business Days before the date on which interest is due to be paid in respect of that Interest Period, and (ii) in respect of a Loan denominated in USD, by the Reporting Time, to be that which expresses as a percentage rate per annum its cost of funds relating to its participation in that Loan. |
(b) | If this Clause 10.4 applies and the Agent or the Company so requires, the Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. |
(c) | Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties. |
(d) | If this Clause 10.4 applies pursuant to Clause 10.3 (Market disruption) and: |
(i) | in relation to a Loan denominated in euro: |
(A) | a Lenders Funding Rate is less than EURIBOR; or |
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(B) | a Lender does not notify a rate to the Agent by the time specified in paragraph (a)(ii) above, |
that Lenders cost of funds relating to its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be EURIBOR; or
(ii) | in relation to a Loan denominated in USD: |
(A) | a Lenders Funding Rate is less than the relevant Market Disruption Rate; or |
(B) | a Lender does not notify a rate to the Agent by the time specified in paragraph (a)(ii) above, |
(iii) | that Lenders cost of funds relating to its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be the Market Disruption Rate for that Loan. |
(e) | If this Clause 10.4 applies the Agent shall, as soon as is practicable, notify the Company. |
10.5 | Break Costs |
(a) | Subject to paragraph (c) below, each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs (if any) attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day prior to the last day of an Interest Period for that Loan or Unpaid Sum. |
(b) | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become, or may become, payable. |
(c) | This Clause 10.5 shall only apply with respect of a Loan or Unpaid Sum denominated in USD if an amount is specified as Break Costs in the Reference Rate Terms. |
11. | FEES |
11.1 | Ticking fee |
(a) | In this Agreement: |
Applicable Margin means the Margin in respect of Loans in USD.
Variable Percentage means, in respect of the period represented by the number of days from and including the date of this Agreement set out under the heading Days in the table below, the percentage rate set out opposite such number of days under the heading Percentage of Applicable Margin.
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Days | Percentage of Applicable Margin | |||
0 90 days |
0 | % | ||
91 180 days |
15 | % | ||
On and after 181 days |
35 | % |
(b) | The Company shall pay a ticking fee on the amount of each Lenders Available Commitment during the period from (and including) the date of this Agreement to (but excluding) the first Utilisation Date. The Ticking fee shall accrue on a daily basis and shall be computed at a per annum rate equal to the Variable Percentage multiplied by the Applicable Margin on that Lenders Available Commitment during the period from (and including) the date of this Agreement to (but excluding) the first Utilisation Date. |
(c) | If a ticking fee is payable under paragraph (b) above, it shall, subject to paragraph (d) below, be payable in arrear: |
(i) | on the last day of each successive period of three (3) Months which ends during the Availability Period; |
(ii) | on the last day of the Availability Period; and |
(iii) | if the Facility is cancelled in full, at the time the cancellation is effective. |
(d) | Notwithstanding the provisions of paragraph (c) above, the Company shall not be obliged to pay any ticking fee until the fifth Business Day after it has received notice from the Agent of the amount of the ticking fee accrued and due in accordance with paragraph (c) above together with its details of calculation. |
(e) | No ticking fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. For the avoidance of doubt, no ticking fee is payable in respect of any cancelled amount of a Lenders Commitment. |
11.2 | Upfront fee |
The Company shall pay (or procure that a Borrower pays) to the Agent on behalf of each Lender that participates in the first Loan, an upfront fee in the amount and at the times agreed in a Fee Letter.
11.3 | Agency fee |
The Company shall pay (or procure that a Borrower pays) to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. | TAX GROSS UP AND INDEMNITIES |
12.1 | Definitions |
(a) | In this Agreement: |
Bank Levy means any amount payable by a Lender or any of its respective Affiliates on the basis of or in relation to its balance sheet or capital base or any part of it or its liabilities or minimum regulatory capital or any combination thereof, in relation to the Lender, any Tax in any jurisdiction levied on a similar basis or for a similar purpose (and imposed by reference to assets and/or liabilities) (including, for the avoidance of doubt, the German bank levy as set out in the German Restructuring Fund Act (Restrukturierungsfondsgesetz)).
Protected Party means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
Qualifying Lender means:
(a) | in relation to a payment to be made by a Borrower resident in Belgium, a Lender which is beneficially entitled to interest payable to that Lender in respect of a Loan under a Finance Document and is: |
(i) | a company with its head office in Belgium or acting through an establishment located in Belgium with which its participation in a Loan is effectively connected; |
(ii) | a Credit Institution acting through an establishment (whether its head office or a permanent establishment with which its participation in the Loan is effectively connected) located in a member state of the European Economic Area or in a jurisdiction with which Belgium has a double taxation agreement in force on the date of payment. For the purposes of this Clause 12.1, Credit Institution shall mean an institution whose business is to receive deposits or other repayable funds from the public and to grant credit for its own account; or |
(iii) | a Treaty Lender; |
(b) | in relation to a payment to be made by a U.S. Borrower or by a Borrower that is effectively connected with the conduct by such Borrower of a trade or business within the U.S. or otherwise attributable to a permanent establishment of such Borrower in the U.S.: |
(i) | a United States person within the meaning of Section 7701(a)(30) of the Code, provided such Lender timely has delivered to the Agent for transmission |
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to the Obligor making such payment two original executed copies of IRS Form W-9 (or any successor form) either directly or under cover of IRS Form W-8IMY (or any successor form) certifying its status as a United States person; or |
(ii) | a Treaty Lender with respect to the U.S., provided such Lender timely has delivered to the Agent for transmission to the Obligor making such payment two original executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, (or any successor form) either directly or under cover of IRS Form W-8IMY (or any successor form) certifying its entitlement to receive such payments without any such deduction or withholding under a double taxation treaty; or |
(iii) | a Lender which is entitled to receive payments under the Finance Documents without deduction or withholding of any U.S. federal income Taxes either as a result of such payments being effectively connected with the conduct by such Lender of a trade or business within the U.S. or under the portfolio interest exemption, provided such Lender timely has delivered to the Agent for transmission to the Obligor making such payment two original executed copies of either (1) IRS Form W-8ECI (or any successor form) either directly or under cover of IRS Form W-8IMY (or any successor form) certifying that the payments made pursuant to the Finance Documents are effectively connected with the conduct by that Lender of a trade or business within the U.S. or (2) IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or any successor form) either directly or under cover of IRS Form W-8IMY (or any successor form) claiming exemption from withholding in respect of payments made pursuant to the Finance Documents under the portfolio interest exemption and a statement certifying that such Lender is not a person described in Section 871(h)(3)(B) or Section 881(c)(3) of the Code or (3) such other applicable form prescribed by the IRS certifying as to such Lenders entitlement to exemption from U.S. withholding tax with respect to all payments to be made to such Lender under the Finance Documents. |
For purposes of this paragraph (b), in the case of a Lender that is not treated as the beneficial owner of the payment (or a portion thereof) under Chapter 3 and related provisions (including Sections 871, 881, 3406, 6041, 6045 and 6049) of the Code, the term Lender shall mean the person who is so treated as the beneficial owner of the payment (or portion thereof);
(c) | in relation to a payment to be made by an Obligor resident in the United Kingdom, a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
(A) | a Lender: |
(1) | which is a bank (as defined for the purpose of section 879 of the Income Tax Act 2007) making an advance under a Finance Document and is within the charge to United Kingdom |
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corporation tax as respects any payments of interest made in respect of that advance or could be within such charge as respects such payments apart from section 18A of the Corporation Tax Act 2009; or |
(2) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the Income Tax Act 2007) at the time that that advance was made, |
and, in each case, which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or
(B) | a Lender which is a company resident in the United Kingdom for United Kingdom tax purposes; or |
(C) | a Lender which is a partnership each member of which is: |
(1) | a company so resident in the United Kingdom; or |
(2) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the Corporation Tax Act 2009) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the Corporation Tax Act 2009; |
(D) | a Lender which is a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the Corporation Tax Act 2009) of that company; or |
(E) | a Treaty Lender; or |
(F) | a building society (as defined for the purpose of section 880 of the Income Tax Act 2007) making an advance under a Finance Document; and |
(d) | in relation to any other Borrower, a Lender which is: |
(i) | a Treaty Lender in relation to that Borrower; or |
(ii) | otherwise entitled to receive that interest from that Borrower without any withholding or deduction for or on account of Tax in accordance with the relevant Tax legislation of the Tax Jurisdiction of that Borrower at the time that it becomes a Lender. |
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Tax Confirmation means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of any Loan made by that Lender under a Finance Document is:
(a) | in the case of a Loan to any Borrower that is resident in Belgium, a person falling within paragraph (a) of the definition of Qualifying Lender; |
(b) | in the case of a Loan to any Borrower that is a U.S. Borrower or in the case of a Loan to any Borrower any payment payable in respect of which is effectively connected with the conduct by such Borrower of a trade or business within the U.S. or otherwise attributable to a permanent establishment of such Borrower in the U.S., a person falling within paragraph (b) of the definition of Qualifying Lender; |
(c) | in the case of a Loan to any Borrower that is resident in the United Kingdom a person falling within paragraph (c) of the definition of a Qualifying Lender; or |
(d) | in the case of a Loan to any Borrower not falling within (a) to (c) above, a person falling within paragraph (d) of the definition of Qualifying Lender. |
Tax Credit means a credit against, relief or remission for, or repayment of, any Tax.
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document other than a FATCA Deduction.
Tax Jurisdiction means in relation to any Borrower, the jurisdiction in which that Borrower is resident for tax purposes.
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).
Treaty Lender means a Lender which:
(a) | is treated as a resident of a Treaty State for the purposes of the relevant Treaty; |
(b) | does not carry on a business in the jurisdiction in which the relevant Borrower is incorporated through a permanent establishment with which that Lenders participation in the relevant Loan is effectively connected; and |
(c) | meets all other conditions in the relevant Treaty for full exemption from tax imposed on interest by the jurisdiction in which the relevant Borrower is incorporated provided that for this purpose it shall be assumed that there are satisfied any necessary procedural formalities. |
Treaty State means a jurisdiction having a double taxation agreement signed and ratified (a Treaty) with the jurisdiction of incorporation of the relevant Borrower which makes provision for full exemption from tax imposed by the jurisdiction of incorporation of the relevant Borrower on interest.
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Unless a contrary indication appears, in this Clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.
12.2 | Tax gross-up |
(a) | Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
(b) | The Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Company and that Obligor. |
(c) | If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
(d) | An Obligor is not required to make an increased payment under paragraph (c) above by reason of a Tax Deduction: |
(i) | in respect of Tax imposed from a payment of interest on a Loan, if on the date on which the payment falls due: |
(A) | the payment could have been made to the relevant Lender without a Tax Deduction if it had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or |
(B) | the relevant Lender is a Qualifying Lender falling within paragraph (c)(B), (c)(C) or (c)(D) of the definition and the Borrower is resident in the United Kingdom; and: |
(A) | an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a Direction) under section 931 of the Income Tax Act 2007 which relates to the payment and that Lender has received from the Obligor making the payment or from the Company a certified copy of that Direction; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
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(C) | the relevant Lender is a Qualifying Lender falling within paragraph (c)(B), (c)(C) or (c)(D) of the definition and the Borrower is resident in the United Kingdom; and: |
(A) | the relevant Lender has not given a UK Non-Bank Lender Tax Confirmation to the Company; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a UK Non-Bank Lender Tax Confirmation to the Company, on the basis that the UK Non-Bank Lender Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an excepted payment for the purpose of section 930 of the Income Tax Act 2007; or |
(D) | the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below. |
(e) | If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. |
(f) | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. |
(g) | A Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction, as soon as reasonably practicable after the date of this Agreement (or, in the case of a Treaty Lender that becomes a Lender after the date of this Agreement, as soon as reasonably practicable after the date on which that Treaty Lender becomes a Lender), including for the avoidance of doubt, the completion and submission to the taxation authority in the relevant Lenders country of incorporation (or, if different, the country in which its Facility Office is located or its country of residence for the purposes of the relevant Treaty) of appropriate forms and documents as reasonably requested by the Company. |
(h) | Each Lender which becomes a Party on the date of this Agreement gives a Tax Confirmation to the Company (qualified, if applicable, as agreed in writing with the Company prior to execution of this Agreement) by entering into this Agreement on the date of this Agreement. |
(i) | Each Lender which becomes a Party to this Agreement: |
(i) | on the date of this Agreement (an Existing Lender); or |
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(ii) | as a New Lender in accordance with Clause 23 (Changes to the Lenders), |
shall promptly notify the Company and the Agent if there is any change in the position set out in the Tax Confirmation (in the case of an Existing Lender), Transfer Certificate or Assignment Agreement (in the case of a New Lender) or Increase Confirmation (in the case of an Increase Lender), other than in relation to any change in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority.
(j) | Following written request by a Borrower incorporated and resident in Germany, any Lender or Agent claiming any additional amounts or indemnity payable pursuant to this Clause 12.2 (Tax gross-up) shall use its reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its applicable lending office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that would be payable or may thereafter accrue and would not, in the sole determination of such Lender, or Agent, as the case may be, be otherwise disadvantageous to such Party. |
12.3 | Tax indemnity |
(a) | The Company shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party reasonably determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. |
(b) | Paragraph (a) above shall not apply: |
(i) | with respect to any Tax assessed on a Finance Party: |
(A) | under the law of the jurisdiction in which that Finance Party is incorporated or organised or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes or as carrying on a business through a permanent establishment to which any right (including any sum received or receivable) under a Finance Document is attributable for Tax purposes; |
(B) | as a result of a present or former connection between such Finance Party and the jurisdiction imposing such Tax (other than connections arising from such Finance Party having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan or Finance Document, or sold or assigned an interest in any Loan, Facility or document relating thereto); or |
(C) | under the law of the jurisdiction in which that Finance Partys Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
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if that Tax is: (i) imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or (ii) any branch profits tax or franchise tax imposed by the U.S.; or (iii) by reference to the assets or net assets of a Finance Party; or
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or |
(B) | would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 12.2 (Tax gross-up) applied; |
(C) | relates to a FATCA Deduction required to be made by a Party; or |
(D) | relates to any Bank Levy. |
(c) | A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim and shall provide to the Agent reasonably satisfactory evidence of the relevant loss, liability or cost, following which the Agent shall notify the Company and provide such evidence to the Company. |
(d) | A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3, notify the Agent. |
12.4 | Tax Credit |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a) | a Tax Credit is attributable to an increased payment of which that Tax Payment forms part; to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and |
(b) | that Finance Party has obtained and utilised that Tax Credit, |
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
12.5 | Stamp taxes |
The Company shall pay and, within three Business Days of demand, indemnify each Finance Party and Arranger against any cost, loss or liability that Finance Party or Arranger incurs in relation to all stamp duty, registration, excise and other similar Taxes payable in respect of any Finance Document, for the avoidance of doubt, other than occurring directly and exclusively
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under a Transfer Certificate or an Accession Agreement/Accession Letter and other than resulting from voluntary registration of any Finance Document.
12.6 | Value added tax |
(a) | All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes shall be deemed to be exclusive of any VAT which is or becomes chargeable on such supply, and accordingly, subject to paragraph (b) below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party) provided that the reverse charge mechanism is not applicable. |
(b) | If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any Party (the Relevant Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT provided that the reverse charge mechanism is not applicable. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which it reasonably determines relates to the VAT chargeable on that supply. |
(c) | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses and their reimbursement to the extent that the Finance Party reasonably determines that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT. |
12.7 | FATCA Information |
(a) | Subject to paragraph (c) below, each Finance Party shall, within 10 Business Days of a reasonable request by another Party: |
(i) | confirm to that other Party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; and |
(ii) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Partys compliance with FATCA; and |
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(iii) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests or as otherwise required by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) for the purposes of that other Partys compliance with any other law, regulation or exchange of information regime. |
(b) | If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
(c) | Paragraph (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (a)(ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
(e) | If a Borrower is a U.S. Tax Obligor, or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within 10 Business Days of: |
(i) | where a Borrower is a U.S. Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement; |
(ii) | where a Borrower is a U.S. Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date; |
(iii) | the date a new U.S. Tax Obligor accedes as a Borrower; or |
(iv) | where the Borrower is not a U.S. Tax Obligor, the date of a request from the Agent, |
supply to the Agent:
(i) | a withholding certificate on the applicable IRS Form W-8, IRS Form W-9 or any other relevant form; or |
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(ii) | any withholding statement and other documentation, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation. |
(f) | The Agent shall provide any withholding certificate, withholding statement, documentation, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the relevant Borrower. |
(g) | If any withholding certificate, withholding statement, documentation, authorisation or waiver provided to the Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, documentation, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, documentation, authorisation or waiver to the Borrower. |
(h) | The Agent may rely on any withholding certificate, withholding statement, documentation, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with paragraph (e), (f) or (g) above. |
12.8 | FATCA Deduction |
(a) | Notwithstanding anything to the contrary herein, each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Company, the Agent and the other Finance Parties. |
12.9 | Non-Cooperative Jurisdiction |
(a) | As at the date of this Agreement, each Finance Party represents that it is not incorporated, having its place of effective management, or acting through a Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction. |
(b) | Each Finance Party which becomes a Party to this Agreement after the date of this Agreement shall indicate in the Transfer Certificate, Assignment Agreement or Increase Confirmation which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor whether it is tax resident of, or acting through a Facility Office with which the Finance Documents are effectively connected and which is situated in, as the case may be, a Non-Cooperative Jurisdiction. |
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(c) | Each Finance Party shall promptly notify the Company (i) if the state or territory in which it is incorporated, resident or established or where its Facility Office is established is a Non-Cooperative Jurisdiction or (ii) if the bank account(s) to which payments to which that Finance Party is entitled have been or will be made, are (A) managed or held by a person or persons incorporated, resident or established in a Non-Cooperative Jurisdiction or by the permanent establishment of a non-resident of Belgium situated in a Non-Cooperative Jurisdiction or (B) managed by, or opened with, (1) a financial institution incorporated, resident or established in a Non-Cooperative Jurisdiction or (2) a branch or office of a financial institution situated in a Non-Cooperative Jurisdiction. |
(d) | Each Finance Party shall provide information reasonably demonstrating that it cannot be considered as an artificial construction within the meaning of article 198 §1, 10° of the Belgian Income Tax Code (i) if the state or territory in which it is or becomes incorporated, resident or established or where its Facility Office is or becomes established is a Non-Cooperative Jurisdiction and (ii) if the bank account(s) to which payments to which that Finance Party is entitled have been or will be made, are (A) managed or held by a person or persons incorporated, resident or established in a Non- Cooperative Jurisdiction or by the permanent establishment of a non-resident of Belgium situated in a Non-Cooperative Jurisdiction or (B) managed by, or opened with, (1) a financial institution incorporated, resident or established in a Non-Cooperative Jurisdiction or (2) a branch or office of a financial institution situated in a Non-Cooperative Jurisdiction. Each Finance Party shall provide such information within ten Business Days following the receipt of a demand of the Company (which demand shall refer to this paragraph (d)). Such demand can be made by the Company (i) at the occasion of completing and filing its annual tax returns or (ii) if such request is accompanied by a written request from the Belgian tax authorities to the Company to demonstrate that the Lender is not an artificial construction within the meaning of article 198, 10° of the Belgian Income Tax Code. |
(e) | If after the Date of this Agreement the lists referred to in article 307, §1, fifth subparagraph of the Belgian Income Tax Code 1992 is amended, the Company shall provide the Agent with such amended lists. The Agent shall provide any amended list it receives to each other Finance Party. |
13. | INCREASED COSTS |
13.1 | Increased costs |
(a) | Subject to Clause 13.3 (Exceptions) the Company shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or |
(ii) | compliance with any law or regulation made after the date of this Agreement |
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(b) | In this Agreement Increased Costs means: |
(i) | a reduction in the rate of return from the Facility or on a Finance Partys (or its Affiliates) overall capital; |
(ii) | an additional or increased cost; or |
(iii) | a reduction of any amount due and payable under any Finance Document, |
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
13.2 | Increased cost claims |
(a) | A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Company. |
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
13.3 | Exceptions |
(a) | Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; or |
(ii) | compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied); or |
(iii) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; |
(iv) | attributable to a FATCA Deduction required to be made by a Party; or |
(v) | attributable to any Bank Levy. |
(b) | In this Clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in Clause 12.1 (Definitions). |
14. | OTHER INDEMNITIES |
14.1 | Currency indemnity |
(a) | If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of: |
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(i) | making or filing a claim or proof against that Obligor; or |
(ii) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
14.2 | Other indemnities |
(a) | The Company shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of: |
(i) | the occurrence of any Event of Default; |
(ii) | a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing Among the Finance Parties); |
(iii) | funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or |
(iv) | a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company to the extent that it has not been revoked in accordance with the terms of this Agreement. |
(b) | The Company shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each an Indemnified Person), against any third party costs which have been reasonably incurred or loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) arising out of the funding arrangements for the Acquisition (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the funding arrangements of the Acquisition), unless such cost, loss or liability is caused by the gross negligence or wilful misconduct, or breach of the terms of the Finance Documents or any confidentiality undertaking given, by that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate). |
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(c) | If any event occurs in respect of which indemnification under paragraph (b) above may be sought from the Company, the relevant Indemnified Person shall notify the Company (where legally permissible to do so and without being under any obligation to so notify to the extent that it is not lawfully permitted to do so) promptly after the relevant Indemnified Person becomes aware of such event, consult with the Company in good faith and promptly with respect to the conduct of the relevant action, claim, investigation or proceeding, conduct such action, claim, investigation or proceeding properly and diligently and shall consult with the Company prior to settling any action, claim, investigation or proceeding (in each case to the extent permitted by law and without being under any obligation to disclose any information which it is not lawfully permitted to disclose). Any required response to communication from the Company in connection with, or as part of, such consultation shall not be unreasonably withheld or delayed. |
(d) | Neither the Company nor any of its Affiliates shall be responsible or have any liability to any Indemnified Person for consequential losses or damages unless, in the case of the Company (only), such consequential losses or damages are awarded against any Indemnified Person as a result of the funding arrangements for the Acquisition and such Indemnified Person is entitled to indemnification from the Company in respect of the same under paragraph (b) above. |
14.3 | Indemnity to the Agent |
The Company shall promptly following demand by the Agent indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
(a) | investigating any event which it reasonably believes is a Default; or |
(b) | entering into or performing any foreign exchange contract for the purposes of paragraph (b) of Clause 29.10 (Change of currency); or |
(c) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. |
15. | MITIGATION BY THE LENDERS |
15.1 | Mitigation |
(a) | Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in the Facility ceasing to be available or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. |
(b) | Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents. |
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15.2 | Limitation of liability |
(a) | The Company shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation), other than costs and expenses incurred by the Finance Party to comply with FATCA or to obtain an exemption from any FATCA Deduction. |
(b) | A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
16. | COSTS AND EXPENSES |
16.1 | Transaction expenses |
The Company shall promptly on demand pay the Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:
(a) | this Agreement (to the extent previously agreed); and |
(b) | any other Finance Documents executed on or after the date of this Agreement. |
16.2 | Amendment costs |
If:
(a) | an Obligor requests an amendment, waiver or consent; |
(b) | an amendment is required pursuant to Clause 29.10 (Change of currency); or |
(c) | an amendment is required pursuant to Clause 35.3 (Changes to reference rates and use of Term SOFR), |
the Company shall, within three Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request, requirement or amendment.
16.3 | Enforcement costs |
(a) | The Company shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with the enforcement of, or (whilst an Event of Default is continuing) the preservation of any rights under, any Finance Document. |
(b) | Any person making a claim under Clauses 14.2 (Other indemnities), 14.3 (Indemnity to the Agent) and 16 (Costs and Expenses) shall provide reasonable detail of the amounts claimed and copies of relevant invoices (including VAT invoices). |
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SECTION 7
GUARANTEE
17. | GUARANTEE AND INDEMNITY |
17.1 | Guarantee and indemnity |
Each Guarantor irrevocably and unconditionally jointly and severally (but subject to any limitations set out herein or in any Accession Letter by which such Guarantor becomes a party hereto):
(a) | guarantees to each Finance Party punctual performance by each Borrower of all that Borrowers obligations under the Finance Documents; |
(b) | undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and |
(c) | agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 if the amount claimed had been recoverable on the basis of a guarantee. |
17.2 | Continuing guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.3 | Reinstatement |
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or otherwise) is made by a Finance Party in whole or in part on the basis of any payment or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 17 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
17.4 | Waiver of defences |
The obligations of each Guarantor under this Clause 17 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 17 (without limitation and whether or not known to it or any Finance Party) including:
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(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
17.5 | Guarantor Intent |
Without prejudice to the generality of Clause 17.4 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
17.6 | Immediate recourse |
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
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17.7 | Appropriations |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and |
(b) | hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantors liability under this Clause 17. |
17.8 | Deferral of Guarantors rights |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17:
(a) | to be indemnified by an Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligors obligations under the Finance Documents; |
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
(d) | to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 (Guarantee and indemnity); |
(e) | to exercise any right of set-off against any Obligor; and/or |
(f) | to claim or prove as a creditor of any Obligor in competition with any Finance Party. |
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 29 (Payment Mechanics).
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17.9 | Release of Guarantors right of contribution |
If any Guarantor (a Retiring Guarantor) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(a) | that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and |
(b) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
17.10 | Additional security |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
17.11 | Guarantee Limitations |
With respect to any Additional Guarantor, this guarantee is subject to any limitations set out in the Accession Letter applicable to such Additional Guarantor.
17.12 | Limitation on German Guarantors |
(a) | The Finance Parties agree, other than in accordance with the procedure set out in paragraphs (b) to (h) of this Clause 17.12, not to enforce any guarantee granted under this Agreement (the Guarantees, each a Guarantee) by a Guarantor in the form of a German Gesellschaft mit beschränkter Haftung (GmbH) or a Kommanditgesellschaft with a GmbH as general or limited partner (Restricted KG) (such GmbH or Restricted KG, a Restricted GmbH Guarantor, and such general or limited partner in the form of a GmbH, a GmbH Partner) if and to the extent the Guarantee is an Up-Stream or Cross-Stream Guarantee (as defined below) (save for any Guarantee granted as guarantee for borrowings to the extent these borrowings are on-lent to the Restricted GmbH Guarantor and its subsidiaries) and the enforcement would otherwise (i) lead to the situation that (1) the Restricted GmbH Guarantor, or (2) in case of a Restricted KG, its GmbH Partner, does not have sufficient net assets (Reinvermögen) to maintain its stated share capital (Stammkapital) where required by Sections 30 and 31 of the German Act on Limited Liability Companies (GmbHG) or (ii) increase an existing shortage of the stated share capital provided that for the purposes of the calculation of the amount not to be enforced (if any) the following balance sheet items shall be adjusted as follows: |
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(i) | the amount of any increase of stated share capital (Stammkapital) of the Restricted GmbH Guarantor after the date hereof that is prohibited under the Finance Documents and has been effected without the prior written consent of the Agent shall be deducted from the stated share capital (Stammkapital); |
(ii) | to the extent the enforcement of the Guarantee would deprive the Restricted GmbH Guarantor of the ability to fulfil its obligations to third parties (incurred, whether on a contingent or non-contingent basis, at the time of enforcement) or to continue its business, then for the determination of net assets, the assets of the Restricted GmbH Guarantor shall be calculated at the lesser of their book value (Buchwert) and their realisation value (Liquidationswert); and |
(iii) | the net assets shall take into account the costs of the Auditors Determination (as defined below), either as a reduction of assets or an increase of liabilities. |
(b) | The Finance Parties further agree (i) only to enforce any Up-Stream or Cross-Stream Guarantee (as defined below) granted under this Agreement by a Guarantor in the form of a German Aktiengesellschaft (AG) if and to the extent such Guarantee has been granted as a result of a valid and permissible instruction under a domination agreement with such AG as the dominated entity (save for any Guarantee granted for borrowings to the extent these borrowings are on-lent to the AG or its subsidiaries) and to the extent such guarantee does not violate German law, in particular Sections 57 and 71a of the German Stock Corporation Act (Aktiengesetz); and (ii) only to enforce any Up-Stream or Cross-Stream Guarantee granted under this Agreement by a company that is a direct or indirect subsidiary of such AG if and to the extent the AG has procured the granting of such guarantee as a result of a valid and permissible instruction under a domination agreement with such AG as the dominated entity (save for any Guarantee granted for borrowings to the extent these borrowings are on-lent to such subsidiary or its subsidiaries) and to the extent such Guarantee does not violate German law, in particular Sections 57 and 71a of the German Stock Corporation Act. The Finance Parties shall not be entitled to any claims, and no Obligor (including its or its shareholders officers, directors and employees), shall be liable as a result of or in connection with the unenforceability or illegality of any Guarantee by an AG or its direct or indirect subsidiaries solely as a consequence of German law capital maintenance and/or financial assistance rules in relation to an AG. For the avoidance of doubt: any limitations in this Clause 17.12 applying to a Restricted GmbH Guarantor shall also apply to any subsidiary of an AG in the form of a Restricted GmbH Guarantor in addition to the rules applying to subsidiaries of an AG. |
(c) | Each of the Finance Parties agrees that it will not commence and will, to the extent it is within its power, exercise any voting rights against the commencement of any action or other form of recourse against any person who has, at any time during the term of this Agreement, been a managing director or other officer of a Restricted GmbH Guarantor or a GmbH Partner where such action is taken as a result of or relates to the guarantees and/or indemnities granted under this Clause 17. Any such managing director or other officer of a Restricted GmbH Guarantor or a GmbH Partner (or former managing director or other officer of a Restricted GmbH Guarantor or a GmbH Partner) |
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may rely on this paragraph (c) subject to paragraph (b) of Clause 1.4 (Third Party Rights) and the provisions of the Third Parties Act. |
(d) | Promptly after the Restricted GmbH Guarantor has received a notification by the Agent of its intention to enforce a Guarantee by such Restricted GmbH Guarantor, such Restricted GmbH Guarantor shall realise, to the extent legally permitted and commercially reasonable, in a situation where it does not have sufficient net assets to maintain its stated share capital, any and all of its assets that are shown in the balance sheet with a book value (Buchwert) that is significantly lower than the market value of the assets if the relevant asset is not necessary for the relevant Restricted GmbH Guarantors business (betriebsnotwendig). |
(e) | The limitations set out in paragraph (a) only apply if and to the extent that (i) within ten (10) Business Days following the demand against a Restricted GmbH Guarantor under any Guarantee by the Agent (the Guarantee Demand), the managing director(s) on behalf of the Restricted GmbH Guarantor has confirmed in writing to the Agent (1) to what extent the Guarantee is an Up-Stream or Cross-Stream Guarantee and (2) which amount of such Up-Stream or Cross-Stream Guarantee cannot be enforced as it would cause the net assets of the Restricted GmbH Guarantor to fall below its stated share capital or increase an existing shortage of the stated capital (taking into account the adjustments set out in paragraph (a) above) (the Management Determination) and the Finance Parties (acting through the Agent) have not contested this within twenty (20) Business Days and argued that no or a lesser amount would be necessary to maintain or avoid a further shortfall of the Restricted GmbH Guarantors stated share capital; or (ii) within 20 Business Days (or such longer time the appointed auditor states it reasonably requires to prepare in good faith the Auditors Determination) from the date the Agent has contested the Management Determination the Agent receives a determination by auditors of international standard and reputation (the Auditors Determination) appointed by the Restricted GmbH Guarantor, of the amount that would have been necessary on the date the Guarantee Demand is given to maintain (or avoid a further shortfall of) its stated share capital. |
(f) | If the Agent has not contested the Management Determination within the time period set forth above, the amount that can be enforced pursuant to paragraph (a) above shall be determined in accordance with the Management Determination. If the Agent has contested the Management Determination within the time period set forth above and has not stated that it disagrees with the Auditors Determination within 20 Business Days after receipt thereof, the amount that can be enforced pursuant to paragraph (a) above shall be determined in accordance with the Auditors Determination. If the Agent stated to disagree with the Auditors Determination within the time-period set forth above, the Finance Parties (acting through the Agent) shall be entitled to enforce the Guarantee up to the amount which is undisputed between themselves and the Restricted GmbH Guarantor in accordance with the provisions of paragraph (a). In relation to the amount which is disputed, the Finance Parties (acting through the Agent) shall be entitled to further pursue their claims (if any) and the Restricted GmbH Guarantor shall be entitled to prove that this amount is necessary for maintaining or |
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avoiding a further shortfall of its stated share capital (calculated as of the date that the Guarantee Demand was given), for the avoidance of doubt it being understood that the Guarantee shall not be enforced up to such amount. |
(g) | If any of the Guarantees by a Restricted GmbH Guarantor was enforced without limitation because the Management Determination and/or the Auditors Determination (as the case may be) was not delivered within the relevant time frame the Finance Parties shall within thirty (30) Business Days after receipt of the respective Auditors Determination repay to the Restricted GmbH Guarantor any amount which is necessary to maintain the stated share capital of the Restricted GmbH Guarantor, calculated as of the date that the Guarantee Demand was given. The Restricted GmbH Guarantor shall also be entitled to claims in court that the Management Determination or the Auditors Determination overstated the amount that can be enforced pursuant to this Agreement, and if such claim is successful, the Finance Parties shall without undue delay repay to the Restricted GmbH Guarantor any amount that is necessary to maintain the stated share capital of the Restricted GmbH Guarantor, calculated as of the date that the Guarantee Demand was given. Any AG and/or any of its Subsidiaries that has granted a Guarantee that has been enforced shall be entitled to claim in court that its guarantee violated German law capital maintenance and/or financial assistance rules in relation to an AG and, in case these claims are successful, the Finance Parties shall without undue delay repay to such guarantor any such amount paid as a result of a Guarantee violating German law. |
(h) | Up-Stream or Cross-Stream Guarantee shall mean any direct or indirect guarantee for the obligations or liabilities of a person that is not a direct or indirect Subsidiary of the Restricted GmbH Guarantor or AG (or, in case of an AG only, as the case may be, its Subsidiaries). |
(i) | The term guarantee as used in this Clause 17.12 shall be broadly construed to include any guarantees, indemnity obligations or covenants to pay the obligations and liabilities of another party towards the Finance Parties. |
17.13 | Limitation on U.S. Guarantors |
(a) | Any term or provision of this Clause 17 or any other term in this Agreement or any Finance Document notwithstanding, the maximum aggregate amount of the obligations for which any Guarantor shall be liable under this Agreement or any other Finance Document shall in no event exceed an amount equal to the largest amount that would not render such Guarantors obligations under this Agreement subject to avoidance under applicable U.S. Debtor Relief Laws, in all cases before taking into account any liability under any other guarantee by such Guarantor. |
(b) | Each U.S. Guarantor acknowledges that: |
(i) | it will receive valuable direct or indirect benefits as a result of the transactions financed by the Finance Documents; |
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(ii) | those benefits will constitute reasonably equivalent value and fair consideration; and |
(iii) | each Finance Party has acted in good faith in connection with the guarantee given by that U.S. Guarantor and the transactions contemplated by the Finance Documents. |
(c) | Any term or provision of this Clause 17 or any other term in this Agreement or any Finance Document notwithstanding: |
(i) | no member of the Group will have any obligation or liability, directly or indirectly, as guarantor or otherwise under this Agreement or any Finance Document with respect to any obligation or liability arising under any Finance Document of any U.S. Borrower (the U.S. Obligations); and |
(ii) | not more than 65% of the stock or other equity interests (measured by the total combined voting power of the issued and outstanding voting stock or other equity interests) of, and none of the assets or property of, any member of the Group may be pledged directly or indirectly as security for any U.S. Obligations, |
in each case to the extent such obligation, liability or pledge would cause or result in any deemed dividend to any U.S. Obligor pursuant to Section 956 of the Code.
17.14 | Limitation on Belgian Guarantors |
(a) | In the case of each Guarantor incorporated in Belgium other than the Company (a Belgian Guarantor) its liability under this Clause 17 shall be limited, at any time, to a maximum aggregate amount equal to the higher of: |
(i) | an amount equal to 90% of such Belgian Guarantors net assets (as determined in accordance with the Belgian Code of Companies and Associations, and accounting principles generally accepted in Belgium, but not taking intra-groups debts into account as debts) as shown by the most recent audited annual financial statements available as at the date of this Agreement or, in the case of an Additional Guarantor incorporated in Belgium, as at the date of its accession to this Agreement (the Initial Net Assets); and |
(ii) | without prejudice to the obligation of such Belgian Guarantor to pay in full (a) all amounts borrowed by it under the Facility, (b) the interest accrued on such amounts, and (c) all other amounts outstanding in connection with such borrowing by such Belgian Guarantor, the aggregate amount outstanding on the day prior to the date on which the relevant demand is made, of (a) the principal amount borrowed by such Guarantor under the Facility and (b) any intra-group loans or facilities made to it by any other member of the Group directly and/or indirectly using all or part of the proceeds of the Facility (whether or not such intra-group loan is retained by the relevant Guarantor for |
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its own purposes or on-lent to another Group company) outstanding on the date on which the relevant demand is made.
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. | REPRESENTATIONS |
Each Obligor makes the representations and warranties set out in this Clause 18 to each Finance Party on the date of this Agreement other than the representations and warranties set out in:
(a) | Clause 18.8 (Financial statements) which are made solely by the Company to each Finance Party on the date of this Agreement; and |
(b) | Clause 18.7 (No misleading information) which is made solely by the Company to each Finance Party on the Lender Information Package Date. |
18.1 | Status |
(a) | It is a corporation, limited liability company or limited partnership, duly incorporated or formed and validly existing under the law of its jurisdiction of incorporation. |
(b) | It has the legal capacity to own its assets and carry on its business as it is being conducted in all material respects. |
18.2 | Binding obligations |
The obligations expressed to be assumed by it in each Finance Document are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
18.3 | Non-conflict with other obligations |
The entry into and performance by it of, and the transactions contemplated by, the Finance Documents to which it is a Party do not and will not conflict with:
(a) | any material law or regulation applicable to it in any material respect; |
(b) | its constitutional documents; or |
(c) | any agreement or instrument binding upon it or any of assets, to an extent which will have a Material Adverse Effect. |
18.4 | Power and authority |
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.
18.5 | Validity and admissibility in evidence |
Subject to the Legal Reservations, all Authorisations required or desirable:
(a) | to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and |
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(b) | to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation, |
have been obtained or effected and are in full force and effect, save to the extent that failure to do so would not have a Material Adverse Effect.
18.6 | No default |
To the best of its knowledge and belief, no Event of Default is continuing or would reasonably be expected to result from the making of any Utilisation in respect of which a Utilisation Request is outstanding.
18.7 | No misleading information |
(a) | To the knowledge and belief of the Company having made due and careful enquiry, any material factual information contained in the Lender Information Package was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. |
(b) | To the knowledge and belief of the Company having made due and careful enquiry, the financial projections contained in the Lender Information Package have been prepared on the basis of recent historical information and on assumptions believed by the Company at the time to be reasonable. |
(c) | To the knowledge and belief of the Company having made due and careful enquiry, as at the date of the Lender Information Package nothing had occurred or been omitted from the Lender Information Package and no information had been given or withheld that resulted in the information contained in the Lender Information Package being untrue or misleading in any material respect. |
18.8 | Financial statements |
(a) | To the knowledge and belief of the Company having made due and careful enquiry, the Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied. |
(b) | To the knowledge and belief of the Company having made due and careful enquiry, the Original Financial Statements give a true and fair view of its financial condition and operations (consolidated in the case of the Company) of the Group during the relevant financial year. |
(c) | To the knowledge and belief of the Company having made due and careful enquiry, there has been no change in its business or financial condition (or the business or consolidated financial condition of the Group) since the date of the Original Financial Statements which has, or could be reasonably expected to have, a Material Adverse Effect. |
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18.9 | Pari passu ranking |
Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
18.10 | No proceedings pending or threatened |
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are reasonably likely to be adversely determined and which, if adversely determined, would have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
18.11 | Environmental Laws |
To the best of its knowledge and belief, it is in compliance with Environmental Laws and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which would have a Material Adverse Effect.
18.12 | Governing law and enforcement |
Subject to the Legal Reservations:
(a) | the choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation; and |
(b) | any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation. |
18.13 | Good title to assets |
It has a good title to, or valid leases of, or is otherwise entitled to use all assets (including intellectual property rights) necessary to carry on its business as presently conducted except where failure to have good title or valid leases or other rights to use would not have a Material Adverse Effect.
18.14 | ERISA and Multiemployer Plans |
(a) | No ERISA Event has occurred, is continuing, or is reasonably likely to occur with respect to which any Obligor or ERISA Affiliate has or is reasonably likely to incur any liability, which would reasonably be expected to have a Material Adverse Effect. |
(b) | Each Employee Plan is in compliance in form and operation with ERISA and the Code and all other applicable laws and regulations save where any failure to comply would not reasonably be expected to have a Material Adverse Effect. |
(c) | Each Employee Plan which is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be so qualified or is in the process of being submitted to the IRS for approval or will be so submitted and, nothing has occurred since the date |
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of such determination that would reasonably be expected to adversely affect such determination (or, in the case of an Employee Plan with no determination, nothing has occurred that would reasonably be expected to materially adversely affect such qualification). |
(d) | There exists no Unfunded Pension Liability with respect to Employee Plans in the aggregate, taking into account only Employee Plans with positive Unfunded Pension Liability, except as would not reasonably be expected to have a Material Adverse Effect. |
(e) | Neither any Obligor nor any ERISA Affiliate is making or accruing an obligation to make contributions or has within any of the five calendar years immediately preceding the date of this Agreement made or accrued an obligation to make contributions to any Multiemployer Plan, liability for which has not been satisfied in full. Neither any Obligor nor any ERISA Affiliate has incurred a complete or partial withdrawal from any Multiemployer Plan. |
(f) | There are no actions, suits or claims pending against or involving an Employee Plan (other than routine claims for benefits) or, to the knowledge of the Borrowers, any Obligor or any ERISA Affiliate, threatened, which would reasonably be expected to be asserted successfully against any Employee Plan and, if so asserted successfully, would reasonably be expected either singly or in the aggregate to have a Material Adverse Effect. |
(g) | Each Obligor and any ERISA Affiliate has made all material contributions to or under each such Employee Plan required by law within the applicable time limits prescribed thereby, the terms of such Employee Plan, or any contract or agreement requiring contributions to an Employee Plan save where any failure to comply would not reasonably be expected to have a Material Adverse Effect. |
(h) | Neither any Obligor nor any ERISA Affiliate has ceased operations at a facility so as to become subject to the provisions of Section 4062(e) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Employee Plan subject to Section 4064(a) of ERISA to which it made contributions save where any such event would not reasonably be expected to have a Material Adverse Effect. |
(i) | Neither any Obligor nor any ERISA Affiliate has incurred or reasonably expects to incur any liability to PBGC save for any liability for premiums due in the ordinary course or other liability which would not reasonably be expected to have a Material Adverse Effect. |
18.15 | Federal Reserve Regulations |
(a) | It is not engaged nor will engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. |
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(b) | None of the proceeds of the Loans under this Agreement will be used, directly or indirectly, for the purpose of buying or carrying any Margin Stock, for the purpose of reducing or retiring any Financial Indebtedness that was originally incurred to buy or carry any Margin Stock or for any other purpose which might cause all or any Loans or other extensions of credit under this Agreement to be considered a purpose credit within the meaning of Regulation U or Regulation X. |
18.16 | Investment Companies |
It is not required to be registered as an investment company under the U.S. Investment Company Act of 1940 (the 1940 Act).
18.17 | Anti-terrorism Laws |
(a) | To the best of its knowledge, it (i) is not a Restricted Party or controlled by a Restricted Party; (ii) has not received funds or other property from a Restricted Party; or (iii) is not in breach of or is the subject of any action or investigation under any Anti-Terrorism Law. |
(b) | It has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws. |
The representations given above to any Lender are made only to the extent that making, or receiving the benefit of, such representation would not violate or conflict with the EU Council Regulation (EC) No 2271/96 of 22 November 1996 protecting against the effects of the extra-territorial application of legislation adopted by a third country, Section 7 of the German Foreign Trade Ordinance Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung AWV), and actions based thereon or resulting therefrom or from a similar applicable anti-boycott statute.
18.18 | The Acquisition |
(a) | The Merger Agreement and the CVR Agreement, together, contain all of the terms of the Acquisition that would reasonably be expected to be material to the interests of the Finance Parties. |
(b) | So far as the Company is aware and assuming the accuracy and truthfulness of all material information provided to the Company by or on behalf of the Target Group, all material information provided to a Finance Party by or on behalf of the Company in connection with the Acquisition and/or the Target Group on or before the date of this Agreement and not superseded before the date of this Agreement (whether or not contained in the Information Packages) was, at the time it was provided, accurate in all material respects and not misleading in any material respect. |
18.19 | Repetition |
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:
(a) | the date of each Utilisation Request and the first day of each Interest Period; and |
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(b) | in the case of an Additional Obligor, the day on which the company becomes (or it is proposed that the company becomes) an Additional Obligor. |
19. | INFORMATION UNDERTAKINGS |
The undertakings in this Clause 19 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
19.1 | Financial statements |
The Company shall supply to the Agent in sufficient copies for all the Lenders:
(a) | as soon as the same become available, but in any event within 120 days after the end of each of its financial years: |
(i) | its audited consolidated financial statements for that financial year; and |
(ii) | the statutory standalone financial statements of each Borrower (other than the Company) for that financial year (audited, if such financial statements are so audited); and |
(b) | as soon as the same become available, but in any event within 90 days after the end of each of its financial half years its consolidated financial statements for that financial half year. |
19.2 | Compliance Certificate |
(a) | The Company shall supply to the Agent, with each set of financial statements delivered pursuant to paragraph (a)(i) or (b) of Clause 19.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) Margin computation as set out in the definition of Margin as at the date at which those financial statements were drawn up, a list of Material Subsidiaries, and confirmation that there is no outstanding Event of Default or details of any Event of Default and any steps being taken to remedy it, in each case as at the date as at which those financial statements were drawn up. |
(b) | Each Compliance Certificate shall be signed by any two members of the executive committee of the Company or by the secretary of the Company and any member of the executive committee, all duly empowered, acting jointly, to sign on behalf of the Company (in each case, without personal liability). |
19.3 | Requirements as to financial statements |
(a) | Each set of financial statements delivered by the Company pursuant to Clause 19.1 (Financial statements) shall be certified (without personal liability) by a director of the relevant company as giving a true and fair view of (in the case of the annual audited financial statements for any financial year), or disclosing with reasonable accuracy (in other cases), its financial condition as at the date as at which those financial statements were drawn up. |
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(b) | The Company shall procure that each set of financial statements delivered pursuant to Clause 19.1 (Financial statements) is prepared using the Accounting Principles. |
19.4 | Information: miscellaneous |
The Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
(a) | all documents required by law to be dispatched by the Company to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; |
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, which are reasonably likely to be adversely determined and which, if adversely determined, would have a Material Adverse Effect; and |
(c) | subject to any applicable confidentiality restrictions (which the Company shall, if requested to do so, use reasonable endeavours to obtain waivers in respect of) promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Agent) may reasonably request. |
19.5 | Notification of default |
Each Obligor shall notify the Agent of any Event of Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
19.6 | Year end |
The Company shall not change its Accounting Reference Date without the consent of the Majority Lenders.
19.7 | ERISA related information |
The Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
(a) | promptly and in any event within 15 days after any Obligor or any ERISA Affiliate files a Schedule SB (or such other schedule as contains actuarial information) to IRS Form 5500 in respect of an Employee Plan with Unfunded Pension Liabilities, a copy of such IRS Form 5500 (including the Schedule SB); |
(b) | promptly and in any event within 30 days after any Obligor or any ERISA Affiliate knows or has reason to know that any ERISA Event which, individually or when aggregated with any other then existing ERISA Event, would reasonably be expected to have a Material Adverse Effect has occurred, the written statement of the Chief Financial Officer of such Obligor or ERISA Affiliate, as applicable, describing such ERISA Event and the action, if any, which it proposes to take with respect to such |
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ERISA Event and a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA Event; provided that, in the case of ERISA Events under paragraph (d) of the definition thereof, the 30-day period set forth above shall be a 10-day period, and, in the case of ERISA Events under paragraph (b) of the definition thereof, in no event shall notice be given later than the occurrence of the ERISA Event; and |
(c) | promptly, and in any event within 30 days, after becoming aware that there has been (i) a material increase in Unfunded Pension Liabilities, taking into account only Employee Plans with positive Unfunded Pension Liabilities; (ii) a material increase in potential withdrawal liability under Section 4201 of ERISA, if the Company and its ERISA Affiliates were to completely or partially withdraw from all Multiemployer Plans; (iii) the adoption of, or newly commencing contributions to, any Employee Plan subject to Section 412 of the Code by any Obligor or any ERISA Affiliate; or (iv) the adoption of any amendment to an Employee Plan subject to Section 412 of the Code which results in a material increase in contribution obligations of any Obligor, a detailed written description thereof from the Chief Financial Officer of each affected Obligor or ERISA Affiliate, as applicable, except to the extent that such event would not reasonably be expected to have a Material Adverse Effect. |
19.8 | Use of websites |
(a) | The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the Website Lenders) who accept this method of communication by posting this information onto an electronic website designated by the Company and the Agent (the Designated Website) if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; |
(ii) | both the Company and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and |
(iii) | the information is in a format previously agreed between the Company and the Agent. |
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Agent shall notify the Company accordingly and the Company shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company shall supply the Agent with at least one copy in paper form of any information required to be provided by it.
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Company and the Agent. |
(c) | The Company shall promptly upon becoming aware of its occurrence notify the Agent if: |
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(i) | the Designated Website cannot be accessed due to technical failure; |
(ii) | the password specifications for the Designated Website change; |
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; |
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or |
(v) | the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
If the Company notifies the Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(d) | Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company shall comply with any such request within ten Business Days. |
19.9 | Know your customer checks |
(a) | If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(ii) | any change in the status of an Obligor after the date of this Agreement; or |
(iii) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or
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other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b) | Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
(c) | The Company shall, by not less than 10 Business Days prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 25 (Changes to the Obligors). |
(d) | Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor. |
19.10 | Price sensitive information |
The Lenders acknowledge that certain information about the Group and the Target Group that comes into their possession pursuant to the Finance Documents and the Information Packages may amount to confidential price sensitive information and that they may become insiders in connection with that information. The Lenders agree that they shall not use any such information for any purpose that might amount to insider trading.
20. | FINANCIAL COVENANTS |
20.1 | Financial definitions |
In this Clause 20:
Consolidated Cash and Cash Equivalents means, at any time
(a) | cash in hand or on deposit with an Acceptable Bank; |
(b) | certificates of deposit, issued by an Acceptable Bank, and other marketable debt securities issued or guaranteed by the government of the US, the UK or any EEA member state or by any instrumentality or agency of any of them or having a rating of either A-1 or higher by Standard & Poors or F1 or higher by Fitch Ratings Ltd or P-1 |
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by Moodys (or equivalent from an internationally recognised credit rating agency), maturing within one year after the relevant date of calculation; |
(c) | certificates of deposit, issued by an Acceptable Bank, and other marketable debt securities issued or guaranteed by the government of the US, the UK or any EEA member state or by any instrumentality or agency of any of them or by a person whose indebtedness is rated not less than A by Standard & Poors or Fitch Ratings Ltd or A2 by Moodys (or equivalent from an internationally recognised credit rating agency) maturing prior to the Termination Date for an aggregate principal amount not higher than 75 million euro; |
(d) | open market commercial paper: |
(i) | for which a recognised trading market exists; |
(ii) | which matures within one year after the relevant date of calculation; |
(iii) | which has a credit rating of either A-1 or higher by Standard & Poors or F1 or higher by Fitch Ratings Ltd or P-1 by Moodys (or equivalent from an internationally recognised credit rating agency), or, if no rating is available in respect of the commercial paper, the issuer or guarantor of which has, in respect of its long-term debt obligations, an equivalent rating; |
(e) | sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank; |
(f) |
(i) | investments in money market funds which have a credit rating of either Am or higher by Standard & Poors, Ammf or higher by Fitch Ratings Ltd or A-mf or higher by Moodys (or equivalent from an internationally recognised credit rating agency); |
(ii) | investments in money market funds which invest in securities that have an average credit rating of either A- or A3, or higher, based on the credit ratings attributed to such underlying securities by Standard & Poors, Fitch Ratings Ltd or Moodys (or such other equivalent credit rating assessment used by such money market fund); and |
(iii) | if no credit rating is available in respect of the money market funds stipulated in paragraph (i) above or no average credit rating is available in respect of the securities in which the money market funds invest as stipulated in paragraph (ii) above, any investments in Short-Term Money Market Funds as defined by the European Securities and Markets Authority or any successor thereto; and |
(g) | any other instrument, security or investment approved by the Majority Lenders, |
in each case, to which any member of the Group is beneficially entitled at that time and which is capable of being applied against Consolidated Total Borrowings.
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Consolidated EBITDA means, in respect of the Group, the consolidated operating profit before impairment, restructuring and other income and expenses (recurring EBIT) as adjusted by adding back depreciation and intangible assets amortisation expenses.
Consolidated Total Borrowings means, in respect of the Group, at any time the aggregate of the following:
(a) | the outstanding principal amount of any moneys borrowed; |
(b) | the outstanding principal amount of any acceptance under any acceptance credit; |
(c) | the outstanding principal amount of any bond, note, debenture, loan stock or other similar instrument evidencing Financial Indebtedness for borrowed money; |
(d) | the capital element of indebtedness under a finance or capital lease; |
(e) | the outstanding principal amount of all moneys owing in connection with the sale or discounting of receivables (but only to the extent of any recourse against any member of the Group for non-payment of such receivables by the receivable counterparty); |
(f) | the outstanding principal amount of any indebtedness arising from any deferred payment agreements arranged primarily as a method of raising finance or refinancing the acquisition of an asset; |
(g) | any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in paragraph (c) above; |
(h) | the outstanding principal amount of any indebtedness arising in connection with any other transaction (including any forward sale or purchase agreement but excluding for the avoidance of doubt Treasury Transactions) which has the commercial effect of a borrowing; and |
(i) | the outstanding principal amount of any indebtedness of any person of a type referred to in paragraphs (a) to (h) above which is the subject of a guarantee, indemnity or similar assurance against financial loss given by a member of the Group in each case without double-counting. |
less any amounts constituting identified cash collateral for any of the foregoing elements of Consolidated Total Borrowings to the extent not included in the calculation of Consolidated Cash and Cash Equivalents for the applicable Relevant Period. For the avoidance of doubt, (i) guarantees by a member of the Group of payment obligations of another member of the Group shall not increase the amount of Consolidated Total Borrowings; and (ii) the outstanding amount of any financial instrument which qualifies for treatment as equity under IFRS shall be excluded from Consolidated Total Borrowings. For the avoidance of doubt, any amounts referred to in paragraphs (a) to (i) above which are owed by one member of the Group to another member of the Group shall be excluded from Consolidated Total Borrowings.
Consolidated Total Net Borrowings means at any time Consolidated Total Borrowings less Consolidated Cash and Cash Equivalents.
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Financial Year means the annual accounting period of the Group ending on or about 31 December in each year.
Leverage Ratio means the ratio of Consolidated Total Net Borrowings on a specified date to Consolidated EBITDA in respect of the Relevant Period ending on that date.
Relevant Period means a period of 12 Months ending on the last day of a financial year or financial half-year of the Company.
20.2 | Leverage Ratio |
(a) | The Leverage Ratio shall be calculated in accordance with the Accounting Principles and by reference to each of the financial statements and the accompanying Compliance Certificate delivered pursuant to Clause 19 (Information Undertakings). |
(b) | Except as provided to the contrary in this Agreement, an accounting term used in this Clause 20 is to be construed in accordance with the Accounting Principles. |
(c) | In calculating Consolidated Total Net Borrowings for the purposes of determining the Leverage Ratio: |
(i) | any amount in a currency other than euro shall be converted into euro using the same principles as those used in establishing an euro denominated figure for the operating profit of the Group for the Relevant Period ending on the date at which Consolidated Total Net Borrowings is being calculated; and |
(ii) | any currency swap entered into by any member of the Group for the purpose of converting the currency of a borrowing to another currency (but for the avoidance of doubt not including foreign exchange swaps) shall be included in the calculation as follows: |
(A) | to the extent any notional amounts payable or receivable under such currency swap are not denominated in euro, then these amounts shall be converted into euro applying the principles outlined in sub-paragraph (i) above; and |
(B) | having been converted into euro in accordance with sub-paragraph (ii)(A) above, the notional amounts payable and receivable in relation to the relevant currency swap outstanding as at the date at which Consolidated Total Net Borrowings is being calculated shall be netted and included in the calculation of Consolidated Total Net Borrowings. For this purpose, the notional amounts payable of such currency swap outstanding as at the date at which Consolidated Total Net Borrowings is being calculated shall be considered as a financial borrowing and the notional amount receivable outstanding of such currency swap as at the date at which Consolidated Total Net Borrowings is being calculated shall be considered as a financial deposit, |
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provided that any such currency swap shall only be included in the relevant calculation if that currency swap was established for the purpose of implementing a hedge between the currencies in which the Group has Financial Indebtedness and the currencies in which the Group generates earnings and provided further that where any such currency swap has been included in a calculation, the relevant Compliance Certificate shall identify the currency swaps included and explain in reasonable detail the manner in which they affected the calculation. |
(d) | For the purpose of calculation of the Leverage Ratio for any Relevant Period ending less than 12 Months after a company, business or going concern (for his purposes each a New Enterprise) has become a Subsidiary of the Company, Consolidated EBITDA shall be adjusted pro forma to include the consolidated earnings, before interest, tax, depreciation and amortisation of the New Enterprise (calculated on the same basis as Consolidated EBITDA mutatis mutandis and using to the extent relevant financial information contained in the relevant financial statements of the New Enterprise) as if the New Enterprise had been a member of the Group on the first day of the Relevant Period. |
21. | GENERAL UNDERTAKINGS |
The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1 | Authorisations |
Each Obligor shall promptly, subject to the Legal Reservations, obtain, comply with and do all that is necessary to maintain in full force and effect save where failure to do so would not have a Material Adverse Effect any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform in all material respects its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document in all material respects.
21.2 | Compliance with laws |
Each Obligor shall comply in all respects with all laws to which it may be subject, if failure so to comply would have a Material Adverse Effect.
21.3 | Environmental compliance |
Each Obligor shall comply with all Environmental Law where failure to do so would have a Material Adverse Effect.
21.4 | Negative pledge |
(a) | No Obligor shall, and the Company shall procure that no member of the Group will, create or permit to subsist any Security over any of its assets. |
(b) | Paragraph (a) above does not apply to any Security which is Permitted Security. |
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21.5 | Merger |
No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Merger.
21.6 | Insurance |
Each Obligor shall maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business save to the extent such insurance is not available on commercially reasonable terms.
21.7 | Change of business |
The Company shall procure that no substantial change is made to the general nature of the business of the Company or the Group (taken as a whole) from that carried on at the date of this Agreement.
21.8 | Pari passu ranking |
Each Obligor shall ensure that at all times any claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
21.9 | Material Intellectual Property |
Each Obligor shall preserve and maintain the subsistence and validity of the material intellectual property necessary for its business if failure to do so would have a Material Adverse Effect.
21.10 | Compliance with ERISA |
No Obligor shall:
(a) | allow, or permit any of its ERISA Affiliates to allow, (i) the termination of any Employee Plan with respect to which any Obligor or any ERISA Affiliate may have any liability, (ii) any Obligor or ERISA Affiliates to withdraw from any Employee Plan or Multiemployer Plan, (iii) any ERISA Event to occur with respect to any Employee Plan, or (iv) any Employee Plan to fail to satisfy the minimum funding standard (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, to the extent that any of the events described in (i), (ii), (iii) or (iv), singly or in the aggregate, could have a Material Adverse Effect; |
(b) | allow, or permit any of its ERISA Affiliates to allow the aggregate amount of Unfunded Pension Liability among all Employee Plans (taking into account only Employee Plans with positive Unfunded Pension Liability) at any time to exist where such amount could reasonably be expected to have a Material Adverse Effect; or |
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(c) | fail, or permit any of its ERISA Affiliates to fail, to comply in any material respect with ERISA or the related provisions of the Code, if any such non-compliance, singly or in the aggregate, would be reasonably likely to have a Material Adverse Effect. |
21.11 | Federal Reserve Regulations |
Each U.S. Borrower will use the Facility without violating Regulations T, U and X.
21.12 | Compliance with U.S. Regulations |
No Obligor shall (and the Company shall ensure that no other member of the Group will) become an investment company, or an affiliated person of, or promoter or principal underwriter for, an investment company, as such terms are defined in the 1940 Act.
21.13 | Anti-Money Laundering |
Each Obligor will use commercially reasonable efforts to ensure that no funds used to pay the obligations under the Finance Documents are derived from any unlawful activity.
21.14 | Acquisitions |
If any member of the Group acquires any shares in a company or any business and, as a result of such acquisition, the Leverage Ratio immediately thereafter (calculated on a pro forma basis (as described in Clause 20.2(d) (Leverage Ratio)), the Post-Acquisition Leverage Ratio) both increases and exceeds 3.50:1, the Company shall promptly after such acquisition deliver to the Agent a certificate (signed by any two members of the executive committee of the Company or by the secretary of the Company and any member of the executive committee of the Company (in each case, without personal liability)) containing the Post-Acquisition Leverage Ratio, together with forward-looking projections of the Leverage Ratio for the following three years after such acquisition which are based on assumptions that the Company believes to be reasonable and which demonstrate that at the end of such three year period the Leverage Ratio will not be greater than 3.50:1 (taking into account synergies that the Company reasonably believes will be achieved in respect of such acquisition).
21.15 | Disposals |
No Obligor shall (and the Company shall ensure that no Material Subsidiary will), enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to dispose of companies and/or assets comprising a whole business unit or substantially all of a business unit except, in each case, on arms-length terms.
21.16 | Financial indebtedness of non-Obligors |
(a) | The Company shall procure that no member of the Group which is not an Obligor will incur or allow to remain outstanding any Financial Indebtedness. |
(b) | Paragraph (a) above does not apply to Permitted Financial Indebtedness. |
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21.17 | Financial Assistance |
The Company shall procure that the Facility will not be used to finance or refinance the acquisition of or subscription for shares in any Obligor incorporated in Belgium (save for share buy-backs carried out in accordance with Belgian company law, and except for acquisitions not otherwise restricted by this Agreement and where such acquisition, in conjunction with the provisions of this Agreement, does not contravene Belgian financial assistance or corporate benefit laws).
21.18 | Acquisition related undertakings |
(a) | The Company will notify the Agent of any amendment, waiver or termination of or under the Merger Agreement (other than any such amendment or waiver that is minor or technical in nature or would not be reasonably expected to adversely affect the interests of the Lenders (taken as a whole) in their capacities as such) and will promptly notify the Agent upon receipt of any notification of a material delay in the Acceptance Time or the Closing Date beyond the Long Stop Date. Notwithstanding the foregoing, nothing in this Clause 21.18(a) shall require the Company to deliver to the Agent any information (i) in respect of which disclosure to the Agent or any Lender (or their respective representatives) is prohibited by any applicable law or regulation or (ii) in respect of which to do so would result in a breach of any agreement or arrangement with governmental authorities. |
(b) | The Company shall promptly pay (or shall procure prompt payment of) all amounts payable under and in accordance with the terms of the Merger Agreement, as and when they become due (except to the extent that any such amounts are being contested in good faith by a member of the Group). |
(c) | The Company shall not (and shall ensure that no other member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of the Merger Agreement in a manner that would reasonably be expected to be materially adverse to the interest of the Lenders (taken as a whole), it being understood and agreed that, without prejudice to the generality of the foregoing, (i) any reduction in the Offer Price (as defined in the Merger Agreement) or the Merger Consideration (as defined in the Merger Agreement) to be paid in connection with the Acquisition, (ii) any increase in the Offer Price or the Merger Consideration to be paid in connection with the Acquisition (provided the Company or a member of the Group has sufficient funds to satisfy such increase) and (iii) any exercise of the right to postpone the Acceptance Time to a date not later than the end of the Certain Funds Period, is not, and shall not be deemed to be, materially adverse to the interests of the Lenders. |
(d) | The Company shall take all reasonable and practical steps to preserve and enforce its rights (or the rights of any other member of the Group) and pursue any claims and remedies arising under the Merger Agreement to the extent it (in its absolute discretion) considers it commercially expedient to do so. |
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21.19 | Conditions subsequent |
(a) | The Company shall use all reasonable endeavours to include the approval of the terms of, and the transactions contemplated by, the Finance Documents to which it is a party, for the purpose of article 7:151 of the Belgian Code of Companies and Associations, on the agenda of the next annual general meeting of shareholders of the Company. If such approval has been obtained, the Company shall file an extract of such shareholder approval with the clerk of the competent enterprise court, for the purpose of and in accordance with article 7:151 of the Belgian Code of Companies and Associations, and shall forthwith provide the Agent with evidence thereof. |
(b) | The Company shall provide to the Agent, within 3 Business Days of execution of the CVR Agreement, a copy of the executed CVR Agreement. |
22. | EVENTS OF DEFAULT |
Each of the events or circumstances set out in Clause 22 is an Event of Default (save for Clause 22.12 (Acceleration)).
22.1 | Non-payment |
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
(a) | its failure to pay is caused by: |
(i) | administrative or technical error; or |
(ii) | a Disruption Event; and |
(b) | payment is made within 3 Business Days of its due date. |
22.2 | Other obligations |
(a) | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 22.1 (Non-payment)). |
(b) | No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20 Business Days of the earlier of (A) the Agent giving notice to the Company and (B) the Company becoming aware of the failure to comply. |
22.3 | Misrepresentation |
(a) | Any representation made or deemed to be made by an Obligor in the Finance Documents is or proves to have been incorrect in any material respect when made or deemed to be made and by reference to the facts or circumstances then existing. |
(b) | No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20 Business Days of the earlier of (A) Agent |
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giving notice to the Company and (B) the relevant Obligor becoming aware of the relevant representation being so incorrect or misleading. |
22.4 | Cross default |
(a) | Any Financial Indebtedness of the Company or any Material Subsidiary is not paid when due, or as the case may be, within any applicable grace period, or within five Brussels business days of becoming due if a longer grace period is not applicable. |
(b) | Any Financial Indebtedness of the Company or any Material Subsidiary becomes due and payable prior to its specified maturity as a result of an event of default (however described). |
(c) | No Event of Default will occur under this Clause 22.4 if: |
(i) | the aggregate amount of Financial Indebtedness falling within paragraphs (a) and (b) above is less than EUR 50,000,000 (or its equivalent in any other currency or currencies); or |
(ii) | external legal advisers to the Company or the relevant Material Subsidiary, as the case may be, of recognised standing have advised that such Financial Indebtedness is not due and payable, and the Company or relevant Material Subsidiary, as the case may be, is contesting in good faith that such Financial Indebtedness is due and payable. |
22.5 | Insolvency |
(a) | The Company or any Material Subsidiary is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors not in its capacity as a party to this Agreement with a view to rescheduling any of its indebtedness and in particular a Material Subsidiary incorporated in Germany is unable to pay its debts as they fall due (zahlungsunfähig) within the meaning of section 17 of the Insolvency Code (Insolvenzordnung). |
(b) | A Material Subsidiary incorporated in Germany is overindebted within the meaning of section 19 of the Insolvency Code (Insolvenzordnung) and, as a consequence, its directors are obligated pursuant to section 15a of the Insolvency Code (Insolvenzordnung) to file for insolvency. |
(c) | A moratorium is declared in respect of any indebtedness of any Obligor. |
(d) | Any Obligor shall in any U.S. jurisdiction: |
(i) | apply for, or consent to, the appointment of, or the taking of possession by, pursuant to the laws of the United States, any state thereof or the District of Columbia, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its property; |
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(ii) | make a general assignment for the benefit of its creditors pursuant to the U.S. Debtor Relief Laws; |
(iii) | commence a voluntary proceedings or file any petition seeking relief under the U.S. Debtor Relief Laws; or |
(iv) | take any corporate action for the purpose of effecting any of the foregoing with respect to itself. |
22.6 | Insolvency proceedings |
(a) | Any board resolution or shareholders resolution is passed, formal legal proceedings or other constitutional or legal procedure or formal step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Company or a Material Subsidiary other than (i) a solvent liquidation or reorganisation of any Material Subsidiary which is not an Obligor, or (ii) as part of a Permitted Reorganisation; |
(ii) | a composition, compromise, assignment or arrangement with any creditor of the Company or a Material Subsidiary for reasons of financial difficulty of the Company or the relevant Material Subsidiary; |
(iii) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Company or a Material Subsidiary or any of its assets other than (i) in respect of a solvent liquidation or reorganisation of any Material Subsidiary which is not an Obligor, or (ii) pursuant to a Permitted Reorganisation; or |
(iv) | enforcement of any Security over any assets having an aggregate value of more than EUR 50,000,000 of the Company or a Material Subsidiary, |
or any analogous procedure or step is taken in any jurisdiction.
(b) | In respect of any Obligor, a proceeding analogous to the type of proceedings referred to in paragraph (a) above shall be commenced, without the voluntary application or consent of such Obligor, in any U.S. court of competent jurisdiction, seeking: |
(i) | its reorganisation, liquidation, dissolution, arrangement or winding-up or the composition or readjustment of its debts; |
(ii) | the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the Obligor or of all or any substantial part of its property under the U.S. Debtor Relief Laws; or |
(iii) | similar relief in respect of any Obligor under the U.S. Debtor Relief Laws, |
and any such proceeding or case referred to in paragraphs (i) to (iii) above shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall
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be entered and continue unstayed and in effect, in each case for a period of 60 or more consecutive days, or an order for relief against such Obligor shall be entered in an involuntary case under the U.S. Bankruptcy Code.
(c) | For any Material Subsidiary incorporated or with its centre of main interest in the Federal Republic of Germany this shall include if for any of the reasons set out in Sections 17 19 (inclusive) of the German Insolvency Code any application for the opening of insolvency proceedings is made (Antrag auf Eröffnung des Insolvenzverfahrens) or the competent court takes any of the actions set out in Section 21 of the German Insolvency Code (Insolvenzordnung) provided in each case those continue unstayed for 20 days or more or the competent court institutes or rejects (for reason of insufficiency of its funds to implement such proceedings) insolvency proceedings against it (Eröffnung des Insolvenzverfahrens). |
(d) | Paragraphs (a) and (c) shall not apply to any winding-up petition, or any analogous step or procedure taken in any jurisdiction, which is frivolous or vexatious and is discharged, stayed or dismissed within 45 Business Days of commencement. |
22.7 | Creditors process |
(a) | Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of the Company or any Material Subsidiary having an aggregate value of EUR 50,000,000 (or its equivalent). |
(b) | Paragraph (a) shall not apply to any such process which is either being contested by the Company or the relevant Material Subsidiary in good faith or which is frivolous or vexatious provided that in each case it is discharged within 45 Business Days. |
22.8 | Unlawfulness or invalidity |
(a) | It is or becomes unlawful for an Obligor to perform any of its material obligations under the Finance Documents. |
(b) | Subject to the Legal Reservations, any obligation or obligations of any Obligor under any Finance Documents are not or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
22.9 | Repudiation |
An Obligor repudiates a Finance Document.
22.10 | Material adverse change |
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
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22.11 | Employee Plans |
Any ERISA Event shall have occurred, or Clause 21.10 (Compliance with ERISA) shall be breached, and the liability of an Obligor or its ERISA Affiliates, either individually or in the aggregate, related to such ERISA Event or breaches, individually or when aggregated with all other ERISA Events, and all such breaches would have or would be reasonably expected to have a Material Adverse Effect.
22.12 | Acceleration |
Subject to Clause 4.4 (Utilisation during the Certain Funds Period), on and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:
(a) | cancel the Total Commitments whereupon they shall immediately be cancelled; |
(b) | declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or |
(c) | declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders. |
If an Event of Default under Clause 22.5(d) (Insolvency) or Clause 22.6(b) (Insolvency proceedings) shall occur in respect of an Obligor, then without notice to such Obligor or any other act by the Agent or any other person, the Loans to such Obligor, interest thereon and all other amounts owed by such Obligor under the Finance Documents shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are expressly waived.
22.13 | Clean-Up Period |
(a) | Notwithstanding any other provision of any Finance Document, in respect of the Acquisition or any other acquisition not prohibited by this Agreement, for the period from (i) in respect of the Acquisition, the Closing Date and (ii) in respect of any other acquisition, the date of completion of that acquisition until, in each case, the date falling four Months thereafter (the Clean-Up Period): |
(i) | any breach of a representations or an undertaking; or |
(ii) | any Event of Default constituting a Clean-Up Event of Default, |
will | be deemed not to be a breach of representation or warranty, a breach of an undertaking, a Default or an Event of Default (as the case may be) if: |
(A) | it would have been (if it were not for this Clause 22.13) a breach of representation or warranty, a breach of an undertaking, a Default or Event of Default (as the case may be) only by reason of circumstances relating exclusively to any member of the Target Group or the target |
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group, business or undertaking which is the subject of the relevant acquisition (or any obligation to procure or ensure in relation to a member of the Target Group, the relevant target group, business or undertaking); |
(B) | it is capable of remedy and the Company, after having become aware of such breach, Default or Event of Default, has had, is having or will have, reasonable steps taken to remedy it; |
(C) | the circumstances giving rise to it have not been procured by or approved (other than (i) in the case of the Acquisition, by consummating the Acquisition and (ii) in the case of any other acquisition, by consummating that acquisition, and in each case it being understood that knowledge does not constitute procuring or approval for these purposes), by any Obligor that was an Obligor immediately prior to the relevant acquisition (excluding for the avoidance of doubt (i) in the case of the Acquisition, any actions of the Target Group prior to the Closing Date and (ii) in the case of any other acquisition, any actions of the relevant target and its subsidiaries prior to the completion of that acquisition); and |
(D) | it is not reasonably likely to have a Material Adverse Effect. |
(b) | If the relevant circumstances that constituted a breach of a representation, undertaking or Clean-Up Event of Default are continuing on or after the end of the Clean-Up Period, there shall be a breach of representation or warranty, breach of an undertaking, Default or Event of Default, as the case may be notwithstanding the above (and without prejudice to the rights and remedies of the Finance Parties). |
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SECTION 9
CHANGES TO PARTIES
23. | CHANGES TO THE LENDERS |
23.1 | Assignments and transfers by the Lenders |
(a) | Subject to this Clause 23 and Clause 24 (Debt Purchase Transactions), a Lender (the Existing Lender) may: |
(i) | assign any of its rights; or |
(ii) | transfer by novation any of its rights and obligations, |
under this Agreement to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender).
(b) | Any Lender (the Originating Lender) may sub-participate its interests in any Loans or Commitments to any bank or financial institution or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the Sub-Participant) provided that (i) the Originating Lenders obligation under the Finance Documents shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, and (iii) the Obligors and the Agent shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lenders rights and obligations under the Finance Documents. |
23.2 | Conditions of assignment or transfer |
(a) | The consent of the Company is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is after the end of the Availability Period and is: |
(i) | to another Lender or an Affiliate of an Existing Lender; |
(ii) | if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or |
(iii) | made at a time when an Event of Default is continuing. |
(b) | After the end of the Availability Period (i) the consent of the Company to an assignment or transfer must not be unreasonably withheld or delayed and (ii) the Company will be deemed to have given its consent in respect of an assignment or transfer five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Company within that time. |
(c) | Notwithstanding the foregoing: |
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(i) | any assignment, transfer, sub-participation or subcontracting in relation to any Loans or Commitments may not be entered into with a New Lender or Sub-Participant without the prior written consent of the Company (i) if the state or territory in which that New Lender or Sub-Participant is incorporated, resident or established or where its Facility Office is established is a Non-Cooperative Jurisdiction or (ii) if the bank account(s) to which payments will be made to which that New Lender or Sub-Participant will be entitled, are or will be (A) managed or held by a person or persons incorporated, resident or established in a Non-Cooperative Jurisdiction or by the permanent establishment of a non-resident of Belgium situated in a Non-Cooperative Jurisdiction or (B) managed by, or opened with, (1) a financial institution incorporated, resident or established in a Non-Cooperative Jurisdiction or (2) a branch or office of a financial institution situated in a Non-Cooperative Jurisdiction; and |
(ii) | the Company may, in its sole discretion, either grant its prior written consent or request additional information in order to assess whether (i) the New Lender or Sub-Participant cannot reasonably be considered as an artificial construction within the meaning of article 198, 10° of the Belgian Income Tax Code or (ii) an Obligor would be or would expected to become obliged to make a payment to the New Lender or Sub-Participant under Clause 12 (Tax Gross Up and Indemnities). The Company will have the right to refuse its consent if: (A) it has requested any such information and does not receive information which is reasonably satisfactory to it; or (B) it reasonably believes that (1) the New Lender or Sub-Participant may be considered as an artificial construction within the meaning of article 198, 10° of the Belgian Income Tax Code or (2) an Obligor would be or expected to become obliged to make a payment to the New Lender or Sub-Participant under Clause 12 (Tax Gross Up and Indemnities). |
(d) | An assignment will only be effective on: |
(i) | receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the Obligors as it would have been under if it was an Original Lender; and |
(ii) | performance by the Agent of all necessary know your customer or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender. |
(e) | A transfer will only be effective if the procedure set out in Clause 23.5 (Procedure for transfer) is complied with. |
(f) | If: |
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(i) | a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and |
(ii) | as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs), |
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
(g) | Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender. |
(h) | Unless the Company and the Agent otherwise agree, a transfer or assignment of an Existing Lenders Commitment to a New Lender must be in a minimum amount of USD 5,000,000 (if the Loans are denominated in USD) or EUR 5,000,000 (if the Loans are denominated in euro). |
(i) | In respect of an assignment or transfer of any Commitment, the Existing Lender must assign or transfer its rights and obligations in its euro and USD denominated Loans on a pro rata basis. |
23.3 | Assignment or transfer fee |
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of EUR 2,500.
23.4 | Limitation of responsibility of Existing Lenders |
(a) | Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: |
(i) | the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents; |
(ii) | the financial condition of any Obligor; |
(iii) | the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or |
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(iv) | the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, |
and any representations or warranties implied by law are excluded.
(b) | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(i) | has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and |
(ii) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
(c) | Nothing in any Finance Document obliges an Existing Lender to: |
(i) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23; or |
(ii) | support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise. |
23.5 | Procedure for transfer |
(a) | Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender and the Agent makes a corresponding entry in the Register pursuant to Clause 23.8 (The Register). The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and make such a corresponding entry in the Register. |
(b) | The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender and make such corresponding entry in the Register once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender. |
(c) | Subject to Clause 23.10 (Pro rata interest settlement), on the Transfer Date: |
(i) | to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further |
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obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the Discharged Rights and Obligations); |
(ii) | each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender; |
(iii) | the Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and |
(iv) | the New Lender shall become a Party as a Lender. |
23.6 | Procedure for assignment |
(a) | Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement. |
(b) | The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender. |
(c) | Subject to Clause 23.10 (Pro rata interest settlement), on the Transfer Date: |
(i) | the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement; |
(ii) | the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the Relevant Obligations) and expressed to be the subject of the release in the Assignment Agreement; and |
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(iii) | the New Lender shall become a Party as a Lender and will be bound by obligations equivalent to the Relevant Obligations by its execution of a duly completed Assignment Agreement. |
(d) | Lenders may utilise procedures other than those set out in this Clause 23.6 to assign their rights under the Finance Documents (but not, without the consent of the Obligor or unless in accordance with Clause 23.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 23.2 (Conditions of assignment or transfer). |
23.7 | Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company |
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation, send to the Company a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation.
23.8 | The Register |
The Agent, acting solely for this purpose as an agent of the Obligors, shall maintain at one of its offices a copy of each Transfer Certificate, Assignment Agreement and Increase Confirmation delivered to it and a register (the Register) for the recordation of the names and addresses of each Lender and the Commitments of and obligations owing to each Lender. Without limitation of any other provision of this Clause 23 (Changes to the Lenders), no increase, transfer or assignment shall be effective until recorded in the Register. The entries in the Register shall be conclusive absent manifest error and each Obligor, the Agent and each Lender may treat each person whose name is recorded in the Register as a Lender notwithstanding any notice to the contrary. The Register shall be available for inspection by each Obligor at any reasonable time and from time to time upon reasonable prior notice. The foregoing provisions are intended to comply with the registration requirements in U.S. Treasury Regulation Section 5f.103-1 so that the Loans are considered to be in registered form pursuant to such regulation.
23.9 | Security over Lenders rights |
In addition to the other rights provided to Lenders under this Clause 23, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a) | any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and |
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
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except that no such charge, assignment or Security shall:
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or |
(ii) | require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents. |
23.10 | Pro rata interest settlement |
(a) | If the Agent has notified the Lenders that it is able to distribute interest payments on a pro rata basis to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 23.5 (Procedure for transfer) or any assignment pursuant to Clause 23.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period): |
(i) | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and |
(ii) | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt: |
(A) | when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and |
(B) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 23.10, have been payable to it on that date, but after deduction of the Accrued Amounts. |
(b) | In this Clause 23.10 references to Interest Period shall be construed to include a reference to any other period for accrual of fees. |
(c) | An Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 23.10 but which does not have a Commitment shall be deemed not to be a Lender for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents. |
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24. | DEBT PURCHASE TRANSACTIONS |
(a) | The Company shall not, and shall procure that each other member of the Group shall not (i) enter into any Debt Purchase Transaction other than in accordance with the other provisions of this Clause 24 or (ii) beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction. |
(b) | Any member of the Group may purchase by way of transfer or assignment, pursuant to Clause 23 (Changes to the Lenders), a participation in any Loan and any related Commitment where: |
(i) | such purchase is made for a consideration of less than par; |
(ii) | such purchase is made using one of the processes set out at paragraphs (c) and (d) below; and |
(iii) | such purchase is made at a time when no Event of Default is continuing; |
(c) |
(i) | A Debt Purchase Transaction referred to in paragraph (b) above may be entered into pursuant to a solicitation process (a Solicitation Process) which is carried out as follows. |
(ii) | Prior to 11.00 a.m. on a given Business Day (the Solicitation Day) the Company or a financial institution acting on its behalf (the Company or such financial institution (as applicable) being the Purchase Agent) will approach at the same time each Lender (the Agent having provided the relevant member of the Group with all necessary details of the then Lenders) to enable them to offer to sell to the relevant member of the Group an amount of their participation in the Facility. Any Lender wishing to make such an offer shall, by 11.00 a.m. on the second Business Day following such Solicitation Day, communicate to the Purchase Agent details of the amount of its participation in the Facility it is offering to sell and the price at which it is offering to sell such participations. Any such offer shall be irrevocable until 11.00 a.m. on the third Business Day following such Solicitation Day and shall be capable of acceptance by the Company on behalf of the relevant member of the Group on or before such time by communicating its acceptance in writing to the Purchase Agent or, if it is the Purchase Agent, the relevant Lenders. The Purchase Agent (if someone other than the Company) will communicate to the relevant Lenders which offers have been accepted by 12 noon on the third Business Day following such Solicitation Day. In any event by 11.00 am on the fourth Business Day following such Solicitation Day, the Company shall notify the Agent of the amounts of the participations purchased through the relevant Solicitation Process and the average price paid for the purchase of participations in the Facility. The Agent shall disclose such information to any Lender that requests such disclosure. |
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(iii) | Any purchase of participations in the Facility pursuant to a Solicitation Process shall be completed and settled on or before the fifth Business Day after the relevant Solicitation Day. |
(iv) | In accepting any offers made pursuant to a Solicitation Process the Company shall be free to select which offers and in which amounts it accepts but on the basis that in relation to a participation in a particular Facility it accepts offers in inverse order of the price offered (with the offer or offers at the lowest price being accepted first) and that if in respect of participations in a particular Facility it receives two or more offers at the same price it shall only accept such offers on a pro rata basis. |
(d) |
(i) | A Debt Purchase Transaction referred to in paragraph (b) above may also be entered into pursuant to an open order process (an Open Order Process) which is carried out as follows. |
(ii) | The Company (on behalf of the relevant member of the Group) may by itself or through another Purchase Agent place an open order (an Open Order) to purchase participations up to a set aggregate amount at a set price by notifying at the same time all the Lenders of the same. Any Lender wishing to sell pursuant to an Open Order will, by 11.00 a.m. on any Business Day following the date on which the Open Order is placed but no earlier than the first Business Day, and no later than the fifth Business Day, following the date on which the Open Order is placed, communicate to the Purchase Agent details of the amount of its participations in the Facility it is offering to sell. Any such offer to sell shall be irrevocable until 11.00 a.m. on the Business Day following the date of such offer from the Lender and shall be capable of acceptance by the Company on behalf of the relevant member of the Group on or before such time by it communicating such acceptance in writing to the relevant Lender. |
(iii) | Any purchase of participations in the Facility pursuant to an Open Order Process shall be completed and settled by the relevant member of the Group on or before the fourth Business Day after the date of the relevant offer by a Lender to sell under the relevant Open Order. |
(iv) | If in respect of participations in the Facility the Purchase Agent receives on the same Business Day two or more offers at the set price such that the maximum amount of such Facility to which an Open Order relates would be exceeded, the Company shall only accept such offers on a pro rata basis. |
(v) | The Company shall, by 11.00 a.m. on the sixth Business Day following the date on which an Open Order is placed, notify the Agent of the amounts of the participations purchased through such Open Order Process and the identity of the Facility to which they relate. The Agent shall disclose such information to any Lender that requests the same. |
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(e) | For the avoidance of doubt, there is no limit on the number of occasions a Solicitation Process or an Open Order Process may be implemented. |
(f) | In relation to any Debt Purchase Transaction entered into pursuant to this Clause 24, notwithstanding any other term of this Agreement or the other Finance Documents: |
(i) | on completion of the relevant transfer or assignment pursuant to Clause 23 (Changes to the Lenders), the portions of the Loans to which it relates shall be extinguished; |
(ii) | such Debt Purchase Transaction and the related extinguishment referred to in paragraph (i) above shall not constitute a prepayment of the Facility or a cancellation of the relevant part of the Facility; |
(iii) | the relevant member of the Group which is the assignee shall be deemed to be an entity which fulfils the requirements of Clause 23.1 (Assignments and transfers by the Lenders) to be a New Lender (as defined in such Clause); |
(iv) | no member of the Group shall be deemed to be in breach of any provision of Clause 21 (General Undertakings) or any related Event of Default solely by reason of such Debt Purchase Transaction; |
(v) | Clause 28 (Sharing Among the Finance Parties) shall not be applicable to the consideration paid under such Debt Purchase Transaction; and |
(vi) | for the avoidance of doubt, any extinguishment of any part of the Loans shall not affect any amendment or waiver which prior to such extinguishment had been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement. |
25. | CHANGES TO THE OBLIGORS |
25.1 | Assignments and transfer by Obligors |
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents, other than pursuant to the provisions of Clause 25.7 (Change of Borrower).
25.2 | Additional Borrowers |
(a) | Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 19.9 (Know your customer checks), the Company may request that any of its wholly owned Subsidiaries becomes an Additional Borrower. That Subsidiary shall become an Additional Borrower if: |
(i) | that Subsidiary is incorporated in Belgium or the U.S. or if all of the Lenders approve the addition of that Subsidiary; |
(ii) | in case of a Subsidiary that qualifies as a small or medium sized enterprise and to which the provisions of the Belgian law of 21 December 2013 on the financing of small and medium sized enterprises (Wet betreffende diverse |
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bepalingen inzake de financiering voor kleine en middelgrote ondernemingen/Loi relative à diverses dispositions concernant le financement des petites et moyennes entreprises), as amended from time to time, apply, and as a result of which that law would apply to this Agreement, all of the Lenders approve the addition of that Subsidiary;
(iii) | the Company delivers to the Agent a duly completed and executed Accession Letter; |
(iv) | the Company confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and |
(v) | the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent. |
(b) | The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it (acting reasonably)) all the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent). |
(c) | Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (b) above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification. |
(d) | For the purpose of this Clause 25.2, a Subsidiary of the Company is wholly owned if the Company owns, directly or indirectly, at least 95 per cent., of the voting shares of that Subsidiary. |
25.3 | Resignation of a Borrower |
(a) | The Company may request that a Borrower (other than the Company) ceases to be a Borrower by delivering to the Agent a Resignation Letter. |
(b) | The Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if: |
(i) | no Default is continuing or would result from the acceptance of the Resignation Letter (and the Company has confirmed this is the case); and |
(ii) | the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents, |
whereupon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents.
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25.4 | Additional Guarantors |
(a) | Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 19.9 (Know your customer checks), the Company may request that any of its wholly owned Subsidiaries become an Additional Guarantor. That Subsidiary shall become an Additional Guarantor if: |
(i) | the Company delivers to the Agent a duly completed and executed Accession Letter; and |
(ii) | the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent. |
(b) | The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent). |
(c) | Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (b) above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification. |
(d) | For the purpose of this Clause 25.4, a Subsidiary of the Company is wholly owned if the Company owns, directly or indirectly, at least 95 per cent., of the voting shares of that Subsidiary. |
25.5 | Repetition of Representations |
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
25.6 | Resignation of a Guarantor |
(a) | The Company may request that a Guarantor (other than the Company) ceases to be a Guarantor by delivering to the Agent a Resignation Letter. |
(b) | The Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if: |
(i) | no Default is continuing or would result from the acceptance of the Resignation Letter (and the Company has confirmed this is the case); and |
(ii) | all the Lenders have consented to the Companys request. |
(c) | Notwithstanding paragraph (b) above the Agent shall accept a Resignation Letter in respect of any Guarantor which ceases to be a Guarantor as a result of a Permitted |
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Merger provided, for the avoidance of doubt, that following such Permitted Merger the surviving entity shall be a Guarantor. |
(d) | Each Guarantor incorporated in Belgium expressly waives the benefit of Articles 1281 and 1285 of the Belgian Civil Code to the extent such provisions would be applicable. |
25.7 | Change of Borrower |
(a) | After the end of the Availability Period, a Borrower (the Existing Borrower) may, in relation to any Loan in respect of which it is a Borrower, transfer by novation all or any of its rights and obligations in respect of that Loan (whether in whole or in part) (the Novated Loan) on the first day of an Interest Period in respect of that Novated Loan to another Borrower (the New Borrower) by serving on the Agent a Borrower Substitution Certificate not later than 5 Business Days before the first day of that Interest Period. |
(b) | The Agent shall accept and countersign the Borrower Substitution Certificate if no Default is continuing or would result from the acceptance of the Borrower Substitution Certificate. |
(c) | If the Agent accepts and countersigns the Borrower Substitution Certificate, on the first day of the relevant Interest Period (the Borrower Transfer Date): |
(i) | all of the rights and obligations of the Existing Borrower under the Finance Documents in respect of and which relate to the Novated Loan shall be novated to the New Borrower and shall be rights and obligations of the New Borrower; |
(ii) | the Existing Borrower and the Finance Parties shall be released from further obligations towards one another under the Finance Documents in respect of the Novated Loan and their respective rights against one another in respect of the Novated Loan under the Finance Documents shall be cancelled (being the Borrower Discharged Rights and Obligations); |
(iii) | the New Borrower and the Finance Parties shall assume obligations towards one another and/or acquire rights against one another which differ from the Borrower Discharged Rights and Obligations only insofar as the Finance Parties and the New Borrower have assumed and/or acquired the same in place of the Finance Parties and the Existing Borrower; and |
(d) | the New Borrower shall be the Borrower in respect of the Novated Loan. |
(e) | Each Finance Party irrevocably authorises and request the Agent to acknowledge, execute and confirm acceptance of any Borrower Substitution Certificate received by it. |
(f) | For the avoidance of doubt, Borrowers shall be entitled to substitute one Borrower for another, to change the Currency of a Loan and to divide a Loan into more than one Loan or to take some of those actions on the start of the same Interest Period. |
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SECTION 10
THE FINANCE PARTIES
26. | ROLE OF THE AGENT AND THE ARRANGER |
26.1 | Appointment of the Agent |
(a) | Each other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents. |
(b) | Each other Finance Party authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
(c) | Each other Finance Party hereby relieves the Agent from the restrictions pursuant to section 181 Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other applicable law, in each case to the extent legally possible to such Finance Party. A Finance Party that is barred by its constitutional documents or by-laws from granting such exemption shall notify the Agent accordingly. |
26.2 | Duties of the Agent |
(a) | Subject to paragraph (b) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. |
(b) | Without prejudice to Clause 23.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company), paragraph (a) above shall not apply to any Transfer Certificate, any Assignment Agreement or any Increase Confirmation. |
(c) | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
(d) | If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties. |
(e) | If the Agent is aware of the non-payment of any principal, interest, ticking fee or other fee payable to a Finance Party (other than the Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties. |
(f) | The Agents duties under the Finance Documents are solely mechanical and administrative in nature. |
26.3 | Role of the Arranger |
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
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26.4 | No fiduciary duties |
(a) | Nothing in this Agreement constitutes the Agent or the Arranger as a trustee or fiduciary of any other person. |
(b) | Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. |
26.5 | Business with the Group |
The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
26.6 | Rights and discretions of the Agent |
(a) | The Agent may rely on: |
(i) | any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and |
(ii) | any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify. |
(b) | The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that: |
(i) | no Default has occurred (unless it has actual knowledge of a Default arising under Clause 22.1 (Non-payment)); |
(ii) | any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and |
(iii) | any notice or request made by the Company (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors. |
(c) | The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts. |
(d) | The Agent may act in relation to the Finance Documents through its personnel and agents. |
(e) | The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
(f) | Without prejudice to the generality of paragraph (e) above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company or the Majority Lenders. |
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(g) | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. In particular, and for the avoidance of doubt, nothing in any Finance Document shall be construed so as to constitute an obligation of the Agent or the Arranger to perform any services which it would not be entitled to render pursuant to the provisions of the German Act on Rendering Legal Services (Rechtsdienstleistungsgesetz) or pursuant to the provisions of the German Tax Advisory Act (Steuerberatungsgesetz) or any other services that require an express official approval, licence or registration, unless the Agent or the Arranger (as the case may be) holds the required approval, licence or registration. |
26.7 | Majority Lenders instructions |
(a) | The Agent shall: |
(i) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by: |
(A) | all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; |
(B) | in all other cases, the Majority Lenders or such other group of Lenders as is specified in the applicable Finance Document; and |
(ii) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above. |
(b) | Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties. |
(c) | The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or relevant group of Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions. |
(d) | In the absence of instructions from the Majority Lenders (or the relevant group of Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders. |
(e) | The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lenders consent) in any legal or arbitration proceedings relating to any Finance Document. |
26.8 | Responsibility for documentation |
Neither the Agent nor the Arranger:
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(a) | is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Obligor or any other person given in or in connection with any Finance Document or the Information Packages; or |
(b) | is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document; or |
(c) | is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise. |
26.9 | Exclusion of liability |
(a) | Without limiting paragraph (b) below (and without prejudice to the provisions of paragraph (e) of Clause 29.11 (Disruption to payment systems etc.)), the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct. |
(b) | No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.4 (Third Party Rights) and the provisions of the Third Parties Act. |
(c) | The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. |
(d) | Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger. |
26.10 | Lenders indemnity to the Agent |
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability including, without limitation, for negligence or any other category of liability whatsoever incurred by the Agent (otherwise than by reason of the Agents gross
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negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 29.11 (Disruption to payment systems etc.) notwithstanding the Agents negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).
26.11 | Resignation of the Agent |
(a) | The Agent may resign and appoint one of its Affiliates acting through an office in Belgium or The Netherlands as successor by giving notice to the other Finance Parties and the Company. |
(b) | Alternatively the Agent may resign by giving 30 days notice to the other Finance Parties and the Company, in which case the Majority Lenders (after consultation with the Company) may appoint a successor Agent. |
(c) | If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Company) may appoint a successor Agent (acting through an office in Belgium or The Netherlands). |
(d) | After consultation with the Company, the Majority Lenders may, at any time the Agent is an Impaired Agent, replace the Agent by appointing a successor Agent (acting through an office in Belgium or The Netherlands). |
(e) | The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. |
(f) | The Agents resignation notice shall only take effect upon the appointment of a successor. |
(g) | Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of this Clause 26. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
(h) | After consultation with the Company, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above. |
(i) | The Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date hereof: |
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(i) | the Agent fails to respond to a request under Clause 12.7 (FATCA Information) and the Company or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party; |
(ii) | the information supplied by the Agent pursuant to Clause 12.7 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party; or |
(iii) | the Agent notifies the Company and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party; |
and in each case, the Company or a Lender reasonably believes that a Party will be required to make a FATCA Deduction with respect to any payment to the Agent under the Finance Documents that would not be required if the Agent were a FATCA Exempt Party, and the Company or that Lender, by notice to the Agent, requires it to resign.
26.12 | Confidentiality |
(a) | In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. |
(b) | If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. |
26.13 | Relationship with the Lenders |
(a) | Subject to Clause 23.10 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agents principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office: |
(i) | entitled to or liable for any payment due under any Finance Document on that day; and |
(ii) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, |
unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b) | Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents provided that such person has entered into a Confidentiality Undertaking. Such notice shall contain the address, electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for |
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whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address, department and officer by that Lender for the purposes of Clause 31.2 (Addresses) and paragraph (a)(ii) of Clause 31.6 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
26.14 | Credit appraisal by the Lenders |
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(a) | the financial condition, status and nature of each member of the Group; |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; |
(c) | whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and |
(d) | the adequacy, accuracy and/or completeness of the Information Packages and any other information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document. |
26.15 | Reference Banks |
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
26.16 | Deduction from amounts payable by the Agent |
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
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26.17 | Role of Reference Banks |
No Reference Bank is under any obligation to provide a quotation or any other information to the Agent.
26.18 | Third party Reference Banks |
A Reference Bank which is not a Party may rely on Clause 26.17 (Role of Reference Banks) and Clause 35.2(c) (Exceptions) subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
27. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
Save to the extent inconsistent with obligations under Clause 12 (Tax Gross Up and Indemnities) no provision of this Agreement will:
(a) | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
(b) | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
(c) | oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
28. | SHARING AMONG THE FINANCE PARTIES |
28.1 | Payments to Finance Parties |
If a Finance Party (a Recovering Finance Party) receives or recovers any amount from an Obligor other than in accordance with Clause 29 (Payment Mechanics) or pursuant to a Debt Purchase Transaction in accordance with Clause 24 (Debt Purchase Transactions) (a Recovered Amount) and applies that amount to a payment due under the Finance Documents then:
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Agent; |
(b) | the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 29 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and |
(c) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 29.6 (Partial payments). |
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28.2 | Redistribution of payments |
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing Finance Parties) in accordance with Clause 29.6 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
28.3 | Recovering Finance Partys rights |
On a distribution by the Agent under Clause 28.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
28.4 | Reversal of redistribution |
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a) | each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount); and |
(b) | as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
28.5 | Exceptions |
(a) | This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor. |
(b) | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if: |
(i) | it notified that other Finance Party of the legal or arbitration proceedings; and |
(ii) | that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings. |
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(c) | This Clause 28 shall not apply to amounts due and payable by an Obligor to a Defaulting Lender which are discharged by way of set off in accordance with paragraph (b) of Clause 29.7 (No set-off by Obligors) or Clause 30 (Set-Off). |
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SECTION 11
ADMINISTRATION
29. | PAYMENT MECHANICS |
29.1 | Payments to the Agent |
(a) | On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment. |
(b) | Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies. |
29.2 | Distributions by the Agent |
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 29.3 (Distributions to an Obligor) and Clause 29.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).
29.3 | Distributions to an Obligor |
The Agent may (with the consent of the Obligor or in accordance with Clause 30 (Set-Off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
29.4 | Clawback and pre-funding |
(a) | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. |
(b) | If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
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(c) | If the Agent is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower: |
(i) | the Agent shall notify the Company of that Lenders identity and the Borrower to whom that sum was made available shall on demand from the Agent refund it to the Agent; and |
(ii) | the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender. |
29.5 | Impaired Agent |
(a) | If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 29.1 (Payments to the Agent) shall pay that amount directly to the required recipient. If the Party receiving such payment has notified the Party making the payment of the account to which such payment should be made at least 3 Business Days prior to the due date for the payment, it shall be made to that account. Such payment must be made within 3 Business Days of the due date for payment under the Finance Documents. |
(b) | A Party which has made a payment in accordance with this Clause 29.5 shall be discharged of the relevant payment obligation under the Finance Documents. |
(c) | The Company shall use reasonable endeavours to provide each Lender with a current list of the Lenders as soon as reasonably practicable upon the Agent becoming an Impaired Agent. For the avoidance of doubt, no Default shall arise as a result of the failure of the Company to provide such a list. |
29.6 | Partial payments |
(a) | If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order: |
(i) | first, in or towards payment pro rata of any unpaid amounts owing to the Agent under the Finance Documents; |
(ii) | secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement; |
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(iii) | thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and |
(iv) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
(b) | The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above. |
(c) | Paragraphs (a) and (b) above will override any appropriation made by an Obligor. |
29.7 | No set-off by Obligors |
(a) | Subject to paragraph (b) below, all payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. |
(b) | Paragraph (a) above does not restrict the ability of an Obligor to set off, in accordance with paragraph (b) of Clause 30 (Set-Off), any amount due and payable by it to a Defaulting Lender against any amount due and payable by the Defaulting Lender or any of its Affiliates (with whom any Obligor has deposits or has entered into Treasury Transactions). |
29.8 | Business Days |
(a) | Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). |
(b) | During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. |
29.9 | Currency of account |
(a) | Subject to paragraphs (b) to (e) below, USD is the currency of account and payment for any sum due from an Obligor under any Finance Document. |
(b) | A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated, pursuant to this Agreement, on its due date. |
(c) | Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated, pursuant to this Agreement, when that interest accrued. |
(d) | Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. |
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(e) | Any amount expressed to be payable in a currency other than USD shall be paid in that other currency. |
29.10 | Change of currency |
(a) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Company); and |
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably). |
(b) | If a change in any currency of a country (being a currency in which the Facility is made available under this Agreement) occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency. |
29.11 | Disruption to payment systems etc. |
If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Company that a Disruption Event has occurred:
(a) | the Agent may, and shall if requested to do so by the Company, consult with the Company with a view to agreeing with the Company such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances; |
(b) | the Agent shall not be obliged to consult with the Company in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; |
(c) | the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; |
(d) | any such changes agreed upon by the Agent and the Company shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 35 (Amendments and Waivers); |
(e) | the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability |
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whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 29.11; and |
(f) | the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (c) above. |
30. | SET-OFF |
(a) | Subject to Clause 4.4 (Utilisation during the Certain Funds Period), while an Event of Default is continuing, a Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
(b) | Notwithstanding paragraph (a) above, each Obligor may set off any amount due and payable by it to a Defaulting Lender under a Finance Document against any amount due and payable by the Defaulting Lender or any of its Affiliates (with whom any Obligor has deposits or has entered into Treasury Transactions) to that Obligor. |
(c) | The Obligor will notify the Agent and the Defaulting Lender as soon as practicable and in no event later than the date falling one Business Day prior to the due date for payment of the relevant amount by that Obligor that it intends to exercise a right of set off in accordance with paragraph (b) above and shall provide the Agent and the Defaulting Lender with reasonable computations in relation thereto. |
31. | NOTICES |
31.1 | Communications in writing |
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by email or letter.
31.2 | Addresses |
The address and email (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(a) | in the case of the Company, that identified with its name below; |
(b) | in the case of each Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and |
(c) | in the case of the Agent, that identified with its name below, |
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or any substitute address or email or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days notice.
31.3 | Delivery |
(a) | Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: |
(i) | if by way of email, when received in legible form; or |
(ii) | if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 (Addresses), if addressed to that department or officer.
(b) | Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agents signature below (or any substitute department or officer as the Agent shall specify for this purpose). |
(c) | All notices from or to an Obligor shall be sent through the Agent. |
(d) | Any communication or document made or delivered to the Company in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors. |
31.4 | Notification of address and email |
(a) | Promptly upon receipt of notification of an address or email or change of address or email pursuant to Clause 31.2 (Addresses) or changing its own address or email, the Agent shall notify the other Parties. |
(b) | The Agent shall provide to the Company on the date of this Agreement and within 5 Business Days of registering any assignment or transfer pursuant to Clause 23 (Changes to the Lenders), a list (which may be in electronic form) setting out the names of the Lenders, their respective Commitments, the address and email (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents. |
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31.5 | Communication when Agent is Impaired Agent |
If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. Where a communication is to be made to more than one Party, the Party making such communication shall use reasonable endeavours to make the communication to all relevant Parties simultaneously. (For the avoidance of doubt, no Default shall arise as a result of the failure of a Party to make such communication to all relevant Parties simultaneously). This provision shall not operate after a replacement Agent has been appointed.
31.6 | Electronic communication |
(a) | Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if those two Parties: |
(i) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and |
(ii) | notify each other of any change to their address or any other such information supplied by them. |
(b) | Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose. |
31.7 | English language |
(a) | Any notice given under or in connection with any Finance Document must be in English. |
(b) | All other documents provided under or in connection with any Finance Document must be: |
(i) | in English; or |
(ii) | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
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32. | CALCULATIONS AND CERTIFICATES |
32.1 | Accounts |
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
32.2 | Certificates and Determinations |
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
32.3 | Day count convention and interest calculation |
(a) | Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated: |
(i) | on the basis of the actual number of days elapsed and a year of 360 days (or, in any case where the practice in the Relevant Market differs, in accordance with that market practice); and |
(ii) | subject to paragraph (b) below, without rounding. |
(b) | The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by an Obligor under a Finance Document shall be rounded to 2 decimal places. |
33. | PARTIAL INVALIDITY |
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
34. | REMEDIES AND WAIVERS |
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any Finance Document on the part of any Finance Party shall be effective unless it is in writing. No, single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
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35. | AMENDMENTS AND WAIVERS |
35.1 | Required consents |
(a) | Subject to Clause 35.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors Agent and any such amendment or waiver will be binding on all Parties. |
(b) | The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 35. |
(c) | Paragraph (c) of Clause 23.10 (Pro rata interest settlement) shall apply to this Clause 35.1. |
35.2 | Exceptions |
(a) | Subject to Clause 35.3 (Changes to reference rates and use of Term SOFR) an amendment or waiver that has the effect of changing or which relates to: |
(i) | the definition of Majority Lenders in Clause 1.1 (Definitions); |
(ii) | an extension to the date of payment of any amount under the Finance Documents; |
(iii) | a reduction in the Margin (other than pursuant to the Margin ratchet mechanism set out in the definition of Margin) or a reduction in the amount of any payment of principal, interest, fees or commission payable; |
(iv) | an increase in or an extension of any Commitment (other than any increase in or extension of any Commitment that occurs as part of Clause 5.4 (Refinancing of the Facility)); |
(v) | a change to the Borrowers or Guarantors other than in accordance with Clause 25 (Changes to the Obligors); |
(vi) | any provision which expressly requires the consent of all the Lenders; or |
(vii) | Clause 2.3 (Finance Parties rights and obligations), Clause 23 (Changes to the Lenders) or this Clause 35, |
shall not be made without the prior consent of all the Lenders.
(b) | An amendment or waiver that has the effect of releasing the guarantee and indemnity granted under Clause 17 (Guarantee and Indemnity) or of releasing any Guarantor from the guarantee and indemnity granted under Clause 17 (Guarantee and Indemnity) shall not be made without the prior consent of all the Lenders. |
(c) | An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger (each in their capacity as such) or a Reference Bank (if any) may not be |
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effected without the consent of the Agent, the Arranger or that Reference Bank (if any), as the case may be.
(d) | Any amendment or waiver which: |
(i) | relates only to the rights or obligations applicable to a particular Loan, Facility or class of Lender; and |
(ii) | does not materially and adversely affect the rights or interests of Lenders in respect of any other Loan or Facility or another class of Lender, |
may be made in accordance with this Clause 35 but as if references in this Clause 35 to the specified proportion of Lenders (including, for the avoidance of doubt, all the Lenders) whose consent would, but for this paragraph (d), be required for that amendment or waiver were to that proportion of the Lenders participating in that particular Loan or Facility or forming part of that particular class.
(e) | If a Lender does not accept or reject a request within 10 Business Days (or such longer period as the Company may specify) of it being made, that Lenders Commitment(s) or participation under the Facility shall not be included for the purpose of calculating Total Commitments or Lenders participations when ascertaining whether any relevant percentage of the Total Commitments and/or Lenders participation (including for the avoidance of doubt, unanimity) has been obtained to approve an amendment or waiver and its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request. |
35.3 | Changes to reference rates and use of Term SOFR |
(a) | Subject to Clause 35.2(c) (Exceptions), any amendment or waiver which relates to: |
(i) | providing for the use of a Replacement Reference Rate or Term SOFR; and |
(ii) |
(A) | aligning any provision of any Finance Document to the use of that Replacement Reference Rate or Term SOFR; |
(B) | enabling that Replacement Reference Rate or Term SOFR to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate or Term SOFR to be used for the purposes of this Agreement); |
(C) | implementing market conventions applicable to that Replacement Reference Rate or Term SOFR; |
(D) | providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate or Term SOFR; or |
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(E) | adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate or Term SOFR (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation), |
may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Company.
(b) | An amendment or waiver that relates to, or has the effect of, aligning the means of calculation of interest on a Loan under this Agreement to any recommendation of a Relevant Nominating Body which: |
(i) | relates to the use of the RFR on a compounded basis in the international or any relevant domestic syndicated loan markets; and |
(ii) | is issued on or after the date of this Agreement, |
may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Company.
(c) | If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) or paragraph (b) above within 10 Business Days (or such longer time period in relation to any request which the Company and the Agent may agree) of that request being made: |
(i) | its Commitment(s) or participation under the Facility shall not be included for the purpose of calculating Total Commitments or Lenders participations when ascertaining whether any relevant percentage of the Total Commitments and/or Lenders participation (including for the avoidance of doubt, unanimity) has been obtained; and |
(ii) | its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request. |
(d) | In this Clause 35.3: |
Published Rate means:
(a) | the Screen Rate for any Quoted Tenor; or |
(b) | an RFR. |
Relevant Nominating Body means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
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Replacement Reference Rate means a reference rate which is:
(a) | formally designated, nominated or recommended as the replacement for a Published Rate by: |
(i) | the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate; or |
(ii) | any Relevant Nominating Body, |
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the Replacement Reference Rate will be the replacement under paragraph (ii) above;
(b) | in the opinion of the Majority Lenders and the Company, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Published Rate; or |
(c) | in the opinion of the Majority Lenders and the Company, an appropriate successor to a Published Rate. |
35.4 | Replacement of Lender |
(a) | If at any time any Lender becomes a Non-Consenting Lender (as defined in paragraph (c) below), the Company may, on 10 Business Days prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Company, and which is acceptable to the Agent (acting reasonably), which confirms its willingness to assume and does assume all the obligations of the transferring Lender (including the assumption of the transferring Lenders participations on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Loans and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents. |
(b) | The replacement of a Lender pursuant to this Clause shall be subject to the following conditions: |
(i) | the Company shall have no right to replace the Agent; |
(ii) | no Finance Party shall have any obligation to the Company to find a Replacement Lender; |
(iii) | such replacement must take place no later than 180 days after the date the Non-Consenting Lender notifies the Company and the Agent of its failure or refusal |
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to agree to any consent, waiver or amendment to the Finance Documents requested by the Company; and |
(iv) | in no event shall the Lender replaced under this paragraph (b) be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents. |
(c) | In the event that: |
(i) | the Company or the Agent (at the request of the Company) has requested the Lenders to consent to a waiver or amendment of any provisions of the Finance Documents; |
(ii) | the waiver or amendment in question requires the consent of all the Lenders; and |
(iii) | the Majority Lenders have consented to such waiver or amendment, |
then any Lender who does not and continues not to agree to such waiver or amendment shall be deemed a Non-Consenting Lender.
35.5 | Disenfranchisement of Defaulting Lenders |
(a) | For so long as a Defaulting Lender has any Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lenders Commitments under the Facility will be reduced by the amount of its Commitments under the Facility. |
(b) | For the purposes of this Clause 35.5, the Agent may assume that the following Lenders are Defaulting Lenders: |
(i) | any Lender which has notified the Agent that it has become a Defaulting Lender; |
(ii) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b), (c) or (d) of the definition of Defaulting Lender has occurred, |
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent a copy of which is provided to the Company) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
35.6 | Replacement of a Defaulting Lender |
(a) | The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days prior written notice to the Agent and such Lender: |
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(i) | replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement; |
(ii) | require such Lender to (and such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its Available Commitment(s) under the Facility; or |
(iii) | require such Lender to (and such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations, |
to a Lender or other bank, financial institution, trust, fund or other entity (a Substitute Lender) selected by the Company, and which (unless the Agent is an Impaired Agent) is acceptable to the Agent (acting reasonably), which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lenders participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Loans and all accrued interest, but excluding Break Costs and other amounts payable in relation thereto under the Finance Documents.
(b) | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions: |
(i) | the Company shall have no right to replace the Agent; |
(ii) | neither the Agent nor the Defaulting Lender shall have any obligation to the Company to find a Substitute Lender; |
(iii) | the transfer must take place no later than 10 Business Days after the notice referred to in paragraph (a) above; and |
(iv) | in no event shall the Defaulting Lender be required to pay or surrender to the Substitute Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
36. | CONFIDENTIALITY |
36.1 | Confidential Information |
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 (Disclosure of Confidential Information) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
36.2 | Disclosure of Confidential Information |
Any Finance Party may disclose:
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(a) | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
(b) | to any person: |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under the Finance Documents and to any of that persons professional advisers; |
(ii) | with (or through) whom it enters into (or may potentially enter into), any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to the Finance Documents and/or one or more Obligors and to any of that persons professional advisers; |
(iii) | appointed by any Finance Party or by a person to whom paragraph (b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (b) of Clause 26.13 (Relationship with the Lenders)); |
(iv) | to whom information is required to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(v) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 23.9 (Security over Lenders rights); |
(vi) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(vii) | who is a Party; or |
(viii) | with the consent of the Company; |
in each case, such Confidential Information as that Finance Party (acting reasonably) shall consider appropriate if:
(A) | in relation to paragraphs (b)(i), (b)(ii)and (b)(iii) above, the person to whom the Confidential Information is to be given has entered into a |
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Confidentiality Undertaking and has been informed in writing that some or all of such Confidential Information may be price sensitive information except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(B) | in relation to paragraphs (b)(iv), (b)(v)and (b)(vi) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party (acting reasonably), it is not practicable so to do in the circumstances; and |
(C) | other than in relation to paragraph (iv) above, the recipient is not engaged in a business that would reasonably be considered to be a competitor of the Group; |
(c) | to any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or (b)(ii)above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party; and |
(d) | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information. |
36.3 | Entire agreement |
This Clause 36 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
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36.4 | Inside information |
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
36.5 | Notification of disclosure |
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Company:
(a) | of the circumstances of any disclosure of Confidential Information made pursuant to paragraph (b)(iv) of Clause 36.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that Confidential Information has been disclosed in breach of this Clause 36 (Confidentiality). |
36.6 | Continuing obligations |
The obligations in this Clause 36 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:
(a) | the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and |
(b) | the date on which such Finance Party otherwise ceases to be a Finance Party. |
37. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
37.1 | Confidentiality and disclosure |
(a) | The Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below. |
(b) | The Agent may disclose: |
(i) | any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant Borrower pursuant to Clause 8.4 (Notifications); and |
(ii) | any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide |
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those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender or Reference Bank, as the case may be. |
(c) | The Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to: |
(i) | any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it; |
(ii) | any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
(iii) | any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and |
(iv) | any person with the consent of the relevant Lender or Reference Bank as the case may be. |
(d) | The Agents obligations in this Clause 37 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 8.5 (Notifications) provided that (other than pursuant to paragraph (b)(i) above) the Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification. |
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37.2 | Related obligations |
(a) | The Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Agent, any Reference Bank Quotation for any unlawful purpose. |
(b) | The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be: |
(i) | of the circumstances of any disclosure made pursuant to paragraph (c)(ii) of Clause 37.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(ii) | upon becoming aware that any information has been disclosed in breach of this Clause 37. |
37.3 | No Event of Default |
No Event of Default will occur under Clause 22.2 (Other obligations) by reason only of an Obligors failure to comply with this Clause 37.
38. | COUNTERPARTS |
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
39. | U.S. PATRIOT ACT |
Each Lender herby notifies each Obligor that pursuant to the requirements of the USA Patriot Act, such Lender is required to obtain, verify and record information that identifies such Obligor, which information includes the name and address of such Obligor and the other information that will allow such Lender to identify such Obligor in accordance with the USA Patriot Act.
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SECTION 9
GOVERNING LAW AND ENFORCEMENT
40. | GOVERNING LAW |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
41. | ENFORCEMENT |
41.1 | Jurisdiction |
(a) | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a Dispute). |
(b) | The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. |
(c) | This Clause 41.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions. |
41.2 | Service of process |
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(a) | irrevocably appoints UCB Pharma Limited as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and |
(b) | agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned. |
42. | WAIVER OF JURY TRIAL |
EACH OF THE PARTIES TO THIS AGREEMENT AGREES TO WAIVE IRREVOCABLY ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN THIS AGREEMENT. This waiver is intended to apply to all Disputes. Each party acknowledges that (a) this waiver is a material inducement to enter into this Agreement, (b) it has already relied on this waiver in entering into this Agreement and (c) it will continue to rely on this waiver in future dealings. Each party represents that it has reviewed this waiver with its legal advisers and that it knowingly and voluntarily waives its jury trial
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rights after consultation with its legal advisers. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
43. | CONTRACTUAL RECOGNITION OF BAIL-IN |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) | any Bail-In Action in relation to any such liability, including (without limitation): |
(i) | a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability; |
(ii) | a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and |
(iii) | a cancellation of any such liability; and |
(b) | a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability. |
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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SCHEDULE 1
THE PARTIES
Part I
The Original Obligors
Name of Original Borrower | Registration number (or equivalent, if any) | |
UCB SA | 0403.053.608, RLP Brussels, Belgium | |
UCB Biopharma SRL | 0543.573.053, RLP Brussels, Belgium |
Name of Original Guarantor | Registration number (or equivalent, if any) | |
UCB SA | 0403.053.608, RLP Brussels, Belgium | |
UCB Biopharma SRL | 0543.573.053, RLP Brussels, Belgium | |
UCB Pharma GmbH | HRB 62600, Düsseldorf, Germany | |
UCB GmbH | HRB 58429, Düsseldorf, Germany | |
UCB, Inc. | 2138606, Delaware, the United States of America |
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Part II
The Original Lenders
Name of Original Lender |
Commitment (USD) | |||
BNP Paribas Fortis SA/NV |
400,000,000 | |||
Barclays Bank PLC |
400,000,000 |
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SCHEDULE 2
CONDITIONS PRECEDENT
Part I
Conditions Precedent To Initial Utilisation
1. | Original Obligors |
(a) | A copy of the constitutional documents of each Original Obligor incorporated in a jurisdiction other than Germany. |
(b) | In relation to an Original Obligor incorporated or established in Germany an up-to-date commercial register extract (Handelsregisterausdruck), its articles of association (Satzung) or partnership agreement (Gesellschaftsvertrag) and its shareholder list (Gesellschafterliste) (if applicable). |
(c) | A copy of a resolution of the board of directors of each Original Obligor incorporated in a jurisdiction other than Germany and/or, if applicable and required, a copy of a resolution of the supervisory board (Aufsichtsrat) and/or advisory board (Beirat) of such Original Obligor: |
(i) | approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party; |
(ii) | authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and |
(iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request, Selection Notice or any other notice) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party. |
(d) | A specimen of the signature of the relevant persons authorised by the resolution referred to in paragraph (c) above. |
(e) | Other than with respect to the Company, where customary in the jurisdiction of incorporation of the relevant Original Obligor, a copy of a resolution signed by all the holders of the issued shares in each Original Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Original Obligor is a party. |
(f) | A certificate of the Company (signed by a director or an authorised signatory) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on any Original Obligor to be exceeded. |
(g) | A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, |
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complete and in full force and effect as at a date no earlier than the date of this Agreement. |
(h) | A copy of a good standing or existence certificate (if available) with respect to each U.S. Obligor, issued as of a recent date by the Secretary of State or other appropriate official of such U.S. Obligors jurisdiction of incorporation, organisation or formation. |
2. | Legal opinions |
(a) | A legal opinion of Clifford Chance LLP, legal advisers to the Arranger and the Agent in England, substantially in the form distributed to the Original Lenders prior to signing this Agreement. |
(b) | If an Original Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arranger and the Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders prior to signing this Agreement. |
3. | Other documents and evidence |
(a) | This Agreement, duly executed. |
(b) | The Fee Letters, duly executed. |
(c) | A copy of the executed Merger Agreement dated no later than 5 Business Days after the date of this Agreement, provided that it is understood and agreed that the draft Merger Agreement delivered to Clifford Chance LLP by Skadden, Arps, Slate, Meagher & Flom (UK) LLP by email on 17 January 2022 at 18:35 is in form and substance satisfactory to the Agent. |
(d) | A certificate of the Company certifying that the Company has or has access to sufficient funds (after giving effect to the Loans to be made on the Utilisation Date) to complete the Acquisition and make all payments (or procure the making of all payments) required to be made under and in connection with the Merger Agreement with respect to each of the Acceptance Time and the Closing Date. |
(e) | A certificate of the Company certifying that: |
(i) | the Company has complied with the provision of Clause 21.18(c) (Acquisition related undertakings); and |
(ii) | all Offer Conditions (as defined in the Merger Agreement) set forth in Annex I of the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Acceptance Time) have been (if such condition relates to any member of the Target Group, to the knowledge of the Company) satisfied or, to the extent not prohibited by Clause 21.18(c) (Acquisition related undertakings), waived. |
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(f) | A structure chart of the Group showing the Group assuming the Closing Date for the Acquisition has occurred, certified by the Company, to its knowledge and belief having made due and careful enquiry, to be true, complete and accurate in all material respects. |
(g) | Evidence that any process agent referred to in Clause 41.2 (Service of process), if not an Original Obligor, has accepted its appointment. |
(h) | The Original Financial Statements of each Original Obligor. |
(i) | Completion of the know your customer checks provided that the Original Lenders have used all reasonable endeavours to complete such checks. |
(j) | Evidence that the fees, costs and expenses then due from the Company pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) to the extent invoiced at least 3 Business Days prior to the first Utilisation Date have been paid or will be paid on the first Utilisation Date. |
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Part II
Conditions Precedent Required To Be
Delivered by an Additional Obligor
1. | An Accession Letter, duly executed by the Additional Obligor and the Company. |
2. | A copy of the constitutional documents of the Additional Obligor incorporated in a jurisdiction other than Germany. |
3. | In relation to an Additional Obligor incorporated or established in Germany an up-to-date commercial register extract (Handelsregisterausdruck), its articles of association (Satzung) or partnership agreement (Gesellschaftsvertrag) and shareholder list (Gesellschafterliste) (if applicable.) |
4. | A copy of a resolution of the board of directors of the Additional Obligor incorporated in a jurisdiction other than Germany and/or if applicable and required a copy of a resolution of the supervisory board (Aufsichtsrat) and/or if applicable the advisory board (Beirat) of such Additional Obligor: |
(a) | approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter; |
(b) | authorising a specified person or persons to execute the Accession Letter on its behalf; |
(c) | authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including, in relation to an Additional Borrower, any Utilisation Request, Selection Notice and any other notice) to be signed and/or despatched by it under or in connection with the Finance Documents; and |
(d) | in the case of an Additional Guarantor incorporated in Belgium, setting out the reasons why the board of directors of that Obligor considered that the entry into of this Agreement, and in particular the assumption of its guarantee obligations in accordance with Clause 17 (Guarantee and Indemnity) is of benefit to that Obligor. |
5. | A specimen of the signature of the relevant persons authorised by the resolution referred to in paragraph 4 above. |
6. | If applicable, a copy of a resolution signed by all the holders of the issued shares of the Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Additional Guarantor is a party. |
7. | In the case of an Additional Obligor incorporated in Belgium, a copy of a resolution of the shareholders meeting, or a written resolution of all shareholders, approving any provision of the Finance Documents that may fall within the scope of Article 7:151 of the Belgian Code of Companies and Associations, including without limitation Clause 7.2 (Change of control) and Clause 21.15 (Disposals) (in combination with Clause 22.2 (Other obligations) and Clause 22.12 (Acceleration)) of this Agreement, together with evidence that such resolution has been filed with the clerk of the competent enterprise court in accordance with Article 556 |
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of the Belgian Company Code or article 7:151 of the Belgian Code of Companies and Associations (as applicable). |
8. | A certificate of the Additional Obligor (signed by a director or authorised signatory) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded. |
9. | A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter. |
10. | A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document. |
11. | If available, the latest audited financial statements of the Additional Obligor. |
12. | A legal opinion of Clifford Chance LLP, legal advisers to the Arranger and the Agent in England. |
13. | If the Additional Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arranger and the Agent in the jurisdiction in which the Additional Obligor is incorporated. |
14. | If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in Clause 41.2 (Service of process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor. |
15. | A copy of a good standing or existence certificate (if available) with respect to each Additional Obligor incorporated in the United States, issued as of a recent date by the Secretary of State or other appropriate official of such Additional Obligors jurisdiction of incorporation, organisation or formation. |
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SCHEDULE 3
REQUESTS
Part I
Utilisation Request
From: | [Borrower]/[Company] | |
To: | BNP PARIBAS FORTIS SA/NV as Agent |
Dated:
Dear Sirs
UCB SA Term Facility Agreement
dated [ ] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request. |
2. | We wish to borrow a Loan on the following terms: |
Proposed Utilisation Date: |
[ ] (or, if that is not a Business Day, the next Business Day) | |
Amount: |
USD [ ] or, if less, the Available Facility | |
Interest Period: |
[ ] |
3. | We confirm that each condition specified in [Clause 4.2 (Further conditions precedent)]/[Clause 4.4 (Utilisation during the Certain Funds Period)] of the Agreement is satisfied on the date of this Utilisation Request. |
4. | The proceeds of this Loan should be credited to [account]. |
5. | This Utilisation Request is irrevocable. |
Yours faithfully
authorised signatory for
[name of relevant Borrower or Company where the Company is delivering the Utilisation
Request on behalf of the Relevant Borrower]
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Part II
Selection Notice
From: | [Borrower]/[Company] | |
To: | BNP PARIBAS FORTIS SA/NV as Agent |
Dated:
Dear Sirs
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice. |
2. | We refer to the following Loan[s] in [identify currency] with an Interest Period ending on [ ].1 |
3. | [We request that the above Loan[s] be divided into [ ] Loans with the following amounts and Interest Periods:] 2 |
or
[We request that the next Interest Period for the above Loan[s] is [ ]].3
or
[We request that USD [ ] of such Loan[s] be converted to EUR on first day of the Interest Period to commence after this Selection Notice being [ ] and that the Interest Period for this converted Loan is [ ].
[We request that the next Interest Period for the above Loan[s] not converted to EUR (being an amount of USD [ ]) is [ ]]]4
4. | This Selection Notice is irrevocable. |
1 | Insert details of all Loans in the same currency which have an Interest Period ending on the same date. |
2 | Use this option if division of Loans is requested. |
3 | Use this option if sub-division is not required. |
4 | Use this option if currency change if requested. |
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Yours faithfully
authorised signatory for
[name of relevant Borrower or Company where the Company is delivering the Selection Notice on behalf of the Relevant Borrower]
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SCHEDULE 4
FORM OF TRANSFER CERTIFICATE
To: | BNP PARIBAS FORTIS SA/NV as Agent | |
From: | [The Existing Lender] (the Existing Lender) and [The New Lender] (the New Lender) |
Dated:
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate. |
2. | We refer to Clause 23.5 (Procedure for transfer) of the Agreement: |
(a) | The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation, and in accordance with Clause 23.5 (Procedure for transfer) of the Agreement, all of the Existing Lenders rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lenders Commitment and participation in Loans under the Agreement as specified in the Schedule. |
(b) | The proposed Transfer Date is [___________] . |
(c) | The Facility Office and address, email and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule. |
3. | The New Lender expressly acknowledges the limitations on the Existing Lenders obligations set out in paragraph (c) of Clause 23.4 (Limitation of responsibility of Existing Lenders) of the Agreement. |
4. | The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is: |
(a) | With respect to a Borrower who is resident in Belgium: |
(i) | [A Qualifying Lender within paragraph (a)(i)or (a)(ii) of that definition;] or |
(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender].5 |
(b) | With respect to a Borrower who is resident in U.S: |
5 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
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(i) | [A Qualifying Lender within paragraph (b) of that definition;] or |
(ii) | [Not a Qualifying Lender].6 |
(c) | With respect to an Obligor who is resident in the United Kingdom: |
(i) | [A Qualifying Lender within paragraph (c)(A) or (c)(B) or (c)(C) or (c)(D) or (c)(F) of that definition]; or |
(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender.] 7 |
(d) | With respect to any other Borrower: |
(i) | [A Treaty Lender]; or |
(ii) | [A Qualifying Lender within paragraph (d)(ii) of that definition;] or |
(iii) | [Not a Qualifying Lender.] 8 |
5. | The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it [is]/[is not] incorporated, having its place of effective management, or acting through its Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction. |
6. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]9 |
6 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
7 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
8 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
9 | Include only if New Lender is a UK Non-Bank Lender - i.e., falls within paragraph (c)(B)(C) or (D) of the definition of Qualifying Lender in Clause 12.1 (Definitions). |
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7. | The New Lender expressly confirms that it [can/cannot] exempt the Agent from the restrictions pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other law as provided for in paragraph (c) of Clause 26.1 (Appointment of the Agent). |
8. | This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate. |
9. | This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
10. | This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate. |
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THE SCHEDULE
Commitment/rights and obligations to be transferred
[insert relevant details]
[Facility Office address, email and attention details for notices and account details for payments,]
[Existing Lender] | [New Lender] | |
By: | By: |
This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [___________] .
BNP PARIBAS FORTIS SA/NV as Agent
By:
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SCHEDULE 5
FORM OF ASSIGNMENT AGREEMENT
To: BNP PARIBAS FORTIS SA/NV as Agent and UCB SA as the Company, for and on behalf of each Obligor
From: [the Existing Lender] (the Existing Lender) and [the New Lender] (the New Lender)
Dated:
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement. |
2. | We refer to Clause 23.6 (Procedure for assignment) of the Agreement: |
(a) | The Existing Lender hereby assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement and the other Finance Documents which relate to that portion of the Existing Lenders Commitments and participations in Loans under the Agreement as specified in the Schedule. |
(b) | The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lenders Commitments and participations in Loans under the Agreement specified in the Schedule. |
(c) | The New Lender hereby becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above. |
3. | The proposed Transfer Date is [___________] . |
4. | On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender. |
5. | The Facility Office and address, email and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule. |
6. | The New Lender expressly acknowledges the limitations on the Existing Lenders obligations set out in paragraph (c) of Clause 23.4 (Limitation of responsibility of Existing Lenders). |
7. | The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is: |
(a) | With respect to a Borrower who is resident in Belgium: |
(i) | [A Qualifying Lender within paragraph (a)(i) or (a)(ii) of that definition;] or |
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(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender].10 |
(b) | With respect to a Borrower who is resident in U.S: |
(i) | [A Qualifying Lender within paragraph (b) of that definition;] or |
(ii) | [Not a Qualifying Lender].11 |
(c) | With respect to an Obligor who is resident in the United Kingdom:: |
(i) | [A Qualifying Lender within paragraph (c)(A) or (c)(B) or (c)(C) or (c)(D) or (c)(F) of that definition]; or |
(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender.] 12 |
(d) | With respect to any other Borrower: |
(i) | [A Treaty Lender]; or |
(ii) | [A Qualifying Lender within paragraph (d)(ii) of that definition;] or |
(iii) | [Not a Qualifying Lender.] 13 |
8. | The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it [is]/[is not] incorporated, having its place of effective management, or acting through its Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction. |
9. | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(d) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(e) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(f) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest |
10 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
11 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
12 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
13 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
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payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]14 |
10. | This Assignment Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 23.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company) of the Agreement, to the Company (on behalf of each Obligor) of the assignment referred to in this Assignment Agreement. |
11. | The New Lender expressly confirms that it [can/cannot] exempt the Agent from the restrictions pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other law as provided for in paragraph (c) of Clause 26.1 (Appointment of the Agent). |
12. | This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement. |
13. | This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. |
14. | This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement. |
14 | Include only if New Lender is a UK Non-Bank Lender - i.e., falls within paragraph (c)(B)(C) or (D) of the definition of Qualifying Lender in Clause 12.1 (Definitions). |
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THE SCHEDULE
Rights to be assigned and obligations to be released and undertaken
[insert relevant details]
[Facility office address, email and attention details for notices and account details for payments]
[Existing Lender] | [New Lender] | |
By: | By: |
This Assignment Agreement is accepted by the Agent and the Transfer Date is confirmed as [ ].
Signature of this Assignment Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to herein, which notice the Agent receives on behalf of each Finance Party.
BNP PARIBAS FORTIS SA/NV as Agent
By:
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SCHEDULE 6
FORM OF ACCESSION LETTER
To: | BNP PARIBAS FORTIS SA/NV as Agent | |
From: | [Subsidiary] and UCB SA as the Company |
Dated:
Dear Sirs
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter. |
2. | [Subsidiary] agrees to become an Additional [Borrower]/[Guarantor] and to be bound by the terms of the Agreement as an Additional [Borrower]/[Guarantor] pursuant to Clause [25.2 (Additional Borrowers)]/[Clause 25.4 (Additional Guarantors)] of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction]. |
3. | [[Subsidiary] hereby represents that it does not qualify as a small or medium sized enterprise to which the provisions of the Belgian law of 21 December 2013 on the financing of small and medium sized enterprises (Wet betreffende diverse bepalingen inzake de financiering voor kleine en middelgrote ondernemingen/Loi relative à diverses dispositions concernant le financement des petites et moyennes entreprises), as amended from time to time, apply, and as a result of which that law would apply to the Agreement.]15 |
4. | [The Company confirms that no Default is continuing or would occur as a result of [Subsidiary] becoming an Additional Borrower.] |
5. | [Subsidiarys] administrative details are as follows: |
Address:
Email:
Attention:
6. | This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by English law. |
15 | Only relevant in case of an Additional Borrower incorporated in Belgium. |
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7. | [The following limitations on the guarantee given under Clause 17 (Guarantee and Indemnity) of the Agreement shall apply in respect of the Additional Guarantor: [List limitations, as contemplated by Clause 17.11 (Guarantee Limitations)]] |
[This Accession Letter is entered into by deed.]
UCB SA as the Company | [Subsidiary] |
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SCHEDULE 7
FORM OF RESIGNATION LETTER
To: | BNP PARIBAS FORTIS SA/NV as Agent | |
From: | [resigning Obligor] and UCB SA as the Company |
Dated:
Dear Sirs
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter. |
2. | Pursuant to [Clause 25.3 (Resignation of a Borrower)]/[Clause 25.6 (Resignation of a Guarantor)] of the Agreement, we request that [resigning Obligor] be released from its obligations as a [Borrower]/[Guarantor] under the Agreement. |
3. | We confirm that: |
(a) | no Default is continuing or would result from the acceptance of this request; and |
(b) | []* |
4. | [It is expressly agreed that the guarantees granted by each Obligor under the Agreement and any other Finance Document shall be preserved for the benefit of the Finance Parties.] ** |
5. | This Resignation Letter and any non-contractual obligations arising out of or in connection with it are governed by English law. |
UCB SA as the Company | [Subsidiary] | |
By: | By: |
* | Insert any other conditions required by the Facility Agreement. |
** | Include for Belgian resigning entity only. |
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SCHEDULE 8
FORM OF COMPLIANCE CERTIFICATE
To: | BNP PARIBAS FORTIS SA/NV as Agent |
From: | UCB SA as the Company |
Dated: |
Dear Sirs
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2. | We confirm that in respect of the Relevant Period ended [], Consolidated Total Net Borrowings were [] and Consolidated EBITDA was []. The Leverage Ratio was therefore [] and the applicable Margin is therefore []. |
3. | [For the purposes of paragraph (c) of Clause 20.2 (Leverage Ratio), [describe any relevant currency swaps and attach any necessary explanation of how they affect the calculation of the Leverage Ratio].]. |
4. | We confirm that the Material Subsidiaries are as follows: |
[list]
5. | [We confirm that no Event of Default is continuing.]* |
Signed: |
|
| ||
[Title] | [Title] | |||
Of | of | |||
[Company] | [Company] |
[insert applicable certification language]
* | If this statement cannot be made, the certificate should identify any Event of Default that is continuing and the steps, if any, being taken to remedy it. |
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SCHEDULE 9
TIMETABLES
Part 1 - Loans
Loans in euro | Loans in USD | |||
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of a Utilisation Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods)) | D-3* 11:00 a.m. (Brussels time) |
D-3* 11:00 a.m. (Brussels time) | ||
Agent notifies the Lenders of the Loan in accordance with Clause 5.5 (Lenders participation) | D-3** 3:00 p.m. (Brussels time) |
D-3** 3:00 p.m. (Brussels time) | ||
EURIBOR is fixed | Quotation Day 11:00 a.m. (Brussels time) |
N/A | ||
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 10.1 (Absence of Quotations) | Quotation Day 11:30 a.m. (Brussels time) in respect of EURIBOR | N/A |
D = Utilisation Date
D-X = Business Days prior to date of utilisation.
* | In respect of the first Utilisation Date, a Utilisation Request shall be accepted provided that it is delivered prior to 2:30 p.m. (London time) on the day which is at least 1 Business Day prior to the proposed Utilisation Date. |
** | In respect of the first Utilisation Date, 3:00 p.m. (London time) on the date of delivery of the Utilisation Request. |
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SCHEDULE 10
FORM OF INCREASE CONFIRMATION
To: | BNP PARIBAS FORTIS SA/NV as Agent and UCB SA as Company, for and on behalf of each Obligor |
From: | [the Increase Lender] (the Increase Lender) |
Dated: |
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation. |
2. | We refer to Clause 2.2 (Increase) of the Agreement. |
3. | The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment) as if it had been an Original Lender under the Agreement in respect of the Relevant Commitment. |
4. | The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the Increase Date) is [ ]. |
5. | On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender. |
6. | The Facility Office and address, email and attention details for notices to the Increase Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule. |
7. | The Increase Lender expressly acknowledges the limitations on the Lenders obligations referred to in paragraph (i) of Clause 2.2 (Increase) of the Agreement. |
8. | The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is: |
(a) | With respect to a Borrower who is resident in Belgium: |
(i) | [A Qualifying Lender within paragraph (a)(i) or (a)(ii) of that definition;] or |
(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender].16 |
(b) | With respect to a Borrower who is resident in U.S: |
(i) | [A Qualifying Lender within paragraph (b) of that definition;] or |
16 | Delete as applicableeach New Lender is required to confirm which of these three categories it falls within. |
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(ii) | [Not a Qualifying Lender].17 |
(c) | With respect to an Obligor who is resident in the United Kingdom:: |
(i) | [A Qualifying Lender within paragraph (c)(A) or (c)(B) or (c)(C) or (c)(D) or (c)(F) of that definition]; or |
(ii) | [A Treaty Lender]; or |
(iii) | [Not a Qualifying Lender.] 18 |
(d) | With respect to any other Borrower: |
(i) | [A Treaty Lender]; or |
(ii) | [A Qualifying Lender within paragraph (d)(ii) of that definition;] or |
(iii) | [Not a Qualifying Lender.] 19 |
9. | The Increase Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it [is]/[is not] incorporated, having its place of effective management, or acting through its Facility Office situated, as the case may be, in a Non-Cooperative Jurisdiction. |
10. | The Increase Lender expressly confirms that it [can/cannot] exempt the Agent from the restrictions pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other law as provided for in paragraph (c) of Clause 26.1 (Appointment of the Agent). |
11. | [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest |
17 | Delete as applicableeach Increase Lender is required to confirm which of these three categories it falls within. |
18 | Delete as applicableeach Increase Lender is required to confirm which of these three categories it falls within. |
19 | Delete as applicableeach Increase Lender is required to confirm which of these three categories it falls within. |
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payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]20 |
12. | This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation. |
13. | This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by English law. |
14. | This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation. |
20 | Include only if Increase Lender is a UK Non-Bank Lender - i.e., falls within paragraph (c)(B)(C) or (D) of the definition of Qualifying Lender in Clause 12.1 (Definitions). |
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THE SCHEDULE
Relevant Commitment/rights and obligations to be assumed by the Increase Lender
[insert relevant details]
[Facility Office address, email and attention details for notices and account details for payments]
[Increase Lender]
By: |
This Increase Confirmation is accepted by the Agent and the Increase Date is confirmed as [ ].
Agent |
By: |
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SCHEDULE 11
REFERENCE RATE TERMS
CURRENCY: | Dollars. | |
Cost of funds as a fallback | ||
Cost of funds will not apply as a fallback. | ||
Definitions | ||
Additional Business Days: | An RFR Banking Day. | |
Break Costs: | None specified. | |
Business Day Conventions (definition of Month and Clause 9.2 (Non-Business Days)): | (a) If any period is expressed to accrue by reference to a Month or any number of Months then, in respect of the last Month of that period: | |
(i) subject to paragraph (iii) below, if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(ii) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(iii) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end. | ||
(b) If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). | ||
Central Bank Rate: | (a) The short-term interest rate target set by the US Federal Open Market Committee as published by the Federal Reserve Bank of New York from time to time; or
(b) if that target is not a single figure, the arithmetic mean of: | |
(i) the upper bound of the short-term interest rate target range set by the US Federal Open Market Committee and |
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published by the Federal Reserve Bank of New York; and
(ii) the lower bound of that target range. | ||
Central Bank Rate Adjustment: | In relation to the Central Bank Rate prevailing at close of business on any RFR Banking Day, 20 per cent. trimmed arithmetic mean (calculated by the Agent) of the Central Bank Rate Spreads for the five most immediately preceding RFR Banking Days for which the relevant RFR is available. | |
Central Bank Rate Spread: | In relation to any RFR Banking Day, the difference (expressed as a percentage rate per annum) calculated by the Agent of:
(a) the RFR for that RFR Banking Day; and
(b) the Central Bank Rate prevailing at the close of business on that RFR Banking Day. | |
Daily Rate: | The Daily Rate for any RFR Banking Day is: | |
(a) the RFR for that RFR Banking Day; or | ||
(b) if the RFR is not available for that RFR Banking Day, the percentage rate per annum which is the aggregate of: (i) the Central Bank Rate for that RFR Banking Day; and
(ii) the applicable Central Bank Rate Adjustment; or
(c) if paragraph (b) above applies but the Central Bank Rate for that RFR Banking Day is not available, the percentage rate per annum which is the aggregate of:
(i) the most recent Central Bank Rate for a day which is no more than five RFR Banking Days before that RFR Banking Day; and
(ii) the applicable Central Bank Rate Adjustment,
rounded, in either case, to five decimal places, and if, in either case, that rate is less than zero, the Daily Rate shall be deemed to be zero. | ||
Lookback Period: | Five RFR Banking Days. | |
Market Disruption Rate: | None specified. |
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Relevant Market: | The market for overnight cash borrowing collateralised by U.S. Government securities. | |
Reporting Day: | The Business Day which follows the day which is the Lookback Period prior to the last day of the Interest Period. | |
RFR: | The secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate). | |
RFR Banking Day: | Any day other than:
(a) a Saturday or Sunday; and
(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. Government securities. | |
Interest Periods | ||
Periods capable of selection as Interest Periods (paragraph (d) of Clause 9.1 (Selection of Interest Periods)): | One (1) or three (3) Months or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan). |
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SCHEDULE 12
DAILY NON-CUMULATIVE COMPOUNDED RFR RATE
The Daily Non-Cumulative Compounded RFR Rate for any RFR Banking Day i during an Interest Period for a Loan denominated in USD is the percentage rate per annum (without rounding, to the extent reasonably practicable for the Finance Party performing the calculation, taking into account the capabilities of any software used for that purpose) calculated as set out below:
where:
UCCDRi means the Unannualised Cumulative Compounded Daily Rate for that RFR Banking Day i;
UCCDRi-1 means, in relation to that RFR Banking Day i, the Unannualised Cumulative Compounded Daily Rate for the immediately preceding RFR Banking Day (if any) during that Interest Period;
dcc means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number;
ni means the number of calendar days from, and including, that RFR Banking Day i up to, but excluding, the following RFR Banking Day; and
the Unannualised Cumulative Compounded Daily Rate for any RFR Banking Day (the Cumulated RFR Banking Day) during that Interest Period is the result of the below calculation (without rounding, to the extent reasonably practicable for the Finance Party performing the calculation, taking into account the capabilities of any software used for that purpose):
where:
ACCDR means the Annualised Cumulative Compounded Daily Rate for that Cumulated RFR Banking Day;
tni means the number of calendar days from, and including, the first day of the Cumulation Period to, but excluding, the RFR Banking Day which immediately follows the last day of the Cumulation Period;
Cumulation Period means the period from, and including, the first RFR Banking Day of that Interest Period to, and including, that Cumulated RFR Banking Day;
dcc has the meaning given to that term above; and
the Annualised Cumulative Compounded Daily Rate for that Cumulated RFR Banking Day is the percentage rate per annum (rounded to five decimal places) calculated as set out below:
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where:
d0 means the number of RFR Banking Days in the Cumulation Period;
Cumulation Period has the meaning given to that term above;
i means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order in the Cumulation Period;
DailyRatei-LP means, for any RFR Banking Day i in the Cumulation Period, the Daily Rate for the RFR Banking Day which is the applicable Lookback Period prior to that RFR Banking Day i;
ni means, for any RFR Banking Day i in the Cumulation Period, the number of calendar days from, and including, that RFR Banking Day i up to, but excluding, the following RFR Banking Day;
dcc has the meaning given to that term above; and
tni has the meaning given to that term above.
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SCHEDULE 13
CUMULATIVE COMPOUNDED RFR RATE
The Cumulative Compounded RFR Rate for any Interest Period for a Loan denominated in USD is the percentage rate per annum (rounded to the same number of decimal places as is specified in the definition of Annualised Cumulative Compounded Daily Rate in SCHEDULE 12 (Daily Non-Cumulative Compounded RFR Rate)) calculated as set out below:
where:
d0 means the number of RFR Banking Days during the Interest Period;
i means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order during the Interest Period;
DailyRatei-LP means for any RFR Banking Day i during the Interest Period, the Daily Rate for the RFR Banking Day which is the applicable Lookback Period prior to that RFR Banking Day i;
ni means, for any RFR Banking Day i, the number of calendar days from, and including, that RFR Banking Day i up to, but excluding, the following RFR Banking Day;
dcc means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number; and
d means the number of calendar days during that Interest Period.
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SCHEDULE 14
FORM OF BORROWER SUBSTITUTION CERTIFICATE
To: | BNP PARIBAS FORTIS SA/NV as Agent | |
From: | [The Existing Borrower] (the Existing Borrower) and [The New Borrower] (the New Borrower) |
Dated:
UCB SA Term Facility Agreement
dated [___________] 2022 (the Agreement)
1. | We refer to the Agreement. This is a Borrower Substitution Certificate. Terms defined in the Agreement have the same meaning in this Borrower Substitution Certificate unless given a different meaning in this Borrower Substitution Certificate. |
2. | We refer to Clause 25.7 (Change of Borrower) of the Agreement: |
(a) | The Existing Borrower and the New Borrower agree to the Existing Borrower transferring to the New Borrower by novation, and in accordance with Clause 25.7 (Change of Borrower) of the Agreement, all of the Existing Borrowers rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Borrowers under the Agreement as specified in the Schedule. |
(b) | The first day of the next relevant Interest Period is [] |
3. | The Existing Borrower and New Borrower confirm that no Default is continuing or would result from the acceptance of the Borrower Substitution Certificate. |
4. | This Borrower Substitution Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law. |
5. | This Borrower Substitution Certificate has been entered into on the date stated at the beginning of this Transfer Certificate. |
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THE SCHEDULE
Rights and obligations to be transferred
[insert relevant details including amount and currency of the Loan to be transferred]
[Existing Borrower] | [New Borrower] | |
By: | By: |
This Borrower Substitution Certificate is accepted by the Agent and the Borrower Transfer Date is confirmed as [].
BNP PARIBAS FORTIS SA/NV as Agent
By:
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Documentary duty of EUR 0.15 per original paid by bank transfer from Clifford Chance on 29 September 2016. Droit décriture de 0,15 euro par original payé par transfert bancaire de Clifford Chance le 29 septembre 2016. Recht op geschriften van 0,15 euro per origineel betaald per overschrijving door Clifford Chance op 29 September 2016.
SIGNATURES | ||||
THE COMPANY | ||||
UCB SA | ||||
By: | /s/ Raf Remijsen |
|||
Raf Remijsen | ||||
By: | /s/ Xavier Michel |
|||
Xavier Michel | ||||
Address: | Allée de la Recherche 60, B-1070 Brussels | |||
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
THE ORIGINAL BORROWERS | ||||
UCB SA | ||||
By: | /s/ Raf Remijsen |
|||
Raf Remijsen | ||||
By: | /s/ Xavier Michel |
|||
Xavier Michel | ||||
Address: |
Allée de la Recherche 60, B-1070 Brussels |
|||
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
UCB BIOPHARMA SRL | ||
By: | /s/ Sandrine Dufour | |
Sandrine Dufour | ||
Director | ||
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
THE ORIGINAL GUARANTORS | ||
UCB SA | ||
By: | /s/ Raf Remijsen | |
Raf Remijsen | ||
By: | /s/ Xavier Michel | |
Xavier Michel | ||
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
UCB BIOPHARMA SRL | ||
By: | /s/ Sandrine Dufour | |
Sandrine Dufour | ||
Director | ||
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
UCB PHARMA GMBH | ||
By: |
/s/ Dr. Karl-Werner Leffers | |
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
UCB GMBH | ||
By: | /s/ Ilaria Villa | |
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
UCB INC. | ||
By: | /s/ Jennifer Trevett | |
Address: | Allée de la Recherche 60, B-1070 Brussels | |
Email: | Raf.Remijsen@ucb.com; Jeroen.DeSchauwer@ucb.com |
THE BOOKRUNNERS | ||||||
BNP PARIBAS FORTIS SA/NV | ||||||
By: | /s/ Francis Vandeventer |
/s/ Liesbeth Willaert |
||||
Francis Vandeventer | Liesbeth Willaert | |||||
Corporate Debt Platform | Senior Banker | |||||
Address: | BNP Paribas Fortis, Montagne du Parc 3, 1000 Brussels | |||||
Email: | liesbeth.willaert@bnpparibasfortis.com, francis.vandeventer@bnpparibasfortis.com | |||||
Attention: | Liesbeth Willaert, Francis Vandeventer |
BARCLAYS BANK PLC | ||
By: | /s/ Roger Cosby | |
Address: | Barclays Bank PLC | |
1 Churchill Place | ||
London | ||
E14 5HP | ||
United Kingdom | ||
Email: | edwin.lau@barclays.com | |
Attention: | Edwin Lau |
THE ARRANGERS | ||||||
BNP PARIBAS FORTIS SA/NV | ||||||
By: | /s/ Francis Vandeventer |
/s/ Liesbeth Willaert |
||||
Francis Vandeventer | Liesbeth Willaert | |||||
Corporate Debt Platform | Senior Banker | |||||
Address: | BNP Paribas Fortis, Montagne du Parc 3, 1000 Brussels | |||||
Email: | liesbeth.willaert@bnpparibasfortis.com, francis.vandeventer@bnpparibasfortis.com | |||||
Attention: | Liesbeth Willaert, Francis Vandeventer |
BARCLAYS BANK PLC | ||
By: | /s/ Roger Cosby | |
Address: | Barclays Bank PLC | |
1 Churchill Place | ||
London | ||
E14 5HP | ||
United Kingdom | ||
Email: | edwin.lau@barclays.com | |
Attention: | Edwin Lau |
THE UNDERWRITERS | ||||||
BNP PARIBAS FORTIS SA/NV | ||||||
By: | /s/ Francis Vandeventer |
/s/ Liesbeth Willaert |
||||
Francis Vandeventer | Liesbeth Willaert | |||||
Corporate Debt Platform | Senior Banker | |||||
Address: | BNP Paribas Fortis, Montagne du Parc 3, 1000 Brussels | |||||
Email: | liesbeth.willaert@bnpparibasfortis.com, francis.vandeventer@bnpparibasfortis.com | |||||
Attention: | Liesbeth Willaert, Francis Vandeventer |
BARCLAYS BANK PLC | ||
By: | /s/ Roger Cosby | |
Address: | Barclays Bank PLC | |
1 Churchill Place | ||
London | ||
E14 5HP | ||
United Kingdom | ||
Email: | edwin.lau@barclays.com | |
Attention: | Edwin Lau |
THE ORIGINAL LENDERS | ||||||
BNP PARIBAS FORTIS SA/NV | ||||||
By: | /s/ Francis Vandeventer |
/s/ Liesbeth Willaert |
||||
Francis Vandeventer | Liesbeth Willaert | |||||
Corporate Debt Platform | Senior Banker | |||||
Address: | BNP Paribas Fortis, Montagne du Parc 3, 1000 Brussels | |||||
Email: | liesbeth.willaert@bnpparibasfortis.com, francis.vandeventer@bnpparibasfortis.com | |||||
Attention: | Liesbeth Willaert, Francis Vandeventer |
BARCLAYS BANK PLC | ||
By: | /s/ Roger Cosby | |
Address: | Barclays Bank PLC | |
1 Churchill Place | ||
London | ||
E14 5HP | ||
United Kingdom | ||
Email: | edwin.lau@barclays.com | |
Attention: | Edwin Lau |
THE AGENT | ||||||
BNP PARIBAS FORTIS SA/NV | ||||||
By: | /s/ Diego Zeijlstra |
/s/ Thi Karen Chu Van |
||||
Diego Zeijlstra | Thi Karen Chu Van | |||||
Agency Relationship Manager | Head of Credit Transaction Management Brussels | |||||
Corporate & Institutional Banking | ||||||
Address: | BNP Paribas Fortis SA/NV, Montagne du Parc 3, | |||||
1000 Brussels | ||||||
Email: | diego.zeijlstra@bnpparibasfortis.com | |||||
Attention: | Diego Zeijlstra |
Exhibit (d)(3)
CONFIDENTIALITY AGREEMENT
1 | Effective Date. This Agreement is entered into and effective as of the latest date of signature appearing below (the Effective Date). |
2 | Parties. The parties to this Agreement and their addresses are: |
UCB Biopharma SPRL | Zogenix, Inc. | |
Allee de la Recherche 60 | 5959 Horton Street | |
Brussels, 1070 | Emeryville, CA 94608 | |
Belgium | United States | |
(UCB) | (Zogenix) |
3 | Purpose. The purpose of the disclosure of Confidential Information is to evaluate, discuss and/or negotiate a potential business transaction between the parties (or their respective Affiliates) for a commercial relationship in Europe related to Zogenixs proprietary product known as Fintepla® (fenfluramine) (the Purpose). |
4 | Disclosing Party and Receiving Party. Confidential Information may be disclosed under this Agreement by or on behalf of each of the parties in connection with the Purpose. In each case, the party disclosing Confidential Information is referred to herein as the Disclosing Party and the party receiving Confidential Information is referred to herein as the Receiving Party. |
5 | Confidential Information. |
As used in this Agreement the term Confidential Information means any confidential and/or proprietary data or information which is disclosed or otherwise made available by or on behalf of the Disclosing Party to the Receiving Party, whether in oral, visual, written, electronic, or any other form. Information to which the Receiving Party gains access during visits to the facilities of the Disclosing Party or its Affiliates shall also be Confidential Information.
Confidential Information may include, but is not limited to (i) data, know-how, formulas, processes, documents, designs, plans, graphs, drawings or specifications, (ii) software, source or object codes, algorithms, or information about the methods, concepts and techniques on which software is based, (iii) chemical structures, amino/nucleic acid sequences, structural biology, or descriptions of any devices, cell lines or molecular models, (iv) clinical trial protocols, assays, services, studies, results, findings, inventions, ideas and other knowledge, (v) information regarding patent applications and patents, trademarks or
Page | 1
other intellectual property rights, (vi) information regarding third party contracts, or (vii) finances, financial models, business plans and marketing plans, reports, customer lists or pricing information.
Confidential Information also includes the existence, terms and Purpose of this Agreement, the terms of any other agreements being discussed by the parties related to the Purpose, as well as the fact that any such discussions are taking place with respect thereto.
6 | Restrictions. The Receiving Party shall: |
(a) | hold the Disclosing Partys Confidential Information in confidence using at least the same degree of care with respect to Confidential Information that it exercises with respect to its own proprietary information of similar nature (but in no event less than a reasonable degree of care); |
(b) | not disclose the Disclosing Partys Confidential Information to any third party without the Disclosing Partys prior written consent; |
(c) | only use Disclosing Partys Confidential Information for the Purpose (and not use it for any other purposes); and |
(d) | limit access to the Disclosing Partys Confidential Information to only those of its and its Affiliates respective employees, officers, directors, agents and consultants (Representatives) whose duties justify the need to know such information in furtherance of the Purpose, who have been advised of the existence and terms of this Agreement, and who are legally obligated to protect such Confidential Information from unauthorized disclosure or use on terms at least as stringent as those contained herein. The Receiving Party shall be liable for actions or omissions in violation of this Agreement by any of its Representatives as if they were the actions or omissions of the Receiving Party itself. |
7 | Exceptions. The obligations of confidentiality and use restrictions set forth herein shall not apply with respect to Disclosing Partys Confidential Information to the extent that it: |
(a) | is or becomes generally available to the public through no fault of the Receiving Party; or |
(b) | is or becomes rightfully in the possession of the Receiving Party on a non-confidential basis from an independent third party having the legal right to make such disclosure; or |
(c) | was lawfully in the Receiving Partys or its Affiliates possession prior to disclosure hereunder and not directly or indirectly from the Disclosing Party (and such prior knowledge is properly documented in contemporaneous records); or |
(d) | was independently developed by or on behalf of the Receiving Party or its Affiliates without the aid, application or use of the Disclosing Partys Confidential Information (and such independent development is properly documented in contemporaneous records). |
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For clarity, Disclosing Partys Confidential Information shall not be deemed to be within such exceptions merely because it is (1) specific and embraced by more general information in the public domain or Receiving Partys possession or (2) a combination of exempted information from multiple sources.
8 | Legally Required Disclosure. The Receiving Party will have the right to disclose Disclosing Partys Confidential Information if and to the extent required by applicable law, regulation, rule, act or order of any court or other governmental authority or agency; provided that it (i) promptly notifies the Disclosing Party of such requirement, (ii) upon request, reasonably cooperates with the Disclosing Partys efforts to obtain confidential treatment or otherwise preserve the confidentiality of such Confidential Information, and (iii) furnishes only that portion of such Confidential Information which is legally required (in the opinion of the Receiving Partys legal counsel) in order to comply. |
9 | Term. This Agreement and all confidentiality and non-use obligations hereunder shall expire six (6) years after the Effective Date; provided that such expiration shall not affect any rights or obligations of a party which have accrued prior thereto. Except as may otherwise be agreed in writing by the parties, any exchanges of Confidential Information between the Parties pursuant to this Agreement shall only occur during the one (1) year period after the Effective Date; provided that either party may unilaterally cease the further exchange of Confidential Information at any time during such period. |
10 | Return of Confidential Information. Upon written request by the Disclosing Party, the Receiving Party shall promptly deliver to the Disclosing Party and/or destroy and/or erase (where held electronically) the Disclosing Partys Confidential Information (including all copies of any portion thereof) which are in the possession of the Receiving Party of its Representatives; provided, however, that one (1) copy of the Disclosing Partys Confidential Information may be retained by the Receiving Party in a secure location for the sole purpose of identifying its obligations hereunder and any such retained Confidential Information remains subject to the terms and conditions of this Agreement in perpetuity notwithstanding Section 9. If requested, the Receiving Party will certify in writing that all such information has been returned, destroyed and/or erased (as applicable). However, the foregoing will not be construed as obligating the Receiving Party to destroy or erase copies of the Disclosing Partys Confidential Information in electronic form which are automatically generated and stored by information technology back-up and archiving systems and any such stored Confidential Information remains subject to the terms and conditions of this Agreement in perpetuity notwithstanding Section 9. |
11 | Ownership. All of Disclosing Partys Confidential Information (including all copies therefore) is and shall remain property of the Disclosing Party. By disclosing any such Confidential Information to the Receiving Party, the Disclosing Party does not grant, create or otherwise convey any express or implied rights or license to the Receiving Party in or under any patents, patent applications, inventions, design rights, copyrights, trademarks, trade secrets or other intellectual property right of any kind which are owned by the Disclosing Party or its Affiliates. |
12 | Remedies. Each party specifically acknowledges that money damages alone may not be an adequate remedy for a breach of this Agreement and hereby agrees that in the event of any actual or threaten breach of this Agreement the non-breaching party will, in addition to and without limiting any other remedies it may have at law or in equity, be entitled to seek a |
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restraining order, injunction, or other similar equitable remedy without the need to post bond. In any such event, the other party hereby waives any requirement for the submission of proof of the economic value of any Confidential Information. |
13 | Disclaimer. The Disclosing Party hereby represents and warrants that it has the right and authority to disclose its Confidential Information to the Receiving Party for the Purpose. THE DISCLOSING PARTY MAKES NO OTHER REPRESENTATIONS OR WAARANTIES IN RESEPCT OF THE CONFIDENTIAL INFORMATION IT DISCLOSES HEREUNDER, AND HEREBY DISCLAIMS ALL WARRANTIES (EXPRESS OR IMPLIED) OF ACCURACY, RELIABILITY, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE, AND ANY WARRANTY THAT THE USE OF THE CONFIDENTIAL INFORMATION WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHT OF ANY THIRD PARTY. CONFIDENTIAL INFORMATION IS PROVIDED ON AN AS-IS BASIS, and the Disclosing Party shall not be liable hereunder for any inaccuracy or lack of completeness of the Confidential Information or for its use by the Receiving Party for the Purpose. |
14 | Duty to Notify. The Receiving Party will promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of Disclosing Partys Confidential Information by the Receiving Party or any of its Representatives, and upon request will reasonably cooperate with the Disclosing Party efforts to regain possession of its Confidential Information and prevent its further unauthorised use or disclosure. |
15 | Notices. All notices and other communications under this Agreement shall be deemed to have been duly given three (3) days after being sent by certified mail, postage prepaid, or one day after being sent by overnight courier, and addressed to the parties as set forth in Section 2, or to such other address as a party designates by written notice to the other. |
16 | Affiliates. Each of UCB and Zogenix shall be responsible for and liable under this Agreement with respect to the acts and/or omissions of its Affiliates in violation of this Agreement. In this Agreement, any references to Affiliate shall mean an entity which directly or indirectly controls, is controlled by or is under common control with the relevant party, where control means the direct or indirect ownership of greater than 50% of the voting stock or interest in a company, or such other relationship as results in actual control over the management, assets, business and affairs of an entity. |
17 | No Obligations. Nothing in this Agreement shall be construed as requiring either party to enter into any agreement with the other party for any purpose. |
18 | Miscellaneous. |
(a) | This Agreement constitutes the complete agreement of the parties with respect to the subject matter hereof, supersedes all prior discussions, understandings and arrangements with respect to such subject matter and can only be modified by an instrument in writing signed by both parties. |
(b) | This Agreement and the rights and obligations under this Agreement may be assigned upon prior written approval of the other party, which shall not be unreasonably withheld. The rights and obligations of the parties will inure to the benefit of, will be binding upon and will be enforceable by the parties and their lawful successors and permitted assigns. |
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(c) | No failure or delay by a party in exercising any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy. A waiver of any right or remedy under this Agreement is only effective if given in writing and shall not be deemed a waiver of any subsequent breach or default. |
(d) | This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall in all respects be governed by and construed in accordance with the laws of England and Wales, without regard to its conflict of law principles. |
(e) | Neither party shall use the name of the other party or make any oral or written release of any statement, information, advertisement or press release having any reference to a party, whether express or implied, without the express prior written approval of that party; except where required by law, such as, but not limited to, where a party is obligated to publish information regarding payment or other transfer of value to a health care provider or teaching hospital, if applicable. |
(f) | This Agreement may be executed in multiple counterparts and exchanged via electronic mail, each of which will be deemed an original, but both of which together shall constitute one and the same agreement. |
In witness whereof, this Agreement has been executed by duly authorized representatives on behalf of the parties and shall be in full force and effect as of the Effective Date.
Signed for and on behalf of UCB Biopharma SPRL |
/s/ Alexandre Moreau |
Signature |
Name: Alexandre Moreau |
Title: Head Seizure Freedom Mission |
Date of Signature: 25-août-2021 |
Signed for and on behalf of Zogenix, Inc. |
/s/ Michael Smith |
Signature |
Name: Michael Smith |
Title: EVP, Chief Financial Officer |
Date of Signature: 23-Aug-2021 |
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Exhibit (d)(4)
AMENDMENT NO. 1
TO THE CONFIDENTIALITY AGREEMENT
This Amendment No. 1 (this Amendment), effective as of 03 January 2022 (the Amendment Effective Date), is made by and between Zogenix, Inc., having a place of business at 5959 Horton Street, 5th Floor, Emeryville, CA 94608, United States (Zogenix), and UCB Biopharma SPRL, having a place of business at Allée de la Recherche 60, Brussels, 1070 Belgium ( UCB). Zogenix and UCB are hereinafter referred to singularly as party or collectively as the parties.
WHEREAS, the parties entered into a certain Confidentiality Agreement having an Effective Date of 25 August 2021 (the Original Agreement); and
WHEREAS, the parties now desire to amend the Original Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. Capitalized Terms. Capitalized terms used herein shall have the same meanings ascribed to them in the Original Agreement unless otherwise expressly defined herein. In the event of any conflict between the terms of the Original Agreement and the terms of this Amendment, the terms of this Amendment shall govern and control.
2. Amendments to Original Agreement. The Original Agreement is hereby amended as follows:
The Purpose, as defined in Clause 3 of the Original Agreement is hereby amended and expanded to include the evaluation, discussion, and/or negotiation of a potential business transaction between the parties (or their respective Affiliates), for the acquisition by UCB or an Affiliate of UCB of Zogenix.
3. Interpretation; Full Force And Effect; Counterparts. The Amendment shall be construed reasonably to carry out its intent without presumption against or in favor of either party. The Original Agreement shall remain in full force and effect in accordance with its original terms and provisions, except as expressly modified by the terms of this Amendment. This Amendment may be executed by the parties hereto in one or more counterparts, all of which shall be valid and binding on the party or parties executing them and all counterparts shall constitute one and the same document for all purposes. Each party hereto represents and warrants that this Amendment has been duly authorized, executed and delivered by or on behalf of such party.
1
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the Amendment Effective Date.
ZOGENIX, INC. | ||
By: | /s/ Michael P Smith |
Name: | Michael P Smith |
Title: | Chief Financial Officer |
Date: | Jan 3, 2022 |
UCB BIOPHARMA SPRL |
By: | /s/ Alexandre Moreau | |
Name: | Alexandre Moreau | |
Title: | Head of Seizure Freedom Mission | |
Date: | January 4, 2022 |
2
Calculation of Filing Fee Tables
Schedule TO
(Rule 14d-100)
ZOGENIX, INC.
(Name of Subject Company (Issuer))
Zinc Merger Sub, Inc.
an indirect wholly owned subsidiary of
UCB S.A.
(Names of Filing Persons (Offerors))
Table 1Transaction Valuation
Transaction Valuation |
Fee rate | Amount of Filing Fee |
||||||||||
Fees to Be Paid |
$ | 1,670,581,276 | .0000927 | $ | 154,863 | |||||||
Fees Previously Paid |
0 | 0 | ||||||||||
Total Transaction Valuation |
$ | 1,670,581,276 | ||||||||||
Total Fees Due for Filing |
$ | 154,863 | ||||||||||
Total Fees Previously Paid |
0 | |||||||||||
Total Fee Offsets |
0 | |||||||||||
Net Fee Due |
$ | 154,863 |
The Transaction Valuation is estimated solely for purposes of calculating the filing fee. This calculation is based on the offer to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, of Zogenix, Inc. (Zogenix), at a purchase price of $26.00 per share, net to the seller in cash, without interest and less any applicable tax withholding. As of January 27, 2022 (the most recent practicable date): (i) 56,125,822 shares of Zogenix common stock were issued and outstanding, (ii) 6,637,422 shares of Zogenix common stock were subject to outstanding Zogenix stock options, (iii) 804,112 shares of Zogenix common stock were subject to outstanding Zogenix restricted stock unit awards, (iv) 300,255 shares of Zogenix common stock were subject to outstanding Zogenix performance stock unit awards (at maximum), and (v) rights to purchase a maximum of 385,515 shares of Zogenix common stock pursuant to Zogenixs 2010 Employee Stock Purchase Plan were outstanding.
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